Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2025

Sarah Jones Excerpts

Tuesday 20th May 2025 General Committees

[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.

--- Later in debate ---

[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.

British Steel: Special Measures Update

Sarah Jones Excerpts

Tuesday 20th May 2025 Written Statements

[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]

Automotive Manufacturing: Employment

Sarah Jones Excerpts

Wednesday 7th May 2025 Westminster Hall

[The Minister for Industry (Sarah Jones)]

It is a pleasure to serve under your chairmanship, Sir John, and to have this important debate. I congratulate the hon. Member for Reigate (Rebecca Paul) on securing the debate and on her words; she gave a very helpful summary of the importance of the automotive sector to the UK. She is absolutely right about the number of jobs it creates and the amount that it brings into the economy, as well as the importance of Toyota in her area, which is not far from mine—I know how important Toyota is. Other Members have talked about the importance of the factories in their constituencies, stabilising whole economies through their supply chains. I thank the hon. Member for Reigate for her valid points.

I start by saying that we need to deal with the world as we find it, and the world we find today is a difficult one in terms of tariffs. I will talk about those in more detail. There are many challenges facing the automotive sector. However, as nobody has mentioned it, I will champion the trade deal with India that we secured yesterday. This is good for the automotive industry in the UK, in particular JLR and our high-end manufacturing —they are going to win from this deal.

Automotive tariffs into India are historically incredibly high at 100%, and we have negotiated bringing them down to 10% under a new quota system. Yesterday, the Secretary of State for Business and Trade said that we could see 22,000 high-end cars from the UK being sold into the Indian market. That is very substantial for those high-end vehicle manufacturers, and hopefully it is something that everyone will welcome. We worked with the automotive industry as we developed our relationship with India and came to this deal, so we are confident that it is a good deal for the industry.

Members rightly pointed to the challenging issues of the day in their contributions. My hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) and I spoke yesterday about those issues. We will continue to do so, just as she will continue to champion JLR, the number of people it employs and the importance of that site. I will come on to our approach to the US and what we are doing, but I hope that we will continue to have those conversations about JLR. My hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) also talked about the importance of her area in the supply chain, quoting companies such as Lavender’s, which is so important in JLR’s production. I will say more about our approach to the US in a minute.

Of course, it is about not just the US but the rapid growth of China as a major car manufacturer, high energy costs—as Members have rightly said—and the transition to electric vehicles. That has led to lower sales and volumes of production, which in turn has put pressure on the supply chain, increasing the risk of job losses across the sector. This Government are not prepared to sit back and leave industry to face those challenges alone. I would say that I speak to the automotive industry every week, but often more regularly, and since the introduction of tariffs I have been having regular roundtables with the whole affected sector and talking in detail about what needs to be done. We are determined to do what is necessary to help our car industry to weather the storm and achieve the long-term growth that we all want to see.

Where manufacturers are telling us that there are policy hurdles, we are listening, responding and helping industry to overcome them. That is why we launched the zero emission vehicle mandate consultation back in December, and in April we announced significant changes to the mandate, which I think everyone in this place welcomes, to ease the path for the automotive sector’s transition to electric vehicles. We have increased the flexibilities within the mandate for manufacturers up to 2030, smoothing the transition towards zero emission vehicles. We are allowing hybrid cars, such as the Toyota Corolla and the Nissan e-POWER, to be sold until 2035 to ease the transition and give industry more time to prepare. British supercar brands, such as McLaren and Aston Martin, have been exempted altogether from the 2030 phase-out date.

Crucially, we are also boosting demand for electric vehicles by improving charging infrastructure—an issue that several Members mentioned. The current statistic on charging infrastructure is that there are now 76,500 public charging points, and the National Audit Office recently found that we were on track to deliver 300,000 charging points. However, I hear what Members are saying, and I heard what the hon. Member for Reigate said about the need to go further. Of course, we are working with our colleagues in the Department for Transport to do just that.

Moving on to the US trade deal, Members will have seen speculation in the Financial Times this morning that we are very close to a deal. Of course, we cannot comment on that, but we know that we are in a good starting position. We have good relationships with our colleagues in the US, and the Business Secretary has been having regular conversations with them; the Prime Minister has also been talking to the President.

We know that tariffs are a real concern for the sector, and we saw JLR temporarily having to pause shipments to the US last month. From the outset, we have been talking to the industry and playing back our approach to them all the way along. They very much support our calm and cool-headed response, as well as the discussions that we are having with the US. That is what industry wants us to do, and that is exactly what we are doing.

At the beginning of April, we launched a request for input to hear from business about their concerns and assessments of what the next steps need to be. We are working through all those responses now. Following that request for input—it was not a consultation; for some reason we have to call it a “request for input”, but I do not know why—we are looking at the feedback and my colleagues are continuing to talk to the industry every day.

We will always act in the best interests of UK consumers and businesses, and throughout the last few weeks we have rightly focused on negotiating a deal. My hon. Friend the Member for Tipton and Wednesbury mentioned the letter from the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), and other Members mentioned preparations in the event that there is not a deal. Obviously, our focus is on getting that deal, but we would not be doing what we should if we did not also look at the available options in the event that there was not a deal. Of course the Chair of the Business and Trade Committee has suggested some options and, as I say, we are considering all options in the event that there is not a deal. However, we firmly believe that we are in a good position. We have a good relationship with the United States and we want to secure a deal as quickly as we can.

In addition to trying to achieve a reduction of tariffs, we are really investing in the automotive industry. In the Budget last year, we committed over £2 billion of capital in research and development funding until 2030, as has been mentioned, for zero emission vehicle manufacturing and the supply chains, and a further £300 million to drive the uptake of electric vehicles.

This new funding will support cutting-edge research and the scale-up of innovative zero emission vehicle technologies. It will also unlock capital investment in ZEVs, batteries and the wider supply chain. And that comes on top of the great work being supported by our Automotive Transformation Fund, which enables British brands and car manufacturers to benefit from a globally competitive supply chain for electric vehicles and their batteries. That has given much confidence to the sector and helped to secure major investment in the UK —including, of course, the £4 billion investment by Tata in its new gigafactory in Somerset. We also want future initiatives to work alongside the National Wealth Fund as part of a comprehensive offer to other big-hitting international investors.

Several Members raised the issue of skills, and they were absolutely right to do so. We recognise that we have a skills gap, and we need to ensure that we can fill it through the development of the industrial strategy, which will come out in a few weeks’ time. We are working with the Department for Education and with Skills England to look at the skills gaps across a whole range of industries in the UK, including advanced manufacturing and automotive, to see what the gaps are and to see how we can tilt funding to help to fill them. That is exactly the work that we are doing. Apprenticeships are also incredibly important in this space. There are some brilliant apprenticeship models out there in our car manufacturers. Of course we will continue to support those models. We are also making the apprenticeship levy more flexible, so that a wider range of people can use such models.

The hon. Member for Reigate mentioned East Surrey college, which I know; it is very good, and I am very pleased to see that it is helping in this space. She also raised the level 7 apprenticeships issue, which I recognise. We are working on all these issues in the run-up to the industrial strategy and the publications that will go alongside it.

Skills have to be at the heart of this agenda. We do not just want to grow the automotive industry. It is an industry in transition, so we must ensure that we are transitioning skills and creating the workforce of the future that we want to see. So, Members are right to raise these issues. Of course we are working very hard on them, and I hope that we will have much more to say about them shortly.

The hon. Member for Reigate also mentioned a couple of tax issues—the employee share ownership scheme and the double-cab pick-up vehicles. We have no plans to change those things at the moment, but I hear what she says about the pressures that exist. What we are doing through the run-up to the spending review is looking at how we can support the industry more widely. How do we increase demand, how do we provide support, how do we help to fund, and how do we break down further barriers? So, she is right to raise those issues and of course we continue to look at them. There will also be technical consultation later this year on the employee car ownership scheme, which she might want to look out for. However, I have heard the points she makes. We are currently in a period when we are developing plans but are unable to speak about them, because we cannot yet confirm what the spending review will tell us. However, I hope that the industrial strategy and the spending review will give her reassurance that we are very serious about the automotive sector and will support it in the future.

In the run-up to the publication of the industrial strategy, we are engaging with the sector on very complex issues such as access to finance or the planning system when it comes to electric vehicle charging infrastructure. We are looking at everything.

Of course, all Members rightly mentioned energy prices. I am acutely aware of how high our energy costs are in this sector compared with other sectors. Our industrial energy costs doubled under the last Government, and we want to take action to tackle that. Of course, we are pushing for clean energy by 2030 to ensure that energy bills come down in the long term and that we have the stability to ensure that we never again suffer a massive shock, as we did when the war in Ukraine began. However, we know that we need to do more. I am working at pace to do that. I hope that, through the processes that we have coming up in the next few weeks, we will see movement; but I completely understand the situation. I am working with lots of sectors, including ceramics, chemicals and automotive. Everybody has the same challenge, and we are looking to see what we can do about that.

To conclude, the automotive sector is incredibly important to our country. I appreciate Members’ caring so much about those high-quality jobs and supply chains. We know we need to upskill and reskill the workforce, provide the industry with support for the transition, and build our strengths in new technology, artificial intelligence software, connected and autonomous vehicles—which comes under this remit—and of course, our off-road vehicles as well, which we are supporting. The automotive sector will be at the heart of our industrial strategy, and we will create the right climate for the industry to thrive.

Energy Prices: Energy-intensive Industries

Sarah Jones Excerpts

Thursday 1st May 2025 Commons Chamber

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op) (Urgent Question)]

To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the Government’s approach to reducing energy prices for energy-intensive industries.

[The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)]

I relay my thoughts to the workers in my hon. Friend’s constituency, for whom I know this is a worrying time. I thank my hon. Friend for raising the issue. He is a tireless champion for workers and businesses in his constituency. We have spoken and will continue to speak regularly about these issues and the importance of the ceramics industry in his area in particular.

This Government recognise the challenges high energy prices pose to UK businesses. We know that the ceramics sector is particularly affected; my hon. Friend has raised the issue in Parliament on other occasions. The Government are working closely with Ceramics UK and local Stoke MPs to work out how we can support the sector.

For energy-intensive industries overall, our clean power 2030 target is the key to long-term sustainable price reductions. Clean home-grown energy is the best way to protect bill payers and boost Britain’s energy independence. We are already bringing energy costs for UK industries closer into line with other major economies through the British industry supercharger. That will fully exempt eligible firms, including some but by no means all of those in the ceramics sector, from certain costs linked to renewable energy policies, particularly those exposed to the high cost of electricity.

Using more electricity and less fossil fuel is the future for UK businesses. The latest advice from the Climate Change Committee expects electricity to meet 61% of industrial energy demand by 2040, so we are developing options to enable businesses to do that.

We are already taking action. When my hon. Friend raised this important issue in a Westminster Hall debate in March, I noted:

“We are working on how to remove undeveloped, speculative programmes from the grid connection queue and prioritise others.”—[Official Report, 4 March 2025; Vol. 763, c. 109WH.]

Just last month, we announced pro-growth reforms to help unlock £40 million of mainly private investment a year in clean energy and infrastructure, so that so-called “zombie projects” will no longer hold up the queue for connection to the electricity grid.

We recognise that we need to support a range of energy-intensive industries, including industries such as ceramics, that are essential to our UK economy and our missions, for example to build the 1.5 million homes and the clean energy infrastructure products in which this Government are already investing. Following years of economic chaos and instability under the previous Administration, this Government are implementing a modern industrial strategy that will drive growth and the creation of good high-quality jobs in communities across the UK.

I look forward to continuing to work with my hon. Friend and other hon. Members from across the House. We are meeting next Wednesday and I hope to be able to progress things further at that stage.

[Gareth Snell]

I thank the Minister for her engagement on this issue, because she has genuinely and authentically tried to look for a way forward. When my hon. Friends the Members for Stoke-on-Trent North (David Williams) and for Stoke-on-Trent South (Dr Gardner) and I had a meeting with the Minister six weeks ago, we warned her that other factories were going to fail, and we stand here following the closure of Moorcroft yesterday. She will be aware that other factories in Stoke-on-Trent are working on short time as a way of reducing costs so that they can put more money into meeting their ever-increasing energy bills.

I thank the Minister for the outline she has given, but she will know that we have previously talked about most of the things she has raised today, and they do not apply to the ceramics sector or to great swathes of the energy-industrial sector as a whole. The supercharger scheme does not work for the ceramics sector; indeed, ceramics companies end up having to subsidise other energy-intensive industries, because they are not part of the supercharger scheme. We have been told that we cannot see an exception to that. We have asked about the emissions trading scheme and free trade allowances and have been told that some are available for ceramics, but that does not go far enough to meet the demands we have today.

We have been constantly promised jam tomorrow, by the last Government as well as this one—well, jam is no good if you are dead, and the ceramics sector in Stoke-on-Trent is on life support. We are at a point where good manufacturing jobs done by proud people are falling away every month. This is not new: it started in 2019, with the closure of Dudson, and continued with the closure of Wade in 2022, Johnson Tiles in 2023 and Royal Stafford and now Moorcroft in 2025. The energy-intensive industries in this country are pivotal to manufacturing. If we see them fall away, manufacturing in this country will fall away.

I ask the Minister three very simple questions. Will she look at a wholesale change to the way in which we do subsidies and energy prices for energy-intensive industry in the short term, before GB Energy comes online? As well meaning as GB Energy is, it is too far away to help. Will she rule out specifically moving any policy costs on to gas costs? Gas is the big cost for the ceramics sector; electricity is a small proportion of what we do. Will she take the opportunity to make a clear commitment at the Dispatch Box, as the Secretary of State for Business and Trade just did when he talked about a sector falling on its knees? Ceramics is there. We do not need the same level of investment that steel does; we need a tiny fraction of it. Can we have it, and can we have it soon? If we have to come back here in six weeks, there will be no sector left to defend.

[Sarah Jones]

I agree with my hon. Friend and recognise the challenge. We lost 1,250 jobs in the ceramics sector between 2015 and 2023. It has been a very sad decline, and we want to turn that around.

The whole point of an industrial strategy is to have a Government who are proactive in supporting our industries. We will not put extra cost on the ceramics industry; we are looking to see how we can help and support. My hon. Friend has my word on that. We are working on every single one of the suggested policy reforms in the package that Ceramics UK has put forward, and we will meet him next week to talk about these things.

I cannot make promises at the Dispatch Box on areas that are not my responsibility and rule out whole swathes of policy, but I assure my hon. Friend that we will not put extra costs on the ceramics industry. We are looking to do more and to support, and we will come back. I completely understand his point about the timing and the need to act quickly.

[Mr Speaker]

I call the shadow Secretary of State.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Grangemouth, the Luton Vauxhall plant and now the Moorcroft pottery in Stoke-on-Trent—every single week, we hear of more job losses in energy-intensive industries and more British companies shutting up shop and laying off workers because of the toxic combination of high energy costs and this Chancellor’s devastating jobs tax. We have the highest industrial electricity prices in the developed world. Just this week, INEOS told us in no uncertain terms that carbon taxes and high energy costs are killing off manufacturing in the UK.

This Government have been warned by Opposition Members, by the GMB this week and by Unite. This week, they were warned by none other than Tony Blair. What was their response? Advisers in No. 10 Downing Street picked up the phone and begged him to row back on what he said. They asked him to row back on what we all know to be true—what the Minister, Morgan McSweeney, apparently, and an increasing number of the Government’s own Back Benchers know to be true: the current approach to energy and net zero is doomed to fail, and voters are being asked to make financial sacrifices when they know that the impact on global emissions is minimal. That is at the heart of this madness.

This Government are wilfully destroying British industry in oil and gas, ceramics, chemicals and metals when they know that it will not make a difference to global emissions. We will not use any less oil and gas; neither will we use any less steel, cement, bricks or chemicals. We will just import those things from abroad, at greater cost to our economy and the climate and with British job losses added to the bargain. As the Government are led by an ideological zealot, the Secretary of State for Energy Security and Net Zero, and by a Prime Minister too weak to rein him in, we will continue down this path, and British workers will pay the price—in Aberdeen, in Grangemouth, in Luton, and today in Stoke.

Energy is not a silo; energy costs underpin growth, prosperity, competitiveness and living standards. Without cheap energy, our industries will not survive—British manufacturers cannot remain competitive—so what will the Minister do to prevent more British jobs being lost in energy-intensive industries in this country? Will she listen to the head of Unite, who says that working-class people are losing their jobs and that this Government have no plan to replace them? Will the Government end their mad ideological plan to shut down North sea operations? What will it take for Labour Back Benchers to wake up and realise that this ideological approach is crippling this country?

[Sarah Jones]

The Conservative party is hiding behind this new-found scepticism of net zero to conceal its complete failure to support and grow our foundational and manufacturing industries on its watch. On its watch, we lost 70,000 jobs in the North sea and 1,250 jobs in the ceramics sector, chemicals manufacturing fell by 30%, and we produced only 30% of the steel that we use in this country. The Conservative party’s record on this issue is shameful.

