Harland & Wolff
Debate between Nusrat Ghani and Jonathan Reynolds(4 days, 23 hours ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I shall make a statement on the UK shipbuilding firm Harland & Wolff. I am pleased to inform the House that, subject to approvals, a commercial deal has been reached that will protect jobs, drive investment and secure the future of the workforce. The deal will see Navantia UK, a specialist in shipbuilding, purchase all of Harland & Wolff’s shipyards.
As right hon. and hon. Members will know, Harland & Wolff is a major employer in Belfast, with additional important yards at Arnish and Methil in Scotland and Appledore in Devon. For more than 150 years, the firm has built famous vessels for notable shipping organisations and companies, including the Royal Navy, the Royal Mail and the White Star Line. This industry-led deal, which we expect to complete shortly, will secure all four of Harland & Wolff’s shipyards, protecting around 1,000 jobs right across the UK. I hope that this announcement will come as some relief to Harland & Wolff’s employees. I realise that this has been a deeply worrying time for them, and for everyone affected by the continued speculation over the firm’s future. I welcome Navantia UK’s intention to work closely with the relevant unions to protect workers’ existing terms and conditions. That is important for the hard-working employees and communities who have served the firm over many years.
I was first informed that Harland & Wolff was in serious financial difficulty on day one of the new Government. As the previous Government had open-book arrangements with the company, it was clear that the firm had significant and unsustainable debts. Members will be aware that, at that point, Harland & Wolff was seeking a Government guarantee or liquidity loan. Had that occurred, the British taxpayer would have been put at significant risk of losing millions of pounds, without the safeguarding of any yards, jobs or ships. I believe that the possibility of the Government providing such a guarantee or loan, which was much speculated on in the press, was preventing a market-based solution. The former Government’s inability to make a decision left the yards and the workforce in limbo. That is why I made it clear in my first weeks in this job that no taxpayer guarantee or loan would be provided. I was dismayed that when I did so Conservative Members opposed that, knowing as they did that with a guarantee or loan there stood a significant risk of losing an eye-watering amount of taxpayers’ money. That was deeply irresponsible.
Crucially, the deal that has been agreed will secure the delivery of the fleet solid support contract of the Ministry of Defence. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed the absolute minimum of changes to the contract to ensure its continued delivery. Navantia UK is the prime contractor of the Team Resolute consortium, which is charged with building three logistics support vessels for the Royal Navy, and it will maintain the required portion of UK-only build as part of this deal. It is also worth saying that FSS is a vital component of the UK carrier strike capability, providing munitions, spares and stores. At a time when strategic alignment with our NATO allies is more critical than ever, the Government fully endorse this deal, which will also see Navantia UK invest significantly on commercial terms in Harland & Wolff shipyards.
Anyone familiar with Navantia UK will know that the firm boasts strong expertise in naval shipbuilding. I am pleased that, thanks to this agreement, it will continue to bring the next generation of technology to its operations here in the UK. This is quite simply a good deal for the Harland & Wolff shipyards, a good deal for its employees, and a good deal for British shipbuilding. It provides the best opportunity to sustain our essential sovereign shipbuilding capacity and capability, now and over the long term. Defence is at the heart of the industrial strategy that we have identified. Defence is one of our eight growth-driving sectors of the UK economy. That industrial strategy is unreservedly and unashamedly pro-business, engaging on complex issues that are currently barriers to growth and investment. National security is one of the foundations of our plan for change. Without it, we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs like those at Harland & Wolff.
UK shipbuilding alone supports some 42,500 jobs nationwide and adds £2.4 billion to the economy every single year. We recognise how important it is, as a vital pillar of our civil and defence industrial base. That is why my Department, together with the Ministry of Defence and the National Shipbuilding Office, is doing everything that we can to bolster our world-class shipbuilding industry. That includes the significant progress that we are making on key procurement programmes. We have a major contract with BAE Systems, which has increased the order from three to eight Type 26 anti-submarine warfare frigates on the Clyde, and a contract with Babcock for five Type 31 general purpose frigates at Rosyth. Those projects have already brought significant recapitalisation investment to shipyards throughout the UK, and there are further procurements to be won, ranging from Border Force and local councils to marine in-port service vessels at His Majesty’s naval bases.
The Government are absolutely committed to supporting vibrant, growing and successful shipbuilding and fabrication industries across the country, and I pay tribute to the skilled, diligent workforces who have made these industries what they are today. Thanks to the deal that has been announced, workers in Belfast, Arnish, Methil, Appledore and right across the country can be confident that the Government are squarely behind them, that UK ship- building is secure, and that together, as a United Kingdom, we will lead the sector into a better future. I hope that all workers in all four yards are now able to enjoy this Christmas with their families, as they should. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Secretary of State. Having served in his Department, I too will be paying close attention to the answer.
Jonathan Reynolds
I agree with the shadow Secretary of State on the iconic nature of this business; its role in British history and in the community, particularly in Belfast; and the esteem in which it is held. I do feel he could have thanked us for cleaning up another mess that the previous Government left us, although perhaps that is too much to ask. After all, they could have made the decisions to allow the market-based solution with support from Government that we have been able to achieve. Despite those caveats, I welcome the fact that he welcomed the news and recognised it as a substantial good news story for many workers as we go into Christmas and for the next years.
