Steel Safeguards

– in the House of Commons at 12:36 pm on 29th June 2022.

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Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade 12:36 pm, 29th June 2022

With permission, Mr Speaker, I will make a statement on the Government’s final decision regarding the UK’s steel safeguards.

A strategic steel industry is of the utmost importance to the UK, especially given the uncertain geopolitical and economic waters that we are all charting. Trade remedies are one of the ways that Government can protect their businesses. Trade remedies tackle issues of dumping, unfair Government subsidies or, as in the case of safeguards, give businesses time to adjust to unforeseen increases in imports.

When we left the EU, the UK rolled over the relevant trade remedies that were already in place. That included safeguards on 19 different categories of steel imported into the UK from the rest of the world. Last year, the Trade Remedies Authority reviewed those measures and recommended keeping the safeguard on 10 categories of steel and removing it on nine. On 30 June 2021, the Government announced that they would extend the safeguard, as recommended by the TRA, on 10 product categories of steel for three years and remove it on four of the remaining nine, but that they would extend the safeguard for one year on five categories of steel to allow further time to review them.

In March this year, we passed legislation to allow the Government to take responsibility for the conduct of transitional reviews and reconsiderations of any transitional review. In March, I called in the reconsideration of the steel safeguards with the new authority. The TRA has since completed additional analysis for my consideration. I have considered its report and findings and have concluded that there would be serious injury, or the threat of serious injury, to UK steel producers if the safeguards on the five additional categories of steel were to be removed at this time.

Given the broader national interest and significance of this strategic UK industry and the global disruptions to energy markets and supply chains that the UK faces, we have concluded that it is in the UK’s economic interest to maintain these safeguards to reduce the risk of material harm if they are not maintained. I am therefore extending the measure on the five steel categories for a further two years until 30 June 2024, alongside the other 10 categories. That means that the safeguard will remain in place on all 15 categories, updated from 1 July to reflect recent trade flows.

The Government wish to make it clear to Parliament that the decision to extend the safeguards on the five product categories departs from our international legal obligations under the relevant World Trade Organisation agreement as it relates to the five product categories. However, from time to time, issues may arise in which the national interest requires action to be taken that may be in tension with normal rules or procedures.

The Government have therefore actively engaged with interested parties—including those outside the UK—on the future of the UK safeguard, and have listened to the concerns raised, including the needs of the many thousands of people employed throughout our downstream steel industry, who play a vital role in the economic life of the UK. Throughout the investigation, downstream users of steel have raised concerns about difficulties in sourcing some steel products in the UK, particularly those classified under category 12. I have listened to those concerns and am acting to protect this vital part of the economy by increasing the tariff rate quota on category 12A to ensure that it better reflects trade flows.

The Government have also decided to suspend the safeguard measure for steel goods coming from Ukraine for the next two years. The Government are clear that we will do everything in our power to support Ukraine’s brave fight against Russia’s unprovoked and illegal invasion and to ensure long-term security, prosperity and the maintenance of the world order from which we all benefit. The Government have already removed all tariffs under the UK-Ukraine free trade agreement to zero to support Ukraine’s economy. This decision means that Ukrainian steel will not be subject to the additional safeguard quotas and duty.

These are unusual times. The aftershocks of the gravest pandemic have combined with the biggest war in Europe since 1945, the spike in energy costs is creating huge stresses on manufacturing, global steel markets are facing persistent overcapacity, and the TRA’s findings provide clear evidence of serious injury or the threat of serious injury to our UK producers. The Government have a duty to use our democratic mandate to the greatest possible effect to protect the interests of the British people and provide leadership in these challenging times. On balance, we have therefore decided that it is in the vital public interest that the Government act to protect the steel sector, which is why we have taken these steps.

We believe that our approach is in the public interest. The decision has been taken collectively and with reference to the ministerial code, noting the conflict that I have outlined. It has been a finely balanced decision. Steel is a vital industry for the UK and is in constant use in our everyday lives, but the global position for steel production is challenging. The use of unfair subsidies contributes to global overcapacity, putting domestic industries at risk around the world, so the measures that I am announcing today will further support our steel industry and those who work in it. They come on the back of the Government’s having secured an expansive removal of section 232 tariffs on imports of UK steel and aluminium products into the USA, which came into effect earlier this month. The tariff-free volumes that we have secured mean that UK steel and aluminium exports to the US can return to levels not seen since before 2018.

It is important to remember that safeguards are a temporary, short-term measure. We will continue to work with international partners, alongside other Departments, to support our domestic steel sector for the long term. I hope that the House will support the Government’s stance in defending our strategically important steel sector. I commend this statement to the House.

