19:40 Emily Thornberry (Labour)

Thirdly, it makes no sense whatsoever for the TRA to make recommendations affecting the British steel industry without considering the knock-on implications for our defence procurement programmes, for the construction of critical national infrastructure, and for the delivery of our net zero emission targets. All those major considerations for the Government will be dramatically altered depending on whether we are producing the majority of our steel we need here in Britain or importing it from abroad. Yet the potential impacts of its recommendations on those different areas were not among the factors considered by the TRA, because apparently it was not in its remit to do so.

That leaves us with a fundamental dilemma: either the TRA’s remit needs to change so that it can consider the global context for its recommendations and take into account their impact on our jobs, communities and regions, our national defence, our civil infrastructure and our climate change objectives, or, alternatively, the Secretary of State’s powers need to change to allow her to weigh up all those factors against the TRA’s analysis and make a decision, with Parliament’s approval, based on our overall national interest, on what is best for Britain. Which of those two options would be better is a discussion for another day, but one thing that we should be certain of now is that the Government cannot proceed with a decision on steel safeguards on the basis of recommendations by the TRA that have not even taken into account some of the most crucial factors at the heart of that decision. On that basis alone, I hope that Members in all parts of this House will agree on the need for emergency legislation to allow the Secretary of State to reject the TRA’s recommendations, extend the current safeguards beyond 30 June, and allow time for discussion about the right course of action for the future.

If we do wish to do so in Britain, we can wean ourselves entirely away from the cheap imported steel that causes 50% extra carbon emissions, and instead have a British steel industry that leads the world in the development of hydrogen steel technology and decarbonised steel production, and by doing so leads our country to the achievement of net zero. If we choose to do so in Britain, we can put home-produced steel at the heart of every defence contract and infrastructure project from warships to wind farms, and use British steel to build our way back to full economic recovery. If we choose to do so in Britain, we can make the jobs in our steel industry the foundation for creating thousands more well-paid, good-quality, skilled jobs in other communities that need them, as we apply our skills and strengths in steelmaking to the new opportunities created by the green industrial revolution.

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20:15 Marion Fellows (Motherwell and Wishaw) (SNP)

The report, “Closing the Gap”, shows the huge structural barrier facing the UK steel sector as it faces the core challenges of adapting to a trading environment outside the EU and trying to recover in the aftermath of the pandemic, and embarks on the major challenge of decarbonisation. The report makes a powerful argument for the UK Government to put forward a bold programme of support for the sector, to level the playing field. Consistently higher UK electricity prices increase production costs, reduce available capital and deter inward investment, severely reducing the sector’s ability to invest. Gareth Stace, UK Steel’s director, said:

“Our new report plainly demonstrates UK steelmakers face systemic disadvantages in higher electricity prices than our competitors… Electricity is one of the biggest costs for the steel industry, it undermines our competitiveness and it damages our ability to invest… And the issue is becoming even more urgent with the growing need to rapidly decarbonise”.

The GFG Alliance has said that its Scottish businesses are performing strongly and have access to sufficient resources for their current needs. There has been no call on the Government guarantee and the Government receive a fee from the business for providing the guarantee, and the guarantee is backed by security over its assets. In Scotland, there is political will to support the steel industry. Where is that will in the UK Government? It appears that this UK Government are happy to give a hand to their cronies, but are willing to allow steel, a foundation industry, to founder under unfair competition and high energy prices. There is a reluctance to help an industry that provides decent, well-paid jobs and that could supply steel for the green energy industry and infrastructure for recovery after this coronavirus pandemic.

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20:25 Peter Aldous (Waveney) (Con)

I will take the few short minutes available to me to highlight the need to promote the production of clean steel, which can play a key role in the covid recovery, levelling up and decarbonisation. With COP26 rapidly coming into view on the horizon, there is an opportunity for the UK to be a global leader in this sector.

The Government are laying the foundations for a world-leading clean steel industry with the 10-point plan, the industrial decarbonisation strategy and the industrial fuel switching competition. It is vital that they now build on that work, announce the findings of the call for evidence for the clean steel fund and bring forward the following policy initiatives: first, a border carbon adjustment on imported goods based on their carbon content; secondly, the setting of clear targets for the use of clean steel by specific dates in infrastructure projects; and, finally, the promotion of a clean steel demonstrator project. It is also important that the forthcoming hydrogen strategy provides the framework for the industry to develop in East Anglia.

