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UK Steel Production: Greensill Capital
25 March 2021
Lead MP
Kwasi Kwarteng
Debate Type
Ministerial Statement
Tags
EconomyEmploymentEnergy
Other Contributors: 42
At a Glance
Kwasi Kwarteng raised concerns about uk steel production: greensill capital 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 Secretary of State Kwasi Kwarteng acknowledged concerns expressed by Members regarding the steel industry following Greensill Capital entering administration. He stated that he and his Department have been closely monitoring developments and had direct communication with local management, trade unions, and officials. Kwarteng emphasised a united commitment to supporting the workforce and UK's steel industry despite commercial sensitivity issues.
Lucy Powell
Lab Co-op
Manchester Central
Question
The Secretary of State has been dragged here to finally say something because earlier in the week he had nothing to say. Can the Business Secretary confirm that he is considering all options from immediate support if due diligence is met, to public ownership should the business fall into administration?
Minister reply
Kwarteng avoided disclosing commercial information but acknowledged the importance of considering all viable options.
Question
Does my right hon. Friend agree that with the Opposition’s abysmal record on steel, the Government are right to discard their failed vision and continue with our proactive approach to helping the sector?
Minister reply
Kwarteng agreed that past Labour Governments devastated the industry and emphasised commitment to decarbonisation and green jobs in line with the industrial decarbonisation strategy.
Stephen Flynn
SNP
Aberdeen South
Question
I would welcome assurance from the Secretary of State that he will engage in open and transparent dialogue with my colleagues north of the border moving forward. Can you provide some clarity on how far your Government are willing to go in respect of supporting viable businesses?
Minister reply
Kwarteng confirmed ongoing conversations with Scottish representatives, acknowledging mutual interests and commitment to closely monitor the situation.
Question
Will the Secretary of State confirm that he will address key industry concerns such as energy pricing, champion the UK steel charter and increase domestic production? Can we work together on a new electric arc furnace for Redcar?
Minister reply
Kwarteng agreed to work with Jacob Young on increasing domestic steel production and addressing key concerns.
Sarah Olney
Lib Dem
Richmond Park
Question
Does the Secretary of State agree that transparency is essential for effective scrutiny, and will he commit to publishing the list of companies that have received Government-backed loan support without delay?
Minister reply
Kwarteng stated he would look into Sarah Olney’s request regarding publishing company details receiving government-backed loans.
Question
Does he agree that we must explore avenues like sustainable building materials such as engineered wood alongside supporting existing industries in the transition to a greener economy?
Minister reply
Kwarteng welcomed Duncan Baker’s report on sustainable building materials and highlighted importance of considering all forms of innovative and novel materials.
John Spellar
Lab
Warley
Question
The three fleet solid support ships, at 40,000 tonnes, are equivalent in size to the two aircraft carriers. That is a lot of steel. Only this week, the Ministry of Defence finally conceded that they will be designated as naval vessels, meaning that they will be built in British yards. When the Secretary of State goes back to his office, will he get on to the Defence Secretary and tell him they must also be built with British steel?
Minister reply
I admire and am always impressed by the right hon. Gentleman’s passion for these issues, and I think he is absolutely right. We do have a need for huge amounts of steel in infrastructure in this country. That is why I have said repeatedly that there is a future for the steel industry in the UK.
Shaun Bailey
Con
West Bromwich West
Question
Obviously, steel is also a crucial part of this Government’s decarbonisation strategy. Can my right hon. Friend reassure my constituents in Oldbury, where a Liberty Steel site is currently based, that he will ensure that Black Country steel is placed at the heart of that decarbonisation strategy and that they will get the support they need from the Government as we go through this difficult time for Liberty Steel Group?
Minister reply
I assure my hon. Friend that we are committed to the steel industry in the UK. That is why, last week, we published the industrial decarbonisation strategy, which I was very pleased to commission as energy Minister.
