(1 week, 6 days ago)
Commons ChamberWith permission, I would like to make a statement about this Government�s plans to unleash the North sea�s clean energy future.
For almost half a century, the workers, businesses and communities of the North sea have powered our country and the world. We believe that they can and will continue to do so for the next half a century and beyond, which is why yesterday, we launched a consultation on the steps we are taking to seize the opportunities of the clean energy transition in the North sea. This is about working with businesses, workers and communities to strengthen north-east Scotland�s status as the energy capital of the UK, and it is about showing global leadership as we deliver a well-managed, orderly and prosperous transition.
We know that the North sea is a maturing basin. Oil and gas production has seen a natural decline of 72% between 1999 and 2023, and as a result, the industry has lost around a third of its direct workforce over the past decade. The truth is that sprinting to clean energy is the only way to deliver energy security and good, long-term jobs for the workforce and for communities. At the same time, we know that we need to listen to the science on what is required to keep global warming to 1.5�C. A science-aligned approach to future oil and gas production is the only way to deliver climate security for future generations, so we owe it to the North sea�s workers and communities�who have done so much for our country�to come up with a proper plan for the future. That is what this Government are doing.
First, we are consulting on our manifesto commitment not to issue new licences to explore new fields. While we have always been clear that oil and gas will continue to play an important role for decades to come, the reality is that new licences for oil and gas awarded in the past decade have made only a marginal difference to overall production. To continue granting them would not help our energy security, would not be compatible with our climate commitments, and would not take one penny off bills. As such, we will not award new licences, but we will continue working with the sector to manage existing fields for the entirety of their lifespan. We will also provide the long-term certainty on its fiscal landscape that the sector needs. Yesterday, the Treasury set out plans for a new regime to respond to future spikes in oil and gas prices once the energy profits levy ends in 2030.
The second part of the consultation is about harnessing the North sea�s unique strengths, including its offshore infrastructure, highly skilled engineers and deep supply chains, to make it a global clean energy powerhouse. In just eight months, we have already made significant progress. We have established Great British Energy in Aberdeen, so that it is in the perfect position to drive the roll-out of clean energy projects. We have improved the offshore wind auction, so that later this year there will for the first time be a new clean industry bonus to reward investment in good manufacturing jobs and clean supply chains. We have overseen a record-breaking renewables auction. We have kick-started the UK�s carbon capture and hydrogen industries�the energy sectors of the future�with strong, early investments. Just yesterday, we awarded more than �55 million to the port of Cromarty Firth for upgrades that will support the development of floating offshore wind, creating hundreds of jobs as we ensure Scotland and the UK remain world leaders in this next-generation technology. But that is just the start.
Our clean power action plan will drive �40 billion a year of investment to meet our goal of clean power by 2030. Research shows that jobs in offshore renewable sectors could increase by tens of thousands in that time. We will also make sure workers have the tools they need to take up these new opportunities. Already, we have worked with the Scottish Government and trade bodies to launch a skills passport, making it easier and quicker for oil and gas workers to bring their skills and experience into clean energy jobs. That idea has been stuck in the mud for years. Thankfully, we have made more progress in the past eight months than was made in the previous 14 years combined. At the same time, we are putting clean energy at the heart of our upcoming modern industrial strategy.
We are incredibly fortunate to have the North sea on our doorstep. For decades, the oil and gas buried there have fuelled development and charged our economy, but the North sea�s long-term future lies in its incredible clean energy potential. We know that its stable winds and shallow shelves make it one of the best locations in the world for offshore wind farms. We know that the UK continental shelf alone has enough capacity to store up to 78 billion tonnes of carbon, which is roughly the amount this country has produced since the industrial revolution. With our skilled offshore industry and workforce, we are perfectly placed to seize this natural advantage and get ahead in the global race for new jobs in new industries.