This Government have a completely different approach. We are developing the industrial strategy, which will support those foundational industries. We are looking to make sure we can reach net zero by 2030, in order to provide the economic and energy security we need. The last cost of living crisis was caused by our reliance on global gas prices, as the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) knows, and as he occasionally says in some meetings when he flips and flops on his position on net zero. We will support manufacturing; we are developing our industrial strategy, which will be published in a few weeks’ time, and we are already providing more support to the energy-intensive industries through the energy supercharger than the previous Government did. We will act where the previous Government failed to act.

[Mr Speaker]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

My hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) is an enormous champion of the ceramics industry, and he is right to bring this question to the House today, but this issue is wider than simply the ceramics sector. Tata Steel has told our Committee that energy prices are the single biggest factor in its lack of competitiveness, and Nissan has told us that electricity prices at its plant in Sunderland are the highest of any Nissan plant in the world. We have recommended that the Government bring energy prices in line with our European competitors; can the Minister tell us today that she shares that ambition?

[Sarah Jones]

I thank my right hon. Friend the Committee Chair for his question. Of course this is a huge issue. Under the previous Government, industrial energy prices doubled, and as my right hon. Friend says, we have higher prices than many other countries. The 3,000 people who responded to our consultation on the industrial strategy said that energy, skills and access to finance were their top three issues, so we are absolutely aware of the issue. We are looking at what support we can provide and how we can make our country more competitive, both for the people who are looking to invest in the UK and for our existing manufacturing base.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[James MacCleary (Lewes) (LD)]

The Liberal Democrats believe that the future of British industry and our national security depend on a serious and sustained commitment to renewable energy. We want to see far greater emphasis on clean energy sources, particularly solar, in order to reduce our dangerous reliance on fossil fuels, strengthen our energy security, and tackle fuel poverty by bringing down energy bills for households and businesses alike. In the face of Putin’s barbaric war in Europe and with Donald Trump’s reckless tariffs threatening fresh economic turmoil, we cannot afford to be complacent. The future of energy-intensive industries, not least our steel industry, hangs in the balance.

Steelmaking is not just an economic asset; it is of vital strategic importance to the UK. We need steel in order to build the infrastructure required for a sustainable, secure future, from wind turbines and railways to hospitals and homes. Without it, our ambitions for net zero and national resilience will collapse. As such, will the Government give a clear, unequivocal commitment to their net zero plans, and will they ensure that no option is off the table when it comes to safeguarding our steel industry and the future of British manufacturing?

[Sarah Jones]

I can give the hon. Gentleman reassurance that we are looking at all options to support the steel industry, which is foundational to our country. He makes the correct points about how important steel is to building our future, whether it be runways, homes or other infra- structure. We are looking at all options, and we have the steel plan, which will be coming out soon, and the £2.5 billion earmarked to support the steel industry.

[Sarah Coombes (West Bromwich) (Lab)]

My constituency has many brilliant metal manufacturing companies that supply critical UK industries in defence, automotive and construction. However, many of them are struggling because the last Government left us with sky-high electricity prices and a dependence on foreign gas imports. Last month, I launched Make UK’s new “Electrify Industry” initiative in Parliament, which seeks to address this broad challenge. Can the Minister set out how the clean power 2030 action plan will make industrial energy costs cheaper and help us drive growth in the west midlands manufacturing industry?

[Sarah Jones]

I thank my hon. Friend for her championing of her constituency. I am still to visit, and I must do that, because I know she has many exciting places for me to see. Electrifying industry is crucial. The Climate Change Committee has said that that is the route and that 61% of industry will need to be electrified. We need to make sure we do that. We are looking through the spending review process, as I am sure she would expect, at how we can support industries to make that change to electric and how we can help with some of the capital costs, which will lead to lower costs in the longer term. Making that leap can be difficult, and that is what we are looking at through the spending review.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

Why is it better, according to the Government, to import gas from Norway instead of developing our own North sea gas fields?

[Sarah Jones]

The North sea fields are a declining basin. We lost 70,000 jobs under the previous Government. Something like only one in 10 of the licences that have been approved over recent years have actually amounted to anything, because of the difficulties of a declining basin. The impact on prices of a very small amount of the global mix coming from the North sea would be zero. It would not change a penny in the costs we would pay.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

When the previous Government looked at supporting energy-intensive industries, they included within the definition brewers, cider makers and wine makers, but not distillers, despite the fact that distillers use 17 kW per hour to make a litre of alcohol, compared with brewers which use just 0.5 kW per hour. As the Government consider what they will have to do to support energy-intensive industries such as distilling, will the Minister consider that the Scotch whisky industry in particular is critical to the maintenance of economic activity and good- quality jobs in some of the most remote and economically fragile communities in this country?

[Sarah Jones]

We are obviously keen to do what we can to support the Scottish whisky industry. I have been to see it and understand how important it is. The definitions of energy-intensive industries were developed under the previous Government, and we have no immediate plans to change those, but I will take away the right hon. Gentleman’s point and look into it.

[Mark Pritchard (The Wrekin) (Con)]

On net zero, I think there is a national consensus on making the environment better, creating green jobs and improving energy security, but will the Minister recognise that for many people, consumers and companies out there—particularly small businesses, by the way; it is not all about large ones—there is too much happening, too soon and too fast? Rather than having regressive and punitive taxes on industry and small businesses, there should be more education and more incentives to change consumer and company behaviour.

[Sarah Jones]

The right hon. Gentleman makes a perfectly reasonable point. We have a national consensus that we need to act, and I think the population are with us on that. They understand that we need to make sure we have a planet for our children and our grandchildren and that we need to do everything we can. As was said this week, we want to tread lightly on people’s lives, and of course we do not want to inflict regressive and punitive taxation. We want to make sure we are supporting industry and business, and we are looking at how we can help to incentivise the changes that we need to see.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

Despite Scotland’s growing abundance of potentially cheap renewable energy, businesses in Scotland’s energy sector are dealt a double blow, whereby energy-intensive businesses in the renewables supply chain are hammered by high energy costs in production and extortionate transmission charges. When the Minister looks at this problem, as her colleague told me he would the other day, will she bear in mind that this is entirely linked to the high cost of producing energy and all the other ways in which the current energy market model serves Scotland poorly?

[Sarah Jones]

I think it was probably the Minister for Energy, my hon. Friend the Member for Rutherglen (Michael Shanks), who gave that assurance to the hon. Gentleman, and he is looking at all these issues. We have a very complex energy system. We are trying to make it as cost-effective as we can, and sustainable in the long term, to give us the energy security that we all need. I am sure my hon. Friend will continue to look at these issues.

[Sir Desmond Swayne (New Forest West) (Con)]

A vital ingredient of any net zero policy is an understanding of the word “net”. Ultimately, we are going to have to grapple with technology that we have had for over a century to remove carbon directly from the air, aren’t we?

--- Later in debate ---

[Sarah Jones]

We are happy to look at a range of options. The whole point of the clean energy plan is that we are using a very diverse range of interventions, some of which are more high-tech and for the future, and some of which are well established. We need that mix.

[Ellie Chowns (North Herefordshire) (Green)]

Given the huge economic and environmental effects of burning fossil fuels, it is clear that the future of energy has to be clean, green, cheap renewables, plus energy efficiency. All of us who care about fact-based, truth-based politics should call out the outrageous misinformation from those who suggest that net zero is the reason for high energy prices, when it clearly is not. Gas prices have gone through the roof in recent years, and we all know why: because of Putin’s outrageous invasion of Ukraine. That is why companies and businesses are struggling.

There are two specific things that the Government can and should do to help precisely those businesses: first, decouple the price of electricity from gas so that the true costs of generating electricity are reflected in the price that consumers pay; and secondly, implement a carbon tax in order to be able to use those revenues to assist industries to make the just transition from fossil fuels to the clean, green, cheap energies of the future.

[Sarah Jones]

The hon. Lady is right to point out that there is a lot of misinformation in this space, and it is often used by the Conservatives to hide their own failings in government. Of course, the energy price hike that we had was partly because the previous Government had not delivered the security that we needed in our home-grown energy supply and storage. We are looking at all options to make sure that we have the right systems in place going forward. We already have the emissions trading scheme, and we are looking at where that goes in future years. She is right to point out that we need to look at all these things.

[John Cooper (Dumfries and Galloway) (Con)]

The pretence is that Britain is somehow caught in a storm- tossed sea of international gas prices, which drives up energy costs, but when INEOS reports that it is paying £127 million a year in carbon taxes, rising to £2 billion by 2030, is it not the case that we are seeing the cascade of jobs losses because Labour has made decarbonisation deindustrialisation?

[Sarah Jones]

I think the hon. Gentleman knows that his own party are the experts on deindustrialisation, which we saw significantly across all parts of our manufacturing sector, including at INEOS. I regularly meet INEOS, as do the Secretary of State and other colleagues, and we are looking at what we can do to support the sector. It faces a lot of challenges, and we are looking to try to resolve them.

[Christine Jardine (Edinburgh West) (LD)]

My constituents in Edinburgh West, like many others across Scotland and the UK, depend on energy-intensive industries for their livelihoods: defence, whisky and Grangemouth. How can the Minister reassure people who are already suffering because of high domestic energy prices that the situation will not be made worse by losing jobs in those industries?

--- Later in debate ---

[Sarah Jones]

The hon. Lady is right to raise these challenges, which we are trying to grapple with. We are looking at how we can provide support on energy prices and other aspects for energy-intensive industries. Of course, the energy-intensive industries that qualify for the supercharger are getting significantly increased support from April, which will be helpful, but we recognise that that does not go far enough, and we need to do more.

[Blake Stephenson (Mid Bedfordshire) (Con)]

Talking of experts in deindustrialisation, over 1,000 jobs at Luton’s Stellantis plant have been lost, impacting my constituents, because this Government did not respond to concerns about energy policy. If the Minister does not agree with us on net zero, does she agree with the general secretary of the GMB, who says that the Government’s energy policies amount to

“exporting jobs and importing virtue”?

[Sarah Jones]

I have met and talked with those from Stellantis many times, and while the closure of the site at Luton was of course very difficult, I know that the reasons were global and complex; it is simply not the case that it was because of energy policy. Stellantis faced a whole range of issues globally, and it had to respond in the way it did. We regret that, and we offered support, but we could not get to a point where we could persuade it to stay. We are working with the MPs and the local council to ensure that what comes afterwards provides good, decent jobs, but the hon. Member is just wrong to say that that was the only reason.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

The Minister has told the House that the Government would not impose any new costs on the ceramics industry, but we know that they are going to increase carbon taxes, which will kill off energy-intensive industries. Does she not see that this is a totally incoherent policy position?

[Sarah Jones]

There was no coherence under the previous Government, and there will be coherence under this Government. We are developing our plan of support for our foundational industries in the industrial strategy. I know that the Opposition are very keen to see what the industrial strategy will contain. They will have to wait a few weeks for its publication, but all will be revealed in due course.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister very much for her answers. Manufacturing currently represents less than 10% of the UK economy, but in Northern Ireland it represents 16% of the economy and about one in four families in Northern Ireland are dependent on manufacturing. It is clear that, as energy prices rise, so do the concerns for such industries. How can the Government and the Minister offer support to those industries to retain their viability while the Government are finding an energy solution?

[Sarah Jones]

The hon. Member is right to raise this issue, and the figure for manufacturing in Northern Ireland of 15% or 16% is high. Yesterday, I was with trade unionists from Shorts Brothers—Spirit AeroSystems —to talk about the importance of manufacturing there and the importance of retaining those jobs. They made the point that these good jobs have helped not just with people’s lives, but with the sectarian divides. Bringing people out of poverty and giving them good, well-paid jobs is an incredibly important part of the history of Northern Ireland and of what we need to preserve there. I will continue to work with him to make sure we protect that manufacturing base. We of course had huge support in the Budget, with the £2 billion for the automotive sector and the £1 billion for the aerospace sector to support exactly that manufacturing industry.

Oral Answers to Questions

Sarah Jones Excerpts

Thursday 1st May 2025 Commons Chamber

[Kanishka Narayan (Vale of Glamorgan) (Lab)]

4. What steps he is taking to include the chemicals sector within the industrial strategy.

[The Minister for Industry (Sarah Jones)]

The industrial strategy has identified eight key growth-driving sectors that will be the arrowhead of our economic success, but of course they cannot succeed without the critical supply chains and foundational industries that underpin them. We are looking at all those foundational industries, including the chemicals industry, to see what the barriers to growth are, what challenges they face, and how can we overcome them through our strategy.

[Kanishka Narayan]

I very much welcome the Minister’s recognition of the chemicals sector’s contribution as a foundational sector and an anchor employer in constituencies such as mine; we have the Dow site there. What can we do to support the deeply integrated supply chains across the UK and Europe that the chemicals sector, and Dow in particular, relies on?

[Sarah Jones]

I do not want to underestimate the challenges that the chemical sector faces. Between 2021 and 2024, UK chemicals manufacturing fell in real terms by about a third. We are working to improve the UK’s trade and investment relationship with the EU. We want to build exports and investment opportunities and reduce barriers to trade. Conversations are at an early stage, so I will not go into specifics, but we are certainly working to help the chemicals industry.

[Jim Shannon (Strangford) (DUP)]

What assessment has the Minister made of the benefits that inclusion of the chemicals sector among the eight sectors could bring for our national security and our pharmaceutical sector? How can all regions of the United Kingdom of Great Britain and Northern Ireland benefit from this sector?

[Sarah Jones]

When we look at the eight sectors that we are trying to turbocharge through the industrial strategy, we see that the chemicals sector underpins so many other sectors. We need to make sure that we protect it. As I have just said, chemicals manufacturing has fallen by nearly a third over the past three years; we need to turn that around. We are looking at what we can do to break down barriers and make improvements—for example, on the cost of energy. That is part of the mix when it comes to making sure that we are secure in the future.

[Gregory Stafford (Farnham and Bordon) (Con)]

5. What steps he is taking to support the hospitality industry.

--- Later in debate ---

[Carolyn Harris (Neath and Swansea East) (Lab)]

T6. Can the Minister assure the steel communities of south Wales that they will receive a substantial share of the £2.5 billion steel fund?

[The Minister for Industry (Sarah Jones)]

My hon. Friend and several other Welsh colleagues have been talking to me about this. We renegotiated the deal with Port Talbot and the £500 million that goes alongside that. I had a good meeting this week with Blastr, which is looking to build an iron pellet plant at the Port Talbot site if possible, and we are trying to support that. Of course, our focus in recent weeks has been on Scunthorpe and British Steel, but the steel fund remains. The steel plan is still being worked on, which is very broad and hopes to lift the entire UK steel industry.

[Sarah Olney (Richmond Park) (LD)]

Sheen Uncovered is a clothing business in my constituency that the Secretary of State is welcome to visit any time. It has been significantly affected by the need to pay import duty up front, thanks to the Conservatives’ terrible Brexit deal, and that duty ranges between 6% and 12% and greatly impacts its cash flow. What are the Government doing to support businesses such as Sheen Uncovered to reduce the challenge of import costs?

British Steel

Sarah Jones Excerpts

Tuesday 22nd April 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

With permission, Madam Deputy Speaker, I wish to make a statement on the steps the Government have taken since the Steel Industry (Special Measures) Act 2025 came into force.

The Government took the decision to recall Parliament on 12 April so that we could take swift, significant action on British Steel. As hon. Members will be aware, that was the first time Parliament had sat on a Saturday in over 40 years. Our attendance in this place was testament to the urgency and importance of the issue at hand, which was the need to prevent the immediate closure of the blast furnaces at Scunthorpe. The action we took on 12 April and the measures we have taken since matter greatly for this country, and are of enormous importance to thousands of steelworkers and their families. I am very pleased to inform the House that this afternoon, British Steel has cancelled the redundancy consultations started by Jingye. I know that many British Steel employees will breathe a sigh of relief at that news.

It is regrettable that when this Government took office, we inherited a steel sector in crisis, and an iconic British company facing an existential threat. Since day one, we have worked tirelessly with British Steel and the trade unions to find a resolution, because blast furnace closures at Scunthorpe is an outcome that this Government were simply not willing to allow. I want to stress that this kind of state intervention is not something that we intend to replicate in other situations, or for other industries. We recognised that unprecedented action was warranted in a truly unprecedented situation.

As hon. Members will know, the legislation we introduced, which was passed that weekend, gave us the power to direct British Steel’s board and workforce, ensure they got paid, and order the raw materials to keep the blast furnaces running. It also permits the Government to do those things themselves, if the circumstances demand it. We have wasted no time in enacting those powers and taking the urgent action required to keep the blast furnaces lit at Scunthorpe. We have secured the raw materials needed to keep the blast furnaces operating, and we continue to work at pace to secure a steady pipeline of materials. Officials were on site to help British Steel within hours of the Steel Industry (Special Measures) Act 2025 becoming law, and we are already seeing the real-world impact of our decisive intervention.