Stephen Kinnock
Lab
Aberavon
Question
British steelworkers make the best steel that money can buy, but they are having to compete with one hand tied behind their back because electricity costs our steel companies 86% more than in Germany and 62% more than in France. What progress has the Secretary of State made in addressing this critical issue since our February discussion, and does he think that the Chancellor understands that there can be no post-pandemic recovery without a strong and healthy steel industry?
Minister reply
My right hon. Friend the Chancellor is fully aware of the importance of the sector. The hon. Gentleman will know—I think he attended the Steel Council where this issue was raised—that we have commissioned work to see what can be done to redress the balance he alludes to.
Halifax
Question
I was really pleased to hear the Prime Minister speak yesterday about the opportunities he sees for British steelmakers in major projects such as HS2. Can my right hon. Friend provide more information on that and can he—I know it is difficult—reassure the Liberty Steel workers in Scunthorpe that the Government will do all they can to support them?
Minister reply
I would like to reassure my hon. Friend. My right hon. Friend the Prime Minister was absolutely right to say that we need a huge amount of steel—about 5 million tonnes—over the next decade and that this Government are committed to an ongoing steel industry.
Geraint Davies
Lab
Cynon Valley
Question
We know that David Cameron was an adviser to Greensill Capital, with shareholdings of potentially tens of millions of pounds, and that he made private texts and calls on a number of occasions to the Chancellor to help secure funds for Liberty before Greensill went bust. What investigation will BEIS carry out? Will the Secretary of State ensure that in future taxpayers’ money is no longer interfered with by David Cameron and former Conservative Ministers?
Minister reply
The hon. Gentleman will know that officials often meet with a range of businesses affected by policy changes—that is part of policy development—but it is always done with proper and due consideration.
Guildford
Question
A key part of our efforts to drive long-term green growth is to support workers in high-carbon sectors such as steel to retrain in new green technologies. Does my right hon. Friend agree that upskilling and retraining workers will be integral to our efforts to level up opportunity right across the country?
Minister reply
I am delighted to relate to my hon. Friend that she is absolutely right. We need to retrain people in new green technologies, which is precisely why I, as energy Minister, with my hon. Friend the Member for Chichester (Gillian Keegan), set up the green jobs taskforce to look at exactly the requirements and skills we need to drive the green industrial revolution.
Peter Grant
SNP
Coastbridge, East Fife and Levenmouth
Question
We know that Greensill was a major financer of the Gupta Family Group. When does the Secretary of State expect to have full information on other businesses affected by the collapse at Greensill?
Minister reply
The hon. Gentleman makes a legitimate point. The collapse of a company like Greensill has ramifying effects, and I, Ministers and officials in the Department are looking closely at the potential impact.
Nicola Richards
Con
High Peak
Question
I thank my right hon. Friend for his personal engagement with me on this issue and for acting so quickly. Liberty Steel is a big employer in the Black Country and we have been hit particularly hard by the worst effects of the pandemic. Will he continue to prioritise this issue and work with me to help protect jobs in West Bromwich East?
Minister reply
I would be very happy to work with my hon. Friend to protect jobs. She is doing a great job of representing her constituents. All I would say on this is that we published last week the industrial decarbonisation strategy, which is the first of its kind in the world, and we are absolutely committed to a continuing future for British steel.
Nick Smith
Lab
Blaenau Gwent
Question
Liberty Steel has a diverse portfolio with a long supply chain. How will the Secretary of State protect the different elements of this complex company, such as the tubing plant in Tredegar?
Minister reply
The hon. Gentleman is quite right. The company has a range of assets spread across England and Wales, in particular, and we are looking very closely at what specific assets and jobs are necessary. We hope to support the company in its entirety.
Miriam Cates
Con
Penistone and Stocksbridge
Question
The funding challenges faced by Liberty are serious, but I have been reassured by meetings with my right hon. Friend that the Government are committed to doing whatever is possible to safeguard jobs and livelihoods in the UK steel industry. Will future procurement processes favour British steelmakers such as Speciality Steels in Stocksbridge?
Minister reply
I reassure my hon. Friend, whom I have met on several occasions on precisely this issue, that we remain committed to decarbonised steel and a decarbonised industrial strategy.
