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UK Steel Sector: Supply Chains
09 June 2021
Lead MP
Stephen Kinnock
Aberafan Maesteg
Lab
Responding Minister
Amanda Solloway
Tags
EconomyTaxationClimateEnergyBusiness & TradeParliamentary Procedure
Word Count: 13238
Other Contributors: 11
At a Glance
Stephen Kinnock raised concerns about uk steel sector: supply chains in Westminster Hall. A government minister responded.
Key Requests to Government:
The government must reject TRID's recommendation on steel safeguards, address industrial energy crisis, implement patriotic procurement policy, and coordinate forums like the Industrial Strategy Council for a modern manufacturing renaissance.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Since 2015, Labour MPs have secured numerous debates and urgent questions on steel but the industry still faces serious challenges due to UK Government's inadequate support. The British steel sector needs protection from import surges and high energy costs, impacting its competitiveness.
Bill Esterson
Lab
Sefton Central
He expressed concerns about the Trade Remedies Investigations Directorate's draft recommendation to withdraw half of all trade remedies on steel, which he believes could have disastrous consequences. He highlighted that UK steel production supports significant employment and contributes over £6 billion in economic value, arguing that the current regulations governing TRID are inadequate for protecting domestic producers against global market fluctuations.
She discussed the critical importance of the steel sector to communities in Neath Port Talbot and Wales. She warned about the potential catastrophic effects if half of the existing steel safeguards were lifted, noting that it could open UK markets to increased imports from countries like the EU and US who retain their own protections.
Scunthorpe
Stressed the importance of steel as a foundation industry for national security and economic self-reliance, highlighting the need to support the sector through long-term measures rather than just crisis interventions. Emphasised the high cost of energy for UK steelworks compared to European counterparts, urging the Government to address this issue and prevent import competition from undermining domestic production. Advocated for a more transparent procurement process that ensures reporting on origin of steel used in national projects.
Jessica Morden
Lab
Newport East
She emphasised the importance of steel in her constituency, highlighting local organisations such as Celsa and Liberty Steel. She noted that steel contributes £2.8 billion directly to GDP and supports an additional £3.6 billion through supply chains. Morden called for a change in procurement policies to support domestic jobs and stressed the environmental benefits of using UK steel over imports from the EU or China. She also discussed the need for lower energy prices, highlighting that UK steel producers pay 86% more for electricity than German counterparts and 62% more than French companies.
Jim Shannon
DUP
Strangford
The Northern Ireland perspective on the steel sector supply chains is critical for local businesses and employment. The cost of steel has risen by a third to £200 per square foot, threatening the construction industry. In 2019, the UK steel sector supported 33,400 jobs. Steel production should be self-reliant with government contracts bound to buy British steel. Shipping costs have soared from £1,061 to over £5,873 for a container, affecting all products and prices. It is important that we have steel for offshore wind power and construction at competitive prices. The Minister was asked to assure him on the availability of competitively priced steel.
Marion Fellows
SNP
Motherwell and Wishaw
Marion Fellows criticised the UK Government's plans to remove steel safeguards, warning that it risks damaging the sector long term. She pointed out that UK Steel warned removing protections could turn the UK into a 'magnet for huge volumes of steel imports'. The SNP MP also highlighted the need to address the £54 million extra in energy costs that UK companies pay compared with Germany, which over five years has cost the UK steel sector £254 million or 130% of annual capital investment. She urged the Government to support a bold programme for the steel industry and praised Scottish Enterprise's support for Liberty Steel.
Mark Tami
Lab
Alyn and Deeside
He highlighted the long history of Shotton steelworks, which has been operating for 125 years. However, he pointed out that despite current profitability and efficiency, Shotton Steel relies heavily on Port Talbot for raw materials, illustrating a wider dependency in the UK steel industry. Tami criticized the government's inconsistent support for the sector, noting high electricity costs compared to European competitors and a lack of action from Ofgem. He also emphasized the need for increased public procurement of British steel and called for it to be central to infrastructure projects.
British steel once supported hundreds of thousands of jobs but now struggles to compete internationally, with output falling by 30% in 2016. The crisis at Liberty Steel threatens livelihoods and the wider supply chain. Technological advances like direct reduced iron technology and hydrogen power can transform the industry into a leader in sustainable steel production. Government support is needed for decarbonisation efforts and to ensure that procurement policies benefit British steelmakers.
Ruth Jones
Lab
Newport West and Islwyn
Ruth Jones expressed concern about the Trade Remedies Authority's recommendation to extend UK safeguard measures on only 10 out of 19 product categories, potentially undermining the effectiveness of remaining safeguards. She urged Ministers to maintain current protections due to global overcapacity in steel and trade diversions resulting from US tariffs. Jones also highlighted the lack of hydrogen steel projects in progress in the UK compared to Europe and called for government support for transitioning to net-zero production.
Sarah Champion
Lab
Rotherham
The British steel industry has vast potential but faces ongoing challenges, including uncertainty over Liberty's sale of its speciality steels division in Rotherham. The Government must ensure that any sale safeguards the future of the plant and holds Sanjeev Gupta to his commitment. The Aldwarke plant can lead in decarbonising the steel sector, requiring sustained support from the Government for long-term growth. British Steel faces higher electricity costs than competitors, necessitating action on energy costs and protection against cheap foreign imports.
Seema Malhotra
Lab Co-op
Feltham and Heston
Ms. Malhotra thanked the lead MP for securing the debate, praised colleagues who spoke in support of UK steel, and expressed concern over a lack of strategic focus from successive Conservative Governments leading to reduced resilience against external shocks and fierce international competition. She highlighted that 60% of steels are imported without an assessment of their carbon footprint, affecting around 1,100 businesses and 75,000 jobs in the UK steel industry. Ms. Malhotra criticised the draft recommendations by TRID to remove safeguards protecting UK steel producers, urging for an assessment of industry evidence against data used in TRID's recommendations. She also called for a wider range of public interest tests in trade remedies legislation and demanded the Government extend current steel safeguards until certainty is provided. Ms. Malhotra highlighted the need for a truly ambitious vision for decarbonising UK steel, urging better progress on industrial decarbonisation strategy and acceleration of the clean steel fund worth £250 million. She also suggested that delaying until 2024 shows a lack of co-ordination with industry investment cycles. Ms. Malhotra emphasised the need for capital investment in future productivity, pointing out that UK electricity prices impose an extra £54 million a year additional cost on the UK steel sector compared to Germany. Ms. Malhotra proposed that priorities for fair transition include long-term planning, protecting jobs and retaining high skills through retraining while avoiding hard redundancies. The Minister was questioned about supporting viable plants such as Stocksbridge and Brinsworth, which purchase their supplies from Rotherham. The need for working capital to support existing orders and products was highlighted.
Government Response
Amanda Solloway
Government Response
Acknowledged the debate's focus on supporting the UK steel sector, emphasizing government efforts including safeguarding trade remedies, addressing climate change through decarbonisation strategies and funds, reducing energy costs, improving procurement processes, and closely monitoring companies like Liberty Steel. Highlighted actions such as the £250 million clean steel fund, £350 million industrial energy transformation fund, and up to £66 million in innovative technology funding for key industries.
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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.