I am delighted to say that British Steel has also confirmed today that it can keep operating both of the UK’s last remaining blast furnaces. By contrast, Jingye’s plan was to shut one of them down earlier this month. It will come as no surprise to hon. Members to hear that the company’s workforce, their families, suppliers and communities have expressed deep gratitude for the action we have taken, which has preserved steelmaking at Scunthorpe and safeguarded thousands of skilled steel jobs.

Now that the immediate emergency has passed, it is right that hon. Members also ask questions about what is next. We have been clear that in order to secure the long-term future of British Steel, which has not been properly invested in for years, we will need a modernisation programme, ideally with a private sector partner. Furthermore, we will need to look beyond any individual company, and ensure a secure and thriving future for the whole steel sector. That is why we are continuing our work to publish the steel strategy this spring.

All options are on the table as we begin to address the company’s long-term sustainable future. My officials met Jingye on 16 April. It was a respectful conversation, and that dialogue will continue as we find a way forward in the national interest that safeguards steelmaking and protects jobs. With that in mind, I also want to say thank you—thank you to those who sent us messages to say we did the right thing to save British Steel, thank you to everyone who offered practical support and, most importantly, thank you to the workers and managers at British Steel who have heard our call to produce the steel that we need to deliver our plan for change, to keep the Scunthorpe site and everyone working at it safe, and to do so in a way that reduces the scale of financial losses. They have shown remarkable resilience and dedication at a supremely difficult time, and have served the plant, their community and the nation. They have promised us that there are better days ahead for British Steel, and we agree. We are giving them the chance they need to write the next chapter of British Steel’s history.

We have assured this House time and again that steel has a bright future under this Government, and I restate that today. Steel is fundamental to Britain’s industrial strength and to our identity as a global power, and we will never hesitate to protect it. We have committed to update both Houses as policy develops and a longer-term strategy is formulated. I reaffirm that written updates will be forthcoming regularly. So let there be no doubt: this week is not the end. It is not the end of the work, and it is not the end of the negotiations, but thanks to the actions we have taken, it is also not the end of British Steel. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Andrew Griffith (Arundel and South Downs) (Con)]

I thank the Minister for advance sight of her statement, and I join her in thanking the Scunthorpe workers for their efforts over the last few weeks.

We are here once again because the Government had no plan—they failed to prepare, they bungled negotiations, and they took too long to listen to the warnings. What do we have to show for it? We have this botched nationalisation and a potential bill for the taxpayer stretching into the billions. I say billions, but it remains entirely unclear how much this bungled 11th-hour decision will cost, while the assets still belong to China. I hope that Members across the House will agree that this is a complete mockery of transparency and accountability, and I hope that the relevant Select Committees will take it upon themselves to conduct their own inquiries. Instead of a statement from the Treasury today, the Chancellor is running to the International Monetary Fund in Washington to explain how she broke the UK economy. Steel nationalisation, the IMF downgrading growth forecasts, trade union summits in No.10—it is all sounding a bit 1970s.

The simple problem is that we do not know the answers to any of these questions because the Government have failed to publish an impact assessment. Will the Minister confirm to the House when they plan to do so? Has anyone in government asked the Office for National Statistics whether British Steel will now be classified as a publicly owned entity? Has the ministerial team discussed the impact of the takeover with the Chancellor on her already evaporated fiscal headroom? To date, how much has the Department spent, or how much has it committed to underwrite—that is a straightforward question that deserves an answer? Given that her Department had no budget for revenue support of steel, has the Minister been able to secure additional funds from the Treasury, so that other sectors or support for British exporters do not pay the price?

We have seen no further detail of the Government’s proposed steel strategy, or any confirmation of longer-term plans to protect British steelmaking. Labour Members refused to back a coking coalmine to produce some of the raw materials that blast furnaces rely on. Instead, they wait for shipments to arrive from halfway around the world. Most importantly, the Government have not set out how they intend to reduce the enormous burden of sky-high energy costs. Instead, the Secretary of State for Energy Security and Net Zero seems dead set on delusional policies that drive energy prices in this country even higher. We cannot make steel sustainably when we have the highest energy prices in Europe. Prices for industrial energy in Birmingham in this country are four times higher than those in Birmingham Alabama. We cannot make steel if we do not have coal.

As Nissan’s Alan Johnson said today, the “simple fact” is that the UK is

“too expensive… Once you’ve paid your electricity, gas, NICs we are too expensive—any industrial strategy that does not tackle that is a waste of time.”

Well, we are here once again. There is no steel strategy, no industrial strategy, no export strategy and no energy strategy. Perhaps when she replies the Minister can share a single strategy that this Government actually possess.

[Sarah Jones]

It is getting harder and harder to understand quite what the Opposition’s policy is on steel. It is all over the place. On the one hand, they ask us questions about costs. They say they had negotiated a modernisation plan with British Steel, but they will not tell us how much money they were willing to throw at that plan. Their proposal, apparently, was to build on two sites. If Jingye was asking us for £1.2 billion to build on one site, how much taxpayers’ money were the Government putting on the table to fund two? We need answers to those questions.

On nationalisation, last week the shadow Secretary of State for Business and Trade, who was, as we know, Financial Secretary to the Treasury when Liz Truss crashed the economy, said that he backed full nationalisation of British Steel. On the other hand, this morning the Leader of the Opposition said on Radio 4 that nationalisation should be the “last resort.” It seems a bit muddled. Finally, the hon. Member asked questions about the cost of energy pricing, forgetting of course that industrial energy prices doubled under the Tories. UK Steel, the trade body for the steel industry, is clear and has said that it is

“the UK’s reliance on natural gas power generation”

that leaves us with higher prices than our international allies. It is not too much clean energy, but too little.

The hon. Member asked a reasonable question about the costs. I hope he will understand that matters at the moment are sensitive and commercially confidential, and I hope he will be assured that we will publish accounts in due course. We are securing materials and reviewing things such as health and safety, and other critical roles. Regular meetings are happening between the Departments and British Steel, as he would expect, and of course we will publish those details in due course. He asked about the coalmine. British Steel has told us directly that it could not use that coal because of the sulphur content. We also need coke ovens to turn coal into coke, and the coke ovens at British Steel were closed on his watch several years ago. The reality is that the Tories failed the British Steel sector, and this Labour Government are securing it.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

I want to thank the Government for saving British Steel. Our Committee has been clear that it is essential for us to retain the ability to make primary steel in this country, and the steps that were taken a couple of Saturdays ago have helped derisk exactly that. The Government deserve credit for that. However, the Committee has written to the Government to say that a steel strategy needs to come forward as quickly as possible. It must be a clear, long-term vision for the industry, and there must be safeguards against the potential of a floodtide of steel from China. We need to use public procurement much more aggressively to support our local industry, energy costs need to come down, and we need a plan to keep scrap onshore. Will the Minister tell us when she plans to bring forward that steel strategy? Ultimately, what is good for the steel industry is good for Scunthorpe.

[Sarah Jones]

My right hon. Friend is of course right: the steel strategy is all the more important now than when we devised it in opposition and committed £2.5 billion for the steel strategy fund in our manifesto. We are looking at how we use that financial support, and, as he knows, at how we might do primary production. We are investigating future market opportunities and how we can increase demand here in the UK. He speaks of procurement, which of course is incredibly important. I have been talking to the procurement Minister and working on that, along with the Steel Council. We need to consider the availability of suitable sites for future investments.

Scrap is important, as my right hon. Friend says—how can we improve UK capability? Trade and overcapacity is a huge issue, and one that we share with our American colleagues, which is why we do not believe that the tariffs are necessary—we have the same problems and should try to solve them together. Carbon leakage, green steel, research and development, jobs and skills—we will develop a whole package of measures as quickly as we can. We will ensure that the plan, which we will publish in the spring, is one for the whole country and secures steel in the UK.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Clive Jones (Wokingham) (LD)]

I thank the Minister for advance sight of her statement, and I associate myself with her gratitude towards Mr Speaker, hon. Members, parliamentary staff and, most importantly, the workers and managers of British Steel.

It is incredibly welcome news that both blast furnaces in Scunthorpe will continue to operate, allowing those who are employed at the site, the 35,000-plus families in this country who would have been affected by its closure, and Britain’s national security, to breathe a momentary sigh of relief. Will the Minister join me in thanking the British Steel workforce for ensuring that the furnaces have not been allowed to go cold? It is good to see the Government taking action after the Conservatives spent far too long dithering over what to do.

The Minister has committed to delivering a steel strategy by the end of the spring, so the Government have five weeks left to produce it. Can she confirm that it will be published before 31 May, and that Parliament will have the opportunity to debate it? When we were here a few Saturdays ago, I asked the Secretary of State to confirm that the pension fund of employees and former employees is not in deficit, that all company contributions are up to date, and that assets of the scheme have not been transferred to the holding company or any offshore businesses. I am waiting for confirmation on that.

Finally, can the Minister guarantee that no redundancies will be made as a result of the action taken in the Steel Industry (Special Measures) Act 2025?

[Sarah Jones]

I thank the Lib Dem spokesperson for his support for our interventions and for his helpful questions. We will publish an impact assessment in due course, including classification considerations. He is right to point out that we did not answer his questions last time, and neither am I answering them this time, but I will ensure that I do. We have said that we will come back every four weeks with a statement, but I will write to him separately to ensure that he has the reassurance that he needs.

I cannot give the hon. Gentleman a date for the steel strategy, but I assure him that we are working as fast as we can. The issue is difficult because we are talking about spending £2.5 billion of public money. We have to ensure that we do that in the correct way. The roundtables that we have held, the advice from the Steel Council, and the work that we are having done by the Materials Processing Institute and Hatch to consider the economic issues that we need to grapple with, are really important—we must get that right. Of course, when we have a steel strategy, the House must have the opportunity to come and talk about it and be reassured that it is the right thing for the steel industry.

[Jessica Morden (Newport East) (Lab)]

Last week, I met trade union representatives at Llanwern steelworks. I clearly understand and welcome the action taken at Scunthorpe, which stands in complete contrast with the Conservative party, which had no steel strategy in 14 years of government. Will the Minister be mindful of the promises made by Tata to invest in assets at Llanwern? We need that to be delivered. Plants like Llanwern should get their fair share of the green steel fund and procurement. What progress will we soon see on that?

--- Later in debate ---

[Sarah Jones]

My hon. Friend is right to raise the issue of Tata investing in those assets and the future of the Port Talbot site, which is incredibly important. Of course, we meet regularly to talk about that. We have the transition board, which the Secretary of State for Wales convenes, along with the Welsh Government. We are working at pace to understand what those future investments could be. She is right to demand that the steel plan is for everywhere rather than just for one part or other of the UK. We want to and will ensure that the nations and regions all benefit from the funding and mechanisms that we put in place to improve procurement, scrap and all those things. Of course, it is not just Tata in Wales; Celsa too is incredibly important and a very impressive company. She can be reassured on that front. I am always happy to have more conversations with colleagues from Wales about how that can work going forward.

[Martin Vickers (Brigg and Immingham) (Con)]

It is clearly extremely welcome that the redundancy notices have been withdrawn—the steel community will breathe a sigh of relief. The Minister quite rightly speaks about what happens next. As well as a national streel strategy, the north Lincolnshire area needs a strategy of its own to maintain the local economy. Will she commit to an early meeting with MPs from the affected area, as well as with Councillor Rob Waltham, who leads North Lincolnshire council and has produced a document highlighting the way forward? That would be extremely helpful.

[Sarah Jones]

I thank the hon. Gentleman for his continued support for his community. Yes, I am very happy to meet the leader of North Lincolnshire council, as I have done previously; he is an incredibly important part of the jigsaw of what happens in the area. I am always happy to meet MPs—I meet my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) and the hon. Gentleman regularly—and will continue to do so to ensure that we work in the interests of the whole area.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I congratulate my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) on his tireless advocacy for the steelworkers and his Scunthorpe constituents—it should be recognised. How has the Government’s decision to take control of British Steel been received by the workforce, customers and suppliers?

[Sarah Jones]

I agree with my hon. Friend’s comments about the tireless work of our hon. Friend the Member for Scunthorpe on securing the future of British Steel. The Secretary of State went to the British Steel site in Scunthorpe just after the legislation was passed. I think it is fair to say that there was great relief after our intervention, but workers will also quite rightly be asking us, “What happens next and how will you secure the future of the site?” We are now completely focused on that.

[Sir Edward Leigh (Gainsborough) (Con)]

Let me ask a question on behalf of my constituents who have sweated blood to keep the blast furnaces going. Unfortunately, as we know, electric arc technology cannot make virgin steel—only blast furnaces can do that. Are the Government 100% committed to maintaining our permanent ability to make virgin steel?

--- Later in debate ---

[Sarah Jones]

As the Secretary of State made clear during the debate of Saturday before last, the capacity for primary steelmaking production is important, and the steel strategy will look at exactly how we deliver that. There are new ways of delivering primary steel—using hydrogen, for example—that other European countries are now using and developing. We will ensure that, whatever the future brings, we have the right level of production in this country.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Government have my full-hearted support for the action they have taken with regard to Scunthorpe, which is important for not merely Scunthorpe itself and the workers there but the supply chain as well. In that regard, I want to raise an issue of concern that I hope my hon. Friend the Minister will look into. I have had a letter from Ian Walker, who is the chairman of Rotary Engineering, a long-established, highly regarded specialist engineering firm in my constituency. It provided services to British Steel last November, and it is still waiting for payment for those services, despite regular correspondence that has been ignored. If Rotary Engineering is having this difficulty with British Steel, many other small and medium-sized enterprises could as well. Will my hon. Friend look into this as a matter of urgency, find out what British Steel has been doing and try to ensure that these important companies—important for not merely British Steel but our whole engineering industry—are paid and able to survive?

[Sarah Jones]

My hon. Friend makes a really important point. The supply chain of these big steel production companies, whether Tata, British Steel or others, is really important. I do not have an answer for him now, but I will look into the issue he raises about Rotary Engineering and ensure the right thing is being done.

[Richard Tice (Boston and Skegness) (Reform)]

I thank the Minister for her statement and the good news about the saving of British Steel. She has not referred to the timetable for moving towards nationalisation, which we fully support and encourage the Government to push on with, so that they can accelerate towards the modernisation programme that she referred to. The new-found love of this House for blast furnaces should be encouraged, and we should be refurbishing and investing in them. That is the right thing to do to create a thriving steel industry to support British industry and our defence industry.

[Sarah Jones]

We know that Reform is a recent convert to steel—some of us have been supporting the industry for a long time—but the hon. Gentleman makes a fair point about what comes next. Our position remains that the best way forward is to try to find a commercial business to invest alongside Government, but we will do whatever it takes to secure the future of steelmaking and protect those jobs, for national security and for the supply chains. No options are off the table. I hope he will understand that although nationalisation is the most likely option, we would prefer a commercially run business. We are investigating all options. Nothing is off the table. We continue having many conversations, and as soon as we have an answer, we will come to this House.

[Bill Esterson (Sefton Central) (Lab)]

We need steel for wind turbines, for the equipment for carbon capture and for the expansion of grid infrastructure. In short, it is an essential part of how we expand our energy security in this country. The Prime Minister told the Liaison Committee that the grid connection date for Scunthorpe was 2034. Can my hon. Friend confirm that, as a crucial element of the modernisation agenda and securing the long-term future of Scunthorpe and steelmaking, which is so important to energy and every other part of our economy, she and her colleagues are looking at how that grid connection can be brought forward?

[Sarah Jones]

I thank the Chair of the Energy Security and Net Zero Committee for his important question. He makes the point that we need steel for green energy—wind turbines, carbon capture and so on—and our energy security. There is an important wider point, which is that since the election, £43.7 billion has been committed by the private sector to invest in clean energy in this country. Those on the Opposition Benches who are questioning net zero are putting at risk thousands of jobs that we will see delivered through clean energy. We have to be very careful what we wish for, because that investment is incredibly important for our country. The green energy sector is growing 10% faster than the rest of the economy. These are important things and important jobs.

My hon. Friend makes a really sensible point about grid connection. We have not just seen this at Scunthorpe; we have seen it with many different companies, where grid connections being 15 or even 20 years away makes investment completely unviable. My right hon. Friend the Secretary of State for Energy Security and Net Zero announced last week how we are reforming the grid queue, getting rid of zombie projects and ensuring that we prioritise what is important. We will ensure we are doing everything we can to improve that connection at Scunthorpe.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

I take at face value what the Minister has said today about British Steel having a bright future. However, she did not mention any figures, other than a global figure of £2.5 billion floating around somewhere. Will she tell the House when she expects to publish the accounting officer assessment that is required when public money is committed? We can then test in the Public Accounts Committee whether those rules for spending public money are being adhered to, particularly in terms of feasibility.

