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British Steel
08 November 2023
Lead MP
Nusrat Ghani
Debate Type
Ministerial Statement
Tags
No tags
Other Contributors: 25
At a Glance
Nusrat Ghani raised concerns about british steel 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
Government Statement
Steel is vital to the UK economy, especially in Scunthorpe where British Steel plays a significant role. The Government recognises this and has taken steps to support energy-intensive industries like steel by introducing the 'British industry supercharger' package which aims to reduce the electricity price gap with competitor countries. Over £730 million in energy cost relief has been provided since 2013, and the current energy bill discount scheme will continue until March 2024. The Government also invested heavily in Tata Steel's decarbonisation plans and supported Celsa Steel during the pandemic to save jobs.
Question
The MP questioned whether the UK will be able to produce virgin steel if all blast furnaces are decommissioned, and how many G20 countries cannot produce their own virgin steel. She inquired about guarantees on job security when offering financial support to British Steel, and sought information on the government's awareness of the company’s upcoming announcement and timely responses to her letters. Additionally, she requested details on government support for North Lincolnshire Council's initiatives.
Minister reply
The minister apologised for not providing timely communication regarding British Steel’s plans and confirmed that any financial support will prioritise job security and sustainability in line with the company’s transition towards greener steel production. She highlighted ongoing efforts to support the sector, including energy cost relief, investments in decarbonisation projects like Tata Steel's, and emergency loans during the pandemic to safeguard jobs.
Jonathan Reynolds
Lab Co-op
Stalybridge and Hyde
Question
Questions the status of ongoing negotiations, inquires about delays in carbon capture technology due to government infrastructure issues over 13 years, uncertainties around green hydrogen for DRI solutions, confirms job loss figures post transition to electric arc furnaces at Scunthorpe and Redcar.
Minister reply
Negotiations are indeed ongoing with limited public information available. The decision on electric arc furnaces is due to faster transitioning capabilities compared to alternatives like direct reduced iron equipment. Government support includes energy cost coverage, the supercharger, and promoting UK steel in domestic projects. Emphasises importance of green steel demand while maintaining virgin steel capacity.
Edward Leigh
Con
Gainsborough
Question
Expresses concern over national security implications and challenges with global competitors. Questions the Minister’s commitment to producing virgin steel as a major economy.
Minister reply
Believes in having virgin steel capacity but acknowledges ongoing commercial negotiations. Reiterates support for electric and virgin steel capacity in the UK, addressing market challenges and price fluctuations.
Question
Expresses concern for workers affected by transition and emphasises importance of virgin steelmaking for security and construction demands. Questions plans for just transition and development of hydrogen furnaces.
Minister reply
Negotiations ongoing, nothing finalized. Acknowledges the role of electric arc furnaces in various sectors and supports hydrogen production with up to £240 million capital co-investment through 2024-25 for steel producers.
Greg Clark
Con
Islington North
Question
Acknowledges the need for primary steel at net zero and questions if this logic applies to maintaining capability in UK.
Minister reply
Agrees on the importance of a mix of steel types, including primary or virgin steel, for future needs within renewables sector. Emphasises that much green technology can be produced by electric arc furnaces but supports space for virgin steel production.
Liam Byrne
Lab
Birmingham Hodge Hill and Solihull North
Question
The announcement comes at a time when an analysis shows that the Department’s budget is set for a 16% real-terms cut in the years ahead. Is it the policy of His Majesty’s Government that blast furnaces will stay in operation in our country and that we will not be dependent on imports of primary steel? When can we expect a conclusion to the negotiations and some safeguarding of the vital industry either at Tata or at British Steel?
Minister reply
I congratulate the new Chair of the Business and Trade Committee, of which I was previously a member. As I have made clear, these are commercial negotiations and they are ongoing. When the decision was taken on Port Talbot, discussions had taken place for several years—even decades. This will not take that long, but my point is that many Ministers have stood at the Dispatch Box talking about steel and doing what can be done to protect and promote the steel sector in the UK. The negotiations are ongoing.
David Davis
Con
Goole and Pocklington
Question
Much of the arc furnace capacity is being moved away from Scunthorpe or not put in Scunthorpe because of a lack of grid capacity. That electrical grid capacity is due to be increased. If she were to accelerate the increase to 2025, we may save many more jobs in Scunthorpe. Will she seek to do that?
Minister reply
Unfortunately, there is never a simple answer to these questions. Access to the grid is a challenge for many industries, let alone for the steel sector. We have been doing everything we can to increase access to the grid. British Steel’s proposal—negotiations will continue—says that it has chosen two sites over one, with its key site at Scunthorpe and a second site at Teesside to be closer to its manufacturing work.
Jon Trickett
Lab
Normanton and Hemsworth
Question
Yorkshire and the Humber is one of the great centres of steelmaking—in our area, there were more than 8,000 jobs in steelmaking, the last time that was counted—but how many jobs will be left when the Minister has finished with her cuts? Has she noticed that whenever the Conservative party is in government, it deindustrialises further? Unite the union—I declare an interest as a member—is saying that if the Government would commit to procurement of steel for all our relevant contracts, 8,000 further jobs could be created. What exactly does she make of that? Has she met representatives of the union to discuss that matter?
