CCUS Track 1 Contingent Liabilities: Padeswood
Sarah Jones Excerpts(1 week, 2 days ago)
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The Minister for Industry (Sarah Jones)
Today, I am pleased to have laid a departmental minute with an update on the contingent liabilities associated with the carbon capture usage and storage track 1 clusters, HyNet and East Coast Cluster. This update is in anticipation of our signing contracts with the Padeswood cement project, which we expect soon, subject to timely conclusion of negotiations and resolution of outstanding conditions. Padeswood is a key demonstrator for decarbonisation of the cement industry, on which the security of the UK’s net zero transition is dependent. The addition of further CO2 capture projects like Padeswood was planned and is part of the Government’s plan to maximise our investment in the HyNet cluster. Contingent liability Maximum exposure (£m) for Padeswood Reasonable worst-case (£m) for Padeswood The discontinuation of capture project contracts 447 187
Context
CCUS is the only feasible method for decarbonising many hard-to-abate sectors, including cement. Located in north Wales, Padeswood will be the first at-scale UK cement plant incorporating carbon capture and storage technology. The project presents a high value opportunity for the UK to secure a strong global foothold, in a growing customer market, for low-carbon cement production.
His Majesty’s Government’s CCUS programme is the first of its kind and consequently we have sought to overcome multiple market barriers which inhibit the development of a CCUS market in the UK. The costs of constructing and operating CCUS currently exceed the costs of emitting CO2—Government support is necessary to address these challenges and enable CCUS deployment at scale. Parliament agreed in November 2024 to accept five contingent liabilities within the CCUS track 1 contracts in order to reduce investor risk in CCUS technologies by bearing some of the initial risk inherent in developing a CCUS market, as well as the cross-chain risk existing across the participants in the CCUS network.
Parliament was notified on 13 November 2024 of the five CLs outlined below, which are associated with the various CCUS track 1 contracts. These were:
The supplemental compensation agreement, which is a long-term mechanism within the Government support package that enables the management of leakage risks at the geological store during operations and the post-closure period.
The revenue support agreement, which addresses demand-risks by providing for payments to CO2 transport and storage companies if their allowed revenue is not covered by user fees.
The discontinuation agreement, which provides a right for the Secretary of State to discontinue support to the transport and storage companies and entitles investors to be compensated for their investment.
The decommissioning shortfall agreement, which covers potential decommissioning fund shortfall which might arise if decommissioning is required before the fund has been fully built up.
The discontinuation of capture project contracts, which allows for payment of compensation to capture projects for any losses due to a qualifying change in law or prolonged CO2 transport and storage unavailability.
Now that HMG is near finalisation of negotiations with the Padeswood project, I am updating Parliament on our exposure to these contingent liabilities.
Update to contingent liability exposure
The table below shows the impact of signing contracts with the Padeswood project for the discontinuation of capture project contracts contingent liability. It is important to note that while the table below represents the maximum possible exposure, the probabilised exposures and likely crystallisations are far lower. There are robust risk management frameworks in place. Our assessments indicate that there are no liabilities that are likely to be realised and the vast majority are very remote.
The increase in maximum exposure outlined above is necessary to allow us to decarbonise, not deindustrialise, our cement industry. The adoption of the five contingent liabilities summarised above is already allowing HMG to deliver a first-of-a-kind CCUS sector, which we know will be vital for delivering on our net zero targets, as well as supporting jobs and growth in our industrial heartlands.
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Contingent Liability Notification
Sarah Jones Excerpts(1 week, 3 days ago)
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The Minister for Industry (Sarah Jones)
I wish to make Members aware of the details of a contingent liability guarantee, which will be entered into in favour of npower in accordance with and pursuant to the Steel Industry (Special Measures) Act 2025 to support British Steel Ltd and for the purpose of securing the continued and safe use of blast furnace operation in Scunthorpe.
The guarantee will replace the existing substantially similar credit support that is required by the terms of the underlying supply agreement, and would be in respect of British Steel Ltd’s payment obligations to npower. Without such guarantee, British Steel Ltd would otherwise be unable to access the bespoke rates they need or would only be able to do so on materially worse terms.
The terms of the guarantee ensure that the impact to the public purse is reduced. The guarantee will terminate immediately where the Steel Industry (Special Measures) Act ceases to be in force in relation to British Steel Ltd and/or where the directions issued under the Steel Industry (Special Measures) Act in relation to British Steel Ltd are revoked—i.e. when British Steel Ltd is no longer operating under His Majesty’s Government’s direction.
Authority for any expenditure required under this liability will be sought through the normal procedure. I will be laying a departmental minute today containing a description of the liability undertaken.
If, during the period of 14 parliamentary sitting days, a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
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UK Automotive Sector: DRIVE35
Sarah Jones Excerpts(1 week, 5 days ago)
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The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)
As part of their industrial strategy, the Government have announced a new £2 billion programme to unlock investment in our automotive industry, DRIVE35—driving research and investment in vehicle electrification.
Building on the successes of the automotive transformation fund and Advanced Propulsion Centre R&D programmes, this programme will support the latest research and development, accelerate commercial scale-up, and unlock capital investment in zero emission vehicles, batteries and the wider supply chain. It will ensure continuity in Government support while transitioning to a new funding offer for investors that is much simpler, clearer and faster. The new programme will work alongside the national wealth fund, as part of a comprehensive offer to attract strategic investments.
DRIVE35 will provide long-term certainty to investors, with capital funding over five years and R&D funding for 10 years, to 2035. This long-term commitment is a vote of confidence in the sector, supporting its transformation to unlock growth and enable competitiveness.
We will release further detail in the coming weeks, and will continue to engage with industry as we take forward our plans.