Photo of Nick Thomas-Symonds Nick Thomas-Symonds Shadow Secretary of State for International Trade 12:43 pm, 29th June 2022

I am grateful to the Secretary of State for her statement and for advance sight of it. The extension of safeguards will come as a welcome relief to the steel sector. It is not anti-competitive to provide a level playing field for our steel industry. I also support the decision to exclude Ukrainian steel.

Labour backs our steel communities up and down the country. Our steel sector is foundational for our economy; we must support it, now and as we transition to net zero. However, it is regrettable that resolution of the issue has once again gone to the eleventh hour, just as it did when the present Foreign Secretary extended the safeguards last year, and that the Secretary of State did not even attend the Select Committee this morning to face scrutiny.

Labour has called on the Secretary of State to extend the safeguards, but also to change the law in advance of this latest decision. When the same safeguards were extended last year, Labour called on the Government to introduce emergency legislation, which we would have supported, so that the national interest could be invoked by Ministers in relation to Trade Remedies Authority advice. It is too weighted towards the interests of importers rather than those of domestic industry, and too narrow in scope in that it does not give sufficient weight to issues such as regional employment and support for nationally important industries, and, indeed, the international context for these safeguarding decisions. The United States and the European Union have such measures, and in the case of the EU, the World Trade Organisation has not found the extension of the safeguards to be in breach of its rules. In short, if there is to be a challenge at the WTO, it will be a mess entirely of the Government’s own making.

Although, of course, I thank the Trade Remedies Authority for its work, there are still issues with its framework.

Ministers appeared to agree with Labour’s analysis when, a year ago, the Government announced a wider review of the Trade Remedies Authority framework “as an urgent priority”, in the words of the then International Trade Secretary—the present Foreign Secretary, Elizabeth Truss. Well, it has not been a priority for Ministers. That review has disappeared into the long grass, leaving the country in the position we are in today. Had the review been completed, with wider factors eligible for consideration by the TRA, the Secretary of State would be in a much stronger position, just like other major economies that have steel tariffs in place and have had no problems at the WTO. Ministers knew that this issue of extending the safeguards was coming, but they did not plan for it properly, either in terms of our domestic law or internationally, by working with those countries that have extended safeguards without any problems.

Let me also put on record that the last-minute rush to extend safeguards in no way makes up for the shortcomings in support for the steel industry from this Government, and that Labour has set out plans to secure the industry’s future for years to come by investing £3 billion in the transition to net zero over the next 10 years.

May I ask the Secretary of State when that wider review of the Trade Remedies Authority framework will be completed? May I also ask whether she intends to introduce further legislation once the review is completed? Will she publish all the TRA papers relating to this decision, and will she tell us what lessons have been learned from the WTO ruling on the EU safeguards that have been extended? Finally, can she reassure steelworkers and their families that the framework will have been fully reformed before this matter is considered again?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am grateful to the right hon. Gentleman for welcoming the statement and supporting the Government’s decision to extend the safeguards applying to these five categories of steel, but I do not agree with his claim that this has been done in a rush. The statement has been made today because the rollover is to take place on 1 July, and it was therefore appropriate to make an announcement this week.

The right hon. Gentleman made an interesting point about the EU’s choice to maintain the safeguards after it was found not to be in breach of the rules. I was unable to be present at the Select Committee this morning—frustratingly—because I was indeed dealing with the international part of these processes as much I could. I will continue to do so over the next few days in order to ensure that our WTO partners and friends understand the reasons for my decision, which I am pleased to hear is supported by the right hon. Gentleman and the Labour party. Obviously we stand ready to take up any concerns that WTO members may have about the decision, but I am certain that it is the right decision, enabling us to avoid as much harm or risk of injury to our steel producers as we can.

The TRA, as an independent organisation, has done an excellent job in examining the challenges faced by the industry. It is also working apace on many issues brought to it by British companies that have concerns, and I am pleased to see it up and running on a daily basis. I meet its representatives regularly, but its submissions to me are made independently, which allows me to make my decisions more broadly.

