Tata Steel: Port Talbot

Baroness Chapman of Darlington Excerpts

Tuesday 19th September 2023 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

Noble Lords will understand that there is deep concern about the loss of as many as 3,000 jobs in south Wales. It is important to remember that, for many communities, this is not happening for the first time. The areas of the country where steel making is still a significant industry are scarred by decisions made in the 1980s in the name of progress by Conservative politicians without any thought to the economic devastation or the need for alternative investment, and no understanding of the damage to community pride, sense of place and even long-term health of the people affected. Doing deals over the heads of local people and then presenting as a success an outcome that costs £0.5 billion of taxpayers’ money and 3,000 jobs, leaving us with only one blast furnace site in the UK and diminished capacity to make virgin steel, shows how arrogant, out of touch, lacking in strategy and blasé this Government have become.

There are some serious questions that the Government have so far failed to answer. First, why was this deal done behind the backs of the workforce and their representatives? Secondly, the electric arc furnace uses scrap steel, but this will not work for Trostre and Llanwern, so where will that steel come from in future? Will it come from India or Turkey? Thirdly, when will a grid connection for the arc furnace be provided? Fourthly, what specifically is the intention for the site? Fifthly, what is going to be done to support the workforce?

Green steel is something that we all support, including workers and trades unions, so the Government need to do much better in planning for transition because, if this mass job loss model becomes the norm, workforce and wider public support will vanish. Transition requires trust, detail, openness and the involvement of all interested parties, and the Government have failed Port Talbot. The most important question that the Government need to answer is simply this: do they accept that the ability to make virgin steel for our national security is strategically important and must be sustained? Will they guarantee that the UK will retain its ability to make virgin steel in future?

[Lord Fox (LD)]

My Lords, I thank the Minister for allowing us to debate this Statement. The noble Baroness from His Majesty’s loyal Opposition made some important points, and I associate myself with her remarks. I have some additional questions.

The agreement to fund the installation of new arc furnaces for steel making will have a positive effect on emissions, and that is good news. However, as the noble Baroness said, the package could mean as many as 3,000 job losses in the UK, and in one area of the UK. That is a terrible outcome.

Tata is reported as warning that there would be a

“transition period including potential deep restructuring”

at the plant. I am not sure that I understand what that means. Can the Minister please translate it for your Lordships’ House in real terms and real lives? Those jobs are being shed. What plans do the Government have to support those people and that local economy when the jobs go? What are the plans for retraining, for example? What are the realistic expectations for a concentration of new and different jobs in that area?

As we also heard, the electric arc furnaces deliver different grades and qualities of steel compared to what we get from a blast furnace site. What is the Government’s assessment as to how the new capacity in this country as a result of that will affect the profile of steel we need to import? To add to the point that the noble Baroness made, what is the assessment on resilience in this country as a result of this change?

The new coal mine in Whitehaven that was last year partially waved through by Michael Gove is also a factor here. West Cumbria Mining said that the coking coal that it would produce would be used for steel making in the UK and Europe. As the Minister knows, electric arcs do not use coke. Yesterday’s announcement removes at a stroke a large proportion of the domestic market for that mine, meaning that the mine will be almost solely for export only, which even further removes the legitimacy of that venture.

The Statement mentions that the British industry supercharger, aimed at assisting electricity prices and helping to make them competitive for energy-intensive industries, will be applied here. His Majesty’s Government responded to the consultation on this only on 5 September, so I suspect that this is its first outing. I really do not understand what it is, but it is cited in reports. Can the Minister please write to us outlining what it is and what it means? I saw the consultation on the British industry supercharger and the response to it, and it is cited as being applied here. How is it applied? What are the terms of that application and what does it mean in energy terms for this business? What other businesses are now in line to benefit from it—not least Scunthorpe, where the Chinese owners cited energy costs as the reason for their shutting down of its coking ovens?