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20:28 Darren Jones (Labour)

The Government, however, have failed to do anything helpful on these issues. In fact, they have made things worse by publishing an industrial decarbonisation strategy that once again does not have sufficient buy-in from the Chancellor to help businesses to make the changes they need. Now, to make things even worse, the Minister tells us that the Government cannot do anything to stop the Trade Remedies Authority scrapping tariff safeguards, at a time when we all know that huge gluts of cheap steel are waiting to be exported from countries such as China.

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20:31 Nicola Richards (West Bromwich East) (Con)

I have already spoken about this situation, but I really hope for a positive resolution to it soon and call again for the protection of jobs in West Bromwich. I have spoken to the Business Secretary about this directly on many occasions and want once again to place on record my personal thanks to him for his regular engagement and his commitment to the industry. Re-establishing the UK Steel Council and creating the £250 million clean steel fund to help the sector adapt to new challenges, such as decarbonisation, is absolutely the right way forward. Later this year, the Prime Minister will be looking to secure firmer climate target agreements when he hosts the COP26 summit in Glasgow, so I implore the Government to engage with industry leaders and stakeholders ahead of the summit to bring the entire steel industry with us on this decarbonisation drive.

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20:34 Christina Rees (Neath) (Lab/Co-op) [V]

Steel is at the centre of everything we build. Railways, schools and hospitals all need high-quality British steel, as do the aerospace, agriculture, automotive, defence and construction supply chains, too. The British steel industry produces 7 million tonnes of crude steel every year, 70% of the UK’s annual requirement of which 96% is recycled again and again, and it makes a £2.1 billion direct contribution to UK GDP. Some 33,700 people are directly employed, with an average annual salary of £34,299, and 42,000 people work in the supply chain. Steel is vital for building green technologies of the future, such as wind turbines, and steel is helping the UK to achieve net zero by going through its own decarbonisation process.

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20:37 Dr Jamie Wallis (Bridgend) (Con) [V]

There is a need to revolutionise the steel industry in the UK towards the economy of the future. Decarbonisation is clearly key to that. Through the clean steel fund, provided by the UK Government, the industry will adapt to the challenges of decarbonisation while continuing to manufacture world-renowned steel. However, adapting to the future green economy brings with it new challenges as well. For example, electric arc furnaces reduce carbon emissions, but there is a huge concern locally in my constituency about the impact on local jobs of moving to that technology. Although we must work to forge a greener industry, we must also continue to support the steelworkers.

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20:58 Mark Tami (Labour)

UK steel makes up only about 10% of UK public sector demand. That is pathetic, but it will not change unless the Government work with UK steel well in advance of major procurements to maximise UK input. Too often, it is an afterthought, or left to the companies delivering the projects, with Government turning a blind eye. The Government are right that the industry needs to modernise and invest in new technologies to meet the challenges of the future, but that is not simply going to happen by some sort of magic. It is no good just saying to an industry that relies on coal and high-energy usage that it needs to change and decarbonise overnight. This industry pays 86% more for its electricity than in Germany and 62% more than in France, and that imbalance is set to get worse rather than better. It is no good saying that hydrogen is the solution to every problem going when we do not have a single facility in the UK, unlike in other countries. The industry will need help and support to meet these challenges and not just warm words and no action, which is what we have seen up until now.

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21:08 Peter Gibson (Darlington) (Con)

In addition, this Government are helping to decarbonise the sector. That has been achieved by creating a new £250 million clean steel fund, and launching a £315 million industrial energy transformation fund to help businesses with high energy use, helping the industry to cut its bills and emissions. While the Labour party does nothing but talk down the steel sector, failing to support production and jobs, this Conservative Government are supporting the industry, so that British steel is best placed to benefit from the opportunities presented by our new trade deals around the world, and our massive infrastructure investment.