As with all financial assistance, Government will disburse DRIVE35 funding via specific spending powers. As part of the requirements for capital spending under section 8 of the Industrial Development Act 1982, the Government are today tabling a parliamentary motion seeking authorisation to disburse up to £1 billion of DRIVE35’s total £2 billion via section 8. The motion is as follows and will be debated in due course:
“That this House authorises the Secretary of State to undertake, during the period beginning with the date of approval of this motion and ending on 31 July 2030, to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, grants to businesses as part of His Majesty’s Government’s project to support zero-emission vehicle manufacturing in the UK and the UK’s automotive supply chain, including to support the creation of jobs, private investment into the UK, the development of the automotive industry and emission reductions, up to an overall limit of £1 billion, and to pay during or after that period the grants that are undertaken to be paid.”
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Steel Trade Measures: Call for Evidence
Sarah Jones Excerpts(1 week, 5 days ago)
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The Minister for Industry (Sarah Jones)
Steel is essential for a modern and secure economy underpinning many sectors, from construction to advanced manufacturing. The UK steel industry provides high-quality jobs in local economies—circa 40,000 jobs across the country and circa 61,000 jobs in the upstream supply chain in 2024—and plays a vital role in infrastructure, manufacturing and defence supply chains, which are critical for economic growth. However, the UK steel industry faces a challenging global trading landscape due to significant steel overcapacity. This overcapacity introduces unfairly cheap imports into the market, artificially lowering prices, reducing profitability, and hindering investment.
The UK Government have taken steps to protect our steel industry from unfair trading practices through the use of trade remedies. This includes a safeguard measure on certain product categories of steel due to expire on 30 June 2026. Initially applied in 2018 by the EU on behalf of the EU28, the measure was transitioned to the UK’s independent trading system after leaving the EU.
It is within this context that we are launching a call for evidence on steel trade measures, inviting stakeholders across the steel supply chain, including manufacturers, distributors, and end-users of steel products, to provide input, as well as other industries that may be indirectly affected by tariff policy changes. The evidence gathered will support the development of future trade policy options for imported steel products, following the expiry of the steel safeguard. Our goal is to ensure a balanced approach that considers the needs of all interested parties.
The call for evidence will be open for six weeks and will be available at https://www.gov.uk/government/calls-for-evidence/steel-trade-measures We encourage all interested stakeholders to respond. The objectives of this call for evidence have been designed to align with the UK’s trade strategy and industrial strategy, the resilience of steel supply chains, and other wider priorities within the steel strategy.
Background
The UK steel industry faces a challenging global trading landscape due to significant steel overcapacity. The OECD estimates the gap between global steel production capacity and demand—“excess capacity”—was 551 million metric tonnes in 2023. Research from the OECD has shown the global steel excess capacity is expected to continue to worsen beyond 2026. Compounding this problem is trade deflection resulting from other countries’ responses to steel excess capacity and increased geopolitical trade tensions between major trading partners.
This overcapacity artificially and unfairly lowers prices, reducing profitability and hindering investments in modern and lower-carbon technologies. In this global context, increased dependency on steel imports then impacts the security and resilience of UK supply chains and exposes the UK to the risk of price fluctuations and disruption. The UK Government have taken steps to protect our steel industry from unfair trading practices through the use of trade remedies. This includes 15 anti-dumping and two anti-subsidy measures on imports from seven individual countries, and a global safeguard measure on steel imports. This safeguard is set to expire in June 2026 in line with World Trade Organisation rules.
The Government recognise the importance of the UK steel industry and the need to ensure the security and resilience of the UK’s steel supply chains and to explore long-term protection beyond the expiry of the steel safeguard. It is within this context that we propose to gather stakeholder views on evidence that will inform future trade policy options on imported steel products.
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British Steel
Sarah Jones Excerpts(3 weeks, 1 day ago)
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The Minister for Industry (Sarah Jones)
The Government committed to updating Parliament on British Steel every four weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
As the Chancellor set out at spending review on 11 June, this Government faced a choice in April: to let British Steel collapse, or to intervene. We were not prepared to tolerate a situation in which Britain’s steel capacity was critically undermined, or to see another community with a deep industrial heritage lose the pride, prosperity and dignity that industry provides. We are proud of our decision to intervene to save British Steel in Scunthorpe, and the jobs that come with it.
Since my last written ministerial statement on British Steel on 20 May, I have written to several Members to respond to further questions. Work continues to develop an impact assessment and bring forward regulations under section 7 of the Act, which allow the Secretary of State to introduce a compensation scheme for steel undertakings that have received a notice under the Act. We are committed to facilitating ongoing scrutiny of the Government’s use of these powers and, to that end, the Secretary of State has replied to correspondence from the Chair of the Business and Trade Committee, and Baroness Jones will shortly write to the Lords Constitution Committee in response to their report entitled “Fast-track legislation and the Steel Industry (Special Measures) Act 2025”, published on 8 May.
Our intervention in British Steel under the Act has enabled the company to continue to operate two blast furnaces in Scunthorpe, and we have secured sufficient supplies of raw materials to maintain this asset configuration for the coming months. As hon. Members are aware, the redundancy consultation initiated by British Steel’s owners, Jingye, was cancelled shortly after the Government’s legislative intervention, removing the immediate risk to 2,700 jobs, and I am pleased to confirm that British Steel is now seeking to enrol its first apprentices in over 3 years. More than 200 people have applied to become British Steel apprentices as the business seeks to develop its next generation of engineers and technical experts, all based in Scunthorpe.
I am also delighted that British Steel, the UK’s only manufacturer of rail, has secured a new £500 million long-term supply contract with Network Rail. The 5-year agreement has an option to extend for a further 3 years and ensures that British Steel retains its position as principal supplier to Network Rail, the organisation which operates and maintains Britain’s rail infrastructure. British Steel will deliver between 70,000 and 80,000 tonnes of rail a year, all manufactured at Scunthorpe.
Government officials continue to work onsite in Scunthorpe, supporting British Steel’s management team. Our priorities remain continuing production, stabilising operations and remedying critical health and safety issues. Since the Government took control of operations, significant progress has been made to improve safety standards.
