Contribution
I am aware that there are many questions; I guarantee that we will respond to them in full in writing.
As part of our modern industrial strategy, the Government have proposed deepening the support provided by our British industry supercharger by increasing the level of network charging compensation from 60% to 90% by 2026. We have consulted on this proposal and will respond in more detail in due course. This Government remain steadfast in their commitment to ensure that our energy-intensive industries are not disadvantaged by our transition to net zero. We will continue to support these sectors, which are vital not only to our economy but to our national resilience and prosperity.
I turn to the questions about global excess capacity and market-distorting practices by China, raised by the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria and Lord Liddle. As my noble friend Lady Lloyd of Effra set out in her remarks, we are calling out the practice of some countries that are choosing to flood the market with cheap steel in a bid to quash healthy competition. She joined Ministers from partner countries at the global forum on steel excess capacity in South Africa earlier this month, and the UK has lobbied hard to develop a comprehensive framework for joint action to redress global steel excess capacity by June of next year. The noble Lord, Lord Hunt, asked specifically about discussions with the WTO, and the UK regularly challenges China’s market-distorting practices during bilateral meetings, at the WTO’s subsidies committee and in other settings.
I turn to the topic of EU and US tariffs, raised by the noble Lords, Lord Bilimoria, Lord Murphy and Lord Liddle. The Government want to do everything they can to mitigate the impacts of tariffs raised by international partners. The UK will always defend its critical steel industry where required, and we will continue to explore stronger trade measures to protect UK steel producers from unfair behaviours.
On the recent announcement by the EU on proposed new steel trade measures on imports to replace the current steel safeguard, we are in close contact with the European Commission to understand the details of this proposal. This decision was not targeted to the UK but would be highly concerning for many steel producers and their workers, so we have been meeting with the steel industry to understand its impacts. As ever, this Government are committed to defending our critical steel industry.
Moreover, thanks to the strength of the UK-US partnership, the UK remains the only country to benefit from a preferential 25% tariff on steel and aluminium on all our exports to the US, avoiding the global tariff of 50%. That has reinforced the UK’s position as a trusted source of high-quality steel and aluminium. We have already committed up to £2.5 billion of investment, including through the National Wealth Fund, to rebuild the steel industry and continue to explore stronger trade measures to protect UK steel producers.
The UK has a robust trade defence system in place, including the UK’s existing steel safeguard measures. While the UK steel safeguard will expire in June 2026, in line with the WTO rules, we held a call for evidence from 26 June to 7 August to gather stakeholder views on the future policy options, and we are keeping all options under review to defend our critical industry. As set out in the trade strategy, the international trading landscape has rapidly changed, and we are sharpening our toolkit to respond to these increased threats.
To some of the points that the noble Lord, Lord Fox, made—I will have to write to him personally on many of them—I concur with his views on the fact that our families and communities should be at the heart of this debate. I remind the House that at present there are proposals and that we will not be drawn on the UK’s response to EU tariffs, but we will continue to take a cool-headed approach.
The UK Steel Council has met on three occasions, in January, April and July, and the next meeting is scheduled for 4 November.
On the question of our relationship with Jingye, the Government are engaged in a constructive dialogue with Jingye, in line with our commitment to a pragmatic commercial solution.
In closing, I just want to reiterate my thanks to all noble Lords who spoke in today’s debate. I want to convey my appreciation for their valuable contribution of insights and thank them for their generosity in allowing me to give written responses to many of the questions, particularly those asked at the end. I guarantee that we will provide written answers to anything I have missed.
My noble friend Lady Lloyd and I have set out the Government’s long-term vision for a strong, resilient, productive steel industry in this country that is primed for long-term success, driving growth in the communities that depend on our steel industry and help build it—the same communities that I spoke about in my opening remarks. The Government want them to feel and see the benefits of our plan for change and the decade of national renewal that we promised, and I look forward to working with noble Lords in that ambition.