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21:10 Stephen Kinnock (Labour)

Every military vehicle, major infrastructure project and power station requires steel. Steel enables us to stand on our own two feet as a nation. Homegrown steel is the only route to tackling climate change, and it will play a critical role in greening our economy, from electric cars to solar, wind and tidal power. British production processes have half the carbon footprint of China’s far less decarbonised steel industry, and shipping steel from the other side of the world is obviously more carbon intensive.

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21:22 Jessica Morden (Labour)

When Britain left the EU, this Tory Government made a promise that we would be able to support British industry more than we had done previously and that foundation sectors such as steel would be at the forefront of the Government’s thinking. Unfortunately, here is one of the major tests of our new trading priorities, and the Government are sitting on their hands and pretending there is nothing they can do. How can our steel sites supposedly make a business case to investors for long-term projects such as decarbonising when the Government speak positively about the industry one day, only to strip away protections the next? It is a nonsense. I urge the Government to get their act together and secure a long-term solution on safeguards, which are so important to the industry. There is a motion here today that they could choose to adopt, and in doing so they could help the industry. It is a massive test for the Government, and one our industry cannot afford for them to fail.

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21:25 Geraint Davies (Swansea West) (Lab/Co-op) [V]

We cannot allow cheap carbon-intensive steel from China to destroy our steel industry and our planet. Over half the steel in the world is now produced by China—the amount has doubled in the last 20 years—and we face a climate catastrophe. British steel uses 50% less carbon, and we have a situation in which, since Kyoto, global emissions have gone up 60% since 1990. The Paris limit of 1.5° C will be breached by 2025, and 8,500 tonnes of ice is melting every second of this debate in Greenland. China is emitting 28% of global emissions, which is more than the US and the EU combined: 7 tonnes of carbon per person, compared with 5.8 tonnes in Britain. On a consumption basis we do 8 tonnes, because we have subcontracted our coal-fired power stations and manufacturing to China. China now has over half the capacity for coal-fired power stations—1,037 coal-fired power stations—and it plans another 300. Its emissions will not peak until 2030, and we do not know what that peak will be. It will only be carbon neutral by 2060, and that is not even net zero.

We must act. We need to have the same tariff safeguards as the EU and the US against the dirty steel the Chinese are dumping. We need to switch to the border adjustment carbon tax being considered by the EU, which factors the carbon price into those taxes, for COP26. We have talked a lot today about the balance between strategic industrial interests and consumer prices, but those consumer prices need to factor in the environmental cost of carbon. It must be in the guidelines for the TRA to make these recommendations, which it is not. Buying more carbon-intensive products—whether steel, manufacturing or agriculture—is destroying our planet. Let us build back greener, reward lower carbon, tax higher carbon in COP26 and remember that, as the US says, we want to make trade a force for good that encourages a race to the top—not just for workers’ rights, but for our environment. Let us build back British steel, let us have a safer planet and let us protect jobs in Wales, in England and beyond.

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21:28 Jerome Mayhew (Conservative)

The Government are right to focus on defending fair competition while supporting our steel industry to adopt low-carbon energy sources as we move toward renewable supplies, supporting our producers to the tune of £500 million since 2013 so that our cleaner energy does not disadvantage them. In the long run though, we need to move away from clumsy and expensive state support. Rather than costing our Treasury money to compensate industry, a carbon border adjustment mechanism would raise income from high-carbon imports, providing funds to invest in our own decarbonisation plans. Those are supports that can work within WTO rules, not in flagrant breach of them, as Labour wants.

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21:33 Grahame Morris (Labour)

Current trade policy is failing the UK’s regions. Despite the protestations of Government Members, time and again the Conservatives have failed to back British steel, opting instead to rely on imported steel in Government procurement contracts. Ministers and the TRA are undermining an industry that, as we have heard, directly employs nearly 34,000 people in relatively well paid and highly skilled jobs and supports a further 42,000 jobs in the supply chain. Labour has pledged to build in Britain to create UK manufacturing jobs in the low-carbon infrastructure of the future. We cannot allow the Government to offshore this vital industry. British steel should be at the heart of every major UK defence and infrastructure project. We need to see investment in decarbonisation and in hydrogen technology that will enable our steel industry to lead the way towards achieving the UK’s net zero target and safeguard good, well-paid green jobs in the process.

