British Steel

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of British Steel.

As hon. Members will recall, I made a statement to the House a few hours after British Steel entered insolvency on 22 May. This was, and still is, an uncertain time for the British Steel workforce, their families and their communities, for the customers and suppliers of the business and for everyone who believes, as I do, in the importance of excellent steelmaking and manufacturing in the UK.

In my statement, I said that, although the independent official receiver is solely responsible for the operation and sale of the British Steel business, I would, both personally and on behalf of the Government, do everything that I possibly could within my powers to help secure a good future for the whole of British Steel’s operations.

Following a visit to the Scunthorpe plant the following day and to Skinningrove and Lackenby on Teesside the day after with local MPs, including the hon. Member for Redcar (Anna Turley), we formed a British Steel support group to work together immediately and actively to pursue that aim. I chaired the group with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle (Andrew Stephenson), which has included British Steel management; trade unions Community, Unite and the GMB; the Mayor of the Tees Valley and the leader of North Lincolnshire Council and their officers; the chairs of the Humber, Greater Lincolnshire and Tees Valley local enterprise partnerships; UK Steel; Make UK, the manufacturers’ organisation, on behalf of suppliers and customers; the Federation of Small Businesses; Government officials and other local MPs, including the hon. Lady, my hon. Friends the Members for Middlesbrough South and East Cleveland (Mr Clarke) and for Brigg and Goole (Andrew Percy), and the hon. Member for Scunthorpe (Nic Dakin). The support group has now met eight times, usually in Doncaster, and sub-groups on the supply chain have met separately, as have local partners.

I wish to pay tribute to the hard work, tenacity and dedication of this group and the extraordinary commitment of the workforce who, during this time, have worked magnificently, not only to continue but to increase steel production.

Often in insolvencies, customer orders dry up, suppliers withdraw their services and the workforce drifts away, precipitating a rapid failure. In this instance, the opposite has been the case. The confidence that the support group has built, coupled with a Government indemnity to the official receiver, has allowed trading to continue, orders to be won and production to increase. This is without precedent in my experience.

Although all decisions are for the official receiver, I have been active, as Members know, in visiting prospective buyers in many parts of the world to make it clear that the UK Government will, within our legal powers, work with a good long-term owner of these important assets to see how we can help them to realise their vision for the company.

Let me begin by putting on record my thanks to the Secretary of State—not only for his response just now, but for the way in which he has responded to this crisis. We find ourselves in a fundamentally different position from the situation in 2015, where, either by design or flat-footedness, the Government failed to respond, with devastating consequences. This is a completely different scenario, and I am grateful to the Secretary of State for stepping in and helping to secure the asset, enabling the business to continue and ensuring that the workforce were paid. Through the indemnity that the Government have given to the official receiver, the Secretary of State has given us a very good chance of ensuring the future for British Steel in this country. I also thank him for his efforts in going around the world to help secure a buyer.

Of course, the situation remain precarious. In the past few weeks, we have seen the new Prime Minister running around the country waving kippers in the air; by contrast, 5,000 dedicated, highly-skilled workers in British Steel have been putting their shoulders to the wheel in Scunthorpe, Skinningrove and Lackenby, despite their livelihoods being in the balance. They have been producing at record levels and working with every effort they have to ensure that the business continues to produce the best steel in the world and to flourish. I pay tribute to all those working within British Steel. They deserve a Government who will be straining every single sinew to ensure that the business survives.

I pay tribute to the trade unions, including Community and Unite; every worker in British Steel; everybody in the customer base who has continued to ensure that requests for steel have come through, including some who have even stepped up their demands; everyone in the supply chain who has continued to work so hard to supply the business; and colleagues in the Doncaster round- table. I again pay tribute to the Secretary of State for the inclusive and positive way in which he has responded. However, I do have a number of questions for the Secretary of State—for whoever will be at the Dispatch Box in the coming days, weeks and months ahead.

I am grateful to the hon. Lady for asking the question that has given us the chance to talk about these issues. She has been dedicated and devoted to her constituents, as have other Members—starting the week with me in Doncaster with the colleagues I described to ensure that we can work together and join together to ensure that there are no gaps between any of the interested parties. That has had an appreciable effect, as has been noted by many prospective buyers. Certainly, many customers and suppliers have also observed the resolution and the unanimity of resolution behind this.

