UK Steel Industry

Alex Sobel Excerpts

Tuesday 9th July 2019 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

On that point about opportunities, my hon. Friend’s constituency was the cradle of stainless steel, and it now has ITM Power, which makes hydrogen. Does she agree that hydrogen steel furnaces are part of our commitment to address climate change, and could create a whole new steel industry in the UK, leading the world?

[Gill Furniss]

I thank my hon. Friend for his intervention. I absolutely agree, and I very much look forward to my home town of Sheffield taking up those opportunities, because it is well placed to lead a green industry.

As I was saying, we always need steel, which literally forms the fabric of everything we see. I sincerely worry that both contenders to be the next Prime Minister are advocating a no-deal Brexit. As UK Steel has clearly stated, that would be catastrophic for the sector. It could cost it £70 million and lead to further collapses.

The steel industry has many strengths and is able to thrive, but, for that to be achieved, we need the Government to commit to help. The future of UK steel can be bright, and the Government’s own analysis has identified a £3 billion opportunity by 2030, sustaining good jobs in the areas that need them the most. The news last week that Jaguar Land Rover will invest £1 billion in building electric cars in the UK was an enormous boost, with the company leading the way on electrifying the cars on our roads and signalling a commitment to a greener economy. The opportunities for end-to-end supply in that process—making the steel at home to support the building of those vehicles—could be enormous. That could support and encourage growth in the steel sector while spearheading a green revolution.

It is disappointing that the opportunity to secure a steel sector deal has never come to fruition. I am pleased to see the new Minister in his place, and I urge him to give that issue the greatest importance. The steel sector needs that deal for innovation, for user research and development, and to be there to take on exciting opportunities for the future. The steel industry is there and waiting to be helped with the challenges ahead and the opportunities to make it thrive.

UK steel companies pay 50% more in energy costs than their competitors in the EU. On procurement, we know that UK Government decisions are a hugely powerful policy tool to boost British steelmakers’ orders. The decision to use our steel for the royal fleet, mentioned, I believe, by my hon. Friend the Member for Rotherham (Sarah Champion), would be much welcomed. It would also make complete sense for our national defence. Please, Minister, look at that, because those are the opportunities that need to be put forward.

I commend the UK steel charter, which is aimed at enhancing and maximising procurement opportunities for UK steel producers. The Welsh Labour Government were the first to sign up to that commitment. They are leading the way, but Departments in Whitehall appear to be resistant to signing up. Will the Minister commit that all Departments will sign up to the charter?

On business rates, the perverse inclusion of investment in machinery, which increases a company’s business rates, is patently a barrier to investment. Some British steel companies have huge disparities in their business tax bills across their plants in Europe. For example, Tata pays a business tax bill in Wales that is 10 times that of its operation in the Netherlands. Will the Government join the Labour party in our pledge to remove machinery for steel companies from business rates to ease that burden and invite more investment back into the steelworks? I am not saying it will be easy, but what is a Government for if not to support our foundation industries and encourage their growth?

Our steel industry is fabulous, innovative, flexible and resilient, and it can thrive. Please help us to make sure it stays that way.