British Steel

Sarah Jones Excerpts

Tuesday 22nd April 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

With permission, Madam Deputy Speaker, I wish to make a statement on the steps the Government have taken since the Steel Industry (Special Measures) Act 2025 came into force.

The Government took the decision to recall Parliament on 12 April so that we could take swift, significant action on British Steel. As hon. Members will be aware, that was the first time Parliament had sat on a Saturday in over 40 years. Our attendance in this place was testament to the urgency and importance of the issue at hand, which was the need to prevent the immediate closure of the blast furnaces at Scunthorpe. The action we took on 12 April and the measures we have taken since matter greatly for this country, and are of enormous importance to thousands of steelworkers and their families. I am very pleased to inform the House that this afternoon, British Steel has cancelled the redundancy consultations started by Jingye. I know that many British Steel employees will breathe a sigh of relief at that news.

It is regrettable that when this Government took office, we inherited a steel sector in crisis, and an iconic British company facing an existential threat. Since day one, we have worked tirelessly with British Steel and the trade unions to find a resolution, because blast furnace closures at Scunthorpe is an outcome that this Government were simply not willing to allow. I want to stress that this kind of state intervention is not something that we intend to replicate in other situations, or for other industries. We recognised that unprecedented action was warranted in a truly unprecedented situation.

As hon. Members will know, the legislation we introduced, which was passed that weekend, gave us the power to direct British Steel’s board and workforce, ensure they got paid, and order the raw materials to keep the blast furnaces running. It also permits the Government to do those things themselves, if the circumstances demand it. We have wasted no time in enacting those powers and taking the urgent action required to keep the blast furnaces lit at Scunthorpe. We have secured the raw materials needed to keep the blast furnaces operating, and we continue to work at pace to secure a steady pipeline of materials. Officials were on site to help British Steel within hours of the Steel Industry (Special Measures) Act 2025 becoming law, and we are already seeing the real-world impact of our decisive intervention.

I am delighted to say that British Steel has also confirmed today that it can keep operating both of the UK’s last remaining blast furnaces. By contrast, Jingye’s plan was to shut one of them down earlier this month. It will come as no surprise to hon. Members to hear that the company’s workforce, their families, suppliers and communities have expressed deep gratitude for the action we have taken, which has preserved steelmaking at Scunthorpe and safeguarded thousands of skilled steel jobs.

Now that the immediate emergency has passed, it is right that hon. Members also ask questions about what is next. We have been clear that in order to secure the long-term future of British Steel, which has not been properly invested in for years, we will need a modernisation programme, ideally with a private sector partner. Furthermore, we will need to look beyond any individual company, and ensure a secure and thriving future for the whole steel sector. That is why we are continuing our work to publish the steel strategy this spring.

All options are on the table as we begin to address the company’s long-term sustainable future. My officials met Jingye on 16 April. It was a respectful conversation, and that dialogue will continue as we find a way forward in the national interest that safeguards steelmaking and protects jobs. With that in mind, I also want to say thank you—thank you to those who sent us messages to say we did the right thing to save British Steel, thank you to everyone who offered practical support and, most importantly, thank you to the workers and managers at British Steel who have heard our call to produce the steel that we need to deliver our plan for change, to keep the Scunthorpe site and everyone working at it safe, and to do so in a way that reduces the scale of financial losses. They have shown remarkable resilience and dedication at a supremely difficult time, and have served the plant, their community and the nation. They have promised us that there are better days ahead for British Steel, and we agree. We are giving them the chance they need to write the next chapter of British Steel’s history.

We have assured this House time and again that steel has a bright future under this Government, and I restate that today. Steel is fundamental to Britain’s industrial strength and to our identity as a global power, and we will never hesitate to protect it. We have committed to update both Houses as policy develops and a longer-term strategy is formulated. I reaffirm that written updates will be forthcoming regularly. So let there be no doubt: this week is not the end. It is not the end of the work, and it is not the end of the negotiations, but thanks to the actions we have taken, it is also not the end of British Steel. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Andrew Griffith (Arundel and South Downs) (Con)]

I thank the Minister for advance sight of her statement, and I join her in thanking the Scunthorpe workers for their efforts over the last few weeks.

We are here once again because the Government had no plan—they failed to prepare, they bungled negotiations, and they took too long to listen to the warnings. What do we have to show for it? We have this botched nationalisation and a potential bill for the taxpayer stretching into the billions. I say billions, but it remains entirely unclear how much this bungled 11th-hour decision will cost, while the assets still belong to China. I hope that Members across the House will agree that this is a complete mockery of transparency and accountability, and I hope that the relevant Select Committees will take it upon themselves to conduct their own inquiries. Instead of a statement from the Treasury today, the Chancellor is running to the International Monetary Fund in Washington to explain how she broke the UK economy. Steel nationalisation, the IMF downgrading growth forecasts, trade union summits in No.10—it is all sounding a bit 1970s.

The simple problem is that we do not know the answers to any of these questions because the Government have failed to publish an impact assessment. Will the Minister confirm to the House when they plan to do so? Has anyone in government asked the Office for National Statistics whether British Steel will now be classified as a publicly owned entity? Has the ministerial team discussed the impact of the takeover with the Chancellor on her already evaporated fiscal headroom? To date, how much has the Department spent, or how much has it committed to underwrite—that is a straightforward question that deserves an answer? Given that her Department had no budget for revenue support of steel, has the Minister been able to secure additional funds from the Treasury, so that other sectors or support for British exporters do not pay the price?

We have seen no further detail of the Government’s proposed steel strategy, or any confirmation of longer-term plans to protect British steelmaking. Labour Members refused to back a coking coalmine to produce some of the raw materials that blast furnaces rely on. Instead, they wait for shipments to arrive from halfway around the world. Most importantly, the Government have not set out how they intend to reduce the enormous burden of sky-high energy costs. Instead, the Secretary of State for Energy Security and Net Zero seems dead set on delusional policies that drive energy prices in this country even higher. We cannot make steel sustainably when we have the highest energy prices in Europe. Prices for industrial energy in Birmingham in this country are four times higher than those in Birmingham Alabama. We cannot make steel if we do not have coal.

As Nissan’s Alan Johnson said today, the “simple fact” is that the UK is

“too expensive… Once you’ve paid your electricity, gas, NICs we are too expensive—any industrial strategy that does not tackle that is a waste of time.”

Well, we are here once again. There is no steel strategy, no industrial strategy, no export strategy and no energy strategy. Perhaps when she replies the Minister can share a single strategy that this Government actually possess.

[Sarah Jones]

It is getting harder and harder to understand quite what the Opposition’s policy is on steel. It is all over the place. On the one hand, they ask us questions about costs. They say they had negotiated a modernisation plan with British Steel, but they will not tell us how much money they were willing to throw at that plan. Their proposal, apparently, was to build on two sites. If Jingye was asking us for £1.2 billion to build on one site, how much taxpayers’ money were the Government putting on the table to fund two? We need answers to those questions.

On nationalisation, last week the shadow Secretary of State for Business and Trade, who was, as we know, Financial Secretary to the Treasury when Liz Truss crashed the economy, said that he backed full nationalisation of British Steel. On the other hand, this morning the Leader of the Opposition said on Radio 4 that nationalisation should be the “last resort.” It seems a bit muddled. Finally, the hon. Member asked questions about the cost of energy pricing, forgetting of course that industrial energy prices doubled under the Tories. UK Steel, the trade body for the steel industry, is clear and has said that it is

“the UK’s reliance on natural gas power generation”

that leaves us with higher prices than our international allies. It is not too much clean energy, but too little.

The hon. Member asked a reasonable question about the costs. I hope he will understand that matters at the moment are sensitive and commercially confidential, and I hope he will be assured that we will publish accounts in due course. We are securing materials and reviewing things such as health and safety, and other critical roles. Regular meetings are happening between the Departments and British Steel, as he would expect, and of course we will publish those details in due course. He asked about the coalmine. British Steel has told us directly that it could not use that coal because of the sulphur content. We also need coke ovens to turn coal into coke, and the coke ovens at British Steel were closed on his watch several years ago. The reality is that the Tories failed the British Steel sector, and this Labour Government are securing it.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

I want to thank the Government for saving British Steel. Our Committee has been clear that it is essential for us to retain the ability to make primary steel in this country, and the steps that were taken a couple of Saturdays ago have helped derisk exactly that. The Government deserve credit for that. However, the Committee has written to the Government to say that a steel strategy needs to come forward as quickly as possible. It must be a clear, long-term vision for the industry, and there must be safeguards against the potential of a floodtide of steel from China. We need to use public procurement much more aggressively to support our local industry, energy costs need to come down, and we need a plan to keep scrap onshore. Will the Minister tell us when she plans to bring forward that steel strategy? Ultimately, what is good for the steel industry is good for Scunthorpe.

[Sarah Jones]

My right hon. Friend is of course right: the steel strategy is all the more important now than when we devised it in opposition and committed £2.5 billion for the steel strategy fund in our manifesto. We are looking at how we use that financial support, and, as he knows, at how we might do primary production. We are investigating future market opportunities and how we can increase demand here in the UK. He speaks of procurement, which of course is incredibly important. I have been talking to the procurement Minister and working on that, along with the Steel Council. We need to consider the availability of suitable sites for future investments.

Scrap is important, as my right hon. Friend says—how can we improve UK capability? Trade and overcapacity is a huge issue, and one that we share with our American colleagues, which is why we do not believe that the tariffs are necessary—we have the same problems and should try to solve them together. Carbon leakage, green steel, research and development, jobs and skills—we will develop a whole package of measures as quickly as we can. We will ensure that the plan, which we will publish in the spring, is one for the whole country and secures steel in the UK.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Clive Jones (Wokingham) (LD)]

I thank the Minister for advance sight of her statement, and I associate myself with her gratitude towards Mr Speaker, hon. Members, parliamentary staff and, most importantly, the workers and managers of British Steel.

It is incredibly welcome news that both blast furnaces in Scunthorpe will continue to operate, allowing those who are employed at the site, the 35,000-plus families in this country who would have been affected by its closure, and Britain’s national security, to breathe a momentary sigh of relief. Will the Minister join me in thanking the British Steel workforce for ensuring that the furnaces have not been allowed to go cold? It is good to see the Government taking action after the Conservatives spent far too long dithering over what to do.

The Minister has committed to delivering a steel strategy by the end of the spring, so the Government have five weeks left to produce it. Can she confirm that it will be published before 31 May, and that Parliament will have the opportunity to debate it? When we were here a few Saturdays ago, I asked the Secretary of State to confirm that the pension fund of employees and former employees is not in deficit, that all company contributions are up to date, and that assets of the scheme have not been transferred to the holding company or any offshore businesses. I am waiting for confirmation on that.

Finally, can the Minister guarantee that no redundancies will be made as a result of the action taken in the Steel Industry (Special Measures) Act 2025?

[Sarah Jones]

I thank the Lib Dem spokesperson for his support for our interventions and for his helpful questions. We will publish an impact assessment in due course, including classification considerations. He is right to point out that we did not answer his questions last time, and neither am I answering them this time, but I will ensure that I do. We have said that we will come back every four weeks with a statement, but I will write to him separately to ensure that he has the reassurance that he needs.

I cannot give the hon. Gentleman a date for the steel strategy, but I assure him that we are working as fast as we can. The issue is difficult because we are talking about spending £2.5 billion of public money. We have to ensure that we do that in the correct way. The roundtables that we have held, the advice from the Steel Council, and the work that we are having done by the Materials Processing Institute and Hatch to consider the economic issues that we need to grapple with, are really important—we must get that right. Of course, when we have a steel strategy, the House must have the opportunity to come and talk about it and be reassured that it is the right thing for the steel industry.

[Jessica Morden (Newport East) (Lab)]

Last week, I met trade union representatives at Llanwern steelworks. I clearly understand and welcome the action taken at Scunthorpe, which stands in complete contrast with the Conservative party, which had no steel strategy in 14 years of government. Will the Minister be mindful of the promises made by Tata to invest in assets at Llanwern? We need that to be delivered. Plants like Llanwern should get their fair share of the green steel fund and procurement. What progress will we soon see on that?

--- Later in debate ---

[Sarah Jones]

My hon. Friend is right to raise the issue of Tata investing in those assets and the future of the Port Talbot site, which is incredibly important. Of course, we meet regularly to talk about that. We have the transition board, which the Secretary of State for Wales convenes, along with the Welsh Government. We are working at pace to understand what those future investments could be. She is right to demand that the steel plan is for everywhere rather than just for one part or other of the UK. We want to and will ensure that the nations and regions all benefit from the funding and mechanisms that we put in place to improve procurement, scrap and all those things. Of course, it is not just Tata in Wales; Celsa too is incredibly important and a very impressive company. She can be reassured on that front. I am always happy to have more conversations with colleagues from Wales about how that can work going forward.

[Martin Vickers (Brigg and Immingham) (Con)]

It is clearly extremely welcome that the redundancy notices have been withdrawn—the steel community will breathe a sigh of relief. The Minister quite rightly speaks about what happens next. As well as a national streel strategy, the north Lincolnshire area needs a strategy of its own to maintain the local economy. Will she commit to an early meeting with MPs from the affected area, as well as with Councillor Rob Waltham, who leads North Lincolnshire council and has produced a document highlighting the way forward? That would be extremely helpful.

[Sarah Jones]

I thank the hon. Gentleman for his continued support for his community. Yes, I am very happy to meet the leader of North Lincolnshire council, as I have done previously; he is an incredibly important part of the jigsaw of what happens in the area. I am always happy to meet MPs—I meet my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) and the hon. Gentleman regularly—and will continue to do so to ensure that we work in the interests of the whole area.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I congratulate my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) on his tireless advocacy for the steelworkers and his Scunthorpe constituents—it should be recognised. How has the Government’s decision to take control of British Steel been received by the workforce, customers and suppliers?

[Sarah Jones]

I agree with my hon. Friend’s comments about the tireless work of our hon. Friend the Member for Scunthorpe on securing the future of British Steel. The Secretary of State went to the British Steel site in Scunthorpe just after the legislation was passed. I think it is fair to say that there was great relief after our intervention, but workers will also quite rightly be asking us, “What happens next and how will you secure the future of the site?” We are now completely focused on that.

[Sir Edward Leigh (Gainsborough) (Con)]

Let me ask a question on behalf of my constituents who have sweated blood to keep the blast furnaces going. Unfortunately, as we know, electric arc technology cannot make virgin steel—only blast furnaces can do that. Are the Government 100% committed to maintaining our permanent ability to make virgin steel?

--- Later in debate ---

[Sarah Jones]

As the Secretary of State made clear during the debate of Saturday before last, the capacity for primary steelmaking production is important, and the steel strategy will look at exactly how we deliver that. There are new ways of delivering primary steel—using hydrogen, for example—that other European countries are now using and developing. We will ensure that, whatever the future brings, we have the right level of production in this country.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Government have my full-hearted support for the action they have taken with regard to Scunthorpe, which is important for not merely Scunthorpe itself and the workers there but the supply chain as well. In that regard, I want to raise an issue of concern that I hope my hon. Friend the Minister will look into. I have had a letter from Ian Walker, who is the chairman of Rotary Engineering, a long-established, highly regarded specialist engineering firm in my constituency. It provided services to British Steel last November, and it is still waiting for payment for those services, despite regular correspondence that has been ignored. If Rotary Engineering is having this difficulty with British Steel, many other small and medium-sized enterprises could as well. Will my hon. Friend look into this as a matter of urgency, find out what British Steel has been doing and try to ensure that these important companies—important for not merely British Steel but our whole engineering industry—are paid and able to survive?

[Sarah Jones]

My hon. Friend makes a really important point. The supply chain of these big steel production companies, whether Tata, British Steel or others, is really important. I do not have an answer for him now, but I will look into the issue he raises about Rotary Engineering and ensure the right thing is being done.

[Richard Tice (Boston and Skegness) (Reform)]

I thank the Minister for her statement and the good news about the saving of British Steel. She has not referred to the timetable for moving towards nationalisation, which we fully support and encourage the Government to push on with, so that they can accelerate towards the modernisation programme that she referred to. The new-found love of this House for blast furnaces should be encouraged, and we should be refurbishing and investing in them. That is the right thing to do to create a thriving steel industry to support British industry and our defence industry.

[Sarah Jones]

We know that Reform is a recent convert to steel—some of us have been supporting the industry for a long time—but the hon. Gentleman makes a fair point about what comes next. Our position remains that the best way forward is to try to find a commercial business to invest alongside Government, but we will do whatever it takes to secure the future of steelmaking and protect those jobs, for national security and for the supply chains. No options are off the table. I hope he will understand that although nationalisation is the most likely option, we would prefer a commercially run business. We are investigating all options. Nothing is off the table. We continue having many conversations, and as soon as we have an answer, we will come to this House.

[Bill Esterson (Sefton Central) (Lab)]

We need steel for wind turbines, for the equipment for carbon capture and for the expansion of grid infrastructure. In short, it is an essential part of how we expand our energy security in this country. The Prime Minister told the Liaison Committee that the grid connection date for Scunthorpe was 2034. Can my hon. Friend confirm that, as a crucial element of the modernisation agenda and securing the long-term future of Scunthorpe and steelmaking, which is so important to energy and every other part of our economy, she and her colleagues are looking at how that grid connection can be brought forward?

[Sarah Jones]

I thank the Chair of the Energy Security and Net Zero Committee for his important question. He makes the point that we need steel for green energy—wind turbines, carbon capture and so on—and our energy security. There is an important wider point, which is that since the election, £43.7 billion has been committed by the private sector to invest in clean energy in this country. Those on the Opposition Benches who are questioning net zero are putting at risk thousands of jobs that we will see delivered through clean energy. We have to be very careful what we wish for, because that investment is incredibly important for our country. The green energy sector is growing 10% faster than the rest of the economy. These are important things and important jobs.

My hon. Friend makes a really sensible point about grid connection. We have not just seen this at Scunthorpe; we have seen it with many different companies, where grid connections being 15 or even 20 years away makes investment completely unviable. My right hon. Friend the Secretary of State for Energy Security and Net Zero announced last week how we are reforming the grid queue, getting rid of zombie projects and ensuring that we prioritise what is important. We will ensure we are doing everything we can to improve that connection at Scunthorpe.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

I take at face value what the Minister has said today about British Steel having a bright future. However, she did not mention any figures, other than a global figure of £2.5 billion floating around somewhere. Will she tell the House when she expects to publish the accounting officer assessment that is required when public money is committed? We can then test in the Public Accounts Committee whether those rules for spending public money are being adhered to, particularly in terms of feasibility.

[Sarah Jones]

The hon. Gentleman makes a really good point: we are spending public money, and we need to be incredibly careful in the way we do that. Of course, what we spend will be accounted for in the Department for Business and Trade annual accounts, as the insolvency costs were when we were in this position in 2019. We will update the House and bring forward whatever we can on those figures. He is right to raise that. I want to reassure him that the £2.5 billion is not floating around; it is a commitment in the Labour manifesto, and it is budgeted for. How we might spend that money is what we are trying to devise through the plan for steel, which will rightly have a lot of scrutiny from this House, the Public Accounts Committee and others.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

I wholeheartedly congratulate my hon. Friend on her sterling work and very much welcome her statement. No doubt she will remember that on 11 April, the Leader of the Opposition said that in government she had negotiated a steel modernisation plan. The next day, when the Government brought in emergency legislation to save Scunthorpe, she said she was still negotiating a deal when her boss called the snap general election. There was never any agreement for an electric arc furnace on Teesside, as she claimed, as much as me and my colleagues support the concept. Will the Minister confirm that it was the Conservative party that presided over the end of virgin steelmaking in Redcar and Port Talbot, and that it would have done the same at Scunthorpe were it not for the Labour Government? Will she also confirm that if the private sector will not sufficiently invest, the Government will maintain British Steel through public ownership and use their public procurement strategy to make the company sufficiently profitable?

[Sarah Jones]

My hon. Friend is completely correct. Indeed, the Leader of the Opposition confirmed on the “Today” programme this morning that the Conservative party policy is for an electric arc furnace at Scunthorpe or Scunthorpe and Teesside—it is unclear—which would have cost nearly twice as much as the existing proposals, without any mention of primary steelmaking. I understand that the official Opposition’s position is that they are not in favour of retaining primary steelmaking capacity in the UK.

