Steel Trade Measure
Debate between Andrew Griffith and Chris Bryant(1 month ago)
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Andrew Griffith (Arundel and South Downs) (Con)
I thank the Minister for advance sight of his statement.
We welcome the partial U-turns that have been announced, the engagement there has been and the reflection, even at this very late hour, that the original proposals from the Government would have done great damage to British manufacturing. This decision could, however, have come months ago. If not, it could have come weeks ago, when Members of the House and businesses started raising the alarm and engaging with the Department. It took this Government—if Members can remember—more than a year and three quarters to come up with their original steel strategy, yet the industry is now expected to adjust with less than one week to go. That is not a reasonable way on which to proceed.
The Government have left untouched the 50% tariff rate, and that will do great damage to British manufacturing, house builders and those who construct the nation’s infrastructure. It will mean higher inflation, fewer jobs, fewer homes and fewer public projects. The Government have made some welcome concessions on how much steel can be brought in but conceded nothing on the rate that punishes imported steel the very moment that the quota is exceeded.
I know, as does the Minister, that he has received significant private representations from industry on this issue, particularly from defence and aerospace, and I imagine that the Minister does understand that this measure will not be enough. Of the 60 codes that we believe are relevant to aerospace and space, just two codes have been removed, and while quota uplifts have been applied, they are not particularly useful to the small-scale, high-value defence manufacturers, as commodity buyers will snap up all those quotas at the start of the year before they get a look-in.
As a result, we are, I am sad to say, putting the defence of this country at risk by imposing a shock to defence industry prices, and it will either be the Treasury or the Ministry of Defence that picks up the bill. Projects such as AUKUS, Tempest, drones and much-needed munition rearming will all be vulnerable as a consequence.
Finally, let me put some questions to the Minister on behalf of the industry. Will he commit to publishing the impact assessment on downstream steel sectors before Parliament rises for the summer? Does the Minister understand that by not exempting pre-agreed purchase contracts, which may in some cases run for years, he is damaging good, decent British manufacturing firms, even those in Rhondda and Ogmore? His exclusions rest on a test of “no production, or production paused”, but will he explain how he justifies keeping specialist grades in scope when in some industries, such as aerospace, it takes years to certify suppliers? Can he confirm that the EU’s reciprocal quota for exports from the UK will fully protect the 2.4 million tonnes of annual British exports of steel that would otherwise be at risk?
Chris Bryant
I honestly just do not think that the hon. Gentleman understands how this works—any single element of it, to be honest. Let me first address his point about the timing. I would have much preferred to give greater notice to everybody, and I worked towards being able to do so. Unfortunately, one of the key parts of the interaction is with the European Union, and we only completed our negotiations with the European Union over the last few days. I point out that the EU itself has not as yet announced its quota, either with us or for any other country, and will not do so until Monday. I wanted to bring this forward as soon as I possibly could.
The hon. Gentleman refers to U-turns. We have listened to the concerns both from specific businesses—I know that some are very pleased with some of the categories we have changed and the quotas we have increased—and from hon. Members, who have brought their concerns to the Chamber or directly to Ministers. We have tried to address as many issues as possible, but, as I said in my statement, there are difficult trade-offs here.
The hon. Gentleman suggests that we should cut the 50% tariff rate. I am not sure that is a point he has made anywhere previously, but if we had a lower tariff rate than other countries, in particular the European Union, we would—this is why I do not think he understands how any of this works—immediately become the dumping ground for all the cheap steel in the world. We would be a magnet for that and we would be exacerbating the problem for steel production that we already have in the UK.
The shadow Secretary of State raised the question of defence. I have looked carefully at this. Of course, he wrote a letter this morning that made some rather ill-founded remarks about what is likely to happen to defence. First, Sheffield Forgemasters is already providing significant amounts of UK steel precisely into the UK defence sector. When the defence investment plan is produced, I want it to deliver jobs in the UK rather than just everywhere else in the world, and I would like more of our defence industry to be based on using UK steel, because that would be a double win for us.
I note that when the previous Government were in place, they commissioned: Type 26 frigates—65% of that steel came from Sweden; Type 31 frigates—all the steel from Finland; and four Royal Fleet Auxiliary Tide-class tankers—44,000 tonnes of steel from Korea. When the Dreadnought-class nuclear ballistic submarines were commissioned by the last Government, where did the steel come from? From France! We can do far, far better than this. It is absolutely preposterous that only 30% of UK steel needs are being met by UK steel production. We need to get that number up. We have committed to getting it to 50% and that is why I am immensely supportive of the measure that we are introducing today.
