Steel Industry

Lord Vaizey of Didcot Excerpts

Wednesday 14th January 2015 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I declare my interest as a member of the wonderful Community union; I am very proud to be so. We have had an important and critical debate, sending out a strong message not just to the steel industry that we stand up for steel, but to the Government that more needs to be done. It is a sad indication of the Government’s commitment to this issue that we have heard only one speaker from the Government side—the hon. Member for Redcar (Ian Swales)—and nobody from the Conservative party. The Government Benches have been almost completely empty for the majority of this debate. This is not to belittle the contribution of the hon. Member for Redcar, but if someone lives in Redcar and wants a party that stands up of for steel, they should vote for the Labour party and get their MP on the Government Benches.

It is worth emphasising the importance of the industry to this country. The UK steel industry and associated metals sector has 24,000 firms employing more than 330,000 people and generating £45.5 billion in the UK economy. Every directly employed job in the sector sustains a further three jobs in the wider economy. Today’s debate is important, too, because steel is a foundation for supply chains of strategic sectors such as aerospace, automotives, construction and energy, which are so important to the UK economy. The debate is important because steel is an essential part of a low-carbon, resource-efficient future.

All these points have been raised consistently by my right hon. and hon. Friends, and particularly in the wonderful opening speech made by my hon. Friend the Member for Hartlepool (Mr Wright). The Secretary of State was ungenerous in his praise for my hon. Friend. I thought my hon. Friend made a very positive speech, outlining the industry’s problems, and it is important to raise with the Government our concerns about their actions in supporting the sector.

There is no bigger or more passionate supporter in this House of steel and manufacturing than my hon. Friend the Member for Hartlepool. He stands up for his constituents’ jobs and he stands up for his constituents in promoting the steel industry. Indeed, we should call him “Mr Hartlepool” and “Mr Manufacturing”. He does so much for current generations in Hartlepool and looks after the future as well. During his opening remarks, my hon. Friend was right to say that steel has to be a key part of the vision of a modern innovative economy. The UK steel and metal sector, as our motion rightly makes clear, provides highly skilled jobs—not just in my hon. Friend’s constituency, but throughout the United Kingdom, and we have heard contributions from Sheffield, Scunthorpe, Corby, Cardiff, Port Talbot, Newport and Clydebridge and Motherwell in Scotland.

My hon. Friend was absolutely right in his opening remarks to highlight the significant economic contribution that those facilities make through the wealth created by the plants and by the workers who make the steel. The wealth that is circulated in firms in the supply chain and businesses in those areas, not to mention through the steelworkers themselves, is often the foundation of many local economies. My hon. Friend stressed that the steel industry is the foundation of many valuable sectors of the economy, forming part of a number of important value chains in which Britain has a competitive advantage.

I have a number of pages to my speech and I would have liked to have run through them, but it is probably much better to reflect on the wonderful contributions made by my right hon. and hon. Friends. We heard speakers from Wales, from England and from Scotland who all had two things in common: standing up for steel and being Labour Members. Members from no other party—apart from the hon. Member for Redcar, who I am delighted to see back in his place—spoke in this debate.

I was delighted when my right hon. Friend the Member for Wentworth and Dearne (John Healey) mentioned the contribution of the Community union to this debate and reminded us that the union’s general secretary said:

“UK steel companies need a UK Government that can intervene just as they do in France and Germany.”

That was brought out as part of the general debate. My right hon. Friend also spoke up for his Aldwarke plant, explaining how it was saved in the past by proper co-operation among the trade unions, the Government and the owners.

Let me especially mention and pay particular tribute to my hon. Friend the Member for Motherwell and Wishaw (Mr Roy)—a steelworker himself for many years. Whenever he speaks in this House or when we speak privately and professionally together, he talks of his love for the steel industry. He stands up for his constituents in Motherwell and Wishaw, and he is a strong advocate of steel and jobs in his constituency. I was struck by what he said about all the processes involved in the steel industry. It is not just about forging and blacksmiths; it is about the cleaners, about the accountants, about the drivers, and about the wider supply chain. It is about every single business that the industry supports in his constituency.

My hon. Friend also referred to the Scottish Government’s approach to the steel industry. It was an absolute dereliction of duty for them to import £790 million-worth of steel from Poland, Spain and China for the new Queensferry crossing when there was a plant 35 miles down the road. We need Governments to stand up for industry in this country, rather than being full of rhetoric about standing up for it. Standing up for it in practice is slightly different.

We heard a valuable contribution from my hon. Friend the Member for Newport East (Jessica Morden), who rightly pressed the Government to do more. That has been a common theme in the debate. I hear the members of the Scottish National party chuntering behind me, but the facts speak for themselves. Moreover, none of them contributed to the debate, just as they did not contribute to debate on the urgent question on steel that was asked back in November. My hon. Friend spoke of the pressures on the steel plants in her constituency. As she explained, Tata and other companies have invested in key industries in her constituency for many years, but they cannot continue to do that in isolation, and the Government must help.