Minister reply
I meet representatives of the unions regularly, and I co-chair a steel council. The steel procurement policy note on increasing procurement in the UK was a personal ambition of mine. Previously, we did not calculate enough of the data on what was being procured and how we could continue to secure more contracts. Procurement has increased, with the value of contracts up by £97 million on the previous year.
Martin Vickers
Con
Brigg and Immingham
Question
I fully endorse all the comments of my neighbour, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft). Many hundreds of my constituents work at British Steel, and I have a British Steel terminal on Immingham docks in my constituency. What assessment have the Department and the Treasury made of the impact on the local economy if the changes go ahead? The Minister talked about support for workers who may be made redundant. I have witnessed the decline of the fishing industry in the Grimsby-Cleethorpes area, which has ripped the core out of the community, who need generations of support. What plans will the Government put in place to ensure that that happens?
Minister reply
First of all, negotiations are ongoing, but I fully appreciate that the statements from British Steel will be incredibly unsettling for my hon. Friend’s constituents. Let me explain the way that we worked on Port Talbot. We were keen to ensure that any support we provided continued to guarantee jobs, in consultation with local stakeholders and the unions.
Mark Tami
Lab
Alyn and Deeside
Question
The Minister will know that Shotton steelworks rely on steel from Port Talbot. What assurances can she give on the supply of steel between the closure of the blast furnaces and the installation of new electric arc furnaces?
Minister reply
While negotiations were ongoing and support was being provided, we had a conversation to ensure that the supply chain continues to be resilient. A taskforce has been set up to ensure that supply chains continue to get support, working with the unions, Tata and the local community.
Question
Supporting British Steel need not be just about money; it can be about ensuring that the Government are joining the dots for industry and explaining the pipeline of work available to it. With the Dreadnought and SSN-AUKUS programmes, we have generations of need for virgin steel. The same goes for the new nuclear programme. Will my hon. Friend confirm that the Government are doing that work and signalling to British Steel that the demand is there? Also, where we have control over procurement, are we ensuring that we lean towards the British market?
Minister reply
Absolutely. That is why procurement went up by £97 million recently. I was looking at what the industry group UK Steel reflected on when it came to steel produced by electric arc furnaces—the reality is that a substantial amount of speciality military-grade steel can be manufactured using electric arc furnaces.
Jessica Morden
Lab
Newport East
Question
The Minister seems to be ignoring events in south Wales last week. I met steelworkers from Llanwern last week, who understandably are deeply worried following speculation about the closure of the blast furnaces at Port Talbot. What conditions were attached to the £500 million grant agreed with Tata? Was this the agreed plan? What are the Government actually doing to safeguard jobs?
Minister reply
We put in place a programme of work and a substantial sum of money—around £100 million—to ensure that the transition took place in a just fashion. Decisions will be taken by the transition board—as has been mentioned—about providing upskilling and reskilling and ensuring that there are assurances in the supply chain.
Question
The Government have supported a coalmine in west Cumbria that will produce coking coal, which is used in steel production. Does the Minister agree that it would be sensible for strategic reasons—which should override commercial reasons—to retain virgin steel production capacity in this country, and that from a practical perspective the coal mined in Cumbria could be used in the production of steel in Scunthorpe? Will she take into consideration the wider issues in the policy decisions that she may make?
Minister reply
Absolutely. I think all of this has made it clear to British Steel that there is a supply chain here in the UK, not only in the ability to make virgin steel but in the market afterwards, but even with electric arc furnaces we still need some ability to access coal.
Richard Foord
Lib Dem
Honiton and Sidmouth
Question
The official march of the Royal Navy includes the words,
“Heart of oak are our ships”.
In the 21st century, virgin steel is the critical industry for the Royal Navy, in the way that timber was in the 18th century. I am the first to want reduced carbon emissions, but this move sounds more like offshoring than about reducing carbon emissions. What consideration have the Government given to the supply of steel to the defence industry?
Minister reply
First of all, negotiations continue; no decision has been taken. Having said that, the UK steel industry group, which oversees the steel sector in the UK, has made it very clear that military-grade speciality steel can be made in electric arc furnaces.
Peter Gibson
Cons
Kelvedon and Witham
Question
I commend my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for her dogged campaign in respect of steel; she is a real champion for her constituents. This week’s news is bittersweet, as Teesside welcomes the return of steelmaking. Will the Minister outline what the whole Government are doing to support my hon. Friend’s constituents at this time, and what use of carbon capture and storage is being explored to ensure that we continue to produce our own virgin steel?
Minister reply
I agree with my hon. Friend’s point on Scunthorpe's champion for steel sector advocacy. The Government have had several programmes supporting the industry since 2013, including an energy costs relief scheme worth up to £730 million; a supercharger in place and the Steel Procurement Policy Note to ensure UK procurement of UK steel; support provided for Tata and Celsa recently. We are working closely with Scunthorpe constituents.