[Sarah Jones]

The hon. Gentleman makes a really good point: we are spending public money, and we need to be incredibly careful in the way we do that. Of course, what we spend will be accounted for in the Department for Business and Trade annual accounts, as the insolvency costs were when we were in this position in 2019. We will update the House and bring forward whatever we can on those figures. He is right to raise that. I want to reassure him that the £2.5 billion is not floating around; it is a commitment in the Labour manifesto, and it is budgeted for. How we might spend that money is what we are trying to devise through the plan for steel, which will rightly have a lot of scrutiny from this House, the Public Accounts Committee and others.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

I wholeheartedly congratulate my hon. Friend on her sterling work and very much welcome her statement. No doubt she will remember that on 11 April, the Leader of the Opposition said that in government she had negotiated a steel modernisation plan. The next day, when the Government brought in emergency legislation to save Scunthorpe, she said she was still negotiating a deal when her boss called the snap general election. There was never any agreement for an electric arc furnace on Teesside, as she claimed, as much as me and my colleagues support the concept. Will the Minister confirm that it was the Conservative party that presided over the end of virgin steelmaking in Redcar and Port Talbot, and that it would have done the same at Scunthorpe were it not for the Labour Government? Will she also confirm that if the private sector will not sufficiently invest, the Government will maintain British Steel through public ownership and use their public procurement strategy to make the company sufficiently profitable?

[Sarah Jones]

My hon. Friend is completely correct. Indeed, the Leader of the Opposition confirmed on the “Today” programme this morning that the Conservative party policy is for an electric arc furnace at Scunthorpe or Scunthorpe and Teesside—it is unclear—which would have cost nearly twice as much as the existing proposals, without any mention of primary steelmaking. I understand that the official Opposition’s position is that they are not in favour of retaining primary steelmaking capacity in the UK.

[Harriet Cross (Gordon and Buchan) (Con)]

In her statement, the Minister celebrated the fact that this is not the end of British Steel, and we all welcome that, but Labour’s policies very well could be the end of domestic oil and gas, whether it is the extended windfall tax, removing investment allowances or no new oil and gas licences. We are walking towards the end of our domestic oil and gas sector, which has proven so beneficial to us across Scotland and the UK, all the while offshoring our emissions and relying on, at best, unreliable and, at worst, hostile states such as China to supply our renewable energy infrastructure. Taking the example of British Steel, is it not time to reverse Labour’s headlong rush towards ending oil and gas in the North sea and to rely on our domestic supply for as long as we can, to help our energy security into the future?

[Sarah Jones]

It would be helpful to understand the Opposition’s official position when it comes to China. China is the world’s second largest economy and our fourth largest trading partner. Hundreds of thousands of jobs in this country rely on our relationship and our trade with China. We on the Government Benches believe in free and open trade, and we will continue on that basis. The hon. Lady suggests that that is not the Conservative party’s official opinion; it would be useful to understand that.

Some 70,000 jobs have been lost in North sea oil and gas since the Conservatives were in power, because it is a declining basin and it is getting harder to drill for oil and gas—we know that. The transition is happening; the issue is how we support that. This Government are putting in place a huge amount of support to try to ensure that those very skilled workers can transition into the green energy sector. I repeat this statistic: £43.7 billion of private sector investment in clean energy has been promised since this Government came to power. Is it really the Conservatives’ opinion that we should throw away all that investment and not protect all those jobs for the future?

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I thank the Minister for her statement and for her swift action. The people of Scunthorpe will be grateful, but as my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) noted, that stands in contrast to the way in which the people of Redcar and other areas were so cruelly abandoned by the last Government. The steel industry is not the production of steel alone; it also includes the supply chain. The Davy Roll Company, now Union Electric Steel, in my constituency, at the heart of Gateshead, performs a vital role as the last cast steel roll maker in the UK. The Minister has met representatives from the company, so will she update me on the work that she is doing to protect not only the steel industry where steel is made, but the wider supply chain?

[Sarah Jones]

I have met representatives from Union Electric Steel—everyone still calls it Davy Roll. The supply chain is incredibly important, and we are looking at it in our plan for steel. However, the investments made across Government more broadly over the years show that that supply chain, in whichever area of manufacturing it is found, has not been protected. The Ministry of Defence is keen to secure the supply chain in the UK for the investment that we are putting into defence, whether in aerospace, advanced manufacturing or space. We need to build supply chain capacity here in the UK because the world has changed and we have different priorities now, and my hon. Friend is right to raise that.

[David Reed (Exmouth and Exeter East) (Con)]

There is consensus across this House that producing steel in the UK is completely necessary—that is undeniable. However, to produce steel we need coking coal. The US has given us a supply line for the next couple of weeks to keep our blast furnaces alive, and I know that the Minister is speaking to Australia and Sweden as well, but we need the ability to produce coking coal, so will the Minister please breathe fire into producing coking coal here in the UK?

[Sarah Jones]

I think the hon. Gentleman is referring to the situation at Whitehaven. As I have already said, British Streel told us directly that it could not use that coal because of the sulphur content and working coke ovens are needed to—

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

That is not true.

[Sarah Jones]

The hon. Gentleman says that is not true, but he needs to provide evidence of that, because that is what British Steel has told us, and it does not have coking ovens because they were closed under the previous Government.

[Sarah Champion (Rotherham) (Lab)]

Madam Deputy Speaker, you know that I am a proud steel MP, so it has pained me to watch my business wither on the vine under the last Government. I am incredibly grateful to the Minister for acting so decisively to save British Steel, but in the steel strategy, can she commit to look at the underlying problems affecting Liberty Steel, a speciality green steel producer, including high energy prices, business rates and other countries, particularly China, dumping their dirty, inefficient steel in our market?

[Sarah Jones]

My hon. Friend makes important points and that is exactly what we are looking at in the steel strategy. On dumping steel, having been requested to examine the issue by British Steel, the Trade Remedies Authority has agreed to look at steel safeguards and ensure that they are fit for purpose in the here and now. We are also looking at what happens beyond 2026, when the steel safeguards stop, to ensure that sufficient safeguards are in place. All the issues she mentions need to be looked at, including electricity prices and energy prices, which doubled under the last Conservative Government. As we have said before, 53% of global steel production comes from China. We need to look at that imbalance, at how we can ensure cheap steel does not come into this country and at how carbon leakage is working. We are working hard on all those issues.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

If the Government now believe that primary steelmaking capacity is critical for the security of the UK, do they also recognise that the skilled workers needed to produce that steel are equally as important? If so, why were they willing to let 2,800 of them be made unemployed last September in Port Talbot?

[Sarah Jones]

I hope the hon. Gentleman understands that the interventions that we made in this case were different for a number of reasons. When we were in Opposition, we worked with Tata to try to get it to change its plans, but we were unsuccessful. When we came into Government, we improved the deal that the previous Government had negotiated and we improved the redundancy offer. We got Tata to commit to invest in assets and free up land for other things, and we got it to provide a package of measures to improve that situation. The hon. Gentleman is right that that package meant the closure of the blast furnaces and the building of an electric arc furnace, with the closure happening before the electric arc furnace arrived, and because of the way that electric arc furnaces work, they are more efficient and need fewer people. We have been working really hard through the transformation board, led by the Secretary of State for Wales and the Welsh Government, to ensure that everybody has a significant package of support to try to ensure they transition to other jobs. That work is ongoing and progressing well, and we will continue to focus on it.

The two situations were fundamentally different. In Scunthorpe, British Steel was in the middle of a consultation on potential redundancies, and it failed to secure the materials to keep the blast furnaces going, which would have completely broken what British Steel should have been doing during that consultation. We could not allow that to happen, those blast furnaces to close and thousands of people to be suddenly made redundant, which is why we intervened in the way we did.

[Chris McDonald (Stockton North) (Lab)]

I thank my hon. Friend for her statement and for her action on British Steel. I extend my thanks to the officials in her Department, who I know have worked tirelessly in support of our Ministers to secure a future for the business. The Government’s plan for change has changed the lives of steelworkers in Scunthorpe and Teesside. People I work with, and their families, will feel a sense of relief—I feel a sense of relief. Ultimately, it is the customers of British Steel who will pay the wages of those workers in the future. In one of the future updates that the Minister has promised, can we cover the product and market development for British Steel, and how British Steel can better penetrate the UK market and increase its market share for domestic production?

[Sarah Jones]

I thank my hon. Friend for his work and for the support that he has provided to me, officials and others because of his expertise in this space. He is right to thank staff; they have worked unbelievably hard, and I am very grateful for what they have done. He is also right to talk about how we ensure that the product market develops in the way that we want it to. We are looking at how we increase demand in the UK, as well as at procurement and other issues, so that we are not just trying to save our existing provision, but to expand our provision so that the steel industry can start to grow, instead of halving as it has done over the past 10 years under the Tories.

[Chris Law (Dundee Central) (SNP)]

Despite recent comments by a Scotland Office Minister, may I make it crystal clear that it is not “manufacturing grievance” to suggest that Grangemouth, like Scunthorpe, should be nationalised to protect a critical economic and security asset that has been run down by foreign owners? What we have seen from the UK Government in the last weeks, including today, is that when push comes to shove, they can take bold action in crisis, as they have done in Scunthorpe. Therefore, is it not the case that if the UK Government fail to act in a similar fashion at Grangemouth, highly skilled jobs will be lost, Scotland’s only capacity to refine oil will be shut down and critical energy security will be further diminished?

[Sarah Jones]

We deeply regret the choices that INEOS has made. As the hon. Gentleman knows, Grangemouth does not provide the only refining capacity in the UK, but he is right to say it is the only provision in Scotland, which is why we intervened with a package of support and a £200 million commitment from the national wealth fund for what happens to the site. The hon. Gentleman is right to stand up for people in Grangemouth over the issues that they are facing, and we are doing all we can. As I said in my statement, the position in Scunthorpe was unique and particular, but that does not mean that we do not care just as much about the people in Grangemouth and that we will not ensure that we do everything that we can to pursue to the future development of that site in a way that supports jobs.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I add my thanks to the Minister and her colleagues for their sterling work in recent weeks. It is true to say that Labour is saving steel. Some 68% of the steel this country needs is imported. That is a disgraceful legacy from the last Conservative Government, but it presents an opportunity for this Labour Government. Does the Minister agree that the next step we need to take is to mount robust trade protections, including bringing the carbon border adjustment mechanism forward to 2026 and making it mandatory for public procurement to use British steel, so that as we rebuild this country, we do it with British steel made by British workers?

[Sarah Jones]

My hon. Friend is right to say that we produce only about 30% of the steel we use in this country, and we must be much more ambitious about increasing that figure. He is also right to raise questions about carbon leakage and safeguards. The CBAM is being introduced in 2027. We are working through what happens in the interim period, how it works and how it interacts with the European CBAM—some changes are being made to what will be implemented. This work is obviously being led by the Treasury, but we are working really closely with the Treasury to ensure that the CBAM works in a way that protects the steel industry.

[Sir Julian Lewis (New Forest East) (Con)]

On the day that Parliament was recalled, I gather that the workers themselves had to confront Chinese executives who were intent on coming on to the site. They believe that those executives intended to take unilateral action to shut down the blast furnace irrecoverably. Is that correct? What does that tell us about the motivation and behaviour of China when it gets its hands on our strategic industries?

[Sarah Jones]

I need to be clear on this point, because I know that there has been lots of speculation. We are not aware of any deliberate acts of sabotage. There was an issue with people coming on site who did not gain access. No Jingye officials are on site at the moment. We are talking to Jingye in a respectful way about what happens next. That said, it was the case that we had been negotiating in good faith, and we felt that that good faith had ended in the way in which Jingye was not securing the raw materials that we were really clear it needed to secure, so there was a breakdown there. The position on Jingye is a position about it as a company; it is not a position about our wider view of China. Because we have hundreds of thousands of jobs that are dependent on trade with China and because it is our fourth-largest trading partner, our position remains that we need to be mindful of that, but we also need to be mindful of security, and we always will be. There will always be a very specific and deliberate account of the security implications of any investors in the UK.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

We cannot make British steel without British ceramics. High temperature-resistant refractory ceramics are needed to line the blast furnaces to keep them alight, but the Minister is acutely aware that the ceramics sector in this country, much like the glass and chemicals sectors, is being crippled by energy prices, because of both wholesale costs and policy costs, which the last Government chose to put on and which were continued by this Government. When the Minister talks about backing British industry and manufacturing, can she say when glass, ceramics and other foundational industries will get the support they need to prop up and support the advanced manufacturing that we are all so proud of? The cost of that will be a tiny proportion of what has been committed to British Steel.

[Sarah Jones]

My hon. Friend is quite right to raise ceramics and their importance in blast furnaces. We have all become steel experts through the many podcasts that everybody has been listening to over recent weeks. One of the issues with shutting down blast furnaces immediately without proper provision is not just that the metal hardens, but that the ceramics crack and fracture. That was the risk with Jingye refusing to bring in those raw materials. My hon. Friend knows that the ceramics industry is very important to the Secretary of State and to myself, and the wider foundational industries are very important too. He is right to raise issues that we have talked about many times in terms of energy prices. The Government are working at pace to try to alleviate that problem and many others that he has raised, whether cheap imports or other issues.

[Sammy Wilson (East Antrim) (DUP)]

The Government have done the right thing, because steel is strategically important and the jobs are locally important. The Minister has asked what is next. I suspect that the House will come back to this issue, maybe very shortly, because over the last decade, we have seen energy-intensive industries flee the United Kingdom. Aluminium is gone, we have hardly any oil refineries, and we have one steel plant left. The reason for that is the mad net zero policy, which the Minister has tried to defend today. Decarbonisation has increased our energy costs, so that they are three times higher than in the US and eight times higher than in China. We do not have any local supplies of raw materials; we bring them halfway round the world. Carbon taxes add to the cost for businesses. Does the Minister accept that the economic reality is that we pour public money in at one end, and see it going down the net zero drain at the other?

[Sarah Jones]

I just do not agree with the right hon. Gentleman’s position on this issue. He is right to say that we have seen the offshoring of manufacturing over a period of years. We have not entirely lost the aluminium sector—there is one smelter left, but that is all. Indeed, I meet representatives of the aluminium sector regularly, because it has had 25% tariffs put on it, just as the steel industry has. The trade body, UK Steel, was really clear that the UK’s reliance on natural gas power generation leaves us with higher prices. The steel sector does not pay the green levies because of reductions that it is given. It is not net zero causing this problem; the challenge is how we get the clean energy that we need to stop our reliance on the overseas oil and gas market. He is right to say that we have seen offshoring, and we are working to stop that.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the Minister, in contrast with the last speaker, agree that the future of this country is in clean power, safely produced from our own natural resources, such as floating offshore wind in the Celtic sea, and ultimately in our infrastructure being built out of green British steel, not steel imported from China?

[Sarah Jones]

My hon. Friend is absolutely right. We were talking earlier today about the importance of floating offshore wind in the Celtic sea, and the huge possibilities that brings the UK for energy security and good jobs.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Further to the answer that the Minister gave to my right hon. Friend the Member for New Forest East (Sir Julian Lewis), will she at least concede that it would be opportune to conduct an audit of our critical national industries, to ensure that if there are issues around foreign ownership, or ownership by malign state entities, we know where they are and have a plan to deal with them?

[Sarah Jones]

The right hon. Gentleman is right. We need an audit of our critical national industries, and we are doing that through our industrial strategy, so that, particularly in the eight growth-driving sectors that we have identified, we have policies to ensure that companies in the UK can continue to thrive. We believe in free and open trade, and we are not moving away from that; the Chancellor is making that case this week with our American colleagues. Security is incredibly important. The right hon. Gentleman will know that we are ensuring that where security is an issue, we take appropriate action, but that does not mean that we will stop trading with the second largest economy in the world.

[Lola McEvoy (Darlington) (Lab)]

I put on record how proud I am to be sat on the Benches of the Government who are finally taking action to save the steel industry in this country. In my constituency, tens of thousands of people have steel engineering and manufacturing running through their blood. We are proud of that history, and we really want to contribute to a green, clean industrial future. When Ministers have big discussions about investment, and meet great businesses that want a place in which to invest, I ask them to consider Darlington and the Tees valley—a fruitful land full of people who know the value of hard graft.

[Sarah Jones]

Darlington and the Tees valley are excellent places in which to invest, so I wholeheartedly agree with my hon. Friend. In many parts of our country, steel is in the bones of our communities, but of course, this is not about looking back—it is about looking forward. In the future, we will need steel for not just clean energy, but for building the 1.5 million homes that we want to build, for Heathrow expansion and for our railways. We will need it across a whole range of sectors, and we know that demand is increasing, not reducing.

