Asked by
To ask Her Majesty’s Government what plans they have, if any, to
require shipbuilders in the United Kingdom to use British steel
in ships and submarines built for the Royal Navy; and what
percentage of steel in the Dreadnought class submarines and Type
31 class frigates is expected to be provided by UK plants.
(Con)
My Lords, sourcing steel is a matter for our prime contractors.
The special steel required in the manufacture of submarine
pressure hulls and the thin plate required for shipbuilding
cannot be sourced in the UK. Nevertheless, we encourage the
sourcing of UK steel wherever it is technically and commercially
feasible and publish our future pipeline of steel requirements,
enabling steel manufacturers better to plan and bid for
government opportunities.
(Lab)
I thank the Minister for his answer. I have to say I am a little
disappointed by that. There is a need for a sovereign capability
to build ships, and part of that is the steel that is used to
build them. It is disappointing that the refreshed shipbuilding
strategy that we have been promised for a long time now is still
not out, even though there has been the spending review, and we
were told that it would come out shortly after that. I hope that,
when it comes out, it will point out very clearly that ships such
as the fleet solid support ship will have to be built in the UK,
and that we have a whole rolling programme of shipbuilding, as
that is essential for our ship programme.
The Minister mentioned that we are not able now to provide all
the types of steel required for nuclear submarines, but only a
few years ago we were ahead of everyone in the world in our
ability to produce these types of steel. Is this an area that we
are actually going to resolve so that we can provide the steel
required for the nuclear submarine programme from steel within
this country? Are we considering bringing forward the clean steel
fund by some two years so we can actually produce clean steel in
this country to meet all the green targets that we have been
set?
(Con)
There is quite a lot in the noble Lord’s question, but I will
start by saying that shipbuilding in this country is a good
story. Investment will double over the life of this Parliament,
rising to £1.7 billion a year, and this will allow us to increase
the number of frigates and destroyers beyond the 19 that we
currently have by the end of the decade. The noble Lord mentioned
the FSS, or fleet solid support, and he will know that all three
ships must be delivered by 2032. The date for the initial
operating capability and in-service dates will not be determined
until the full business case is submitted. That ties in with
another question, which is on the refreshed strategy, which will
be rolled out and published very soon.
(Lab)
Is the Minister aware that British steel producers are at a
disadvantage because they pay a local carbon tax that is not paid
by Chinese or Russian producers? We have been aware of this
loophole for some time. To address this, will the Government
introduce a carbon border tax? This is important not only for
British jobs and British security but also to help address
climate change.
(Con)
The noble Lord makes a good point, and the Government recognise
the vital role that the steel sector plays in our economy and
across all areas of the UK. We continue to work through the steel
council to support its decarbonisation, and it is a core part of
our ambitious plan for the green industrial revolution. The
net-zero strategy, which the noble Lord will be familiar with,
published in October this year, reaffirms our commitment to work
and to setting targets for ore-based steelmaking to reach
near-zero emissions by 2035.
of Newnham (LD)
My Lords, I applaud the idea of supporting British steel, but
British Steel as a company is owned by the Chinese Jingye Group,
is it not? In which case, what on earth difference does it make
whether we import our steel from China or it is produced here by
a Chinese-owned company?
(Con)
As I said earlier, this Government are committed to creating the
right conditions in the UK for a competitive and sustainable
steel industry. We publish our future pipeline for steel
requirements, enabling UK steel manufacturers to better plan and
bid for government contracts.
(Con)
My Lords, a patriotic Government should want our armed services
to have the best and aptest steel in the most economical way, so
as to free up the rest of their budget for more kit and more
materiel. Will my noble friend the Minister confirm that whether
it is sourced from the UK, Germany, Turkey or the Netherlands, we
will always endeavour to ensure that our service men and women
get the best possible equipment?
(Con)
My noble friend makes a very good point. In October 2020 the ONS
published a report on UK steel procurement across government. It
showed that the reported proportion of steel procured within the
UK for public projects was 77%, up from 40% in the previous
year.