Many of the hon. Lady’s questions were addressed to whoever might be the Secretary of State under the new Prime Minister, so it would be presumptuous of me to answer on his or her behalf, but she has placed a clear set of requirements on the record and I endorse everything she said. Not only would the consequences of the loss of historical assets—hugely important in all the communities she mentions—be unconscionable; there would also be the loss of a substantial opportunity.

The hon. Lady, like me, believes that there is a strong strategic future for the British steel industry. As I said in my previous answer, the world is going to need steel. Through investing in infrastructure, this country has opportunities to make greater use of UK steel. We export much in the way of our scrap steel to other countries. That could be made better use of, both environmentally and in terms of industrial opportunities. If we invest—as we intend to and are doing through the industrial strategy—in the technologies that will make steelmaking cleaner, more efficient and suitable for new uses, there is every reason to think that the UK steel industry, including British Steel, can be a beacon showing the rest of the world how a modern manufacturing industry can flourish.

May I associate myself with the priorities outlined by my constituency neighbour, the hon. Member for Redcar (Anna Turley)? This is an opportunity to say a big thank you on behalf of the people of Teesside for all the dedication that the Secretary of State—a son of Teesside—has shown to our steel industry. It has not gone unnoticed locally how much he has gone over and above what might be called the ordinary line of duty to secure a positive outcome to this sale, so I pass on a sincere and lasting thank you.

It would be helpful to get on record what the Secretary of State has been doing to leave no stone unturned in these negotiations. In particular, will he talk about the in-principle willingness potentially to invest alongside a future purchaser?

I am grateful for my hon. Friend’s generous words. He has been assiduous not just in being a member of the support group, but by working in Skinningrove with the customers of British Steel to convey the assurances that are necessary. Buyers will have questions about this extensive and complex set of assets, so it is important—and will continue to be important, especially during the weeks ahead in August—that everyone is available and active in providing the answers to those questions.

Through the industrial strategy, the Government have established programmes to support improvement in energy efficiency, which is very important; to decarbonise industrial clusters, of which steelmaking is a prime example; and to invest in research and development. Through the industrial strategy, we have the biggest increase in R&D in the history of this country. I am making these points to prospective purchasers so that they can see that the environment is a positive one.

It would be wrong for me to comment on the individual bids, as that is legally and strictly a matter for the official receiver, but I have made myself available in this country and overseas to answer questions. I think that I have had more than 25 meetings with bidders, and it has been encouraging—to use the words of the official receiver—that serious bids have been made, but the work must continue to land them and to secure the future.

I do hope that this is not my last exchange with the Secretary of State, but just in case it is, I want to stress my thanks for the amazing Mini Cooper toy that he presented me with last week and to say that he should not worry because there will always be a parking space in my heart for him. We might differ in our approach to many of the structural flaws that our economy faces, but we actually have more in common on most issues than many people would realise, not least on industrial strategy. I also thank my hon. Friend the Member for Redcar (Anna Turley) for securing this important update on British Steel.

The Secretary of State shares my opinion that British Steel must be kept as one entity, not splintered off to different buyers who do not have the long-term success of the company at heart. However, there have been reports this week that the Chinese Jingye Group, which was interested in the company as a whole, has pulled out. It was also reported that the deadline for bids has been moved a number of times. Indeed, an email sent from the official receiver is reported to have stated that no deadline has been set to conclude a sale process. Can the Secretary of State confirm how many prospective buyers remain, how many are interested in acquiring the entire the company and what deadlines for the sale have been set? Will he also confirm, as my hon. Friend mentioned earlier, that he will only give his support to bids that support the long-term interests of the company, the workforce, the local community and the steel industry as a whole?

The Secretary of State must recognise that, as Labour has repeatedly stated, action must be taken on electricity prices, business rates, driving investment and, of course, securing a good Brexit deal, because no deal could mean no steel. Will he therefore assure the House that he will be taking steps to ensure that the new Prime Minister urgently takes action on these issues and understands the real importance of the steel industry?

I am very grateful to the hon. Lady for the generosity of her remarks. I have enjoyed my exchanges and meetings with her. I hope the parking space in her heart has a charging point for the electric Mini—that would be very important.

