British Steel - Statement

Part of the debate – in the House of Lords at 3:28 pm on 21st May 2019.

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Photo of Lord Henley Lord Henley Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 3:28 pm, 21st May 2019

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given earlier today in another place to an Urgent Question, which asked my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy whether he will make a Statement on the discussions he has held with British Steel regarding its future. The Statement is as follows:

“As the business department, my department is in regular conversation with a wide range of companies, including those in the steel industry. As the House will be aware, on 24 April the Government entered into a commercial arrangement with British Steel, valued at £120 million, relating to the company’s obligations under the EU Emissions Trading Scheme. The Secretary of State updated the House on this agreement in an Oral Statement on 1 May—the first available opportunity after market-sensitive elements of the resulting transaction were concluded. The commercial agreement reached with British Steel ensured that the company was able to meet its 2018 EU ETS obligations under a deed of forfeiture. It also ensured that the company did not incur EU ETS non-compliance fines, coupled with 2018 ETS liabilities, which would have equated to a financial pressure of over £600 million on the company, a sum which would have put the company under significant financial strain.

The speculation regarding the future of British Steel will no doubt be creating uncertainty for those employed by the company. As shown through the ETS agreement, the Government have been willing to act. We have been in ongoing discussions with the company and I am sure the House will understand that we cannot comment in detail at this stage. We will, however, update the House when there is more information available. I can, however, reassure the House that, subject to strict legal bounds, the Government will leave no stone unturned in their support of the steel industry. Yesterday I signed up to the UK steel charter. We want to acknowledge and support this initiative from industry and the charter is one element of that. We have been also been encouraging the UK steel sector to strengthen its engagement with all existing and potential domestic steel consumers, maximising opportunities to benefit from the £3.8 billion a year by 2030 high market-value opportunities that we have identified.

We recognise that global economic conditions continue to be challenging for the industry, which is why the Government are working with the sector, unions and the devolved Administrations to support a sustainable, productive and modern UK steel sector”.

My Lords, that concludes the Statement.