Steel Industry (Nationalisation) Bill

Debate between Ashley Fox and Chris McDonald

Committee of the whole House
Monday 8th June 2026 Commons Chamber

[Chris McDonald]

Let me address that point. It is helpful for us to think about the potential options. There is agreement across the Committee that we want a successful and thriving steel industry, and the Government have made some serious financial commitments. We have committed £500 million to support the transformation of the plant in Port Talbot, which has attracted another £500 million of private sector investment. We have committed £2.5 billion through our steel strategy and an additional £400 million to support the Forgemasters operation, which is successfully under public ownership.

We have to think about the potential options. Given that the Government have put that money on the table and are seeking private sector partners to work with for all our steel plants, the alternative would be the closure and the loss of those facilities. This comes down to a judgment as to whether we think the UK is capable of having a successful, profitable and investable private sector industry.

It is the Government’s view that it is possible for the UK to have that, not least when we compare ourselves with similar advanced economies in Europe—we are not necessarily comparing ourselves with low-cost economies around the world—but it is a matter of ensuring that we have the right business environment to enable that to happen, and it is clearly incumbent on Government to arrange policy in that way. I think our steel strategy, in particular, and our trade measures provide that response, which is what gives us confidence that we have the resources to do that.

[Sir Ashley Fox (Bridgwater) (Con)]

Will the Minister give way?

[Chris McDonald]

If the hon. Gentleman does not mind, I will take the second intervention from my hon. Friend the Member for Rotherham, and then I will give way to him.

[Chris McDonald]

The supply chain is incredibly important. My hon. Friend is right about the jobs and the economic value in the supply chain; my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) also referenced the supply chain, and particularly how its needs relate to the measures in the Bill.

A number of the proposed amendments to the Bill would ultimately slow down the ability of the Secretary of State to make decisions—that point was also made by the hon. Member for Boston and Skegness. If the Secretary of State cannot act swiftly, there is a risk of greater uncertainty among employees and commercial partners in the supply chain, as my hon. Friend the Member for Newton Aycliffe and Spennymoor rightly said. That can have real-world consequences for businesses that rely on trade finance or other forms of working capital support, as a lack of confidence can rapidly turn into business closures. While some of those amendments are well-meaning—I am speaking particularly about amendments 2, 3, 18 and 19—they would fundamentally interfere with the speed and operational ability of the Secretary of State under the legislation and reduce legal certainty.

[Sir Ashley Fox]

Does the Minister believe that the Government’s current energy strategy is consistent with a successful British steel industry, or does he envisage that energy strategy having to change in order to lower industrial electricity prices?

[Chris McDonald]

I am pleased that the hon. Gentleman has raised that question, because it was mentioned by a number of Members during the debate. To go back to the point about having a business environment that creates a profitable and investable steel industry, energy is clearly part of that. Some of the changes that the Government have already made—increasing the rebate on the supercharger from 60% to 90%, or the British industrial competitiveness scheme, which will support some of the downstream industry—will be particularly helpful in supporting not only the steel industry but other parts of heavy industry between now and 2030, which is when the Government’s clean power mission will come fully online. We anticipate that at that point, we will have not only clean energy, but secure and lower-cost energy.

If we consider the timescale of some of the investments in steel companies that we are talking about—not only multiple-year investments in order to commission, but multiple-decade investments beyond that—we can see that we have a pathway on energy that will enable us to get from now to 2030 and beyond. The Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), who is not currently in his place, was concerned about this issue as well. He was also concerned that the UK has the highest energy prices in Europe, but we do not currently, and it is certainly our plan to ensure that our energy prices for industry are competitive with Europe in future.

Returning to the amendments that have been tabled, there was quite a lot of discussion about the sunset clause in the Bill. There were a number of objections to it, but the case for its continuation was made extremely well by my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer). As it stands today, the Government have no intention of extending the sunset period, but we recognise that we are living through particularly volatile times. There is geopolitical and economic uncertainty, which is likely to have a bearing on the steel sector in ways that it is difficult for us to see at the moment. As such, our view is that it is simply pragmatic to include this level of flexibility in the Bill, and of course, regulations made under that clause would be subject to the affirmative procedure.

It is important that I address some of the concerns of the hon. Member for Caerfyrddin (Ann Davies), who spoke with great passion and commitment about the importance of the steel industry throughout the whole of Wales. There is often considerable discussion of Port Talbot in this House, but as she rightly set out, there are also steelworks in Llanwern, Cardiff, Newport, Trostre and Shotton—I hope I have remembered all of them—that deserve recognition and investment.

I could not disagree more, however, that this Government have treated the Welsh steel industry unfairly, or not in an equitable way, compared with the steel industry elsewhere in the UK. The steel industry in Wales is the only part of the industry that has a ringfenced fund—£500 million for Port Talbot. The hon. Lady said that that has been spent with no benefit to the local community, but I frankly cannot agree with that. That £500 million has enabled Port Talbot to invest an additional £500 million in a transformation of that steelworks that will secure steel production at that site and the future of the south Wales steel industry for decades to come. It is a significant investment in the local community.

I know that the hon. Lady, like me, would have preferred for that transition in south Wales to have happened without the hard stop between the closure of the blast furnaces and the restart of the electric arc furnace, and I support Tata Steel’s view on the installation of its electric arc furnace. However, the decision to close was taken before the general election, and my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds)—the former Secretary of State, who is now Chief Whip—was able to intervene at that point and get a much better deal for the workers at Port Talbot and the community there than the previous Government did. I share the hon. Lady’s frustration and concern, but we need to be clear about where the indifference to the blast furnace closures in Port Talbot was. It was not with this Government; it was with the then Conservative Government.

ExxonMobil: Mossmorran

Debate between Ashley Fox and Chris McDonald

Tuesday 18th November 2025 Commons Chamber

[Chris McDonald]

I pay tribute to my hon. Friend and colleagues for how they have engaged so carefully on this issue for such a long period of time. I look forward to working with them in supporting the workforce. He makes an important point that alludes to the strategy of the company. The company did not present the Government with a viable investable proposition. It has also closed a chemicals plant in France and has confirmed that it is reviewing its European assets. I think we have reached a point where we have to accept that the company has made its decision. However, even though the company could not find a buyer, as I have said, I understand that some expressions of interest have been made and we would be happy to work with anyone who is interested in the plant. We have vehicles such as the British Business Bank and the National Wealth Fund that stand by to support any viable business proposition in our industrial strategy areas.

[Sir Ashley Fox (Bridgwater) (Con)]

The closure of the ExxonMobil plant is bad news for the whole of the UK economy, and it is the direct result of Labour’s economic and energy policies. Does the Minister accept that by pushing up taxes and energy prices, his Government are making the UK an uncompetitive environment for energy-intensive industries? What policy changes will he make to ensure that this is not the first of many such closures?

[Chris McDonald]

As I pointed out earlier, the business has suffered from a lack of competitiveness for the last five years, in part due to the relative lack of competitiveness of UK energy prices, and it is important to point out the things that we have done and are doing to address that. We have the energy-intensive industries support scheme and the supercharger scheme, which is providing up to 90% relief. We also have the British industrial competitiveness scheme, which will reduce prices for over 7,000 businesses by £40 per unit of power over a period of time. Of course, with this business, the energy input was gas. We are competitive on gas with Europe, but the issue has been the much cheaper gas prices in the US; the ethylene imports coming into Europe are primarily coming from the United States of America. On that basis, as an exporting business in the UK, the competitiveness issues are fundamentally why the business does not see a future in the plant.