09:30 Richard Tice (Reform)

Perhaps it is not so smart to lose all our steel-making capacity at a time when 71% of all steel manufactured around the world is made in blast furnaces. Even if all the electric arc furnaces that have been announced are built, which of course they will not be, we will only get to a balance, in 2050, of about 50-50. The majority of all new steel-making capacity around the world being built as we speak comes from blast furnaces. There is a reason for that. And here in the UK, imports of steel from the likes of China, India and Vietnam are soaring. Hang on—I thought we were supposed to be world leaders in steel, but 66% of all steelmaking around the world happens in nations that either have no net zero targets or have targets that are general and way beyond 2050.

I would suggest to the House that it is vital that we keep steel manufacturing going in a sizeable way in the United Kingdom. Not to do so would cause a self-inflicted wound, driven by the main two political parties’ obsession with net zero. That is the reality. Net zero, and the increase in renewable energy capacity, is directly linked to the increase in our electricity prices, and to the fact that we are becoming ever more uncompetitive. The Tories started it, and now under the new net zero zealot-in-chief—the new Secretary of State for Energy—it is being accelerated.

The third reason why this is a catastrophe is what I call the community interest. We saw the devastation in the coal-mining communities in the 1980s; when I have been campaigning, I still hear people talk about that. That was absolutely devastating. The oil and gas industry is under huge threat at the moment because of net zero, which is again devastating. There is a huge loss of the multiplier effect, skills are disappearing and families are concerned.

Here we are today, with thousands of jobs sacrificed on the altar of net zero in Port Talbot, with the risk facing Scunthorpe in front of us. Lots of people say, “Don’t worry, Richard. We’ll be a world leader in this stuff.” Really—a world leader? I suggest that the only things we will be a world leader in are naivety, stupidity and negligence. The truth is that behind our backs, other countries making steel, growing their economies and enjoying cheap energy are laughing at us. They cannot believe how foolish we are. They cannot believe that we are serious about destroying some of our finest manufacturing industries, but they will take it. They are benefiting and we are losing.

My five-point plan is first to take a strategic stake in British Steel to guarantee that the blast furnaces in Scunthorpe will not close. We cannot run that risk. Otherwise, if the electric arc furnaces are not built, we have nothing—niente, zip. The second part of my plan is to scrap the carbon taxes and the potential carbon border adjustment mechanism.

The fourth part is to buy British. The Secretary of State for Energy Security and Net Zero wants more and more wind turbines, but as I understand it not a single bit of British steel is used in all those turbines, which all come from overseas. If we want more turbines—some people do; some do not—maybe we should make it a condition that we use British steel to grow our own economy with more jobs and more money. Those four things plus the fifth thing are all deliverable by this Government. That is what I urge the Minister to consider.

The fifth thing is the right thing to do. I accept that it is not going to happen, but if we want cheaper electricity and to be more competitive, the fastest way to do it is to scrap net zero. That would bring down prices. It would stop us wasting tens of billions of pounds and stop blighting our countryside with thousands and thousands of pylons, including in my constituency. The first four components of my five-point plan the Government can and should do to protect our steel industry, which is strategically vital. Not to do so is negligent to the point of criminality.

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09:47 Jessica Morden (Labour)

The steel industry is important for many of our communities and, as we know, on average jobs in the industry pay more in the communities that really need them, such as mine in south Wales and my hon. Friend’s. I agree that our communities and the downstream industries that depend on steel should have a fair and just transition. I look forward to working on this issue with the new steel Minister, my hon. Friend the Member for Croydon West (Sarah Jones), and with the steel unions—Community, GMB and Unite—which stand up strongly for their workforce, have worked incredibly hard for their members, and understand the value of those jobs, as well as with the trade body UK Steel.

Steel is vital to any climate solution, and steelworkers themselves accept the need to decarbonise, but they need to partner with a Government who are committed to a just transition. I know that with this steel Minister, my hon. Friend the Member for Croydon West, we can all work together to ensure that.

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09:54 Martin Vickers (Conservative)

The hon. Member is making a great speech and makes a great point. Does he agree that if we are going to go down this road of net zero madness and make our steel more expensive, we should ban steel and steel products from other countries that are made in blast furnaces?

There would certainly be a case for the point the hon. Member makes. I gently point out that net zero is actually crucial to the economy of northern Lincolnshire, which I represent—I am thinking of the Humber Zero project and similar schemes.