[Harriet Cross (Gordon and Buchan) (Con)]

In her statement, the Minister celebrated the fact that this is not the end of British Steel, and we all welcome that, but Labour’s policies very well could be the end of domestic oil and gas, whether it is the extended windfall tax, removing investment allowances or no new oil and gas licences. We are walking towards the end of our domestic oil and gas sector, which has proven so beneficial to us across Scotland and the UK, all the while offshoring our emissions and relying on, at best, unreliable and, at worst, hostile states such as China to supply our renewable energy infrastructure. Taking the example of British Steel, is it not time to reverse Labour’s headlong rush towards ending oil and gas in the North sea and to rely on our domestic supply for as long as we can, to help our energy security into the future?

[Sarah Jones]

It would be helpful to understand the Opposition’s official position when it comes to China. China is the world’s second largest economy and our fourth largest trading partner. Hundreds of thousands of jobs in this country rely on our relationship and our trade with China. We on the Government Benches believe in free and open trade, and we will continue on that basis. The hon. Lady suggests that that is not the Conservative party’s official opinion; it would be useful to understand that.

Some 70,000 jobs have been lost in North sea oil and gas since the Conservatives were in power, because it is a declining basin and it is getting harder to drill for oil and gas—we know that. The transition is happening; the issue is how we support that. This Government are putting in place a huge amount of support to try to ensure that those very skilled workers can transition into the green energy sector. I repeat this statistic: £43.7 billion of private sector investment in clean energy has been promised since this Government came to power. Is it really the Conservatives’ opinion that we should throw away all that investment and not protect all those jobs for the future?

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I thank the Minister for her statement and for her swift action. The people of Scunthorpe will be grateful, but as my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) noted, that stands in contrast to the way in which the people of Redcar and other areas were so cruelly abandoned by the last Government. The steel industry is not the production of steel alone; it also includes the supply chain. The Davy Roll Company, now Union Electric Steel, in my constituency, at the heart of Gateshead, performs a vital role as the last cast steel roll maker in the UK. The Minister has met representatives from the company, so will she update me on the work that she is doing to protect not only the steel industry where steel is made, but the wider supply chain?

[Sarah Jones]

I have met representatives from Union Electric Steel—everyone still calls it Davy Roll. The supply chain is incredibly important, and we are looking at it in our plan for steel. However, the investments made across Government more broadly over the years show that that supply chain, in whichever area of manufacturing it is found, has not been protected. The Ministry of Defence is keen to secure the supply chain in the UK for the investment that we are putting into defence, whether in aerospace, advanced manufacturing or space. We need to build supply chain capacity here in the UK because the world has changed and we have different priorities now, and my hon. Friend is right to raise that.

[David Reed (Exmouth and Exeter East) (Con)]

There is consensus across this House that producing steel in the UK is completely necessary—that is undeniable. However, to produce steel we need coking coal. The US has given us a supply line for the next couple of weeks to keep our blast furnaces alive, and I know that the Minister is speaking to Australia and Sweden as well, but we need the ability to produce coking coal, so will the Minister please breathe fire into producing coking coal here in the UK?

[Sarah Jones]

I think the hon. Gentleman is referring to the situation at Whitehaven. As I have already said, British Streel told us directly that it could not use that coal because of the sulphur content and working coke ovens are needed to—

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

That is not true.

[Sarah Jones]

The hon. Gentleman says that is not true, but he needs to provide evidence of that, because that is what British Steel has told us, and it does not have coking ovens because they were closed under the previous Government.

[Sarah Champion (Rotherham) (Lab)]

Madam Deputy Speaker, you know that I am a proud steel MP, so it has pained me to watch my business wither on the vine under the last Government. I am incredibly grateful to the Minister for acting so decisively to save British Steel, but in the steel strategy, can she commit to look at the underlying problems affecting Liberty Steel, a speciality green steel producer, including high energy prices, business rates and other countries, particularly China, dumping their dirty, inefficient steel in our market?

[Sarah Jones]

My hon. Friend makes important points and that is exactly what we are looking at in the steel strategy. On dumping steel, having been requested to examine the issue by British Steel, the Trade Remedies Authority has agreed to look at steel safeguards and ensure that they are fit for purpose in the here and now. We are also looking at what happens beyond 2026, when the steel safeguards stop, to ensure that sufficient safeguards are in place. All the issues she mentions need to be looked at, including electricity prices and energy prices, which doubled under the last Conservative Government. As we have said before, 53% of global steel production comes from China. We need to look at that imbalance, at how we can ensure cheap steel does not come into this country and at how carbon leakage is working. We are working hard on all those issues.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

If the Government now believe that primary steelmaking capacity is critical for the security of the UK, do they also recognise that the skilled workers needed to produce that steel are equally as important? If so, why were they willing to let 2,800 of them be made unemployed last September in Port Talbot?

[Sarah Jones]

I hope the hon. Gentleman understands that the interventions that we made in this case were different for a number of reasons. When we were in Opposition, we worked with Tata to try to get it to change its plans, but we were unsuccessful. When we came into Government, we improved the deal that the previous Government had negotiated and we improved the redundancy offer. We got Tata to commit to invest in assets and free up land for other things, and we got it to provide a package of measures to improve that situation. The hon. Gentleman is right that that package meant the closure of the blast furnaces and the building of an electric arc furnace, with the closure happening before the electric arc furnace arrived, and because of the way that electric arc furnaces work, they are more efficient and need fewer people. We have been working really hard through the transformation board, led by the Secretary of State for Wales and the Welsh Government, to ensure that everybody has a significant package of support to try to ensure they transition to other jobs. That work is ongoing and progressing well, and we will continue to focus on it.

The two situations were fundamentally different. In Scunthorpe, British Steel was in the middle of a consultation on potential redundancies, and it failed to secure the materials to keep the blast furnaces going, which would have completely broken what British Steel should have been doing during that consultation. We could not allow that to happen, those blast furnaces to close and thousands of people to be suddenly made redundant, which is why we intervened in the way we did.

[Chris McDonald (Stockton North) (Lab)]

I thank my hon. Friend for her statement and for her action on British Steel. I extend my thanks to the officials in her Department, who I know have worked tirelessly in support of our Ministers to secure a future for the business. The Government’s plan for change has changed the lives of steelworkers in Scunthorpe and Teesside. People I work with, and their families, will feel a sense of relief—I feel a sense of relief. Ultimately, it is the customers of British Steel who will pay the wages of those workers in the future. In one of the future updates that the Minister has promised, can we cover the product and market development for British Steel, and how British Steel can better penetrate the UK market and increase its market share for domestic production?

[Sarah Jones]

I thank my hon. Friend for his work and for the support that he has provided to me, officials and others because of his expertise in this space. He is right to thank staff; they have worked unbelievably hard, and I am very grateful for what they have done. He is also right to talk about how we ensure that the product market develops in the way that we want it to. We are looking at how we increase demand in the UK, as well as at procurement and other issues, so that we are not just trying to save our existing provision, but to expand our provision so that the steel industry can start to grow, instead of halving as it has done over the past 10 years under the Tories.

[Chris Law (Dundee Central) (SNP)]

Despite recent comments by a Scotland Office Minister, may I make it crystal clear that it is not “manufacturing grievance” to suggest that Grangemouth, like Scunthorpe, should be nationalised to protect a critical economic and security asset that has been run down by foreign owners? What we have seen from the UK Government in the last weeks, including today, is that when push comes to shove, they can take bold action in crisis, as they have done in Scunthorpe. Therefore, is it not the case that if the UK Government fail to act in a similar fashion at Grangemouth, highly skilled jobs will be lost, Scotland’s only capacity to refine oil will be shut down and critical energy security will be further diminished?

[Sarah Jones]

We deeply regret the choices that INEOS has made. As the hon. Gentleman knows, Grangemouth does not provide the only refining capacity in the UK, but he is right to say it is the only provision in Scotland, which is why we intervened with a package of support and a £200 million commitment from the national wealth fund for what happens to the site. The hon. Gentleman is right to stand up for people in Grangemouth over the issues that they are facing, and we are doing all we can. As I said in my statement, the position in Scunthorpe was unique and particular, but that does not mean that we do not care just as much about the people in Grangemouth and that we will not ensure that we do everything that we can to pursue to the future development of that site in a way that supports jobs.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I add my thanks to the Minister and her colleagues for their sterling work in recent weeks. It is true to say that Labour is saving steel. Some 68% of the steel this country needs is imported. That is a disgraceful legacy from the last Conservative Government, but it presents an opportunity for this Labour Government. Does the Minister agree that the next step we need to take is to mount robust trade protections, including bringing the carbon border adjustment mechanism forward to 2026 and making it mandatory for public procurement to use British steel, so that as we rebuild this country, we do it with British steel made by British workers?

[Sarah Jones]

My hon. Friend is right to say that we produce only about 30% of the steel we use in this country, and we must be much more ambitious about increasing that figure. He is also right to raise questions about carbon leakage and safeguards. The CBAM is being introduced in 2027. We are working through what happens in the interim period, how it works and how it interacts with the European CBAM—some changes are being made to what will be implemented. This work is obviously being led by the Treasury, but we are working really closely with the Treasury to ensure that the CBAM works in a way that protects the steel industry.

[Sir Julian Lewis (New Forest East) (Con)]

On the day that Parliament was recalled, I gather that the workers themselves had to confront Chinese executives who were intent on coming on to the site. They believe that those executives intended to take unilateral action to shut down the blast furnace irrecoverably. Is that correct? What does that tell us about the motivation and behaviour of China when it gets its hands on our strategic industries?

[Sarah Jones]

I need to be clear on this point, because I know that there has been lots of speculation. We are not aware of any deliberate acts of sabotage. There was an issue with people coming on site who did not gain access. No Jingye officials are on site at the moment. We are talking to Jingye in a respectful way about what happens next. That said, it was the case that we had been negotiating in good faith, and we felt that that good faith had ended in the way in which Jingye was not securing the raw materials that we were really clear it needed to secure, so there was a breakdown there. The position on Jingye is a position about it as a company; it is not a position about our wider view of China. Because we have hundreds of thousands of jobs that are dependent on trade with China and because it is our fourth-largest trading partner, our position remains that we need to be mindful of that, but we also need to be mindful of security, and we always will be. There will always be a very specific and deliberate account of the security implications of any investors in the UK.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

We cannot make British steel without British ceramics. High temperature-resistant refractory ceramics are needed to line the blast furnaces to keep them alight, but the Minister is acutely aware that the ceramics sector in this country, much like the glass and chemicals sectors, is being crippled by energy prices, because of both wholesale costs and policy costs, which the last Government chose to put on and which were continued by this Government. When the Minister talks about backing British industry and manufacturing, can she say when glass, ceramics and other foundational industries will get the support they need to prop up and support the advanced manufacturing that we are all so proud of? The cost of that will be a tiny proportion of what has been committed to British Steel.

[Sarah Jones]

My hon. Friend is quite right to raise ceramics and their importance in blast furnaces. We have all become steel experts through the many podcasts that everybody has been listening to over recent weeks. One of the issues with shutting down blast furnaces immediately without proper provision is not just that the metal hardens, but that the ceramics crack and fracture. That was the risk with Jingye refusing to bring in those raw materials. My hon. Friend knows that the ceramics industry is very important to the Secretary of State and to myself, and the wider foundational industries are very important too. He is right to raise issues that we have talked about many times in terms of energy prices. The Government are working at pace to try to alleviate that problem and many others that he has raised, whether cheap imports or other issues.

[Sammy Wilson (East Antrim) (DUP)]

The Government have done the right thing, because steel is strategically important and the jobs are locally important. The Minister has asked what is next. I suspect that the House will come back to this issue, maybe very shortly, because over the last decade, we have seen energy-intensive industries flee the United Kingdom. Aluminium is gone, we have hardly any oil refineries, and we have one steel plant left. The reason for that is the mad net zero policy, which the Minister has tried to defend today. Decarbonisation has increased our energy costs, so that they are three times higher than in the US and eight times higher than in China. We do not have any local supplies of raw materials; we bring them halfway round the world. Carbon taxes add to the cost for businesses. Does the Minister accept that the economic reality is that we pour public money in at one end, and see it going down the net zero drain at the other?

[Sarah Jones]

I just do not agree with the right hon. Gentleman’s position on this issue. He is right to say that we have seen the offshoring of manufacturing over a period of years. We have not entirely lost the aluminium sector—there is one smelter left, but that is all. Indeed, I meet representatives of the aluminium sector regularly, because it has had 25% tariffs put on it, just as the steel industry has. The trade body, UK Steel, was really clear that the UK’s reliance on natural gas power generation leaves us with higher prices. The steel sector does not pay the green levies because of reductions that it is given. It is not net zero causing this problem; the challenge is how we get the clean energy that we need to stop our reliance on the overseas oil and gas market. He is right to say that we have seen offshoring, and we are working to stop that.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the Minister, in contrast with the last speaker, agree that the future of this country is in clean power, safely produced from our own natural resources, such as floating offshore wind in the Celtic sea, and ultimately in our infrastructure being built out of green British steel, not steel imported from China?

[Sarah Jones]

My hon. Friend is absolutely right. We were talking earlier today about the importance of floating offshore wind in the Celtic sea, and the huge possibilities that brings the UK for energy security and good jobs.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Further to the answer that the Minister gave to my right hon. Friend the Member for New Forest East (Sir Julian Lewis), will she at least concede that it would be opportune to conduct an audit of our critical national industries, to ensure that if there are issues around foreign ownership, or ownership by malign state entities, we know where they are and have a plan to deal with them?

[Sarah Jones]

The right hon. Gentleman is right. We need an audit of our critical national industries, and we are doing that through our industrial strategy, so that, particularly in the eight growth-driving sectors that we have identified, we have policies to ensure that companies in the UK can continue to thrive. We believe in free and open trade, and we are not moving away from that; the Chancellor is making that case this week with our American colleagues. Security is incredibly important. The right hon. Gentleman will know that we are ensuring that where security is an issue, we take appropriate action, but that does not mean that we will stop trading with the second largest economy in the world.

[Lola McEvoy (Darlington) (Lab)]

I put on record how proud I am to be sat on the Benches of the Government who are finally taking action to save the steel industry in this country. In my constituency, tens of thousands of people have steel engineering and manufacturing running through their blood. We are proud of that history, and we really want to contribute to a green, clean industrial future. When Ministers have big discussions about investment, and meet great businesses that want a place in which to invest, I ask them to consider Darlington and the Tees valley—a fruitful land full of people who know the value of hard graft.

[Sarah Jones]

Darlington and the Tees valley are excellent places in which to invest, so I wholeheartedly agree with my hon. Friend. In many parts of our country, steel is in the bones of our communities, but of course, this is not about looking back—it is about looking forward. In the future, we will need steel for not just clean energy, but for building the 1.5 million homes that we want to build, for Heathrow expansion and for our railways. We will need it across a whole range of sectors, and we know that demand is increasing, not reducing.

[John Cooper (Dumfries and Galloway) (Con)]

The Minister talks about working at pace. If she wants to see what pace looks like, she might consider the Business and Trade Committee’s report on steel, which was turned around in rapid time—much faster than the snail’s pace review of steel, which has yet to emerge. Will it do so in the spring, or the summer? No one is quite sure. When that review finally emerges, will it address the elephant in the room, which is the ridiculous energy costs in this country? They have been driven up in part by gas, but also by carbon taxes, and by the renewable subsidies laid on by this Government.

[Sarah Jones]

The ridiculous energy costs that the hon. Gentleman refers to are a result of 14 years of Conservative Government—we need to be really clear about that. His point about the steel strategy, which has already been made, is reasonable. Of course, Members are really keen for us to bring that strategy forward as soon as possible, but I repeat what I have said: we are looking at spending up to £2.5 billion, and there is absolutely no way that I, the Secretary of State, the Chancellor or the Prime Minister could come to this House and say, “Here is a steel strategy that we have written on the back of a fag packet after a couple of weeks thinking about it.” We need to do this right, and that is what we are doing.

[Madam Deputy Speaker (Judith Cummins)]

I call Ann Davies.

[Ann Davies (Caerfyrddin) (PC)]

Diolch yn fawr, Madam Dirprwy Lefarydd. I would like to follow up on a question from the hon. Member for Brycheiniog, Radnor and Cwm Tawe (David Chadwick), because unlike at Scunthorpe, jobs at Port Talbot are not being saved. The Government say that instead, they will retrain workers through the employment and skills flexible fund. Seven months later, can the Secretary of State say exactly how that money has been spent, and how many of the 2,800 laid-off steelworkers at Port Talbot have been retrained or re-employed?

[Sarah Jones]

I thank the hon. Lady for promoting me to Secretary of State—I am actually just a junior Minister. She is right to raise the issue of Port Talbot. The transition board has papers that we can send her, which set out exactly how many people have gone through training processes. The number of people who have taken compulsory redundancy is very small; I might be wrong—I am speculating slightly—but I think it is in the region of 190. Those people have had a package of support, and a lot of detail is available through the transition board about how that support will be provided. Of course, about 5,000 jobs will be secure in Port Talbot, but the hon. Lady is right to raise the issue; it is a significant and important one that I would not want to downplay. The situation in Port Talbot was different, and we had to have a different response, but I am very happy to provide the information that she wants in more detail.

[Madam Deputy Speaker (Judith Cummins)]

I call Jim Shannon to ask the final question from the Back Benches.

[Jim Shannon (Strangford) (DUP)]

Thank you very much, Madam Deputy Speaker. I thank the Minister for all her hard work, and I thank the Secretary of State, the Prime Minister and the Labour Government for their commitment to, and for saving, British Steel. There is no one in this great nation of the United Kingdom of Great Britain and Northern Ireland who is not aware of that and does not welcome it, so well done.

I welcome the Minister’s statement, but can she confirm that developers and those in the construction sector in Northern Ireland, where steel is really important, will be able to secure steel as a certainty, and at a reasonable price? Can she confirm that they will not be tempted to outsource for fear that orders will not be fulfilled, because British steel will be accessible, viable, ready and available to those in Northern Ireland who wish to use it?

[Sarah Jones]

I thank the hon. Gentleman for his words of appreciation. The construction sector is incredibly important when it comes to steel. We are looking at every measure we can take to ensure that people can buy British steel in a way that is competitive and useful for them. We are looking at procurement and at other measures to make the sector more competitive, but the hon. Gentleman is absolutely right that British Steel provides huge amounts of steel for the construction sector, and we want that to continue.

Steel Industry (Special Measures) Bill

Sarah Jones Excerpts

2nd reading
Saturday 12th April 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

I thank hon. Members on both sides of the House not just for participating in this debate, but for returning to this place in these exceptional circumstances. There seems to be some debate about it, but I think this is the sixth time since the second world war that we have met on a Saturday, and only the second time that the House has been recalled on a Saturday—the other being during the Falklands war.

Before I respond to Members’ comments, I echo the point made by my right hon. Friend the Secretary of State in his opening remarks: this Government will never hesitate to protect our steel industry and the thousands of steel workers in this country who built it. We always said, from the outset of our negotiations with Jingye, that we would keep every option on the table and would act in the national interest to protect jobs. UK-forged steel built our railways, bridges and buildings. It is integral to our economy’s future, just as much as it has been to our rich industrial past. That is why we need to pass this legislation today.

I will try to address as many of the points raised as I can. Members made the argument for British Steel. My right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) pointed out that 95% of Network Rail steel is from British Steel. My right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) pointed out that TfL would not get anywhere were it not for steel. My hon. Friend the Member for Stockton North (Chris McDonald), who has such expertise, pointed out that steel is the future and everything we have is made from or with steel.

I can reassure the House that our plan for steel—the £2.5 billion that we committed to in the manifesto—will work to break down the trade barriers that we have on steel, consider the all new technologies that we can introduce, and look across the whole of the UK to ensure that we protect steel everywhere.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The Minister speaks about the whole of the United Kingdom. I am very pleased that the Government are acting, literally at pace for once, by stepping in to protect the workers in Scunthorpe, in precisely the opposite way to when they turned a blind eye to the plight of workers at Grangemouth, which is also critical national infrastructure labouring under energy prices. Why is there one rule for industrial production in England and another for industrial production in Scotland?

[Sarah Jones]

In the first 10 weeks after coming to power, this Government negotiated a better deal on Port Talbot and delivered a £200 million commitment to secure the future of Grangemouth. We acted last week on the zero emission vehicle mandate to secure our automotive industry. We are acting today to save the workers of Scunthorpe. The Government believe in direct action—in an active state securing the future of our industry across the UK.

