17:13 Jonathan Reynolds (Labour)

That this House recognises the need to decarbonise steel production; appreciates the pride that local communities have in their historic steelworks; regrets that the Government has pushed through plans for decarbonising steel in the UK which will result in thousands of steelworkers losing their jobs and risk leaving the UK as the first developed country in the world without the capacity to produce primary steel; further regrets that the Government has failed to produce an industrial strategy which could have included a plan for the whole steel sector; believes that primary steel is a sovereign capability and is therefore concerned about the impact that the Government’s plans could have on national security; also believes that steel production can have a bright future in the UK; therefore calls on the Government to work with industry and workers to achieve a transition that secures jobs and primary steelmaking for decades to come; and further calls on the Secretary of State for Business and Trade to report to Parliament by 27 February 2024 with an assessment of the impact on the UK of the loss of primary steel production capabilities.

Labour has secured this debate today because this is a hugely important issue. It is important not just because the future of the Port Talbot steelworks is integral to communities across south Wales—I know that many hon. Friends will be making that case passionately—but because it speaks to a much bigger challenge that we face as a country: how to decarbonise heavy industry in a way that is effective for our climate objectives and fair for our communities.

The Opposition believe that the Government’s push to decarbonise the steelworks at both Port Talbot and Scunthorpe, in a way that guarantees large job losses and has no support from the workforce or unions, risks irrevocably damaging working people’s trust in the opportunities the net zero transition could bring. We believe that it is a calamitous mistake for the UK to become, under the Conservatives, the first major economy in the world without the ability to make our own primary steel.

Decades of underinvestment and managed decline have devastated our steel industry, as the news from Port Talbot painfully brings home, but as the Unite the union’s workers’ plan for steel sets out, with the right Government action this crucial industry can still be saved. Does my hon. Friend agree that the Government must invest in UK steel, transitioning Britain’s remaining blast furnaces to fully decarbonised steel production, saving thousands of skilled jobs and putting Britain at the heart of clean, green steel production?

I agree with that case. That is why this is such an important issue for Parliament to consider. I always acknowledge that there are parts of it that are difficult. Decarbonising industry is an urgent priority, but in some cases the technology is uncertain or expensive. It is my contention, however, that getting it right is more important than doing it quickly or necessarily at the cheapest cost. To state the obvious, we can decarbonise anything by shutting it down. The cheapest path will likely always involve outsourcing most of our industrial production to other places. If we do that—it is the Government’s plan for Port Talbot—we will spend millions of pounds, and we will see huge job losses and global emissions rise as we effectively offshore our emissions and then claim that is progress. That would be a fundamental political mistake with potentially enormous ramifications for the future of the transition to net zero. We should know that from our own past.

The decision of this Conservative Government to hand over half a billion pounds of taxpayers’ money to make thousands of people redundant is quite simply a bad deal. It is a bad deal for workers, a bad deal for taxpayers and a bad deal for the future of our industrial sovereign capability. Worse than that, it sends a message that decarbonisation effectively means deindustrialisation. I put it to Conservative colleagues that if net zero becomes a zero-sum game for working people, that risks the very support that we need to achieve the transition. There must be public consent for the transition, and that requires our economy to benefit from better jobs and better opportunities. This is the real politics of getting net zero right: it is not imaginary meat taxes or made-up claims about seven bins but whether the transition is just and fair and delivers something for Britain’s workers. The Government’s plans so far are simply none of those things.

The race to decarbonise is a race for jobs and prosperity, and this could be a hugely significant time for steel. As the Minister knows, I have many criticisms of Government policy, and I believe that we have weak business investment, weak productivity and weak growth as a result. I recognise that the Port Talbot site is in a challenging financial position, but the Government have already recognised that uncompetitive energy prices need tackling. We have procurement rules in place that are seeing significant steel content from the UK in infrastructure projects, and we are getting close to carbon border adjustment mechanisms both here and in the EU, which will be a major development. CBAMs in particular will likely completely change the economics of the UK steel industry. There is no reason to believe that the UK cannot have a vibrant steel sector, so to make this irreversible decision now, when the policy background is clearly improving, seems odd indeed. Better options are on the table; anyone claiming otherwise is simply being disingenuous.

It does not have to be this way. We cannot afford to blow this opportunity, repeat the mistakes of the 1980s and leave regional inequality entrenched—we can still see those scars. That is why I always say that, under Labour, decarbonisation will never mean deindustrialisation. I want green steel, and I believe that the workforce are our greatest asset in delivering that. Any real plan for green steel must cover the whole industry. It must be open to all technology that is available, and it should fundamentally be a story of new jobs, new opportunities, new exports and renewed British economic strength, rather than outsourcing our emissions and pretending that that is progress.

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17:33 Nus Ghani (Conservative)

Is not the truth of the matter—I admired, by the way, the shadow Secretary of State’s rhetoric—that Port Talbot is a victim of climate militancy and extremism? Net zero zealots do not understand that unless we manufacture in this country, we will extend supply chains and our carbon footprint will grow. Is that not the truth of the matter?

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17:55 Marion Fellows (Motherwell and Wishaw) (SNP)

I agree on that. We in the Scottish National party recognise the need to reduce our emissions and reach net zero targets, but we are equally clear that it is vital that the individuals and communities most impacted by the green transition must be at the heart of the decisions made by Governments. A just transition must have at its heart fairness and transparency for the workers affected. In the case of Tata Steel, it is clear that the impact of the closures on the workers has been an afterthought.

