← Back to House of Commons Debates
British Steel: Negotiations
02 February 2023
Lead MP
Nusrat Ghani
Debate Type
Ministerial Statement
Tags
EconomyEmploymentBusiness & Trade
Other Contributors: 19
At a Glance
Nusrat Ghani raised concerns about british steel: negotiations in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The Minister, Nusrat Ghani, began by acknowledging the concerns of British Steel employees and expressed disappointment at recent commercial decisions made by the company. She emphasised that the Government has been working closely with British Steel to provide support for shareholder investment and safeguard jobs while ensuring a sustainable future for the steel sector. The minister highlighted various initiatives including £800 million in electricity cost relief since 2013 and additional funds worth £1.5 billion aimed at reducing emissions and improving energy efficiency within the industry. She stated that securing a stable, decarbonised and competitive UK steel production is crucial for economic growth and job protection. The minister also confirmed that a generous support package has been offered to British Steel to ensure its success and sustainability, encouraging continued dialogue between the company and Government.
Question
Will the minister challenge British Steel on whether it is credible to run operations with fewer people? Will she express her disapproval of this decision and ask for immediate reconsideration?
Minister reply
The Minister responded by reiterating the Government's determination to support the UK steel industry and urging continued discussions between British Steel and the Government. She did not directly address whether the company will be challenged but emphasised the importance of maintaining a sustainable future for the sector.
Scunthorpe
Question
As my hon. Friend has set out, in the midst of these negotiations with Government, involving hundreds of millions of pounds of further support on top of what she has listed, Jingye sat down yesterday with the unions and talked about laying off 800 British Steel workers. I ask the Minister to do three things, please. First, will she challenge the company on whether it is actually credible to run its operations with 800 fewer people? Secondly, will she express in the strongest terms that this is not a way to do business and ask the company to immediately reconsider these potential redundancies?
Minister reply
Our lady of steel basically sums up the whole argument in her two minutes, and I agree with much of what she has said. Of course, we will drive home the message that it is peculiar for this conversation to take place while negotiations are ongoing involving substantial taxpayer money. The Government want some assurances and guarantees linked to jobs. We will continue to be available to ensure discussions and negotiations continue.
Kerry McCarthy
Lab
Bristol East
Question
I thank the hon. Member for Scunthorpe (Holly Mumby-Croft) for securing this urgent question on an issue that affects not just the workers in her constituency but the future of a foundation industry across the UK. In November last year, the iconic Redcar blast furnace—once the second largest in Europe—was demolished. Here we are, yet again: another crisis under the Conservatives’ watch, with Liberty Steel announcing the potential loss of hundreds of jobs and yet more pain this week from British Steel.
Minister reply
I had hoped that the Opposition Front Bench spokesperson would support our ongoing desire for negotiations, and that she would ask why redundancy conversations are taking place while negotiations are ongoing. The Government is providing substantial funding to help decarbonise the steel sector with over £1.5 billion in long-term strategic support including funds for carbon capture and storage infrastructure, net zero hydrogen fund, industrial fuel switching fund, research into industrial decarbonisation, and energy transformation.
Martin Vickers
Con
Brigg and Immingham
Question
The company has clearly acted in a most inappropriate and high-handed manner, and that affects not just the 800 workers directly employed at British Steel: my neighbouring constituency has many thousands of jobs dependent on the supply chain. Could the Minister assure us that the Government will give maximum support and recognise the importance of steel to the region as a whole?
Minister reply
My hon. Friend, you have always been a great advocate for all the jobs in your constituency, including those linked to the steel supply chain. The sector is vital due to its huge impact on employment across various industries. We are negotiating as hard as we can to ensure that we get over the present hurdle and that we can go on and talk about further procurement which would be great news for the supply chain.
Dave Doogan
SNP
Angus and Perthshire Glens
Question
Why does the Government not consider nationalising steel in the UK given the amount of public money going into the industry?
Minister reply
Nationalisation would not solve problems faced by the steel sector, it would burden taxpayers without guaranteeing a long-term sustainable strategy. The government is providing substantial support during the energy crisis and has a £1 billion fund to help tackle emissions and energy costs.
Question
The Government should not use affected constituents as political pawns and should demand more respect from British Steel and Jingye.
Minister reply
Steel sector has excellent champions across the House, but it is unfortunate that they are feeling let down today. There is a huge amount of growth coming for steel with UK demand expected to rise by 20%.
Jessica Morden
Lab
Newport East
Question
Does the Minister understand the need for a long-term plan to give confidence to the industry, given high production costs and limited government support?
Minister reply
Since 2013, there has been £800 million of investment in the steel sector. Support is being reviewed and will continue going forward with substantial funds available for decarbonisation.
Question
Could the Minister say more about discussions that have taken place to secure the future of UK steel, including using recycled steel in electric arc furnaces?
Minister reply
Conversations are taking place across the sector. Attention is focused on ensuring competitiveness through procurement and ensuring use of the £1.5 billion fund for decarbonisation.
Mark Tami
Lab
Alyn and Deeside
Question
The industry needs a long-term solution to energy costs, not just pots of money.
Minister reply
There has been £800 million of energy cost relief since 2013, with more coming down the line. Energy costs are an issue worldwide and we have a strategy in place.