My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) raised trade protection issues. I want to reassure her that we will ensure that the right trade protections are in place for our steel industry. Concerns were raised about future decisions about moving towards nationalisation and whether we would come back to this place. I can reassure the House that we will come back to this place if are any further matters relating to ownership or otherwise. We will keep the House updated.

Concerns were raised about the “reasonable excuse” part of the Bill, and examples were requested. The “reasonable excuse” clause could include physical inability, illness or accident, and it is reasonable and measured in this case.

Many hon. Members talked about China. We are focusing on this company today; we are not focusing on the nation of China. The Bill is about what has happened with British Steel and what this Government are going to about British Steel. I would not want this House to believe that the policy of this Government is anything other than a belief in free and fair trade, and that includes with China.

Turning to the sunset clause amendments that have been tabled and the suggestions during the debate that those measures should be included in the Bill, I reiterate what the Secretary of State explained about the risk of a hard backstop reducing our leverage, which was why we did not include a sunset clause. However, we have heard the House’s concerns. I confirm that we will repeal the legislation as quickly as we can and that we will involve the Select Committee. I also make this pledge to the House: we will update the House regularly and the Secretary of State has committed to do so every four working weeks. I hope that that will give the House reassurance.

[Several hon. Members rose—]

[Nick Smith (Blaenau Gwent and Rhymney) (Lab)]

I welcome the Government’s actions today. I thank my hon. Friend the Minister for Industry for all the hard work that she has put in to get us to this place. Does she agree with me that our future industrial strategy must contain an extended section on Government procurement for steel, so that British-produced steel has a fair crack of the whip in the future?

[Sarah Jones]

My hon. Friend is right that procurement has a key role to play in our industrial strategy in steel and beyond. We are working with colleagues in the Cabinet Office to ensure that that is the case. I speak to the hon. Member for Brigg and Immingham (Martin Vickers) about these issues regularly, as does the Secretary of State—

[Graham Stuart]

On a point of order, Mr Speaker. It is reported that Jingye management has been turned away by workers and the Humberside police today, so will the Minister tell the House whether the Government’s policy is to bar Jingye management from going on to the premises?

[Mr Speaker]

As the right hon. Member knows, that is great information but not a point of order.

[Sarah Jones]

I will not comment from the Dispatch Box on reports that have been made during the debate. We are actively engaged, minute by minute, on activities in British Steel. If anything, those reports underwrite the need for the powers in the Bill to be introduced on this day. I hope all hon. Members will support the introduction of the legislation and vote for it today.

The hon. Member for Brigg and Immingham suggested that we could have moved faster. I reassure the House that we do not recall the House lightly. We do it because we have a choice today: do we want to deny any possibility of the future of the steelworks at Scunthorpe and do we want to see the closure of the blast furnaces, or do we want to secure a future for those workers and for primary steelmaking in this country?

[Brian Leishman (Alloa and Grangemouth) (Lab)]

On that point, will the Minister give way?

[Sarah Jones]

I hope my hon. Friend will forgive me, but there is no time for me to give way. I reassure the hon. Member for Brigg and Immingham that in no way have we moved slowly—we have been moving at pace throughout our time in government.

There were suggestions that we should move to nationalise British Steel today and that this Bill is already nationalisation. It is not nationalisation and we are not moving to nationalise British Steel today. We are taking very significant powers that we do not underestimate. That buys us time to have the leverage and the time we need to look at what must be done next, but we will act in the national interest. As the Prime Minister said yesterday, nothing is off the table. There was a suggestion that we should use the Civil Contingencies Act 2004. That is difficult to do because it is very hard to meet the criteria; there has to be a risk of death, so we did not meet that criteria.

I agree with my hon. Friend the Member for Sefton Central (Bill Esterson) that economic security and national security are two sides of the same coin. The emergency legislation we have brought forward today is essential to protect British Steel, its workforce and the national interest. This Government will never hesitate to act in the national interest to keep Britain secure at home and strong abroad, and this legislation is proof of that. Today we take back control, and I urge all Members of this House to vote for this Bill.

Scunthorpe Steelworks

Sarah Jones Excerpts

Monday 7th April 2025 Commons Chamber

[Martin Vickers (Brigg and Immingham) (Con)]

(Urgent Question:) To ask the Secretary of State for Business and Trade what actions the Government are taking to prevent the closure of Scunthorpe’s steelworks.

[The Minister for Industry (Sarah Jones)]

I appeared before this House on 27 March, just moments after British Steel’s devastating announcement of early asset closures at Scunthorpe and its commercial decision to consult on large-scale redundancies. The course of action chosen by British Steel’s owner is deeply disappointing, and our thoughts remain with British Steel workers and their families at this very concerning time. Government’s contingency plans have kicked in, and teams from the Departments for Work and Pensions and for Education are there to provide support and advice to affected workers. We will ensure that support is in place for as long as possible.

Looking ahead, I can assure this House that early blast furnace closures at Scunthorpe are far from a done deal. We have been clear that the best way forward is for British Steel to continue as a commercially run business with private investment and Government acting in support, which is why we made the company a generous offer of public funding on 24 March. As Members are aware, British Steel’s owner did not accept our offer or the necessary conditions attached, which were designed to protect workers, safeguard taxpayers’ money and deliver a sustainable company at the core of the future of British steelmaking.

However, that is not the end of the matter. The Business and Trade Secretary and I met Jingye, the owner of British Steel, on Friday, and there are plans to meet again this week. The Government remain resolute in our desire to secure a long-term future for the Scunthorpe steelworks, retaining steel production and putting an end to the years of uncertainty, and I can assure the House that no options are off the table to achieve that. We will continue to work tirelessly across Government and with British Steel’s owner to find a better outcome.

I cannot go into further detail at this stage. It would be damaging to British Steel’s workers and their families, the company and its supply chain for me to speculate on how events might unfold in the coming days and weeks while a live negotiation is under way and policy is being developed at pace. However, Members should be in no doubt that there is a bright future for steelmaking in the UK under this Government, and we believe that British Steel and its superb workforce at Scunthorpe have an integral role to play in it.

[Martin Vickers]

I thank the Minister for her comments. While it is welcome that work is being done through DWP and so on to support potential redundant workers, the reality is that Jingye is not involved in meaningful negotiations. The Government have been critical of it in previous responses to my questions. It is very obvious that Jingye has cancelled the raw material orders that are essential to keep the furnaces going; those orders were due in mid-May. When I was at the steelworks on Friday, I was told that unless another order for iron ore pellets could be placed this week, it would be too late.

The Minister was somewhat reluctant to go down the nationalisation route when I raised the matter a couple of weeks ago. However, the majority opinion in the area and among leading politicians is that nationalisation on a temporary basis is the only solution to keep the furnaces burning come the middle of next month. Can the Minister therefore confirm that it is something the Government are actively considering? It would provide an opportunity to rebuild the industry, hopefully secure new private sector involvement and convince the customers—most notably Network Rail, which gets 95% of its rail track from the Scunthorpe works—that supply will continue.

I have come round to the view that nationalisation on a temporary basis is, in this instance, the only way. It will secure the jobs and secure a future for steel production in Scunthorpe. I urge the Minister not to rule it out, and indeed to commit to it.

[Sarah Jones]

I thank the hon. Gentleman for securing this urgent question and for his comments. I know we will continue to talk and have honest conversations.

Jingye is very much talking to us. As I said, I met Jingye with the Secretary of State and others on Friday, and we hope to do so again this week.

Our priority is respecting the workers, safeguarding jobs and retaining steelmaking. We have been clear in our belief that the best way forward is for Scunthorpe and British Steel to continue as a commercially-run business with private investment and with the Government acting in support, but I can tell the hon. Gentleman that no options are off the table.

[Matt Western (Warwick and Leamington) (Lab)]

I was concerned to read about the cancellation of shipments of essential coking coal and so on for Scunthorpe. The Business and Trade Committee heard from British Steel and Tata about some of their needs. The Minister will be aware that an area where we have failed as a country over the last six years or so is not having an industrial strategy, so I make clear to her once more the absolute urgency for us to establish a steel plan to set out the UK’s needs and ensure that we have resilience across our industries and for our economy.

[Sarah Jones]

My hon. Friend is absolutely right, and we talked about exactly that at the Business and Trade Committee. This country has seen a significant decline in steel manufacturing over the last decade, and we want to turn that around. Long before we got into government, we committed to a plan for steel, which represents a £2.5 billion investment in UK steelmaking. As we speak, there is a roundtable at JCB in Stafford on the plan for steel, on this occasion discussing trade barriers—I was due to be chairing but came back to be in the Chamber. We have been having a series of roundtables to gather evidence and pull the facts and figures together so that we can put the right investment in place.

[Mr Speaker]

I call the shadow Secretary of State for Housing, Communities and Local Government.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) and Rob Waltham, our excellent candidate for Mayor of Greater Lincolnshire, for their engagement and work on this issue.

Despite repeatedly promising to protect and support virgin steelmaking capacity when in opposition, the Labour party is potentially presiding over its total demise. In the process, thousands of blue-collar jobs in this once proud industry have either gone forever or are at risk, including 5,000 directly employed roles at Port Talbot and Scunthorpe alone and many more in the supply chain.

Given that the regions with the highest numbers of steelworkers are Wales and Yorkshire and the Humber, the situation is dealing a hammer blow to efforts to address regional inequality. Steel is obviously a key strategic industry—even more so given our need to increase defence spending and infrastructure investment, and even more so again given President Trump’s game-changing imposition of tariffs.

The Prime Minister keeps saying that the world has changed, and that we are witnessing the end of globalisation. I cannot say that I totally agree, but if that is the Government’s position, surely they have no choice but to intervene to support domestic production. The alternative could see us locked out of reliable, consistently priced sources of steel. The Government have stepped in to help car manufacturing in recent days, so will the Minister now redouble her efforts to reach a deal with British Steel?

Steel production is just one of the industries closing due to our high energy prices, which are 50% higher than our competitors in France and Germany and 400% higher than in the USA. Other manufacturers such as CF Fertilisers on Teesside and Ineos at Grangemouth have closed their doors or are in the process of doing so. Will the Minister press with the Chancellor the case for permanently lower industrial energy prices?

The Minister mentions support for steelworkers. How many steelworkers have the Government engaged with? What support has been given to account for the knock-on effect to communities? What assessment has the Minister made of the effects this situation will have on national security? She mentions a bright future for steelmaking in this country. Will she confirm that that means primary steelmaking capability?

[Sarah Jones]

I thank the hon. Gentleman for his contribution and for welcoming the Prime Minister’s announcements today on the zero emission vehicle mandate and the changes we have made to support the automotive industry, which is incredibly important.

The hon. Gentleman talks about the number of good steel jobs that have gone forever or are at risk, but that happened because the previous Government failed to intervene to support our steel industry. That is why we lost so many jobs over the last decade. Not having an industrial strategy or a plan for steel meant that we allowed offshoring of our jobs in the steel sector, which has damaged us. He rightly said that in many key parts of our country we need good jobs. I should say that steel produced really good jobs, which are better paid than the average in the area and are done by really good, qualified people we want to retain in the UK.

The hon. Gentleman talked about energy. Again, the reason why we are here is that we had years of the previous Government not intervening in this space. We are well aware of energy prices in this country and are doing all we can to bring those down. [Interruption.]

I was asked by the hon. Gentleman to redouble my efforts in the negotiations we are having with British Steel. I will do everything that I possibly can—as we are doing. I hope he understands that I cannot go into detail about the state of those negotiations because that would be bad for the workers, bad for our supply chains and bad for the outcome.

The hon. Gentleman talked about national security and primary steel. We are conducting a review of primary steel as part of our plan for steel and we will have the results of that soon. We will look at those results and see what we need to do. I should stress that there is defence equipment made in the UK from electric arc furnaces; there is not much defence work either in British Steel or at Tata in Port Talbot at the moment. People such as Sheffield Forgemasters produce steel from electric arc furnaces. However, the hon. Gentleman is right to talk about the importance of national security and to say that the world has changed and things have moved on, so we need to ensure that we are protecting our country as we need to.

As I said in the Chamber in response to the last urgent question on this issue, there is a reason why Putin bombed the blast furnaces in Ukraine pretty much first: it was because a country wants to have that steelmaking capacity. We are alive to those issues, and that is why nothing is off the table. We are doing everything that we can.

[Hon. Members]

You’re not!

[Bill Esterson (Sefton Central) (Lab)]

It is a shame that the Conservative Members who were heckling the Minister have forgotten their own Government’s failure to tackle the problems of high industrial energy prices. [Interruption.] They can heckle again now, but they did nothing in government.

Two weeks ago, I was at the Tata steelworks with the Energy Security and Net Zero Committee. We spoke to people locally, who had great concerns that when the blast furnaces there shut—it was too late for this Government to take action to prevent that when they came in—it was some years before the new electric arc furnace technology was ready to be installed and to operate.

Will my hon. Friend do everything in her power to ensure that there is not that same gap here? The problem that has caused in south Wales has reminded people of the damage done by previous eras of deindustrialisation, and they are concerned that we are now repeating the same mistakes. Will she confirm that the Government will do everything in their power to ensure that we do not make those same mistakes of deindustrialisation this time?

[Sarah Jones]

We are very much planning not to make the mistakes that my hon. Friend talked about. We do not want the blast furnaces to shut—that remains the Government’s view—and we will do everything we can to reach a deal with British Steel to protect workers and secure those jobs and the production of steel in the long term.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Sarah Gibson (Chippenham) (LD)]

Speculation around British Steel at the Scunthorpe plant is deeply concerning for the workers and business owners alike, who are desperately waiting for the Government to deliver just one piece of good news. Steel is vital to our green economy as it plays a huge role in our ability to extend our railways and to build zero carbon homes. What incentive does British Steel have to keep going? It has had to contend with the Chancellor’s decision to hike national insurance contributions and with Trump’s terrifying tariffs.

Manufacturing businesses need the Government to offer reassurance, certainty and stability. We need to move from a patchwork of last-minute rescues to a long-term plan that will see industry on a sustainable footing. We need a robust industrial strategy with a proper plan for steel within it. We have been told to expect this industrial strategy shortly. Will the Minister confirm exactly when we will have it? Can she reassure the small and medium-sized manufacturing businesses in my constituency and across rural England that Britain wants them to grow? Will the strategy include a long-term vision that will allow the UK to secure the investment that we need for virgin steel production?

[Sarah Jones]

I can reassure the hon. Lady that we are developing a long- term plan in the industrial strategy. We are developing the plan for steel, as I have said, and alongside that we have our trade strategy, which has become very significant in recent times. She is right to point to the tariffs that have been placed on steel and aluminium. This is a deeply difficult situation and I have met the steel sector on multiple occasions to talk about it. That is what the conversation that is happening in Stafford as we speak is about: what extra measures need to be put in place. The Secretary of State met the Trade Remedies Authority this morning to push on some of the issues around trade protections.

The hon. Lady talked about the SME manufacturing supply chain. Of course that is very important and we will do what we can within the industrial strategy and the steel strategy to support those businesses. I understand that the speculation about what may or may not happen at Scunthorpe is deeply distressing, not just to the workers and their families but to all those who are part of the supply chain. That is why we will continue at pace to have the conversations we need to have with British Steel to ensure that we do the right thing, and as I said, nothing is off the table.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

The whole of northern Lincolnshire will feel the brunt of this British Steel decision, should the site close, and I urge Jingye to reconsider the Government’s generous £500 million offer. Support through the Department for Work and Pensions is really welcome but the truth is that people have been leaving British Steel for years because of the cycle of its uncertain future. I welcome the Government’s comment that no options are off the table. In the interim, are the Government considering ordering the raw materials to keep the blast furnaces burning?

[Sarah Jones]

I thank my hon. Friend for her question and for pointing out that the uncertainty that has existed for many years is difficult for people, and that if they can secure jobs elsewhere, they will do that. I have been to Scunthorpe and talked to people who work there and to the trade unions a lot, as she would expect, to make sure that we understand all the issues at play.

I understand my hon. Friend’s question about what we may or may not do in the immediate term, but I hope she will respect the fact that we cannot at this point talk about what we might end up doing, because those conversations are commercially sensitive. I want to reassure her, and the whole House, that we are doing what we can to ensure we get the right solution and that we do not want the blast furnaces to close.

[Richard Tice (Boston and Skegness) (Reform)]

About 10 days ago, I urged the Minister and the Government to use this decision by the Chinese to close British Steel as an opportunity to take British Steel into public ownership. The situation is urgent. It has stopped ordering the raw materials for the blast furnaces, and unless those raw materials are ordered within about 10 days, those blast furnaces will go cold in mid-May. The Minister says that no options are off the table. Will she confirm that the Government will make those decisions and come to a conclusion about the options within this very short timeframe to ensure that the blast furnaces stay open, and that the right long-term solution is to take British Steel into public ownership and invest in it for British industry, for British Steel and for the workers in Lincolnshire?

[Sarah Jones]

As I said about 10 days ago, economics and jobs, not ideology, will drive the decisions that we make. The hon. Member is right to point to lots of speculation about the need to buy raw materials. I assure him that we are having those conversations with British Steel, and we will continue to do so. As I said, our preference is for a commercial solution, with Government providing support, but all options remain on the table, and I can assure him that we are working at pace.

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

Wolverhampton North East has the UK’s largest steel processing and distribution centre. Will the Minister outline how the Government intend to protect jobs across this vital industry by backing a robust industrial strategy and the £2.5 billion plan for steel?

[Sarah Jones]

I would be happy to come to my hon. Friend’s constituency to have a look at and to talk to some of the people who work in the steel business. Huge numbers of organisations and businesses across the country rely on, use, and produce things from steel, and we need to ensure that we factor them into the conversations we are having. We are looking at the supply chains and how we boost industry more widely through our industrial strategy. We are looking at all the things—whether it is skills, R&D or access to finance—that businesses of all sectors have told us they need. Whether it is through the industrial strategy or the plan for steel, we are trying to ensure that we have a robust industry in this country so that jobs are not offshored and we have the security of knowing that we are producing the things that we need here in the UK.

[John Cooper (Dumfries and Galloway) (Con)]

Between 1997 and 2010, about 36,000 jobs were lost in steelmaking, or about half the workforce—that was under Labour, of course. I am concerned to hear talk today about nationalisation, and I say that with due deference to my hon. Friend the Member for Brigg and Immingham (Martin Vickers); the old joke is that if we want to stop crime paying, we should nationalise it. Given that this Government could not run a bath, never mind the steel industry, would a better idea not be to support the industry with, as I have mentioned before, a golden share to give us some say over what happens? Again, is the truth not that the dogmatic pursuit of net zero is driving up energy bills in this country to a level that is simply not sustainable for industry?

[Sarah Jones]

I will repeat what I have said: we are looking at all the options on the table; we are talking to British Steel about the right outcome; and we will do what is right for our country and our industry. On energy prices, the hon. Member is right to raise the high costs of energy. The supercharger comes into effect this month, and British Steel will get support from that, as will other high-end energy-intensive industries. But he is right to point to that issue and we are looking at it.

[Emma Foody (Cramlington and Killingworth) (Lab/Co-op)]

I thank the Minister for her answers. As she will know, there has been intense media speculation that the blast furnaces will close before the consultation is complete. Will she reassure me and workers that everything is being done to ensure that does not happen, and that Jingye conducts its affairs with respect to UK law?

[Sarah Jones]

My hon. Friend is right, and we will do that. The offer that was put to British Steel and which was refused included conditions to do exactly that, as well as including a number of other things around jobs, as we would expect. It is very important that any deal using British taxpayers’ money is done in a way that we know is within the law and is a good use of taxpayers’ money. I am very mindful of that, and I am constantly mindful of the insecurity that people who work at British Steel will feel, as well as the need for all of us to try to work as hard as we can to ensure that we get a good outcome for those people.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I thank the hon. Lady for keeping an open mind about what to do to save the remnants of our steel industry. Does she not agree that it is vital that we maintain a strategic capability to make steel? Is it not unconscionable that we are building British warships with imported steel? I recognise that the situation represents the cumulative failings of Governments over many decades, but it is now time utterly to change our policy. That includes the energy policy, which has prioritised things other than price in relation to our energy-intensive industries. I am glad to hear that the Government have some answer to that, but to build up a strategic capability for wartime, which is what we now need to tool up for in this country, we need a wholesale change in energy policy. I hope that she will look for common cause between the two Front-Bench teams, because this should be done on a consensus basis. We do not need to tear chunks out of one another for the mistakes we have all made in the past.