Sarah Champion
Lab
Rotherham
Question
Liberty in Rotherham employs 900 people, along with five times that number in the local supply chain. Our steel goes into defence, energy, aviation—all key strategic industries. Will the Secretary of State please make a commitment that all Government procurement projects using steel will commit to buying British steel for them?
Minister reply
On procurement, I want to relay to the hon. Lady that we have constructed in government a UK Steel and BEIS Procurement Taskforce, which met for the first time only a couple of weeks ago, on 12 March.
John Redwood
Con
Wokingham
Question
I strongly support all measures to ensure that public orders concentrate on UK-made steel. What further measures can be taken to ensure that energy prices are realistic and competitive?
Minister reply
My right hon. Friend is absolutely right to point to electricity and energy costs. I am in regular contact with my right hon. Friend the Chancellor to see what can be done, as my right hon. Friend the Member for Wokingham (John Redwood) said, to address that problem.
Rupa Huq
Lab
Ealing Central and Acton
Question
The Greensill affair raises issues of transparency on conflicts of interest when former Prime Minister David Cameron was lobbying the Chancellor. How can the Government ensure transparency on conflicts of interest?
Minister reply
Obviously, I completely reject the hon. Lady’s characterisation of what goes on. She will know that officials often meet huge numbers of business people who are affected by policy. That is part of policy development, but it is always done in a transparent, open and proper way.
Julie Marson
Lab
Redditch
Question
The Labour party talks about vision. Does my right hon. Friend agree that this Government’s commitment to net zero and their clear vision of being a technology-led innovation superpower, as demonstrated by initiatives such as the Clean Steel Fund, the Advanced Research and Invention Agency, and the Future Fund: Breakthrough, mean that the future of UK steel is positive and in very good hands?
Minister reply
Obviously, I entirely agree with everything that my hon. Friend has said. Reflecting on two years as a Minister within the Department, I can tell her that we have had the 10-point plan for the green industrial revolution, the Energy White Paper, the decarbonisation industrial strategy, and, as she says, we have committed hundreds of millions of pounds to making sure that we drive the green industrial revolution. It is a very exciting time to be in Government and I look forward to speaking with her precisely about how we can move forward.
Marion Fellows
Lab
Aberavon
Question
With booming metal prices, GFG’s business in Scotland, including Liberty Steel in my Motherwell and Wishaw constituency, remains profitable. Notwithstanding his previous answers, I must press the Secretary of State to echo the promise given by the Scottish Government and do all in his power to protect this profitable industry. Will he do so?
Minister reply
That is a fair question, but the hon. Lady will appreciate that the assets in Scotland relate particularly to aluminium smelting, whereas in England and Wales their job is really focused on the steel industry. None the less, we are looking at all options to see what we can do to sustain these crucial jobs.
Richard Fuller
Con
North Bedfordshire
Question
An acquisition strategy based on supply chain financing arrangements, plus a future receivables derivative scheme, plus an additional month’s cash-flow, and a liberal mix of state guarantees has the characteristics of a potential Ponzi scheme. Has my right hon. Friend been able to ascertain the facts here, or is this an issue for investigation by the Serious Fraud Office?
Minister reply
My hon. Friend raises very serious questions about the business model, which I am not prepared to go into now. What I will say is that, in the first two months of my tenure as Secretary of State, I have pushed forward audit reform as a big issue. A consultation on it is under way. It is issues relating to things such as Greensill capital that show how necessary it is for us to reconsider what we are doing on audit reform and to have the best standards in the world.
Alistair Carmichael
Lib Dem
Orkney and Shetland
Question
I think we all understand the importance of commercial confidentiality, but, where significant sums of taxpayers’ money are concerned, that cannot not be a barrier to full accountability. The Secretary of State will be aware that the Scottish Government are out for guarantees north of £500 million as a consequence of Greensill’s difficulties. Is that not something for which there really ought to be full explanations?
Minister reply
The right hon. Gentleman is absolutely right. My understanding is that the Scottish Government are very exposed to Greensill’s financial engineering—let me put it that way—and there should be far greater transparency in this regard.