Photo of Holly Mumby-Croft Holly Mumby-Croft Conservative, Scunthorpe

Steel is of course a strategic industry, and it is worth remembering that no one in the House or the country can go a single day without needing to use some. I thank my right hon. Friend and the Prime Minister for their sensible approach to this issue. They have stood behind steel jobs in Scunthorpe, and they have ensured that we have the right steel safeguards, just like every other country. Does my right hon. Friend agree that it is beyond any doubt that the future of the UK steel industry is safest under a Conservative Government?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

My hon. Friend is genuinely an incredible champion for her constituency, and indeed for her steel constituents. I can tell the House that a week does not go by without her appearing to remind me of the importance of the Scunthorpe steelworks, and that is a fantastic consideration. As a Conservative MP, she never stops doing that, and her voice has been well heard as we have reached these decisions. As she says, we do not spend a day without using steel—I had never thought about that. It is an integral part of our day-to-day lives, and in all the investments we are making through the green revolution and the transport revolutions, steel is at the core of all that. I very much hope that this decision will ensure stability and a reduction in the risk of injury to our fantastic steel producers in Scunthorpe.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

Scotland’s whisky producers have already suffered significantly from Trump-era tariffs of 25% and the current 100% tariff imposed by the Indian Government. The prospect of retaliatory tariffs from India and South Korea is alarming, especially when the Asia-Pacific makes up a quarter of Scotland’s whisky export markets. What is the Secretary of State doing to mitigate the likelihood of retaliatory tariffs that will harm Scotland’s whisky industry?

I am not going to repeat the question asked of the Deputy Prime Minister at PMQs today, but could the reason that the Secretary of State is sitting here be that she has managed to avoid scrutiny in the International Trade Committee? The House has known for weeks that the deadline for renewing steel safeguards is tomorrow. Why have the Government waited until the dying hours of this timeline before coming to the House with a decision? This does not paint a picture of a long-term organisation and strategy that is working well within the Department for International Trade. In the light of this move, and of the prospect of retaliatory tariffs from those countries I have already mentioned, the Government must now move fast to ensure that the UK can improve the level of steel exports to the EU to make up for this. Is the Department for International Trade formulating a plan to increase steel exports to EU markets? Finally, can I ask the Secretary of State if she is going to speak to the Secretary of State for Business, Energy and Industrial Strategy and look at the price of making steel in this country? That issue has been going on as long as I have been here—seven years—and even before that.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am slightly disappointed that the hon. Lady does not support us, as she has the Liberty steelworks in her constituency. I will repeat, because clearly I was not heard, that the reason I was unable to make it to the International Trade Committee this morning—we have, I hope, set a date for next week—is that I was dealing with those international relationships and discussions that are necessary to ensuring that WTO members understand why we have taken this decision and will therefore choose not to bring retaliatory charges to any other industry. It is incredibly important that those relationships are maintained. I was at MC12—the WTO ministerial conference—in Geneva two weeks ago, where those relationships were building, as ever, to make sure it was understood that we are defending our British steel interests because of some of the imbalances across the steel sector. I very much hope that the hon. Lady will welcome the decision we have taken, because it will support her own constituency steelworks, and that she will support me in the continuing work that I will be doing at the WTO to ensure that every other member understands why we have taken this decision.

Photo of Miriam Cates Miriam Cates Conservative, Penistone and Stocksbridge

I thank my right hon. Friend to listening to representations from myself and other MPs representing steel industries. Extending the safeguards like this is really great news for the steel industry, and I know that my constituents who work for Speciality Steels in Stocksbridge will agree. The safeguards will ensure that the UK steel industry is protected from market-distorting practices such as dumping, but our industry faces other disadvantages, including unfair energy prices. Will she commit to working with colleagues across Government to address the disadvantages affecting our UK steel industry and making it uncompetitive?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

My hon. Friend has been championing her steelworks, and we have worked closely to understand the support needed. There are already a number of examples of supports for the sector. Since 2013, more than £600 million of relief has been provided to the steel industry to help with high electricity costs. The £315 million industrial energy transformation fund is also available, and the £1 billion net zero innovation portfolio is also a really important part of the work that we are going to do. I absolutely hear my hon. Friend and I will continue to work with colleagues across Government, especially the Secretary of State for Business, Energy and Industrial Strategy, to support the steel industry, to transform it and to take on the challenges of clean steel, which is part of our net zero challenge.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Trade Team Member), Chair, International Trade Committee, Chair, International Trade Committee

The Secretary of State will of course know of the cross-party fury of my Committee as regards the constant run-around, with this morning being the tin lid. She also knows that I know that she knew she would be making this statement at least a week ago, which further underlines our fury, but I will leave that there. The UK has no known trade strategy, and it cannot export the famous prawn sandwich to any country in the world without the same, or nearly the same, weight of bureaucratic paperwork going with the said sandwich. Today we are here with the next move on steel tariffs, but the only manufactured good not seeing any tariff removal in the Australian free trade agreement on imports and exports between the UK and Australia is UK steel. Why is that? Did the Government drop the ball or is it because they have no strategy to know what they are doing from one day to the next?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am at risk of repeating myself, but I will do so for clarity. I was unable to make it to the Committee this morning because I was dealing with those international relationships and having really important conversations. Obviously I was not able to do that until I had made a final determination as a result of those. The information was passed to the Committee yesterday that I would not be able to make it, once we knew that you had granted a statement for today, Mr Speaker. That was the point at which I was able to make a final determination, and then of course I needed to start talking to my WTO friends and colleagues. The timeframe is such that one thing comes from another, but we are always at the disposal of the Chair to determine when those statements are able to be made in the House.