The hon. Lady invites me to comment on the bids and some of the press speculation as to who is bidding and who is not. First, this is a matter for the official receiver, and secondly, I would not want to prejudice any of the bids by commenting. The discussions, in many cases, take place under confidential terms, and it would be wrong to do anything that might disadvantage that. There is often, in situations like this, speculation in the press, and much of it is misplaced. What I can say—the official receiver has said this publicly—is that several bids have been made and he is looking for bids that consider the whole of the operation. I welcome that, as the hon. Lady does.

On long-term commitments, we do have a long-term commitment to manufacturing, and to steel in particular. I mentioned some of the funds that are available in the industrial strategy. Of course, because they would accompany substantial investments, which I hope will be in place, they require a long-term commitment from any prospective buyer.

The hon. Lady is right to raise the question of energy prices and electricity prices. This is not a new phenomenon, and it is not unique to any particular Government. In fact, the biggest increase in industrial electricity prices took place under the previous Government. In the past five years, we have contributed nearly £300 million to energy-intensive industries as a rebate towards those costs. Through the industrial energy efficiency fund that is available in the industrial strategy, we want to reduce further the costs of energy. It is very important that we should do that.

The hon. Lady asks questions about the incoming Prime Minister. I spoke to both candidates during the leadership contest to impress on them what she and I agree is the crucial role of this industry. I know that she, the Under-Secretary—my hon. Friend the Member for Pendle (Andrew Stephenson)—and other hon. Members have communicated not just with the current Prime Minister but with her potential successors to reinforce the resolution across all parts of the House that this is at the top of the new Prime Minister’s agenda.

A very large number of my constituents work at Scunthorpe. Can the Secretary of State assure me that whatever happens, their welfare is at the forefront of his mind? In an international market that is often manipulated by Governments, notably the Chinese, will he assure me that in this case, to quote Sir Keith Joseph, the market is not enough, and there will be an activist and extremely interventionist approach by the Government to ensure that there is a buyer? Lastly, I have always thought that my right hon. Friend was an outstanding parliamentarian ever since our days on the Public Accounts Committee together, and I wish him well in the reshuffle.

I am very grateful to my right hon. Friend. My training under his expert tutelage on the PAC stood me in good stead for ministerial office, and I am grateful to him for that.

I am encouraged by my right hon. Friend’s encouragement to take an activist approach. That is the approach that I have been taking. In my view—and this applies to everyone who has been part of the support group—we let this slip through our fingers if we are not there to make sure that all the questions can be answered, whether through the trade unions, which have been magnificent in this, or through the local authorities, including some of his neighbours in Lincolnshire. Ursula Lidbetter, who leads the Lincolnshire local enterprise partnership, has been very active in the group. I will, in so far as I am still at this Dispatch Box, continue that approach. I am sure that my right hon. Friend’s recommendation of an activist approach will sound with some resonance down the corridors of this place and reach the ears of the new Prime Minister, who I hope will follow his sage advice.

It is disheartening to hear that this process continues to drag on with no idea how long it will take for a deal to conclude. This UK Government must at last stand up for the steel industry and deliver a sector deal. In today’s global world, the uncertainty caused by Brexit is providing businesses with the nudge they need to leave the UK. How many more will leave when it becomes apparent that the new Prime Minister has no plans beyond a no-deal Brexit? Our thoughts are with all those dealing with continued uncertainty—employees, management, unions, and those in the supply chain. What will the Secretary of State, who has shown real commitment to securing the continuation of the British steel plants, do—or, indeed, what will his successor do—in the face of a Brexit that is doing irreparable damage to our manufacturing sector?

I am grateful for what the hon. Lady said about me personally.

I think it would be more disheartening if this process had concluded, as was the wide expectation eight weeks ago, with what happened in Redcar, as the Redcar mentioned, which was the more or less immediate closure of the plant. The fact that the process continues, far from being disheartening, is heartening in that there are several bidders that the official receiver and his agents are working with. It is absolutely vital that those discussions should continue for as long as they prove necessary. That is one of the reasons why my first act on the warning of the insolvency was to commit a Government indemnity to allow an orderly process to take place, and I very much hope it will.