Great Yarmouth
Question
A strong domestic steel industry is vital to so much of what the Government do, from frigates and submarines to schemes such as HS2. With that in mind, may I ask the Secretary of State whether he will work with colleagues across all of Government—not just with the Treasury, but with the Ministry of Defence and the Transport Department—to ensure that we protect this strategic sovereign capability?
Minister reply
My hon. Friend is absolutely right. It is crucial that we work across Government to look at procurement and the strategic interests of this country in having a strong steel industry, as he describes, and in order to work out how best to progress with this key sector.
Lilian Greenwood
Lab
Nottingham South
Question
Investing in transport infrastructure such as the full HS2 route and a rolling programme of rail electrification is an excellent way to boost economic recovery and put the UK on the path to net zero, but the Government will be wasting a huge opportunity to safeguard and grow jobs in our steel industry if they do not use public procurement to support it. Will the Secretary of State commit to setting targets for UK steel content in contracts for major public works, and if not, why not?
Minister reply
The hon. Lady will know, as I have said at the Dispatch Box today, that we have a taskforce in BEIS chaired by my noble Friend Lord Grimstone. This is absolutely something that we are looking into, given the huge need we have and the huge demand for steel products in our infrastructure plans.
Theresa Villiers
Con
Chipping Barnet
Question
For all the many reasons set out by Members today, retention of a domestic steel industry is vital for our economy and our security. Will the Secretary of State set out what he is doing to ensure that we have the right regulatory climate for steel to thrive? Will he commit that, if other countries dump steel on world markets that has been inappropriately subsidised, he will take action via our trade policy to introduce anti-dumping measures to protect and support our steel industry?
Minister reply
My right hon. Friend will know that the steel industry in particular is subject to fairly stringent World Trade Organisation rules. She will also know, given the publication of our industrial decarbonisation strategy, that we are rigorously focused on trying to source clean, green steel in order to drive a green industrial revolution and to create the infrastructure projects without which we cannot have any real economic growth.
Warrington North
Question
Last year, the Government spent £4.8 billion on subsidies for wind power, yet almost no wind farms use UK steel. Those orders would be a boon to the struggling steel industry, but the Department does not even include renewable energy products in its annual list of orders that went to domestic suppliers. In January, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stratford-on-Avon (Nadhim Zahawi), said that the Government would consider reporting the share of UK steel used in offshore wind projects if it is in the public interest. Will the Secretary of State accept that it clearly would be in the public interest to name and shame the developers that do not use UK steel, and will he commit to making that change?
Minister reply
The hon. Lady will appreciate that, as part of the offshore wind sector deal, we have explicitly said that 60% of the supply chain should be UK-sourced, and clearly steel is a big part of that supply chain. She will also appreciate that, as Energy Minister, I made it a priority to ensure that in the fourth auction round at the end of this year, these targets will be met. Steel is part of that, and we are absolutely committed to having more UK content in the supply chain for offshore wind.
Richard Holden
Con
Basildon and Billericay
Question
Being in the European Union prevented us from prioritising British steel, despite steel and its component parts being strategic resources. Now that we have left, will the Secretary of State prioritise British steel, at least in Government procurement? Will he ensure that steel and its component parts are, where possible, protected and bought from UK producers to prevent us being strategically vulnerable in the future?
Minister reply
I pay tribute to my hon. Friend—another Conservative who won a so-called red wall seat. He has done a fantastic job in representing his constituency, particularly on this critical issue. From my answers, he will know that we are committed to making sure that UK steel has a big part to play in the construction and infrastructure plans that we ambitiously set out.
Carmarthen East and Dinefwr
Question
Tata Steel has reportedly said that it is in active discussions with the British Government about creating a “decarbonised footprint” for the future, especially in Port Talbot. While I welcome that, will the Secretary of State confirm that at the heart of those strategies, the British Government will prioritise maintaining volume of production and jobs in the Welsh steel industry?
