Steel Trade Measure
House of Lords · Lords Chamber · 30 Jun 2026 · 26 speeches · Official Report
Statement
The following Statement was made in the House of Commons on Thursday 25 June.
“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 Organization 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. Again I say: that would mean the end of UK steel production. That is why we must take similar action to the European Union, which announced its measure on 7 October last year. Earlier this year, we committed to introduce a 50% out-of-quota tariff on imported steel, and in April we published provisional quotas for several key categories of steel. This measure needs to work not just for our steel producers but for our manufacturers, who depend on steel-those who source it from the UK and those who source it from abroad. Our aim is solely to protect categories of steel that we produce in the UK, so we have deliberately excluded many categories from the measure. To be absolutely clear, nearly three-quarters of UK steel imports by value, and 53% by volume, are out of scope of this measure.
Today I announce the final design of our steel trade measure, which will take effect on the same day as the measures imposed by the European Union. The total quota volume will now be 3.2 million metric tonnes. That is an increase of over 560,000 metric tonnes of steel that can be imported tariff-free compared with the provisional volumes that we announced-a significant 21% uplift. Today’s announcement includes the final quotas in each category. Having listened to Members and industry, we have increased the quotas in several instances so as more accurately to protect categories of steel that are manufactured in the UK.
Some of the changes reflect the fact that the European Union remains our largest export market for steel and that we have highly interconnected supply chains. Since we announced our measure in March, we have engaged intensively with the European Union and UK industry. We have reached a mutual outcome with the EU as a result of those discussions. On our side, we will increase the EU’s quota access from the announced 1.58 million tonnes to 2.08 million tonnes, and the EU will announce quotas under its own measure shortly. That will provide stability for UK-EU steel trade from 1 July while we continue to work together to strengthen UK-EU steel trade in the longer term. We have also worked closely with our international partners, and we are committed to constructive engagement with them on our steel measure. We will continue to prioritise working with our partners to tackle overcapacity.
I want to be very honest with colleagues: there are tough trade-offs here. We are determined to ensure that steel continues to be forged and made in the UK by proud steel-making communities across the UK-in Port Talbot, Motherwell, Scunthorpe, Sheffield and on Teesside. The Labour movement was forged in these communities, just as steel was, and we will not let them down. But we know that businesses will sometimes need to find specialised steel that we simply cannot procure in the UK. In those cases, quotas have been designed to allow for imports and to ensure continued availability for UK businesses without unnecessary additional costs. To ensure continuity within supply chains for business, we are also introducing a transitional arrangement. That means that our new trade measure will not apply to steel under contract before 14 March, and imported between 1 July and 30 September. We will conduct a review after 12 months and actively monitor implementation of the measure from day one to ensure that it operates as intended and remains responsive to emerging evidence and stakeholder feedback.
There are some who think that steel is an industry of the past. Others think that the market alone should provide-‘Just buy it as cheap as you can, whatever the cost to British industry’. I could not disagree more, because I know how that script runs. We buy cheap this year and next year, and maybe for a decade. Unable to compete, our national steel industry dies in the meantime. Every single UK steel mill closes. Then suddenly, miraculously, the global price rockets, and we have nowhere to turn because we are caught in a trap of our own making. I fully understand the concerns of those who worry about this measure, and will seek to address them, but I say to them that this is in the interests of the whole sector-producers and users alike.
Finally, I will be hosting a drop-in surgery for Members on Monday 29 June from 3.15 pm to 5 pm, where colleagues can meet with me and officials to discuss any concerns and to understand the impact of this measure on the particular businesses in their constituency. I hope that will be of convenience to Members.
I would especially like to thank my officials, including Beth Sedgwick, Malte Werner and Chris Taylor, and the wonderful Lola Oates in my private office, for all the work they have done on this. I commend this Statement to the House”.
My Lords, this episode says a great deal about the attention the Government pay to the business community. For months now, manufacturers, fabricators, construction firms and businesses in aerospace, automotive and defence have warned about the consequences of the Government’s original proposals, yet meaningful changes have come only at the 11th hour, just days before the new regime is due to take effect. Now, we warmly welcome the partial changes that have been announced. It is right that the Government have increased the overall tariff-free quota, that they have reduced the proposed reduction in quota volumes from 60% to 51%, and that they have removed 11 product codes where there is no UK production. But the core problem remains. The Government have left untouched the 50% tariff once a quota is exhausted. This will be passed through supply chains into downstream sectors and ultimately into higher prices for British consumers. Additionally, the Government themselves accept that some commodity codes contain both UK-produced and non-UK-produced grades and sizes. This poses grave problems for UK importing businesses which depend on specialist steel products, alloys and certified grades not readily available from domestic suppliers. There is therefore no genuine case-by-case exemption for specialist steel unavailable from a UK mill. There is only a quota. That is particularly worrying for smaller, high-value manufacturers-specialist firms which import smaller volumes but depend...