[John Cooper (Dumfries and Galloway) (Con)]

The Minister talks about working at pace. If she wants to see what pace looks like, she might consider the Business and Trade Committee’s report on steel, which was turned around in rapid time—much faster than the snail’s pace review of steel, which has yet to emerge. Will it do so in the spring, or the summer? No one is quite sure. When that review finally emerges, will it address the elephant in the room, which is the ridiculous energy costs in this country? They have been driven up in part by gas, but also by carbon taxes, and by the renewable subsidies laid on by this Government.

[Sarah Jones]

The ridiculous energy costs that the hon. Gentleman refers to are a result of 14 years of Conservative Government—we need to be really clear about that. His point about the steel strategy, which has already been made, is reasonable. Of course, Members are really keen for us to bring that strategy forward as soon as possible, but I repeat what I have said: we are looking at spending up to £2.5 billion, and there is absolutely no way that I, the Secretary of State, the Chancellor or the Prime Minister could come to this House and say, “Here is a steel strategy that we have written on the back of a fag packet after a couple of weeks thinking about it.” We need to do this right, and that is what we are doing.

[Madam Deputy Speaker (Judith Cummins)]

I call Ann Davies.

[Ann Davies (Caerfyrddin) (PC)]

Diolch yn fawr, Madam Dirprwy Lefarydd. I would like to follow up on a question from the hon. Member for Brycheiniog, Radnor and Cwm Tawe (David Chadwick), because unlike at Scunthorpe, jobs at Port Talbot are not being saved. The Government say that instead, they will retrain workers through the employment and skills flexible fund. Seven months later, can the Secretary of State say exactly how that money has been spent, and how many of the 2,800 laid-off steelworkers at Port Talbot have been retrained or re-employed?

[Sarah Jones]

I thank the hon. Lady for promoting me to Secretary of State—I am actually just a junior Minister. She is right to raise the issue of Port Talbot. The transition board has papers that we can send her, which set out exactly how many people have gone through training processes. The number of people who have taken compulsory redundancy is very small; I might be wrong—I am speculating slightly—but I think it is in the region of 190. Those people have had a package of support, and a lot of detail is available through the transition board about how that support will be provided. Of course, about 5,000 jobs will be secure in Port Talbot, but the hon. Lady is right to raise the issue; it is a significant and important one that I would not want to downplay. The situation in Port Talbot was different, and we had to have a different response, but I am very happy to provide the information that she wants in more detail.

[Madam Deputy Speaker (Judith Cummins)]

I call Jim Shannon to ask the final question from the Back Benches.

[Jim Shannon (Strangford) (DUP)]

Thank you very much, Madam Deputy Speaker. I thank the Minister for all her hard work, and I thank the Secretary of State, the Prime Minister and the Labour Government for their commitment to, and for saving, British Steel. There is no one in this great nation of the United Kingdom of Great Britain and Northern Ireland who is not aware of that and does not welcome it, so well done.

I welcome the Minister’s statement, but can she confirm that developers and those in the construction sector in Northern Ireland, where steel is really important, will be able to secure steel as a certainty, and at a reasonable price? Can she confirm that they will not be tempted to outsource for fear that orders will not be fulfilled, because British steel will be accessible, viable, ready and available to those in Northern Ireland who wish to use it?

[Sarah Jones]

I thank the hon. Gentleman for his words of appreciation. The construction sector is incredibly important when it comes to steel. We are looking at every measure we can take to ensure that people can buy British steel in a way that is competitive and useful for them. We are looking at procurement and at other measures to make the sector more competitive, but the hon. Gentleman is absolutely right that British Steel provides huge amounts of steel for the construction sector, and we want that to continue.

Steel Industry (Special Measures) Bill

Sarah Jones Excerpts

2nd reading
Saturday 12th April 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

I thank hon. Members on both sides of the House not just for participating in this debate, but for returning to this place in these exceptional circumstances. There seems to be some debate about it, but I think this is the sixth time since the second world war that we have met on a Saturday, and only the second time that the House has been recalled on a Saturday—the other being during the Falklands war.

Before I respond to Members’ comments, I echo the point made by my right hon. Friend the Secretary of State in his opening remarks: this Government will never hesitate to protect our steel industry and the thousands of steel workers in this country who built it. We always said, from the outset of our negotiations with Jingye, that we would keep every option on the table and would act in the national interest to protect jobs. UK-forged steel built our railways, bridges and buildings. It is integral to our economy’s future, just as much as it has been to our rich industrial past. That is why we need to pass this legislation today.

I will try to address as many of the points raised as I can. Members made the argument for British Steel. My right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) pointed out that 95% of Network Rail steel is from British Steel. My right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) pointed out that TfL would not get anywhere were it not for steel. My hon. Friend the Member for Stockton North (Chris McDonald), who has such expertise, pointed out that steel is the future and everything we have is made from or with steel.

I can reassure the House that our plan for steel—the £2.5 billion that we committed to in the manifesto—will work to break down the trade barriers that we have on steel, consider the all new technologies that we can introduce, and look across the whole of the UK to ensure that we protect steel everywhere.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The Minister speaks about the whole of the United Kingdom. I am very pleased that the Government are acting, literally at pace for once, by stepping in to protect the workers in Scunthorpe, in precisely the opposite way to when they turned a blind eye to the plight of workers at Grangemouth, which is also critical national infrastructure labouring under energy prices. Why is there one rule for industrial production in England and another for industrial production in Scotland?

[Sarah Jones]

In the first 10 weeks after coming to power, this Government negotiated a better deal on Port Talbot and delivered a £200 million commitment to secure the future of Grangemouth. We acted last week on the zero emission vehicle mandate to secure our automotive industry. We are acting today to save the workers of Scunthorpe. The Government believe in direct action—in an active state securing the future of our industry across the UK.

My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) raised trade protection issues. I want to reassure her that we will ensure that the right trade protections are in place for our steel industry. Concerns were raised about future decisions about moving towards nationalisation and whether we would come back to this place. I can reassure the House that we will come back to this place if are any further matters relating to ownership or otherwise. We will keep the House updated.

Concerns were raised about the “reasonable excuse” part of the Bill, and examples were requested. The “reasonable excuse” clause could include physical inability, illness or accident, and it is reasonable and measured in this case.

Many hon. Members talked about China. We are focusing on this company today; we are not focusing on the nation of China. The Bill is about what has happened with British Steel and what this Government are going to about British Steel. I would not want this House to believe that the policy of this Government is anything other than a belief in free and fair trade, and that includes with China.

Turning to the sunset clause amendments that have been tabled and the suggestions during the debate that those measures should be included in the Bill, I reiterate what the Secretary of State explained about the risk of a hard backstop reducing our leverage, which was why we did not include a sunset clause. However, we have heard the House’s concerns. I confirm that we will repeal the legislation as quickly as we can and that we will involve the Select Committee. I also make this pledge to the House: we will update the House regularly and the Secretary of State has committed to do so every four working weeks. I hope that that will give the House reassurance.

[Several hon. Members rose—]

[Nick Smith (Blaenau Gwent and Rhymney) (Lab)]

I welcome the Government’s actions today. I thank my hon. Friend the Minister for Industry for all the hard work that she has put in to get us to this place. Does she agree with me that our future industrial strategy must contain an extended section on Government procurement for steel, so that British-produced steel has a fair crack of the whip in the future?

[Sarah Jones]

My hon. Friend is right that procurement has a key role to play in our industrial strategy in steel and beyond. We are working with colleagues in the Cabinet Office to ensure that that is the case. I speak to the hon. Member for Brigg and Immingham (Martin Vickers) about these issues regularly, as does the Secretary of State—

[Graham Stuart]

On a point of order, Mr Speaker. It is reported that Jingye management has been turned away by workers and the Humberside police today, so will the Minister tell the House whether the Government’s policy is to bar Jingye management from going on to the premises?

[Mr Speaker]

As the right hon. Member knows, that is great information but not a point of order.

[Sarah Jones]

I will not comment from the Dispatch Box on reports that have been made during the debate. We are actively engaged, minute by minute, on activities in British Steel. If anything, those reports underwrite the need for the powers in the Bill to be introduced on this day. I hope all hon. Members will support the introduction of the legislation and vote for it today.

The hon. Member for Brigg and Immingham suggested that we could have moved faster. I reassure the House that we do not recall the House lightly. We do it because we have a choice today: do we want to deny any possibility of the future of the steelworks at Scunthorpe and do we want to see the closure of the blast furnaces, or do we want to secure a future for those workers and for primary steelmaking in this country?

[Brian Leishman (Alloa and Grangemouth) (Lab)]

On that point, will the Minister give way?

[Sarah Jones]

I hope my hon. Friend will forgive me, but there is no time for me to give way. I reassure the hon. Member for Brigg and Immingham that in no way have we moved slowly—we have been moving at pace throughout our time in government.

There were suggestions that we should move to nationalise British Steel today and that this Bill is already nationalisation. It is not nationalisation and we are not moving to nationalise British Steel today. We are taking very significant powers that we do not underestimate. That buys us time to have the leverage and the time we need to look at what must be done next, but we will act in the national interest. As the Prime Minister said yesterday, nothing is off the table. There was a suggestion that we should use the Civil Contingencies Act 2004. That is difficult to do because it is very hard to meet the criteria; there has to be a risk of death, so we did not meet that criteria.

I agree with my hon. Friend the Member for Sefton Central (Bill Esterson) that economic security and national security are two sides of the same coin. The emergency legislation we have brought forward today is essential to protect British Steel, its workforce and the national interest. This Government will never hesitate to act in the national interest to keep Britain secure at home and strong abroad, and this legislation is proof of that. Today we take back control, and I urge all Members of this House to vote for this Bill.

Scunthorpe Steelworks

Sarah Jones Excerpts

Monday 7th April 2025 Commons Chamber

[Martin Vickers (Brigg and Immingham) (Con)]

(Urgent Question:) To ask the Secretary of State for Business and Trade what actions the Government are taking to prevent the closure of Scunthorpe’s steelworks.

[The Minister for Industry (Sarah Jones)]

I appeared before this House on 27 March, just moments after British Steel’s devastating announcement of early asset closures at Scunthorpe and its commercial decision to consult on large-scale redundancies. The course of action chosen by British Steel’s owner is deeply disappointing, and our thoughts remain with British Steel workers and their families at this very concerning time. Government’s contingency plans have kicked in, and teams from the Departments for Work and Pensions and for Education are there to provide support and advice to affected workers. We will ensure that support is in place for as long as possible.

Looking ahead, I can assure this House that early blast furnace closures at Scunthorpe are far from a done deal. We have been clear that the best way forward is for British Steel to continue as a commercially run business with private investment and Government acting in support, which is why we made the company a generous offer of public funding on 24 March. As Members are aware, British Steel’s owner did not accept our offer or the necessary conditions attached, which were designed to protect workers, safeguard taxpayers’ money and deliver a sustainable company at the core of the future of British steelmaking.

However, that is not the end of the matter. The Business and Trade Secretary and I met Jingye, the owner of British Steel, on Friday, and there are plans to meet again this week. The Government remain resolute in our desire to secure a long-term future for the Scunthorpe steelworks, retaining steel production and putting an end to the years of uncertainty, and I can assure the House that no options are off the table to achieve that. We will continue to work tirelessly across Government and with British Steel’s owner to find a better outcome.

I cannot go into further detail at this stage. It would be damaging to British Steel’s workers and their families, the company and its supply chain for me to speculate on how events might unfold in the coming days and weeks while a live negotiation is under way and policy is being developed at pace. However, Members should be in no doubt that there is a bright future for steelmaking in the UK under this Government, and we believe that British Steel and its superb workforce at Scunthorpe have an integral role to play in it.

[Martin Vickers]

I thank the Minister for her comments. While it is welcome that work is being done through DWP and so on to support potential redundant workers, the reality is that Jingye is not involved in meaningful negotiations. The Government have been critical of it in previous responses to my questions. It is very obvious that Jingye has cancelled the raw material orders that are essential to keep the furnaces going; those orders were due in mid-May. When I was at the steelworks on Friday, I was told that unless another order for iron ore pellets could be placed this week, it would be too late.

The Minister was somewhat reluctant to go down the nationalisation route when I raised the matter a couple of weeks ago. However, the majority opinion in the area and among leading politicians is that nationalisation on a temporary basis is the only solution to keep the furnaces burning come the middle of next month. Can the Minister therefore confirm that it is something the Government are actively considering? It would provide an opportunity to rebuild the industry, hopefully secure new private sector involvement and convince the customers—most notably Network Rail, which gets 95% of its rail track from the Scunthorpe works—that supply will continue.

I have come round to the view that nationalisation on a temporary basis is, in this instance, the only way. It will secure the jobs and secure a future for steel production in Scunthorpe. I urge the Minister not to rule it out, and indeed to commit to it.

[Sarah Jones]

I thank the hon. Gentleman for securing this urgent question and for his comments. I know we will continue to talk and have honest conversations.

Jingye is very much talking to us. As I said, I met Jingye with the Secretary of State and others on Friday, and we hope to do so again this week.

Our priority is respecting the workers, safeguarding jobs and retaining steelmaking. We have been clear in our belief that the best way forward is for Scunthorpe and British Steel to continue as a commercially-run business with private investment and with the Government acting in support, but I can tell the hon. Gentleman that no options are off the table.

[Matt Western (Warwick and Leamington) (Lab)]

I was concerned to read about the cancellation of shipments of essential coking coal and so on for Scunthorpe. The Business and Trade Committee heard from British Steel and Tata about some of their needs. The Minister will be aware that an area where we have failed as a country over the last six years or so is not having an industrial strategy, so I make clear to her once more the absolute urgency for us to establish a steel plan to set out the UK’s needs and ensure that we have resilience across our industries and for our economy.

[Sarah Jones]

My hon. Friend is absolutely right, and we talked about exactly that at the Business and Trade Committee. This country has seen a significant decline in steel manufacturing over the last decade, and we want to turn that around. Long before we got into government, we committed to a plan for steel, which represents a £2.5 billion investment in UK steelmaking. As we speak, there is a roundtable at JCB in Stafford on the plan for steel, on this occasion discussing trade barriers—I was due to be chairing but came back to be in the Chamber. We have been having a series of roundtables to gather evidence and pull the facts and figures together so that we can put the right investment in place.

[Mr Speaker]

I call the shadow Secretary of State for Housing, Communities and Local Government.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) and Rob Waltham, our excellent candidate for Mayor of Greater Lincolnshire, for their engagement and work on this issue.

Despite repeatedly promising to protect and support virgin steelmaking capacity when in opposition, the Labour party is potentially presiding over its total demise. In the process, thousands of blue-collar jobs in this once proud industry have either gone forever or are at risk, including 5,000 directly employed roles at Port Talbot and Scunthorpe alone and many more in the supply chain.

Given that the regions with the highest numbers of steelworkers are Wales and Yorkshire and the Humber, the situation is dealing a hammer blow to efforts to address regional inequality. Steel is obviously a key strategic industry—even more so given our need to increase defence spending and infrastructure investment, and even more so again given President Trump’s game-changing imposition of tariffs.

The Prime Minister keeps saying that the world has changed, and that we are witnessing the end of globalisation. I cannot say that I totally agree, but if that is the Government’s position, surely they have no choice but to intervene to support domestic production. The alternative could see us locked out of reliable, consistently priced sources of steel. The Government have stepped in to help car manufacturing in recent days, so will the Minister now redouble her efforts to reach a deal with British Steel?

Steel production is just one of the industries closing due to our high energy prices, which are 50% higher than our competitors in France and Germany and 400% higher than in the USA. Other manufacturers such as CF Fertilisers on Teesside and Ineos at Grangemouth have closed their doors or are in the process of doing so. Will the Minister press with the Chancellor the case for permanently lower industrial energy prices?

The Minister mentions support for steelworkers. How many steelworkers have the Government engaged with? What support has been given to account for the knock-on effect to communities? What assessment has the Minister made of the effects this situation will have on national security? She mentions a bright future for steelmaking in this country. Will she confirm that that means primary steelmaking capability?

[Sarah Jones]

I thank the hon. Gentleman for his contribution and for welcoming the Prime Minister’s announcements today on the zero emission vehicle mandate and the changes we have made to support the automotive industry, which is incredibly important.

The hon. Gentleman talks about the number of good steel jobs that have gone forever or are at risk, but that happened because the previous Government failed to intervene to support our steel industry. That is why we lost so many jobs over the last decade. Not having an industrial strategy or a plan for steel meant that we allowed offshoring of our jobs in the steel sector, which has damaged us. He rightly said that in many key parts of our country we need good jobs. I should say that steel produced really good jobs, which are better paid than the average in the area and are done by really good, qualified people we want to retain in the UK.

The hon. Gentleman talked about energy. Again, the reason why we are here is that we had years of the previous Government not intervening in this space. We are well aware of energy prices in this country and are doing all we can to bring those down. [Interruption.]