[Sarah Jones]

I agree with the hon. Member’s premise that we need to ensure that we have steel production in the UK, although there is some nuance around some of this. High-quality steel is being made, as we speak, for defence purposes by electric arc furnaces. That is perfectly possible; we melt scrap and add about 20% of primary steel. For some things, depending on what we are making—I know too much about the steel industry now—we do not need any primary steel. We are conducting a review of primary steel, which will be finished shortly. Again, neither Tata nor British Steel is a critical supplier to defence programmes at the moment, but we need that steel production, as I said before, so that we can build whatever we might need in the future. Of course, we will work cross-party; if that is his offer, it is very gladly taken.

[Sir Julian Lewis (New Forest East) (Con)]

The Minister should not waste the opportunity of a lifetime in the parties of the right urging a party of the left to nationalise a British industry. One organisation that has been utterly consistent in all this is the GMB union: it wrote to the previous Government’s Defence Secretary saying that a business Minister had failed to answer clearly whether virgin steel was essential for defence. Today’s Minister seems to suggest that it might not be, but we must have a quantity of virgin steel, even if we add other things to it, to embark on the process of making essential defence products. Seize the opportunity: keep the blast furnaces, and if necessary, nationalise them for good.

[Sarah Jones]

If we get into conversations about different types of steel, it is like the Facebook update “It’s complicated”, right? It is complicated. For some things, we absolutely need primary steel; and for some things, we do not. That is why we are carrying out a fundamental review of steelmaking and the need for it here in the UK. Those results will come out soon. The right hon. Member is right that the GMB has been an advocate for this, as have Community and Unite. We talk to them regularly about British Steel. I have not failed to notice the slightly odd position that we find ourselves in today. I repeat that we are looking at all options. The House will understand that we are talking about large amounts of taxpayers’ money, which we have to spend in the right way, in a sensible way, and in a way that will get us what we need. That is what we are looking at, and it is what we will do.

[Lee Anderson (Ashfield) (Reform)]

These steelworkers do not want visits from the DWP. They do not even want visits from out-of-touch Labour Back-Bench MPs. What they want is their jobs: they want to make steel. It is interesting to hear from the Minister that all options are on the table. Do they include Reform UK’s policy of scrapping net zero and renationalising British Steel?

[Sarah Jones]

It is good to hear that the workers in British Steel do not want visits from politicians; I assume the hon. Member, and his party, will take his own advice. I hope that he will understand that we cannot talk about the conversations that we are having with British Steel. It would be very disruptive to the process, the workforce there, the supply chain and commercial confidentiality. I can only repeat that our preference is that we come to an agreement with British Steel based on commercial terms, with Government support, but we are looking at all options and nothing is off the table.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Does the Minister agree that we appear to have hammered out a cross-party consensus on the need to ensure that this country is able to continue to produce virgin steel, just like every other G7 country, for a whole raft of reasons? Does she agree that the case is underscored and reinforced by the Trump slump, by her party’s welcome, albeit belated, pragmatism on net zero and, one hopes, an attendant fall in energy costs, and by the Prime Minister’s intriguing announcement of the end of globalisation? Does she agree that those three things have underscored and reinforced the case for continuing to produce virgin steel in this country?

[Sarah Jones]

I agree with the right hon. Member that the world has changed. We know that we are in a different position than that which we found ourselves in a few years ago. We need to ensure that we are secure as a country, and I believe steel is part of that answer.

We also need to ensure that we are stopping the decline of the steel industry, which was always the Labour party’s wish in opposition. We are committed to the plan for steel—the £2.5 billion on top of the £500 billion that we are giving to Tata Steel in Port Talbot. This is a real commitment to changing how we operate the steel industry in this country, so that we stop this constant decline and start to grow the industry and ensure that we are producing the things we need.

[Mr Richard Holden (Basildon and Billericay) (Con)]

The Minister seems to be on the verge of acknowledging that, as the last virgin steel production in the UK, Scunthorpe is critical national infrastructure and that the Government will nationalise it, if necessary. Can she commit to the House that virgin steel production in the UK is critical national infrastructure and that, if necessary, she will indeed nationalise it to maintain this critical resource for UK defence?

[Sarah Jones]

I am afraid I have to disappoint the right hon. Member, as I am not on the verge of anything. I repeat what I said, because it is the right thing to do: we will continue to negotiate with British Steel, mindful of the workers and the insecurity of the consultation they are currently undergoing. We will ensure that we do the right thing through our plan for steel and our response to British Steel, and I cannot say any more than that at this point.

[James McMurdock (South Basildon and East Thurrock) (Reform)]

I thank the Minister for her comments. Given the vital importance of this industry, on which I believe the whole House agrees, does she recognise that it would be a siren to those who, on a national scale, would be less than trustworthy, if we were unable to produce virgin steel ourselves? Given the undoubted national security risk, does she agree that, despite no options being off the table, one outcome that is absolutely off the table is closure? If so, why not just commit to protecting and saving these jobs?

[Sarah Jones]

British Steel is a private company owned by Jingye, and it is for Jingye to make its own decisions. I have said multiple times that we will continue to talk to see if we can come to an agreement on the very generous offer that was made. We are looking at all options, because we know that is the right thing to do. To be clear, we do not want the blast furnaces to close, and we want to come to an agreement.

[Nick Timothy (West Suffolk) (Con)]

I wish the Minister would stop saying that some of these issues are complicated, and therefore that we should not debate them. We are sent here to debate complicated issues, and she is supposed to be here to answer our questions.

We are witnessing the absurd spectacle of the Government begging a Chinese company to take taxpayers’ money to keep British Steel alive, while China suppresses its own costs and dumps its steel on other countries. We may soon be the only G7 country incapable of producing primary steel. The Minister brushes off the reality of crippling British energy costs, which will only get worse in the years ahead as a matter of deliberate Government policy. Why will she not guarantee the supply of the raw materials needed to keep the blast furnaces open, and why will she not admit that steel has no future in this country so long as this Government’s trade and climate policies continue?

[Sarah Jones]

If only the hon. Member had done something when he had some influence as an adviser to a previous Prime Minister. That would have been good, wouldn’t it?

I was not sent here to divulge commercially confidential conversations with a private company that affect thousands of people’s jobs, and if the hon. Member thinks that I was, he is wrong. We are not going to do that, nor are we begging anywhere for anything—

[Nick Timothy]

You are.

[Sarah Jones]

No, absolutely not, and I am disappointed that the hon. Member would speak in that way. As he knows, we are having a conversation about a potential deal that we believe is there to be done with British Steel.

On the wider issue, it is a fact that China produces 53% of the world’s steel, and we have huge issues with that, as the hon. Member knows. The tariffs have over-complicated the situation, which is why the Secretary of State is meeting the Trade Remedies Authority today, why we are looking at our trade strategy, and why we are talking to the Americans to make sure we can do a deal with them. We will continue to ensure that we have all the protection we need, in terms of stopping the onshoring of steel as much as we can. Those conversations will continue. The TRA is now looking at steel, and we expect those results quite soon.

[Mr Andrew Snowden (Fylde) (Con)]

The Minister used the interesting stat that 53% of the world’s steel is produced by China. If we look back at the lead-up to Russia’s illegal invasion of Ukraine, and the way that Russia started to dominate the nuclear fuel market in particular by pushing out western providers, we see that there is a reason why China and Russia are behaving this way: they want to control the raw materials that are critical for national security around the world. This House is debating the prospect of a Chinese-owned company turning off our blast furnaces in this country in a month’s time. That cannot be an acceptable position to be in. This has been asked several times, but it has not been answered: will the Minister commit to ordering the raw materials to keep those furnaces on, if necessary? She said in response to a question on primary steel that a consultation was under way on a strategy, and that we would look at what we needed to do. It is clear what we need to do: produce primary steel.

--- Later in debate ---

[Sarah Jones]

That is what we were telling the previous Government for many years. British Steel is owned by a Chinese company because the purchase was made under the last Government in a commercial and private sector way. Labour Members believe in fair, open markets; I do not know quite what the Opposition are becoming. On China, our priority is UK jobs and steel production. We believe in a fair, open market for foreign investments, and in having mature and balanced relationships with trading partners such as China. We will ensure protections for the steel industry in the UK, and make sure we do the right thing. On primary steel and the materials that the hon. Member wants me to commit to spending millions of pounds on, I think most Members would understand that I cannot commit to anything like that at this time and place.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers to the questions—they have been very helpful. My concern is not only about retaining UK steel, but for the workers. The potential for 2,700 people to lose their jobs is frightening, and I think of all the families who will be directly impacted by this. Will the Minister confirm that ahead of any announcement made on Scunthorpe steel, she will commit to meeting the workers who will be directly affected by any decision, and provide a way forward, so that workers in the steel industry are secure in their employment and are protected throughout the United Kingdom?

[Sarah Jones]

I thank the hon. Gentleman for his question. We of course continue to talk to the trade unions, including Community, GMB and Unite, who have been incredibly strong voices for their workers in Scunthorpe. We will continue to talk to them and to people who work there, to understand exactly what they are going through. They have to be at the heart of all the decisions we make.

Scunthorpe Steelworks

Sarah Jones Excerpts

Thursday 27th March 2025 Commons Chamber

[Martin Vickers (Brigg and Immingham) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade to make a statement on the future of Scunthorpe steelworks.

[The Minister for Industry (Sarah Jones)]

First, my thoughts are, and the thoughts of all hon. Members will be, with British Steel workers and their families, following the company’s announcement of plans to close the blast furnaces and other steelmaking assets at Scunthorpe, and its commercial decision to consult on redundancies. This is not what we wanted, and I know how worrying it will be for all those involved. I am grateful to my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who is in his constituency today engaging directly with his local community.

In the immediate term, we must support the people who work at British Steel. Our contingency plans have kicked in to ensure that all possible support is made available to British Steel’s workforce. Both the Department for Work and Pensions and the Department for Education will have teams on the ground shortly to engage with employees for as long as necessary. We have asked British Steel that officials be given direct access to British Steel sites to bring their support as close as possible to affected workers.

This Government inherited a steel sector in crisis, and resolving the long-standing uncertainty around the future of Scunthorpe has been a priority from our first days in office. That is why, when we committed up to £2.5 billion of investment to support our steel industry, we earmarked substantial funding to support British Steel, in addition to the funding allocated to our new and improved deal with Tata Steel.

I confirm today that we have taken another significant step forward. On Monday, my right hon. Friend the Business and Trade Secretary made a generous conditional offer of financial support to British Steel designed to deliver a sustainable future for the workforce, industry and local communities. In the light of the challenging fiscal context, this speaks volumes about our commitment to the steel industry. The offer follows months of intensive engagement with British Steel to reach a deal that meets our public accountability and legal requirements, works for local people and UK taxpayers, safeguards as many jobs as possible and ensures the company’s long-term commercial viability. The offer that we have made is conditional on British Steel meeting those key tests, which is consistent with our approach to similar investment deals.

The company must provide the commitments that we need, and which taxpayers would quite rightly expect, in exchange for substantial public funding. It is regrettable that it has not yet done so or accepted our offer. I therefore call on the company to reconsider its plans to announce early closures, accept our conditions and accept our generous offer, which remains on the table.

I assure the House that we are working tirelessly to find a solution. We believe that there is a bright future for steelmaking in the UK, and we call on British Steel to work in partnership with a Government who care deeply about the steel sector to put the business on a sustainable footing for the future and to put an end to the years of uncertainty at Scunthorpe.

[Martin Vickers]

I thank the Minister for her statement and for the updates that she has provided to me in recent weeks. As she said, there will be increased anxiety among the workforce today, and we look to the Government to provide maximum support.

For the sake of clarity, will the Minister confirm that the Government do wish to maintain blast furnace production until an alternative arc furnace installation is up and running? Will she also confirm that they want to maintain production to meet the demands of the defence sector, particularly in view of the recently announced increased spending?

The Minister will be aware of the projects that North Lincolnshire council have proposed, such as the green growth zone and those in the artificial intelligence sector. Will she confirm that she will support them? She will also be aware of other projects in the region that are looking for Government support. Will she confirm that she will look sympathetically on them? Also, although I would not want to advocate this, will the Government consider nationalisation of the industry as a last resort?

[Sarah Jones]

I thank the hon. Gentleman for the manner in which he has represented his constituents today and engaged with us previously. On the point of clarity, I confirm that we would rather the blast furnaces remained open. He knows that if they closed before a supply of steel were secured, that would be significant in terms of customer confidence and what will happen to the customer base.

On the hon. Gentleman’s point about defence, as was said at the Business and Trade Committee yesterday, there was a reason why the Russians bombed the blast furnaces in Ukraine first: steelmaking capacity is needed not just for defence, but for building the structures required for construction. He was therefore absolutely right on that front.

This morning, I met the council and talked about both the plans for us to work together on British Steel and the wider question of what else we can do in the region and how the Government can support that. A small ministerial team has been coming together to think about those things.

On the hon. Gentleman’s final point, as he knows, the amount of money that we are talking about to develop new infrastructure is significant. Our preferred approach by far is that British Steel comes back to the table, talks with us about the offer on the table and we have that private sector investment in the future, but of course we are looking at all options.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

May I welcome the Minister’s explicit ambition to retain primary steelmaking capability on these islands? I hope the whole House will row in with that. I also welcome the £2.5 billion that the Government have earmarked for investment in the sector. Will she, however, put a rocket up the Trade Remedies Authority? We have heard very clearly from steelmakers that they need the same safeguards against diverted Chinese steel flooding into our market that will click into place in Europe in April. It is not acceptable that we have to wait until the summer for our markets to be safeguarded in the same way. The TRA needs to act, and it needs to act now.

[Sarah Jones]

I thank my right hon. Friend for his question and his contribution through the Select Committee session we had yesterday. The TRA announced yesterday that it will widen its review of UK steel defences. It has accepted the challenge from UK Steel to do just that and is acting. The Secretary of State and others will be looking to make sure our steel defences are as strong as they need to be. Today’s news about Scunthorpe sits alongside the wider issues about tariffs and the global trade of steel. We need to make sure we are helping in that space too.

[Madam Deputy Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

The news from Scunthorpe is deeply concerning. Jobs are at risk and our thoughts are with all those who now face uncertainty. The world is becoming more dangerous and we need to bolster our defence industry. Without the ability to produce our own primary steel, those efforts could be put in jeopardy. What impact does the Minister believe the news will have on Britain’s defence industry and what impact does she believe closure would have on our national security?

It takes a special something to be able to offer someone £500 million and for them to reject it, but whatever it is, I guess the Business Secretary has it. Whenever Labour negotiates, Britain loses. Whether with Mauritius, AstraZeneca or now British Steel, the Government confirm that—and so far, at least, that appears to be the case with the United States too. The Government pretend that tariffs on steel are inevitable, which, as we showed in government, is simply not the case. Therefore, will the Minister update the House on United States trade negotiations, in particular in relation to steel? Will the Minister confirm that the Business Secretary has engaged further with Jingye since it rejected him?

Tariffs are but one challenge facing the industry. Alongside the jobs tax and the unemployment Bill, the steel industry is being choked by the Government’s ideological green targets. Will the Minister tell the House what concerns British Steel has expressed about those net zero targets? As I said at the beginning, this news will be deeply concerning for steelworkers in Scunthorpe. Has the Minister or the Secretary of State spoken with them about the news and, if so, what support are they being offered?

[Sarah Jones]

I do not want to insult this House by suggesting that there was any kind of deal on the table under the previous Government and that anything happened on steel other than a halving of production over the last decade—a halving. Lots of things shut down and closed during that period, not just in the steel industry but in many others. I look at my hon. Friend the Member for Redcar (Anna Turley) for proof of that.

Whether in steel, in shipbuilding or in the automative sector, the previous Government had neglected to take major decisions or had kicked the can down the road. All we inherited were a series of industrial crises that we are now trying to solve. We delivered a better deal with Port Talbot than had been negotiated under the previous Government. We are still in talks with British Steel and hoping that we can come to a resolution, and not just because of the very many very highly skilled workers in Scunthorpe who we respect, honour and want to make sure stay in their jobs. I have nothing more to say on that front.

On tariffs and the situation with the US, we are in a good position in this country in that the relationship that our Prime Minister has built with President Donald Trump and his team means that we are in active conversations about a potential trade deal. This is a good, positive thing, and we are carrying on having those conversations. My right hon. Friend the Secretary of State has been talking regularly with our American counterparts, as Members would expect. We will have cool heads in this space and navigate our way through. We—our officials—are talking daily with British Steel. We are talking with the trade unions and all the players to try to ensure that, in the difficult global landscape that we find ourselves in, we are doing right by the people of Scunthorpe.

[Laurence Turner (Birmingham Northfield) (Lab)]

I draw the House’s attention to my background as an official of the GMB steelworkers union, that union’s support for my constituency party and my membership of GMB and Unite.

The three steelworkers unions—GMB, Unite and Community—have put forward a multi-union plan for Scunthorpe. Will the Minister meet those unions urgently, including with cross-governmental officers, so that we can do everything possible to keep that multi-union plan on the table?

[Sarah Jones]

I take this opportunity to pay tribute to the trade unions—GMB, Community and Unite—which we have been working with closely. We have been discussing their plan. As I say, our preference is that British Steel accepts the deal—the incredibly generous offer of public funding—we have given it. We hope we can find a way forward that involves keeping the blast furnaces open, but we are of course looking at every other option, and we certainly have been talking to the trade unions about their suggestions.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Clive Jones]

It is going to.

From electric vehicles to wind turbines, high-quality green steel is an important component of our transition to a low-carbon economy. The Government need to move rapidly from the Conservative’s legacy of a patchwork of last-minute rescues to a genuinely long-term approach that is effective for British industry and does not harm British workers. What are the Government doing to ensure that communities in Teesside and Scunthorpe are supported against job losses? When will the Government realise that sitting on our hands and hoping that Trump will not hit us with even more tariffs is not a good negotiating strategy? Will the Minister take a stronger approach and bring forward retaliatory measures against Donald Trump’s political allies such as his co-President Elon Musk and his company Tesla?

[Sarah Jones]

I can reassure the hon. Gentleman that we are not sitting on our hands, and there is a good reason why it would not be right to comment in this place on the internal negotiations between this Government and the United States. We will rightly keep a cool head in those conversations and ensure that we are ultimately doing what is right for our industry and our people, but we are in a good position in that we are engaged in deep conversations with the US and will continue to do that.

The hon. Gentleman asked about the support for local people. There are various stages. The starting point is that we very much hope that we can come to a deal and negotiate with British Steel—that it will accept what we are offering and that we can move forward on those terms. In the short term, the Department for Work and Pensions and the Department for Education will be there on the ground ensuring that people are getting the immediate support they need. If the consultation continues and there is a closure, of course much more intervention to support local people would need to kick in. We are already working on all manner of contingencies to ensure that we support people as we are doing in Port Talbot, but our aim is absolutely not to get to that point.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Select Committee member Sonia Kumar.

[Sonia Kumar (Dudley) (Lab)]

The UK now produces less steel than our European neighbours Germany, Italy, Spain, France, Austria and Poland, and over the past 30 years, China’s share of global steel production has risen from 13% to 54%. To safeguard the future of the steel industry, we must think about diversification. Does my hon. Friend agree that supporting British small and medium-sized enterprises into the steel industry will make it more competitive and sustainable?

[Sarah Jones]

I thank my hon. Friend for that conversation and all her work with the steel industry in her constituency. The steel strategy that we are putting together, which will be published in the spring with £2.5 billion to invest, will consider how to stimulate demand, use research and development and get the most out of scrap in the UK, as well as looking at trade and overcapacity, carbon leakage and the availability of sites—there is a whole raft of work going on. She is right about ensuring that there is an industry for the big and small players. That is what we are working through, and I look forward to working with her on that.

[Madam Deputy Speaker]

I call the Father of the House.

[Sir Edward Leigh (Gainsborough) (Con)]

Scunthorpe neighbours my constituency, and many of my constituents who work there will be desperately worried today. This is a vital national interest—a crisis. For the past 150 years, wars have been won by states that can make virgin steel. Will the Government do anything—tariffs, or the Secretary of State going up to Scunthorpe now to negotiate directly with the company—to ensure that we keep our vital national interest going, which means blast furnaces?