Instead of sticking our head in the sand and avoiding the big decisions, we have set out a plan to deliver the future that the North sea�s workers and communities deserve. It is a plan to co-ordinate the scale-up of clean energy industries, from offshore wind and hydrogen to carbon capture and storage; a plan to give the oil and gas sector the support and clarity it needs to continue operating for decades to come; a plan for energy security and sustainable economic growth; and a plan to keep working with the people who matter most�the North sea�s businesses, workers, communities and trade unions� to take advantage of the tremendous opportunities of the years ahead together. I commend this statement to the House.
The shadow Minister quoted trade union representatives, having not met them or supported them in government. That is always rich. [Interruption.] He says that he did; I stand corrected, although I suspect that he did not do it often. He quoted the general secretary of the GMB, so let me quote him back. The general secretary said:
�Tory ideology has left the UK vulnerable and exposed. Our Government stood by and exported the bulk of the jobs, closed gas storage and failed to invest in new nuclear and skills.�
I thank the shadow Minister for his questions, and I will come to them shortly, but I have to say that this is a fairly familiar story from the Conservative party: no acknowledgment of their failed record on the North sea, no acknowledgment of their having presided over the worst cost of living crisis in a generation, and no answers to the future challenges that our country faces. I remind the hon. Gentleman that it was his party that lost 70,000 North sea jobs in less than a decade. His Government were content for those workers to have to go around the world to find jobs, but this Government want to keep those talents here in the UK, which is why, unlike the last Government, we have a plan.
In my statement, I said that everyone accepts that the North sea is a declining basin. I do not know whether the shadow Minister understands the basic geology, but this is a super-mature basin, and the harder it becomes to drill for oil and gas, the less likely it is that people will be successful. Only one in 10 of the licences that have been offered and granted in recent years have ultimately led to any work.
The hon. Gentleman needs to establish what his party�s view of this agenda is. The hon. Member for West Suffolk (Nick Timothy), who is sitting next to him, had some very peculiar things to say in Westminster Hall yesterday, and it is unclear exactly what their position is. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) was a Minister for the grid who opposed grid infrastructure, he was a Minister for solar who opposed solar power, and here he is now, the Minister for Aberdeen, campaigning against jobs and investment in his own community.
We are getting on with a plan for the future. First, we will invest in clean power. It is ludicrous that at this time when our bills depend on what Putin chooses to do and we have to respond, the shadow Minister is suggesting that we should do more of that. Even if there were no climate change, even if there were no push to clean power, if we drilled as much oil and gas from the North sea as we possibly could, it would amount to less than 1% of the global market and would have no impact on bills whatsoever.
We will give immediate support to workers�we have explained how we will do that�and we will support Scotland more widely. We will support Great British Energy in Aberdeen. We will support Grangemouth with �200 million from the national wealth fund. Harland and Wolff in Arnish and Methil has been saved from closure. Yesterday, the Port of Cromarty Firth received �55 million through the floating offshore wind manufacturing investment scheme. Twenty per cent. of the contracts in allocation round 6 of the contracts for difference auction are going to Scotland. We have hydrogen investment in Cromarty and Ayrshire. We have the biggest budget for the Scottish Government that we have seen. This is a party that is committed to supporting the people of Scotland, not overseeing managed decline.
I call the Chair of the Select Committee.
The Minister was right to remind us that the North sea is a mature basin, she was right to remind us that 70,000 jobs have been lost there in the last 10 years, and she was right to praise the highly skilled engineers who have made such a contribution in the North sea and to the country. She mentioned the skills passport, and said that the Government were making progress with the industry in finding alternatives in the jobs transition. The Select Committee has heard, a number of times, evidence that one of the challenges is the fact that pay in the North sea is significantly higher than pay in equivalent jobs in the renewable sector, and offshore wind in particular. What, at this stage, are the Minister�s thoughts on how we can make pay more attractive for workers moving from oil and gas into renewables?
I thank my hon. Friend for his work on the Select Committee, which is very important. As he knows, for a long time we have been a bit stuck in trying to set up a passport system because of the slightly different skills and qualifications in each industry and the need to bring them together. The Government became involved to try to ensure that we could bridge that gap and enable people to make the transition. Oil and gas workers are highly skilled and greatly in demand, and, as my hon. Friend says, they are paid a good wage. We need to work with the new offshore wind companies; we like to see union recognition, and we like to see good salaries for people doing those jobs as well. There will be other jobs that people can go into. The plan is to help people make the transition rather than leaving them adrift as the last Government did.