We recognise the ongoing interest from Members across both Houses regarding the funding that will be required for the Scunthorpe site. The position remains that all funding will be drawn from existing budgets, within the spending envelope set out by the Government at spring statement 2025. As the Prime Minister and the Chancellor have made clear, the UK's fiscal rules are non-negotiable.
To date, we have provided approximately £100 million for working capital. This covers items such as raw materials, salaries, and addressing unpaid bills, including for SMEs in the supply chain. This does not take into account future revenue. As previously confirmed, the Department for Business and Trade’s accounts for 2025-26 will reflect the financial support that the Department has given to British Steel.
As spending review 2025 has highlighted, this Government are investing for the long-term future of UK steel—from £500 million for Tata Steel in Port Talbot to new nuclear-grade capacity at Sheffield Forgemasters—and we will invest in Scunthorpe’s long-term future. However, we have been clear that there also needs to be private investment to modernise British Steel. Work continues at pace to develop the optimal policy and strategy approach, and we are working closely with Jingye to inform that process.
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Oral Answers to Questions
Sarah Jones Excerpts(1 month ago)
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Kenneth Stevenson (Airdrie and Shotts) (Lab)
The Minister for Industry (Sarah Jones)
The Department is making good progress developing our industrial strategy—a strategy that has been called for by industry for many years and opposed by the Conservatives for ideological reasons. We have launched our consultation, we have met industry and thousands of businesses across the land, and we are finalising our report, which we will be publishing shortly. The spending review announcements yesterday on investment will add to the business growth in the country that we all want to see.
Alison Hume
British bus manufacturer Alexander Dennis announced yesterday that it is consolidating its operations in the UK to its Scarborough facility, placing 400 jobs in Falkirk at risk. The company is warning about competitive imbalance, the increasing market share of Chinese bus manufacturers and an absence of incentives for British-built vehicles. How are the Government planning to support British bus manufacturers as part of our industrial strategy?
Sarah Jones
This is a challenging and difficult time for the workers and their families at Alexander Dennis, as well as for the local area. As Members would expect, I have engaged extensively with ADL’s senior executives alongside the Secretary of State for Scotland, the Department for Transport and the First Minister of Scotland to discuss what we can do to support. We wrote jointly to the company, offering to support it in any way we can. There are many issues that we tried to talk through with its representatives. Bus manufacturing sits with the Department for Transport, so it is taking the lead, but we are working together to do what we can.
Kenneth Stevenson
Do the Secretary of State and the Minister agree that the industrial towns and villages that make up Lanarkshire must be central to any modern industrial strategy? Will they meet me, potentially in Airdrie and Shotts, to hear more about the excellent skills and potential that exist throughout the constituency that could undoubtedly contribute to their and this Government’s ambitious work?
Sarah Jones
Of course, our industrial strategy will speak to the whole country about the way that we are supporting businesses to grow and thrive. We have identified eight growth-driving sectors as the arrowheads of growth, but there are also policies that we believe will lift the whole country. I would be delighted to meet my hon. Friend. I congratulate him on the support that the local community showed in the recent Hamilton by-election, and look forward to talking to him further.
Sir Ashley Fox (Bridgwater) (Con)
As part of the Government’s industrial strategy, will the Minister and her colleagues in the Department for Science, Innovation and Technology carefully consider Somerset’s bid for an artificial intelligence growth zone? Its unique advantages—the Gravity local development order, and its existing connections to the grid—make it an ideal location to boost jobs and growth.
Sarah Jones
We have very big ambitions for AI and growth across the country, and I am very happy to talk to the hon. Gentleman about his proposals. I am sure that he has already talked to colleagues in DSIT, but I am very happy to take this matter further.
Max Wilkinson (Cheltenham) (LD)
Cyber-security will be a key pillar in the industrial strategy. That is welcome news in my constituency of Cheltenham, which is already a centre of excellence in the sector. We are on the cusp of unlocking £1 billion-worth of investment at the Golden Valley development in west Cheltenham. I know Ministers are aware of that, as are their colleagues in many other Departments. A planning application is expected very soon. Will Ministers join me in urging the two councils—the borough council and the county council—to get on with it and unlock that investment, which will bring growth to Cheltenham and the nation and, crucially, support defence as well?
Sarah Jones
As the hon. Gentleman will know, we are doing what we can to unlock the planning challenges that people have faced for many years in a whole range of areas. We are introducing legislation to do that, and making several changes. I obviously cannot comment on specific planning proposals in his area, but he should be reassured that we are doing what we can to encourage growth.
Dame Harriett Baldwin (West Worcestershire) (Con)
We have been promised a modern industrial strategy for nearly a year. First, it was going to be with us in the spring; then it was going to be published at the spending review; and now it will be here “shortly”. The industrial strategy seems to be a strategy to clobber industry with higher taxes and higher business rates. Will the modern industrial strategy have greater longevity than the Office for Investment? It was announced in October, and we were not given an update until last Thursday, when it launched. Yesterday, we were told in the spending review that it is now being restructured. What is the future for the Office for Investment?
Sarah Jones
I can guarantee the hon. Lady that our industrial strategy will have a longer shelf life than hers did; I think it lasted 18 months—I am not entirely sure. We forget, because it did not have much of an impact. We have worked with all industries across the country to put together a comprehensive package that will make it easier to do business in the UK, and support our city regions and clusters across the country, where we have excellent industry. It will turbocharge the eight growth sectors, and it will make the Government more agile in interacting with business. That is why we are reforming the Office for Investment, as we have always said we will. It is now a significantly more substantial organisation, and will give significantly more support. The hon. Lady should look at—
Mr Speaker
Order. I am really bothered, because we have only got to question 8, and I still need to call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats welcome yesterday’s announcements from the Chancellor on investment in public infrastructure projects. However, the general secretary of the Prospect trade union has warned that the UK lacks the skilled workers required for the new defence and nuclear projects outlined by the Chancellor. Similarly, Make UK and the Federation of Small Businesses have highlighted that a shortage of skilled workers would be a critical stumbling block for growth. As we continue to await the much-anticipated industrial strategy, why are the Government moving funding away from level 7 apprenticeships, when we know that they support social mobility? More broadly, why did they not seize the opportunity in yesterday’s statement to commit to fixing the apprenticeship levy, to ensure that money is invested in skills and training?