I turn to the hon. Gentleman’s specific questions. On the delivery of the fleet solid support contract, the issues that the previous Government left us may have some material impact, although there is no large, foreseen delay to the delivery of the project at this stage. On the support to the business, there is no support going directly from Government to the business to subsidise the transaction. There have been amendments to the contracts supported by my Department and the Ministry of Defence. He asked for the details. I will not reveal it in the House because of the commercial sensitivity, but I will find out whether there is a way to share that with him. On whether the deal is compliant with the Windsor framework and our commitments as a country under those arrangements, I am satisfied with all that. Despite the fact that we will always respect those arrangements, we are the UK Government and we make decisions for every part of the UK, with the regulatory approvals, and I seek no one’s permission to be the Secretary of State for Business and Trade across all the UK.
On additional work packages, there are no additional promises from the Government, although he will know that there is a 30-year supply pipeline for shipbuilding in the UK and many opportunities, particularly in sectors such as energy, maintenance and fabrication, and a whole range of functions where Members across the House would want to have a strong, diverse and competitive shipbuilding and maintenance sector.
Finally, on defence spending, the hon. Gentleman had a bit of a try-on. He asked what assurances the sector can have. The biggest assurance I can give is that we only ever hit that 2.5% under Labour Governments. The fact is that we have a Labour Government with that commitment to the defence sector and its role—the ability to deliver maximum economic benefits for the UK, as well as that vibrant and important defence role—and we will continue to deliver on the way to that.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Congratulations to the Secretary of State. This is excellent news for the people of Appledore and of Northern Ireland and for workers across the Harland & Wolff supply chain. He might want to confirm that the peril of providing a Government guarantee was the possibility of entailing a huge payout to a US-based hedge fund, which was the largest creditor for Harland & Wolff. What is happening to the contract value for the FSS deal? It was priced at about £1.6 billion. Has that contract value now gone up? Crucially, what does the Secretary of State envisage for Harland & Wolff after that enormous contract is safely and soundly delivered?
Jonathan Reynolds
I thank the Select Committee Chair for his kind words. I am delighted that we have been able to secure this future for Harland & Wolff. His assessment is right that the largest creditor to Harland & Wolff when we took office was Riverstone, a significant US hedge fund. He is right to say that had we gone ahead with that Government guarantee or loan, there would likely have been no real return to the taxpayer—no guarantee of jobs, shipyards or ships being built. That money would have gone to the creditors. Actually, in the commercial market-based solution that we have been able to broker, all creditors have behaved responsibly, but, understandably, if anyone thinks the Government will come along and give them free money, they will hold out for that option. That was why it was so important to make that decision early on to secure this far better outcome.
On the specific question, and I should have directed my answer to the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), there is no change to the UK-based content of the contract. As I said in the statement, there have been some changes on commercial terms, although they are relatively minor based on the overall value of the contract.
On the future, I can tell the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) that the deal we have brokered guarantees not only all four yards, but the jobs in the Belfast yard for three years and jobs in the three other yards for two years. We therefore have a chance not just for new investment coming into those yards, but for the long-term future to be secured for a pipeline of work and energy and defence contracts, which is a vibrant and successful opportunity for the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson, who has up to two minutes.
Madam Deputy Speaker (Ms Nusrat Ghani)
I encourage the Secretary of State to be brave in responding to the point about the Treasury.
Jonathan Reynolds
Absolutely, Madam Deputy Speaker. I very much welcome the question and would like to put on the record that I have only good things to say about His Majesty’s Treasury at all times. [Laughter.] It is true; I mean that. The hon. Gentleman is absolutely right to say that there is great imperative—with a particular degree of responsibility in the defence part of the industrial strategy—in the challenges we face. It is imperative not just that we work closely with colleagues in the Ministry of Defence on procurement issues and Government-to-Government sales, in which my Department plays a major role, but that we address wider regulatory issues.
As the hon. Gentleman may know, the Department recently did work on environmental, social and governance criteria to ensure that they do not prevent investment into defence companies. There are issues with small and medium-sized enterprises in the defence sector struggling to access bank accounts—not through a prohibition on defence, but perhaps because of a lack of understanding about such commercial contracts being different from those in other parts of the economy. There are a whole range of issues that we must get right, but I think that, in the main, Members across the House share his aspirations and objectives. He has been a voice of expertise and authority on these issues throughout my time in Parliament, and I am grateful for his engagement on them.
Jonathan Reynolds
I recognise the role that shipbuilding has played in my hon. Friend’s city. I grew up in Sunderland —part of what was once one of the major civil shipbuilding locations in the world—and I recognise the identity and pride that comes with that industrial heritage. In many cases, people feel that it is something of the past, but in this statement we are stressing exactly what she said about the contemporary contribution and the opportunities for the future, about which we should be excited. There are a whole range of increasing needs to shipbuilding expertise, particularly in the energy sector—offshore wind, for example, creates a range of demand for different types of maintenance and supply vessels—so this should be an optimistic story for the future. Sometimes I feel that the wider British public perhaps do not understand the number of jobs or the economic benefit that come from such a sector, so it is always good to make that case from the Dispatch Box—as my hon. Friend does every day from the Back Benches.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call John Cooper, a member of the Business and Trade Committee.