Order. There is always a maximum of two minutes, and you have exceeded it. Please be seated.
I thank the hon. Lady for her remarks. On upskilling and redeploying workers, as I said previously, we are introducing the passporting scheme and making sure that we can break down the barriers that exist in different industries, because the skills and talents of people working in oil and gas can be transferred to renewable energy. We want to make sure that we do that.
The hon. Lady talks about vulnerable residents and the cost of heating, and she is absolutely right to do so. We have all suffered from the huge cost of living crisis caused by Putin�s invasion of Ukraine. We are doing what we can, and 6 million people will now get the �150 warm homes discount this winter, which will help with their energy bills.
The hon. Lady asks about the windfall tax. The clue is in the name: it is a tax on windfall profits. While the oil and gas industry is making windfall profits, there will be a windfall tax; when it is not, there will not be. That is the way the scheme works, but her points on the need to insulate homes�we are working at pace on that�and to support vulnerable people are absolutely right. The basic principle is that we have an energy bill rise driven by fossil fuels, so we must move to home-grown power for our energy security and for long-term bill reductions.
I congratulate the Minister on setting out a plan that supports jobs, skills and communities in the face of technological change�unlike the Conservative party, which abandoned wholesale our industrial base in the 1980s. Like the north-east of Scotland, the north-east of England has jobs, skills and opportunities that depend on the energy of the North sea. Kinewell Energy, in my constituency, leads in wind farm design optimisation. Can the Minister confirm that she will work with the Mayor of the North East, Kim McGuiness, to ensure that the north-east of England benefits from the jobs and opportunities of the North sea?
I meet industry representatives all the time, and their response to Kim McGuiness is great. She is such a force of enthusiasm, knowledge and power for her communities, and people engage with her. They like what she says about investing in the north-east, and they are responding to her. She is making a real difference in her community. We are doing all we can, through all kinds of levers that the Government can use, to make sure that the investment in clean energy supports all our communities. My hon. Friend is right to highlight the fact that we need to take advantage of the particular skills of people in the north-east.
I ask the Minister to keep her responses short.
Forgive me, Madam Deputy Speaker. I am over-enthusiastic and have so many things to say.
I always worry when my hon. Friends quote my words back to me. My hon. Friend and I have talked often about ceramics, and I am well aware of the issues. We had a great debate in Westminster Hall this week on the ceramics industry�s challenges with the transition and with energy prices. We are well aware of all of them, and we are working to fix them. I give as much time to ceramics as I do to any other industry, and I will continue to do so.
My hon. Friend will know about the announcements that were made recently about support for Grangemouth. In the last couple of weeks, I met INEOS to talk about its chemical factory and the huge contribution it brings in terms of jobs and the provision of chemicals. The �200 million investment from the National Wealth Fund is really important in this space. The work that the Government have done to look at possible businesses and industries for Grangemouth in the future is really important and I am very happy to have a conversation with him.
While I very much welcome the move towards clean energy, my concern is that we cannot allow energy prices to rise any further, especially when we take into account the loss of the winter fuel payment for many pensioners on the poverty line. How will the Minister ensure that clean energy and heat will not be out of reach for those who are already struggling: the elderly, the vulnerable, those in poor health and those in poverty?
The hon. Gentleman raises a really important point. We know that energy bills have been rising because of the oil and gas we rely on and the impact of the war in Ukraine. We have massively increased the warm home discount so that 6 million households will get �150 to help towards their energy bills, but he is right to champion people who are going through a cost of living crisis. We will do what we can to support them.
That marks the end of the statement. I could not get all colleagues in because questions were so long, and answers were occasionally just as lengthy.
(1 month, 2 weeks ago)
Commons ChamberWord salad? Gosh. That abuse from the Opposition Front Bench has cut me to the core. The industrial strategy has set out eight sectors that will turbocharge the economy. Across all those sectors lie our foundational sectors, of which the chemical industry is one. We will support that industry in a way that his Government failed to do.