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21:50 The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)

Hon. Members heard the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena), clearly set out the role of the Trade Remedies Authority, which is sponsored by the Department for International Trade, and how its recommendation process works. The world has changed since 2018 when these powers were put in place, so my Department is very supportive of the Trade Secretary’s desire to review the domestic toolkit, given the challenges of global trade. At the same time, my ministerial colleagues in BEIS and I will continue to devote our focus to the future of this important sector. Although the global economic context is challenging, hon. Members will recall that the Secretary of State said when giving oral evidence to the BEIS Committee’s inquiry into the future of steel that the UK industry will continue to need high-quality steel and British steel is among the best in the world. Making sure our steel industry has the right conditions to thrive is a key part of our efforts to reach net zero and level up across our country.

As my hon. Friend the Member for Darlington (Peter Gibson) highlighted, the Government’s £350 million industrial energy transformation fund will support businesses with high energy use to cut their bills and reduce carbon emissions. It is a fact that to reach our ambitious net zero target the UK steel sector does need to decarbonise, as my hon. Friend the Member for Waveney (Peter Aldous) set out so eloquently. Our new industrial decarbonisation strategy, which is the first net zero-aligned strategy from a major economy, sets out, for the first time, the Government’s comprehensive assessment of how industry, including the steel sector, can decarbonise in line with net zero in a way that supports competitiveness and clean growth. As my hon. Friend the Member for West Bromwich East (Nicola Richards) highlighted, this is an important journey for the industry.

The strategy includes a commitment to work with the UK Steel Council, which the Business Secretary re-formed on 5 March and provides a forum to work in partnership with industry and the unions to develop a plan to support the sector’s transition to a competitive, sustainable and low-carbon future. In particular, we are working with the UK Steel Council to examine the implications of the recommendations of the Committee on Climate Change to set targets for steelmaking to reach net zero emissions by 2035. In 2019, we announced the £250 million clean steel fund to support the sector to transition to low-carbon iron and steel production through new technologies and processes, so I can reassure the right hon. Member for Islington South and Finsbury (Emily Thornberry) that we have indeed got the steel industry’s back. This fund is currently in development and we need to take the time to design this policy. Complex decarbonisation projects have long lead-in times and the steel sector has indicated that its preference is for the fund to be launched in 2023.

All that strong steel action is aligned with our prioritisation of science and innovation. We recognise the equally strong economic benefits of public investment in science and innovation, and in its capacity to leverage private investment. Because of that, we will increase public research and development investment to £22 billion per year from 2024-25. We also plan to establish a net zero hydrogen fund, with £240 million of capital co-investment out to 2024-25. This will support at-scale hydrogen production projects, allowing steel producers the potential to access supplies of low-cost hydrogen.

Decarbonisation is one top priority. Another one is resolving procurement challenges that the industry faces, as my hon. Friend the Member for Bridgend (Dr Wallis) highlighted. We are working hard to ensure that UK steel producers have the best possible chance of competing for and winning contracts for all Government projects, including those like ships identified by my hon. Friend the Member for Ashfield (Lee Anderson), with his now famous colour. We have established a BEIS industry-led steel procurement taskforce co-chaired by the Minister for investment to explore what Government and industry can do to address the challenges the sector has reported when competing for public contracts.

I thank the hon. Gentleman, but I refer back to the comments made by the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire. The tools available to us relating to anti-dumping measures continue to be ones that remain at the forefront of the Secretary of State’s toolkit, as I mentioned. I know she will be focusing on that very closely in the days and weeks ahead. There should be no doubt that we absolutely have the future of our steel industry at the centre. It is a strategic industry and remains so, as so many colleagues have mentioned this evening. Speaking as the Minister challenged with delivering net zero, I can say that the offshore wind industry and the nuclear industry, and so many other critical parts of our infrastructure within the net zero part of this Government’s and this country’s commitment over the next 30 years, will require high quality and hopefully very much British-made steel. We are fully cognisant of the international situation that the industry and all its communities face, so we continue to work to protect jobs and to ensure that the industry succeeds in securing its sustainable future. I firmly believe that we will and know that the Secretary of State will continue to update the House in the days ahead.

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