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10:02 Chris McDonald (Labour)

Therefore, I do not envy the position of my hon. and right hon. colleagues in the Department for Business and Trade, who are wrestling with this legacy. Essentially, they are putting out the fires of the previous Government, and we will see, when the steel strategy has been brought forward, how we can create a bright future for the industry. We need to do that, and I support the calls to do it, but I think that the challenge is not actually about adherence to net zero; it is about adherence to a different ideology, which has been to assume that the steel industry operates in a free market and that we can treat it as such. It does not. Other countries around the world support their steel industries, so we need to create a level playing field for investment in our steel industry, too. If we do that then we can attract billions of pounds of private sector investment into our industry, as countries such as Austria, Sweden, Germany, France and so on do.

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10:13 Jim Shannon (DUP)

The hon. Member for Boston and Skegness rightly raised concerns about the impact that our net zero advancements could have on the steel sector. It is crucial that we get this correct while ensuring a proper balance. Our defence industry relies heavily on domestic home-grown steel to build tanks and warships. That raises issues of us potentially relying too much on foreign imports, which the hon. Member referred. We should not ignore that, and our focus should be on providing incentives to the fantastic local companies we already have and putting them front and centre to the UK steel sector’s success. We must modernise to advance our steel industry and properly take care of it and get it right together.

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10:23 Greg Smith (Conservative)

The Minister knows that Scunthorpe is now the only site in the UK with the ability to produce virgin steel. If she allows it to close on her watch, we will be left open and vulnerable to cheap imports from China, and that must not be allowed to happen. Equally, I understand that the Government are not prepared to support virgin steel manufacturing while new electric arc furnaces are being commissioned and are coming online. Is that correct? If so, how does it chime with the Secretary of State’s previous commitment that decarbonisation must not mean deindustrialisation?

What we are seeing on the ground right now is something different, however, because we have returned to the Labour party playbook: scrap jobs, scrap production and become reliant on higher-polluting countries for imports. That is not what I call decarbonisation, so I ask the Minister to come clean. What has gone wrong so early in this Government’s tenure? Why are she and the Secretary of State unable to fulfil their manifesto commitments? Can the Minister explain what will happen to those thousands of jobs in the steel sector across our country? We need the steel strategy now, not a promise of it for the future. Time is running out.

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10:31 Sarah Jones (Labour)

We need to lay out long-term policies and plans to ensure that the UK steel industry is not left behind as the world decarbonises, so last month the Government announced that we will bring forward a new steel strategy next spring. I hear the House’s impatience for that strategy and I understand it: there has been a long period of decline, and we need to turn that around. Given the £2.5-billion investment that we have committed to the strategy, however, it is right that we talk to experts and to politicians around the country, particularly those who have steel in their areas.

At the moment, we do not have a factory that makes turbines on the scale that we need for floating offshore wind, but SeAH is building that factory because it has an agreement with RWE, which will be running the turbines that it builds in future. That green job development into wind and renewable energy is driving our ability to build a factory in Teesside to create hundreds of jobs to build those monopiles, and we are using British steel. That is the kind of future that we want to see through the steel strategy; we are looking at those opportunities to bring new steel companies into this country and to find ways to drive up production in this country.

The British industry supercharger that the previous Government developed, which the hon. Member for Brigg and Immingham (Martin Vickers) mentioned, will bring down electricity costs for the UK’s most energy intensive industries, but we know that we need to go further. It brings down only 60% of costs and there is still a disparity. We believe that, in an unstable world, cheap home-grown green energy is the future. That is what will drive down prices, reduce our exposure to the volatile fossil fuel market, protect bill payers and strengthen our energy independence. Fundamentally, that is what will bring down costs in the long term.

Members also mentioned the challenges of decarbonisation. Tata and British Steel’s plans to invest in electric arc furnaces are driven by market conditions and the desire to reduce their carbon footprint—customers want greener steel. The UK is going to have a CBAM. If we were producing steel in the UK with blast furnaces, we would be massively inhibited because the EU is bringing in a CBAM, so the cost of exporting to the EU would be much higher. We have to deal with the world as we find it, which again is where we disagree with the hon. Member for Boston and Skegness. We cannot look back and try to re-create the past; we have to deal with the world as we find it, which means that we have to move towards those more efficient and greener energies.

The EU, where 78% of our steel exports went in 2023—that is worth pointing out—will bring in its carbon border adjustment mechanism in 2027. We rely on exporting a lot of the steel we produce to the EU, and we would be at a massive disadvantage were we to carry on producing steel from blast furnaces. We have committed to a UK carbon border adjustment mechanism, which will give UK businesses the confidence that, when they invest in decarbonisation and electrification, they will not be at a disadvantage. That is important.

To close my remarks, in steel, not to mention the wider economy, the inheritance of this Government from the previous Government was nothing short of a travesty. We had more than a decade of lurching from crisis to crisis, with no clear plan to safeguard the future of a competitive domestic steel industry. This Government are determined to change that, making the steel industry in this country fit for the future so that it is not left behind in a decarbonised world.

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