Minister reply
The hon. Gentleman will know, but I say in the interests of transparency, that one of my first meetings when I was appointed Secretary of State was with the head of Tata Steel. He will also know that having visited Hinkley Point as Energy Minister I am fully aware of the impact and the contribution that the Tata plant makes to infrastructure. I am sure he will be pleased to hear that this is a top priority of mine. I have made the point many times this morning that our infrastructure plans are absolutely intertwined with a strong domestic steel industry.
Bob Stewart
Con
Beckenham
Question
I am very sorry I was late for the start, Mr Speaker, but I was having a rather shouted conversation with the Chief of the General Staff about the massive cut of 12% in our Army, and particularly the loss of my battalion—
Minister reply
I am very pleased to see my right hon. Friend in his place. The key point is that Liberty Steel produces via electric arc furnaces, so it is clean steel. A lot of the steel that we produce relies on older methods. That is why, for me, in terms of our decarbonisation strategy, the future of Liberty Steel is of great importance.
Tan Dhesi
Lab
Slough
Question
For national security reasons, to tackle the climate crisis, and to build our rail infrastructure, electric vehicles and the like with well-paid unionised jobs, domestic steel production must be a strategic national priority. However, time and again the Government have let down Britain’s steel industry. On their watch, we have seen British Steel collapse, minimal action taken to tackle the huge handicap of high energy prices for our steelmakers, and an over-reliance on imported steel for Government projects. Prior to Brexit, the excuse for the lack of Government intervention was EU state aid rules. What is the excuse now?
Minister reply
There is no “excuse now”. I am afraid that the hon. Gentleman lost me rather when he said that the Government have done nothing. We have heard from all around the House the devastating impact of the last Labour Government on the steel industry. I even took a question from an extremely able Conservative Member, my hon. Friend the Member for Redcar (Jacob Young), whose seat was represented by a Liberal Democrat, because of the debacle around the closure of SSSI.
Gary Sambrook
Con
Daventry
Question
I welcome my right hon. Friend’s decision to re-establish the Steel Council. Does he agree that this is a perfect opportunity for the Government to work in partnership with the industry so that we can create a long-term, sustainable plan to ensure the sector’s transition to a low-carbon future?
Minister reply
I am delighted that my hon. Friend has mentioned the Steel Council. I remind right hon. and hon. Members that the Steel Council last met in February 2020. It was a first priority of mine, on becoming Secretary of State, to have another meeting, so we had a meeting on 5 March that went extremely well and is a solid basis for our ongoing dialogue with the sector not only among employers but among union representatives.
Clive Betts
Lab
Sheffield South East
Question
I am sure the Secretary of State will recognise that Sheffield is the home of steel. Stainless steel was invented in Sheffield, steel made in Sheffield is famous not merely in the UK but throughout the world, and thousands of Sheffielders still work in the steel industry and in related industries as well. So will he give an absolute assurance that the term, “Steel made in Sheffield”, will not be consigned to the history books?
Minister reply
It certainly will not be consigned to the history books. We have an excellent firm in Sheffield, Forgemasters, among others. We all know the great history and traditions that Sheffield embodies and its vital role in the development, and the birth, really, of the steel industry worldwide.
Andrew Griffith
Con
Arundel and South Downs
Question
On behalf of manufacturers in my constituency relying on specialist grades of steel, I thank my right hon. Friend for his Department’s work to support UK steel and ask him to keep working with the industry so that we can be leaders in green steel production as we transition to a low-carbon economy.
Minister reply
I commend my hon. Friend’s work in representing COP26 and doing a great job in engaging with businesses on COP26. I assure him that green steel is very much at the front of our minds. It is something that I am very focused on.
Angela Eagle
Lab
Wallasey
Question
Can the Secretary of State explain why Greensill—an unregulated shadow bank with close links to the Conservative party—was given access to the coronavirus large business interruption loan scheme, which is backed by 80% taxpayer guarantees? Following its collapse, which puts the future of Liberty Steel and thousands of jobs at risk, will the Minister practise the transparency he has just been talking about and tell the House how many millions of pounds of losses incurred will end up being dumped on the UK taxpayer?