I have a couple of other points. Tata expects to release land at Port Talbot for transfer or sale following the closure of the blast furnaces. This land presumably hosted high industrial activity for decades, so who will be responsible for the not inconsiderable costs of decontaminating and remediating this land before it becomes useful and valuable for anything else? Who will be stumping up these costs?

In conclusion, we have seen a number of government interventions, including the also Tata-owned Jaguar Land Rover, Nissan, BMW and perhaps, going forward, British Steel. It has been said by some that these are foreign investors who are masters at extracting subsidies. We understand that there is an international subsidy competition going on here, but how does the Minister respond to that charge? The Chancellor has said that he was not prepared to go toe to toe with the US and EU in the subsidy bidding war, but this looks like the Government reacting to things when they settle in their in-tray. A patchwork of deals is a poor substitute for a coherent industrial strategy. Where is His Majesty’s Government’s plan? What are the Government seeking to cause to happen, or should we expect further examples of sticking plaster activity?

Industrial Strategy

Baroness Chapman of Darlington Excerpts

Tuesday 20th June 2023 Lords Chamber

[The Earl of Minto (Con)]

My Lords, there is a conference later this year on investment into Northern Ireland, which I am sure will prove a successful enterprise. Investment into Northern Ireland is critical; the difficulty we have had with extricating that part of the United Kingdom is well known.

[Baroness Chapman of Darlington (Lab)]

My Lords, Make UK says that the UK is

“the only leading nation in the world without a comprehensive, long-term industrial plan”.

The Government might be on slightly firmer ground on the UK storming ahead of other economies but a range of initiatives, as the Minister has referred to, is not a strategy. The Government are sitting on their hands and we are losing out to the US and the EU too often when they should be acting. They will have to grip this at some point. When will they?

CPTPP: Conclusion of Negotiations

Baroness Chapman of Darlington Excerpts

Wednesday 19th April 2023 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, the Government’s record on trade is quite dreadful. UK exports are projected to fall by 6.6% this year, which is over £51 billion lost to the UK economy according to the OBR. The failure to deliver the India trade deal or the US trade deal promised by the end of last year is a significant issue, so it is important to scrutinise what exactly Ministers have agreed to in these talks. The Government have a history of lauding trade deals one minute and then criticising them the next.

As we all know, CPTPP is made up of 11 countries—Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—but we also know that other countries, including China, have applied to join or expressed an interest in doing so. We are all aware of the developing situation in relation to Taiwan. It is inconceivable that there would not be economic consequences should tensions continue to escalate in the way some fear they might. Can the Minister let the House know, as far as he is able today, whether our involvement with CPTPP might affect the UK’s response? What is the UK’s position on the application of China to be part of CPTPP?

The UK will be the first new member since the bloc was established in 2018, and the first European member. The Government say that CPTPP membership brings a range of benefits, including lowering trade barriers to a dynamic region. Accession also forms part of the Government’s Indo-Pacific tilt set out in the integrated review. However, the UK already has bilateral agreements with nine of the 11 CPTPP members.

Over the year to September 2022, the UK exported £60.6 billion of goods and services to the CPTPP countries, which is 7.8% of the UK total, and imported £50.2 billion, or 5.9%, so the economic benefits appear at this stage to be relatively small. In fact, the Government’s own assessment tells us that the long-run increase in GDP will be 0.08%. Can the Minister confirm that the figure of 0.08% is correct?

As part of the Spring Budget, the OBR forecast that, in 2023, UK exports are set to fall by 6.6%. That is a hit of over £51 billion to the UK economy. Can the Minister explain why this has happened? The Prime Minister wants us all to be better at maths, so can the Minister lead by example and tell us what proportion of that loss he thinks this deal is going to replace?

Other countries joining CPTPP have negotiated safeguards and put in place support for their domestic producers. For example, New Zealand and Australia have put side letters in place to opt out of the dispute mechanism. Is the UK going to do this and if not, why not?

