Shotton Steelworks: 125th Anniversary

Nia Griffith Excerpts

Wednesday 1st December 2021 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

I congratulate Shotton steel plant on its 125th anniversary. I bring greetings from Trostre, which this year celebrated nearly 70 years of existence but, like Shotton, uses the steel produced in Port Talbot. Does my right hon. Friend agree that the Government must not only pull out all the stops to ensure the very existence of our steel industry, which is facing these astronomical and totally uncompetitive prices, but invest in a massive renewables programme to secure energy for the future, help the decarbonisation of steel production in this country and ensure the future of Shotton, Trostre, Llanwern and Port Talbot?

[Mark Tami]

Once again, I agree. I am also very concerned that the Government only ever seem interested in the steel industry when we are in crisis. When there is a crisis, suddenly the Government are all over the steel industry, and the moment it drops out of the headlines, so does the Government’s interest in it. That is just not acceptable. As my hon. Friends have said, the danger is that, at some point, the industry—or significant parts of it—will fall over. My hon. Friend the Member for Aberavon (Stephen Kinnock) made the point that without Port Talbot, there is a danger that there would not be a Shotton either. That is a point that the Government really need to grasp.

There is no mention of steel in the Government’s latest Budget or their so-called plan for growth, and their industrial strategy has effectively been scrapped. There has been a total failure to support environmental targets with investment that could boost decarbonisation in the industry. Funding from the clean steel fund has been delayed until 2023 and, as I have said, the issue of high energy prices has been completely ignored. All we ever get is, “Oh, it’s nothing to do with us. Have a look at Ofgem; maybe they can do something.” That is not acceptable.

Labour’s analysis shows that 24p of every pound spent on steel for Government infrastructure projects was spent outside the UK in 2017-18, meaning that Shotton and other plants throughout the UK have been left behind. The Government are making an utter mockery of their pledge to “level up” with such actions, which leave behind steel areas completely. Stronger “buy British” steel targets could create and safeguard around 50,000 jobs, and boost the economy by £4.4 billion. Vitally, it would also lower the environmental damage of steel imports. True levelling up would consist of more than just rhetoric. It is clear that we need decisive action and decisive planning. We heard only a couple of days ago in the other place that steel for our warships and our submarines is being imported, with the argument being, “We don’t have it in this country.” We do not have it in this country because we were not told soon enough that the plants could start producing what was needed. The end result is that we are importing steel to build warships and submarines. That is how stark the position is and how stark the Government’s failure is.

As well as taking action to secure the next 125 years of production at Shotton, we must also reflect on the role Shotton is taking in the fight against the climate and ecological crises we face—a point raised earlier. We need a green plan for steel and we need it to be supported by the Government. I want Shotton steelworks to become the first carbon-neutral plant in the UK. Shotton has been central to much progress in UK steelmaking for more than a century, so it would be fitting for the plant to lead the country’s decarbonisation efforts. Fortunately for us in Wales, the Welsh Labour Government are already taking the first vital steps to support Shotton’s path to becoming carbon neutral. The manufacturing action plan for Wales, a collaborative effort made between Industry Wales, trade unions and representatives from the manufacturing sector, is central to that progress. First Minister Mark Drakeford is stepping in to take action in pursuit of a prosperous, green and equal economy.

The Tata Steel group has been clear that decarbonisation and securing a green approach to steelmaking are top priorities. Shotton is already playing a key role in the fight against climate change through the application of its products in the construction of “active” buildings, which produce more energy through renewables than they consume. There is scope for more progress, and we must support and encourage Tata with that. Many critics argue that decarbonisation and economic growth in the steel industry are mutually exclusive, but with the right financial backing and strategic approach, Shotton can lead the UK steel industry to being carbon neutral and continue to support jobs in north Wales.

We hear a lot from the Government that hydrogen is the future. It may well be the future, but it is not currently the present and it will not be the future unless we invest in it. It is not going to happen by accident that one day we wake up and the steel industry and other industries suddenly have plentiful supplies of hydrogen, it works and everything is fine. We need to be ploughing investment into research now, otherwise we will fall further behind and we are already falling behind our European neighbours.

The steel industry in Alyn and Deeside is the very fabric of our area.

--- Later in debate ---

[Lee Rowley]

If the hon. Gentleman will forgive me, I will not set out our energy strategy on wind turbines today. That would be a matter for one of my colleagues in the Department. The broader point that he makes, however, is that over the coming decades we need to decarbonise our electricity supply. We have had some success in doing that over the previous decades. By doing that, through whichever process we can achieve it, we will ensure that we have clean and green energy to support industries such as we are talking about today.

I just want to touch on a couple more points before I close. The right hon. Member for Alyn and Deeside highlighted his concern that the Government do not focus on steel. I would not accept that point. In the 10 or so weeks that I have been the Industry Minister, I have already visited two steel mills and had regular conversations with the companies involved. I have met them on a number of roundtables and will continue to do that. On a broader level, we had the announcement at COP26 and the Glasgow breakthroughs, and we will be working with a number of countries around the world to ensure that we can decarbonise the industries that are more challenging to decarbonise. That indicates a desire to find ways through difficult challenges where there are no easy answers, and the Government and communities are trying to work through how to do that.

One way is through hydrogen, as the right hon. Gentleman highlighted extensively in his speech. He was somewhat sceptical about the UK Government’s activities in this space, but I want to place on record for completeness that there has been significant movement on hydrogen in recent months. We had the publication of the hydrogen strategy in August, the hydrogen business model is being consulted on, and the net zero hydrogen fund stands at nearly £0.25 billion. We also have the UK low carbon hydrogen standard. Of course there is much more to do on that, which is why we are putting in place the frameworks for that to happen, but I hope that that demonstrates an intent from the Government to explore the possibilities around hydrogen.

Finally, I want to touch on procurement, because I know that that was an important part of the right hon. Gentleman’s speech.

[Nia Griffith]

Just before the Minister moves on to procurement, may I say that it is disappointing that he does not seem to have taken on board the seriousness of the issue of energy costs? They were 61% above those of our major competitors before any of the crises and conditions that we now face. I ask him to take this seriously now, and to go back and have a real think about what we are going to do, because we are genuinely facing the extinction of our steel industry if we cannot be properly competitive.

[Lee Rowley]

I am grateful to the hon. Lady for highlighting that this issue is vital to companies across Wales and across the country, and I reiterate that we take it seriously. In recent months, much of my time as Industry Minister has been spent on meeting and speaking to those affected to get into the detail of their concerns and how they are affecting individual companies and individual sectors. A diverse range of sectors are affected, and we will continue to work with industry to see what is possible within the wider context of volatile and variable gas prices over the coming months.

The right hon. Member for Alyn and Deeside highlighted his concern about procurement, and I gently highlight the procurement taskforce, which is currently under way. A substantial amount of procurement in the public sector is supported by UK steel. Last year more than £100 million-worth of UK steel was procured by major public projects in the UK. Network Rail reports that 85% of the steel it took in during 2019-20 was from UK producers, and High Speed 2 reports that all of its structural steel is from UK producers. We know that UK steel is a brilliant product, and we know it has brilliant opportunities. We want it to be able to take those opportunities both in the UK market and globally in the years ahead.

I hope it is recognised on both sides of the House that the importance of the UK steel industry to resilience and ensuring we have a clear pathway is taken as read. Steel is important to the UK and to the UK Government. We have given it substantial support in recent years, and we will continue to consider what is possible in the years ahead. We recognise there are challenges and the work continues, but I thank the right hon. Gentleman for securing this debate and for providing me with the opportunity to respond. I wish Shotton all the best in the next century and a half.