Photo of Jacob Young Jacob Young Conservative, Redcar

Seven years ago Teesside faced the single biggest event of the industrialisation, with the collapse of the SSI steelworks and the loss of 3,000 jobs overnight. I wish to pay tribute to my predecessor, Anna Turley, for her work in trying to prevent the closure of that plant. Since this Prime Minister took office, the Government have stood up for our industry with support for British steel protecting 900 jobs in Redcar and Cleveland and extending the safeguards last year and again this year, as we have heard today. Can I urge the Secretary of State to continue her support for the steel sector, recognising how crucial steel is as a strategic national asset?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

My hon. Friend is absolutely right, and I also pay tribute to his predecessor, whom I know well and who was a great champion. We have discussed some of the challenges that the steel industry continues to face, and this Government are absolutely focused on finding the right solutions for them. I am pleased that the category 17 safeguard, which we will keep, should at least help the steelworks in my hon. Friend’s constituency to play on a level playing field with the products that it makes.

Photo of Stephen Kinnock Stephen Kinnock Shadow Minister (Home Office) (Immigration)

This is absolutely the right decision, and it will be warmly welcomed by steelworkers and their families in my Aberavon constituency. Unusually for this Government, it actually complies with international law, so the Secretary of State should be congratulated on that as well. However, as the shadow Secretary of State, my right hon. Friend Nick Thomas-Symonds, said, this cliff edge—this leaving things right until the last minute—creates a huge amount of instability for an industry that is already under a tremendous amount of pressure. In his questions, my right hon. Friend called on the Secretary of State to do a proper review of the framework within which the TRA operates, so that we can have a long-term solution to this and do not end up with the same last-minute scramble next time. Can the Secretary of State please set out what steps she is taking to ensure that that happens?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I thank the hon. Gentleman for his support. I am pleased that we have cross-party support for what I think is an incredibly important decision that we have taken, both as a Government and I would like to say as a country, to support our steel sector at this challenging time for the whole market. I know that his steel mills are busy and productive, and we want to see that continue.

The TRA is an independent organisation, and the Government use our powers to ask for investigations. I use the information the TRA gives me to make determinations, on the Government’s behalf, on what we should do. That will continue to be the case, and I am grateful to the TRA for its work. The TRA team’s investigations are extremely thorough, and in this case it was very comfortable in presenting to me the indications of serious injury or potential for serious injury. I am completely satisfied that the TRA has, indeed, undertaken its responsibilities very effectively in this case.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

The single greatest motor of world prosperity is free trade. Although it is allowable to have trade remedies to deal with unfair dumping or subsidies, they must be strictly temporary and must be based on the clearest evidence. Will the Secretary of State proclaim once more that this Conservative Government are fully committed to world free trade?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

It is well known that I am a champion of free trade, and I have the extraordinary privilege of going around the world to share the United Kingdom’s perspective on free trade and champion it in multinational fora. This was at the heart of the discussions we were driving forward at MC12 just two weeks ago to make sure, exactly as my right hon. Friend says, that anticompetitive activities such as dumping are found to be unacceptable.

Where there are domestic issues—in this case, a surge of imports alongside the need for our steel industry to find its place after leaving the European Union—the safeguards can run for only a further two years. The safeguards are temporary, which is why we will continue to work with the steel industry across the country to make sure we support it to find solutions, especially to the challenge of high energy use and the clean steel transformation we want to see. As my hon. and right hon. Friends have stated, the reality is that every part of our economy contains steel, so we want to make sure that future generations use clean steel.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee, Chairman of the House of Commons Members' Fund

I have talked to engineering firms in my constituency such as Tinsley Bridge and Forged Solutions in the last few days, and they use specialist steel that has to be imported because they cannot source it in this country. They have therefore been paying hundreds of thousands of pounds a month between them in tariffs imposed on those imports. The Secretary of State says she is extending the category 12A quota to help this situation, but these firms will still have significant costs because of the tariffs and quotas that have been imposed. Will she agree to meet me, the companies and the Confederation of British Metalforming to consider how the introduction of greater flexibility could help these companies?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am very happy to meet the hon. Gentleman to discuss the specifics of those businesses in his constituency. I have met many steel producers and downstream users, and they repeatedly raised the category 12A issue, which is why I decided to extend the tariff rate quota very substantially to create enough headroom to ensure the tariff risks do not affect those businesses. I look forward to discussing that with him more fully.

