British Steel: EU Emissions Trading Compliance

Oliver Letwin Excerpts

Wednesday 1st May 2019 Commons Chamber

[Greg Clark]

The hon. Gentleman started out welcoming the action we have taken and ended up, it seems, withdrawing that support. I will take the first half of his statement at face value and recognise that we have taken action to deal with an unusual and urgent problem, and have done so in a way that I think has displayed some agility. Advice has been taken, which will be fully disclosed to the Committees of the House, on the terms of the agreement and how it can be commercially benchmarked. Clearly, borrowing against allowances with a short period of time before the deadline—it is in the company’s gift and the company’s obligation to comply—requires moving quickly. The judgment we took was that we wanted to make sure we could secure against the possibility of the fine, and do so in a way that was commercially benchmarked. We have done that and it can be scrutinised. The deadline was last night. The fact that I have come immediately to this House to make a statement and publish the accounting officer’s advice I hope illustrates the transparency with which we have proceeded.

On the contingency that this arrangement has had and whether a deal has been approved, I put it as a matter of fact that the reason we had to make this transaction was that we have not, as a House of Commons, agreed a Brexit deal. We have not ratified a Brexit agreement. I said to my opposite number that I welcome the constructive discussions that are taking place. I hope that in the days and weeks ahead, the hon. Gentleman’s party might approach them in the same spirit and try to come to an agreement so that not just the steel industry but every industry in the country can have confidence in the terms of our relationship with Europe in the years to come.

[Sir Oliver Letwin (West Dorset) (Con)]

I congratulate the Secretary of State. My experience in government was that the most important things that Secretaries of State do are those least noticed. They are the crises that do not happen. He has, with supreme competence, dealt with what could have been an extraordinarily tricky situation, as all those involved in maintaining British Steel in this country know.

Is the Department taking steps to ensure that when we leave, as I hope, in an orderly way in the relatively near future with an agreement with the EU, there is a proper substitute for the ETS on a domestic basis that will complement the measures that the Secretary of State for Environment, Food and Rural Affairs is taking in a whole realm of cognate spheres?

[Greg Clark]

I am grateful for the endorsement of my right hon. Friend, not least because in the previous Government he played the role he has ascribed to me with some deftness and success on many different occasions. He is absolutely right that agreeing to a withdrawal agreement would allow our continued participation until at least December 2020, giving us the time to put in place different arrangements, which would be in our gift. One reason we felt that it was important that British Steel should comply is that the institutions that drive compliance with emissions reductions targets should be respected. We want to send a clear signal that we expect the targets to be respected and implemented. That will take place while we are a member of the European Union and, as my right hon. Friend indicates, afterwards too.