Lithium: Critical Minerals Supply — [Sir Gary Streeter in the Chair]

Part of the debate – in Westminster Hall at 3:13 pm on 23 April 2024.

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Photo of Sarah Jones Sarah Jones Shadow Minister (Industry and Decarbonisation) 3:13, 23 April 2024

It is a pleasure to serve under your chairmanship, Sir Gary, and a pleasure to follow all the contributors to what has been a thoughtful debate. I am grateful to Steve Double for securing the debate. I completely understand why he wanted to do so, and think I agree with everything he said in his speech. Although we have made some small progress, I agree that there is a silo mentality and it is disappointing that the Government are not as joined up as they should be on these issues. I also agree with the hon. Gentleman’s points about the need for more focus on the midstream. I have heard that several times from people I have engaged with while I have been in this role.

Jim Shannon highlighted the potential role, as we learned, of Northern Ireland. When I was in Northern Ireland a couple of weeks ago, I met representatives of the chamber of commerce and visited businesses including Harland & Wolff, and their ambitions were very high. It was reassuring and encouraging to hear that everybody is pushing forward now that the Assembly is back up and running; it feels as though real progress is being made.

I listened with interest to Cherilyn Mackrory about her role on the all-party parliamentary group for critical minerals. I have met the Critical Minerals Association and others and I understand what she is saying. I agree that mining is not always the dirty industry that it once was, but in some places, it is. Our role is to try to make sure that it is not a dirty industry and that, where we do it and where we supply and rely on others, it is being done properly. I agree that the Government need to be more agile in responding to some of the challenges that we face. The role of the extractive industries and how that works is an important part of the debate, as Richard Thomson said.

I will add to some of the key arguments that have been made. If people are not familiar with the term “critical minerals”, it has an air of mystery about it, but there is nothing clandestine about the importance of critical minerals and how key they are to our modern society. I welcome the Minister to his new role. If he has not already read “Material World” by Ed Conway, I encourage him to do so, because it brings to life how important critical minerals are for us all.

The first thing that many of us do when we wake up in the morning is check our phone, which is powered by a lithium battery. We might spend the day working on a laptop; its chip is laced with tin. In the coming years, we will get more and more of our electricity from turbines that are powered as much by metals like cobalt as by the wind that turns their blades. If the Minister has not already been to the UK Battery Industrialisation Centre, I encourage him to go, so he can see how important critical minerals are in the production of batteries, which will be important for electric vehicle manufacturing in this country.

As has been said, the move to net zero is key. The International Energy Agency has predicted that demand for critical minerals could more than double by 2030. There are different figures—the hon. Member for Truro and Falmouth said that it would quadruple—but we know that the need for critical minerals will increase significantly. It is therefore vital that we secure the supply of lithium and other critical minerals to this country.

Labour is clear that the green transition is our biggest economic opportunity. It is our chance to bring economic growth back to this country—the driving mission of a future Labour Government—along with hundreds of thousands of jobs everywhere, from Cornwall to Carlisle. As the shadow Chancellor has set out, we are living in an age of insecurity. The vulnerabilities exposed by the pandemic, by rising geopolitical tensions, which have been mentioned, and by the changing climate have made it clear that a joined-up approach to the economy is vital for our nation’s security.

Many of the 18 minerals that the UK defines as “critical” are concentrated in specific geographic areas, the majority of which, as has been said, are not dependable allies of the UK. China is the biggest producer of 12 of the 18 minerals. That makes it clear that strategic, co-ordinated and effective steps to secure our supply of those minerals are vital. Critical action is needed, on which we believe that the Government have critically underdelivered.

Other countries are racing ahead, but the Conservatives still refuse on ideological grounds to have an industrial strategy, which leaves our approach to critical minerals disjointed and scattergun. Instead of showing decisive leadership, we risk seeing the UK sidelined in the global race for the industries of the future. The EU Critical Raw Materials Act has introduced benchmarks for domestic capabilities along critical mineral supply chains. The US Inflation Reduction Act, which has accelerated the race for critical mineral production there, is a powerful intervention that the Chancellor dismissed as a “distortive …subsidy race”.