[Sarah Jones]

As the right hon. Gentleman would expect, the Secretary of State is and has been talking to Jingye, as have I and officials. Those negotiations will continue. The site at Scunthorpe produces a lot of different types of steel, as he will know. It provides 95% of all steel used by Network Rail. It is incredibly important in that sense, and he is right to draw attention to that. There are many different ways of making steel. On the primary steel point, we are investigating the merits of investing in direct reduced iron, which is when hydrogen is used instead of the old blast furnaces. The reality is that the Scunthorpe blast furnaces are old infrastructure—decades old—that needs updating. We need to move to new technology, and that is what we are trying to do with Jingye.

[Matt Western (Warwick and Leamington) (Lab)]

Clearly, the absence of an industrial strategy in the past five years has had an impact, so I welcome the Government’s notion of a steel plan. Given that the industrial strategy features three major elements—construction, defence and energy infrastructure—will the steel plan look not at a 10-year horizon but at one of 25 to 30 years, to ensure that we get the investment we need for the UK to have virgin steel production, like all other 19 countries of the G20?

[Sarah Jones]

I thank my hon. Friend for his question and for his expertise as a member of the Select Committee. We had this debate yesterday. Yes, having a long view has to be the right thing. The Government must ensure that we spend that £2.5 billion of taxpayers’ money in the right way to secure the industry well into the future.

[John Cooper (Dumfries and Galloway) (Con)]

As the grandson of a steelworker in Corby, Northamptonshire, I understand something of the iconic nature of the industry. The hon. Lady tries to blame us Conservatives for what went wrong. Is the situation not too confused? The Government are not sending the right signals to the industry and we are not sure what we want. We already do not make the right kinds of steel for much of the defence industry. The steel strategy will be published in the spring—wonderful. When is the spring? The Government need to get a grip and send out signals now. If we are going to negotiate with the Chinese about the Scunthorpe mill and the amount of money we are spending there, should we not have some kind of golden share so that taxpayers are comfortable about what is going on there?

[Sarah Jones]

I can assure the hon. Gentleman that I very much have a grip. We are working with officials, the Secretary of State and others all the time. In terms of the conditions that he suggests we should put on the offer of funding, the offer we made was conditional on job targets, fair terms for workers, adhering to UK law, protecting taxpayers’ money—a whole raft of conditions were set and need to be adhered to.

As for the hon. Gentleman’s haste, there was no steel strategy in the 14 years of the previous Government. We are developing one. I am not going to stand in front of taxpayers in my constituency and say, “I have spent £2.5 billion just on a whim.” We have to get this right.

We are working with industry. I was at Celsa in Cardiff this week at a roundtable of the scrap industry and the steelmakers talking about the plan. I have done roundtables with all the industries that buy steel to ensure that we understand what demand will be over the coming years. We are getting this right, which is what the taxpayer would expect of us.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

My hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) is in Scunthorpe right now, supporting our fantastic steelworkers. Many of my constituents work in Scunthorpe; I know that they will be feeling extremely anxious, and my heart goes out to them. Will the Minister confirm that she remains steely in her determination to secure the future of the UK construction and steel industries, and that she will do everything she possibly can to support my constituents who are affected?

[Sarah Jones]

My hon. Friend’s constituents who work for British Steel will, of course, be deeply worried. When I was last there in February, I talked to workers, the unions and management. This is a proud industry of good jobs with good salaries compared with the local averages. I am well aware of how anxious those workers will be feeling; I hope they can take some comfort, at least, from the fact that we are doing absolutely everything we can to secure a deal with British Steel.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is difficult to listen to the Minister at the Dispatch Box saying that everything is okay with the United States because of the positive relationship between the Prime Minister and the President, when it can be characterised as the President saying, “Jump,” and the Prime Minister asking, “How high?” The US has visited precisely the same tariffs on the UK steel industry as on the Chinese. If that is a special relationship, I would hate to see what an ordinary relationship looks like.

When will the Government get a grip on the production of primary steel? It is a non-negotiable for a G7 nation to produce primary steel. It is intrinsic to our defence and security. The Government seem to be trying to negotiate a situation that is the worst of all worlds, whereby the taxpayer has to stump up the money but the private sector in China gets to dictate the terms.

[Sarah Jones]

I do not recognise that framing at all. We are in a better position than many other countries in terms of the strength of our relationship with the US and the building up of relationships that has happened over recent months. As I said, the Secretary of State is in regular talks with his counterparts and we are having constructive talks with our counterparts. We cannot go into the details of those negotiations, but I can assure the hon. Gentleman and the House that we have a cool head, we know what we want and we will do what is best for our industries in the long run.

On the matter of primary steel and steelmaking in the UK, we need our defence and our security to have strong, vibrant steelmaking production in the UK. There are different ways to do that, including with different technologies, which are moving all the time. That is why the steel strategy needs to anticipate where technology is going and make sure we get that right.

[Bob Blackman (Harrow East) (Con)]

I think the Minister is giving a few mixed messages, if I may say so. The Government are sending support people to counsel those who may be out of a job and are making an offer to the firm that will actually be providing those jobs to try to cushion the blow. The sad reality is that if those blast furnaces close down they will not be recoverable, so the first thing that has to happen is ensuring that they are not closed down. The consequence would be the steel industry going into steep decline, with more people unemployed; we would then have to import steel from China at a much higher cost. Why will we not give a guarantee that the blast furnaces will not close down?

[Sarah Jones]

I am sure the hon. Gentleman knows that this is a private company that will make decisions of its own. We are operating within that environment. We have put an offer on the table that is about the development and redevelopment of Scunthorpe, the creation of an electric arc furnace and the transition for that. The offer is still on the table and we are still talking to the company about it. The reason that we are there on the ground now is that the company has decided to launch a consultation on redundancies, and it is right and proper that we are there to provide support to workers.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I commend the Minister and the Secretary of State for their hard graft to secure a deal in the interests of my steelworkers in Teesside and those in Scunthorpe. It is deeply concerning that Jingye has chosen to reject the generous offer that was on the table. I am sure I stand with Members across the House in urging Jingye to come back to the table and secure that deal. Will the Minister reaffirm that all options remain open, including strong national intervention to protect our steel industry and make sure that British steel is made here in Britain?

[Sarah Jones]

I know that my hon. Friend is working hard on behalf of his constituents; I appreciated being able to talk to him in the run-up to this. I can reassure him that this Government want to deliver a vibrant steel industry in the UK. We are very well aware of the importance of British Steel and of the Scunthorpe site and associated sites. We are doing all we can to make sure that we keep that operation going.

[Richard Tice]

We all know that steel, and particularly the ability to make primary steel, is a critical national industry. The Chinese might be giving up on British steel, but the British people do not want to give up on British steel, nor should we allow the final two blast furnaces to close. May I urge the Minister to take this not as a negative, but as an opportunity to be positive? We should take British Steel into public ownership and create a long-term, 20 to 30-year positive plan to invest in steelmaking for British industry and for our defence industry.

[Sarah Jones]

Through our plan for steel and the £2.5 billion that we are investing in the steel industry, we are aiming to do exactly that, to keep the industry going. I invite the hon. Gentleman to go and see the other sites around the country where we have electric arc furnaces in operation, because they are not that different from blast furnaces: they are still massive buildings melting and making the steel, but in a much more efficient way. The problem we have with Scunthorpe is that the blast furnaces are very old and will need huge amounts of money spent on them, and of course British Steel is losing £700,000 a day on Scunthorpe. This is not about ideology or particular political beliefs; this is about economics and about making sure that we protect our country, that we provide the defences we need, and that we are as secure as we can be in a changing world. On that, I agree with the hon. Gentleman.

[Derek Twigg (Widnes and Halewood) (Lab)]

I thank my hon. Friend for her statement; I know that she is doing all she can on the issue. We cannot have a defence industrial strategy unless we have our own primary steelmaking facilities, so clearly we cannot let these furnaces close. I was interested to hear what the Minister said about having various meetings in Whitehall and with the Treasury. When is she likely to be able to come back to the House and report on the progress made on this issue and, importantly, on a steel strategy for the long term—not just five or 10 years, but 20 years or more?

[Sarah Jones]

I can reassure my hon. Friend that the Treasury is completely committed to having a plan for steel. We talked to my right hon. Friend the Chancellor a lot about this when we were in opposition, just as we have been doing in Government. The very generous offer put on the table to British Steel was signed off, as is quite right, by the Chancellor and by the Prime Minister. They are both committed to this. We will be coming back in the spring with the steel plan, in which we will set out how we will spend the rest of the fund that we have. In the meantime, I again urge British Steel to come back and talk about the offer that is on the table and see whether we can come to a deal.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Given the geopolitical uncertainty ushered in by the new American Administration and by America and China’s attitude to net zero, will the Minister assure the House that in making decisions on the future of critical national infrastructure that touch upon the defence of this country, such as the extraction of shale gas and the continuance of blast furnaces producing virgin steel, she will be very careful about doing anything that would reduce this country’s capability to stand on its own two feet?

[Sarah Jones]

I will certainly ensure that we do not do anything that reduces our ability to stand on our own two feet. I can give the right hon. Gentleman that assurance.

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I thank the Minister for her comments on the national steel strategy and for agreeing to meet the owners of Union Electric Steel in my constituency. Does she agree that continuing to be able to produce cast steel rolls in the UK is an essential part of the steel strategy that will benefit Scunthorpe, Port Talbot and other communities?

[Sarah Jones]

I am very much looking forward to the meeting with my hon. Friend’s constituents, who are an important part of the steel chain. He makes an important point: we make many different products and have many different assets in the UK that we need to protect, beyond the big six steel companies.

[Graham Stuart (Beverley and Holderness) (Con)]

It is now clear that domestic virgin steel production is a national security imperative. Acting on it is not acting on a whim. Will the Minister respond to her hon. Friends and to Conservative Members by recognising that domestic virgin steel production is a national security imperative? Whether it is through nationalisation, golden shares or the other ideas that have been suggested, if it is a national security imperative we must act, regardless of technology. Will the Minister please tell the House that she agrees with that?

[Sarah Jones]

Madam Deputy Speaker, you will recognise the conversations that we are having from your experience as Minister of State in the Department for Business, Energy and Industrial Strategy. The Opposition seem to have a new-found enthusiasm for virgin steelmaking that in government they did not have at all. We will make sure that we are doing the right thing. [Interruption.] I do not have time to go into this conversation at this point, but I will be very happy to have it with the right hon. Gentleman. There are some important points to note, including that we make a lot of our steel for defence not from primary steel but in electric arc furnaces. It is about getting the right mix. That is what we will make sure we do.

[Chris Vince (Harlow) (Lab/Co-op)]

Last week, I visited British Offsite, whose chief executive officer hails from my constituency of Harlow, about the innovative house building that it is doing using techniques that require a lot of steel, although I have to say that it uses it efficiently. What meetings has the Minister had with house builders, as well as with the defence sector, as she rightly said, as part of the Government’s steel strategy?

[Sarah Jones]

I meet house builders regularly; I have some meetings with them today. The production and recycling of steel is important to construction, as are some of the off-takes from steel that can be used to make cement; there is recycling that can be done on that front as well. We need a lot of steel to build the 1.5 million homes that the Government want to build, so we need to make sure that the steel industry is strong.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers. We all share her frustrations about the process. The news that the Government’s offer of funding to retain jobs at Scunthorpe is to be rejected certainly outlines the difficulties in British businesses no longer being owned by those who have an interest in British jobs. My thoughts are with the workers today who are looking at their children and their mortgage repayments and wondering how they can make it work out, when all they want to do is work. How can the Government give confidence to workers in Scunthorpe and in industries that rely on steel throughout the United Kingdom of Great Britain and Northern Ireland, so that they know that a way forward can be found?

Shipyards: Economic Growth

Sarah Jones Excerpts

Tuesday 18th March 2025 Westminster Hall

[The Minister for Industry (Sarah Jones)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) on securing such an important debate. I thank him for quoting Donald Dewar in the first speech of the Scottish Parliament in 1998. I worked in an office next to Donald Dewar for a couple of years and he was an incredible man. He also said in that speech:

“We are fallible. We will make mistakes. But we will never lose sight of what brought us here: the striving to do right by the people of Scotland; to respect their priorities; to better their lot; and to contribute to the commonweal.”

The debate this afternoon has shown that many Members are carrying on in that spirit and acting in that way on behalf of their constituents.

One of the first issues that crossed our desks when we came to power last July was the challenge with Harland and Wolff. We were faced with a dilemma: if we had, as the shadow Minister suggested, thrown money immediately at the problem, we would have been throwing good money after bad. That was clear to anybody who had any sight of what was happening, but it was also clear that we were in a perilous position and we wanted to make sure that the Government could do whatever they could to save all four yards. There was a big push, for a number of reasons including the contracts that existed, to think about Belfast, and not to think about the four yards together.

A collective piece of work was done in which I played a small part and my hon. Friends the Members for Glenrothes and Mid Fife and for Na h-Eileanan an Iar (Torcuil Crichton), who has the Arnish port in his constituency, as well as the Secretaries of State for Northern Ireland, Scotland and Defence and my boss the Secretary of State for Business and Trade, played a large part. They all wanted to make sure we could do some kind of deal. When I was sat in the Ministry of Defence with Navantia, we were scratching our heads and thinking, “What on earth needs to be done here?” It was a big piece of work, with a lot of hard work around the clock from officials. The Prime Minister intervened because he saw the importance of this good piece of work. My hon. Friend the Member for Glenrothes and Mid Fife made the important point that we did not want to do this work out of a sense of charity. It was because the people at Methil, in his case, are enormously skilled, offering the possibility of future contracts and operations.

We did not see it as charity; we saw it as protecting the talent we have in this country, and wanting to see it grow. When I had the privilege of going to Methil to meet and talk to some of the 200 workers, 50 of whom are apprentices, it was apparent that this was a place—though cold—where we built the things that defined the 20th century, and can also be where we build the things that will define the decades to come. It is important to keep that in mind.

I want to touch on an issue many hon. Members raised about the Scottish Government, procurement and the award going to a Polish shipyard. I was talking to my hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey) about that earlier today. He questioned why Poland had been chosen over Port Glasgow, which was a good question to ask. I know Anas Sarwar has also been asking questions. I heard the intervention about phase 2, and perhaps there is something to be pulled and gained from this, though what has transpired is a shame.

There is a question about procurement, which both we and the Minister for Defence Procurement are looking at. We will keep doing that, including considering the Procurement Act 2023. I will soon be talking to that Minister, not only in this area but on steel, to see what more we can do.

[Jamie Stone]

I thank the Minister for giving way. On that point, I do not know how well I can put this. In building offshore structures, different bits can be built in different places, but they would come to Invergordon to be amalgamated, hence the £55 million Government investment. Could the same principle apply of looking at the rules, to ensure that the different bits are built in Methil or Ardersier, rather than being built abroad? Because that is our fear, that they may be made far away in somewhere such as Poland or Korea.

[Sarah Jones]

I thank the hon. Member for that intervention. He mentioned the importance of the £55 million that has gone to Cromarty Firth. Of course, we need to ensure, when looking at supply chains in whatever the industry, we do what we can to rebuild British jobs. In quite a few of our manufacturing industries over recent years, we have seen a slow decline, which we are keen to turn around.

I am working on the steel strategy, where we have a £2.5 billion fund that we committed to in the general election, on top of the £500 million that will be going, if delivered, to the Port Talbot work with Tata. That is a lot of taxpayers’ money; we want to ensure we are spending it wisely and that we are using the levers of Government, whether in procurement or other matters, to ensure that we are building as much as we can in the UK. We obviously have to be cognisant of laws around procurement and need to look at it carefully. It is an ambition of the Government that we make things in the UK and use supply chains here as much as possible.

I am sorry about the decision that was made in Scotland. I am also sorry that there is no one here from the SNP to make their case. We will do what we can with procurement to ensure we make the right decisions. We talked about shipbuilding and shipyards and the importance—

[John Grady]

On the topic of SNP Members being away—perhaps they are all listening to “Desert Island Discs”, although one would not reach the desert island if the SNP were in charge—many of my constituents have family, friends and loved ones on the Scottish islands, but at many times of the year they have terrible difficulty going to see them because of the appalling ferry service. That is because the age of the fleet has increased significantly during the 18 years that the SNP has been in power and the reliability of the vessels is down, which damages businesses, people trying to go to hospitals or travelling, and industry on those islands. Does my hon. Friend agree that the way the SNP has managed the ferry service in Scotland over the last 18 years is utterly contemptible?

[Sarah Jones]

I thank my hon. Friend for his intervention and I will bow to his wisdom as to why and how that situation has transpired, but for sure the ferry service is crucial for people’s lives, wellbeing and health. As my hon. Friend the Member for Isle of Wight West (Mr Quigley) said, a ferry service is not just about identity; it is also about basic necessities and lifelines. So, I agree with my hon. Friend that there does not appear to have been good management of the ferries by the SNP, but sadly we are not overly surprised by that.

There were lots of good contributions to the debate about the role that shipbuilding can play and about some of the issues that we need to look at. We have talked a lot about defence. I know that my hon. Friend the Member for Glenrothes and Mid Fife, who secured this debate, has about 350 workers in his constituency who work for Babcock and we are really pleased that the Government have committed to the 2.5% spending on defence going up to 3%. I have talked to the Minister for Defence Procurement and Industry, and of course we all think that the increase in defence spending presents an opportunity to do more here in the UK. I am working with colleagues to make sure that we get that right.

The whole point of the industrial strategy, which the Conservative party was ideologically opposed to, is to bring together the things that we do really well and ensure that all the levers of Government are tilted in the direction of turbocharging those sectors. Defence is one of those sectors, but historically defence has sort of worked to one side and everybody else has worked to another side. We are trying to bring those two together a bit, so that civil and defence can work together, learn with each other and prioritise all that activity from Government, to make sure that, as I say, we are turbocharging those eight sectors, one of which is defence.

There was a lot of talk about apprenticeships. The spokesperson for the Opposition, the hon. Member for Mid Buckinghamshire, talked about the apprenticeships that were set up under the last Government. Sadly, the apprenticeship levy does not work for a lot of people and we have shortages in professions such as welding. Indeed, welders have been on the Migration Advisory Committee list of people who we can procure from other countries because we are not training enough of our own. So, to see those welders in Methil learning their trade was a great thing. It was also great to hear the senior managers at Navantia talk to me about welding, because they actually know about shipbuilding and welding; they have real expertise. That was really encouraging.

We are reforming the apprenticeship levy, we are talking about how we can ensure that companies invest more in apprenticeships, and we are again looking at how we can tilt the whole skills regime towards the professions that we know we will need in the future. Engineers, welders and electricians are all on the list of the professions we need to boost in the future.

Members also talked about the opportunity provided by offshore wind and the green economy, as it were, more widely. As has been said already, Navantia plans to make Methil the centre of excellence for offshore wind manufacturing. There is also green shipbuilding, which is a burgeoning industry, and there is the whole infrastructure of monopiles and floating jackets—all of those possibilities—as well. I have also talked to the industry about the opportunities to lead the way in autonomous systems and robotics.

When we pull together the industrial strategy, the defence spending, our reforms to apprenticeships and our prioritisation of funding, including the Cromarty Firth example, the National Wealth Fund—with £5.3 billion for clean, green energy in five groupings, one of which is ports—and the clean industry bonus, which is another opportunity to support growth in this sector, it is clear that the Government have a plan. That has been lacking in previous years, but we are not afraid to roll up our sleeves and get things done. We are all invested in the shipbuilding industry for reasons relating to the past and, more importantly, the future.

The hon. Member for West Dorset (Edward Morello) talked about women in boatbuilding. I spend quite a lot of time with a lot of men in the industries I work with. That was a good point, well made.

My hon. Friend the Member for Glasgow East (John Grady) made a good point about the importance of spending taxpayers’ money wisely in this space and not throwing good money after bad. I have talked about that already. We need to back winners and use that money as wisely as we can.

I thank the hon. Member for Strangford (Jim Shannon) for his kind words. He made the point that shipbuilding used to employ tens of thousands of people, but now it employs hundreds to a couple of thousand. We are realistic about that. We are talking about a smaller industry because of the changing nature of how ships are built, but it is still very important.

My hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) talked about procurement, which I have touched on already—it is very important. It is nice that my hon. Friend the Member for Glasgow West (Patricia Ferguson) saw the electric ferry bought in Norway, for Norway, but that speaks to a point that we are all looking at: we want do more in the UK.