Jonathan Reynolds
I am grateful to my hon. Friend for his comments on the deal and for his observations about the questions from the Opposition Front-Bench spokesman about the 2.5% target. On the modern industrial strategy that we are creating, we have had an incredible response to our Green Paper—some 22,000 individual answers to the questions it asked—showing that there is a huge appetite from industry across the board, both in the UK and abroad, to engage with what the Government are seeking to do. Again, I stress that that should always be on a cross-party basis; there is nothing in that Green Paper that anyone of any political stripe should be able to oppose. It is based on our national interest and the goal of being more competitive and business-friendly, succeeding to a greater degree on the world stage.
This week, we had our first meeting of the Industrial Strategy Advisory Council, with some tremendous representatives with expertise across the board—UK industry, academics and business figures. It is an incredibly exciting time. This is just one component of our growth mission, but clearly an important one, alongside areas of work for me such as the small business plan that we are putting together. I genuinely believe that everyone should be excited about the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Alison Griffiths, a member of the Select Committee.
Post Office Horizon: Redress
Debate between Nusrat Ghani and Jonathan Reynolds(3 months, 2 weeks ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I would like to update the House on the Government’s response to the Horizon scandal. How appropriate it is to see you, a former Business and Trade Minister, in the Chair.
My priority as the new Secretary of State is to ensure that victims of the scandal receive the redress that they deserve. Over the past few weeks, I have begun meeting with some of the postmasters whose lives have been so badly damaged by those events. Their stories are harrowing, but their resilience and steadfastness in seeking justice are inspiring. I am also grateful for their candour in sharing insights on how the various compensation schemes can be improved.
May I make a personal point, Madam Deputy Speaker? I know I speak for hon. Members across the House when I say that it fills me with sadness to have to stand here today and address such a significant failure of the state. The role of Government must be to do right, seek justice and defend the oppressed, yet Governments have too often had to be forced into action by brave, tireless and resilient campaigning. Once again, I pay tribute to the Justice for Subpostmasters Alliance, and to campaigners such as Jo Hamilton, Lee Castleton and Sir Alan Bates—incidentally, I add my personal congratulations to Sir Alan on his recent wedding. Without their tireless efforts, justice may well never have been done in this case. As we stand here today, in the shadow not just of this scandal but those of Grenfell, infected blood and several more, I know that it is the firm conviction of everyone in this House that we must do better. This is an issue not of politics but of justice.
In that spirit, I cannot speak of the new Government’s work to address this wrong without again acknowledging and appreciating the work of Lord Arbuthnot and the new Lord Beamish—formerly the Member for North Durham—as well as that of my friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) as Minister. The announcements that we make today are built on their efforts to hasten redress payments and quash wrongful convictions.
Earlier in the summer, the new Government announced the launch of the Horizon conviction redress scheme. I am pleased to report that the first payments have been issued and good progress made on processing the claims received to date. As was the case for the group litigation order compensation scheme, the Department will be setting a target to make, within 40 working days, the first offer to 90% of those who have submitted a full claim. Additionally, the Post Office has now settled over 50% of cases on the overturned convictions scheme, with 57 out of 111 cases fully settled. The Department has also now received over 50% of GLO claims and settled over 200 of them.
Progress has also been made on implementing the £75,000 fixed-sum awards on the Horizon shortfall scheme. As of 30 August, over 1,350 claimants who had previously settled below the £75,000 threshold have been offered top-ups to bring them to that amount, and the Post Office will shortly begin making fixed-sum offers to new claimants. Those interventions will have a significant impact on ensuring that postmasters can access redress swiftly and simply. However, we recognise that this option will not suit everyone and does not address all the concerns raised by postmasters and their representatives. That is why we are taking further action today.
The Horizon compensation advisory board recommended last year that we introduce an independent appeals process for the Horizon shortfall scheme. Today I am pleased to announce that we have accepted that recommendation. That appeals process will enable claimants who have settled their claim under the HSS to have their case reassessed, with the benefit of any new information that they were not able to include in the original application. It will be delivered in-house by my Department, and we will apply the lessons learned from redress schemes to date to ensure that the process is easy for postmasters to engage with and that outcomes are delivered at pace. We will announce further details in the coming months.
There will be no obligation for postmasters to appeal their settlement, and no doubt many will be content that their claims have been resolved fairly. I know that financial redress will never fully compensate victims for their suffering, but we want to help bring some closure to postmasters as soon as we can, which is why we will establish the new appeals process as quickly as possible.
In summary, the new Government will do everything in our power to deliver justice for postmasters, to bring them closure and to ensure that such a national tragedy is never allowed to happen again. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
No doubt that statement will mean a lot to many constituents, including those in my constituency of Sussex Weald. I call the shadow Secretary of State.
Jonathan Reynolds
I am grateful to the hon. Member for his response, and for the tone and collaboration that we tried to model when we were sitting in opposite places in this Chamber. I believe that helped advance what was a difficult piece of legislation to put on the statute book, particularly during a wash-up process, but was the only real vehicle for delivering what we all wanted to see. He has asked me a number of questions; all are absolutely reasonable, and I am happy to respond to them.
