Protecting Britain’s Steel Industry

Toby Perkins Excerpts

Monday 21st June 2021 Commons Chamber

[Mr Toby Perkins (Chesterfield) (Lab)]

We have heard impassioned speeches on both side of the House from Members who represent steelmaking constituencies. I am really pleased that the motion from my hon. Friends also recognises the importance of those in the supply chain, because in Chesterfield, with our close proximity to Sheffield, we have a long-standing history of supply to the steel industry, and that is incredibly important.

What is slightly missing from this debate is how crucial the steel industry is not just to those people employed directly in it or those supplying it, but to manufacturing in the UK more broadly. In terms of the role of global Britain and supporting global manufacturing, having a competitive steel industry here in the UK is absolutely crucial and we must give that support. I feel that the Government do not think through the consequences of us being entirely dependent on China, in terms of our global independence. When I heard the contribution from the Minister at the start of the debate, it made me wonder if that was really the party that, just a few months ago, was claiming that they would enable us to “take back control”, because he simply stood at the Dispatch Box, threw his arms in the air and said that there is nothing that we can do. I am glad that there are some Government Members—in Stocksbridge, in Scunthorpe—who do recognise how dangerous this will be. Let us see how they vote later today and whether they do so based on the sentiments that they laid out.

Manufacturers in Chesterfield have been coming to me saying that the steel prices that have rocketed up recently and a Government who are washing their hands of any responsibility are making UK manufacturers outside the steel industry desperately concerned that they will no longer be competitive in future.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Beth Winter, who has two minutes.

--- Later in debate ---

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I thank everyone who has spoken on this important topic this evening. We have heard some passionate speeches, not least just now from the right hon. Member for Doncaster North (Edward Miliband), and I recognise the significant concern being expressed by all colleagues on behalf of UK steel producers.

Hon. Members heard the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena), clearly set out the role of the Trade Remedies Authority, which is sponsored by the Department for International Trade, and how its recommendation process works. The world has changed since 2018 when these powers were put in place, so my Department is very supportive of the Trade Secretary’s desire to review the domestic toolkit, given the challenges of global trade. At the same time, my ministerial colleagues in BEIS and I will continue to devote our focus to the future of this important sector. Although the global economic context is challenging, hon. Members will recall that the Secretary of State said when giving oral evidence to the BEIS Committee’s inquiry into the future of steel that the UK industry will continue to need high-quality steel and British steel is among the best in the world. Making sure our steel industry has the right conditions to thrive is a key part of our efforts to reach net zero and level up across our country.

There should be no doubt that this Government are committed to UK steel making, as the Secretary of State has affirmed, both at that session and on a number of recent occasions. We are already working to protect jobs and we are straining every sinew to ensure that the industry succeeds at securing a sustainable future. Our unprecedented package of covid-19 support over the past year is still available to the sector, to protect jobs and to ensure that producers have the right support during what has been and continues to be a challenging time.

My hon. Friends the Members for Scunthorpe (Holly Mumby-Croft), for Penistone and Stocksbridge (Miriam Cates) and for Redcar (Jacob Young), whom I know have all met the Business Secretary today to discuss the best way forward for the industry, will, I hope, be reassured about our commitment to our UK steel sector. As many hon. Members with close links to steel will know, the Government are working closely with industry and trade unions to understand how we can, together, create a sustainable future for the steel sector in the UK. We recognise absolutely that industrial users in the UK pay higher electricity costs than European competitors, which is why since 2013 we have provided more than £500 million in relief to help steel producers with electricity costs, and we are currently consulting steel companies on the future of such schemes.

As my hon. Friend the Member for Darlington (Peter Gibson) highlighted, the Government’s £350 million industrial energy transformation fund will support businesses with high energy use to cut their bills and reduce carbon emissions. It is a fact that to reach our ambitious net zero target the UK steel sector does need to decarbonise, as my hon. Friend the Member for Waveney (Peter Aldous) set out so eloquently. Our new industrial decarbonisation strategy, which is the first net zero-aligned strategy from a major economy, sets out, for the first time, the Government’s comprehensive assessment of how industry, including the steel sector, can decarbonise in line with net zero in a way that supports competitiveness and clean growth. As my hon. Friend the Member for West Bromwich East (Nicola Richards) highlighted, this is an important journey for the industry.

