10:40 Mr Iain Wright (Hartlepool) (Lab)

My hon. Friend the Member for Scunthorpe (Nic Dakin) mentioned the supply chain. What are the Government doing to help establish and nurture a UK supply chain, particularly for the renewable energy sector? We have the biggest market anywhere in the world for offshore wind, and steel is a large part of the manufacturing process. However, the industry estimates that only about 10% of the components going into offshore wind installations are British-made. Tata Steel is investing £9 million in its world-class pipe mills in my constituency to increase the possibility of winning contracts for offshore wind component manufacturing, but the company needs the Government’s active support to ensure not only that there is a level playing field for British steel manufacturers, but that those manufacturers get on the pitch in the first place.

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10:50 The Minister for Universities and Science (Mr David Willetts)

As part of the autumn statement, therefore, we announced measures worth about £250 million to help energy-intensive industries, including the steel industry, to reduce their energy bills. That package was intended specifically to mitigate the effect of climate change policies and energy policies on energy-intensive industries such as steel. In February, we launched the third round of the regional growth fund, worth £1 billion, to which steel companies can bid as long as they comply with state aid rules. The £125 million advanced manufacturing supply chain initiative is expected to go live before Easter, and that will offer further funding opportunities for building supply chains.

Offshore wind power clearly has great potential as a market for British steel, so we understand the disappointment that an EDF offshore wind project contract, in which a UK company won some of the fabrication work, does not involve UK manufactured steel. We have to recognise that, ultimately, such decisions are commercial, but we are working with the Department of Energy and Climate Change to see how we can help to strengthen the supply chain so that UK companies are better placed to compete for such business. Together with the Crown Estate and senior executives from 17 developers, we have therefore established the offshore wind developers forum.

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