Sarah Jones
Forgive me for my long answers, Mr Speaker, but there is a lot to talk about in the industrial strategy, and I like to talk about it. The hon. Lady raises an important point. There is a significant skills challenge, and we will not shy away from it. Yesterday, £1.2 billion for skills was announced in the spending review. We have announced £600 million for construction skills, because that is a big issue for building the infrastructure that we need. We know we need to go further, and we are working closely with industry on how we can use the resources we have to recruit the welders, engineers—
Mr Speaker
Order. If there is so much to say, the Minister should bring forward a statement, or let us have a debate on this very important subject. I do not know how she will explain to MPs that they will not get in, because I am now going to topicals.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
The Minister for Industry (Sarah Jones)
I completely agree with my hon. Friend. I know that he will do what he can to promote his constituency, and the extra funding for the British Business Bank will really support his area.
Graham Stuart (Beverley and Holderness) (Con)
Space Industry
Sarah Jones Excerpts(1 month ago)
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The Minister for Industry (Sarah Jones)
It is a pleasure to serve under your chairmanship, Mr Betts. I join everybody else in congratulating the hon. Member for Wyre Forest (Mark Garnier) not just on securing the debate, but on the quality of the debate and the leadership he has shown as chair of the APPG for space. We have had an excellent debate and a lot of shared issues have been brought up. I was struck by the range of different parts of the country in which the space industry is thriving. It is important to understand and acknowledge that.
The hon. Member for Wyre Forest set out the case for the space industry. I do not think I need to repeat any of that, but he spoke about understanding the economic and productivity benefits, as well as the huge benefits to humanity, of satellite technology; how we can mitigate the challenges that the world faces through space; the opportunities for other sectors, such as finance, that are increasingly becoming part of this landscape; and the role of Government as a supporter of space but also as a customer. All those points were very well made. He also talked about the work that UKspace does—it is right that we acknowledge the importance of that organisation—and about businesses from the SMEs to the larger companies, and the ecosystem as a whole.
I will come to a number of points, but one of the most important is that, in a couple of weeks, we will have our industrial strategy, which will set out and prioritise the sectors in advanced manufacturing that are crucial and where this Government intend to turbocharge growth. I cannot reveal the contents of the strategy, but I can say that we are on the verge of having it, and I hope that everyone here will appreciate what is in it.
Later this year, we will hopefully see, for the first time, British satellites on British rockets launching from Scotland. I am putting in my bid to be there, and everyone else is welcome to do the same. I imagine it will be quite a thing to see; it is very exciting. We will also host a global space finance summit at the end of this year. I hope that the hon. Member for Wyre Forest will be able to come to that event, which I think will be an important and useful opportunity to bring in the finance element of this debate.
My hon. Friend the Member for Congleton (Sarah Russell) talked about Jodrell Bank and the Lovell telescope, and made important points about STEM education— I think pretty much everyone mentioned the importance of that. We have set up Skills England and, through our industrial strategy, we are working with the Department for Education to ensure that we tilt towards the courses that we need. Of course, STEM is key to that. My hon. Friend was also right to talk about the north-west cluster.
The hon. Member for St Ives (Andrew George) talked about Goonhilly and the importance of that resource to the country. My hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) talked about that, too, and about the importance of Spaceport Cornwall and the skills there.
The hon. Member for Strangford (Jim Shannon) talked about Northern Ireland, as he always does. He was right to highlight the importance of the defence and aerospace industry there and, in that context, the continued importance of the debate on Spirit. I think we can all be grateful that we were in this place when he said, “Beam me up, Scotty!”—I enjoyed that contribution.
As the hon. Member for Mid Buckinghamshire (Greg Smith) said, my hon. Friend the Member for Stockton North (Chris McDonald) hit the nail directly on the head, as he always does in relation to many different sectors. He talked about going down the Boulby mine, the cluster in the north-east and the importance of avoiding the valley of death scenario that we face in many different sectors, where we get brilliant research but do not quite manage to bring it to commercialisation, it goes offshore and we lose all that talent. Those were all very good points, well made.
I was asked by the hon. Member for Wyre Forest about the national debris mission. It is going through the next stage of approvals and is a live procurement, so I cannot comment on it, but I wanted to ensure that I responded on that.
We have all talked about the importance of our space industry here in the UK. It is the largest in Europe by revenue, by number of companies and by workforce, and, as was mentioned, it is one of the most productive parts of our economy, with almost 2.5 times the average labour productivity. As the Minister for Industry, in the past year I have had the opportunity to visit and speak to many of those fast-growing space companies. They include homegrown talents such as Space Forge, which I am sure several of us will have met, and BAE Systems, and companies from overseas that have chosen the UK as one of their homes, including ClearSpace and Lockheed Martin. I have had the opportunity to talk to them about their plans for growth and how the Government can support their ambitions, as well as engaging with the trade associations UKspace and ADS, which so keenly support our industry.
As I said, the industrial strategy will come out in a couple of weeks. It will be a 10-year long-term plan. One of the eight growth-driving sectors that we have identified is advanced manufacturing, and we will use the strategy to engage with businesses on the complex areas of policy that we need to address, including finance, planning, energy costs and grid connections, so that we can promote long-term growth.
We want to help more space companies to industrialise, and that means better access to finance and more strategic ways of working with individual space companies. It also means concentrating our efforts on a more targeted portfolio of space capabilities. In other words, we already do this well, so let us take full advantage of that and get a competitive edge. For example, we know that space technologies and services play a vital role in climate action, maritime domain monitoring, telecommunications, the gig economy and apps that rely on persistent positioning. The UK is already strong in the services and applications that space technology enables. Ensuring that space companies can overcome the complex and capital-intensive challenges to excel in these areas will be key to growing the industry now and in the future.