There needs to be as close to a level playing field as possible, especially on issues such as workers’ rights but also environmental protections, safety and animal welfare. How can Ministers assure us that the highest possible standards are agreed and implemented, so that UK workers are operating on a fair playing field and workers internationally do not become exploited? On the environment, have conditions been put in place to address concerns around the import of palm oil, which has been linked to deforestation?

What consultation has been undertaken with the devolved Governments to assess their views on negotiating outcomes and how will they be involved in the ratification process? Importantly, what detailed assurances can the Government provide that the CPTPP will not undermine the Windsor Framework, given the closeness of standards regimes and the green lane system?

What safeguards have been secured for UK farmers and what support will the Government offer to our agricultural sector on exports to CPTPP countries, particularly given the strong feeling there is that Ministers sold out our farmers to get the Australia deal over the line? The RSPCA has made it clear that the CPTPP has no explicit language on animal welfare, so what safeguards have the Government put in place to ensure that animal welfare is maintained for products imported to the UK?

Can the Minister also update the House on the progress of negotiations with India and the United States? Is it correct that negotiations with those countries will not even start until 2025?

The reason I have asked a lot of questions—I accept that—is that the problem here is detail. It is very important but very thin on the ground at the moment, and I am afraid that the Government do not have the best track record in supporting UK producers on those issues. There absolutely is an opportunity here, but there is risk too. We do not want to find ourselves again in a position where the Government make an agreement without fully understanding the consequences.

[Lord Purvis of Tweed (LD)]

My Lords, I thank the Minister for being approachable and proactive in communicating. I also thank his office for its openness and willingness to engage. I am sure that will continue, so if he could indicate what the timeframe will be with regard to the legal text being ready, and when we expect the treaty ratification process to commence, that would be enormously helpful.

These Benches believe passionately in free, fair, open and sustainable trade, so we welcome any reductions in tariffs for our exporters and moves towards reducing non-tariff barriers in new markets. As the International Agreements Committee and others have remarked, this will be the first agreement the UK enters into in which we will knowingly increase net emissions. What is the update from the Government with regard to the climate component of this accession? The Government do not provide much clear information with regard to emissions.

As the noble Baroness said, the UK already has trade agreements in place with most CPTPP members. This agreement absorbs the new ones that the UK has signed with Japan, Australia and New Zealand. Are there carve- outs in this agreement that we will be able to understand clearly when we receive the text?

With regard to the omissions in the Australia and New Zealand agreements on protecting geographical indicated foods, for those agreements, UK GI foods—some of the most cherished brands and produce in this country—will be protected only if Australia and New Zealand sign an EU trade agreement so we can protect them through the TCA. What is the protection for UK geographical indicated produce?

The Trade Secretary was getting into a bit of a tangle over the issue of modelling and the figures on Monday, so it is worth reminding the House that the Government’s scoping paper stated that the net benefit to the UK over 15 years of accession would be a mere £120 million per year to the UK economy. The trade writer for the FT said that, in decibel terms, this was

“a cat sneezing three rooms away”.

The Trade Secretary then asked us not to use the Government’s own paper regarding the 0.08% potential benefit. So I suspect we will have to await a full impact assessment. When can we expect to see that?

The Trade Secretary said that the CPTPP accession was “the future of … trade”. She correctly highlighted that this was the “fastest-growing” trade area but did not say that it was because of those countries’ trade with China. She also did not say that the pace of EU trade with those countries is now forecast to outpace what the Government’s modelling has said that the UK will benefit from in accession. The Trade Secretary said that this was the future of trade and that the people had voted for this, not the past—in some way indicating that there was a choice to be made; we trade either with Asia or with Europe. That is obviously nonsense.

The Government’s approach paper was pretty clear. It said that if we had maintained EU membership and the existing trajectory, UK trade with CPTPP members was already set to increase by 65% by 2030, or £37 billion. This accession is only adding 0.08%. I would be grateful if the Minister could say why it is opening up so little in additional markets.

The accession was also spun as a tilt away from China. However, we know that most of the countries within that agreement are also part of an agreement with China in the Regional Comprehensive Economic Partnership, which represents 30% of global GDP. Negotiations are in the final stages between China, Japan and South Korea for an FTA. What is the Government’s position on whether they believe that China should accede to CPTPP?