I was asked by the hon. Gentleman to redouble my efforts in the negotiations we are having with British Steel. I will do everything that I possibly can—as we are doing. I hope he understands that I cannot go into detail about the state of those negotiations because that would be bad for the workers, bad for our supply chains and bad for the outcome.

The hon. Gentleman talked about national security and primary steel. We are conducting a review of primary steel as part of our plan for steel and we will have the results of that soon. We will look at those results and see what we need to do. I should stress that there is defence equipment made in the UK from electric arc furnaces; there is not much defence work either in British Steel or at Tata in Port Talbot at the moment. People such as Sheffield Forgemasters produce steel from electric arc furnaces. However, the hon. Gentleman is right to talk about the importance of national security and to say that the world has changed and things have moved on, so we need to ensure that we are protecting our country as we need to.

As I said in the Chamber in response to the last urgent question on this issue, there is a reason why Putin bombed the blast furnaces in Ukraine pretty much first: it was because a country wants to have that steelmaking capacity. We are alive to those issues, and that is why nothing is off the table. We are doing everything that we can.

[Hon. Members]

You’re not!

[Bill Esterson (Sefton Central) (Lab)]

It is a shame that the Conservative Members who were heckling the Minister have forgotten their own Government’s failure to tackle the problems of high industrial energy prices. [Interruption.] They can heckle again now, but they did nothing in government.

Two weeks ago, I was at the Tata steelworks with the Energy Security and Net Zero Committee. We spoke to people locally, who had great concerns that when the blast furnaces there shut—it was too late for this Government to take action to prevent that when they came in—it was some years before the new electric arc furnace technology was ready to be installed and to operate.

Will my hon. Friend do everything in her power to ensure that there is not that same gap here? The problem that has caused in south Wales has reminded people of the damage done by previous eras of deindustrialisation, and they are concerned that we are now repeating the same mistakes. Will she confirm that the Government will do everything in their power to ensure that we do not make those same mistakes of deindustrialisation this time?

[Sarah Jones]

We are very much planning not to make the mistakes that my hon. Friend talked about. We do not want the blast furnaces to shut—that remains the Government’s view—and we will do everything we can to reach a deal with British Steel to protect workers and secure those jobs and the production of steel in the long term.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Sarah Gibson (Chippenham) (LD)]

Speculation around British Steel at the Scunthorpe plant is deeply concerning for the workers and business owners alike, who are desperately waiting for the Government to deliver just one piece of good news. Steel is vital to our green economy as it plays a huge role in our ability to extend our railways and to build zero carbon homes. What incentive does British Steel have to keep going? It has had to contend with the Chancellor’s decision to hike national insurance contributions and with Trump’s terrifying tariffs.

Manufacturing businesses need the Government to offer reassurance, certainty and stability. We need to move from a patchwork of last-minute rescues to a long-term plan that will see industry on a sustainable footing. We need a robust industrial strategy with a proper plan for steel within it. We have been told to expect this industrial strategy shortly. Will the Minister confirm exactly when we will have it? Can she reassure the small and medium-sized manufacturing businesses in my constituency and across rural England that Britain wants them to grow? Will the strategy include a long-term vision that will allow the UK to secure the investment that we need for virgin steel production?

[Sarah Jones]

I can reassure the hon. Lady that we are developing a long- term plan in the industrial strategy. We are developing the plan for steel, as I have said, and alongside that we have our trade strategy, which has become very significant in recent times. She is right to point to the tariffs that have been placed on steel and aluminium. This is a deeply difficult situation and I have met the steel sector on multiple occasions to talk about it. That is what the conversation that is happening in Stafford as we speak is about: what extra measures need to be put in place. The Secretary of State met the Trade Remedies Authority this morning to push on some of the issues around trade protections.

The hon. Lady talked about the SME manufacturing supply chain. Of course that is very important and we will do what we can within the industrial strategy and the steel strategy to support those businesses. I understand that the speculation about what may or may not happen at Scunthorpe is deeply distressing, not just to the workers and their families but to all those who are part of the supply chain. That is why we will continue at pace to have the conversations we need to have with British Steel to ensure that we do the right thing, and as I said, nothing is off the table.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

The whole of northern Lincolnshire will feel the brunt of this British Steel decision, should the site close, and I urge Jingye to reconsider the Government’s generous £500 million offer. Support through the Department for Work and Pensions is really welcome but the truth is that people have been leaving British Steel for years because of the cycle of its uncertain future. I welcome the Government’s comment that no options are off the table. In the interim, are the Government considering ordering the raw materials to keep the blast furnaces burning?

[Sarah Jones]

I thank my hon. Friend for her question and for pointing out that the uncertainty that has existed for many years is difficult for people, and that if they can secure jobs elsewhere, they will do that. I have been to Scunthorpe and talked to people who work there and to the trade unions a lot, as she would expect, to make sure that we understand all the issues at play.

I understand my hon. Friend’s question about what we may or may not do in the immediate term, but I hope she will respect the fact that we cannot at this point talk about what we might end up doing, because those conversations are commercially sensitive. I want to reassure her, and the whole House, that we are doing what we can to ensure we get the right solution and that we do not want the blast furnaces to close.

[Richard Tice (Boston and Skegness) (Reform)]

About 10 days ago, I urged the Minister and the Government to use this decision by the Chinese to close British Steel as an opportunity to take British Steel into public ownership. The situation is urgent. It has stopped ordering the raw materials for the blast furnaces, and unless those raw materials are ordered within about 10 days, those blast furnaces will go cold in mid-May. The Minister says that no options are off the table. Will she confirm that the Government will make those decisions and come to a conclusion about the options within this very short timeframe to ensure that the blast furnaces stay open, and that the right long-term solution is to take British Steel into public ownership and invest in it for British industry, for British Steel and for the workers in Lincolnshire?

[Sarah Jones]

As I said about 10 days ago, economics and jobs, not ideology, will drive the decisions that we make. The hon. Member is right to point to lots of speculation about the need to buy raw materials. I assure him that we are having those conversations with British Steel, and we will continue to do so. As I said, our preference is for a commercial solution, with Government providing support, but all options remain on the table, and I can assure him that we are working at pace.

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

Wolverhampton North East has the UK’s largest steel processing and distribution centre. Will the Minister outline how the Government intend to protect jobs across this vital industry by backing a robust industrial strategy and the £2.5 billion plan for steel?

[Sarah Jones]

I would be happy to come to my hon. Friend’s constituency to have a look at and to talk to some of the people who work in the steel business. Huge numbers of organisations and businesses across the country rely on, use, and produce things from steel, and we need to ensure that we factor them into the conversations we are having. We are looking at the supply chains and how we boost industry more widely through our industrial strategy. We are looking at all the things—whether it is skills, R&D or access to finance—that businesses of all sectors have told us they need. Whether it is through the industrial strategy or the plan for steel, we are trying to ensure that we have a robust industry in this country so that jobs are not offshored and we have the security of knowing that we are producing the things that we need here in the UK.

[John Cooper (Dumfries and Galloway) (Con)]

Between 1997 and 2010, about 36,000 jobs were lost in steelmaking, or about half the workforce—that was under Labour, of course. I am concerned to hear talk today about nationalisation, and I say that with due deference to my hon. Friend the Member for Brigg and Immingham (Martin Vickers); the old joke is that if we want to stop crime paying, we should nationalise it. Given that this Government could not run a bath, never mind the steel industry, would a better idea not be to support the industry with, as I have mentioned before, a golden share to give us some say over what happens? Again, is the truth not that the dogmatic pursuit of net zero is driving up energy bills in this country to a level that is simply not sustainable for industry?

[Sarah Jones]

I will repeat what I have said: we are looking at all the options on the table; we are talking to British Steel about the right outcome; and we will do what is right for our country and our industry. On energy prices, the hon. Member is right to raise the high costs of energy. The supercharger comes into effect this month, and British Steel will get support from that, as will other high-end energy-intensive industries. But he is right to point to that issue and we are looking at it.

[Emma Foody (Cramlington and Killingworth) (Lab/Co-op)]

I thank the Minister for her answers. As she will know, there has been intense media speculation that the blast furnaces will close before the consultation is complete. Will she reassure me and workers that everything is being done to ensure that does not happen, and that Jingye conducts its affairs with respect to UK law?

[Sarah Jones]

My hon. Friend is right, and we will do that. The offer that was put to British Steel and which was refused included conditions to do exactly that, as well as including a number of other things around jobs, as we would expect. It is very important that any deal using British taxpayers’ money is done in a way that we know is within the law and is a good use of taxpayers’ money. I am very mindful of that, and I am constantly mindful of the insecurity that people who work at British Steel will feel, as well as the need for all of us to try to work as hard as we can to ensure that we get a good outcome for those people.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I thank the hon. Lady for keeping an open mind about what to do to save the remnants of our steel industry. Does she not agree that it is vital that we maintain a strategic capability to make steel? Is it not unconscionable that we are building British warships with imported steel? I recognise that the situation represents the cumulative failings of Governments over many decades, but it is now time utterly to change our policy. That includes the energy policy, which has prioritised things other than price in relation to our energy-intensive industries. I am glad to hear that the Government have some answer to that, but to build up a strategic capability for wartime, which is what we now need to tool up for in this country, we need a wholesale change in energy policy. I hope that she will look for common cause between the two Front-Bench teams, because this should be done on a consensus basis. We do not need to tear chunks out of one another for the mistakes we have all made in the past.

[Sarah Jones]

I agree with the hon. Member’s premise that we need to ensure that we have steel production in the UK, although there is some nuance around some of this. High-quality steel is being made, as we speak, for defence purposes by electric arc furnaces. That is perfectly possible; we melt scrap and add about 20% of primary steel. For some things, depending on what we are making—I know too much about the steel industry now—we do not need any primary steel. We are conducting a review of primary steel, which will be finished shortly. Again, neither Tata nor British Steel is a critical supplier to defence programmes at the moment, but we need that steel production, as I said before, so that we can build whatever we might need in the future. Of course, we will work cross-party; if that is his offer, it is very gladly taken.

[Sir Julian Lewis (New Forest East) (Con)]

The Minister should not waste the opportunity of a lifetime in the parties of the right urging a party of the left to nationalise a British industry. One organisation that has been utterly consistent in all this is the GMB union: it wrote to the previous Government’s Defence Secretary saying that a business Minister had failed to answer clearly whether virgin steel was essential for defence. Today’s Minister seems to suggest that it might not be, but we must have a quantity of virgin steel, even if we add other things to it, to embark on the process of making essential defence products. Seize the opportunity: keep the blast furnaces, and if necessary, nationalise them for good.

[Sarah Jones]

If we get into conversations about different types of steel, it is like the Facebook update “It’s complicated”, right? It is complicated. For some things, we absolutely need primary steel; and for some things, we do not. That is why we are carrying out a fundamental review of steelmaking and the need for it here in the UK. Those results will come out soon. The right hon. Member is right that the GMB has been an advocate for this, as have Community and Unite. We talk to them regularly about British Steel. I have not failed to notice the slightly odd position that we find ourselves in today. I repeat that we are looking at all options. The House will understand that we are talking about large amounts of taxpayers’ money, which we have to spend in the right way, in a sensible way, and in a way that will get us what we need. That is what we are looking at, and it is what we will do.

[Lee Anderson (Ashfield) (Reform)]

These steelworkers do not want visits from the DWP. They do not even want visits from out-of-touch Labour Back-Bench MPs. What they want is their jobs: they want to make steel. It is interesting to hear from the Minister that all options are on the table. Do they include Reform UK’s policy of scrapping net zero and renationalising British Steel?

[Sarah Jones]

It is good to hear that the workers in British Steel do not want visits from politicians; I assume the hon. Member, and his party, will take his own advice. I hope that he will understand that we cannot talk about the conversations that we are having with British Steel. It would be very disruptive to the process, the workforce there, the supply chain and commercial confidentiality. I can only repeat that our preference is that we come to an agreement with British Steel based on commercial terms, with Government support, but we are looking at all options and nothing is off the table.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Does the Minister agree that we appear to have hammered out a cross-party consensus on the need to ensure that this country is able to continue to produce virgin steel, just like every other G7 country, for a whole raft of reasons? Does she agree that the case is underscored and reinforced by the Trump slump, by her party’s welcome, albeit belated, pragmatism on net zero and, one hopes, an attendant fall in energy costs, and by the Prime Minister’s intriguing announcement of the end of globalisation? Does she agree that those three things have underscored and reinforced the case for continuing to produce virgin steel in this country?

[Sarah Jones]

I agree with the right hon. Member that the world has changed. We know that we are in a different position than that which we found ourselves in a few years ago. We need to ensure that we are secure as a country, and I believe steel is part of that answer.

We also need to ensure that we are stopping the decline of the steel industry, which was always the Labour party’s wish in opposition. We are committed to the plan for steel—the £2.5 billion on top of the £500 billion that we are giving to Tata Steel in Port Talbot. This is a real commitment to changing how we operate the steel industry in this country, so that we stop this constant decline and start to grow the industry and ensure that we are producing the things we need.

[Mr Richard Holden (Basildon and Billericay) (Con)]

The Minister seems to be on the verge of acknowledging that, as the last virgin steel production in the UK, Scunthorpe is critical national infrastructure and that the Government will nationalise it, if necessary. Can she commit to the House that virgin steel production in the UK is critical national infrastructure and that, if necessary, she will indeed nationalise it to maintain this critical resource for UK defence?

[Sarah Jones]

I am afraid I have to disappoint the right hon. Member, as I am not on the verge of anything. I repeat what I said, because it is the right thing to do: we will continue to negotiate with British Steel, mindful of the workers and the insecurity of the consultation they are currently undergoing. We will ensure that we do the right thing through our plan for steel and our response to British Steel, and I cannot say any more than that at this point.

[James McMurdock (South Basildon and East Thurrock) (Reform)]

I thank the Minister for her comments. Given the vital importance of this industry, on which I believe the whole House agrees, does she recognise that it would be a siren to those who, on a national scale, would be less than trustworthy, if we were unable to produce virgin steel ourselves? Given the undoubted national security risk, does she agree that, despite no options being off the table, one outcome that is absolutely off the table is closure? If so, why not just commit to protecting and saving these jobs?

[Sarah Jones]

British Steel is a private company owned by Jingye, and it is for Jingye to make its own decisions. I have said multiple times that we will continue to talk to see if we can come to an agreement on the very generous offer that was made. We are looking at all options, because we know that is the right thing to do. To be clear, we do not want the blast furnaces to close, and we want to come to an agreement.

[Nick Timothy (West Suffolk) (Con)]

I wish the Minister would stop saying that some of these issues are complicated, and therefore that we should not debate them. We are sent here to debate complicated issues, and she is supposed to be here to answer our questions.

We are witnessing the absurd spectacle of the Government begging a Chinese company to take taxpayers’ money to keep British Steel alive, while China suppresses its own costs and dumps its steel on other countries. We may soon be the only G7 country incapable of producing primary steel. The Minister brushes off the reality of crippling British energy costs, which will only get worse in the years ahead as a matter of deliberate Government policy. Why will she not guarantee the supply of the raw materials needed to keep the blast furnaces open, and why will she not admit that steel has no future in this country so long as this Government’s trade and climate policies continue?

[Sarah Jones]

If only the hon. Member had done something when he had some influence as an adviser to a previous Prime Minister. That would have been good, wouldn’t it?

I was not sent here to divulge commercially confidential conversations with a private company that affect thousands of people’s jobs, and if the hon. Member thinks that I was, he is wrong. We are not going to do that, nor are we begging anywhere for anything—

[Nick Timothy]

You are.

[Sarah Jones]

No, absolutely not, and I am disappointed that the hon. Member would speak in that way. As he knows, we are having a conversation about a potential deal that we believe is there to be done with British Steel.

On the wider issue, it is a fact that China produces 53% of the world’s steel, and we have huge issues with that, as the hon. Member knows. The tariffs have over-complicated the situation, which is why the Secretary of State is meeting the Trade Remedies Authority today, why we are looking at our trade strategy, and why we are talking to the Americans to make sure we can do a deal with them. We will continue to ensure that we have all the protection we need, in terms of stopping the onshoring of steel as much as we can. Those conversations will continue. The TRA is now looking at steel, and we expect those results quite soon.

[Mr Andrew Snowden (Fylde) (Con)]

The Minister used the interesting stat that 53% of the world’s steel is produced by China. If we look back at the lead-up to Russia’s illegal invasion of Ukraine, and the way that Russia started to dominate the nuclear fuel market in particular by pushing out western providers, we see that there is a reason why China and Russia are behaving this way: they want to control the raw materials that are critical for national security around the world. This House is debating the prospect of a Chinese-owned company turning off our blast furnaces in this country in a month’s time. That cannot be an acceptable position to be in. This has been asked several times, but it has not been answered: will the Minister commit to ordering the raw materials to keep those furnaces on, if necessary? She said in response to a question on primary steel that a consultation was under way on a strategy, and that we would look at what we needed to do. It is clear what we need to do: produce primary steel.

