UK Steel Industry

Debate between Stephen Doughty and Stephen Kinnock

Thursday 21st January 2016 Westminster Hall

[Stephen Kinnock]

Thank you, Mr Walker. I defer to your better judgment, but I would be more than happy to continue that debate outside the Chamber.

In the light of what we are discussing, will the Minister explain why the Government will not go further in using Government procurement to support the British steel industry? It is one thing to put in place procurement guidelines, but driving the message home across Government, let alone the private sector as well, is another matter. Words are easy, but actions are far more difficult, and those actions require leadership. With Hinkley Point B, the Government have a real chance to show leadership by using procurement to support British industry. However, they seem to be squandering that opportunity, with no British steel due to be used on the project.

I would also like to ask the Government about the Swansea bay tidal lagoon. First, they need to get on and approve the project—each day of delay is costing months or years of progress on it. However, I also ask them to show some leadership and to commit to sourcing all the steel for the turbines, or as much of it as possible, from the United Kingdom steel industry. The tidal lagoon not only provides the entire Swansea bay area with job opportunities, which are desperately needed in the light of Monday’s announcement, but supports local jobs at the Port Talbot Tata Steel plant.

British steel is among the highest-quality steel in the world, and we should make better use of it. British-based certifiers have among the most robust standard regimes, particularly on environmental and social impact, so it is unusual to say the least that the Government appear to favour BES 6001, rather than the far more robust BS 8902, as the standard for reinforcing steel. No Chinese steel meets the stringent quality and sourcing criteria of BS 8902, so its adoption as the Government standard would help to protect against Chinese steel dumping and support high-quality British steel.

The fourth area on which we have repeatedly called on the Government to act is the dumping of Chinese steel on the British market, which is the greatest challenge facing the British steel industry. The Secretary of State for Business, Innovation and Skills is no fan of the European Union, but he seems to be a fan of hiding behind it. The Secretary of State and the Minister know that far more can be done to support the steel industry without the Government’s breaching state aid rules. The Government must work with Europe to deal with the issue of Chinese steel dumping. Last year, China produced 441 million tonnes of steel more than it consumed, much of which was dumped in the UK.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an extremely strong speech. I congratulate him on securing this debate. Given that a number of us have been raising the issue of Chinese dumping and providing detailed statistics and examples for years, not just months, is he surprised that the Government have taken so long to take action?

[Stephen Kinnock]

I am surprised. I believe that the Secretary of State had to look up Brussels on a map to work out how to get there last year.

The critical point is that the European Union sets the rules of the game, and it is up to the member states to invoke those rules and deploy defensive trade instruments. I would like to share something with my hon. Friend. I read a very interesting interview from 2012, which was posted on Twitter by Laura Kuenssberg. She interviewed the then managing director of Tata Steel in Port Talbot—[Interruption.] I know my hon. Friend is well acquainted with it. I apologise for that connection; I assure him that it was completely coincidental. Guess what the managing director of Tata Steel asked for? He asked for action on anti-dumping, on high energy costs, on public procurement and on business rates. We have had four years of inaction, and here we are again. It is like a nightmare version of “Groundhog Day”.

--- Later in debate ---

[Stephen Doughty]

My hon. Friend sets out clearly how the situation affects her constituents. The impact on not only the directly employed workforce in all the plants and operations across south Wales and the UK, but all those working in the associated industries, cannot be overemphasised.

While we have the steel backbone that I described, we also have steel veins and arteries running out into many other industries—related manufacturing, training and expertise, and engineering. The loss of highly skilled jobs in the plants themselves has a knock-on effect on communities right across south Wales and the UK.

I pay tribute to the trade unions and especially Community, which plays a constructive role not only in these debates, but in facilitating the relationship between us and workforces in the plants to enable us to understand what is happening on the floor of the melt shop, and in the rod and bar mill, so that we can see with our own eyes the efforts that the workforces are putting in.

I will not reiterate a lot of points that I have made in previous steel debates, whether from the Front or the Back Benches. Instead I shall emphasise several of the points that have been made and ask specific questions of the Minister. I will focus on constructive solutions. I praise the work of the current steel Minister, and the Secretary of State for Wales has been open about and engaged on this matter with me and other south Wales Members but, to be honest, a lot of this is far too little, far too late. When I was elected in November 2012, one of my first meetings was about the steel industry. The Celsa management and I went to the Department for Business, Innovation and Skills to meet senior officials and Ministers. We presented detailed and carefully constructed warnings about what was happening in the market in terms of Chinese dumping and energy costs. We presented thought-through solutions, and we wanted to work together co-operatively and in partnership to find solutions. Unfortunately, a lot of the warnings were ignored.

I think back to a particular meeting I had in November 2014 in the Wales Office with the Secretary of State for Wales and the then steel Minister, who is now the Minister for the Cabinet Office. To be fair, the Secretary of State made an effort—I genuinely think that he cares about the future of the industry in south Wales—but I am sorry to say that that was simply not matched by the former steel Minister, the Chancellor of the Exchequer and officials in the Treasury and elsewhere. There has been a constant battle between those in government who genuinely accept that there is a problem and want to do something, including the current steel Minister, and others who either act with typical Whitehall caution, saying, “Oh, we can’t do this, Minister. We can’t do that, Minister,” or are actively not interested at all and are pursuing a laissez-faire ideology.

[Stephen Kinnock]

The promises, and the lack of delivery on those promises, specifically on market economy status for China, have been a constant theme. China’s current non-market economy status will be up for review in December 2016. The first step in reaching a decision will be the European Commission making a recommendation. Does my hon. Friend agree that it is time for the British Commissioner, Lord Hill, to stand up for British interests in Brussels and to make it absolutely clear that the British Government will not support market economy status for China? Surely it is time for that promise to be made and, for once, not to be broken.

[Stephen Doughty]

I wholeheartedly agree with my hon. Friend, who is absolutely right. Such promises have been the hallmark of much of the relationship with Europe of this Government and the previous one. There has been a lack of engagement. We can argue about the reasons why, but things have not been followed through until far too late in the day. I know that the Minister will talk about the actions she took, which were very welcome—I praised her for them publicly—but that was the first action after many similar requests in terms of our relationship with Europe.

My hon. Friend the Member for Aberavon talked about market economy status, and my biggest concern is China. It is basic economics. The statistics show that Chinese steel exports have increased every year—they rose in 2009, 2010, 2011, 2012, 2013, 2014 and 2015. If we look specifically at statistics for the EU, we see an upward trend of Chinese exports since the start of 2011. In 2014, they increased by 53%. They peaked in quarter 4 of 2014 at 27.1 million tonnes, but in quarter 3 of 2015, a new record was set of 29.4 million tonnes, which was an increase of 17% in one quarter.