Photo of Mark Garnier Mark Garnier Chair, Committees on Arms Export Controls, Chair, Committees on Arms Export Controls

The Secretary of State will understand that these very complex issues need proper parliamentary scrutiny, and the best way to do that is through the Select Committee process. I completely understand her reasons for not being at the International Trade Committee this morning. I have known her for seven years, and she and her fellow Ministers are not shy of parliamentary scrutiny, but there is no doubt that the relationship between the International Trade Committee and the Department for International Trade is not what it should be. Having been a Minister in the Department, I know that some outstanding civil servants work there, but it needs to be beefed up.

I am the Chairman of the Committees on Arms Export Controls, which have a similar problem with the Department for International Trade. We have to work hard to make sure these relationships work well. Parliamentary scrutiny is important, and we need to make sure we are demonstrably getting it right.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I thank my hon. Friend for his honesty. I am not known for being shy of discussing anything, and I am always happy to do so. I was required to be on the phone this morning to discuss urgent WTO matters, and I very much hope to be able to attend the International Trade Committee next week to discuss the Australia trade deal.

I note that my hon. Friend and other members of the Committee have raised some issues between the Committee and some of my team. We continue to work to resolve those issues and to provide information, at every opportunity, in as timely a manner as possible within the confines of market sensitivity.

Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

I welcome this announcement but, as the Secretary of State says, it just buys her some time. What will the Government do to help the industry invest for the future, particularly at it moves to hydrogen, and to help it with the crippling energy prices it faces today and has faced for many years?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

As the right hon. Gentleman says, the safeguards will be in place until June 2024, and we will obviously need to act in concert with our international partners and our domestic steel sector to find longer-term solutions. The energy security strategy that the Government announced a few weeks ago includes an extension and an increase of the compensation for energy-intensive industries, including steel, to help with the current incredibly high electricity prices.

The right hon. Gentleman is right that, as part of the 10-point plan set out by the Prime Minister back in 2020 and the work the Government have continued to do to be at the forefront of solving some of the net zero challenges, of which steel is at the heart of so many, the Government will continue to work with the industry to find long-term solutions both through technological change and through developing clean steel. Hydrogen and other potential energy solutions are currently part of that mix.

Photo of Anthony Mangnall Anthony Mangnall Conservative, Totnes

I never thought that being a free trader would be such a unique and rare position in the Conservative party. I am fully supportive of supporting the steel industry, but not through protectionist measures. What message does it send to Australia, New Zealand, Singapore, Japan or any other country with which we are signing a free trade agreement when we cite national interests above the agreements we have signed?

We have invited the Secretary of State to come before the International Trade Committee eight times to discuss the Australia free trade agreement. She says she could not appear this morning, which I accept, but guess what? We are seeing the TRA this afternoon. Why does she not join us to discuss the Australia agreement and these measures in full? There must be parliamentary scrutiny, but we are not having it. When we come to it, I urge all colleagues to reject the Australia free trade agreement and to extend the Constitutional Reform and Governance Act 2010 process for a further 21 days.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am pleased to hear that the independent TRA team will be able to discuss their work with the Committee this afternoon. I look forward to reading the transcript.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

Sadly, I must decline the invitation as my diary precludes it today, for pretty much the same reason as this morning. I will be working with international partners to ensure these clear and temporary safeguards are understood by our WTO partners and can be used as a springboard to support our steel industry to think about how it can transform to be important and successful globally.

Photo of Sarah Champion Sarah Champion Chair, International Development Committee, Chair, International Development Committee

Protecting British steel from unfair competition is, of course, welcome, but we need more to safeguard the industry itself. Will the Secretary of State explain what the Government are doing to protect the sector as a whole? I am particularly interested in Liberty Steel in my constituency, regardless of the broader issues in the sector.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

The hon. Lady, with whom I have worked on many issues, is a doughty champion of all in her constituency, including Liberty Steel. We will continue to work with all steel producers through the DIT and across Government to make sure we drive forward solutions not only on high energy prices, on which there are a number of sources of support for the steel industry, but on making sure we have the best steel we need, produced in the UK, as we move towards net zero. It is a strategically crucial industry for us. Our producers need to be able not only to produce what our downstream users need, but to export some of the finest steel production in the world to the rest of the world, where it is needed. Having been able to remove the section 232 tariffs, we are now going to see some of our high-end steel production back in the US market. That is important to the US, because some of the stuff it imports we make here, and it needs it. So we are going to continue to work to ensure that those flows—imports and exports—are as they should be and are part of the free and fair trade that the steel industry needs to have.

