Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment he has made of prospects for a sector deal for the steel industry.

The Government remains open to discussing a Sector Deal with the steel industry, and has been meeting regularly with companies in this sector to continue this conversation. To support the sector develop a long-term strategy, BEIS commissioned independent research which identified future domestic market opportunities for the UK steel sector worth an additional £3.8 billion per year. We are actively encouraging this sector to come forward with plans to exploit these opportunities, and remain committed to work with the sector, trade unions, and devolved administrations to help deliver these plans.

The Government is committed to minimising energy costs for businesses – including the steel industry – to ensure that the UK economy remains strong and competitive. We recognise that the UK’s industrial electricity costs are currently higher than those of our competitors, and so we have taken steps to reduce the cumulative impact of energy and climate change policies on the price of industrial electricity for key industries, such as steel. This includes providing the steel sector with over £285m of compensation since 2013 for the indirect costs due to the EU Emission Trading System, carbon price support mechanism, Renewable Obligation, and small-scale Feed-in Tariff.

The Government has also announced an Industrial Energy Transformation Fund – on which we are currently consulting – backed by up to £315m of investment, to help businesses with high energy use cut their bills through increased energy efficiency, and transition UK industry to a low carbon future.

The steel sector is actively engaged with UK Research and Innovation in shaping the Industrial Strategy Challenge Fund: we are providing up to £66m for the ‘Transforming Foundation Industries Challenge’, subject to industry co-funding. In addition, up to a further £170 million has been provided to develop a ‘net-zero carbon’ industrial cluster, that will help heavy industries – including steel – to share expertise, and innovate low-carbon solutions as we move to a greener, cleaner economy.