I also want to make it clear that a lot of categories of steel—as I said, three quarters of the steel by value—is not in scope of the measure at all. That means it can come in and out of the UK without any tariff. Also, the 50% tariff is not on all the steel in a particular category; it is only on that above the quota. In significant areas, we have increased the quota and, for instance, in categories 4, 6, 12A and 7, which is particularly important for the defence sector, the final quotas are higher than the levels of historical trade because some of the previous quotas were not even being fully used. I am afraid that the hon. Member is wrong in nearly every single element of his analysis—and that is not the first time, is it?
Chris Bryant
I have pages and pages on the Windsor framework in relation to this somewhere, but I have only two words on it here. Apart from anything else, part of our negotiations with the European Union had to be about how we ensure proper provision for Northern Ireland. When the EU announces its measures on Monday, I hope that the hon. Member will be pleased with where we have got to on all that. He asked about financial mitigation, which I think means compensation. I am afraid that I am not able to offer that; I want to be very straight with him.
As I say, there are trade-offs here. We need to ensure that we have a strong steel sector. I was thinking about my two grandfathers. One grandfather was a naval draughtsman and an architect on Clydeside. My other grandfather worked on the railways in the docks in Cardiff. For both of them, steel was absolutely essential. I am sure when they were working on Clydeside or in Cardiff, they would have expected all the steel to have been made in the United Kingdom. If we do not take this step today, we will find that we will not have any British Steel at all, and that is why we are keen to take the necessary and, I believe, proportionate steps that we are taking.
Andrew Griffith (Arundel and South Downs) (Con)
On a point of order, Madam Deputy Speaker. I know that in a former life, the Minister was punctilious about standards in this House, so I seek your advice as to how he may correct the record. He referred to a letter that I believe he said his office had received this morning or yesterday. In fact, the Department will have received copies of two letters, one which was sent a week ago, not on my behalf, but on behalf of hundreds of thousands of small manufacturing businesses that were desperately worried, with one week to go before the tariffs. There was a second letter on Tuesday, jointly from me and the shadow Defence Secretary, my hon. Friend the Member for South Suffolk (James Cartlidge), again, sent on behalf of this vital industry, which keeps us all safe. I have not yet received a reply to either of those. I would not necessarily have expected to, but it would not be right for the record to reflect that he had only received the letter this morning.
Business and Trade
Debate between Andrew Griffith and Chris Bryant(2 months, 2 weeks ago)
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Chris Bryant
Of course there are specific things about the Scottish economy that we want to drive forward. For instance, 54% of Scottish goods exports go into the European Union.
Andrew Griffith
The Government do not create jobs; business does. With unemployment rising, this is the last chance to ask the Secretary of State a question ahead of the start of April when a tsunami of business rate rises will hit. Shops and restaurants will see a 50% increase on average and the business rates of hotels will double. He and I both represent wonderful Sussex constituencies full of hospitality, high street and tourism businesses, but young people need those jobs. For their sake and for others, will he finally postpone his business rate rise?
UK-India Free Trade Agreement
Debate between Andrew Griffith and Chris Bryant(5 months, 3 weeks ago)
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Andrew Griffith
The hon. Gentleman makes an important point. I do not want to simply agree with him for the sake of it: it is not easy for Chancellors of whatever flavour to balance the books, but where we have wonderful industries such as all our drinks and spirits industries, including, if I may say so, our English wine industry, the Government must do everything they can to promote them—
Andrew Griffith
And Welsh, and from other parts of this wonderful kingdom.
This Government, as the previous Government, have by and large got the importance of the wonderful Scottish whisky industry, but it is important to do anything that can be done to help. Of course, the way that one reduces taxes over time is by making tough decisions on Government spending, which would be one of the key things the Conservatives would do in order to be able to lower those taxes.