We also want to create a more resilient supply chain, which the hon. Member for Wyre Forest talked about, while improving regulations, which will be needed to enable more activities in our space industry. Of course, DBT does a lot of work in this policy area, but other Departments are important too—I will come to the challenges in a minute. Of course, the Department for Science, Innovation and Technology takes a lead, and the MOD, which published its new strategic defence review last week, is clear that being first in NATO means accelerating and enhancing our military space capability, so it recognises that there is more to do. We need to go further and faster, especially working with commercial companies. Towards the end of this year, all Departments will publish clear delivery plans that set out their priorities for space, their capabilities and exactly how we will work to deliver those priorities.
The hon. Gentleman spoke about the challenges that he had in government navigating the many industries that are responsible for space. We inherited that challenge and have not entirely resolved it. So many Departments have an interest in space for legitimate, very good reasons. A group of Ministers has met to talk about the challenge, and we are planning what to do. I am sure that as soon as we have anything to say on that front, we will come back to the hon. Gentleman. I recognise the challenge. So many things are happening in space, so many aspects of our lives are affected by it, and so many Ministers have a huge interest in it. That will always be the way, and we need to navigate that in a way that enables us to be laser focused on our priorities. We have a clear strategy and we are very ambitious about what we want to achieve.
I am grateful to the hon. Gentleman for securing a debate on this topic. We are absolutely committed to supporting our fantastic space industry, and are already investing in and supporting it. Last month, I celebrated Space Forge’s latest fundraising round, in which it secured £22.6 million. I was pleased to announce the opening of OHB’s new base in Bristol at the Farnborough international airshow—I think the hon. Gentleman was there. Earlier this week, I announced the Government’s support for a space industry partnership between BAE Systems in the UK and Hanwha Systems in South Korea, which is a massive step forward for one of the UK’s leading companies. We have really strong examples of international partnerships, the financial impact and the foreign impact, showcasing the power of our space industry to reach out around the world.
Andrew George
The Minister mentions the importance of international partnerships. In the context of the unpredictable environment in which negotiations take place, particularly with regard to trade with the US, what conversations have taken place between the UK Government and NASA? It is clear that a lot of UK companies, large or small, depend on ensuring that such relationships and future contracts are well founded.
Sarah Jones
The hon. Gentleman makes a good point. NASA and the European Space Agency are both really important in terms of ensuring that our companies get the contracts they need. We will work with our American counterparts on that. My focus with our American counterparts in recent weeks has been more on the UK’s steel industry, automotive industry and aerospace industry, up to a point, but I will take away the hon. Gentleman’s point about NASA. Of course, we need to support our companies in getting contracts, and we work closely together.
We can have different views about the future of space. Tim Marshall’s great book on the future of geography, which I have read, talks about space not in the context of a leap into a beautiful, unknown world, but as a continuation of the power struggles here in the UK, so it is important to work collaboratively across all kinds of agencies if we are to find a way forward. The spokesperson for the Lib Dems, the hon. Member for Harpenden and Berkhamsted (Victoria Collins), talked about how we navigate the legal future of space. That is an important point, and why we are supporting the space industry by giving an 11% uplift to the UK Space Agency’s 2025-26 budget. I hope that increase shows the direction of travel. Our trade strategy will come out in a couple of weeks. The world of exports is important to our space industry, and we need to ensure that we support advanced manufacturing and space through our trade strategy.
I hope Members are reassured of how important we see the space industry as being. We see it as one of the key growth-driving sectors. The industrial strategy will set out exactly what we are going to do. The hon. Member for Mid Buckinghamshire talked about the risk of losing world-class talent and industry from these shores; he will be an expert in that, as so much of it happened under the previous Government. We are trying to ensure that we attract and keep people here, and build young people’s talents to develop a space industry that we can all be proud of. Watch this space in terms of the industrial strategy; I look forward to coming back and talking about it.
British Coal Staff Superannuation Scheme
Sarah Jones Excerpts(1 month ago)
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The Minister for Industry (Sarah Jones)
I thank the hon. Member for Ashfield (Lee Anderson) for securing this debate, and I welcome the opportunity to set out the Government’s position on the BCSSS. There are a lot of hon. Members in attendance. Many have long associations with the coalfield communities they represent, and I know that this is an incredibly important issue to many people across the country. It is also a matter of great importance to me, and I am pleased to be speaking to the House following a meeting I had with the BCSSS trustees this afternoon.
Natalie Fleet (Bolsover) (Lab)
When we speak of the mineworkers’ pension, we speak of everyone who has sustained our pits, such as my constituents Anthony Peck, who joined the scheme aged 17, and Kevin Jowle, automatically enrolled when he became a deputy, without any consultation. Does the Minister agree that everyone deserves a fair pension and compensation for the £3.2 billion that the Treasury has received to date?
Sarah Jones
We believe that everybody deserves a fair pension, and I totally agree with my hon. Friend. I want to set out where we have got to.
As Members will be aware, this Labour Government committed in their manifesto to ending the injustice of the mineworkers’ pension scheme, and I was incredibly proud to deliver on that commitment last October. We committed to transferring the investment reserve fund back to members and reviewing the surplus arrangements so that the mineworkers who powered our country receive a fairer pension. I was incredibly proud that, after only three months in power, the Chancellor announced the transfer of that investment reserve fund at the Budget in October. This was the action of a Labour Government overturning an historic injustice that the previous Government had failed to act on.
