British Steel

Viscount Hailsham Excerpts

Thursday 24th April 2025 Lords Chamber

[Viscount Hailsham (Con)]

My Lords, given that high energy costs and the increased national insurance contributions on employers are threatening the viability of British manufacturing industries, most especially steel-making, what do the Government propose to do about these additional costs?

[Baroness Gustafsson (Lab)]

Energy costs are high in the UK—I see that and regularly hear conversations about that, not just in this sector but in many industries manufacturing across the UK. The Government are already taking particular action on the UK’s high industrial energy costs, which are the highest in Europe and four times those in the United States and which have doubled in recent years.

The British industry supercharger package will bring electricity costs down significantly once fully implemented from April 2025, ensuring that energy-intensive industries such as steel are shielded from future policy costs that would have a significant impact on their electricity costs. To be clear, things such as the net-zero transition are not causing this challenge; the challenge is securing the clean energy that we need to end our reliance on the overseas oil and gas market. Indeed, UK Steel, the trade body for the steel industry, 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.

[Viscount Hailsham (Con)]

What about employers’ contributions?

[Baroness Gustafsson (Lab)]

We will write on that matter.

--- Later in debate ---

[Baroness Gustafsson (Lab)]

I confirm exactly that: energy is going to be such an important growth driver across all our sectors, and a key one that we are talking about today is the steel strategy. For us to grow a sustainable and powerful industry within the UK, we need a sustainable and powerful source of energy that is generated here and that we can rely on. That is why the two go hand in hand.

[Viscount Hailsham (Con)]

I press the Minister further on the impact of the increase in employers’ national insurance contributions. What is the Government’s assessment of the impact of those increases on steelmaking?

[Baroness Gustafsson (Lab)]

I would be more than happy to follow up specifically in that regard.