I thank my hon. Friend for his question. I saw the talent and potential for myself when I visited Exeter in September for Great South West’s annual conference. I am visiting the region again in a few weeks, because there is huge potential, huge excitement and huge opportunities to grow. As he knows, there is £1.8 billion from the national wealth fund to invest in our ports. I am very happy to meet him and others to see what potential we can discuss.
My hon. Friend makes a good point, and I would be happy to meet a group of MPs from her area. The ambition on airport expansion was very clear in the Chancellor’s speech yesterday. We are hungry for growth; we set that need alongside the need to decarbonise our airspace. Yesterday, I chaired a meeting of industry experts looking at how we can turbocharge our decarbonisation of aviation.
I would be pleased to meet my hon. Friend the Member for Doncaster Central (Sally Jameson), and I agree that we need to grow all parts of the UK to make this work.
(1 year ago)
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My hon. Friend is far more knowledgeable on steel plants and steelmaking than I could ever be. The discussions continue. There is a consultation taking place. I was with the unions this week. They will continue to push their plans, which Tata has made clear are neither credible nor economically viable. But within those plans there is a proposal that electric arc furnaces will be upstream, not years away but in a couple of years’ time, which also gives assurances to the supply chains. My hon. Friend knows that the negotiations continue with British Steel and she will probably want to intervene on me later. A huge amount of support was provided by Tata and the transition board, which makes this a far easier programme of work to manage.
Tata has seen a decade of financial losses, with the Port Talbot plant reportedly losing £1.5 million every day. As I mentioned earlier, those challenges stem from complex international dynamics. China’s long-standing practice of flooding the global steel market with subsidised products has been a significant factor. Despite our efforts to mitigate the impact of cheap imports through domestic measures and challenging unfair practices internationally, we cannot ignore the harsh economic reality.
I will in a moment. Private companies in the UK steel industry are facing immense difficulties in turning a profit. In fact, without the opportunity to transition to a modem electric arc furnace, the existence of the Port Talbot plant would have been in jeopardy. I cannot stress that enough.
On the point that the Minister makes about China, we know that the cheapest steel from China has been a factor, but major importers to the UK are western European nations: the Netherlands, Italy, Spain and Germany. We are not competing with them, either. There is a fundamental problem in the way that we run this economy, which has meant that our industries cannot be competitive when others in the European Union can be.
I thank my hon. Friend for putting that on the record. I am not sure what evidence the hon. Member for Croydon Central has that the plant would not have been under threat. When Tata circulated information prior to our debates or made announcements, it said that there was an absolute threat to Port Talbot and the company. The reality is that if we did not provide that support, there was a risk of losing all 8,000 jobs.
The hon. Gentleman knows better than most that these conversations and negotiations have been going on for years. The Labour party had an opportunity to invest in the blast furnaces when it was in government, and it did not do so. He also knows that the blast furnaces are coming to the end of their life, so a decision would have to be made at some time. Tata could have decided to exit completely, which would have resulted in a loss of the 8,000 jobs and certainty in the supply chain. The hon. Gentleman knows that, because he had I have been at meetings with the unions and at the transition board. I know it is very difficult when there are potential job losses in one’s constituency, but the reality is that the model was not working.
Before I give way to the hon. Member for Croydon Central, let me say that Opposition Members constantly want harder, greener net-zero policies, and this is what happens when we flow those through. Customers—end users—want cleaner, greener steel that is made in electric arc furnaces, and this is the outcome of that demand. The reality is that, without the support, there would have been a high risk of Port Talbot and Tata no longer producing steel in the constituency of the hon. Member for Aberavon (Stephen Kinnock).
The Minister is being very generous in giving way. I want to return to the point about whether it was this deal or the end of everything. If the Government had paid attention to their own report in 2017, which said, “Here are the problems with the steel industry: the supply chain, skills, R&D and transition,” and responded with a steel strategy, Tata would not hold all the cards and would not be able to say, rightly or wrongly, “It’s all or nothing.” We would not be in this situation. But the unions are supporting a reasonable deal that has a calmer transition and would not lead to job losses. Does the Minister think there is merit in that union plan?
