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With your permission, Madam Deputy Speaker, I wish to make a statement on our steel trade measure, which will come into force on Wednesday 1 July.
Let me start with first principles. The UK needs a strong steel sector, both in production and downstream, but the whole sector is facing an existential moment. Fifty years ago, the UK produced 27 million tonnes of steel a year, and even in 2010 we produced 12 million tonnes, but in 2024 we produced just 4 million tonnes and met just 30% of UK steel needs.
No Government can or should ever accept such a sharp decline in an industry that forms the backbone of so many other sectors, including defence. We promised that, in government, we would do two things in tandem. First, we promised to launch a steel strategy to tackle all the key issues facing the sector in the round. That strategy, which we published on 19 March, includes up to £2.5 billion of Government investment on top of the £500 million pledged for steelworks at Port Talbot, plus active support for this energy-intensive sector through the British industry supercharger. Secondly, we said that we would introduce a robust new steel trade measure that secures the future of the UK’s steel industry, to protect our ability to produce steel for defence and critical national infrastructure. Today, I will address the latter point.
Why do we need the steel trade measure? A key part of the existential threat to UK steel production is global overcapacity, a lack of transparency about international subsidies and artificially depressed global prices, all of which price UK steel out of the market. For the past eight years, UK steel production has enjoyed some protection thanks to the UK’s steel safeguard, which it inherited from the EU. That allowed us to protect categories of steel manufactured in the UK with quotas and a 25% out-of-quota tariff. That protection, which was introduced by the previous Government, was clearly not sufficient, as our steel sector has continued to suffer. In the seven years under the safeguard, up to 2024, steel production has continued to fall by 3.3 million tonnes—a stunning further 45%.
We now face a key moment. That safeguard must legally expire on 30 June, as World Trade Organisation rules firmly prevent an extension of a safeguard beyond eight years—it is precisely the same for the EU. If we put nothing in its place, our steel production sector will lose all its protection. That would not just bring our steel industry to its knees; it would kill it completely. That is why I promised the House that I would not allow a gap between the expiry of the safeguard and the implementation of our future steel trade measures. We are making good on that promise today.
There is an additional concern. Canada, the United States and the EU have already put in place similar toughened measures to protect their industries, so if we do nothing, or if we delay the introduction of new measures, we will immediately become the global dumping ground for cheap steel from across the world.