Photo of Mike Wood Mike Wood Conservative, Dudley South

I welcome the Secretary of State’s recognition of the need for support not only for British steel producers, as a strategic national interest, but for downstream users, such as our world-class manufacturers and engineering firms in Dudley South. What assessment has she made of the needs of industry in reaching her decision today?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I have had a number of meetings with various groups of downstream users of steel, where I have learned a great deal about all sorts of things. What came across strongly was that category 12A was where we had a shortage of capacity for our downstream users to use without getting caught in the tariff framework, because we do not produce enough of it here and so it must be imported. As I say, we have set out the change to that tariff rate quota to ensure—I hope—that our downstream users who want to make use of that particular quality of steel will be able to do so without tariff imposition.

Photo of Alex Cunningham Alex Cunningham Shadow Minister (Justice)

As Jacob Young acknowledged, we all know how the Government abandoned the steel industry on Teesside and failed to provide support in the recent past. Thousands of people lost their jobs as a result. We are, however, being promised a renaissance, with investment in clean green steel. News releases and talk are cheap—where is the action?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

As I mentioned, there is a £1 billion net zero innovation portfolio, managed by the Department for Business, Energy and Industrial Strategy, in which we are seeing the thinking and the projects coming through to help our industries move into clean steel and the clean generation of any number of parts of our economy, so that we can meet our net zero commitments. We have committed to be 78% net zero by 2035—this is one of the highest commitments in the world. That is a huge challenge and every one of our industries needs to be involved, making changes not only to themselves but through their supply chains, so that we can meet that net zero challenge. We are doing that not because we like a big industrial challenge, but because it is incredibly important that we do it, as part of our commitment to the global challenge to bring down our carbon dioxide emissions and because British businesses are designing and coming up with the innovative solutions with which we can help the rest of the world to do it. My Department is proud of, and is championing, all that British innovation is doing with the rest of the world to help it meet those challenges as well.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I welcome the Secretary of State’s decision. Many of my constituents work at the Scunthorpe plant, and I fully endorse the comments of my hon. Friend Holly Mumby-Croft. However, we must acknowledge that the industry still faces many challenges. Will my right hon. Friend the Secretary of State give an assurance that her Department will work with the industry to explore new export markets, as that is vital to its future?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am happy to give my hon. Friend that assurance. Indeed, in managing to remove the section 232 tariffs, we have opened up, once again, the US markets for some of our specialist steel producers. That is a really exciting and much-needed part of those exports. As we champion all that is the best of British and as we go around the world not only with our free trade agreements, but in looking to unlock market access barriers and allow British businesses to bring their goods and services to new markets, the steel industry is going to be at the heart of so many of those things, for the very reason that has been mentioned: steel is in every part of our lives.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs and International Development)

The Secretary of State will be aware of the importance of Celsa Steel to jobs and the economy in my constituency, to crucial national infrastructure projects, because of the rebar it produces, and to our construction industry. If the energy price crisis continues or deepens, what new measures will the Government consider taking, particularly for those energy-intensive industries? What more is she going to do to boost procurement? Crucially, it is that procurement chain and those long-term orders from within the UK, using UK-made steel, that will secure those jobs for the future.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am afraid that I cannot give the assurance, but we have one of the BEIS Ministers, the Under-Secretary of State for Business, Energy and Industrial Strategy, Lee Rowley, on the Bench, he will have heard the hon. Gentleman’s questions and he will be happy to discuss them more fully. We will continue to work with our industries. Of course, procurement is interesting; it has been raised with me by many of the downstream producers. Some of the steels needed in the procurement contracts we do not make here. Many we do. We have discussed at length some of the incredible work. The rebar from his constituency is used in places such as Hinkley Point C and in new nuclear. That will continue to be an important part of our steel producers’ opportunities to make sure that the UK’s new infrastructure is very well and robustly held together by British steel.