In a situation where someone has already received a top-up to £75,000, the hon. Member is right to say that the appeals scheme would not be available. It is a choice between the two best methods of redress and satisfaction for the postmaster. I recognise what the hon. Member has said—that, given the issues with the speed of delivering redress, having that system clogged up would not be satisfactory to anyone—but I think that both options represent reasonable ways forward for people who are in that position.
The hon. Member asked specifically about the remit of the appeals scheme, and I have listened to what he said. The reason we are announcing today that we will take this scheme forward, but will then consult with postmasters to make sure the eligibility criteria are correct—he asked about the timeline, which is just a matter of months—is to make sure that we do not have to revisit the scheme, and can all be satisfied that crucially, postmasters themselves have confidence in it. That is the intention, so I am grateful to the hon. Member for his comments about the remit of the scheme.
The hon. Member asked about legal representation. Yes, that is part of the scheme, again learning lessons from where we have been in the past. As he knows, most of the schemes have now been adjusted to reflect that, but I absolutely take his point about new announcements.
I want to be clear about the difficulty that has existed with the Horizon convictions redress scheme. To update the House, I will give the hon. Member the figures: so far, 180 letters have gone out from the Ministry of Justice. Including those letters and the people who have registered with the Government who perhaps have not all received a letter yet, there are now 276 claimants. I will make the appeal again: while we are doing everything we can with Ministry of Justice colleagues to make sure those letters go out, people can proactively register with the Government. To be frank, this has been a frustration. When the hon. Member and I were having our conversations when we sat in different places in the Chamber, neither of us perhaps knew the state of the database and the records, and—having passed the legislation—the frustrations we would face in getting to people. However, doing so is clearly integral to sorting this out.
Finally, the hon. Member asked about the scheme reviewer. If I may, I will come back to him on that; I will write to him to tell him the up-to-date situation.
In summary, I say again that we will work with all parties and all postmasters to get redress at pace, and to learn the lessons from where things have not gone well in the past, to make sure new announcements carry the confidence of the people who really need to have confidence in them.
Madam Deputy Speaker (Ms Nusrat Ghani)
Members should continue to bob if they want to be called. I am going to call everybody, as I know the Secretary of State also wants to respond to everybody. I call the previous Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I add my congratulations to Sir Alan Bates and Lady Suzanne on what looked like a very happy day.
I welcome what the Secretary of State has set out for the House this afternoon. When our Select Committee reported back in March, we said that trust in the Post Office was fundamentally broken and that the appeals scheme needed to be independent. This is an important step in that direction, but sub-postmasters have told me this morning that there is still a problem with the time it takes to get offers back when an offer is contested. The claimant’s lawyers have a fixed amount of time to put in a claim; when that claim is contested, it is taking far too long for Addleshaws, in particular, to come back and provide a second offer. What comfort can sub-postmasters take from the Secretary of State’s announcement today? This whole House agrees that justice delayed is justice denied.
Jonathan Reynolds
I am grateful to my right hon. Friend, who will, I hope, see his work as Chair of the Select Committee reflected in this announcement—specifically, that we are setting the target to issue initial offers to 90% of claims within 40 working days of receiving a full claim. On the point of how that is defined, a full claim is one where, following legal assessment, it is deemed that it does not require any further evidence to assess the claim further. Once that is in, the targets, which his Select Committee rightly called for to make sure redress is delivered at speed, are part of this process.
Protecting Steel in the UK
Debate between Nusrat Ghani and Jonathan Reynolds(11 months ago)
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Ms Ghani
My hon. Friend is a staunch champion of her constituency and she highlights the lack of any sort of sensible plans from the Opposition. They do not want stuff coming in or going out. They will not even support the transition, and they would go harder and faster as well.
Closing the Port Talbot plant would cause immeasurable damage to the town and would be harmful for the UK as a whole, risking all 8,000 jobs that Tata Steel provides across the UK, not to mention the 12,500 jobs in the steel supply chain. That is why the Government are investing £500 million of a total of £1.25 billion towards securing the future of Port Talbot’s steel, and an industry that is inextricably linked to the community’s history and identity. That investment is a huge step forward, fortifying UK steel production at a time when traditional blast-furnace steelmaking has stopped being viable.
We have heard loud and clear the calls from the unions to keep one blast furnace open for several months during the transition. Tata held discussions with the UK Steel committee and its advisers on this very issue. In response to those concerns, Tata Steel has revised its proposal and continues to operate Port Talbot’s hot strip mill throughout the transition period and beyond. However, its position remains that continued blast-furnace production is neither feasible nor affordable, and the risk is that we would lose steelmaking at Port Talbot. An electric arc furnace provides us with greater resilience and the ability to absorb shocks in the global supply chain by reducing our dependency on raw material imports. Quite simply, UK steel will be ready for whatever the future holds with state-of-the-art modern equipment.
Just as crucially, the transformation is pivotal to the Government’s ambition to position the UK at the forefront of the growing global economy. Alongside the UK’s proposal for the Celtic freeport and the land at Port Talbot, which Tata expects to release for transfer or sale following the transition from blast furnaces, the investment would unlock thousands of new jobs in south Wales and the wider UK economy. I should also remind the House that the Tata Group continues to make significant investments in the UK’s industries of the future, including through its plans to open a £4 billion battery gigafactory in Somerset, creating 4,000 direct jobs. That will be a game changer for this country that will position us to thrive in the decades ahead.