My hon. Friend the Member for Isle of Wight West said that shipbuilding is a lifeline, a kind of identity and an opportunity for economic growth. I agree with that, of course.

My hon. Friend the Member for Scarborough and Whitby (Alison Hume) mentioned Captain Cook and the Endeavour. I did not know about that, but I now do. She talked about skills and apprenticeships, which I have touched on. She is absolutely right that they are very important.

This is an incredibly important area for the Government. We have put our money where our mouth is and are ready to do what needs to be done. The industrial strategy, the apprenticeship work and the defence spending present huge opportunities for the future, and I look forward to working with everyone here to deliver them.

Oral Answers to Questions

Sarah Jones Excerpts

Thursday 13th March 2025 Commons Chamber

[Shaun Davies (Telford) (Lab)]

2. What steps he is taking to support manufacturing in the west midlands.

[The Minister for Industry (Sarah Jones)]

It was a good night for Villa fans last night, so I congratulate anyone in the west midlands who supports the club, as my husband does.

The west midlands, in many ways, leads the country on manufacturing, and it has one of the UK’s largest specialist workforces. Whether in automotive, aerospace or the rail supply chain, it is an incredibly important area. We have invested in the west midlands investment zone—Made Smarter, the High Value Manufacturing Catapult; it is all there—but we want to keep breaking down barriers to growth in the area, which is why advanced manufacturing is such a key part of the industrial strategy that we will announce soon.

[Shaun Davies]

In Telford and the wider west midlands, we have a strong and proud British manufacturing base, as the Minister has just outlined. One of the biggest challenges that I hear from businesses is the uneven playing field between us and the rest of the world on pay rates and regulation. Clearly, no one wants a race to the bottom, so will the Government back British business to ensure that we sell more, make more and do that in the west midlands and in Telford in particular?

[Sarah Jones]

My hon. Friend is absolutely right; we do not want a race to the bottom. Advanced manufacturing jobs in the west midlands are well paid for a reason: there is a very highly skilled workforce and we want to protect and grow that. He is right that there is more that we can do. Some £2 billion was set aside in the Budget for the automative sector and just shy of £1 billion for aerospace. That will help; however, we can further reduce the barriers, whether around regulation, planning or trading and export, and we are working as fast as we can to do just that.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

In Staffordshire and the west midlands, we are the only part of the country that is a net exporter of manufactured goods. The threat from Trump on tariffs could have a significant impact on manufacturers right across Staffordshire and the west midlands. What action are the Government taking to ensure that we will continue to export our world-leading products?

[Sarah Jones]

The right hon. Gentleman is right that the west midlands is a big exporter to many different countries, including the US and others. Of course, we will keep talking with the US, as the Secretary of State has been doing, and will ensure that we are standing up for British industry and doing the right thing.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

3. What steps his Department is taking to improve the regulatory environment.

--- Later in debate ---

[Steve Race (Exeter) (Lab)]

T2. The south-west has a huge number of innovative start-up and scale-up businesses, but we attract only about 3% of private equity and venture capital funding per year. What is the Department doing to ensure that foreign direct investors are aware of, and have access to, the fantastic business infrastructure opportunities that we have in Exeter and across the south-west?

[The Minister for Industry (Sarah Jones)]

I saw many incredible businesses when I went to the Exeter business park last year. When I was in Saudi Arabia in January, I was with a range of businesses that were promoting investment, including many from the south-west. There is more that we can do, but there are some brilliant people there who are doing brilliant things. I think we can go further, and I am certainly very happy to work with my hon. Friend on that.

--- Later in debate ---

[Sarah Jones]

My hon. Friend asks a very good question. I am very pleased that the Department for Transport today launched the new UK bus manufacturing expert panel. We need to support our bus manufacturing, both for the transition to net zero and for building our businesses in the UK. I am very happy to work with him on that.

North Sea Energy

Sarah Jones Excerpts

Thursday 6th March 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

With permission, I would like to make a statement about this Government�s plans to unleash the North sea�s clean energy future.

For almost half a century, the workers, businesses and communities of the North sea have powered our country and the world. We believe that they can and will continue to do so for the next half a century and beyond, which is why yesterday, we launched a consultation on the steps we are taking to seize the opportunities of the clean energy transition in the North sea. This is about working with businesses, workers and communities to strengthen north-east Scotland�s status as the energy capital of the UK, and it is about showing global leadership as we deliver a well-managed, orderly and prosperous transition.

We know that the North sea is a maturing basin. Oil and gas production has seen a natural decline of 72% between 1999 and 2023, and as a result, the industry has lost around a third of its direct workforce over the past decade. The truth is that sprinting to clean energy is the only way to deliver energy security and good, long-term jobs for the workforce and for communities. At the same time, we know that we need to listen to the science on what is required to keep global warming to 1.5�C. A science-aligned approach to future oil and gas production is the only way to deliver climate security for future generations, so we owe it to the North sea�s workers and communities�who have done so much for our country�to come up with a proper plan for the future. That is what this Government are doing.

First, we are consulting on our manifesto commitment not to issue new licences to explore new fields. While we have always been clear that oil and gas will continue to play an important role for decades to come, the reality is that new licences for oil and gas awarded in the past decade have made only a marginal difference to overall production. To continue granting them would not help our energy security, would not be compatible with our climate commitments, and would not take one penny off bills. As such, we will not award new licences, but we will continue working with the sector to manage existing fields for the entirety of their lifespan. We will also provide the long-term certainty on its fiscal landscape that the sector needs. Yesterday, the Treasury set out plans for a new regime to respond to future spikes in oil and gas prices once the energy profits levy ends in 2030.

The second part of the consultation is about harnessing the North sea�s unique strengths, including its offshore infrastructure, highly skilled engineers and deep supply chains, to make it a global clean energy powerhouse. In just eight months, we have already made significant progress. We have established Great British Energy in Aberdeen, so that it is in the perfect position to drive the roll-out of clean energy projects. We have improved the offshore wind auction, so that later this year there will for the first time be a new clean industry bonus to reward investment in good manufacturing jobs and clean supply chains. We have overseen a record-breaking renewables auction. We have kick-started the UK�s carbon capture and hydrogen industries�the energy sectors of the future�with strong, early investments. Just yesterday, we awarded more than �55 million to the port of Cromarty Firth for upgrades that will support the development of floating offshore wind, creating hundreds of jobs as we ensure Scotland and the UK remain world leaders in this next-generation technology. But that is just the start.

Our clean power action plan will drive �40 billion a year of investment to meet our goal of clean power by 2030. Research shows that jobs in offshore renewable sectors could increase by tens of thousands in that time. We will also make sure workers have the tools they need to take up these new opportunities. Already, we have worked with the Scottish Government and trade bodies to launch a skills passport, making it easier and quicker for oil and gas workers to bring their skills and experience into clean energy jobs. That idea has been stuck in the mud for years. Thankfully, we have made more progress in the past eight months than was made in the previous 14 years combined. At the same time, we are putting clean energy at the heart of our upcoming modern industrial strategy.

We are incredibly fortunate to have the North sea on our doorstep. For decades, the oil and gas buried there have fuelled development and charged our economy, but the North sea�s long-term future lies in its incredible clean energy potential. We know that its stable winds and shallow shelves make it one of the best locations in the world for offshore wind farms. We know that the UK continental shelf alone has enough capacity to store up to 78 billion tonnes of carbon, which is roughly the amount this country has produced since the industrial revolution. With our skilled offshore industry and workforce, we are perfectly placed to seize this natural advantage and get ahead in the global race for new jobs in new industries.

Instead of sticking our head in the sand and avoiding the big decisions, we have set out a plan to deliver the future that the North sea�s workers and communities deserve. It is a plan to co-ordinate the scale-up of clean energy industries, from offshore wind and hydrogen to carbon capture and storage; a plan to give the oil and gas sector the support and clarity it needs to continue operating for decades to come; a plan for energy security and sustainable economic growth; and a plan to keep working with the people who matter most�the North sea�s businesses, workers, communities and trade unions� to take advantage of the tremendous opportunities of the years ahead together. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I thank the Minister for advance sight of her statement.

Another day, another demonstration of this Government�s total ignorance of our oil and gas industry and the north-east of Scotland, their incompetence on the economy and their disregard for the hundreds of thousands of workers in our North sea, as well as their dangerous ineptitude when it comes to our energy security. No other country in the world, especially at a time of heightened global instability and volatility, would actively choose to aggressively and at pace shut down its domestic oil and gas industry, but that is exactly what this Government and in particular this Department, led by the eco-warrior in chief, are doing.

The consultation, announced yesterday, was trumpeted by Government spinners as the beginning of the end of the energy profits levy and a brave new dawn for the North sea. It is complete and utter rubbish. It is a total joke. The energy profits levy is higher now than it was before, because of the decisions of this Labour Government. The investment allowances have almost all been scrapped by this Labour Government. Crucially, the windfall tax is now in place for far longer�until 2030�because of this Labour Government. That is five years away, but the oil and gas industry does not have five years. Investment is drying up, and work is being put on pause. Companies are literally shutting up shop.

The truth is that the high-paid, good, long-term jobs that the Minister speaks of do not yet exist in renewables in the north-east of Scotland. People are leaving in their droves for other countries, such as the USA, Saudi Arabia, the UAE, Qatar and Norway, where the industry does have a future. She says we owe it to the North sea�s workers and communities to come up with a proper plan for their future, but this Government�s plan for the North sea is simply to shut it down. This Government�s plan is a betrayal of those workers. This Government�s plan will devastate the communities of the north-east of Scotland.

It is said that in every oil-producing country in the world you will find an Aberdonian. It turns out that the only country in which you will not find an Aberdonian working in oil in the near future is Scotland, driven by this mad rush to clean power 2030 and the Government�s obsession with renewables at the expense of everything and everyone else. It may be �Drill, baby, drill� in the United States, but it is �Dole, baby, dole� under Labour in the United Kingdom. The Government�s decisions will cost our economy some �12 billion in lost tax revenue to the Treasury, on top of the �12 billion in lost capital investment. This makes a complete mockery of their claim to be anything like pro-growth.

It is insanity to be doing all this to our own industry while becoming increasingly reliant on imports from abroad and causing more carbon to be released into the atmosphere: more imports of liquefied natural gas, fracked in the USA, frozen and then shipped across the Atlantic on diesel-chugging ships; or more imports from Norway, a net exporter, which is drilling from the very same sea from which we could drill ourselves. It is completely nonsensical. This Government are a complete joke, overseeing the wilful deindustrialisation of our nation. If the Minister will not take my word for it, perhaps she will take the word of the GMB leader, who said:

�In the new geopolitical reality�it�s madness. If the North Sea is being prematurely closed down and we are increasing import dependence�that�s bad for jobs, economic growth and national security.�

Or perhaps she will take the word of the general secretary of Unite, who said:

�we need to resist any calls that amount to offshoring our carbon responsibilities for the sake of virtue signalling.�

May I ask the Minister whether she has personally met any oil and gas workers since taking office, in order to understand what her Government�s policy means for them and their families, and whether the Secretary of State has done so? Will the industry receive an answer on the uncertainty surrounding the calculation of scope 3 emissions and environmental impact assessments? Given the announcement of �200 million to support the 400 workers affected by the closure of Grangemouth, how much does the Minister think the Treasury might need to find to support the 200,000 workers currently supported by the oil and gas industry? Does she agree with the Climate Change Committee that we will need oil and gas until at least 2050, and has she accounted for the higher carbon emissions associated with importing liquefied natural gas instead? Finally, let me ask whether she still sees the Department as a sponsor and a champion for the industry�because the industry certainly does not trust that to be the case.

[Sarah Jones]

The shadow Minister quoted trade union representatives, having not met them or supported them in government. That is always rich. [Interruption.] He says that he did; I stand corrected, although I suspect that he did not do it often. He quoted the general secretary of the GMB, so let me quote him back. The general secretary said:

�Tory ideology has left the UK vulnerable and exposed. Our Government stood by and exported the bulk of the jobs, closed gas storage and failed to invest in new nuclear and skills.�

I thank the shadow Minister for his questions, and I will come to them shortly, but I have to say that this is a fairly familiar story from the Conservative party: no acknowledgment of their failed record on the North sea, no acknowledgment of their having presided over the worst cost of living crisis in a generation, and no answers to the future challenges that our country faces. I remind the hon. Gentleman that it was his party that lost 70,000 North sea jobs in less than a decade. His Government were content for those workers to have to go around the world to find jobs, but this Government want to keep those talents here in the UK, which is why, unlike the last Government, we have a plan.

In my statement, I said that everyone accepts that the North sea is a declining basin. I do not know whether the shadow Minister understands the basic geology, but this is a super-mature basin, and the harder it becomes to drill for oil and gas, the less likely it is that people will be successful. Only one in 10 of the licences that have been offered and granted in recent years have ultimately led to any work.

The hon. Gentleman needs to establish what his party�s view of this agenda is. The hon. Member for West Suffolk (Nick Timothy), who is sitting next to him, had some very peculiar things to say in Westminster Hall yesterday, and it is unclear exactly what their position is. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) was a Minister for the grid who opposed grid infrastructure, he was a Minister for solar who opposed solar power, and here he is now, the Minister for Aberdeen, campaigning against jobs and investment in his own community.

We are getting on with a plan for the future. First, we will invest in clean power. It is ludicrous that at this time when our bills depend on what Putin chooses to do and we have to respond, the shadow Minister is suggesting that we should do more of that. Even if there were no climate change, even if there were no push to clean power, if we drilled as much oil and gas from the North sea as we possibly could, it would amount to less than 1% of the global market and would have no impact on bills whatsoever.

We will give immediate support to workers�we have explained how we will do that�and we will support Scotland more widely. We will support Great British Energy in Aberdeen. We will support Grangemouth with �200 million from the national wealth fund. Harland and Wolff in Arnish and Methil has been saved from closure. Yesterday, the Port of Cromarty Firth received �55 million through the floating offshore wind manufacturing investment scheme. Twenty per cent. of the contracts in allocation round 6 of the contracts for difference auction are going to Scotland. We have hydrogen investment in Cromarty and Ayrshire. We have the biggest budget for the Scottish Government that we have seen. This is a party that is committed to supporting the people of Scotland, not overseeing managed decline.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Select Committee.

[Bill Esterson (Sefton Central) (Lab)]

The Minister was right to remind us that the North sea is a mature basin, she was right to remind us that 70,000 jobs have been lost there in the last 10 years, and she was right to praise the highly skilled engineers who have made such a contribution in the North sea and to the country. She mentioned the skills passport, and said that the Government were making progress with the industry in finding alternatives in the jobs transition. The Select Committee has heard, a number of times, evidence that one of the challenges is the fact that pay in the North sea is significantly higher than pay in equivalent jobs in the renewable sector, and offshore wind in particular. What, at this stage, are the Minister�s thoughts on how we can make pay more attractive for workers moving from oil and gas into renewables?

[Sarah Jones]

I thank my hon. Friend for his work on the Select Committee, which is very important. As he knows, for a long time we have been a bit stuck in trying to set up a passport system because of the slightly different skills and qualifications in each industry and the need to bring them together. The Government became involved to try to ensure that we could bridge that gap and enable people to make the transition. Oil and gas workers are highly skilled and greatly in demand, and, as my hon. Friend says, they are paid a good wage. We need to work with the new offshore wind companies; we like to see union recognition, and we like to see good salaries for people doing those jobs as well. There will be other jobs that people can go into. The plan is to help people make the transition rather than leaving them adrift as the last Government did.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. There is always a maximum of two minutes, and you have exceeded it. Please be seated.

[Sarah Jones]

I thank the hon. Lady for her remarks. On upskilling and redeploying workers, as I said previously, we are introducing the passporting scheme and making sure that we can break down the barriers that exist in different industries, because the skills and talents of people working in oil and gas can be transferred to renewable energy. We want to make sure that we do that.

The hon. Lady talks about vulnerable residents and the cost of heating, and she is absolutely right to do so. We have all suffered from the huge cost of living crisis caused by Putin�s invasion of Ukraine. We are doing what we can, and 6 million people will now get the �150 warm homes discount this winter, which will help with their energy bills.

The hon. Lady asks about the windfall tax. The clue is in the name: it is a tax on windfall profits. While the oil and gas industry is making windfall profits, there will be a windfall tax; when it is not, there will not be. That is the way the scheme works, but her points on the need to insulate homes�we are working at pace on that�and to support vulnerable people are absolutely right. The basic principle is that we have an energy bill rise driven by fossil fuels, so we must move to home-grown power for our energy security and for long-term bill reductions.

[Several hon. Members rose�]

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

I congratulate the Minister on setting out a plan that supports jobs, skills and communities in the face of technological change�unlike the Conservative party, which abandoned wholesale our industrial base in the 1980s. Like the north-east of Scotland, the north-east of England has jobs, skills and opportunities that depend on the energy of the North sea. Kinewell Energy, in my constituency, leads in wind farm design optimisation. Can the Minister confirm that she will work with the Mayor of the North East, Kim McGuiness, to ensure that the north-east of England benefits from the jobs and opportunities of the North sea?

[Sarah Jones]

I meet industry representatives all the time, and their response to Kim McGuiness is great. She is such a force of enthusiasm, knowledge and power for her communities, and people engage with her. They like what she says about investing in the north-east, and they are responding to her. She is making a real difference in her community. We are doing all we can, through all kinds of levers that the Government can use, to make sure that the investment in clean energy supports all our communities. My hon. Friend is right to highlight the fact that we need to take advantage of the particular skills of people in the north-east.

[Madam Deputy Speaker]

I call the Father of the House.

[Sir Edward Leigh (Gainsborough) (Con)]

When I climb the hill behind my home in the Lincolnshire wolds, I can see, 20 miles away, a wonderful array of wind turbines in the North sea. We love it locally�we love it for our economy�but nothing in that precludes oil and gas exploration. If we in Lincolnshire are doing so much for green energy, why are we allowing the bread basket of England to be covered with solar farms? We have 10,000 acres of them around Gainsborough, and there is another application for 3,900 acres at North Clifton. Will the Minister and her boss please look at such mass applications in the round so that there is not overdevelopment in the break basket of England?

[Sarah Jones]

The right hon. Gentleman paints a lovely picture of walking up the hill in his constituency� I am sure we would all enjoy doing that. He makes an important point about solar. We need to make sure that we are taking people with us and doing the right things, which is what we are trying to do. We know that even if we pushed as far as we could on solar, it would still account for less than 1% of the overall land and the same proportion of our agricultural land�it is a small amount. He is right to want to make sure that his constituents have an environment that they like and enjoy. It is equally right to say that we will need infrastructure in our communities, and that people should see a benefit where we ask them to have infrastructure. There is the solar taskforce, which is looking at all these issues.

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

It is good to see the Government taking a very sensible approach in the consultation to working with our European partners on how we develop renewable energy and get energy costs down. As with so many other areas, our constituents have paid higher bills because the previous Government refused to work with our European counterparts. Can the Minister give us a bit more detail? As we look to expand our capacity to create renewable energy, she will be very aware that there is a risk of an �800 million charge because of the variation between our emissions trading schemes. Can she also tell us a bit more about what working with the North Seas Energy Co-operation might entail, and whether we might rejoin that organisation to help drive down bills further for our constituents?

[Sarah Jones]

My hon. Friend raises a number of thorny issues relating to ETS, for which I am responsible in the Department. We have been having lots of conversations about how we progress, what the EU does, what we do and what we need to do moving forward. These things are enormously complicated, because pulling a lever here will have an unintended consequence over there, so we are treading carefully, as she would expect.

On the EU partnerships and the new relationships that we have with our partners, they are incredibly important. Today the Prime Minister is with the Taoiseach in Ireland, and we are agreeing an energy partnership. We will be working together in the Celtic sea and the Irish sea to speed up progress on wind turbines by using data and our resources to look at our marine landscape and get to a point where private investors can invest quicker. These things are worth doing, and we will certainly carry on doing them.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I am in favour of net zero, and this country has achieved a great deal in working towards that, but what planet is the Minister�s Department on? Is she unaware that there is now a national security crisis that demands much higher defence expenditure? Is she aware that the costs of net zero are inflicting untold harm on our industry and have done for some years? It is now time to prioritise economic growth, to target cheap energy instead of net zero, and to generate growth and energy exports in order that we can afford the defence we need. The Department is living on another planet, and the Minister should listen to her Chancellor and her Business Secretary, who are trying to give her this advice.

