British Steel Industry

Alexander Stafford Excerpts

Tuesday 10th March 2020 Westminster Hall

[Alexander Stafford (Rother Valley) (Con)]

Does the hon. Lady agree that the steel industry goes wider than just steel manufacturers? For instance, last Friday I visited Lincoln Electric, a high-quality welding company that specialises in welding together all sorts of things, including steel plates. We need those auxiliary industries, which benefit the steel industry, to support more to happen in our country.

[Marion Fellows]

I really did not think I would be in such agreement with the hon. Gentleman, but I am pleased to say that on this topic, I am.

After a study into the industry, the UK Government encouraged the steel industry, as part of a planned industrial strategy, to come forward with a proposal for a sector deal, and it did. The industry made serious commitments on its side and asked for a list of commitments from the UK Government, which they have refused to sign up to—in particular, to decreasing energy costs for the steel industry. The industry sees that as vital if it is to compete with steel producers on the continent. The £50 million per annum electricity price disparity that the sector asked the UK Government to eliminate in autumn 2017 is now about £70 million per annum.

Even leading Tories say that the UK Government are a problem for the UK steel industry. The Tory Tees Valley Mayor, Ben Houchen, was quoted in The Spectator only this month as saying:

“The biggest problem with the steel industry in the UK is Whitehall…The UK steel policy and the BEIS team are absolutely useless.”

No one from the Opposition has actually said that, but this is what he says:

“It has become a sticking plaster. Oh, British Steel’s fallen over, how do we rescue it? Oh, now south Wales is in trouble, how do we rescue it?”

He says there is too much worrying about failure and not enough planning for success:

“It’s never: what do we want the steel industry to look like? What can we do as a developed nation when we’re having to compete with places like China?”

I have agreed with two Tories in one speech. This is something of a record, Sir Charles.

[Alexander Stafford]

Will the hon. Lady give way?

[Marion Fellows]

No, I would like to carry on—

--- Later in debate ---

[Kwasi Kwarteng]

If the hon. Lady will forgive me, I have already given way, and I would like to make a few points before I give way again.

We have provided more than £300 million to the steel sector since 2013. We have tried to make energy costs more competitive in the sector. We are acutely conscious that steel manufacturers in Europe have slightly lower—in some cases, considerably lower—electricity costs, but then again, the other side of that coin is that consumers in those countries have much higher electricity costs than consumers in this country. There is a debate to be had about how that pricing structure should work.

Looking forward, we have announced the £315 million industrial energy transformation fund, which will give steel manufacturers finance towards using clean energy in their manufacturing processes. We also have a £250 million clean steel fund, which is also supporting the sector’s transition from fossil fuel-burning dirty energy to low-carbon technologies. These initiatives and funds have all been announced and funded in the past few years. We continue to support the steel industry, and we engage with it through the Steel Council set up by my right hon. Friend the Member for Bromsgrove (Sajid Javid) when he was Business Secretary, so it is not true to say that the Government are doing nothing, or that we do not regularly engage with the industry.

[Alexander Stafford]

High-end steel engineering at Kiveton Park Steel in Rother Valley produces steel for aircraft, industry and precision engineering requirements, and is exported widely to Brazil, Mexico, India and China. How can we ensure that our trading relationships are enhanced by the benefit of British manufacturing and British steel products?

[Kwasi Kwarteng]

Exports are at the centre of our industrial base, which is one reason why we support the industry in the way I described. I mentioned the funds and actual policy engagement; we see leaders in the steel sector often. I am pleased that my hon. Friend raisd this issue; it makes a change from fracking, which he often raises with me. However, this is of fundamental importance not only to our industrial strategy but for jobs. I have been struck and impressed by the human stories and the passion with which many MPs here have fought for their industry, their constituents and for the country as well, because we recognise that steel is an absolutely strategic sector.

On prices and the business environment, business rates come up as an challenge that steel companies have to deal with, but they are not alone; across our economy, business rates are often raised. In that vein, the Treasury is committed to reviewing business rates—we hear what people are saying. We want to see what mitigations we can introduce to make the business environment even more benign, to allow companies to thrive.

One extraordinary moment in this debate was the hon. Member for Motherwell and Wishaw quoting Ben Houchen’s writing in The Spectator. That was quite an interesting development. I speak to Ben Houchen, the Mayor of Tees Valley, regularly. He knows that he has many friends and associates within BEIS who are always willing to listen to him on these issues, as they relate not only to the Tees Valley but to the wider steel sector and our industrial base generally. I am proud of engaging with him on this, and I am sure that he understands and recognises that we support the sector and that we are thoroughly and absolutely committed to the steel industry in this country.

My hon. Friend the Member for Rother Valley (Alexander Stafford) mentioned exports. My Department works constantly with the Department for International Trade to ensure that the UK has a suitable trade regime. Naturally, we have not concluded a free trade agreement with the United States as of today, but when we are in the process of doing so, the potential and real damage inflicted on our workers by steel tariffs will be a subject of debate. I am sure that everything will be dealt with in that round of conversation.