Jonathan Reynolds
I very much recognise the case that the Minister makes for Tata’s investment in the UK, but will she just be clear with the House on whether the subsidy package for Port Talbot that we are talking about is in any way linked to the subsidy package and the decision to build the gigafactory in Somerset?
Ms Ghani
That is just another performative politics intervention—[Interruption.] No, those are completely separate things. We are talking about the future of the steel sector in the UK and in Port Talbot. The discussions have been going on for years. They are discussions that did not take place when the Opposition were in power. They left it alone and the technology has moved on, but what we have been able to do, even though it is difficult, is ensure that steelmaking continues in the UK by providing it with unprecedented levels of funding. There was no plan presented when the hon. Member spoke at the Dispatch Box. We have been able to ensure that steelmaking will continue at Port Talbot.
Understandably, Members might ask why the Government are not working harder to maintain these particular blast furnaces but, as the hon. Gentleman said, they are at the end of their lives and the cost does not work any more, and nor do they meet the needs of customers. I say this again: without the support, there would have been a complete risk of Tata Steel not continuing to making steel in the UK. We know that the 20th-century way of producing steel is no longer fit for purpose for the UK in the 21st century. The UK’s blast furnaces, such as those at Port Talbot, are reaching the end of their operational lives, and a transition from blast furnaces to electric furnaces will also increase our supply chain resilience, making the UK less reliant on imports of raw materials for steelmaking.
Making Britain a Clean Energy Superpower
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 1 month ago)
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Ms Ghani
That is a valuable point. The most frustrating aspect of being a Minister is the lack of sufficient time and space to talk about some of the challenges and how we respond to them. If we had not provided support to enable Port Talbot to have those electric arc furnaces, thousands of jobs would have been lost. Unfortunately, however, there are always some people who argue that change inevitably brings challenge, and we get stick on that point. However, our investment means that those jobs are now secure, as are, I believe, more than 10,000 jobs in the supply chain. That will give people the reassurance that they need about their continued ability to produce steel or products in the supply chain.
Jonathan Reynolds
Owing to the importance of this issue, I must add something to the record. As the Minister and the Secretary of State know, electric arc furnaces are not the only way to decarbonise the steel industry. There are examples around the world of the use of ammonia and hydrogen in what is known as the direct reduced iron process, and other technologies are under way. Are we to be the first developed country to lose the capacity to make virgin steel? That appears to be Government policy, but I am not sure that the Minister could deliver the necessary votes for that on her own side of the House. I think she should clarify whether it is indeed Government policy, because she would not say so during yesterday’s exchanges on the urgent question.
Ms Ghani
We were talking about Port Talbot and the change to electric arc furnaces there. There is, of course, the DRI hydrogen option, but it will not come online within the time that is required to provide the change from blast to electric arc furnaces. That was a commercial decision taken, with the unions, at Port Talbot. When a technology involving hydrogen is advanced and can be commercialised, that will no doubt become an option, but we are where we are. People might think we can jump from one to another without a transition, but we are providing support for the transition to support jobs in these communities.
I believe I have until 5 o’clock, but that might distress our colleagues. I will conclude, although I am prepared to continue.
British Steel
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank the hon. Member for Scunthorpe (Holly Mumby-Croft) for securing this urgent question, at what will be a very difficult time for her constituents.
The Labour party supports the transition to green steel. We recognise, as the Government have now conceded, that a blend of public and private funding is necessary to do that. We believe electric arc furnaces are part of the solution, but we do not believe they can be the only solution. Specifically, we believe that the retention of primary or virgin steelmaking in the United Kingdom is a matter of economic necessity and of national security. While we all welcome the return of steelmaking to Redcar, which should never have been taken away to begin with, this will clearly mean very significant job losses at Scunthorpe. I therefore have major concerns about this announcement, coming, as it does, just after the Government have confirmed a deal to also close the blast furnaces at Port Talbot.
First, the Minister said in her answer to her hon. Friend that talks are ongoing. I have to say that that is not my understanding of the current status of this deal. Could she confirm that, please? Secondly, is it true that carbon capture technology could not be pursued at Scunthorpe because of delays from the Government to the necessary infrastructure over the last 13 years and uncertainty about a future business model? In addition, is it correct to say that a DRI—direct reduced iron—solution could not go forward because of uncertainty over the Government plans for green hydrogen, which would obviously be essential for a DRI business model? Thirdly, do the Government recognise the figure of 2,000 job losses, and will the Minister confirm that this is the net figure covering Scunthorpe and Redcar—in other words, that once recruitment at Redcar is taken into account, job losses in Scunthorpe will likely be in excess of 2,000? Finally, will she confirm how much public money this announcement involves?
Most of all, I reiterate to the Minister that decarbonisation cannot mean deindustrialisation; we cannot simply outsource our emissions to other countries, call that progress and expect public support for the transition. A real plan for green steel must be open to all technologies, it must be industry-wide, and it should be a story of new jobs, new opportunities and British economic strength. Sadly, this announcement seems very far from that.
