12:11 Holly Mumby-Croft (Scunthorpe) (Con)

As my hon. Friend is aware, the Government made an extremely generous offer of support to British Steel earlier this year to help it to invest in a decarbonised and sustainable future. We have continued to work intensively with British Steel since then and will continue to do so. However, she will also understand that the detail of those conversations remains highly commercially confidential and that any public discussion risks undermining talks.

I know that this must be a deeply concerning time for British Steel employees and others in Scunthorpe following the company’s announcement on Monday of its plans for future operations. I can very much assure my hon. Friend that we will help affected workers and their families, and that we are committed to finding solutions to enable the ongoing sustainable and decarbonised production of steel. Just last month, for example, we announced a £1.25 billion joint-investment package with Tata Steel to secure a decarbonised future for steelmaking in Wales. That has the potential to safeguard several thousand jobs across the UK. In 2020, the Government provided an emergency loan to Celsa Steel to help it continue trading during the covid pandemic, saving over 1,500 jobs, with a further 300 jobs created since the loan was made.

Most of all, I reiterate to the Minister that decarbonisation cannot mean deindustrialisation; we cannot simply outsource our emissions to other countries, call that progress and expect public support for the transition. A real plan for green steel must be open to all technologies, it must be industry-wide, and it should be a story of new jobs, new opportunities and British economic strength. Sadly, this announcement seems very far from that.

Just as in the oil and gas sector, what plans do the UK Government have for a just transition for the steelmaking workforce? What support will the UK Government be giving to the development of hydrogen furnaces in the UK? What challenges will they put constructively to British Steel over these plans? Given the Government’s high-profile retreats on other climate measures, such as the date for banning the sale of internal combustion engine cars, how much faith can the industry have in any guarantees that the Government do make?

Negotiations are ongoing and nothing is concluded. The statement made by British Steel was a proposal, not a conclusion. The steel that comes out of electric arc furnaces can be used for a variety of things, including construction and military-grade steel—it is incredibly nimble—but I fully appreciate that different types of steel are produced out of different furnaces. The hon. Gentleman spoke about hydrogen, and the Government have a substantial hydrogen strategy that we launched in May 2022. The net zero hydrogen fund is worth up to £240 million of capital co-investment out to 2024-25. That will support upscaled hydrogen production projects, allowing companies, including steel producers, the potential to secure supplies of lower-cost hydrogen. Ultimately, decarbonisation pathways for specific sites are commercial decisions for individual companies based on their own operational circumstances. In the case of Port Talbot, it was about timing for using a technology that can be commercialised at scale. At the moment, for that part of the country, it is electric. Hydrogen may no doubt be the next stage of technology that is used.

May I pay tribute to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for her passionate support for steelmaking in her constituency? Just yesterday at the Dispatch Box, the Prime Minister said that even when we get to net zero, we will still need to have oil and gas supplies. Does the same logic not apply to primary steel? We will still need that at net zero. Does that logic not extend to making sure we have the capability to make primary steel in this country to supply our needs in the future?

I agree on both points: first, on the incredible work that my hon. Friend the Member for Scunthorpe does for steelworkers in her constituency; and secondly, that we cannot achieve net zero without a mix of steel being manufactured in the UK. We have a booming renewables sector, whether that is solar panels, blades for offshore wind farms, or electric vehicles. Much of that steel can be produced by electric arc furnaces, but my right hon. Friend the Member for Tunbridge Wells (Greg Clark) is absolutely right that there is a space for virgin steel, too.

British Steel’s statement on Monday contained proposals and a plan—nothing is concluded yet. My focus, as our focus has always been, is on protecting the steel sector in the UK, protecting steel jobs in the UK and doing everything we can to procure more British steel in UK manufacturing. Of course, that continues. These are commercial decisions about how companies wish to continue their business going forward. I have made it clear that fundamentally there needs to be a mix of steel produced in the UK in the steel market, but the reality is this. First, steel produced in electric arc furnaces is far more nimble because of the technology, and it can be used for many more materials in advanced manufacturing than previously—that is a fact. Secondly, manufacturers, customers and consumers fundamentally want a cleaner, greener steel package. It is not just me saying that at the Dispatch Box; it is also the UK steel industry representatives who have put together a net zero strategy and are talking about having cleaner, greener steel going forward. We have a lot of scrap steel in the UK that can be recycled, and we have far more capacity to recycle that than we have for that steel to be used in UK manufacturing, but, fundamentally, we need to have a mix. I believe that that mix will continue as long as it can and should, but these are commercial decisions. We continue to negotiate with British Steel.

I had a feeling that I had mentioned that a few times. We have a fund of about £1.5 million, partly aimed to ensure that we are adopting, testing and commercialising new technologies to enable the steel sector to decarbonise. We have done a huge amount of work on electricity and we are also considering the possibilities of hydrogen, so we are looking into alternative sources of energy to help the sector in the UK. I know there are challenges for places such as the hon. Lady’s constituency because of the sort of steel that they need, but the fact remains that more and more different types of steel can be made to a high standard and a high grade in electric arc furnaces.

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?

I simply do not recognise the picture that the hon. Lady paints. Our recent decision on Tata Steel was welcomed by UK Steel, the organisation representing the UK sector, which said that it was the way forward. UK Steel itself has a net zero strategy, and wants to see the transition proceed apace.

I thank the Minister for her responses. 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? I had a meeting this morning where it was confirmed to me that the United Kingdom of Great Britain and Northern Ireland is No. 7 in the world for manufacturing. If that is the case, steel is a key part of that. The hon. Member for Scunthorpe (Holly Mumby-Croft) is to be congratulated on bringing forward this urgent question. Really, Minister, we need to make sure that the industry can be retained and not reduced at all.

That is why the support was so substantial to Port Talbot, to ensure that the steel sector could continue to thrive here in the UK. Manufacturing in the UK is booming. We are the eighth largest manufacturer in the world and we need to get our goods fundamentally from the UK, including steel. The hon. Gentleman is right to say that we cannot achieve net zero without steel, but we can help steelmaking to become even more green and clean than it is at the moment.

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