--- Later in debate ---

[Sarah Jones]

That is what we were telling the previous Government for many years. British Steel is owned by a Chinese company because the purchase was made under the last Government in a commercial and private sector way. Labour Members believe in fair, open markets; I do not know quite what the Opposition are becoming. On China, our priority is UK jobs and steel production. We believe in a fair, open market for foreign investments, and in having mature and balanced relationships with trading partners such as China. We will ensure protections for the steel industry in the UK, and make sure we do the right thing. On primary steel and the materials that the hon. Member wants me to commit to spending millions of pounds on, I think most Members would understand that I cannot commit to anything like that at this time and place.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers to the questions—they have been very helpful. My concern is not only about retaining UK steel, but for the workers. The potential for 2,700 people to lose their jobs is frightening, and I think of all the families who will be directly impacted by this. Will the Minister confirm that ahead of any announcement made on Scunthorpe steel, she will commit to meeting the workers who will be directly affected by any decision, and provide a way forward, so that workers in the steel industry are secure in their employment and are protected throughout the United Kingdom?

[Sarah Jones]

I thank the hon. Gentleman for his question. We of course continue to talk to the trade unions, including Community, GMB and Unite, who have been incredibly strong voices for their workers in Scunthorpe. We will continue to talk to them and to people who work there, to understand exactly what they are going through. They have to be at the heart of all the decisions we make.

Scunthorpe Steelworks

Sarah Jones Excerpts

Thursday 27th March 2025 Commons Chamber

[Martin Vickers (Brigg and Immingham) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade to make a statement on the future of Scunthorpe steelworks.

[The Minister for Industry (Sarah Jones)]

First, my thoughts are, and the thoughts of all hon. Members will be, with British Steel workers and their families, following the company’s announcement of plans to close the blast furnaces and other steelmaking assets at Scunthorpe, and its commercial decision to consult on redundancies. This is not what we wanted, and I know how worrying it will be for all those involved. I am grateful to my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who is in his constituency today engaging directly with his local community.

In the immediate term, we must support the people who work at British Steel. Our contingency plans have kicked in to ensure that all possible support is made available to British Steel’s workforce. Both the Department for Work and Pensions and the Department for Education will have teams on the ground shortly to engage with employees for as long as necessary. We have asked British Steel that officials be given direct access to British Steel sites to bring their support as close as possible to affected workers.

This Government inherited a steel sector in crisis, and resolving the long-standing uncertainty around the future of Scunthorpe has been a priority from our first days in office. That is why, when we committed up to £2.5 billion of investment to support our steel industry, we earmarked substantial funding to support British Steel, in addition to the funding allocated to our new and improved deal with Tata Steel.

I confirm today that we have taken another significant step forward. On Monday, my right hon. Friend the Business and Trade Secretary made a generous conditional offer of financial support to British Steel designed to deliver a sustainable future for the workforce, industry and local communities. In the light of the challenging fiscal context, this speaks volumes about our commitment to the steel industry. The offer follows months of intensive engagement with British Steel to reach a deal that meets our public accountability and legal requirements, works for local people and UK taxpayers, safeguards as many jobs as possible and ensures the company’s long-term commercial viability. The offer that we have made is conditional on British Steel meeting those key tests, which is consistent with our approach to similar investment deals.

The company must provide the commitments that we need, and which taxpayers would quite rightly expect, in exchange for substantial public funding. It is regrettable that it has not yet done so or accepted our offer. I therefore call on the company to reconsider its plans to announce early closures, accept our conditions and accept our generous offer, which remains on the table.

I assure the House that we are working tirelessly to find a solution. We believe that there is a bright future for steelmaking in the UK, and we call on British Steel to work in partnership with a Government who care deeply about the steel sector to put the business on a sustainable footing for the future and to put an end to the years of uncertainty at Scunthorpe.

[Martin Vickers]

I thank the Minister for her statement and for the updates that she has provided to me in recent weeks. As she said, there will be increased anxiety among the workforce today, and we look to the Government to provide maximum support.

For the sake of clarity, will the Minister confirm that the Government do wish to maintain blast furnace production until an alternative arc furnace installation is up and running? Will she also confirm that they want to maintain production to meet the demands of the defence sector, particularly in view of the recently announced increased spending?

The Minister will be aware of the projects that North Lincolnshire council have proposed, such as the green growth zone and those in the artificial intelligence sector. Will she confirm that she will support them? She will also be aware of other projects in the region that are looking for Government support. Will she confirm that she will look sympathetically on them? Also, although I would not want to advocate this, will the Government consider nationalisation of the industry as a last resort?

[Sarah Jones]

I thank the hon. Gentleman for the manner in which he has represented his constituents today and engaged with us previously. On the point of clarity, I confirm that we would rather the blast furnaces remained open. He knows that if they closed before a supply of steel were secured, that would be significant in terms of customer confidence and what will happen to the customer base.

On the hon. Gentleman’s point about defence, as was said at the Business and Trade Committee yesterday, there was a reason why the Russians bombed the blast furnaces in Ukraine first: steelmaking capacity is needed not just for defence, but for building the structures required for construction. He was therefore absolutely right on that front.

This morning, I met the council and talked about both the plans for us to work together on British Steel and the wider question of what else we can do in the region and how the Government can support that. A small ministerial team has been coming together to think about those things.

On the hon. Gentleman’s final point, as he knows, the amount of money that we are talking about to develop new infrastructure is significant. Our preferred approach by far is that British Steel comes back to the table, talks with us about the offer on the table and we have that private sector investment in the future, but of course we are looking at all options.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

May I welcome the Minister’s explicit ambition to retain primary steelmaking capability on these islands? I hope the whole House will row in with that. I also welcome the £2.5 billion that the Government have earmarked for investment in the sector. Will she, however, put a rocket up the Trade Remedies Authority? We have heard very clearly from steelmakers that they need the same safeguards against diverted Chinese steel flooding into our market that will click into place in Europe in April. It is not acceptable that we have to wait until the summer for our markets to be safeguarded in the same way. The TRA needs to act, and it needs to act now.

[Sarah Jones]

I thank my right hon. Friend for his question and his contribution through the Select Committee session we had yesterday. The TRA announced yesterday that it will widen its review of UK steel defences. It has accepted the challenge from UK Steel to do just that and is acting. The Secretary of State and others will be looking to make sure our steel defences are as strong as they need to be. Today’s news about Scunthorpe sits alongside the wider issues about tariffs and the global trade of steel. We need to make sure we are helping in that space too.

[Madam Deputy Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

The news from Scunthorpe is deeply concerning. Jobs are at risk and our thoughts are with all those who now face uncertainty. The world is becoming more dangerous and we need to bolster our defence industry. Without the ability to produce our own primary steel, those efforts could be put in jeopardy. What impact does the Minister believe the news will have on Britain’s defence industry and what impact does she believe closure would have on our national security?

It takes a special something to be able to offer someone £500 million and for them to reject it, but whatever it is, I guess the Business Secretary has it. Whenever Labour negotiates, Britain loses. Whether with Mauritius, AstraZeneca or now British Steel, the Government confirm that—and so far, at least, that appears to be the case with the United States too. The Government pretend that tariffs on steel are inevitable, which, as we showed in government, is simply not the case. Therefore, will the Minister update the House on United States trade negotiations, in particular in relation to steel? Will the Minister confirm that the Business Secretary has engaged further with Jingye since it rejected him?

Tariffs are but one challenge facing the industry. Alongside the jobs tax and the unemployment Bill, the steel industry is being choked by the Government’s ideological green targets. Will the Minister tell the House what concerns British Steel has expressed about those net zero targets? As I said at the beginning, this news will be deeply concerning for steelworkers in Scunthorpe. Has the Minister or the Secretary of State spoken with them about the news and, if so, what support are they being offered?

[Sarah Jones]

I do not want to insult this House by suggesting that there was any kind of deal on the table under the previous Government and that anything happened on steel other than a halving of production over the last decade—a halving. Lots of things shut down and closed during that period, not just in the steel industry but in many others. I look at my hon. Friend the Member for Redcar (Anna Turley) for proof of that.

Whether in steel, in shipbuilding or in the automative sector, the previous Government had neglected to take major decisions or had kicked the can down the road. All we inherited were a series of industrial crises that we are now trying to solve. We delivered a better deal with Port Talbot than had been negotiated under the previous Government. We are still in talks with British Steel and hoping that we can come to a resolution, and not just because of the very many very highly skilled workers in Scunthorpe who we respect, honour and want to make sure stay in their jobs. I have nothing more to say on that front.

On tariffs and the situation with the US, we are in a good position in this country in that the relationship that our Prime Minister has built with President Donald Trump and his team means that we are in active conversations about a potential trade deal. This is a good, positive thing, and we are carrying on having those conversations. My right hon. Friend the Secretary of State has been talking regularly with our American counterparts, as Members would expect. We will have cool heads in this space and navigate our way through. We—our officials—are talking daily with British Steel. We are talking with the trade unions and all the players to try to ensure that, in the difficult global landscape that we find ourselves in, we are doing right by the people of Scunthorpe.

[Laurence Turner (Birmingham Northfield) (Lab)]

I draw the House’s attention to my background as an official of the GMB steelworkers union, that union’s support for my constituency party and my membership of GMB and Unite.

The three steelworkers unions—GMB, Unite and Community—have put forward a multi-union plan for Scunthorpe. Will the Minister meet those unions urgently, including with cross-governmental officers, so that we can do everything possible to keep that multi-union plan on the table?

[Sarah Jones]

I take this opportunity to pay tribute to the trade unions—GMB, Community and Unite—which we have been working with closely. We have been discussing their plan. As I say, our preference is that British Steel accepts the deal—the incredibly generous offer of public funding—we have given it. We hope we can find a way forward that involves keeping the blast furnaces open, but we are of course looking at every other option, and we certainly have been talking to the trade unions about their suggestions.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Clive Jones]

It is going to.

From electric vehicles to wind turbines, high-quality green steel is an important component of our transition to a low-carbon economy. The Government need to move rapidly from the Conservative’s legacy of a patchwork of last-minute rescues to a genuinely long-term approach that is effective for British industry and does not harm British workers. What are the Government doing to ensure that communities in Teesside and Scunthorpe are supported against job losses? When will the Government realise that sitting on our hands and hoping that Trump will not hit us with even more tariffs is not a good negotiating strategy? Will the Minister take a stronger approach and bring forward retaliatory measures against Donald Trump’s political allies such as his co-President Elon Musk and his company Tesla?

[Sarah Jones]

I can reassure the hon. Gentleman that we are not sitting on our hands, and there is a good reason why it would not be right to comment in this place on the internal negotiations between this Government and the United States. We will rightly keep a cool head in those conversations and ensure that we are ultimately doing what is right for our industry and our people, but we are in a good position in that we are engaged in deep conversations with the US and will continue to do that.

The hon. Gentleman asked about the support for local people. There are various stages. The starting point is that we very much hope that we can come to a deal and negotiate with British Steel—that it will accept what we are offering and that we can move forward on those terms. In the short term, the Department for Work and Pensions and the Department for Education will be there on the ground ensuring that people are getting the immediate support they need. If the consultation continues and there is a closure, of course much more intervention to support local people would need to kick in. We are already working on all manner of contingencies to ensure that we support people as we are doing in Port Talbot, but our aim is absolutely not to get to that point.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Select Committee member Sonia Kumar.

[Sonia Kumar (Dudley) (Lab)]

The UK now produces less steel than our European neighbours Germany, Italy, Spain, France, Austria and Poland, and over the past 30 years, China’s share of global steel production has risen from 13% to 54%. To safeguard the future of the steel industry, we must think about diversification. Does my hon. Friend agree that supporting British small and medium-sized enterprises into the steel industry will make it more competitive and sustainable?

[Sarah Jones]

I thank my hon. Friend for that conversation and all her work with the steel industry in her constituency. The steel strategy that we are putting together, which will be published in the spring with £2.5 billion to invest, will consider how to stimulate demand, use research and development and get the most out of scrap in the UK, as well as looking at trade and overcapacity, carbon leakage and the availability of sites—there is a whole raft of work going on. She is right about ensuring that there is an industry for the big and small players. That is what we are working through, and I look forward to working with her on that.

[Madam Deputy Speaker]

I call the Father of the House.

[Sir Edward Leigh (Gainsborough) (Con)]

Scunthorpe neighbours my constituency, and many of my constituents who work there will be desperately worried today. This is a vital national interest—a crisis. For the past 150 years, wars have been won by states that can make virgin steel. Will the Government do anything—tariffs, or the Secretary of State going up to Scunthorpe now to negotiate directly with the company—to ensure that we keep our vital national interest going, which means blast furnaces?

[Sarah Jones]

As the right hon. Gentleman would expect, the Secretary of State is and has been talking to Jingye, as have I and officials. Those negotiations will continue. The site at Scunthorpe produces a lot of different types of steel, as he will know. It provides 95% of all steel used by Network Rail. It is incredibly important in that sense, and he is right to draw attention to that. There are many different ways of making steel. On the primary steel point, we are investigating the merits of investing in direct reduced iron, which is when hydrogen is used instead of the old blast furnaces. The reality is that the Scunthorpe blast furnaces are old infrastructure—decades old—that needs updating. We need to move to new technology, and that is what we are trying to do with Jingye.

[Matt Western (Warwick and Leamington) (Lab)]

Clearly, the absence of an industrial strategy in the past five years has had an impact, so I welcome the Government’s notion of a steel plan. Given that the industrial strategy features three major elements—construction, defence and energy infrastructure—will the steel plan look not at a 10-year horizon but at one of 25 to 30 years, to ensure that we get the investment we need for the UK to have virgin steel production, like all other 19 countries of the G20?

[Sarah Jones]

I thank my hon. Friend for his question and for his expertise as a member of the Select Committee. We had this debate yesterday. Yes, having a long view has to be the right thing. The Government must ensure that we spend that £2.5 billion of taxpayers’ money in the right way to secure the industry well into the future.

[John Cooper (Dumfries and Galloway) (Con)]

As the grandson of a steelworker in Corby, Northamptonshire, I understand something of the iconic nature of the industry. The hon. Lady tries to blame us Conservatives for what went wrong. Is the situation not too confused? The Government are not sending the right signals to the industry and we are not sure what we want. We already do not make the right kinds of steel for much of the defence industry. The steel strategy will be published in the spring—wonderful. When is the spring? The Government need to get a grip and send out signals now. If we are going to negotiate with the Chinese about the Scunthorpe mill and the amount of money we are spending there, should we not have some kind of golden share so that taxpayers are comfortable about what is going on there?

[Sarah Jones]

I can assure the hon. Gentleman that I very much have a grip. We are working with officials, the Secretary of State and others all the time. In terms of the conditions that he suggests we should put on the offer of funding, the offer we made was conditional on job targets, fair terms for workers, adhering to UK law, protecting taxpayers’ money—a whole raft of conditions were set and need to be adhered to.

As for the hon. Gentleman’s haste, there was no steel strategy in the 14 years of the previous Government. We are developing one. I am not going to stand in front of taxpayers in my constituency and say, “I have spent £2.5 billion just on a whim.” We have to get this right.

We are working with industry. I was at Celsa in Cardiff this week at a roundtable of the scrap industry and the steelmakers talking about the plan. I have done roundtables with all the industries that buy steel to ensure that we understand what demand will be over the coming years. We are getting this right, which is what the taxpayer would expect of us.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

My hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) is in Scunthorpe right now, supporting our fantastic steelworkers. Many of my constituents work in Scunthorpe; I know that they will be feeling extremely anxious, and my heart goes out to them. Will the Minister confirm that she remains steely in her determination to secure the future of the UK construction and steel industries, and that she will do everything she possibly can to support my constituents who are affected?

[Sarah Jones]

My hon. Friend’s constituents who work for British Steel will, of course, be deeply worried. When I was last there in February, I talked to workers, the unions and management. This is a proud industry of good jobs with good salaries compared with the local averages. I am well aware of how anxious those workers will be feeling; I hope they can take some comfort, at least, from the fact that we are doing absolutely everything we can to secure a deal with British Steel.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is difficult to listen to the Minister at the Dispatch Box saying that everything is okay with the United States because of the positive relationship between the Prime Minister and the President, when it can be characterised as the President saying, “Jump,” and the Prime Minister asking, “How high?” The US has visited precisely the same tariffs on the UK steel industry as on the Chinese. If that is a special relationship, I would hate to see what an ordinary relationship looks like.

When will the Government get a grip on the production of primary steel? It is a non-negotiable for a G7 nation to produce primary steel. It is intrinsic to our defence and security. The Government seem to be trying to negotiate a situation that is the worst of all worlds, whereby the taxpayer has to stump up the money but the private sector in China gets to dictate the terms.