Ms Ghani
Negotiations are indeed ongoing, which is why I am limited in what information I can put out in the public domain; information is of course incredibly sensitive. British Steel will make commercial decisions, but if it is hoping to secure Government support, we need to make sure that we are getting value for money for taxpayers.
The hon. Member asked why decisions have been taken on the electric arc furnace compared with other technologies. It is because the other technologies just cannot come up to speed fast enough. In particular, the hydrogen-based direct reduced iron equipment just cannot enable furnaces to transition at the speed at which they need to. He is very much aware of that, and this is also a challenge in Europe, not just in the UK.
Fundamentally, there are a number of challenges for the global steel sector. First, there are energy costs, which we have done everything we can to provide support for, with the hundreds of millions of pounds to cover energy costs and now the supercharger. Secondly, we have to ensure that we get more UK steel into the UK economy. That is why the public procurement note was incredibly important for us to do, and we will be able to secure millions of pounds for more UK steel projects. Thirdly, there is a major challenge in that advanced manufacturers, customers and consumers are looking for greener steel, and a lot of companies are trying to reflect on how they can provide a green steel option. Having said that, it is a particular kind of steel; as I said to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), for me that means a mix of virgin steel in the market as well. Of course, these are commercial decisions, but we need to make sure there is a mix to deliver for the UK market in particular.
The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) talked about the environmental issues and about hydrogen. We export a lot of scrap steel, and that also has a carbon footprint, so for us to have the capacity to turn that steel into products we can use will be incredibly useful. The positive news is that we are the eighth largest manufacturing country in the world. We are going to need more steel, not less, but there will also be demand for more green steel, not less, and we are trying to ensure that we provide support to the steel sector so that it can meet those market needs.
Tata Steel: Port Talbot
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 3 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
After 13 years of failure, expectations of this Government are not high, but even by their standards, spending half a billion pounds to make thousands of British steelworkers redundant is a truly remarkable feat. Last week, I went to Port Talbot to meet some of the workers affected by this announcement, and like us, they support green steel. They have actually been campaigning for green steel for many years, and those workers were promised repeatedly that they would be a part of the process. They rightly feel betrayed by this announcement and the fact it is being done to them, rather than with them.
I know the Minister will come back to say that more jobs were at risk. I have heard the Government’s line that all the jobs would have gone entirely, but she must be honest: it is absurd even to countenance the UK being the first major economy not to have a domestic steel industry. The UK steel sector is already much diminished compared with when the Conservatives came to power. The transition to green steel should be about more jobs, not less. It should be an optimistic, exciting moment for steel communities, but instead this has caused anxiety and anguish. I say genuinely to Government Ministers and to all on the Conservative Benches that if they allow decarbonisation to become associated with Thatcher-style job losses, it will risk the legitimacy and political support for net zero in a way that courts disaster. Is levelling up not a tacit admission by the Conservative party that the scars of the 1980s deindustrialisation cut so deep that we still feel them today?
Why were the workforce not involved in this process? Why has only one technology—the electric arc furnace—been chosen? What consideration was given to hydrogen and carbon capture possibilities? We already know that this deal was not the company’s opening proposal, so what other options have been considered? Crucially, what will happen to downstream facilities, such as Trostre and Llanwern, that provide packaging and automotive steels that cannot currently be served by an electric arc furnace? Will that steel be supplied from India, with a larger emissions profile than at present, which is what many of the workforce believe?
What is included in this package as regards ongoing industrial energy costs? Crucially, when will a grid connection for an arc furnace be provided? In addition, how will this £500 million of taxpayers’ money be protected? In the absence of any clear and identifiable criteria, how do we know that it represents good value for money? Finally, what does this announcement mean for the rest of the UK steel industry and, in particular, Scunthorpe?
The plan that Labour put forward for green steel was industry-wide, comprehensive and transformative, and it was designed to secure major economic dividends for the UK. We cannot secure the future of UK steelmaking with sticking plasters. We cannot do it on a plant-by-plant basis, and we cannot do it without the workforce behind us. This should have been such a positive announcement. It should have been about creating jobs, strengthening national capabilities and showing that we can do decarbonisation in a way that works for working people. I say to every single steelworker out there that it is clear that they will only get the bright future that they know is out there when they get a Labour Government.
Ms Ghani
It is unfortunate that the hon. Member decided to politicise such an important sector. It was not me but Gareth Stace for UK Steel, the trade association for the UK steel industry—the voice of the country’s steel manufacturers—who said:
“This is a really important day for our steel sector in the UK, with the Government showing a real commitment to the future of steel making here in the UK. We will get a true transformation of our sector to create steel for the net-zero economy, something which our customers are asking us for. We have the ability to completely transform our sector and boost the net-zero economy in the UK. We can really seize the opportunity to increase production in the UK and increase exports. We all know that a net-zero economy will need more steel, not less.”
The hon. Member is putting on a very poor display over a serious decision that has been in discussion, I am told, for more than a decade. I have spoken to Ministers who have held the portfolio over many years before me, and they tell me that these matters are nothing new.
More importantly, the hon. Member knows that the blast furnaces were at the end of their life. The right decision is to provide certainty, security and continuity, and that is exactly what we are doing. The UK is a world leader in producing steel, but we need to decarbonise, and this is the best way of ensuring and guaranteeing jobs, of which there are 8,000 on the site and 12,000 in the supply chain.