The strategy includes a commitment to work with the UK Steel Council, which the Business Secretary re-formed on 5 March and provides a forum to work in partnership with industry and the unions to develop a plan to support the sector’s transition to a competitive, sustainable and low-carbon future. In particular, we are working with the UK Steel Council to examine the implications of the recommendations of the Committee on Climate Change to set targets for steelmaking to reach net zero emissions by 2035. In 2019, we announced the £250 million clean steel fund to support the sector to transition to low-carbon iron and steel production through new technologies and processes, so I can reassure the right hon. Member for Islington South and Finsbury (Emily Thornberry) that we have indeed got the steel industry’s back. This fund is currently in development and we need to take the time to design this policy. Complex decarbonisation projects have long lead-in times and the steel sector has indicated that its preference is for the fund to be launched in 2023.

All that strong steel action is aligned with our prioritisation of science and innovation. We recognise the equally strong economic benefits of public investment in science and innovation, and in its capacity to leverage private investment. Because of that, we will increase public research and development investment to £22 billion per year from 2024-25. We also plan to establish a net zero hydrogen fund, with £240 million of capital co-investment out to 2024-25. This will support at-scale hydrogen production projects, allowing steel producers the potential to access supplies of low-cost hydrogen.

Decarbonisation is one top priority. Another one is resolving procurement challenges that the industry faces, as my hon. Friend the Member for Bridgend (Dr Wallis) highlighted. We are working hard to ensure that UK steel producers have the best possible chance of competing for and winning contracts for all Government projects, including those like ships identified by my hon. Friend the Member for Ashfield (Lee Anderson), with his now famous colour. We have established a BEIS industry-led steel procurement taskforce co-chaired by the Minister for investment to explore what Government and industry can do to address the challenges the sector has reported when competing for public contracts.

More broadly, we recently consulted on an ambitious package of procurement reform with the aim of creating a simpler and more flexible regime that works much better for British businesses. The Cabinet Office has now published both the national procurement policy statement and a new procurement policy note on taking account of carbon reduction plans in major projects. BEIS continues to publish our annual steel pipeline, along with data from the previous financial year on levels of steel procured by Departments, origin where known, and compliance with the guidance on procuring steel.

This House should be in no doubt that the Government are working closely with the steel industry and have put our optimism for the future of our steel industry into action.

[Mr Perkins]

The Minister is saying that this Government have the industry’s back, but the letter by UK Steel read out by my right hon. Friend the Member for Doncaster North (Edward Miliband) made it absolutely clear that it believes that if the Government vote against the motion and do not put in place alternatives, it will be catastrophic for our industry. Why should we believe that the Minister knows better than the very people running the UK steel industry?

[Anne-Marie Trevelyan]

I thank the hon. Gentleman, but I refer back to the comments made by the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire. The tools available to us relating to anti-dumping measures continue to be ones that remain at the forefront of the Secretary of State’s toolkit, as I mentioned. I know she will be focusing on that very closely in the days and weeks ahead. There should be no doubt that we absolutely have the future of our steel industry at the centre. It is a strategic industry and remains so, as so many colleagues have mentioned this evening. Speaking as the Minister challenged with delivering net zero, I can say that the offshore wind industry and the nuclear industry, and so many other critical parts of our infrastructure within the net zero part of this Government’s and this country’s commitment over the next 30 years, will require high quality and hopefully very much British-made steel. We are fully cognisant of the international situation that the industry and all its communities face, so we continue to work to protect jobs and to ensure that the industry succeeds in securing its sustainable future. I firmly believe that we will and know that the Secretary of State will continue to update the House in the days ahead.

Question put.