[Sarah Jones]

I do not recognise that framing at all. We are in a better position than many other countries in terms of the strength of our relationship with the US and the building up of relationships that has happened over recent months. As I said, the Secretary of State is in regular talks with his counterparts and we are having constructive talks with our counterparts. We cannot go into the details of those negotiations, but I can assure the hon. Gentleman and the House that we have a cool head, we know what we want and we will do what is best for our industries in the long run.

On the matter of primary steel and steelmaking in the UK, we need our defence and our security to have strong, vibrant steelmaking production in the UK. There are different ways to do that, including with different technologies, which are moving all the time. That is why the steel strategy needs to anticipate where technology is going and make sure we get that right.

[Bob Blackman (Harrow East) (Con)]

I think the Minister is giving a few mixed messages, if I may say so. The Government are sending support people to counsel those who may be out of a job and are making an offer to the firm that will actually be providing those jobs to try to cushion the blow. The sad reality is that if those blast furnaces close down they will not be recoverable, so the first thing that has to happen is ensuring that they are not closed down. The consequence would be the steel industry going into steep decline, with more people unemployed; we would then have to import steel from China at a much higher cost. Why will we not give a guarantee that the blast furnaces will not close down?

[Sarah Jones]

I am sure the hon. Gentleman knows that this is a private company that will make decisions of its own. We are operating within that environment. We have put an offer on the table that is about the development and redevelopment of Scunthorpe, the creation of an electric arc furnace and the transition for that. The offer is still on the table and we are still talking to the company about it. The reason that we are there on the ground now is that the company has decided to launch a consultation on redundancies, and it is right and proper that we are there to provide support to workers.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I commend the Minister and the Secretary of State for their hard graft to secure a deal in the interests of my steelworkers in Teesside and those in Scunthorpe. It is deeply concerning that Jingye has chosen to reject the generous offer that was on the table. I am sure I stand with Members across the House in urging Jingye to come back to the table and secure that deal. Will the Minister reaffirm that all options remain open, including strong national intervention to protect our steel industry and make sure that British steel is made here in Britain?

[Sarah Jones]

I know that my hon. Friend is working hard on behalf of his constituents; I appreciated being able to talk to him in the run-up to this. I can reassure him that this Government want to deliver a vibrant steel industry in the UK. We are very well aware of the importance of British Steel and of the Scunthorpe site and associated sites. We are doing all we can to make sure that we keep that operation going.

[Richard Tice]

We all know that steel, and particularly the ability to make primary steel, is a critical national industry. The Chinese might be giving up on British steel, but the British people do not want to give up on British steel, nor should we allow the final two blast furnaces to close. May I urge the Minister to take this not as a negative, but as an opportunity to be positive? We should take British Steel into public ownership and create a long-term, 20 to 30-year positive plan to invest in steelmaking for British industry and for our defence industry.

[Sarah Jones]

Through our plan for steel and the £2.5 billion that we are investing in the steel industry, we are aiming to do exactly that, to keep the industry going. I invite the hon. Gentleman to go and see the other sites around the country where we have electric arc furnaces in operation, because they are not that different from blast furnaces: they are still massive buildings melting and making the steel, but in a much more efficient way. The problem we have with Scunthorpe is that the blast furnaces are very old and will need huge amounts of money spent on them, and of course British Steel is losing £700,000 a day on Scunthorpe. This is not about ideology or particular political beliefs; this is about economics and about making sure that we protect our country, that we provide the defences we need, and that we are as secure as we can be in a changing world. On that, I agree with the hon. Gentleman.

[Derek Twigg (Widnes and Halewood) (Lab)]

I thank my hon. Friend for her statement; I know that she is doing all she can on the issue. We cannot have a defence industrial strategy unless we have our own primary steelmaking facilities, so clearly we cannot let these furnaces close. I was interested to hear what the Minister said about having various meetings in Whitehall and with the Treasury. When is she likely to be able to come back to the House and report on the progress made on this issue and, importantly, on a steel strategy for the long term—not just five or 10 years, but 20 years or more?

[Sarah Jones]

I can reassure my hon. Friend that the Treasury is completely committed to having a plan for steel. We talked to my right hon. Friend the Chancellor a lot about this when we were in opposition, just as we have been doing in Government. The very generous offer put on the table to British Steel was signed off, as is quite right, by the Chancellor and by the Prime Minister. They are both committed to this. We will be coming back in the spring with the steel plan, in which we will set out how we will spend the rest of the fund that we have. In the meantime, I again urge British Steel to come back and talk about the offer that is on the table and see whether we can come to a deal.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Given the geopolitical uncertainty ushered in by the new American Administration and by America and China’s attitude to net zero, will the Minister assure the House that in making decisions on the future of critical national infrastructure that touch upon the defence of this country, such as the extraction of shale gas and the continuance of blast furnaces producing virgin steel, she will be very careful about doing anything that would reduce this country’s capability to stand on its own two feet?

[Sarah Jones]

I will certainly ensure that we do not do anything that reduces our ability to stand on our own two feet. I can give the right hon. Gentleman that assurance.

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I thank the Minister for her comments on the national steel strategy and for agreeing to meet the owners of Union Electric Steel in my constituency. Does she agree that continuing to be able to produce cast steel rolls in the UK is an essential part of the steel strategy that will benefit Scunthorpe, Port Talbot and other communities?

[Sarah Jones]

I am very much looking forward to the meeting with my hon. Friend’s constituents, who are an important part of the steel chain. He makes an important point: we make many different products and have many different assets in the UK that we need to protect, beyond the big six steel companies.

[Graham Stuart (Beverley and Holderness) (Con)]

It is now clear that domestic virgin steel production is a national security imperative. Acting on it is not acting on a whim. Will the Minister respond to her hon. Friends and to Conservative Members by recognising that domestic virgin steel production is a national security imperative? Whether it is through nationalisation, golden shares or the other ideas that have been suggested, if it is a national security imperative we must act, regardless of technology. Will the Minister please tell the House that she agrees with that?

[Sarah Jones]

Madam Deputy Speaker, you will recognise the conversations that we are having from your experience as Minister of State in the Department for Business, Energy and Industrial Strategy. The Opposition seem to have a new-found enthusiasm for virgin steelmaking that in government they did not have at all. We will make sure that we are doing the right thing. [Interruption.] I do not have time to go into this conversation at this point, but I will be very happy to have it with the right hon. Gentleman. There are some important points to note, including that we make a lot of our steel for defence not from primary steel but in electric arc furnaces. It is about getting the right mix. That is what we will make sure we do.

[Chris Vince (Harlow) (Lab/Co-op)]

Last week, I visited British Offsite, whose chief executive officer hails from my constituency of Harlow, about the innovative house building that it is doing using techniques that require a lot of steel, although I have to say that it uses it efficiently. What meetings has the Minister had with house builders, as well as with the defence sector, as she rightly said, as part of the Government’s steel strategy?

[Sarah Jones]

I meet house builders regularly; I have some meetings with them today. The production and recycling of steel is important to construction, as are some of the off-takes from steel that can be used to make cement; there is recycling that can be done on that front as well. We need a lot of steel to build the 1.5 million homes that the Government want to build, so we need to make sure that the steel industry is strong.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers. We all share her frustrations about the process. The news that the Government’s offer of funding to retain jobs at Scunthorpe is to be rejected certainly outlines the difficulties in British businesses no longer being owned by those who have an interest in British jobs. My thoughts are with the workers today who are looking at their children and their mortgage repayments and wondering how they can make it work out, when all they want to do is work. How can the Government give confidence to workers in Scunthorpe and in industries that rely on steel throughout the United Kingdom of Great Britain and Northern Ireland, so that they know that a way forward can be found?

Shipyards: Economic Growth

Sarah Jones Excerpts

Tuesday 18th March 2025 Westminster Hall

[The Minister for Industry (Sarah Jones)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) on securing such an important debate. I thank him for quoting Donald Dewar in the first speech of the Scottish Parliament in 1998. I worked in an office next to Donald Dewar for a couple of years and he was an incredible man. He also said in that speech:

“We are fallible. We will make mistakes. But we will never lose sight of what brought us here: the striving to do right by the people of Scotland; to respect their priorities; to better their lot; and to contribute to the commonweal.”

The debate this afternoon has shown that many Members are carrying on in that spirit and acting in that way on behalf of their constituents.

One of the first issues that crossed our desks when we came to power last July was the challenge with Harland and Wolff. We were faced with a dilemma: if we had, as the shadow Minister suggested, thrown money immediately at the problem, we would have been throwing good money after bad. That was clear to anybody who had any sight of what was happening, but it was also clear that we were in a perilous position and we wanted to make sure that the Government could do whatever they could to save all four yards. There was a big push, for a number of reasons including the contracts that existed, to think about Belfast, and not to think about the four yards together.

A collective piece of work was done in which I played a small part and my hon. Friends the Members for Glenrothes and Mid Fife and for Na h-Eileanan an Iar (Torcuil Crichton), who has the Arnish port in his constituency, as well as the Secretaries of State for Northern Ireland, Scotland and Defence and my boss the Secretary of State for Business and Trade, played a large part. They all wanted to make sure we could do some kind of deal. When I was sat in the Ministry of Defence with Navantia, we were scratching our heads and thinking, “What on earth needs to be done here?” It was a big piece of work, with a lot of hard work around the clock from officials. The Prime Minister intervened because he saw the importance of this good piece of work. My hon. Friend the Member for Glenrothes and Mid Fife made the important point that we did not want to do this work out of a sense of charity. It was because the people at Methil, in his case, are enormously skilled, offering the possibility of future contracts and operations.

We did not see it as charity; we saw it as protecting the talent we have in this country, and wanting to see it grow. When I had the privilege of going to Methil to meet and talk to some of the 200 workers, 50 of whom are apprentices, it was apparent that this was a place—though cold—where we built the things that defined the 20th century, and can also be where we build the things that will define the decades to come. It is important to keep that in mind.

I want to touch on an issue many hon. Members raised about the Scottish Government, procurement and the award going to a Polish shipyard. I was talking to my hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey) about that earlier today. He questioned why Poland had been chosen over Port Glasgow, which was a good question to ask. I know Anas Sarwar has also been asking questions. I heard the intervention about phase 2, and perhaps there is something to be pulled and gained from this, though what has transpired is a shame.

There is a question about procurement, which both we and the Minister for Defence Procurement are looking at. We will keep doing that, including considering the Procurement Act 2023. I will soon be talking to that Minister, not only in this area but on steel, to see what more we can do.

[Jamie Stone]

I thank the Minister for giving way. On that point, I do not know how well I can put this. In building offshore structures, different bits can be built in different places, but they would come to Invergordon to be amalgamated, hence the £55 million Government investment. Could the same principle apply of looking at the rules, to ensure that the different bits are built in Methil or Ardersier, rather than being built abroad? Because that is our fear, that they may be made far away in somewhere such as Poland or Korea.

[Sarah Jones]

I thank the hon. Member for that intervention. He mentioned the importance of the £55 million that has gone to Cromarty Firth. Of course, we need to ensure, when looking at supply chains in whatever the industry, we do what we can to rebuild British jobs. In quite a few of our manufacturing industries over recent years, we have seen a slow decline, which we are keen to turn around.

I am working on the steel strategy, where we have a £2.5 billion fund that we committed to in the general election, on top of the £500 million that will be going, if delivered, to the Port Talbot work with Tata. That is a lot of taxpayers’ money; we want to ensure we are spending it wisely and that we are using the levers of Government, whether in procurement or other matters, to ensure that we are building as much as we can in the UK. We obviously have to be cognisant of laws around procurement and need to look at it carefully. It is an ambition of the Government that we make things in the UK and use supply chains here as much as possible.

I am sorry about the decision that was made in Scotland. I am also sorry that there is no one here from the SNP to make their case. We will do what we can with procurement to ensure we make the right decisions. We talked about shipbuilding and shipyards and the importance—

[John Grady]

On the topic of SNP Members being away—perhaps they are all listening to “Desert Island Discs”, although one would not reach the desert island if the SNP were in charge—many of my constituents have family, friends and loved ones on the Scottish islands, but at many times of the year they have terrible difficulty going to see them because of the appalling ferry service. That is because the age of the fleet has increased significantly during the 18 years that the SNP has been in power and the reliability of the vessels is down, which damages businesses, people trying to go to hospitals or travelling, and industry on those islands. Does my hon. Friend agree that the way the SNP has managed the ferry service in Scotland over the last 18 years is utterly contemptible?

[Sarah Jones]

I thank my hon. Friend for his intervention and I will bow to his wisdom as to why and how that situation has transpired, but for sure the ferry service is crucial for people’s lives, wellbeing and health. As my hon. Friend the Member for Isle of Wight West (Mr Quigley) said, a ferry service is not just about identity; it is also about basic necessities and lifelines. So, I agree with my hon. Friend that there does not appear to have been good management of the ferries by the SNP, but sadly we are not overly surprised by that.

There were lots of good contributions to the debate about the role that shipbuilding can play and about some of the issues that we need to look at. We have talked a lot about defence. I know that my hon. Friend the Member for Glenrothes and Mid Fife, who secured this debate, has about 350 workers in his constituency who work for Babcock and we are really pleased that the Government have committed to the 2.5% spending on defence going up to 3%. I have talked to the Minister for Defence Procurement and Industry, and of course we all think that the increase in defence spending presents an opportunity to do more here in the UK. I am working with colleagues to make sure that we get that right.

The whole point of the industrial strategy, which the Conservative party was ideologically opposed to, is to bring together the things that we do really well and ensure that all the levers of Government are tilted in the direction of turbocharging those sectors. Defence is one of those sectors, but historically defence has sort of worked to one side and everybody else has worked to another side. We are trying to bring those two together a bit, so that civil and defence can work together, learn with each other and prioritise all that activity from Government, to make sure that, as I say, we are turbocharging those eight sectors, one of which is defence.

There was a lot of talk about apprenticeships. The spokesperson for the Opposition, the hon. Member for Mid Buckinghamshire, talked about the apprenticeships that were set up under the last Government. Sadly, the apprenticeship levy does not work for a lot of people and we have shortages in professions such as welding. Indeed, welders have been on the Migration Advisory Committee list of people who we can procure from other countries because we are not training enough of our own. So, to see those welders in Methil learning their trade was a great thing. It was also great to hear the senior managers at Navantia talk to me about welding, because they actually know about shipbuilding and welding; they have real expertise. That was really encouraging.

We are reforming the apprenticeship levy, we are talking about how we can ensure that companies invest more in apprenticeships, and we are again looking at how we can tilt the whole skills regime towards the professions that we know we will need in the future. Engineers, welders and electricians are all on the list of the professions we need to boost in the future.

Members also talked about the opportunity provided by offshore wind and the green economy, as it were, more widely. As has been said already, Navantia plans to make Methil the centre of excellence for offshore wind manufacturing. There is also green shipbuilding, which is a burgeoning industry, and there is the whole infrastructure of monopiles and floating jackets—all of those possibilities—as well. I have also talked to the industry about the opportunities to lead the way in autonomous systems and robotics.

When we pull together the industrial strategy, the defence spending, our reforms to apprenticeships and our prioritisation of funding, including the Cromarty Firth example, the National Wealth Fund—with £5.3 billion for clean, green energy in five groupings, one of which is ports—and the clean industry bonus, which is another opportunity to support growth in this sector, it is clear that the Government have a plan. That has been lacking in previous years, but we are not afraid to roll up our sleeves and get things done. We are all invested in the shipbuilding industry for reasons relating to the past and, more importantly, the future.

The hon. Member for West Dorset (Edward Morello) talked about women in boatbuilding. I spend quite a lot of time with a lot of men in the industries I work with. That was a good point, well made.

My hon. Friend the Member for Glasgow East (John Grady) made a good point about the importance of spending taxpayers’ money wisely in this space and not throwing good money after bad. I have talked about that already. We need to back winners and use that money as wisely as we can.

I thank the hon. Member for Strangford (Jim Shannon) for his kind words. He made the point that shipbuilding used to employ tens of thousands of people, but now it employs hundreds to a couple of thousand. We are realistic about that. We are talking about a smaller industry because of the changing nature of how ships are built, but it is still very important.

My hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) talked about procurement, which I have touched on already—it is very important. It is nice that my hon. Friend the Member for Glasgow West (Patricia Ferguson) saw the electric ferry bought in Norway, for Norway, but that speaks to a point that we are all looking at: we want do more in the UK.

My hon. Friend the Member for Isle of Wight West said that shipbuilding is a lifeline, a kind of identity and an opportunity for economic growth. I agree with that, of course.

My hon. Friend the Member for Scarborough and Whitby (Alison Hume) mentioned Captain Cook and the Endeavour. I did not know about that, but I now do. She talked about skills and apprenticeships, which I have touched on. She is absolutely right that they are very important.

This is an incredibly important area for the Government. We have put our money where our mouth is and are ready to do what needs to be done. The industrial strategy, the apprenticeship work and the defence spending present huge opportunities for the future, and I look forward to working with everyone here to deliver them.