Steel Industry

Lord Morris of Aberavon Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Morris of Aberavon (Lab)]

My Lords, I have given notice to the Minister that I intend to raise questions on the future of Port Talbot steel. I hope that the Minister will reply either tonight or in writing. I have no present interest to declare, but I was the Member of Parliament for the area for more than 41 years. My first job as a young Minister in 1964 was to supervise the drafting of the steel White Paper on bringing the industry into public ownership. One of the driving forces was the cyclical pattern of world markets and the need to protect the national interest. Have we not seen many cycles since then?

It was my privilege to look after the interests of my constituents working in that part of the steel industry. The lion’s share of my political life was dominated by it. I still maintain—although I am slightly removed—a close interest in their welfare and the future of the plant. I lived through the huge job losses of the 1980s when the labour force came down from 16,000 to under 4,000. The paramount interest of the labour force was to maintain confidence in continuing long-term investment in the plant. The unions, the works council and the management under Sir Brian Moffat saw off the temptation of industrial action and instead put the working conditions of the plant on a firm, workable and economic basis. They worked together to ensure their future.

I had the privilege of opening the huge investment in the continuous casting plant, which I had done a little to secure, as well as opening the reconstructed old harbour. I was a privileged Member of Parliament from the days of a previous Labour Government that built the new harbour at Port Talbot. Port Talbot had all going for it. From the published reports, I see that history is repeating itself and the trade unions have agreed to lower pensions in return for the promise of a long-term future for the plant. However, the pension liabilities of the firm remain—to the extent, we are told, of £15 billion for its 130,000 members.

It is reported that Tata Steel is trying to hive off its liabilities before merging its European steel operations with thyssenkrupp. The talks between Tata Steel, the Pensions Regulator and the Pension Protection Fund have dragged on for month after month. What are the views of the Government about the role of the Pensions Regulator? Is spinning off the pension scheme practicable or would the Government prefer for it to enter the Government-backed lifeboat? I surmise that the latter would be disadvantageous to pensions in the future, although it should not affect the existing workforce, as I understand it. Could the Minister confirm a report that Tata Steel has offered £520 million to the United Kingdom pension scheme in return for relinquishing a guarantee it holds over the company’s assets?

There are significant issues still to be resolved, and the workforce is entitled to know. I raised some of these issues in my remarks during the debate on the Queen’s Speech and the debate on the referendum on 6 July 2016. I criticised the processes of the European Union in its tardiness to take effective and timely action to counter the dumping of exports of steel from China. There are recent reports that President Trump has signed an executive order to assess the impact of steel imports on his military build-up in the United States. The state-owned Chinese steel industry represents half the world’s steel-making capacity. What is the view of the Government on dumping? I ask specifically: given that we are still in the European Union, what representations are they making or have they made in recent years to ensure that the European Union is as resolved as the United States in maintaining British steel in the face of the turbulence of dumped imports?