I will go on to reference that, but not all unions subscribe to the plan, as the hon. Member knows. It was put forward by a collective, but not by all of them. Tata has been clear that keeping open a blast furnace for a very narrow period of time while opening up electric arc furnaces, which will provide the certainty that we need so that we can use scrap steel in the UK, is neither credible nor financially viable. Keeping a blast furnace open also creates difficulties around security and health and safety.
The negotiations continue, and a consultation is taking place. I was asked about what I am doing to ensure that Tata is observing the parameters of that consultation. The transition board is in place, and our focus is on ensuring that the consultation is as wide and deep as it can be, and that the transition board can do the job that it was set up to do, with huge sums of money.
I have already mentioned, and I cannot reiterate enough, the threat that the Port Talbot plant was under. We recognise the vital importance of the steel industry to the community’s heritage and identity. As I have mentioned, the Government have committed £500 million —the biggest sum ever invested in the steel sector—as part of a total investment of £1.25 billion to ensure the future sustainability of Port Talbot steel. That is what we have been able to do, and we should reflect on that. The investment is a huge step towards fortifying UK steel. Sustaining the blast furnaces would entail significant additional losses for the company and compound its current issues. Moreover, as the hon. Member for Llanelli knows, the UK’s blast furnaces, such as those in Port Talbot, are approaching the end of their operational lifespan.
My hon. Friend raises an important point. UK Steel and a number of other umbrella organisations have done a huge amount of work in this space, including with universities in Wales, and they have huge confidence that we could retain most of the 11 million tonnes of scrap steel that circulates in our economy and the 8.2 million tonnes that is exported overseas for use in the electric arc furnaces. Technology will move forward as well—it never stands still—but Tata is confident that it can meet 90% of the contracts it has in place at the moment.
May I make an observation? It is helpful if the Minister can respond to one intervention before people bounce up and down for the next one. Let us take it calmly.
It has been a while since I bounced up and down, Chair; I am too old for that. Is the Minister exploring incentives to keep scrap steel in this country? Because at the moment we export it all. Is she looking at VAT relief, tariffs or restrictions to help that process?
I will make some progress before I take any further interventions. If the hon. Lady paid more attention to the business model, she would know that we cannot use more scrap steel in the UK economy because we do not have the capacity. But we will with the electric arc furnaces, which will be the dynamic change that is definitely needed.
Furthermore, by reducing our reliance on raw materials such as iron ore and coking coal, electric arc furnace technology offers a more sustainable alternative. Unlike blast furnaces, electric arc furnaces use scrap materials that are readily available—as I said, we have around 11 million tonnes circulating—from abundant domestic sources in the UK. In fact, the UK ranks among the top exporters of steel scrap globally, second only to the United States. Leveraging our ample supply of steel scrap for electric arc furnace production enables us to create new steel products locally, supporting British and international manufacturers alike. Every tonne of steel scrap that is sourced domestically diminishes our dependence on raw material imports from overseas countries, none of them near neighbours.
Wider support for the steel industry was raised in the debate. More widely, we are backing UK-made steel and, crucially, we are backing it in the right way, investing hundreds of millions of pounds to help the industry to thrive in increasingly challenging global markets. We are launching initiatives such as the British industry supercharger, which reduces electricity costs for the steel industry and other energy-intensive sectors, bringing them closer in line with the charges of other major economies. That is complemented by the £730 million in energy cost relief given to the steel sector since 2013. We have given specific support through our energy bill relief scheme and energy bills discount scheme.
We are, then, ensuring the resilience and prosperity of the UK steel industry in the face of increasingly competitive global markets. This work is preparing UK steelmaking for the coming years, but it is not the final word in future-proofing the industry. The SUSTAIN future manufacturing research hub, which is led by Swansea University, is the largest fundamental research activity centre working right now to decarbonise and improve the efficiency of steelmaking in the UK. I believe it is also looking at the quality of scrap steel and new technologies to ensure that we can make even more products using steel in the UK.
