I regularly discuss with my Cabinet colleagues promoting trade in Scotland as well as the United Kingdom as a whole. Just this week I chaired a meeting of the Board of Trade that focused on trade promotion across the nations, and held discussions, alongside the Secretary of State for Scotland, on ensuring that the Department’s work delivers for the whole UK.
That sounds just wonderful, but I would like to know how the Secretary of State thinks ending freedom of movement has helped to promote Scottish trade and culture overseas. Does she think it is a good thing that musicians in Glasgow North now find it much more difficult to tour in Europe—one of the most important markets for traditional Scottish music nowadays —and that their merchandise can no longer be manufactured in Scotland but must be manufactured in the countries to which they are travelling because the customs costs have become so prohibitive?
I welcome the hon. Gentleman’s early-morning snarkiness as he asks about what we are doing for Scotland. We understand that there are issues that people have across borders, and my Department works closely with musicians and with all those who trade across borders to see what we can do to resolve those issues. If there are specific cases in the hon. Gentleman’s constituency, the Department is well placed to help his constituents with the issues he has described.
Scotch whisky is an iconic Scottish export, and it is also hugely important strategically to the whole UK. Had Ministers completed the free trade agreement with India by Diwali last year, as was promised, the 150% tariff that producers of Scotch face when exporting to India could have been eliminated. Given that the 10th round of talks has recently ended, with an 11th planned soon, can the Secretary of State tell us whether the free trade agreement will be completed by Diwali this year?
I have said repeatedly that it is about the deal and not the day. Every single trade agreement that we negotiate is bespoke to the specific country and tailored to its economy, to ensure that it benefits both the UK and the counterpart country. I am happy to say that the Scotch Whisky Association is very pleased with what it has been hearing about negotiations from its Indian counterparts, and we are working hard to make sure that the industry is successful.
The Scottish seafood industry has been hit with an estimated 50% increase in the cost of packaging owing to the requirement—thanks to the form of Brexit chosen by this Government—for export health certificates with every consignment. Does the Secretary of State accept that the form of Brexit that was chosen, and in particular the failure to align in respect of sanitary and phytosanitary matters, is adding costs to Scotland’s iconic seafood sector at a time when it can barely afford to absorb such costs?
No, I do not accept that at all. If anything, what is increasing the costs is what the Scottish Government have been doing in relation to the deposit return scheme. While complaining about our divergence between here and the EU, they are trying to split the UK single market, and we are not going to let them do that.
The Paris agreement made clear that the steel industry needs to cut emissions by 93% by 2050, and the Government recognise the vital role that the steel sector plays in our economy. The 2021 net zero strategy sets out our aim to make the transition to a low-carbon economy, and reaffirms our commitment to continuing to work with the steel industry on decarbonisation.
Hundreds of steelworkers gathered in Westminster yesterday to make absolutely clear their feeling that the Government are not doing enough, particularly in comparison with competitor nations, when it comes to investment in the transition to decarbonised steel. The numbers do not lie. The Government are also worryingly slow in introducing a carbon border adjustment mechanism. UK Steel has estimated that nearly 23 million tonnes of non-EU steel could flood the UK market if the UK fails to introduce its own carbon border adjustment mechanism at the same time as the EU in 2026. When will we see the Government stepping up and investing in green steel as is being done in competitor countries, and when can we expect the introduction of a British CBAM?
We have been supporting the steel industry, with more than £1 billion available in grants to help decarbonise the sector and the provision of more than £730 million to cover energy costs since 2013. The CBAM is clearly an issue for many countries, not just ours. We have just finished one consultation, and will produce a response in due course. A transitional reporting phase is due to start in October, with full introduction in 2026. The EU is still developing details about CBAM implementation, and has a consultation open on proposed reporting requirements until 11 July. I know that the hon. Member chairs the all-party parliamentary group for steel and metal related industries, and I urge him to ensure that all businesses express their views as strongly as possible. I think we are meeting on Monday to make sure that we can provide a substantial response.
The Minister said that she recognises the vital role that steel plays in this country, but the UK is the only country in the G20 where steel production is falling. It is also the only G7 country whose Government do not insist on using domestically produced steel in defence contracts. Meanwhile, UK steel producers pay 62% more than their German counterparts for electricity. Labour’s £3 billion green steel plan will give our industry the bright future that other countries are offering their steel sectors. Labour believes in our steel; why do this Government not?
I am not sure where Labour Members will get the money to fund that programme of work. I have not even got to the end of reading this paper but they will probably U-turn by the time I do, so I am not sure how sensible it is going to be. We have provided more than £1 billion for decarbonisation, unprecedented support to help with energy costs, and just recently, there was fantastic news from Celsa, when it was able to repay a Government loan of £30 million that we provided to them, sensibly spending taxpayers’ money. There is and always has been support available. When it comes to procurement, it is absolutely right that we do everything we can to make sure that we have UK firms procuring UK steel.