I very much agree with the hon. Lady that having a sector deal with the steel sector is highly desirable. All the sector deals—colleagues have heard me launch different sector deals from this Dispatch Box—require investment by the industry and by the Government alongside each other. That is precisely what we want to do in this case. I hope that this will be a catalyst for the investment that allows such a deal to take place.

I, too, thank the Secretary of State for his work on behalf of the very large number of my constituents who work at Scunthorpe. It is because of his actions, and the actions of our Government, that they have continued to be paid throughout this process and that they continue to have the confidence to commit to the British Steel site at Scunthorpe. Moving forward, does he agree that it is really important that the incoming new Government commit once again to big infrastructure projects such as High Speed 2 and, of course, Northern Powerhouse Rail—HS3—to give the industry the certainty into the future that there is going to be investment from this Government in such vital infrastructure?

I am grateful to my hon. Friend for his participation in the support group in support of his constituents, which has been very valuable. As I made clear, this is for the official receiver, and I do not want to get ahead of his progress. The situation is still not resolved. He has said that it is encouraging, but we need to work very carefully to ensure that it is resolved satisfactorily. In terms of audit, one of the striking things he has found, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) and the hon. Member for Redcar (Anna Turley) will know, is how loyal customers of British Steel have been, in many cases confirming orders well into the future. Network Rail is one such customer, for two reasons—partly for steel reasons but partly because I believe that we should have big upgrades in our national infrastructure. I very much endorse what my hon. Friend said.

I very much welcome the activist approach that the Secretary of State has taken with regard to British Steel. I also welcome the fact that no deadline has been imposed, because the most important thing is that this time we find a buyer who is going to support British Steel, invest in it and see it through to the future, unlike the previous owner. Will he give an assurance that the Government will stand by British Steel until a new buyer is found? He knows full well that if a steelworks is closed, it is incredibly hard to reopen it. I urge him to look again at a sector deal for the steel sector, which is so important for the whole industry’s future. Our Select Committee, the Business, Energy and Industrial Strategy Committee, will be looking specifically at British Steel, but also at the wider steel industry, in our inquiry in September. We will be looking both at the actions that this Secretary of State has taken, which we welcome, and at those of his successor.

I am grateful to the hon. Lady, the Chair of the Select Committee, and I welcome the prospect of that inquiry. There is a lot to examine, and she will approach it with her usual forensic attention to detail. I very much hope that the new Prime Minister will continue the commitment that the current Prime Minister was willing to give and the authority that she has given me to act in the way that I have. She and others will hold to account the new Prime Minister and his team on that.

The hon. Lady is right; there is something special about steel assets in many respects, but one is that if they are closed down, it is very hard for them to spring back into life, so continuity is of great importance. That is one of the achievements that, together, we have been able to bring about over recent weeks.

No one is keener than I am to conclude a sector deal. It requires investment. There is an opportunity for the British steel industry to be more strategic than it has been and, as some other sectors have done, align itself to some of the products that we know will be in demand in the future, backed by research and development. That is the approach that the industrial strategy takes, and it applies in spades to steel, so I hope there will be a sector deal to reflect that.

I am pleased to hear my right hon. Friend acknowledge the world’s dependence on steel and the value that he places on British Steel. Does he also recognise that, without coking coal, there would be no steel industry? The privately funded, multimillion-pound Woodhouse colliery being developed by West Cumbria Mining in my constituency is of vital importance and will have economic, social and environmental benefits for our area and, indeed, the country. Will he do all he can to help move that project forward?

As my hon. Friend says, much steel production requires coking coal, so it needs to be provided. I understand that there was broad cross-party support for the operation that she describes. One of the imperatives is to move steelmaking to be cleaner and greener in its energy efficiency and use of other fuels. That feature of the industrial strategy programme applies very much to the steel industry.

I echo the comments of my hon. Friend the Member for Redcar (Anna Turley) in thanking the Secretary of State for his approach to the industry in general and this issue in particular. He has reminded us today and on previous occasions that we cannot just turn on and off a steelworks like a tap. If it is allowed to go cold, it is very expensive and difficult to set up again. The indemnity has been the key thing in enabling operations to continue while a buyer is found. What assurance can he give the House that that indemnity will continue for as long as it takes to finish the process of finding a buyer?