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Steel Industry: Contribution to the UK Economy — [Mark Pritchard in the Chair]
25 January 2023
Lead MP
Jessica Morden
Newport East
Lab
Responding Minister
Nusrat Ghani
Tags
TaxationClimateEnergy
Word Count: 14585
Other Contributors: 15
At a Glance
Jessica Morden raised concerns about steel industry: contribution to the uk economy — [mark pritchard in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The MP calls on the Government to provide more substantial energy cost support for steelmakers compared to what has been offered by competitor countries such as Germany and France. She also requests a commitment from the Minister to update the House on her engagement with Tata, British Steel, Liberty Steel and Celsa Steel, and acknowledges that current levels of support are insufficient.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The MP is concerned about the precarious outlook for the steel industry in the UK, particularly due to high energy costs and a lack of support compared to other European countries. She highlighted that British Steel paid nearly £1 million a day for electricity, which has risen tenfold since 2021. The announcement by Liberty Steel to idle its plants in Newport East and Tredegar raised significant uncertainty among workers. Furthermore, she emphasized the need for long-term support for decarbonisation efforts in the industry.
Bill Esterson
Lab
Sefton Central
Mr Pritchard, it is a pleasure to see you in the Chair. The UK steel industry's strategic importance has been emphasised throughout the debate by all members who have spoken. Bill Esterson highlighted the economic and national security value of domestic steel production, citing recent geopolitical events such as Putin's invasion. He stressed the need for strong domestic supply chains and the critical role of steel in transitioning to low carbon emissions. The MP mentioned 185 workers at risk due to redundancies at Liberty Steel and criticised the government's response to previous crises like SSI and Redcar, arguing for stronger Cabinet-level involvement with trade unions. The speaker interjects briefly, suggesting that meeting with unions is necessary for addressing issues in the steel industry.
Chris Davies
Lab
Blaenau Gwent
The MP intervened to agree with the lead speaker, highlighting the need for a long-term plan that supports steel and its role in decarbonisation efforts. He also emphasized the importance of procurement policies that prioritize UK-made steel.
Christina Rees
Lab
Neath
Steel is vital for Neath Port Talbot and Wales. Over 2,000 jobs have been lost since 2014 due to global competition and rising energy prices. The UK's steel industry is declining compared to other top economies. Labour proposes a green steel renewal fund to secure the future of steel in the UK.
Helen Hayes
Lab
Dewsbury
The MP intervened to express concern about the impact of high carbon costs on steel companies' ability to invest in decarbonisation and called for a carbon border adjustment mechanism. She also echoed concerns about procurement policies failing to prioritize UK-made steel.
Scunthorpe
Stressed the importance of Scunthorpe's steelworks, which supports 20,000 jobs and pays roughly 45% more than the average job in Yorkshire and Humberside. Emphasized that a dependable supply of high-quality British steel is vital for growth, defence, and tackling modern challenges like climate change.
Jack Brereton
Con
Bridgwater and West Somerset
Congratulated the hon. Member for Newport East on securing the debate, highlighting the importance of refractory ceramics in steelmaking and the need for additional support from the Government to invest in energy efficiency measures.
Jim Shannon
DUP
Strangford
Jim Shannon supports the steel industry and highlights issues related to the Northern Ireland protocol, which imposes a 25% tariff on British steel imports into Northern Ireland. He argues that this impacts the local construction sector and businesses dependent on British steel. Mr Shannon intervened mentioning the contract for warships benefiting Harland and Wolff in Belfast. However, he noted that buying British steel was 25% more expensive due to the Northern Ireland Protocol Bill.
Dwyfor Meirionnydd
Proposed a closed-loop cycle using floating offshore wind and contracts for difference to support renewable energy hubs with multiple technologies, and asked the Minister to clarify how such projects could be linked and supported.
Marion Fellows
SNP
West Renfrewshire
Ms Fellows highlighted the continuous steel crisis since her entry to Parliament in 2015, noting that despite efforts like the steel charter, no fundamental change has occurred. She praised the Scottish Government for saving Dalzell works and discussed the importance of a forward-looking strategy for UK steel production. Ms Fellows also addressed energy costs and tariffs from the US as major issues affecting the industry.
Mark Tami
Lab
Alyn and Deeside
Stressed the importance of a long-term plan for the steel industry to ensure sustainable future investment and warned about the potential loss of industry confidence if action is not taken promptly.
Nia Griffith
Lab
Llanelli
The tin-plate industry in Llanelli is crucial for local employment and product diversification. Concerned about the future of UK steelmaking due to ageing capacity and global decarbonisation efforts, Griffith calls for a clear industrial strategy to support research, innovation, and production. She also highlights the need for energy cost parity, public procurement commitment to UK-produced steel, and WTO-compliant protection against state-subsidised imports.
Sarah Champion
Lab
Rotherham
The UK steel industry employs 34,500 people directly and supports an additional 43,000 in supply chains. It contributes £2.4 billion to GDP annually. Liberty Steel announced 440 redundancies across its UK businesses, citing soaring energy costs as a major factor. The Government has provided support for the steel industry, but there is a lack of a cohesive strategy. The speaker calls on the Minister to present a comprehensive national plan to secure the future of this vital sector.
Stephen Crabb
Con
Fife North East
Highlighted the role of green energy industries in supporting steel production, welcomed an agreement between RWE and Tata regarding Welsh steel use in offshore wind projects, and emphasized the need for government support to ensure British-made steel is central in these developments. Disputes the narrative that the UK Government neglected the steel industry over the past 12 years, highlighting active support from various Ministers and Departments. Emphasises the need for difficult decisions when balancing taxpayer responsibility with company demands. Advocates for British Steel's role in new green technologies and highlights a bid by Port Talbot and Milford Haven for a freeport to support floating offshore wind projects.
Stephen Doughty
Lab Co-op
Cardiff South and Penarth
Acknowledged the critical role of steel in various industries, expressed frustration over inconsistent government action on competitive energy pricing, and emphasized the need for long-term investment.
Tim Farron
Lib Dem
Westmorland and Lonsdale
Steel is vital for the UK's green economy, contributing to infrastructure development like railways and zero-carbon homes. However, producing steel with coal contributes significantly to climate change, accounting for 5% of EU carbon emissions and 7% globally. The Government approved a new coalmine in West Cumbria, but it will likely export most of the coal produced there, rather than support the UK's steel industry.
Government Response
Nusrat Ghani
Government Response
The Minister acknowledged the importance of the steel industry, noting its contribution of £3.8 billion in 2021 to the UK economy and support for over 98,000 jobs. She highlighted global pressures affecting the sector, including oversupply issues and decarbonisation challenges. The Government has provided more than £800 million since 2013 through various funds such as the CCUS infrastructure fund (£1 billion), net zero hydrogen fund (£240 million), industrial fuel switching fund (£55 million), Industrial Decarbonisation Research and Innovation Centre (£20 million), and industrial energy transformation fund (£289 million). The Minister committed to addressing procurement issues and carbon border adjustments, including working on a CBAM proposal. She also mentioned the creation of new competitive funds with more than £1.5 billion made available for support.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.