Other points were raised by the hon. Member for Cynon Valley (Beth Winter), who serves on the Welsh Affairs Committee. I will go through the transcript from that Committee; I am across most of the issues raised. She asked about an unlimited budget; I am not sure that having an unlimited budget is a good use of taxpayers’ money, nor does it answer the question about the demands of customers looking for cleaner green steel.
A question was asked about absorbing further technologies. We are looking at electric arc furnaces at the moment, but that product is just the first step. As other technologies become commercial, they could be considered in future. I thought the question about our taking a stake in the company was curious because that is not something that we do. Regarding the condition on the grant, the consultation is taking place, and agreements are still being finalised and will include appropriate conditions on the grant. That is why the transition board is vital to that conversation. The grant will be paid in arrears against set milestones for the build of the electric arc furnace.
(1 year, 1 month ago)
Commons ChamberMr Speaker:
“The UK steel industry, the trade unions, and Labour are…proposing an industrial policy worthy of a serious industrial country.”
Those are not my words but those of the world economic editor of The Daily Telegraph writing yesterday. He also said that
“the Government’s minimalist plan…does just half the job, leaving the UK with a stunted second-tier industrial base, the only G20 country lacking a sovereign capability in ‘weapons grade’ primary steel.”
He is right, isn’t he?
The £28 billion that Labour is proposing has no plan behind it, and we are not told what hard workers across the country would have to pay to fill that black hole. Labour has asked for a transition to green steel. It would want us to protect steelworkers and obviously would want to protect advanced manufacturing in the UK. Customers want cleaner steel. Port Talbot could no longer function with its ageing blast furnaces, and our package will save 5,000 jobs at Port Talbot.
(1 year, 3 months ago)
Commons ChamberMy hon. Friend is first and foremost an advocate for the steelworks and steelworkers in her constituency. Obviously that letter will be on its way, and I thank her so much for raising it.
We are used to this Government flip-flopping all over the place. It would be funny if it were not so serious for business, exports and jobs. So when we heard the Treasury telling everyone who would listen that the Government’s response to the carbon border adjustment mechanism would be in the autumn statement, we were not surprised that it was not. The future of steel investment and growth relies on a clear and certain path from Government. We cannot have our business disadvantaged any more, so what is the decision on the CBAM? If this Government cannot decide, is it not time to make way for one who can?
Decisions have to be taken while responding to the consultations that take place. We have been absolutely determined to ensure that steelmaking will remain competitive in the UK, which is why we have been able to support the steel sector with high energy costs and put over £1 billion in place to deal with decarbonisation technology. When it comes to Tata, the support we have pledged involves an investment of over £1 billion to ensure that jobs remain secure in the future, and negotiations continue with British Steel as well. That is the support that we have provided and will continue to provide for steel in the UK.
(1 year, 6 months ago)
Commons ChamberI call shadow Minister Sarah Jones and welcome her to her new position.
In Wales, it is reported that this Government will spend half a billion pounds to make thousands of Port Talbot steelworkers redundant. Head north to Derby to a train assembly plant, where thousands more jobs are under threat because this Government bungled High Speed 2. Head around the UK coastline and the Government have managed to misjudge industry so much that they secured zero offshore wind contracts. That is a UK tour of almighty Conservative incompetence. Labour will harness this country’s talent. Will the Minister explain how many jobs the Government are losing us at Tata Steel, how many jobs they are losing us in Derby, how many jobs they are losing us in offshore wind, and why they are so intent on levelling down our great British industries?
I welcome the hon. Member to her post, but I suggest that leading on stories in the paper is not a good way forward. That is all speculation; we do not comment on commercial decisions. The reality is that there is £730 million in support with energy costs and more than £1 billion of support with decarbonisation. She talks about plans. Well, I am not sure if the Labour party’s plan stands for anything because it flip-flops so often. It is not just me who says that; let us reflect on a statement made by a union leader. They said that Labour was not only just an ’80s tribute act, but that it tends to sit on a “wobbly fence”. Who knows what Labour will say tomorrow after a statement made today?