Britain’s Industrial Future

Sarah Champion Excerpts

Tuesday 15th November 2022 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

At its heart, Rotherham is an industrial town. Coal, steel and glassmaking have been at the core of our identity since the industrial revolution. Although coal may have gone, my constituency still houses a substantial glass manufacturing business, in Beatson Clark, and steel production, in Liberty Steel. As energy-intensive industries, both have been severely impacted by the current colossal increase in the cost of energy. In August, the average UK wholesale price of energy was a staggering £370 per megawatt-hour, as against a pre-crisis level of £50 per megawatt-hour.

Alongside that exponential rise, UK carbon prices have reached historic highs, costing the steel industry an estimated £125 million in compliance costs this year. That not only harms the competitiveness of the sector, but reduces the capital available to the industry to invest in decarbonisation. Capping energy prices for businesses for six months was broadly welcomed by the energy-intensive industries. However, that remains a short-term solution. Industries are understandably fearful of a cliff edge when the support ends. It must be recognised that both steel and glass manufacturing do not operate in a vacuum. The German Government have confirmed the introduction of a scheme running for the entirety of 2023 that caps power prices for industry at £110 per megawatt-hour, which is more than £100 cheaper than the UK price cap scheme. That offers German steel producers not merely cheaper energy costs than UK competitors, but the stability needed to plan for the long term. In contrast, we have heard only deafening silence from the Government on what comes next.

The rising cost of energy is, of course, unprecedented, but the problem of an uncompetitive UK energy market is not new. Even before the current crisis, the costs associated with UK glass manufacturing were 62% higher than those in Turkey. Similarly, UK steel has, for years, faced considerably higher energy costs than European competitors. This has been brought to the Government’s attention time and again, but their approach has been to listen, offer warm words and then do precisely nothing.

UK Steel recently published its five priorities for the new Government. To anyone who has followed debates on the steel industry for the past decade, these are surprisingly familiar. They call for competitive energy prices, a net zero strategy aimed at delivering a green, modern industry, action on dumping of cheap subsidised steel, a commitment to use UK steel in public infrastructure projects and the creation of a UK steel innovation fund—not so new or ground-breaking, but not done by this Government.

We cannot afford to waste another decade repeating the same practical, sensible demands to a Government who have shown neither the willingness nor the ability to deliver solutions. But that is consistent with the broader failure in the Government’s industrial policy. In my 10 years as Rotherham MP, I have called repeatedly, as have my colleagues, for the Government to work with the industry to develop a clear, forward-thinking industrial strategy. The inclusion of “industrial strategy” in the name of a Government Department is not what I had in mind.

The current crisis must be a wake-up call. UK industries cannot hope to compete internationally if they continue to be hamstrung by a Government whose so-called industrial strategy is based entirely on inertia. It is simply not good enough for Government Ministers to stand at the Dispatch Box and tell this House how important these industries are, to recognise their contributions to the UK economy, but then hang them out to dry with their actions—or lack of actions.

I have heard it all before. My constituents have heard it all before. I urge the Minister to reflect on his Government’s record of failure with the industrial sector and work with these industries to deliver the vital support that they need to weather the current storm, and also to provide a policy environment that allows them to play their crucial part in driving our economy in the years to come.