My Lords, as someone who has spent most of his life in Sheffield and South Yorkshire, I know that this issue is not an abstract discussion about tariffs and trade policies; it is about the future of communities that have made steel, engineering and manufacturing part of their identity for generations. South Yorkshire has always been more than a producer of steel; it has been the place of innovation. Today, alongside our proud steel heritage, we are home to one of Europe’s leading advanced manufacturing clusters. The work taking place at Advanced Manufacturing Innovation District, around the Advanced Manufacturing Research Centre, demonstrates what modern British manufacturing can achieve. Global companies such as Rolls-Royce, Boeing, McLaren and many others have chosen to invest there because of the extraordinary skills, research and engineering excellence that exists in our region. That is precisely why getting these measures right matters. I welcome the Government’s Statement and in particular the improvements they have made following engagement with the industry, as we heard earlier. Increasing tariff-free quota volumes and removing product codes where there is no domestic production are sensible changes, and Ministers deserve credit for listening. We on these Benches have consistently supported action to strengthen British steel-making. A resilient domestic steel industry is essential for our economy, our nation’s security and our industrial future. We also recognise the...
First, I welcome the noble Lord, Lord Mohammed of Tinsley, to his place and thank him for everything he has done so far for Sheffield Forgemasters. I thank both noble Lords for their contributions. Let me begin with first principles. The United Kingdom needs a strong and resilient steel sector, both producers and downstream manufacturers. Steel is not simply another commodity; it is the backbone of our manufacturing economy, our defence capability, our critical national infrastructure and our economic security. A country that cannot make steel is a country that becomes increasingly dependent on others for some of its most strategic needs. Yet our steel industry faces an existential challenge. Fifty years ago, the United Kingdom produced 27 million tonnes of steel a year. Even as recently as 2010, we produced 12 million tonnes. By 2024, that had fallen to just 4 million tonnes, meeting around only 30% of our domestic demand. No responsible Government can simply stand by and accept that decline. That is why we are committed to doing two things in tandem. First, we published our steel strategy on 19 March. It addresses the structural challenges facing the sector and is backed by up to £2.5 billion of government investment, alongside the £500 million already committed to Port Talbot, which I hope the noble Lord, Lord Hunt, will appreciate. In response to the noble Lord’s point about electricity, the Government also provide meaningful support through the British industry’s...
I join the Minister in welcoming the noble Lord, Lord Mohammed, to the Liberal Democrat Front Bench. It is so helpful to have someone with such experience of the steel industry participating in our debates. I welcome some of the assurances that the Minister has given, but one of the questions I raised I would like him to focus on for a few moments: the growing regulatory burden faced by our steel industry. I join with him in saying that of course Britain needs a strong steel industry: it is part of our past and it must be part of our future. However, there are many signs that the growing regulatory burden is hampering growth in the sector, particularly the burdensome ESG reporting requirements, including those requiring businesses to report on greenhouse gas emissions, non-financial information and sustainability statements. He did not have time to deal with my question. Before I move on to the other questions, it would be helpful if he could address the growing regulatory burden faced by our industry.
I thank the noble Lord. Ministers, colleagues and officials from the department have regular meetings with the sector, with producers and downstream users through an arrangement of sector councils and all that. We regularly get feedback from them. If any such requirements do hamper, we will take note of that, but so far, we have heard nothing from downstream users or producers. In respect of our international obligations, whether it is CBAM, ETS or whatever, we are a country that complies with international regulations. We have set out our case as far as CBAM and ETS are concerned and will continue to do so.
Dealing with the whole question of energy costs-
My Lords-
Sorry. I am perfectly happy to give way to Back-Benchers if anyone wishes to intervene.
My Lords, it seems to me that the announcement made today was essential. The Government would have come in for criticism had they not put forward such a Statement. Is it consistent with the contents of the steel Bill, for which we have done the first day of Committee and are about to have day 2. I am assuming that everything that has been said today is consistent with the Bill that is going through. Clearly, there will have to be other announcements made as and when we see what is needed to support the industries. There must be some unknowns in all of this. If the Minister has any indication of when we might know the end of the passing of the steel Bill, that would be helpful.
I thank my noble friend for those points. First, let me say something about the Steel Industry (Nationalisation) Bill that is going through this House. That Bill gives us a framework to acquire any steel undertaking in the public interest. Once we do acquire, in the public interest, that aligns with our overall steel strategy, which is to support our domestic supply of steel. That is precisely what we are doing, to increase domestic supply, which is currently 30%, to as much as 50%.
My Lords, as noble Lords will be aware, we are now on the Back-Bench section of questions to the Minister on the Statement. As there do not seem to be any more Back-Benchers wishing to ask questions, and we are still waiting for the full complement of Front-Benchers to continue with next business, I suggest we adjourn briefly to a time to be announced on the annunciator.
Sitting suspended.