Question
Does the Minister agree that British Steel’s actions towards Scunthorpe residents is not how business should be conducted?
Minister reply
Steel sector has substantial support with over £1.5 billion of grants for decarbonisation and £800 million for energy costs. Negotiations are ongoing.
Wera Hobhouse
Lib Dem
Bath
Question
How does the decision to give the green light to the Cumbria coalmine fit with supporting the steel industry to go green?
Minister reply
The Secretary of State's decision on the Cumbrian coalmine was made following a comprehensive planning inquiry that heard from over 40 different witnesses and considered matters such as demand for coking coal, climate change and local economy impact.
Question
To safeguard our national strategic interest, it is imperative that this country maintains a capacity for steel production. The Minister has outlined the considerable package of support that the Government have already provided, not least the £800 million for energy costs over the last few years. Can she reassure the House that this Government will do everything they can to support this key industry?
Minister reply
Absolutely. That is why we are working so closely with the companies and the unions. We have also been buying more British steel, procuring £268 million of UK-produced steel for major projects in 2021-22, an increase of £160 million from the previous year.
Nia Griffith
Lab
Llanelli
Question
I know that the Minister is sympathetic, but Ministers across Government need to realise that this is a crucial time for steel companies, as they are making decisions about where to invest for the future worldwide. What discussions has she had with colleagues across Government about giving guarantees that far more than £300 million will be there for developing the steel technologies of the future, that there will be a proper Government procurement strategy for British steel and that there will be a fair deal on energy prices for the future?
Minister reply
We are committed to ensuring not only that we negotiate well but also that we have the right resources and infrastructure in place for a long-term future for British steel. We have spoken about this previously, and it is incredibly important for us to get it right.
Question
The announcement and news will be frustrating for my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), who has worked so hard, and for neighbouring constituencies such as that of my hon. Friend the Member for Cleethorpes (Martin Vickers). We are all conscious of the strategic importance of steel, the need to modernise the industry and the impact of energy costs on the profitability of the business. As the Minister says, there is a positive future demand for steel. So will she confirm from the Dispatch Box that there is direct ministerial contact with British Steel’s owners, Jingye, and perhaps also with the China Chamber of Commerce in the UK, so that the importance of this partnership is stressed and the need for a successful outcome to the negotiations is made very clear?
Minister reply
Not only are my hon. Friends huge champions for steel but they have good relationships with Ministers, unions and workers locally. There is engagement from the Secretary of State downwards; officials will also be holding meetings with British Steel and others regularly.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
Question
The green freeport announcement for the Cromarty firth is very welcome. Our dream is to build floating offshore wind structures in the Cromarty firth, at the Nigg yard, where I once used to work. We want to build them out of British steel, not steel from any other country. Our hopes, wishes and aspirations are for that to happen, so may I wish the Government all the best in sorting this situation out? I do not want to see my constituents’ hopes dashed.
Minister reply
The hon. Member has hit on two of my favourite topics: freeports and the Maritime 2050 strategy. He has all my support, and I am grateful for his support with ensuring that we get the best possible negotiations over the line as soon as we can.
Question
Does my hon. Friend agree that it is vital that we find a way to ensure that steel is produced sustainably, right here in the UK, so that we can deliver new renewable industries such as floating offshore wind in the Celtic sea?
Minister reply
Absolutely. We have put together substantial funding to help the industry take on board new technology, reduce emissions and decarbonise.
Jim Shannon
DUP
Strangford
Question
On TV this morning, a journalist carefully outlined the case with reference to discussions between the Government and British Steel’s Chinese owners. I echo what the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said about the supply of British steel; its supply to Northern Ireland is so important for the construction sector. What is forcing companies to look elsewhere is the increase in price, not a desire for a better product—the best product is British steel.
Minister reply
Absolutely; once again, the hon. Member asks a very sensible question. We need a cleaner, greener steel sector, so we need to do everything we can to support it in helping us meet our net zero targets.
Bob Blackman
Con
Harrow East
Question
Our steel industry has suffered as a result of unfair international competition for many years, because Governments all over the world have been subsidising their own steel industries. My hon. Friend referred to our steel industry’s bright future and the potential 20% increase. Does she agree that it is an absolute business nonsense to lay off highly skilled staff at a time when the order book is likely to fill up?
Minister reply
That is why it was so peculiar to be made aware of the conversations that took place yesterday. Opportunities are coming down the line and we know that there will be huge demand for more UK steel.
Shadow Comment
Holly Mumby-Croft
Shadow Comment
The shadow Minister, Holly Mumby-Croft, criticised Jingye’s decision to lay off 800 workers while negotiations with the Government are ongoing. She argued that this move is unacceptable and breaches the spirit of current discussions on support for the steel industry. Mumby-Croft urged the minister to challenge British Steel's credibility in maintaining operations without these employees, highlighting safety concerns related to blast furnaces. She also requested the Minister to reiterate the Government’s commitment to supporting skilled workers in the industry and emphasised that this decision sends a negative message to communities relying on steel production.
▸
Assessment & feedback
Summary accuracy
About House of Commons Debates
House of Commons debates take place in the main chamber of the House of Commons. These debates cover a wide range of topics including government policy, legislation, and current affairs. MPs from all parties can participate, question ministers, and hold the government accountable for its decisions.