Protecting Steel in the UK

Liam Byrne Excerpts

Tuesday 23rd January 2024 Commons Chamber

[Ms Ghani]

The technology has moved on. Although 90% of everything that we need can be made from recycled steel, there is a gap, and Scunthorpe is obviously filling that gap at the moment.

My hon. Friend also made an important point about the Opposition, who are talking about potential job losses. In 1997, 70,000 people worked in the steel industry; by 2010, that number had fallen to 30,600—a fall of 40,000 jobs or 56%. The Labour leader between 2010 and 2015 did not mention the steel industry once in Parliament. Our investment at Port Talbot is the largest that has been made for a substantial period, and although the situation is challenging, without that support there was a massive risk that Tata would have left Port Talbot.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

rose—

[Ms Ghani]

I give way to the Chair of the Select Committee.

[Liam Byrne]

I just want to pin something down, because that was an important intervention. On 8 November the Minister said, in reply to a question from the hon. Member for Scunthorpe (Holly Mumby-Croft), that she thought it was vital to our economic security for these islands to retain their virgin steel-making capability. I put that position to the Secretary of State this morning, and she refused to confirm it. Will the Minister tell the House today whether it is her position that this country needs the capability to make virgin steel—yes or no?

[Ms Ghani]

I did follow the debate in the Select Committee, and I think the Secretary of State said that these decisions are commercial but that we will do everything that we can, and that our fundamental priority is to ensure that steelmaking continues in the UK.

Tata Steel’s decision has not been taken lightly. This consultation comes against the backdrop of a decade of losses, which were ignored by the Labour party when it was in power. Indeed, Tata’s managing director confirmed over the weekend that, as I mentioned earlier, the Port Talbot plant has been bleeding £1.5 million a day. Its decision also comes with a growing awareness that the UK steel industry has to modernise, because that is what customers want and the technology now exists. In those circumstances, businesses are compelled to make difficult decisions and tough changes. In fact, without the opportunity to install a modern electric arc furnace, the future of the plant would have been under serious threat.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I add my voice to the chorus asking the Minister to rethink the strategy and this deal comprehensively. At the heart of this debate is a simple truth: what the Government have offered us is a half-measure, and it is a half-measure that now threatens job security, economic security and climate security. Frankly, that is a price not worth paying.

The threat to job security has been well laid out by hon. Members this afternoon. It is not just 2,800 jobs at the steelworks itself; three times as many jobs will be lost because of the economic shock to the community. Here we have a situation where £500 million of taxpayers’ money is being forked out and up to 12,000 people are going to be thrown out of work.

The second point, which we must not let the Minister elude this afternoon, is that there has clearly been a change of Government policy on whether this country needs its own sovereign capability to make virgin steel. The hon. Member for Scunthorpe (Holly Mumby-Croft) spoke brilliantly and eloquently about precisely why we need to keep that capability in this country, and she was right to say that, in response to her urgent question in November last year, the Minister gave the House the very clear impression that she would defend a policy of His Majesty’s Government that we will retain sovereign capability for virgin steelmaking in this country.

However, when I asked the Secretary of State not once, but three times today whether it was the policy of His Majesty’s Government to keep that capability in this country, she declined to answer on all three occasions. She said that that was not a decision for Government to make, but a decision for industry—and, in her words, we might as well be trying to encourage people to keep typewriters. I do not think that is an appropriate response to a fundamental question of economic security.

The third point, of course, is on climate security, as my hon. Friend the Member for Aberavon (Stephen Kinnock) laid out very clearly. Tata has been very clear that it will honour its contract by importing steel from India. We know that that is 40% more carbon-intensive than steel made in this country and that other imports may now come in from China, where about 70% of the power is from dirty coal. That is bad for job security, it is bad for economic security and it is bad for climate security.

At the very least, we could have expected the Government to lay out a better plan that dealt with questions such as how we will guarantee the scrap supply, given that we now export 77% of our scrap and do not have a strategy to ensure that it is kept here in the event that the future is indeed in electric arc furnaces. We have not had a strategy on how to keep direct reduced iron technology here, and Tata is proposing to build that capability in Holland. So £500 million goes out the door, job security goes down, technology goes to Holland and dirty steel comes in. That is a bad deal and it needs rethinking.