Photo of Marco Longhi Marco Longhi Conservative, Dudley North

I welcome the Secretary of State’s statement. I am sure she will be aware that my constituency is home to several small and medium-sized enterprises, notably engineering companies and manufacturers supplying to the defence, automotive and offshore wind sectors—that is increasingly the case as we move to quadruple our offshore wind output. What steps can she take to remove market access barriers to increase exports for this market segment to countries such as Brazil, which has a potential 700 GW in the near future for offshore wind?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

My hon. Friend is absolutely right on this. As my Department champions opportunities for green trade exports, particularly in the technologies and manufacturing where the UK is now genuinely a world leader—offshore wind and others that are coming through—we want to make sure that we have the ability to find those routes to market for our brilliant British businesses. In things such as the trade deal with Australia and New Zealand, we have stripped away tariffs on green and environmental goods to ensure that those markets can open as quickly as possible and that we can see the best of British around the world.

Photo of Jessica Morden Jessica Morden Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Shadow Vice Chamberlain of HM Household (Whip), Shadow Deputy Leader of the House of Commons

As others have said, extending safeguards is, of course, a welcome announcement, but all it does is preserve the status quo for steelmakers such as those in my constituency. With the potential for the targeted charging review to massively increase network costs for steelmakers, what can this Department do, in consultation with BEIS, to bring forward a green steel deal, in partnership with the industry, to make sure that the UK is the best place in the world to make steel?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

The hon. Lady is a champion and the BEIS Minister on the Bench will be happy to meet her to discuss more fully the issues that she raises.

Photo of Richard Holden Richard Holden Conservative, North West Durham

North West Durham and Consett have a proud history of steelmaking and, although the blast furnaces closed more than 40 years ago, there are still many small manufacturers working in very high-end specialised production. What assessment has the Secretary of State made of the impact of the illegal Russian invasion of Ukraine in wiping out the manufacturing of some important steel products and the impact that has had on downstream manufacturers in the UK, especially in terms of cobalt steel? A lot of my constituents work in the high-end manufacturing of that for cutting and mining equipment. If she cannot answer that specifically now, will she write to me and, and if necessary, meet me about it in the future?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

I am very happy to meet my hon. Friend to discuss the details of the particular businesses in his constituency that have found that their markets are distorted and disturbed by the illegal invasion of Ukraine. One reason I have decided to strip away all restrictions on Ukrainian steel is that we want to make sure that, as Ukraine, in due course, is able to get back up and running in those industries, its high-quality steel has a route to market in the UK. We wish to continue to be its champion and supporter, and to ensure that that democracy can rebuild its economy as quickly as possible.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

I appreciate that it is sometimes necessary in the national interest to impose trade restrictions, but free trade is the way to increase competition, bring down prices and raise living standards. The fact is that energy-intensive industries in the United Kingdom have been shedding jobs for many years now, partly because of the energy price costs that have resulted from the Government’s net zero policy. Does the necessity for today’s decision not give the Government another reason to examine the wisdom of the current net zero policy, given that the priority for our competitors is cheap energy produced from fossil fuel?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

As I said earlier, we have provided over £600 million in financial relief to the steel industry since 2013 to address high electricity costs, and the recent security strategy on energy continues to support that. This will be an issue for some time, which is why my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy continues to work with all energy-intensive industries to find solutions. However, it is absolutely right to continue pushing forwards on our net zero agenda, because we need to have security of electricity and other energy supplies and to move to clean energy sources as we transition away from hydrocarbons. In that way, we will have not only security but clean energy, and we need the rest of the world to do the same. If we do not do these things, large parts of our planet will no longer be habitable, because of the climate change impacts.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

I want to stick with energy costs, because the biggest challenge that steel faces as an energy-intensive industry is having far higher energy costs than our international competitors. Will the Secretary of State say a little more about why, as an alternative to tariffs—which operate against Conservative free market principles and carry the risk of retaliation—the Government have not considered providing UK steel producers with more targeted support to put them on a level playing field with their competitors?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

As I said, we have set that out in the strategy. My hon. Friends in BEIS will be happy to discuss the issue in more detail if my hon. Friend wants to raise particular industries. We will continue to work on this issue. Importantly, we want to make sure we move towards clean steel production, because the opportunity to sell the finest, most innovative steels will help the industry and the UK to be a global leader. As the Department for International Trade champions what we do on green trade across the world, we also want to make sure that we lead in this sector.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business and Industrial Strategy)

Leaving it until the last minute to announce the renewal of safeguards denies UK steel producers certainty. Certainty matters if they are to secure investment, and investment matters in an industry that is strategically important for our economic and national security. The Secretary of State has talked a lot about clean steel. If she wants to demonstrate that the Government really do back investment in moving to clean steel, will she tells us whether they will provide the certainty needed by businesses, workers and steel communities and match Labour’s commitment to a £3 billion green steel fund?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire, will have heard that question. It is not within my purview to set such a policy, but the Government want to continue to ensure that, as we drive forward our net zero strategy to meet these challenges, every part of our industrial base moves to a net zero position, and that will involve clean steel. We will continue to work across Government to help find those solutions in the long term.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