The Clydebridge plant in Cambuslang is in the constituency of my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex). It is a centrepiece not just of the constituency as it is now, but of the constituency’s industrial heritage. However, as my hon. Friend reminded us, it should be not just part of the past, but part of the future. He pointed out that procurement was vital, and, like many other Members, he mentioned the dangers involved in Tata’s sale of the long products division to Klesch, which has been raised in a number of other debates.

My hon. Friend the Member for Scunthorpe (Nic Dakin) speaks passionately about the steel industry in his constituency. He is one of the many Members who spring to mind and are always talked about in the same fashion when steel and manufacturing are discussed in the House. He was right to praise Tata’s contribution to the United Kingdom in the form of investment in skills and diversification—it has invested in a number of industries—but he was also right to worry about the future. That, too, was a common theme in the debate.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) spoke of the way in which the trade unions, Tata and the regions worked together to improve the position of the steel industry following the 2008 worldwide crash. He made a point that was at the heart of the debate when he said that it was all about livelihoods—people’s lives and communities—and not just about steel manufacturing and Government intervention. The Minister may wish to reflect on some of his comments.

My hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) told us that four generations of her family had worked in the steel industry, including her grandmother. I think that that is a wonderful model for those working in the industry.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

And her grandmother’s sisters.

[Ian Murray]

The Minister may want to mention that in his speech. We were also reminded earlier of the contribution that my hon. Friend made in highlighting the Government’s decision about Sheffield Forgemasters.

My hon. Friend the Member for Llanelli (Nia Griffith) spoke about the steel industry in her constituency. She said that it was a proud British industry that should form an integral part of the future. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) pointed out that, in a globalised world, we did not want protectionism; all we want is a level playing field. I think that that is a very sensible and pragmatic approach. My hon. Friend the Member for Rotherham (Sarah Champion) is not just called Champion; she champions the steel industry and jobs in her constituency.

My hon. Friend the Member for Aberavon (Dr Francis) is a founder member of the all-party parliamentary group on steel and metal related industries. We shall certainly miss his contribution to steel debates when he leaves the House later this year. He ended with a poignant reminder of the dangers involved in the industry; we should all remember those whom he lost in the tragedies in his constituency.

We have had a wonderful debate, which has shown that Labour Members, at least, stand up for steel. Our motion makes clear the importance of the steel industry to this country. The industry supports tens of thousands of jobs, and supports many of the supply chains that are key UK sectors. It supports communities and livelihoods. The Government must provide a co-ordinated response that involves energy-mitigation measures, challenges the European Union in regard to certification and safety, and supports an active industrial strategy for the metals industry in the United Kingdom. It is time for the Government to stand up for steel. Labour clearly stands up for it, but we want the Government to support it as well. I commend our motion to the House.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

Let me begin by agreeing with the hon. Member for Edinburgh South (Ian Murray)—who lived up to his reputation as an articulate and passionate Member of this House—that this has been a good and important debate on the steel industry. It is important to note that there will be no Division at the end of the debate, because the Government take no issue with the Opposition motion.

The hon. Member for Hartlepool (Mr Wright) set out a coherent and passionate case for what he perceives to be the issues affecting the steel industry in this country, and there was some suggestion that the Secretary of State replied to him in a somewhat churlish manner. I have worked closely with the Secretary of State for many years now, and I have to say that I have always found him to be one of the more congenial members of the Government, and I simply think that perhaps his manner was misinterpreted. He was perhaps less churlish and more wounded. That is how I would characterise the Secretary of State’s response, because he clearly articulated the many visits he has made to the steel industry itself and industries that use steel, and his great engagement with the industry, and his own perception that he is engaged with, and seeking to provide solutions to, many of the issues highlighted by the hon. Gentleman.

This has been a good and passionate debate because so many Opposition Members have strong links with this industry. As the hon. Member for Edinburgh South noted, we heard speeches from those who have worked in the steel industry and those whose families have a long and distinguished history of working in this brilliant industry. It is an industry that began in this country hundreds of years ago and, as some Opposition Members know, I have a tenuous connection with it as my father wrote “The History of British Steel”, published 40 years ago. My father had a somewhat waspish sense of humour; he died 30 years ago, and I suspect he would find it mildly amusing that his son has now spoken in three debates on the steel industry on behalf of the Government despite not having formal responsibility for the industry. However, I can tell Opposition Members that should they ever call a debate on the south London barge-building industry, I will be there to talk about the history of the Vaizeys who worked in that industry from the mid 19th century until just after the second world war.

