UK Steel Sector: Supply Chains

Mick Whitley Excerpts

Wednesday 9th June 2021 Westminster Hall

[Mick Whitley (Birkenhead) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Sir Graham. I thank my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing this important debate, and I draw attention to my entry in the Register of Members’ Financial Interests.

British steel was once the envy of the world. From Newport to north Lanarkshire, steel making supported hundreds of thousands of jobs and inspired a fierce and well-earned pride in all involved. In January 1980, the Thatcher Government provoked a strike at the British Steel Corporation—the first national strike in the industry for more than 50 years—to break the union and pave the way for privatisation and under-investment. We are paying the price for that today, as the future of the industry hangs in the balance. Unable to compete on the international stage, the economic output of British steel fell by a staggering 30% in 2016 alone, and last year the Government’s brazen refusal to step in and save the Orb steelworks in Newport led to the historic site closing after 122 years in operation.

Now, the crisis at Liberty Steel threatens not only the livelihoods of the steelworkers themselves but those of more than 3,000 workers in the wider supply chain. Some argue that the British steel industry is doomed to terminal decline—just another in a long line of industries sacrificed to deindustrialisation. I could not disagree more. If we made the right investment now, I believe we can not only secure work for generations to come but re-establish the UK as a world leader in sustainable steel production. Technological advances, such as direct reduced iron technology and hydrogen power, have the potential to transform the industry. It currently accounts for about a quarter of all UK industrial emissions, but it can be part of the green industrial revolution and once again become a force to be reckoned with.

None of that is possible without direct Government support. There have been many encouraging steps so far, such as the re-establishment of the UK Steel Council, the creation of the £250 million clean steel fund and the commitment to founding two industrial clusters by the mid-2020s. Very good, but I fear that we are failing to go far or fast enough in decarbonising the sector. Hydrogen-based steel making is already being piloted in at least 23 sites across Europe, so the UK risks being left far behind by our European neighbours. Whether it is Scunthorpe or Port Talbot, these are the very communities that the Government promised to level up, yet they will be the ones that pay the price.

The British steel industry faces a stark choice: decarbonise or wither away. That is why I call on the Government to heed the calls of the industry leaders and environmental groups and begin trials of hydrogen steel without delay, with a view to fully decarbonising the sector by 2035, as recommended by the Climate Change Committee. That is an enormous challenge, but without that scale of ambition, we cannot possibly hope to compete with our international competitors.

This is not just about decarbonising steel. If we are going to revive this vital industry, the Government also need to take advantage of our departure from the EU’s regulatory framework and ensure that the procurement policy actively benefits British steelmakers. Over the next 10 years, an estimated 7.6 million tonnes of steel will be needed for public infrastructure projects. The Prime Minister must honour his promise and ensure that British steelworkers are at the very front of the queue.