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18:09 Stephen Kinnock (Labour)

Let me be absolutely clear: when we look at the deal that is now on the table, we see that it does not work for jobs, it does not work for decarbonisation, and it does not work for our national security. On jobs, 2,800 jobs are set to go, with £500 million of taxpayers’ money to pay for that privilege. On decarbonisation, the deal is based on importing millions of tons of steel from India, where steel production is 30% to 40% more carbon intensive. I am not sure if anyone has noticed, but India is 5,000 miles away, so the carbon footprint will be huge. We are literally exporting jobs from Wales to India, and importing carbon from India to Wales.

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18:12 Alun Cairns (Vale of Glamorgan) (Con)

However, the reality is that every time a Member of this House, on either side of the Chamber, has called for us to go further and faster and to be ahead of the curve in the green transition, another nail has been put in the coffin of heavy industry such as Tata in Port Talbot. That is the reality of the position. When we have passed climate change legislation here we have heard many Opposition Members—those who are now seeking to defend the jobs—saying that the Government are not doing enough on our green transition.

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18:19 Jessica Morden (Labour)

Labour will step up. A general election cannot come soon enough for our steel industry. We have long pledged a £3 billion fund to decarbonise UK steel production. This Government’s plan is not a serious one; it is yet another sticking plaster from a Government without a proper industrial strategy. We have had 12 steel Ministers since 2010, and six in the last four years alone.

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18:27 Nia Griffith (Labour)

Instead, the Government should have been negotiating a proper deal such as the multi-union plan to ensure a just transition. They should have been protecting jobs, keeping the blast furnace going until other production means are fully up and running, and recognising that the electric arc furnace can only be part of the solution. Yes, let us recycle more steel in the UK, but we must recognise that that is not suitable for all our needs. We should also be developing green technologies such as hydrogen and direct reduction of iron to do the primary production of steel, as Labour has proposed, committing £3 billion—not half a billion—to work with the industry to make that just transition a reality.

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18:32 Liz Saville Roberts (Plaid Cymru)

Plaid Cymru has called for action to ensure that ownership of the Welsh steel industry is returned to Welsh public control. This would involve nationalisation, and then recapitalisation through green bonds, with a view to mutualising and creating a Welsh steel co-operative. We could save the banks in 2008; why can we not save steel now? Look at Germany, where the Government spent €2.6 billion in state aid to steel producers for decarbonisation projects only last year. That is the scale of intervention that we need. We must also learn from countries such as Spain, Canada and Sweden, which are already investing in their capacity to produce primary steel through green hydrogen furnaces. There are lessons here for Wales. There are suggestions that a closed-loop cycle could be created in south Wales, whereby floating offshore wind is not only used for electricity but to make green hydrogen for local heavy industry, including steel production.

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18:38 Richard Thomson (Gordon) (SNP)

Make no mistake: this decision is economically, environmentally and strategically inept. It means that the UK takes a step closer to being the only state in the G20 without the capacity to make its own virgin steel. That is a risk to security, but it also means that the UK is effectively outsourcing the emissions associated with the production of that virgin steel, while unforgivably offshoring the jobs. That is not a just transition; it is just plain daft.

Finally, I say as gently as I can to those on the Labour Front Bench that if decarbonisation is not to mean deindustrialisation, they should please have a word with their leader and make sure that he does not water down any further his £28 billion pledge, because communities that depend on our getting the transition right, such as mine, deserve and expect no less.

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18:41 Ruth Jones (Labour)

This announcement is a massive blow for everyone across Wales and the UK. It is all the more frustrating, because we know that this decision to shed 2,800 jobs is completely avoidable. We know that the steel industry has to decarbonise, and we must achieve our goal of net zero, but we do not have to do it overnight. We can transition to green steel. Decarbonisation cannot mean deindustrialisation. The route to green steel involves a mix of all the available technologies, not just electric arc furnaces. We will move towards our goal of net zero, but in partnership and co-operation, leaving no one behind. That is the fair way; that is Labour’s way.

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18:43 Sarah Jones (Labour)

As the shadow Secretary of State, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), said in his opening speech, we also risk something much wider: that net zero becomes a zero-sum game for working people and we lose the public consent that we need for the transition. There is no getting away from the facts. The Government have pushed a plan that uses hundreds of millions of pounds to make thousands of people redundant. If Scunthorpe ends up going the same way—the hon. Member for Scunthorpe (Holly Mumby-Croft) made a powerful speech to the contrary—we will be unable to produce primary steel in the UK.

We must think about manufacturing differently. I have lost track of the number of times businesses have said to me, “We would invest in renewables, but the Government make it too hard.” Our manufacturers say, “We want to decarbonise, but we are living hand to mouth because our energy bills are so much higher than in other countries, and Government won’t help us.” This steel debacle speaks to a much wider issue. We do not just need a steel industry: we need glass, ceramics, cement, compost, critical minerals, batteries, composites and cheap energy. We need supply chains that work, an upgraded national grid, planning reform and a job plan to create jobs across every part of this country—a transition from the old to a much cheaper renewable future. In short, we need an industrial strategy. We need a Government who believe in working in partnership with industry, not just telling them to “F off”, and we need a plan that looks to the future of our own country and does not just rely on cheap imports from China.

We are asking the Government to think again, to look at the multi-union plan again and to think about how to defend primary steel capacity in our country. We know that steelworkers are watching this debate, and they must feel wretched. I ask Government Members in all sincerity: are they concerned about our defence capabilities if we lose the capacity to make primary steel? Do they really think the Government’s plan is money well spent? Should decarbonisation really be about cutting jobs? Is manufacturing really a Victorian pursuit best left to the Chinese, as a former Tory Prime Minister is reported as saying?

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