Graeme Downie
Does the Minister agree that it is thanks to campaigners such as Bobby Clelland in my constituency and to the local party that we have managed to succeed in having the MPS move towards a resolution and seeing that money being paid out to those communities in the coalfields in my constituency? It is also thanks to people such as Alan Kenney in my constituency, who is leading the campaign in Scotland on the BCSSS. I hope that she will be able to give us some good news. Does she agree that this is thanks to those former miners who are always standing up for their communities and still fighting now for the justice they deserve?
Sarah Jones
Of course my hon. Friend is right. I want to thank everybody who has campaigned and worked for so long on the mineworkers’ pension and everybody who has been in touch with me and with colleagues across the House on the BCSSS. One of the most humbling events I have been to in my political life was speaking to former miners following the announcement on the mineworkers’ pension. I am incredibly grateful to the many people who have campaigned and who are getting in touch and showing us how important this is. Of course, we completely understand it.
Martin Wrigley (Newton Abbot) (LD)
This is a new topic to me personally. I was contacted by a constituent whose late husband, a good friend of mine, Michael Green, worked for British Coal at the time. He too was passionate that this money should be returned to the miners. Does the Minister agree that we need to get on with this and get this to happen as quickly as possible?
Sarah Jones
We are certainly moving as fast as we can. I will explain where the process has got to, and I hope that Members will be reassured.
The transfer of £1.5 billion from the mineworkers’ pension boosted pensions by 32%, which was an average increase of £29 a week for each member. The hon. Member for Ashfield made the point that this is about putting money not just into people’s pockets but into local communities, and that is incredibly important. I also understand that in the context of the BCSSS in exactly the same way. My officials are working closely with the trustees of the mineworkers’ pension on the review of the future surplus sharing arrangements, and we hope to come forward with proposals and reach an agreement on that soon. Having worked closely with the coalfield communities on the delivery of the mineworkers’ pension, I completely recognise the strength of feeling on the BCSSS.
Ian Lavery (Blyth and Ashington) (Lab)
I want to place on record my sincere thanks on behalf of my constituents and the people who work in the mining industry across the country for the fantastic work the Minister is doing in relation to the finances in the mineworkers’ pension scheme. Might she be able to inform the House what the main differences are between the MPS receiving the money and the challenges with regard to the BCSSS?
Sarah Jones
I thank my hon. Friend for his kind words, and I will do exactly that and set out what the challenges and the differences are.
Having a process of work ongoing with the mineworkers’ scheme and working out how we will do surplus sharing, we are now working on the BCSSS and what we do in that space, even though it was not a manifesto commitment. I wrote to the Chief Secretary to the Treasury in February and secured his agreement to undertake a similar review of the BCSSS, and that review is now well under way. The schemes are not identical. They are different, and the main difference is that there are currently no surplus sharing arrangements in the BCSSS. That is because they were removed in 2015 following two deficit valuations.
The situation at that time meant that members were unlikely to realise any increases to their pensions for a decade or more, and the Government risked having to find new money to fund pensions. Changes were therefore made, and an agreement was reached with the then Government that bonus pension increases would be paid for three years and that the scheme would invest so as to ensure that pensions could be paid, with the aim of returning the reserve to the Government in 2033. That is the main difference.
I met the BCSSS trustees, to whom I am grateful. We are working well together and will continue to do so. I first met them in April, during which I shared my determination to move at pace—that is a Government saying, isn’t it? But we will genuinely move as fast as we can on the review and to start that process for the Government and trustees, and we jointly commissioned analysis from the Government Actuary to inform our decision making.
Louise Jones (North East Derbyshire) (Lab)
I have heard from many of my constituents affected by the BCSSS, and many are advanced in age so there is a real need for speed. I appreciate the Minister setting out how committed she is to getting this sorted as quickly as possible and would appreciate hearing about any further things she could do to expedite it.
Sarah Jones
I completely appreciate my hon. Friend’s comments. I think everybody in this House shares them, and I feel that strongly and am committed to doing exactly that.
We have recently received the analysis from the Government Actuary on the options for making a transfer to scheme members. Because we received that information, I had a meeting with the trustees today to hear their views on that analysis. At that meeting, I committed to move at speed. My officials are meeting the Treasury tomorrow. We are going to put a recommendation to the Chief Secretary to the Treasury, and I made a commitment to meet the trustees again before the summer break so we continue to make progress as fast as we can.
Josh Newbury (Cannock Chase) (Lab)
I am proud to have supported the BCSSS campaign since long before I became an MP, and I have continued to support it. I pay tribute to the campaigners in my constituency, including ex-miner Tony Jones, who gave me a badge that I wear with pride. I am grateful to the Minister for her engagement with BCSSS trustees and us as coalfield MPs. However, many of my constituents are often elderly, in poor health and desperate for a resolution. Given that the investment reserve is already held within the scheme and its return would not require any new public spending, will the Minister continue to work hard to ensure that these deferred pensions are rightly returned as quickly as possible to their rightful owners?
Sarah Jones
That is certainly what we are working to do. Because the two schemes are slightly different, the way the Treasury has to interact and think about these things is slightly different, but we have done this Government Actuary process, and we met the trustees today. We will now put our recommendation to the Chief Secretary to the Treasury—I know that a lot of my hon. Friends are talking to him about this issue whenever they can. While I have a desire to move at speed, I hope colleagues will appreciate that we also need to ensure that we get this absolutely right, and that any spending decisions are carefully considered, especially given the role that the Government have as the guarantor to both the mineworkers’ pension scheme and the BCSSS. I want to assure all hon. Members that I am doing all I can to reach an agreement and improve the conditions for members as soon as possible.
Lee Anderson
The Minister has been good today, actually, at the Dispatch Box, so I thank her for that. A lot of positive things have come out of this Adjournment debate. I have one question: is the scheme running at a surplus and if so, by how much?