Alex Cunningham
Lab
Stockton North
Question
It is clear from today’s comments that the Government are set to abandon more than 2,000 steelworkers in Scunthorpe, just as they abandoned over 3,000 on Teesside eight years ago. That said, I too welcome the news of a new arc furnace for Redcar, but let me give the Minister yet another chance to answer the question from the hon. Member for Scunthorpe (Holly Mumby-Croft) and others: are the Government really going to settle for recycled steel and foreign imports, and consign virgin steelmaking in the UK to history?
Minister reply
Recycled steel can be reused infinitely and contributes significantly to the circular economy. We have a surplus of scrap steel which we export rather than recycle at home. However, these are commercial decisions that are yet to conclude.
Chris Bryant
Lab
Rhondda and Ogmore
Question
Does the Minister not accept that it is a matter of national security that we should retain the ability to create primary steel in this country?
Minister reply
I have stated previously about the need for blast furnace capacity, particularly at the Scunthorpe site. Issues such as China's and Russia’s involvement highlight the importance of domestic production from a national security perspective.
Jamie Stone
LD
Caithness, Sutherland and Easter Ross
Question
Some of the mightiest structures made of steel were built in my constituency, in the Nigg yard—I worked there myself once upon a time. The hon. Member for Scunthorpe (Holly Mumby-Croft) talked about the strategic importance of the industry. May I point out to the Government that it is as important to my constituency in the far north of Scotland as it is to any other parts of our great United Kingdom?
Minister reply
I cannot disagree, given Scunthorpe steel’s historical significance, ranging from structures like the Sydney Harbour Bridge and London Eye.
Nia Griffith
Lab
Llanelli
Question
The feedstock for the Trostre tinplate works in Llanelli is steel of a quality that can currently only be produced in the blast furnace process. Following the devastating news that Port Talbot blast furnaces will be closed by the end of March, leaving Trostre dependent on imported steel—quite possibly produced to lower environmental standards abroad, and certainly not saving on emissions—may I ask the Minister to stop just quoting commercial decisions, and tell us what strategy the Government have to develop the green technologies of the future here in the UK and to keep virgin steel production here as well?
Minister reply
We have a £1.5 million fund aimed at adopting new decarbonisation technologies. We are also considering alternatives like hydrogen energy to support transition.
Chi Onwurah
Lab
Newcastle upon Tyne Central and West
Question
The move to net zero should deliver tens of thousands of long-term, well-paid, green industrial jobs, but with her Government’s sticking-plaster policies the Minister is destroying both jobs and sovereign national capability. Is it really her intention to leave behind her a British steel sector that cannot make British virgin steel, and if not, what is her plan? Labour has an industrial strategy for green steel; why does she not have one as well?
Minister reply
UK Steel welcomed our recent decision on Tata Steel, which saved thousands of jobs and allowed adoption of new technology creating more jobs.
Stephen Kinnock
Lab
Aberavon
Question
Last Wednesday morning, Tata Steel executives in Port Talbot summoned the workforce to tell them of the plan to shut down our entire virgin steel making capability by March 2024. This was utterly shocking because it involves importing millions of tonnes of steel from the other side of the world. The transition board knows that electric arc furnaces need products of virgin steel making such as iron and iron ore, which is why we need direct reduced iron capability. Does the Minister not agree that the idea of this process is that it should be a transition? It needs to be a bridge, not a potentially lethal cliff edge.
Minister reply
Tata Steel was provided with certainty for over £1 billion investment to ensure its transition and support local jobs.
Jim Shannon
DUP
Strangford
Question
We have committed to a net zero target, but consideration must be given to the potential loss of 1,500 to 2,000 jobs, which could be gone from the industry. We have been told that the two furnace closures could put further employment at risk for many. What steps will be taken to ensure that the steel sector and industry jobs throughout the whole of the United Kingdom will be protected? The UK is No. 7 in the world for manufacturing; steel is a key part of that.
Minister reply
Substantial support was provided to Port Talbot to ensure steel's long-term viability, as we are eighth largest manufacturer globally needing to source goods fundamentally from UK.
Nick Smith
Lab
Blaenau Gwent
Question
Does the Minister accept that this news gives up on the UK’s capability to produce primary steel?
Minister reply
British Steel put out a proposal or plan, negotiations have not concluded.
Question
This is a question of national security. It is not just a commercial decision. A specific question was asked of the Minister by the shadow Secretary of State on job losses specifically in Scunthorpe. Is that figure of 2,000 correct?
Minister reply
We are continuing intensive talks with British Steel; negotiations have not concluded.
Shadow Comment
Holly Mumby-Croft
Shadow Comment
The shadow criticised the lack of government action to protect steelmaking capabilities, questioning how virgin steel would be produced if all blast furnaces were decommissioned. She asked for guarantees on job security and requested interim production periods for exploration of green options. The Shadow expressed dissatisfaction with the late communication from the department regarding British Steel's announcement and sought support for North Lincolnshire Council’s efforts to bring additional green jobs to the site.
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