Minister reply
The right hon. Lady will know that I cannot possibly comment on that, because it is part of an ongoing series of discussions. We do not really know the full extent of the impact of Greensill’s collapse on the British economy. We are looking into it very closely and looking at which companies have been affected, but until that further investigation we cannot possibly comment on the extent of the liability.
Question
One of the lessons of the pandemic has been that we need a robust domestic industrial strategy and we cannot be dependent on imports—either of final products or through the supply chain—from China or anywhere else. Does my right hon. Friend agree that steel is an integral component of that industrial strategy—and, with time, decarbonised steel?
Minister reply
I reassure my hon. Friend that the fact that we published the industrial decarbonisation strategy only last week suggests to me, and is a signal to the world of, how seriously we take the strategic impact and necessity of steel, and the net zero commitment.
Dave Doogan
SNP
Angus and Perthshire Glens
Question
We know that David Cameron used his direct line to contact the Chancellor regarding Greensill’s difficulties. However, when did current UK Government Ministers first become aware of the firm’s difficulties? What actions were taken beyond acting on unsolicited advice from a former Prime Minister? And how will the Government categorically ensure the industry’s future and the thousands of jobs that go with it?
Minister reply
There were a lot of questions there. Briefly, on Greensill, we are continually looking at the potential impact. I must say to the hon. Gentleman that we are committed to a future for the steel industry here in the UK.
Question
I thank the Secretary of State for meeting me to discuss the issues around Liberty Steel and for working with me to save jobs in that great company. He knows as well as I do that good British steel—and, hopefully, Sheffield steel—is an essential component of our ongoing green industrial revolution, from electric cars to wind turbines. Will he assure my constituents that there is a place and a need for the steel industry, and for many, many steel jobs here in South Yorkshire?
Minister reply
I am delighted to see my hon. Friend taking part in these critically important proceedings. I know how hard he has worked not only to win his seat and be an excellent, first-rate Member of Parliament, but also in his passion for green energy, renewable technologies and hydrogen.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Question
Tackling emissions from steel is critical to the fight against climate change, and I have heard the Minister refer to green steel. The clean steel fund was announced in 2019, but steelmakers will not be allocated any funding from the £250 million scheme until 2023. Why will Ministers not bring forward this funding to boost the industry and its green future?
Minister reply
As the hon. Lady knows, we are always looking at ways in which we can promote green steel and industrial decarbonisation. I have alluded many times to the fact that we published the strategy last week, and the steel fund is clearly part of that strategy.
Question
British-made steel, British electric car manufacture and British-backed clean growth: would my right hon. Friend agree that the prospects for all three are stronger and brighter now that we have left the European Union?
Minister reply
My hon. Friend will remember that I was a Minister in the Department for Exiting the European Union, as I think it was called. I do not want to revisit those debates, but I will say that the future of our industrial strategy, in terms of our green commitments, in terms of the steel commitments and in terms of electric vehicles, is a very bright one indeed.
Jessica Morden
Lab
Newport East
Question
On behalf of all those working at the successful Liberty plant in Newport, may I reiterate how difficult this uncertainty is for the dedicated workforce who make world-class steel, and for their families? May I urge the Secretary of State to keep talking to and meeting virtually with groups of hon. Members, with Liberty plants and with the steel unions over the coming days? As my hon. Friend the Member for Manchester Central (Lucy Powell) said, the UK steel industry is the cornerstone of our national security and our economic prosperity, and it is absolutely crucial to our building back better.
Minister reply
The hon. Lady will know from our bilateral conversations that I am very committed, as Secretary of State, to the future of this sector. I am always happy to meet representatives, experts, workers, representatives in a trade union capacity and local management.
Shadow Comment
Lucy Powell
Shadow Comment
The shadow Secretary of State Lucy Powell criticised the Government for lacking vision and support for the steel sector during COVID-19. She called for a comprehensive plan B, including options like public ownership if necessary, and highlighted previous Government actions that undermined industry confidence such as high energy prices, delayed clean steel funds, and lack of buy-British guarantees in contracts.
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