My constituents work at the nearby Corby steelworks, and I see the Under-Secretary of State for the Home Department, my hon. Friend Tom Pursglove, on the Front Bench supporting the Minister. However, I have concerns that we have gone down the protectionism route rather than cut energy costs. I am afraid that the Secretary of State has mentioned net zero more times than she has mentioned cutting energy costs. I am disappointed that we do not have a policy of saving the steel industry. It is no good talking about green steel in the future if we do not have an industry. I hope that the next statement will be about cutting the energy costs to the steel industry.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

As I said, these safeguards, which will run for a further two years, are only temporary. They were brought in because, as we transitioned out of the EU, we brought across EU-wide protections, to ensure a fairer balance across a global industry in which there is over-capacity and in which some countries have followed unfair market practices. That has provided assurance, and it has given the industry time to rebalance and think about how it works, so that we manage the shift in imports and exports. As I said, I will continue to work with colleagues across Government to help to tackle the energy challenges we see today. The compensation scheme is obviously in place, and I know that colleagues are happy to discuss that in more detail.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

I thank the Secretary of State for her statement, which is very welcome. It is critical that our manufacturing base is retained, so does she not agree that, given the substantial increase in transport costs, which has seen containers treble in price, the time to help British steel is now? That being the case, will she fund investment in new factories and plants that are built with cutting-edge technology, so that we lessen environmental impacts while retaining the high-quality British steel that we are famed for in this great United Kingdom of Great Britain and Northern Ireland?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

The hon. Gentleman is right, and we want to see those new, innovative solutions coming through across the UK, including in Northern Ireland, where we are seeing incredible growth in innovation in a number of areas—for example, in high-end engineering, where we continue to see real leadership as those innovative ideas come to fruition. He is absolutely right that the challenge of energy prices affects transport costs, as well as many other areas for businesses, and the whole Government are incredibly focused on finding support for business.

Photo of John Penrose John Penrose Conservative, Weston-Super-Mare

President Reagan once said that there is “nothing so permanent” as a temporary Government subsidy. I therefore gently say to my right hon. Friend that, unless we fix the underlying structural problems, including the energy cost problem, which we have heard about on multiple occasions, she will be coming back here in two years’ time—and again after that, and again after that—to prolong these measures. That will put a very serious dent in the Conservative party’s free trade credentials.

May I, further, press my right hon. Friend on the point in her statement that this decision has been taken with reference to the ministerial code? Given the comments in Lord Geidt’s resignation letter, will she please confirm that this decision is not just “with reference to” the ministerial code but “compliant with” it?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

The Department for International Trade has had no contact with Lord Geidt, although I understand that, obviously, the Prime Minister and his former adviser spoke regularly on a number of matters. The Government have a duty to use their democratic mandate to the greatest possible effect to protect the interests of the British people and provide leadership, and the balanced decision I have reached is that today’s course of action is the right one.

To my hon. Friend’s point, these measures are only temporary and can last only a further two years, so the challenges of solving some of the big structural questions are closer to us than ever before—they are not getting further away. We will continue to work closely with the industry, so that, as these safeguards fall away in due course, we support it to move towards becoming the modern steel industry we all need.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

May I thank my right hon. Friend on behalf of all those who work for REIDsteel, which is the largest private sector employer in Christchurch, manufacturing and supplying steel structures across the world? However, what will happen in two years’ time? Can she guarantee that REIDsteel will be able to get supplies of clean British steel in two years’ time? If not, will she not need to abandon this net zero doctrine? What is more important than actually being able to supply homegrown steel so that people in Christchurch can manufacture and export their products?

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade

My hon. Friend is a champion for his constituents, and it is great to hear more about REIDsteel. As all downstream users look to meet their net zero commitments and demand cleaner steel, we will see industry changing. A healthy industry, as we see now, has both imports and exports. We export some of our British steel to the US for its defence industry—they do not make that particular specialist steel themselves. As in any good business, we are sharing our expertise with industries abroad. Equally, there are some steels that we do not make in the UK that we therefore import. As regards the category 12 steel safeguard, I have decided to extend the TRQ because downstream users have been clear to me that they need more of that steel. We do not produce it domestically in the quantities that would meet that need, so it is right to ensure that the balance of the market is right for our downstream users. I look forward to seeing REIDsteel continuing to thrive in the years ahead.