We welcomed the Government’s critical minerals strategy when it was finally published, but some parts of their approach were frankly baffling. For example, why did they choose not to assess the vulnerabilities of the UK’s industrial supply chains while drawing it up? Why did the strategy contain no specific targets for priority sectors? Why was there no plan to expand midstream capacity for processing and refining in the UK, including in the critical minerals refresh published last year? As the Critical Minerals Association said, without developing the UK midstream, there is a risk that the UK Government will not be recognised as integral to global critical mineral supply chains.

The strategy should have been a vital document, but as others have mentioned, the Foreign Affairs Committee concluded in a report that it is simply too broad to have real impact. That failure is deeply concerning, and it means that crucial investors in the critical minerals supply chain will look elsewhere. They will look to Europe, to countries such as Germany who are expected to have the largest battery manufacturing capacity on the continent by 2030. In comparison, the UK still has just one gigafactory that is actually operational.

The Government’s ad hoc approach has failed; the Conservatives have left Britain vulnerable, and Labour will take a new approach. Where this Government have proved themselves ideologically allergic to joined-up thinking, Labour knows that a real industrial strategy is the only adequate response to our age of insecurity. Building a resilient economy will be a core principle of our approach, which is why our industrial strategy provides for a new supply chains taskforce to analyse the potential supply chain needs across critical sectors, to review the vulnerability of critical supply chains to extreme risks and to assess the potential requirements of responding to those shocks.

That industrial strategy will work hand in glove with Labour’s green prosperity plan, built on the principle of using catalytic public investment to secure investment from the private sector—a principle that the hon. Member for St Austell and Newquay may be able to attest to the power of. Labour will make strategic public investments to develop and support critical supply chains here in Britain. Our national wealth fund will invest £1.5 billion in new gigafactories and aim to draw in three times as much from the private sector. Boosting Britain’s automotive industry at the one end and the critical minerals supply chain at the other, the new gigafactories will help to put Britain back on a competitive international footing and to secure Britain’s place in the international supply of those key materials.

When it comes to critical minerals, it is vital to look way beyond our borders, which is why a Labour Government would ensure that our trade policy works in step with our domestic plans. That is why we need to work with our friends and allies on secure and resilient supply chains, aligning capacities in key sectors with our wider security relationships. I was at a roundtable recently with the Critical Minerals Association and many others, including representatives from Australia and Canada, and we were talking about how the Foreign Office works in terms of its relationships and priorities. It is clear that the need for critical minerals needs to be stamped on what is done by the Foreign Office, as well as by other Departments. We need to make sure that we are building relationships with our allies from whom we will need to source materials in the future. We should also use our international position to boost standards, which, when it comes to critical minerals, have too often been sorely lacking.

Securing the supply of new critical minerals is crucial, but it is also vital to consider how we make the most of the materials that already surround us. I did not know that there is an estimated average of 20 unused electronic items in every household across the UK. We have to not make a mockery of recycling, as our Prime Minister has, but see it in its rightful place in helping to secure the circular economy, with buy-in from devolved Administrations across the UK. That is a real priority in moving towards a sustainable future.

Getting this right is vital, so I hope that the Minister can answer a few questions before the end of the debate. What is the Government’s plan to support the development of midstream critical mineral capacity in the UK? How do the Government plan to support the move to a circular economy to reduce our demand for new minerals? How is his Department working with the Foreign Office to engage with our allies so that we can secure our critical mineral supply and boost international standards? In the Government’s response to the task and finish group, they said that they would consider new supportive proposals. Have the Government done that yet? Securing our supply of lithium and other critical minerals needs leadership—leadership that the Government have so far failed to deliver. We risk letting the UK fall behind in securing our supply of critical minerals. Labour will put the UK back in the race.