Finally, there is an omission from all the Government’s data. In the scoping paper and the Statement, there is no mention of trade diversion. There has been no consultation with developing countries on what the likely impact of market access will be. There is one line on page 52 of the Government’s scoping paper that says:

“While the impact of the UK’s accession to CPTPP on GDP in developing countries is likely to be negligible, developing countries with a high share of trade with the UK and CPTPP member countries are most likely to be impacted”.


We already know that some exporters from Africa are complaining that they were not consulted and that their produce is going to be harmed by this accession, so perhaps the Government could provide information on trade diversion.

As with the India agreement, I have a considerable fear that some, if not most, of the benefits that we are likely to see will be trade diversion from developing countries with which we are seeking to encourage trade. I hope that the Minister can provide detailed information with regard to those questions.

Employment (Allocation of Tips) Bill

Baroness Chapman of Darlington Excerpts

2nd reading
Friday 3rd March 2023 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, it is a real pleasure to contribute to this debate and to follow very well-informed contributions, based on experience. I pay tribute to the noble Lord, Lord Robathan, for introducing the Bill, to my noble friend Lord Browne—I do not think I have ever heard him make such a positive speech on any topic—and to the noble Baroness, Lady Berridge, who made some interesting points. The questions of the noble Lord, Lord Mitchell, on agency staff and credit card charges are obviously very important. I do feel for the Minister: he thinks he is going to be introducing something universally popular and we are all going to say, “Well done”, and he ends up with a bunch of technical questions; but that is us doing our job. The points made by the noble Baroness, Lady Deech, about the culture of tipping were very interesting and not something I had thought about before today. I thank her for that, and we must simply see this as a step in the right direction, not the destination. The points about information for customers, so that they know what is happening to the payments they are making, were very important. The awkwardness for the employee when asked if they will get the tip—referred to by the noble Lord, Lord Bourne—which forces them to decide between being honest and undermining their employer, is a difficult situation, even though we as customers are asking with the very best of intentions. That is something we have all encountered.

The Labour Party has obviously been supportive of this direction of travel for a very long time. There is a great deal of overlap between the position of these Benches and the measures in the Bill. We think that all tips, service charges and gratuities should go to workers in full, and that employers must not charge processing fees. The Bill’s provisions cover agency staff, which is good, and give workers the right to ask for records and recourse, which is vital. I thank the trade union Unite, which has for years been raising and campaigning on this issue. Alongside this, we are committed to bringing in a mechanism for collective grievances at work which would enable employees to bring a grievance against their employer to ACAS, as a collective. We believe that this would help to enforce fair tips more strongly.

It is useful to outline where we are as a party, where that overlaps with the Bill and what to do when we think things are not working correctly. As was indicated in the debate, how we advertise and ensure that all employers are aware of this change in law is very important, as is how it will be enforced and how staff can raise problems in the confidence that doing so will not be detrimental to them. There should be no deductions, including processing charges, apart from statutory taxes. The written policy on how tips are allocated needs to be made clear to staff when they start employment, and employers should ensure that all tips are allocated fairly through a TRONC who is genuinely independent of the business. For larger business, it should be stipulated that the TRONC should not be chosen from senior management personnel and should have the genuine consent of the workforce. Obviously, smaller business would not be subject to that, as it would not be practical. This should be underpinned by a statutory code of practice, be extended to agency workers and enforced by employment tribunals through ACAS. We would also reform and update the HMRC E24 guidance to simplify it, ensure it reflects updated requirements and make it easier to understand.

This is a welcome Bill. It may not deal with absolutely everything on this topic, but when the Government do something sensible, we should acknowledge that—perhaps balloons, a carnival or lighting some candles might also be appropriate. After the week I have had with the Retained EU Law (Revocation and Reform) Bill, it is a pleasure to welcome this, and I look forward to the Minister’s response.