As well as the £500 million, £100 million has been put together for a group to consult and work with the unions, the staff, the Welsh Government and the Secretary of State for Wales to ensure that the transition is as appropriate as it can be and not so challenging for the people who are impacted. The proposal is to go for electric because other energy sources are underdeveloped. If the hon. Member will reflect on what is happening in Europe on hydrogen, for example, he will see that nothing else can work at this scale and within the tight timeframe that we want to work in to ensure that the site continues to be viable not only for manufacturing steel in the UK and supporting all the jobs in the supply chain but to support Wales, too.
The proposal will also transform the Welsh community and the Welsh area. A huge amount of work is taking place with the freeport, and a huge number of businesses and jobs will be coming out of the transformation to green steel. It is unfortunate that the hon. Member cannot recognise that, without this decision, there would have been continued uncertainty, no security for the staff and definitely no security for the UK steel sector.
Automotive Industry
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 5 months ago)
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Ms Ghani
He could have gone further.
I saw at first hand the cutting-edge future mobility research being done in Coventry, the birthplace of British motor manufacturing. While in Coventry, I also had the opportunity to attend the Advanced Propulsion Centre to discuss how we can build on the success of our existing R&D and capital investment programmes. During the visit I met year 6 pupils from Templars Primary School in Coventry who attended the Advanced Propulsion Centre’s STEM day. That is a prime example of outreach activity to inspire the next generation of automotive engineers.
We cannot talk about the automotive sector without thinking about the broader supply chain and one of my particular passions, critical minerals, which I am surprised the hon. Member for Stalybridge and Hyde did not spend more time discussing. He missed out the key point of what is needed to produce electric vehicles. We know that China dominates the EV market, partly due to its grip on the supply chain. It controls much of the mining of crucial raw materials, and 80% of battery making for EVs is controlled by Chinese firms. It is also the world’s top car exporter.
I am not sure whether the hon. Member has had time to read Ed Conway’s recent book, “Material World”, which makes some key points on lithium. We know that reserves of the metal are concentrated in a handful of nations. In his book, he said that lithium reserves are concentrated in “a handful of nations”, so that “while the rest of the world panics about China’s dominance of the battery supply chain, many in Beijing are simultaneously panicking about China’s reliance on the rest of the world’s raw materials.”
We know that an EV car battery contains 40 kg of lithium, 10 kg of cobalt, 10 kg of manganese and 40 kg of nickel, and that is before we consider the graphite that goes into the anode. Those materials have to come from somewhere, which is why we updated our critical minerals strategy in the “Critical Minerals Refresh”—[Interruption.] That was a positive noise from the hon. Member—to ensure we were supporting the sector through the whole supply chain. I encourage colleagues to read Ed Conway’s book. I am not on commission, by the way; it is just a good read.
The hon. Member for Stalybridge and Hyde talked about not having a strategy, but we are working with industry to make sure it can plan for the future. To do that, we had the “Critical Minerals Refresh”, which came from the integrated review. We are making sure that we are focused on batteries and the EV supply chain here in the UK. Recent good news that the hon. Member also forgot to mention is the joint venture between British Lithium and Imerys, announced on 29 June. That is a massive boost to the critical minerals supply chain in the UK.
By the end of the decade, the development of Cornwall as the UK’s leading lithium hub will supply enough lithium carbonate for 500,000 electric cars a year. To help secure the supply of critical minerals, the Government have not only refreshed our critical minerals strategy, but put in place a task and finish group to work with industry so that it can highlight its particular vulnerabilities and we can provide it with the confidence and resilience it needs in its supply chains.
Most recently, I visited Indonesia, where I met Indonesian Ministers to emphasise that the UK has a lot to offer on critical minerals, particularly in relation to private finance, environmental, social and governance capabilities, and mining services. I also visited key mine sites and met companies that are critical in the battery supply chain and in critical mineral production, including some innovative UK companies showcasing the best of British—I know that sentence would be hard for the hon. Member for Stalybridge and Hyde ever to put on the record.
This year, I have also visited South Africa, where I represented the UK at the Minerals Security Partnership ministerial meeting and confirmed the UK’s intention to host the next such meeting during London Metal Exchange Week in October. I also visited Canada, where I signed the UK-Canada critical minerals statement of intent and launched our critical minerals dialogue with Canada, forging a key partnership with one of the most important global players in the critical minerals ecosystem. The hon. Member will want to have a moment to reflect on and applaud our work internationally and domestically on critical minerals.
Ms Ghani
So many—too many to list right now.
We also need to look at battery recycling. We want to create a regulatory space that supports the appropriate treatment of EV batteries. The Department for Environment, Food and Rural Affairs is currently reviewing existing UK batteries legislation and working at pace to publish a consultation in the second half of 2023. We have also funded the Faraday battery challenge, which has enabled research into the safe and efficient segregation and repurposing of EV battery cell components. Altilium is exploring how to recover the critical metals from old EV batteries and process them effectively so that they can be reused in new batteries. Reblend aims to develop the core processes and capabilities for a UK-based automotive battery recycling industry that can recover cathode materials from production scrap and end-of-life automotive and consumer batteries for reuse in automotive batteries going forward. We are not only trying to get close to host countries and make sure that we are mining ethically, but seeing how we can ensure that we are recycling batteries.