(CB)
My Lords, can the Minister say how many countries have committed
to acquiring the Type 26 and Type 31 frigates? How many ships are
involved? Has this led to a drop in the unit price cost of those
ships and will the foreign orders affect the in-service dates of
the ships that are for the Royal Navy?
(Con)
The Type 26 construction programme is sufficiently flexible. The
noble Lord will know that there are some delays owing to the late
delivery of the propulsion gearboxes. The cost of the contract
awarded in 2017 to manufacture the first batch of three Type 26
frigates is £3.7 billion. On current plans, HMS “Glasgow” will be
in the water by the end of 2022.
(Lab)
My Lords, is it not an appalling state of affairs that, with the
Government spending billions of pounds on boosting our naval
power, we have to go abroad for much of our steel, as the
Minister has just told this Chamber? What people want to hear is
what the Government are going to do about it. Rather than
describing the problem, can he say how we are going to boost the
British shipbuilding industry so that British naval ships are
built with British steel?
(Con)
Of course, the noble Lord makes a good point: it would be great
if ships could be made from British steel. However, as I said
earlier, the steel required for the ships being built—both the
surface ships and submarines—is highly specialised. He will know
that, for example, the fixed steel required for submarine hulls
is made in France with Industeel. The steel for the surface ships
is there for the UK steel industry, but at the moment it is
sourced from abroad.
of Cheltenham (LD) [V]
Is the Minister aware of the issue of the procurement of steel
for HS2, which was the subject of a Written Question I submitted
recently? It appears that UK steelmakers were unable to supply
the appropriate high-quality steel to the necessary timescale, so
the order went to a French company. Are the Government confident
that UK steelmakers have the capacity to fulfil orders for the
steel needed for these vessels? What are they doing to promote
joined-up thinking in government-sponsored projects such as these
new ships and HS2?
(Con)
This goes some way off the maritime sector, but I can say that we
have established a joint industry and BEIS steel procurement task
force, which launched on 12 March 2021. Its aim is to work with
the sector to promote the unique selling points of UK steel and
explore how best to support the industry and position it for
success in forthcoming major public contracts. This surely plays
into the noble Lord’s question on HS2.
(Con)
What are the consequences of any further delay in the delivery of
the Dreadnought-class submarines?
(Con)
I hope I can reassure my noble friend that the Dreadnought
submarine programme remains on track for the first of class, the
eponymous HMS “Dreadnought”, to enter service in the early 2030s.
As this programme progresses, we continue to review
life-extension options to ensure that the Vanguard-class
submarines continue to operate safely during the phased
transition from Vanguard to Dreadnought.
(CB)
I welcome the Minister’s aspiration for us to have sufficient
steel available to satisfy the needs of our shipbuilding
industry, particularly for the Royal Navy. Is the Minister
persuaded that we have the appropriate skills base to then build
those ships? In particular, I urge him to take a good look at
maritime shipyard welding apprenticeships, as there will be some
real skills shortages affecting ability to deliver.
(Con)
The noble Baroness makes a very good point about skills. This
will certainly be a major part of our refresh strategy, which, as
I said, will be published soon. Having our own skills in this
country, particularly in digital and engineering, is extremely
important so that we have the right skills to build the right
ships faster, using the skills we have.
(GP)
If the Government are not prepared to develop a border tax for
all the carbon emissions coming into this country, which we do
not account for—that is why we have all this false accounting
about how we have reduced our carbon emissions—the very least
they could do is to make sure they know the quantity of the
carbon emissions coming in and start putting some sort of
monetary amount on this, so that we know the cost of
importing.
(Con)
The noble Baroness makes a good point. The Government recognise
the importance of research and development into the UK steel
sector’s transition to low-carbon steel production. She will know
that we have provided over £600 million in relief to make
electricity costs more competitive, and created the £315 million
industrial energy transformation fund to support high energy use
businesses. There is more I could go into, but the noble Baroness
will know that we are on this.