Sarah Jones
I will not give figures, but the scheme is doing well. That is in part because of the trustees and the actions they have taken, and the investments and process they have undertaken. While the 2015 situation caused there to be a change in the way it was managed, it is now running well, and people can be reassured about that. I recognise that for many in coalfield communities, delivery on the mineworkers’ pension scheme has only heightened the sense of injustice about the BCSSS—I hear and feel that and am determined to take action on it.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
For my 719 BCSSS members, with the scheme looking quite healthy now, does the Minister have that oomph to push it forward and expedite it as quickly as possible to get them justice?
Sarah Jones
I certainly have oomph, yes, and I am working as fast as I can on this. I will not talk now about the wider support that we are offering people in our former coalfield communities, but a whole raft of Government interventions are there to support people.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
My constituent Robert Ferguson echoes many of the points made by the constituent of the hon. Member for Ashfield (Lee Anderson) about the difference between families who worked side by side, whereby one benefits and one does not. I know that the Minister has a rather full portfolio—there are many other things that I constantly nag her about—but will we wait for the Treasury, which is not known for its speed in making decisions, or could interim arrangements be put in place to give some of the surplus back to the BCSSS, or something that allows a demonstration of progress while we wait for the Chief Secretary to come to a decision?
Sarah Jones
I would not want to give the impression that this decision is waiting on the Chief Secretary to the Treasury to say yes. That is not the case. We have to go through the correct processes to get it over the line, because it was not in the manifesto; it is a different scheme and we must go through the proper processes. I hope that my hon. Friend understands that.
It would probably cause more trouble than not to give part but not all of the surplus back, because people would wonder why we were doing that. We want to resolve this properly and quickly. The two outcomes that the hon. Member for Ashfield referred to, and which the trustees want, are goals that we all share, but we have to do this properly by going through the right processes and ensuring that we are not putting words into the mouths of our Treasury officials and colleagues before it is right to do so. My commitment is to work at pace on this. As I said, my officials are meeting the Treasury tomorrow, and we are meeting the trustees before the summer.
Adam Jogee (Newcastle-under-Lyme) (Lab)
I have two quick points. First, as the Minister carries out those meetings—I wish her well—will she consider meeting some of us from coalfield communities, to facilitate that conversation? Secondly, she has just touched on the industrial strategy. She knows my views on the BCSSS and its importance to many people in Newcastle-under-Lyme. That industrial strategy must be felt by people not just in Newcastle-under-Lyme but up and down our country, particularly in coalfield communities. As it is finalised, I urge her to give a thought to us—that is really important. I hope that she will find time to meet us soon.
Sarah Jones
I am always very happy to meet my colleagues, particularly my hon. Friend. I am very happy to meet anybody in receipt of or campaigning on the BCSSS. My door is always open. He is right, of course, that our industrial strategy needs to do something that we have not had for so long: it needs to grow our economy across the country, not just in certain areas. We want the industrial strategy to do just that.
I will end by saying that, as politicians, we know that people find it very hard to trust us and what we will deliver, in part because they have been let down so many times over so many years, but I hope that they have noted our delivery of the mineworkers’ pension scheme within three months of coming into office. I understand the frustration and need for speed because the people concerned are getting older. We know that many people passed away before they could get the mineworkers’ pension scheme. The same is true during the long time that we have been talking about these issues. Now, I hope that people can see that we mean it when we look to work at pace on the BCSSS.
Adam Jogee
I am mindful of the fact that hon. Members do not have to be present at Adjournment debates, but does it not say everything that there is not a single Conservative MP here this evening—although there is a former one—to discuss this issue of importance not just to Newcastle-under-Lyme but to the whole United Kingdom?
Sarah Jones
I will let anybody watching the debate draw their own conclusions on that front, but it is there for all to see.
I thank the hon. Member for Ashfield for securing the debate and many hon. Friends for their representations. The Labour Government are absolutely committed to addressing the BCSSS. I look forward to updating Members on our progress towards improving pensions for all our former miners and correcting these historical injustices.
Question put and agreed to.
British Steel: Special Measures Update
Sarah Jones Excerpts(1 month, 3 weeks ago)
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The Minister for Industry (Sarah Jones)
The Government committed to updating Parliament on British Steel every four weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
Government landmark achievements and actions
Since the oral ministerial statement on British Steel on 22 April in the House of Commons, and the repeat statement on 24 April in the Lords, the Minister in the Lords—my noble Friend Baroness Gustafsson—and I have written to a number of Members to respond to specific questions. I can also confirm that work is under way on developing an impact assessment and on bringing forward regulations under section 7 of the Act, which allows the Secretary of State to introduce a compensation scheme for steel undertakings affected by the exercise of powers under the Act. The Secretary of State will also reply to correspondence from the Chair of the Business and Trade Committee to enable ongoing scrutiny of the Government’s use of these powers.
We have prioritised securing the future of the UK steel sector since our first days in office. As we have shown with the passing of the Act on 12 April, in what was a unique and unprecedented situation, we will not hesitate to take steps to safeguard the future of UK steelmaking, protecting jobs and supply chains.
On 8 May we reached agreement on an economic prosperity deal with the United States, which will save thousands of well-paid, high-skilled jobs that are vital for our economy. For the steel sector, this deal will see the US remove 25% s232 tariffs on steel for UK exporters.
Yesterday, 19 May, as part of the substantial package agreed at the EU summit, we also agreed to work towards linking the UK and EU emissions trading systems, creating the conditions to exempt UK exporters from the EU carbon border adjustment mechanism, or CBAM—something the steel industry has been seeking, to lower the cost of decarbonisation, avoid competitive distortions and boost market confidence. The European Commission has also confirmed that, in a specific product category subject to the EU steel safeguard measure, it will restore the UK’s country-specific steel quota to historic levels and that this will be reflected in a post-2026 regime. This will ensure that UK producers, including British Steel—the UK’s largest producer of these goods—will continue to be able to export tariff free at historic trading levels.
British Steel Ltd
Our intervention in British Steel under the Steel Industry (Special Measures) Act has enabled us to secure the raw materials required to maintain a two-blast-furnace operation in Scunthorpe for the coming months. The redundancy consultation initiated by British Steel’s owners, Jingye, has also been cancelled, removing the immediate risk to 2,700 jobs.