We heard passionate contributions from the right hon. Member for Wentworth and Dearne (John Healey), who talked about energy tax and procurement, and the hon. Member for Redcar (Ian Swales), who has Tata in his constituency. We also heard from the hon. Member for Motherwell and Wishaw (Mr Roy), who has worked in the steel industry, the hon. Member for Newport East (Jessica Morden), the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who talked about the infrastructure opportunities for the steel industry, and the hon. Member for Scunthorpe (Nic Dakin), who talked in detail about the long products division potential sale, which I hope I will have a chance to speak about. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) also talked about the long products division and is a worthy successor to that great former Member of this House, Ashok Kumar, who, as well as having been a distinguished Member of this House, is the only Member who has ever read John Vaizey’s “The History of British Steel”. We heard, too, from the hon. Members for Penistone and Stocksbridge (Angela Smith) and for Llanelli (Nia Griffith), and the hon. Member for Cardiff South and Penarth (Stephen Doughty), who talked, obviously, about Celsa in his constituency. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns), who is sitting on the Front Bench with me, has been passionately involved in this issue, as indeed has the Secretary of State for Wales, who was in the Chamber earlier discussing the issue with me and the Business Secretary.

The hon. Member for Rotherham (Sarah Champion) made the point that every five seconds a plane made with steel from Rotherham takes off or lands—challenging, in effect, the hon. Member for Penistone and Stocksbridge (Angela Smith), who was only able to say that of one in three planes flying overhead. The final contribution was from the hon. Member for Aberavon (Dr Francis), whose daughter went to school with my hon. Friend the Member for Vale of Glamorgan, and whom we are sorry to see retiring from the House.

[Mr Frank Roy]

Before he sits down, would the Minister like to tell the thousands and thousands of steelworkers’ families watching or reading this debate what he is going to do for their future?

[Mr Vaizey]

If I am unable to answer any of the specific questions that were asked in the time allocated to me, the Minister responsible for the industry will write to each and every Member who has contributed to the debate.

The main issues that arose from the debate are the need to compensate the steel industry for the high energy costs resulting from the renewables obligation and other mechanisms designed to reduce carbon, a procurement strategy as part of a metals strategy, business rates, the future of the long products division, and CARES. As the Secretary of State explained at length, we are giving as much energy compensation as we are allowed to give under European rules. We are working as fast as we can to get state aid clearance, so that we can increase the level of compensation. We are working with industry to introduce a metals strategy. We hope that such an industry-led strategy will be produced in the next few months, to be published, provisionally, in the summer.

The future of the long products division is a very serious issue and Ministers are engaged with it. The Prime Minister and the Business Secretary met north Lincolnshire MPs, and the Secretary of State and the Minister with responsibility for such matters met Klesch. As I understand it, our officials are supporting the Syndex report, which will be published this month and will look at the rationale for sale and alternative proposals. We hope that the proposals will come forward at the end of February or the beginning of March. Those could include a commercial solution or working with organisations such as the Green Investment Bank or Infrastructure UK.

As has been well trailed, an extensive review of business rates is being undertaken, and a £1 billion package of business rate support is already in place. We do understand that the steel industry, like other large industries, is concerned that new investment in plant and equipment affects the business rate valuation, thereby increasing business rates. It wants such new investment to be excluded, and I would expect the Treasury to consider that as part of its ongoing consultation. However, Members should understand that this includes the whole business rate framework, and needs to be consulted on.

[Tom Blenkinsop]

Will the Minister give way?

[Mr Vaizey]

I will, provided that other Members understand that doing so will reduce my time to address other points of concern to the thousands of steelworkers watching this debate.

[Tom Blenkinsop]

Perhaps the Minister can give a succinct answer. Given that the Government are not opposing the motion, they must support it. The motion

“urges the Government urgently to reconsider whether mitigating measures on energy prices, planned to start in April 2016, can be brought forward”.

Could they be brought forward before or at the Budget?

[Mr Vaizey]

We are in the hands of the European Commission. There is a bottleneck on state aid and, having previously dealt with a state aid issue myself, I know that despite time being of the essence from the UK Government’s perspective, that is not always the Commission’s view. On energy prices, I remind Members that France has the benefit of extensive nuclear power, and Germany has the benefit of having grandfathered previous state aid rights into its current energy prices and state aid support.

As I have said in other debates, the important issue of rebar has been looked at in some detail and we have asked CARES to examine how it is dealing with it. It has increased sampling and checks—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question put and agreed to.

Resolved,

That this House recognises the importance of the UK steel industry including as a provider of highly-skilled jobs and research and development; values the steel supply chain which supports strategic industries such as automotive, aerospace and construction; notes with concern Tata’s proposed sale of its Long Products Division and the impact this could have on UK steel industry capacity; welcomes the efforts of UK steel producers to cut carbon emissions and expresses concern that losing trade to countries with less efficient processes could increase global carbon emissions; further notes with concern that some steel imports do not meet British standards; calls on the Government to recognise the importance of the steel industry and to work with it, the Scottish and Welsh Governments and trade unions to provide a co-ordinated plan for the industry’s future; urges the Government urgently to reconsider whether mitigating measures on energy prices, planned to start in April 2016, can be brought forward to support the competitiveness of UK steel producers, to press the European Commission to launch an inquiry into the CARES certification of imported steel products to ensure safety and traceability and to take action through the EU and World Trade Organisation to challenge the uncompetitive subsidisation of steel products; and further calls on the Government to introduce an active industrial policy for the metals industry, including strengthening supply chains, strategic approaches to public sector procurement, encouraging innovation, skills development and resource efficiency and providing support for steel exporters.