[Sarah Jones]

I can reassure the hon. Gentleman that I am on planet Earth and that we are well aware of what we are doing. We look at the world around us and see the enormous hike in energy prices, which is linked to our being attached to the global market for oil and gas. The previous Government spent tens of billions of pounds of taxpayers� money in order to protect people against the price hike, and we cannot allow that to happen again. It is absolutely right that we push for cheaper renewable energy, and I remind the hon. Gentleman that I sit in two Departments: the Business Secretary is my boss, and the Energy Secretary is my boss. They both agree with this policy, as does the Chancellor, because it is the right thing to do.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Through support for jobs, support for skills, the prominence of the industrial strategy and support for a clean transition, the Minister has demonstrated what is possible when there is political will. To quote her words back to her, when will we be able to give the sector the support and clarity it needs to continue operating for some decades? The ceramics sector would love a package like this�or is the ceramics sector not sufficiently important enough?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I ask the Minister to keep her responses short.

[Sarah Jones]

Forgive me, Madam Deputy Speaker. I am over-enthusiastic and have so many things to say.

I always worry when my hon. Friends quote my words back to me. My hon. Friend and I have talked often about ceramics, and I am well aware of the issues. We had a great debate in Westminster Hall this week on the ceramics industry�s challenges with the transition and with energy prices. We are well aware of all of them, and we are working to fix them. I give as much time to ceramics as I do to any other industry, and I will continue to do so.

[Gregory Stafford (Farnham and Bordon) (Con)]

The Minister has previously said that energy security is national security. Why, then, is she cutting energy jobs in the North sea, yet imposing and buying from energy technology companies in China�at best one of our competitors, at worst our enemy�instead of investing in this country for high-paid, high-skilled jobs in the North sea?

[Sarah Jones]

I am not sure how many times I will have to go through this, but we are not cutting energy jobs. The North sea is declining because there is less and less oil and gas there. The work the previous Government did on renewable energies secured no supply chains for this country, so we were reliant on other countries, as the hon. Member points out. We are putting in place incentives for supply chains to be in this country, so that we make more. I am delivering a steel strategy to make sure that we use steel from this country for our clean energy future. These are the policies we are putting in place to make sure we have a managed transition, clean energy, lower bills and energy security.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

I thank the Minister for her statement, and for the role she played in securing a future for the Methil and Arnish yards in my constituency under the new ownership of Navantia, with new and secure jobs for the future. I am glad she is taking no lessons from the shadow Minister, given that under his Government�s watch, 70,000 jobs were lost from the North sea. What we have today is an industrial strategy that looks after jobs, secures a future for the North sea and ensures that we will be there for another two generations. Can she explain how things such as a skills passport, our investment in GB Energy and our investment in the Cromarty firth�and, I hope, in ports such as Stornoway�will ensure that future?

[Sarah Jones]

I thank my hon. Friend for his question; it has been a pleasure to work with him and to see the way he has championed his community during the conversations we have had about Navantia and Harland & Wolff. The industrial strategy is there for a reason. The previous Government were ideologically opposed to one, for reasons that nobody quite understands. We are setting up a British energy company, which the Conservatives oppose for reasons we do not quite understand. Whether it is Grangemouth, Harland & Wolff, the FLOWMIS money for the port of Cromarty firth, our auction rounds for offshore wind, or hydrogen, we are putting in place the support to make sure that we build an industry we can all be proud of.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

Energy bills are up �300 on Labour�s watch, while our industry cries out for certainty from this Labour Government, who have offered little more than confusion, hostility and prevarication. The Minister talks about clarity and certainty, but what she has given us is another consultation. However, she does not need another consultation to give us certainty on the Acorn carbon capture project at St Fergus, which is a no-brainer if she is serious about economic growth. Will the Minister confirm today that Scotland will finally receive this long overdue investment for the Acorn project in the spring statement later this month?

[Sarah Jones]

If only I was able to confirm what will be in the spring statement, but clearly I cannot do that. We are hugely supportive of the Acorn project, which is an exciting opportunity. We will be investing �21.7 billion in carbon capture, after years of failure and prevarication by the previous Government. That is obviously subject to the spending review, and I cannot give the hon. Member the answer he is after, but I think this is a really exciting opportunity for Scotland. I have met representatives of many of the businesses involved and talked to them about what the potential could be.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I welcome the statement, particularly the Minister�s commitment that oil and gas will be with us for decades to come. Was she as surprised as I was to hear the announcement from Reform UK of a renewables investment tax that would destroy jobs in the North sea and in places such as Hartlepool, which I represent, as well as expose us to Vladimir Putin, and does she suspect that that is what Reform UK actually wants?

[Sarah Jones]

My hon. Friend is completely right to expose Reform�s arguments for the nonsense they are. The CBI brought out a report a week or so ago showing that the net zero economy grew by 10%, which is much faster than the wider economy. This is delivering jobs already, as well as investment from around the world, in part because we are the second most attractive country in the world in which to invest, as PwC has told us. The reality is that we can bring down bills, secure good jobs and make ourselves more energy secure, and Reform is living in the past.

[Martin Vickers (Brigg and Immingham) (Con)]

As the Minister knows, the North sea renewables sector has been very beneficial to my Brigg and Immingham constituency, and I support proposals that will enhance and speed up the development of that sector. However, many businesses in the constituency are struggling because of energy costs, as my hon. Friends have mentioned. Can the Minister give an assurance that, particularly where energy-intensive industries are involved, the Government will bear in mind the consumer, be they business or domestic?

--- Later in debate ---

[Sarah Jones]

I thank the hon. Gentleman for his question, and indeed for the good relationship we have built up from his speaking on behalf of his constituents in relation to steel and other sectors that we have talked about. Of course, energy-intensive industries talk to us about energy prices, and we are looking to see what we can do. I held a roundtable last week with the energy-intensive industries�steel, chemicals, ceramics of course, and others�and we are looking at what we can do to make sure they can be profitable and grow.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

Conservative-led North East Lincolnshire council has embraced the green industries that are helping to reshape our identity in Great Grimsby and Cleethorpes, and it is playing a critical role in decarbonising our energy estuary. Does the Minister agree that the Opposition�s new anti-renewables position undermines the ambition of young people in my constituency, who are excited by this sector? They are keen to work with these companies, which do good, pay well, provide training and benefit the community.

[Sarah Jones]

My hon. Friend is standing up for the jobs and the young people in her community, and it is a shame that the national Conservative party Opposition do not seem clear on what their policy is. Where people can see the jobs and the benefits, councils such as her Conservative-led council support renewables, but for some reason Conservative Front Benchers do not. I do not understand that, but we will keep backing this agenda because we know it will deliver jobs.

[Harriet Cross (Gordon and Buchan) (Con)]

A really interesting line in the Minister�s statement shows, in my opinion, the Labour Government�s complete misunderstanding of the role of the North sea. She said that

�the reality is that new licences�awarded in the past decade have made only a marginal difference to overall production.�

However, that does not take into account the jobs they have supported, the tax intake that comes with them, and the skills, investment and expertise they have preserved and that will help in the transition to renewable energies. Is the Minister saying in her statement that she is actually willing to sacrifice all that to ideologically stop new licences in the North sea?

[Sarah Jones]

The previous Government oversaw a loss of 70,000 jobs that they cared not one jot about. They had no plan of support and no transition plan, and they allowed that managed decline without any commitment. This Government are doing exactly the opposite. We are supporting that transition, we are supporting those workers and we are making sure we can transition people, grow the economy and deliver energy security at the same time.

[Ms Polly Billington (East Thanet) (Lab)]

I welcome my hon. Friend�s statement, and indeed the fact that there is a plan. Although the Tories now accept that they did not have a plan, which is at least an important admission, the result of that lack of a plan is that have been left with uncertainty for both workers and consumers. In East Thanet, we need better jobs and lower bills, and surely she will agree with me that the overall security of our energy is also vital. There is one solution, which is to get off fossil fuels and shift to renewable energy as soon as possible.

--- Later in debate ---

[Sarah Jones]

My hon. Friend is absolutely right. She was of course referring to the shadow Minister, the hon. Member for West Suffolk (Nick Timothy), who said yesterday that

�one of the things our party did not get right in government was setting ambitious goals on�energy policy without having a clear�plan to deliver them.��[Official Report, 5 March 2025; Vol. 763, c. 171WH.]

I entirely agree with him.

[Ellie Chowns (North Herefordshire) (Green)]

I welcome the Government�s commitment to no new oil and gas licences, and to putting workers and communities at the heart of the transition to a climate-safe economy. It is a bit disappointing to hear that so many Conservative Members still live on planet flat earth, with an ostrich approach to our energy future when what we need is a phoenix approach. I would like to ask the Minister a specific question. Can she confirm that the 4 billion barrels of oil equivalent currently in the North sea will not be pumped? If it is, it would be the equivalent of running 15 coal-fired power stations from now until 2050. She will know the climate implications. Will she confirm that the Government will stop consent for new production?

[Sarah Jones]

Our manifesto was clear that we would not issue new licences, we would not revoke existing licences, we would manage existing fields for the entirety of their lifespan, and we would ban fracking. The consultation is about the detail behind that. There are some complicated issues that we need to unpick, which is why we are having the consultation, why we welcome everybody�s views, and why I hope the hon. Lady will add her voice to it.

[Leigh Ingham (Stafford) (Lab)]

We are in the midst of yet another fossil fuel price spike, caused by our overreliance on international gas markets. Despite my constituency of Stafford, Eccleshall and the villages being landlocked and quite far from the North sea, I am very proud to have GE Vernova�s largest UK base there, supporting over 1,700 jobs and providing some of the technology for over 30% of UK electricity. Does the Minister agree that there is only one solution to the price spike: to get off fossil fuels and move on to clean home-grown power here in the UK?

[Sarah Jones]

I welcome my hon. Friend�s question. What GE Vernova is doing and the jobs it is providing are incredibly important for her community. We will continue to encourage growth in that sector and beyond through our industrial strategy with its eight sector plans, one of which is clean energy. These things are all connected. We can grow the economy and deliver clean energy, and we can do it together.

[Lincoln Jopp (Spelthorne) (Con)]

BP�s global headquarters are in my constituency. As the Minister meets industry �all the time�, to use her words, she will be fully aware that it announced a major reset last month, whereby it is increasing its investment in upstream oil and gas to the tune of $10 billion a year from next year. That is investors� money, not taxpayers� money. Is the Minister not concerned that by making Britain a hostile environment for oil and gas extraction, we are simply kissing away that investment to overseas?

--- Later in debate ---

[Sarah Jones]

I met BP yesterday to talk about that. If we look at somewhere like the US, there are massive supplies of oil and gas. BP has made its decision. We are working with it very closely on carbon capture and hydrogen in particular. If we drilled as much as we possibly could in the North sea, we would only find less than 1% of the global market. This is a declining basin �that is a fact. It has declined significantly over the past decade and it will continue to do so. We need to manage that process and support people. BP is working very closely with the Government on our renewables agenda, and on carbon capture and hydrogen.

[Perran Moon (Camborne and Redruth) (Lab)]

The usual luddite tendencies are on display on the Opposition Benches after 14 years of abject failure. This Government are embracing the golden triangle: energy security to reduce bills, transitioning to net zero, and hundreds of thousands of secure British jobs in Scotland and across the UK. Does the Minister agree that if the shadow Minister, who has a great track record of losing jobs, does not want jobs in Scotland, we will have them in Cornwall?

[Sarah Jones]

My hon. Friend is right to point to the golden triangle of energy security, jobs and climate, and how we can bring them together. I am working hard�not as hard as him; he is working incredibly hard�on bringing as many jobs as possible to his constituency. I look forward to continuing to do that.

[Several hon. Members rose�]

[Christine Jardine (Edinburgh West) (LD)]

As someone with two generations of their family who have depended on the North sea oil and gas industry, I know that we have to move away from fossil fuels and that we have to drive forward to the just transition, but we must also recognise that we are not there yet and that this is not the moment to push the industry off a cliff. It is declining naturally. We are leaving ourselves in a position where we will still need oil, so will we import it? We will need gas for hydrogen production, plastics, chemicals and pharmaceuticals. All of that is necessary. We also face a threat from the Chinese trying to infiltrate our renewables, so what are the Government going to do about that?

[Sarah Jones]

As I hope I made clear, we are not revoking existing licences and we will manage the existing fields for the entirety of their lifespan. As I also made clear, this is a declining basin and we need to manage the transition. The hon. Lady is absolutely right to point to the challenges, and I have great respect for her family history and for all those who work in oil and gas. She is right that we will need oil and gas for decades to come. We are trying to have a sensible plan to manage that process and I hope she will take part in the consultation, too.

[Steve Yemm (Mansfield) (Lab)]

The Minister has already alluded to last week�s CBI report, which set out some of the huge opportunities that net zero offers for job creation, investment and growth. Will she outline to the House what steps her Department is taking to ensure we benefit from all that opportunity through Great British Energy and the National Wealth Fund?

--- Later in debate ---

[Sarah Jones]

The National Wealth Fund and Great British Energy will be incredibly important in this space. Most countries have a sovereign wealth fund like the National Wealth Fund. We have set that up. Most countries have their state energy companies. We have loads of state energy companies�just other countries�. It is absolutely right that we set up our own. We also have the clean energy bonus, which will mean that we are encouraging supply chains and jobs here in the UK, so we can move away from reliance on other countries.

[John Cooper (Dumfries and Galloway) (Con)]

With due deference to the newly appointed Minister for Aberdeen on the Conservative Benches, the question of these jobs is not a matter purely for the north-east or purely for Scotland. Those 200,000 jobs are spread across every constituency in this country and they are all at risk. As we heard from the hon. Member for Edinburgh West (Christine Jardine), they are being pushed off a cliff edge. The Minister talked about our energy bills being in the hands of Vladimir Putin. Does she not agree with me that we are stuck between a rock and a hard place? We have Vladimir Putin on one side driving up energy bills and her dogmatic Secretary of State for Energy Security and Net Zero on the other.

[Sarah Jones]

I do not agree with that framing whatsoever. We have Putin who invaded Ukraine, leading to the massive global shock for energy prices, and we have a Secretary of State who is very pragmatically taking forward plans to, as the triangle tells us, protect and grow jobs, and give us energy security. I think most people in the country understand that. They get that we need energy security and to tackle the climate at the same time.

[Brian Leishman (Alloa and Grangemouth) (Lab)]

Scandalously, the workers of the Grangemouth refinery are to be the victims of a very unjust transition. The folly of a foreign state and private capital being in charge of such a key vital piece of energy infrastructure is laid bare, especially with no UK Government involvement. I am curious as to what ownership role the UK Government will take in the new energy industries that will be at Grangemouth.

[Sarah Jones]

My hon. Friend will know about the announcements that were made recently about support for Grangemouth. In the last couple of weeks, I met INEOS to talk about its chemical factory and the huge contribution it brings in terms of jobs and the provision of chemicals. The �200 million investment from the National Wealth Fund is really important in this space. The work that the Government have done to look at possible businesses and industries for Grangemouth in the future is really important and I am very happy to have a conversation with him.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Final question.

[Jim Shannon (Strangford) (DUP)]

While I very much welcome the move towards clean energy, my concern is that we cannot allow energy prices to rise any further, especially when we take into account the loss of the winter fuel payment for many pensioners on the poverty line. How will the Minister ensure that clean energy and heat will not be out of reach for those who are already struggling: the elderly, the vulnerable, those in poor health and those in poverty?

[Sarah Jones]

The hon. Gentleman raises a really important point. We know that energy bills have been rising because of the oil and gas we rely on and the impact of the war in Ukraine. We have massively increased the warm home discount so that 6 million households will get �150 to help towards their energy bills, but he is right to champion people who are going through a cost of living crisis. We will do what we can to support them.

[Madam Deputy Speaker]

That marks the end of the statement. I could not get all colleagues in because questions were so long, and answers were occasionally just as lengthy.

North Staffordshire Ceramics Industry: Energy Costs

Sarah Jones Excerpts

Tuesday 4th March 2025 Westminster Hall

[The Minister for Industry (Sarah Jones)]

It is a pleasure to serve under your chairmanship, Sir John. I am grateful to my hon. Friend the Member for Stoke-on-Trent North (David Williams) for securing this important debate. I begin by echoing his thanks to the trade unions, the industry and Ceramics UK for all they do. I have engaged with Ceramics UK quite a bit since taking up this role, and previously in opposition, and I work closely with the unions and the industry.

My hon. Friend clearly laid out the challenges we face, as well as the challenges facing his community’s disposable household incomes, and the importance of getting this right. He is right to look to the future of ceramics, not to the past. There are several industries that we want to grow in the UK, but we have historically focused on the past—steel is a case in point—not the future.

My hon. Friend talks about new advanced technologies, and the important uses of ceramics in our mobile phones, our aircraft, our defence and our medical equipment are clear to see, though little understood by those outside this sector. We can all do more to make sure people understand the ceramics industry and what it is for. The industrial strategy is one way to do that.

As my hon. Friend knows, the industrial strategy is coming out in the spring. We promised it for years in opposition, and the previous Government but one tried, but they did not persevere. We have identified eight growth sectors within the strategy—advanced manufacturing is one of them—but foundational industries have to power those growth sectors, which is where ceramics is important.

I nod to my hon. Friend’s well-made point about defence, which is one of the growth sectors in the industrial strategy. Over the last few days, we have seen this Government’s commitment to increasing our defence spending. The Chancellor spoke at the Make UK conference today about how we can change defence procurement to include more of this country’s SMEs. We have also been creative in using UK Export Finance to create jobs with Thales in Belfast. There is more we can do, and I will take away my hon. Friend’s point about advanced ceramic carbon filters. I suspect there are other potential applications in this space.

I acknowledge and appreciate the very real challenges that my hon. Friend raises. The cost of energy bills is very difficult for the ceramics industry and other energy-intensive industries. Every one of us has suffered from the huge price hike after Russia invaded Ukraine, although our energy costs are not comparable with those of our neighbours.

My hon. Friend also highlighted how electricity costs so much more than gas and the challenges that will bring as we decarbonise. He mentioned the emissions trading scheme and the ongoing consultation on free allowances. I also heard his well-made points about the low carbon transition and the challenges for sectors such as ceramics, where its up-front cost is potentially prohibitive.

[Gareth Snell]

The Minister probably knows as much about ceramics as those of us from Stoke-on-Trent, as she is constantly on her brief.

On the transition, one of the challenges facing ceramics companies in Stoke-on-Trent and around the country is that the margins on their products are not sufficient to allow big up-front capital investments, which means that going from a gas kiln to an electric kiln is often beyond their reach as they simply do not have the cash flow.

One solution that the Minister could potentially take back to the Department is some sort of VAT exemption for energy-intensive industries and companies that are looking to move towards more low-energy, low-carbon equipment. Perhaps the public sector decarbonisation scheme, which is currently undersubscribed, could be used in some way to help energy-intensive private companies to access new technology that would reduce not only their carbon output but their long-term energy costs through efficiencies.

[Sarah Jones]

I thank my hon. Friend for those points, which he has previously raised with me. I can certainly take away the point about the public sector decarbonisation scheme. Bizarrely, as he knows, it is not part of my brief, but that does not matter. This Government work across Departments and across barriers, and I will endeavour to look into it. The point is well made that it can be challenging when a company has small margins and big up-front costs, especially in these industries where there has not been infrastructure investment for a long time. A lot of places need general infrastructure investment, and we are looking actively at this issue through the spending review process.

Happily, I can say that we are looking to answer all the questions asked by my hon. Friend the Member for Stoke-on-Trent North. I cannot promise what the answers will be at this point, and I cannot promise that we will do everything we seek to do, but we are well aware of all his points and are looking at them in depth.

We are looking at subsidies on energy costs. My hon. Friend said that the Department for Business and Trade and the Department for Energy Security and Net Zero should work together. I sit in both Departments, so I have conversations with myself about these issues. There are competing vantage points that we need to grapple with, but the advantage of my sitting in both Departments is that officials from the two Departments meet to find solutions before speaking to me, which is helpful. They are working well together.

We are also looking at the energy-intensive industries exemption scheme. As my hon. Friend knows, grid connections are an issue across the board. We are working on how to remove undeveloped, speculative programmes from the grid connection queue and prioritise others. One of my roles as the Minister for Industry is to point to the need not to forget our existing industrial base and the need for it to connect to the grid, as well as the need for the important data centres, artificial intelligence and new technologies and new investment that we want to come to the UK. If we cannot get our own industry connected in the way we want, we are getting something wrong, so my hon. Friend is right to make that point.