The Minister of State at the Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on a few issues about the zero-emission vehicle mandate, so I will quickly touch on rules of origin. To support the transition, we must not only champion innovation but address all barriers to trade with partners and markets all over the world. Our closest trading partner is of course the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. More than 50% of cars manufactured in the UK and exported are destined for EU consumers. For those reasons, I am working closely with the industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and EU.
Since signing the deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry on both sides facing tariffs on electric vehicles at a crucial time in the transition to electrification. I am determined to seek a solution to this shared problem and will work with the EU to fix it for 2024. The Prime Minister has raised the issue directly with European Commission President Ursula von der Leyen, and I and other Ministers are engaging with our EU counterparts. We will continue to work closely with industry to address any and all blockers to the electric transition so that our great UK auto industry continues to benefit from access to global markets and UK consumers have the best possible options as we make the switch to electric vehicles.
I wanted to touch on hydrogen, but I believe I am running out of time. I was also going to reflect on success in the aerospace sector, which is very much linked to the automotive sector, but I will not because I can see that you would like me to conclude, Madam Deputy Speaker.
Ms Ghani
Well, I think the mood of the House is to be more positive about the automotive sector. I could list even more stories, but I will conclude because I believe that Opposition Members would despair about all the positivity about the automotive sector that we could talk about and reflect on.
We are home to more than 25 manufacturers that build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. It is incredibly important to reflect how difficult it has been for the automotive sector globally, but of course we have huge success stories here in the UK. In 2022 we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onwards trajectory rising year on year. This is a healthy sector going above and beyond not only to reskill and upskill, but to meet net zero targets.
The Government are supporting the UK automotive industry, and the sector is a stalwart example of innovation and dynamism to the rest of the world. It is a great sector to get into, whether someone joins it as an apprentice or even by taking on a regular job. Of course, there is more to do. There are more opportunities to secure as we transition to zero-emission vehicles and we realise the potential of connected and autonomous mobility. We have already achieved a great deal in partnership with this fantastic sector, but we are determined to do more. We work with the sector—we do not sit in Westminster coming up with plans that we then U-turn on—and that has given the sector the confidence it needs to continue to invest in the UK. The job of those representing the sector is to praise, promote and protect, not to talk the sector down.
UK Car Industry
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 7 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country.
For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?
Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.
This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?
Ms Ghani
It is a good to hear that the Opposition are expecting businesses to make decisions on promises that may or may not come down the line, and on promises of sums of money that have been allocated and reallocated a number of times by the Labour party. This is not just my view: look at the figures from the Society of Motor Manufacturers and Traders, showing that British commercial vehicle production grew by 39% in 2022, the best since 2012, with exports surging by 63%. We are determined to make the UK the best location for export-led automotive manufacturing.
I am going to talk not about a promise, but about the programmes that are in place to ensure that supply chains and gigafactories are here to support the whole automotive sector. I have spoken about the Advanced Propulsion Centre—perhaps the Opposition do not understand how important that is—the Faraday battery challenge and “Driving the electric revolution”. We must not forget the Envision AESC announcement of its investment in a gigafactory in Sunderland or Johnson Matthey confirming its investment in the construction of a factory in Hertfordshire for proton exchange membrane fuel cell components for use in hydrogen vehicles.
Discussions are constantly ongoing with other potential investors into gigafactories in the UK. We are not doing this by ourselves in Government, making decisions that seem good on paper; as I said, I co-host the Automotive Council and just this week—possibly on Monday or Tuesday, I cannot remember—I caught up with Aston Martin, Bentley Motors, BMW, Ford, Jaguar Land Rover, McLaren Automotive, Nissan, Stellantis, Tesla, Toyota and the Volkswagen group. They are keen to continue working with us to ensure that we have supply chains here in the UK.
Oral Answers to Questions
Debate between Nusrat Ghani and Jonathan Reynolds(1 year, 9 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The automotive industry is a jewel in the crown of British manufacturing, but to keep that jewel we need to be building batteries for electric vehicles in the UK. So far we have one gigafactory up and running, while Germany already has 10 times our capacity. Alarm bells are ringing across the sector, and we recently had disappointing news with Ford announcing job cuts in Essex. The Faraday Institution estimates that the UK needs 10 battery factories by 2040 to retain our car industry. Does the Secretary of State agree with that assessment? If she does, how and when will she publish a clear plan for how the Government intend to hit that target?
The Minister of State, Department for Business and Trade (Ms Nusrat Ghani)
We have a strategy in place to support the automotive industry, with £1.3 billion of innovative projects, including the Faraday factory challenge —[Interruption.] I have a response to the question. The hon. Gentleman will be pleased to know that we have investment in place, so let me continue. With a budget of £544 million, the Driving the Electric Revolution scheme includes nearly £80 million of Government investment through the Innovate UK programme. I suggest that the Opposition Front Benchers flick through my “Critical Minerals Refresh” document, because there is a fantastic page on UK battery supply chains—not just the automotive transformation fund but the Envision AESC announcement, which is worth £1 billion for the north-east electric vehicle hub. Perhaps they will read it before the next Question Time, so that they have a tricker question for us to deal with.