Government officials remain on site in Scunthorpe. Our priorities are continuing production, remedying critical health and safety issues, and stabilising operations.
We recognise the considerable interest from Members across both Houses regarding the funding that will be required for the Scunthorpe site. We have been clear that all funding will be drawn from existing budgets, within the spending envelope set out by the Government in the 2025 spring statement. As the Prime Minister and the Chancellor have made clear, the UK’s fiscal rules remain non-negotiable.
To date we have provided £94 million for working capital. This covers items such as raw materials, salaries and addressing unpaid bills, including for SMEs in the supply chain. This does not take into account future revenue. The Department for Business and Trade’s accounts for 2025-26 will reflect the financial support that the Department has given to British Steel.
We have also been clear that there will need to be investment to secure British Steel’s long-term future—including private investment—in modernisation. That position has not changed. Work continues at pace to develop the optimal policy and strategy approach.
Steel strategy
This Government stand by our manifesto commitment to spend up to £2.5 billion to rebuild the UK’s steel sector, in addition to the £500 million we have committed to Tata Steel UK for the transformation of Port Talbot. This is being delivered in part though the National Wealth Fund. The National Wealth Fund is operationally independent, and financing is already accessible to projects that meet the investment principles. Companies across the UK are already engaging with them on projects within the steel sector.
We continue to develop our thinking on the steel strategy. The recent developments in the UK steel industry, including at British Steel, have underscored the need for a steel strategy that represents a long-term vision for a revitalised and sustainable industry and the actions needed to get there. Understanding how the future of British Steel fits into this is crucial and will take some time to work through.
I have engaged extensively with the steel sector in recent months, visiting sites across the country and participating in roundtable discussions with producers, buyers and metal recyclers. This has given me an insight into the emerging opportunities and significant challenges that the UK steel industry faces. I have been left with no doubt that the sector is at a critical juncture, and it cannot afford to wait any longer for decisive action.
That is why we are now looking at what actions we could take under the steel strategy. We sought views on the issues that we know are important to the sector in the Green Paper we published on 16 February, such as electricity prices. We are also looking at ways to increase demand for domestic steel, including through public procurement. We are thinking about the best ways to defend the sector from challenging global market conditions on UK producers and unfair trading practices, and how to support the sector through the transition to greener steelmaking to deliver economic growth. Steelmaking is essential for our modern economy, supporting jobs and living standards in the UK’s industrial heartlands. We are confident that steel has a bright future in the UK and the full strategy will be published later this year.
We will provide a further update on British Steel to Parliament in June.
[HCWS649]
Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2025
Sarah Jones Excerpts(1 month, 3 weeks ago)
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The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)
I beg to move,
That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2025.
It is a pleasure to serve under your chairmanship, Dr Murrison. The draft regulations were laid before the House on 23 April. Before outlining the provisions, I will briefly provide some context. The Department for Energy Security and Net Zero’s Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—minimises the offshore sector’s impact on the environment by controlling air emissions and discharges to sea, and by reducing disturbance over the life cycle of operations, from seismic surveys through to post-decommissioning monitoring.
OPRED recoups the eligible costs of its regulatory functions from industry in the oil and gas offshore sector, to which I shall refer as the offshore sector, rather than from the taxpayer. OPRED’s recoverable costs are covered in two ways: first, by using the fees regulations; and secondly, by five charging schemes that do not require legislative change and will be amended administratively.
OPRED’s annual fees income is around £6.7 million, recovered from about 100 companies. Currently, the fees that it charges are based on hourly rates of £201 for environmental specialists and £104 for non-specialists. Environmental specialists are technical staff who carry out the functions of the Secretary of State, and non-specialists are support staff.
The current hourly rates have been in force since June 2022. Having reviewed the cost base, OPRED concluded that the existing rates need to be revised to reflect today’s costs for regulatory services. The fees regulations will therefore amend the charging provisions by increasing the hourly rate to £210 for environmental specialists and to £114 for non-specialists. OPRED’s fees are determined by adding the recorded number of hours worked per person on cost-recoverable activities and multiplying them by the hourly rates for environmental specialists and non-specialists, respectively.
The new hourly rates were approved by His Majesty’s Treasury in December 2024 and were calculated in line with the Treasury’s “Managing public money” guidance. They cover the expenditure on all resources used by OPRED to support its activities, such as staff salaries, accommodation, IT and legal services. There is no formal requirement to consult on the proposed changes. However, OPRED informed the offshore sector of the planned revisions to the hourly rates in February 2025, and no representations were received. OPRED’s fees regime guidance will be revised to reflect the new hourly rates.
I conclude by emphasising that this revision to the hourly rates will allow OPRED to recover the eligible costs of providing regulatory services from those who benefit from them, rather than passing on the costs to the taxpayer. I hope that hon. Members will support this measure, and I commend the draft fees regulations to the Committee.
Sarah Jones
Although it was unclear, I think the Opposition support these regulations. If they do, I am grateful. We do not need to replay the arguments about the dash to clean power, which is the only way to bring down our energy costs in the long term. We do not need to rehearse the fact that the North sea is a declining basin that has seen 70,000 job losses over the last few years.
Jerome Mayhew (Broadland and Fakenham) (Con)
Given the Government’s best case is that the UK economy will import gas, particularly from Norway, until 2050 and beyond, does the Minister not concede that, since we are going to be using gas, it would be better for our balance of payments if we produced that gas in this country, even from a declining basin?
Sarah Jones
Gas is still being produced in this country, and that will continue for many years to come, as the hon. Gentleman knows. We could rehearse these arguments, but I am not sure they are pertinent to these draft regulations. I will just celebrate the fact that we are now the fastest-growing economy in the G7 and that the economy, more broadly, is on the up—long may that continue. I thank the Opposition for their support for the draft regulations.
Question put and agreed to.