I met representatives of the energy-intensive industries last week, including Rob from Ceramics UK, and I am following up on all these things with the Treasury and with officials. We agreed on a couple of things at that meeting, and one is to have a session with the industrial strategy team and the energy-intensive industries to make sure we are all working towards the same outcome. Another is to talk to the Treasury about the challenge we face in how the ETS and the CBAM align and fit together, or not, depending on policy. These things are enormously complicated, as my hon. Friend knows, and CBAM is a Treasury lead. However, I am very aware of the need to get that relationship right; otherwise, the system does not work at all.

My hon. Friend talked about hydrogen, which is very important and is part of my brief in the Department for Energy Security and Net Zero. We are developing a kind of hydrogen network. We have had what we call HAR1, or hydrogen allocation round 1, which was the initial agreement to fund 11 hydrogen projects—electrolyser projects—around the country. There is hydrogen in the carbon capture and storage clusters that we are developing, and we are currently looking at what the next phase of the hydrogen roll-out will be.

My hon. Friend knows that hydrogen is currently very expensive. We need to work out a path to reduce costs, which is what we are grappling with at the moment, in a climate where it is difficult to bid for money in the spending review. How can we unleash the hydrogen industry and give certainty to businesses that want to invest but need the right signals? How can we do that and use money wisely? And who pays for it? People are very interested in hydrogen, whether in steel, in transport or in the green energy space—it has a lot of uses. We need to make sure we are making the right decisions. I will speak to the hydrogen team about ceramics, and I will ask what we are looking at in that space.

[Gareth Snell]

Again, I am grateful to the Minister for her generosity in giving way. My hon. Friend the Member for Stoke-on-Trent North (David Williams) is right that hydrogen could be the thing that helps our industry, but electrolysis requires electricity. Electricity generation is capped to the gas price, and therefore the gas price drives the hydrogen price. Unless there is a way of decoupling that rather difficult circuit, we will find ourselves replenishing fuel without a particular discount.

Our other unique challenge, as my hon. Friend expertly laid out, is that these factories are in communities, because that is how ceramics worked—a potbank was built and then houses were built around it. Connecting to hydrogen would not be suitable if the hydrogen has to be contained in large towers, which are better suited to large out-of- town factories.

Although I welcome the Minister’s commitment to hydrogen, I hope she can bear those two points in mind, because ceramics are a unique challenge. However, we are willing to work with her to find a solution.

[Sarah Jones]

My hon. Friend articulates his concerns very well. Connecting the gas sounds like a song: “The hip bone’s connected to the thigh bone.” It is very challenging, and he is right to say so. The challenge with hydrogen is getting it to a point where we can deliver it at the scale we want. Or will it always be used in certain areas for certain things, as we will never get the cost down? That is what we are grappling with. On the potential jobs, potential growth and potential exports, these are huge opportunities for the UK, but we need to work out how we take it forward.

Finally, my hon. Friend the Member for Stoke-on-Trent North mentioned the huge challenge of counterfeiting. He nodded to the actions taken by the Trade Remedies Authority. I know that Ceramics UK and ceramics manufacturers have responded to that review and a final recommendation is due in July. Of course, I will make representations where needed. I recognise the challenge that my hon. Friend highlights.

Trade officials regularly meet representatives of Ceramics UK. I do not wish to add to the burden of my colleagues, but it might also be good for my hon. Friend to speak to the Minister for Trade Policy and Economic Security, my right hon. Friend the Member for Lothian East (Mr Alexander), if he has not already done so, about some of the challenges we face.

Hopefully, I have answered my hon. Friend’s questions. I congratulate him again on securing a debate on such an important issue, on behalf of his constituents who work in such a fantastic industry for our country, and hopefully we can work together to fix some of these challenges.

Question put and agreed to.

Business and Trade

Sarah Jones Excerpts

Monday 3rd March 2025 Written Corrections

[Clive Jones (Wokingham) (LD)]

This is yet another failure in the Government’s main aim of getting Britain growing again. Zero-emission vehicles are too expensive and, it appears, too hard to manufacture in the UK. That forces us into an unfortunate reality in which we are reliant on Elon Musk for our supply of EVs, and are funnelling money into his already very deep pockets, rather than promoting a productive domestic market with good jobs. We need to show ambition and make it easier for ordinary families to buy EVs. What measures will the Government take to support and encourage consumer demand for electric vehicles?

[Sarah Jones]

The hon. Gentleman talks about the Government’s policies for growing the economy. A few months ago, we held an international investment summit, at which £63 billion of investment was announced. As I have mentioned, there was £2 billion announced in the Budget for the automotive industry. Interest rates have been cut three times, wages are up, and more than 70,000 jobs have been secured in the UK since the Government came to power. The International Monetary Fund and the OECD predict that the UK will be Europe’s fastest-growing economy over the next few years. The industrial strategy was scrapped under the last Government; our industrial strategy will be the backbone of ensuring that we deliver growth…

[Official Report, 24 February 2025; Vol. 762, c. 509.]

Written correction submitted by the Minister for Industry, the hon. Member for Croydon West (Sarah Jones):

[Sarah Jones]

The hon. Gentleman talks about the Government’s policies for growing the economy. A few months ago, we held an international investment summit, at which £63 billion of investment was announced. As I have mentioned, there was £2 billion announced in the Budget for the automotive industry. Interest rates have been cut three times, wages are up, and more than 70,000 jobs have been secured in the UK since the Government came to power. The International Monetary Fund and the OECD predict that the UK will be Europe’s fastest-growing major G7 economy in the coming years. The industrial strategy was scrapped under the last Government; our industrial strategy will be the backbone of ensuring that we deliver growth…

[Jim Shannon (Strangford) (DUP)]

The Minister has a real interest in the matters for which she has ministerial responsibility; I want to put on the record my thanks to her. When we have had meetings on other issues relating to Northern Ireland, she has been anxious to help and support me, and I appreciate that.

The decision not to go ahead with the EV production is disappointing to say the least, but it perhaps indicates a wider issue that we face in the manufacturing industry due to rising costs. What can the Minister do to help companies attract more investment through lower energy costs, and what can the Government do to ensure that British jobs are not sent to China, and to ensure that firms that choose to relocate jobs understand that no future help will be forthcoming?

[Sarah Jones]

I thank the hon. Gentleman for his kind words. I should be clear for the House that the decision has not been made to not go ahead; this is a delay and a change in timing. BMW is committed to going ahead with the investment. At the moment, its e-Mini is being produced in China. This investment will bring it here to the UK.

[Official Report, 24 February 2025; Vol. 762, c. 512.]

Written correction submitted by the Minister for Industry:

[Sarah Jones]

I thank the hon. Gentleman for his kind words. I should be clear for the House that the decision has not been made to not go ahead; this is a delay and a change in timing. BMW is committed to going ahead with the investment. At the moment, its e-Mini is being produced in China. This investment will bring EV production to the UK, in addition to China.

Plant Oxford Site

Sarah Jones Excerpts

Monday 24th February 2025 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade if we will make a statement on the Plant Oxford site.

[The Minister for Industry (Sarah Jones)]

This Government are determined to see a strong, thriving UK automotive industry. We recognise the vital role that the British motor industry plays within our manufacturing landscape, employing more than 150,000 people, with tens of thousands more working in the wider supply chain. That is why we are ploughing £2 billion into the sector’s green transition and £300 million to encourage the uptake of new, clean, green electric vehicles—a big incentive for the global automotive sector to invest in the UK. Building on this momentum, our modern industrial strategy will back automotive companies that want to invest in Britain and drive long-term sustainable UK growth.

BMW has taken a commercial decision to delay the production of two new electric Mini models at its Oxford plant. Undoubtedly, that news will be unsettling for the company’s many hard-working employees, not least those working directly on the production line, but I must stress that BMW remains committed to its investment in the UK. It is by no means unusual for a manufacturer to adjust its product line-up or production start dates for commercial reasons.

We are proud that BMW considers Oxford to be at the heart of Mini production. As a Government, we are throwing our weight behind its investment. We want big automotive brands from Britain and around the world to lie at the heart of our growth mission and plan for change, creating well-paid jobs and putting more money into people’s pockets. As part of that effort, this Government are working closely with BMW as it reviews its investment timelines, ensuring that more cars are built right here in the United Kingdom.

[Greg Smith]

I draw attention to my entry in the register of interests. I expected the Secretary of State to hide from talk of CVs, but it seems that also applies to EVs. This weekend we saw the disastrous consequences of Labour’s rigid approach to net zero: BMW hitting the brakes on a £600 million investment in Plant Oxford. That deal, from 2023, would have secured 4,000 high-quality jobs and was a strong vote of confidence in the UK. Like other deals, it was possible only because the previous Government were willing to be pragmatic. The Conservatives made the sensible decision to delay the ban on internal combustion engine cars, bringing the UK into line with major global economies such as France, Germany, Sweden and Canada, but Labour said it knew better, restoring the 2030 phase-out date in its manifesto.

When the negative impacts of that approach became clear, the Government launched a fast-track consultation on the zero emission vehicle mandate, pitifully attempting to buy themselves time. Surely, no consultation is necessary. The effects of their puritanical ZEV obsession is already clear: Jaguar Land Rover says that the ZEV mandate is causing disruption to the market; Vauxhall has confirmed that it will shut down its Luton factory, citing the ZEV mandate as making the plant less economically viable; and now the future of Plant Oxford—the home of the Mini since 1959—is uncertain.

Labour’s reckless policies have shattered industry confidence, with consumer demand for EVs dropping off a cliff and numbers only just about sustained by subsidised fleet sales. Will the Minister do the right thing: stop hiding behind consultations and acknowledge that the Government’s ideological approach to net zero will lead only to economic disaster for our automotive sector and consumers alike?

[Sarah Jones]

It is hard to know where to start. The “puritanical ZEV obsession” was, as the hon. Gentleman knows, a Conservative policy from the last Government. The only changes made to that policy under the last Prime Minister dampened demand by changing the deadline, and hampered manufacturers by not ensuring flexibility or pragmatism in how the policy operated—it was the worst of both worlds.

By contrast, Labour and the Government are acting with pragmatism. We are listening to industry and working at pace to get this right. We are also creating the conditions in which the automotive industry can thrive. That means delivering not just the economic and political stability so lacking under the previous Government, but an industrial strategy that will deliver growth, including in the automotive industry; investing £2 billion in automotive transition through the Budget; investing in research and development; supporting and talking to our industries; and understanding the global climate.

It was really clear in BMW’s statement that there were macroeconomic global and commercial reasons why the decision to delay was made, but BMW is clear that it is still committed to this investment in the UK. I have talked to my right hon. Friend the Member for Oxford East (Anneliese Dodds), who is liaising closely with workers and unions, as would be expected. We will continue to work to ensure the right economic and political climate, so that these industries can grow.

[Sonia Kumar (Dudley) (Lab)]

Will the Minister update the House on progress on the industrial strategy for the automotive industry? How will that support supply chains in places like Dudley and across the west midlands?

[Sarah Jones]

We are working at pace on delivering the industrial strategy in the spring. There are 150,000 good jobs in the automotive industry, and we want to see those jobs grow. We have identified eight growth sectors that the industrial strategy will turbocharge. Advanced manufacturing is one of them, and that of course includes the auto industry. We have £2 billion of investment, committed at the Budget, to underpin that. We are also working in the industrial strategy on identifying any barriers to growth, so that we can ensure that the sector grows in the years to come.

The industrial strategy will give the stability that we need over the long term—over five and 10 years. It will look at the policy levers that we can control to ensure that businesses continue to want to invest in the UK. PwC has just ranked the UK the second-best place in the world to invest, so I think the future is positive.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Clive Jones (Wokingham) (LD)]

This is yet another failure in the Government’s main aim of getting Britain growing again. Zero-emission vehicles are too expensive and, it appears, too hard to manufacture in the UK. That forces us into an unfortunate reality in which we are reliant on Elon Musk for our supply of EVs, and are funnelling money into his already very deep pockets, rather than promoting a productive domestic market with good jobs. We need to show ambition and make it easier for ordinary families to buy EVs. What measures will the Government take to support and encourage consumer demand for electric vehicles?

[Sarah Jones]

The hon. Gentleman talks about the Government’s policies for growing the economy. A few months ago, we held an international investment summit, at which £63 billion of investment was announced. As I have mentioned, there was £2 billion announced in the Budget for the automotive industry. Interest rates have been cut three times, wages are up, and more than 70,000 jobs have been secured in the UK since the Government came to power. The International Monetary Fund and the OECD predict that the UK will be Europe’s fastest-growing economy over the next few years. The industrial strategy was scrapped under the last Government; our industrial strategy will be the backbone of ensuring that we deliver growth.

The hon. Gentleman asked what we were doing. I have already set out the stability, investment and reform that we are bringing to the sector to make sure that it can thrive. Hundreds of thousands of people rely on the automotive industry through their work in it, or in its supply chains. Those are good, well-paid jobs, and we are absolutely determined to ensure that the sector grows.

[Antonia Bance (Tipton and Wednesbury) (Lab)]

The Minister has set out how we delivered £2 billion-worth of support for the automotive sector in the Budget. That support is both for manufacturing and for the crucial supply chains in places such as my Black Country constituency and Oxford. Is she able to set out any further details about how that money will be used to support our brilliant manufacturing?

[Sarah Jones]

I thank my hon. Friend for her question, and for her support for the industry, which is so important. Through the £2 billion funding, the automotive transformation fund, the exceptional regional growth fund and the advanced propulsion centre research and development fund, we have found innovative ways of supporting the industry. In January, I was pleased to hear Jatco, a company that makes transmissions for Nissan, announce that it would put its first manufacturing plant in Europe here in the UK; it is converting an old hospital building with a £50 million investment. That plant will be at the international advanced manufacturing park in Sunderland. That is the kind of opportunity that we want to create and deliver.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Jaguar Land Rover, which has its engine manufacturing centre based in Staffordshire, is a vital employer for people not just in Staffordshire, but right across the west midlands. That plant is pioneering the development of electric vehicles for JLR. What additional support and flexibility will there be from the Government to ensure that Great British brands continue to prosper in the west midlands?

--- Later in debate ---

[Sarah Jones]

The right hon. Gentleman is right to talk about Great British brands. We have some incredible small car manufacturers, as well as larger ones, in the UK, and there is great diversity of provision. We are supporting the development of gigafactories in the UK, so that we can make the batteries that we need. We are helping with R&D and innovation to make our cars more sophisticated and efficient, and supporting the large manufacturers to ensure that the conditions are right for them to develop in the UK. We are doing all those things through our industrial strategy and our automotive strategy. I work with the Automotive Council; we met just a couple of weeks ago to talk about the vibrant future that we see for automotives in the UK. I am always happy to talk to JLR about its plans, and have done so several times.

[Perran Moon (Camborne and Redruth) (Lab)]

I know that the shadow Minister struggles with the dynamics of the automotive industry, but for the last 20 years, 50% of new vehicle sales have been fleet and business sales. Does the Minister agree that the decision taken today is a commercial decision, based around the structure of BMW’s dealer network, as opposed to an obsession with petrol and diesel vehicles?

[Sarah Jones]

My hon. Friend as absolutely right to say that this is a commercial decision. As he would expect, we are talking to representatives of BMW; my officials were with them in Munich a couple of weeks ago, and I have met the UK managing director several times. We are talking to them to support the commercial decisions that they need to make. They have made it clear that there were macroeconomic, global and commercial reasons for the delay that has been announced; such delays are not uncommon. I know that BMW remains committed to this investment in the UK.

[Calum Miller (Bicester and Woodstock) (LD)]

More than 300 employees at the BMW plant in Oxford live in my constituency, and this morning I met plant convenors from the Unite union to discuss the impact that the uncertainty at the plant is having on those workers and their families. Can the Minister outline exactly how the new industrial strategy will help the plant to become more competitive, in the face of severe competition from other BMW plants in the EU, the US and China?

[Sarah Jones]

The hon. Gentleman is right to highlight the concern that I suspect those employees feel. They have known about this change since last year. There are 3,500 people who work in the Oxford plant and many more who work at Rolls-Royce, which is owned by BMW, and in other parts of the UK. Through the industrial strategy, we are looking at a number of issues that we will use the £2 billion for, and we will use the powers that we have. Skills, energy costs and access to finance are all issues that we are having lots of conversations about, as well as the transition to electric vehicles. We are making sure that the flight path for investment in the UK is as good as possible, and that those who are already investing in the UK continue to do so. BMW has announced a £300 million investment in Rolls-Royce, which it owns. It remains committed to this investment in the UK, but I appreciate that there will be concerns among the workers to whom the hon. Gentleman has been talking, and I am always happy to meet people to discuss these matters in more detail.

[Jessica Morden (Newport East) (Lab)]

Tata’s Llanwern steelworks in my constituency produces world-class automotive steel. The Minister has acknowledged the importance of the automotive sector. Will she also acknowledge the importance of having a strong steel industry, and of plants like Llanwern making steel for EVs, and put that at the heart of the forthcoming industrial strategy—a strategy that the Conservatives never had?

[Sarah Jones]

I am glad that my hon. Friend has managed, as ever, to bring steel into the debate. It is incredibly important, and that is why we will have a separate steel strategy, on top of the work that we are doing in the industrial strategy to ensure a thriving sector in the future. That will look at all the issues that we are grappling with and that she knows about, including the transition, energy prices, access to finance, access to grid connections and scrap. We will continue to ensure that the UK’s six steel producers can thrive and bring in new business.

[Sammy Wilson (East Antrim) (DUP)]

In answer to the shadow Secretary of State, the hon. Member for Mid Buckinghamshire (Greg Smith), the Minister stated that the strategy is resulting in people wanting to invest in the United Kingdom. The sad fact is that as a result of the mad net zero policies that this Government are following, we are losing investment every week; this is yet another example. Does the Minister not follow the logic? If we punish people for not wanting the cars that we produce, the companies will cut back production and jobs, consumers will not get what they want, and economic growth will be affected. When will this Government come to the conclusion that this policy of net zero and punishing people is wrong?

[Sarah Jones]

I do not know if the right hon. Gentleman saw that the CBI brought out figures over the weekend showing that the net zero economy grew by 10% last year, which is significantly more than the economy as a whole. We are absolutely right to transition to electric vehicles, so that we can stick to our commitments on climate change. We are being pragmatic in how we do that. We are not following the same policy as the previous Government, because we are talking to industry and consulting. We will publish the results of the consultation on how the flexibilities within the transition are working, and whether we need to change them in any way.

[Richard Tice (Boston and Skegness) (Reform)]

The British car industry was thriving until the Conservative party introduced net stupid zero, and now we have another car plant at risk; another business struggling and losing hundreds of millions of pounds; and hundreds more British jobs at risk. Does the Minister agree that the automotive industry in the UK will continue to decline until we scrap net zero?

[Sarah Jones]

Here we go with the same old lines. The hon. Gentleman tells us that net zero is a massive con, yet he owns a company that is investing in electric car charging ports. I rest my case.

[Mr Speaker]

On that well-known BMW plant in Strangford, I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

The Minister has a real interest in the matters for which she has ministerial responsibility; I want to put on the record my thanks to her. When we have had meetings on other issues relating to Northern Ireland, she has been anxious to help and support me, and I appreciate that.

The decision not to go ahead with the EV production is disappointing to say the least, but it perhaps indicates a wider issue that we face in the manufacturing industry due to rising costs. What can the Minister do to help companies attract more investment through lower energy costs, and what can the Government do to ensure that British jobs are not sent to China, and to ensure that firms that choose to relocate jobs understand that no future help will be forthcoming?

[Sarah Jones]

I thank the hon. Gentleman for his kind words. I should be clear for the House that the decision has not been made to not go ahead; this is a delay and a change in timing. BMW is committed to going ahead with the investment. At the moment, its e-Mini is being produced in China. This investment will bring it here to the UK. Lots must be done in terms of energy prices, as he says. Building a gigafactory means significant reductions in energy prices, but the wider manufacturing sector is talking to us virtually every day about these kinds of issues. Through the industrial strategy and the reforms that we want to bring in, and by spending the £2 billion that we were allocated in the Budget, we hope to deliver a thriving automotive industry well into the future.