The hon. Member for Stoke-on-Trent Central (Gareth Snell), who is no longer in his place, made an important point about the protection of ceramics and related industries, such as our brick and energy-intensive chemicals industries, which are all important. A trade deal, however wonderful it may or may not be, will do nothing to help the ruinously high energy costs faced by the ceramics, brick and chemicals industries, along with so many others. This debate is not about that issue and it is not the responsibility of the Minister, but it is nevertheless an important factor; if we are going to lower barriers and frictions so that we can boost trade, increase the prosperity of our citizens and grow our economy, that absolutely must involve the full stack, including energy and what one does about employment law and regulation.
Andrew Griffith
The document produced by the Select Committee lays out the impact for defence, modest as I believe it is. I will leave it to those on the Government Front Bench to answer my right hon. Friend’s important question about security—
Chris Bryant
I wonder if I could talk through the hon. Member for Arundel and South Downs (Andrew Griffith) to the right hon. Member for New Forest East (Sir Julian Lewis): our export control system for any exports from the UK into any other country in the world bears in mind diversion from one country to another. That is a very important part of what we look at. The FTA does not affect that process at all.
Andrew Griffith
I hope that my right hon. Friend is reassured to a degree by the Minister’s response. I will move on now—you will be pleased to know, Madam Deputy Speaker, that my speech is not as comprehensive as the work of the Select Committee.
I would be grateful if the Government could clarify a few points about the position on food and agricultural products. There are protections for sugar, chicken, eggs and pork, and that has been welcomed by producers. However, there are concerns from the British dairy industry about opening the market, which describes the deal as a one-way street: dairy is excluded from UK exports to India, yet tariffs on Indian dairy coming into the UK are removed.
Chris Bryant
I will try to keep up as we are going along, if that is okay. On dairy, I understand the point the hon. Gentleman is making; it has been made to me before and was also made in Committee. However, I am not aware of any Indian cheese company that has been able to export into the UK, as it would still need a licence. We were very keen to secure arrangements so that we were not abandoning any of our food standards, which obviously have to be met before any export can come here.
Andrew Griffith
I will try to leave the Minister with a short list of questions, rather than going through each and every one as we go.
Notwithstanding what the Minister has just said—perhaps we can revert to this later—there are also concerns about the Government’s hypocrisy in respect of pesticides and animal welfare, particularly with regard to crustaceans. I do not know whether the Minister has quite the same degree of expertise in crustacean welfare and in particular prawn eyestalk ablation, which sounds more trivial here than it would to the prawn whose eyestalks are being ablated. Those concerns are particularly relevant because despite the Government publishing and vaunting their virtue in terms of animal welfare, these poor blinded prawns seem to be victims under this deal. [Interruption.] I would be happy to give way to the Minister on prawn eyestalk ablation, which is an important point; perhaps, on winding up, he could make a more general point on trade deals and how the Government will protect our animal welfare and food safety standards.
Andrew Griffith
My hon. Friend puts the point in a better and more informed way than me. It is important, and it is for the Government to set out very clearly how they propose to maintain or create a level playing field on these matters so that producers operating here to British standards are not disadvantaged, while we all get the benefits of trade and prosperity that I spoke of.
Chris Bryant
We are all joking about it, but this is a serious matter. The centre of the point is that whatever the tariffs may do, companies can only sell products in the UK that meet our food standards—precisely the point made by the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). In order to ensure that is true, companies have to have a licence to sell in the UK. In addition, all Indian aquaculture products are currently subject to intensified controls with 50% consignment checks at the border. This is one of the many areas where we need to ensure that we protect our producers in this country, who are abiding by very high standards. I could apply that to all the different agriculture and foods that we are talking about, as well as to aquaculture.
Andrew Griffith
I thank the Minister for that intervention; I drew some comfort from it, but we will have to see the detail of the exact crustacean protections we end up with.
Finally, there is one glaring area that—even beyond the missing benefits to our important services industry—was a point of difference in the negotiations that we conducted and a reason why, when we were in government, we did not consummate that deal and why the negotiations remained outstanding. The Leader of the Opposition has been very clear about this: when she was leading the negotiations, she refused to sign this deal because of the double contributions convention. The Minister will know precisely what I mean by that.
We still have not seen the detail of that convention, and every Member of the House should be concerned. This is a very limited part of the process of scrutiny of trade deals—the rights of Parliament are perhaps not fully discharged just by the CRaG process. However, we have not even seen what the Minister referred to earlier as the HMRC agreement on this. What it means in substance—I will choose my words very precisely—is that Indian workers who come here to work will not pay a penny in British national insurance contributions, and neither will their employers.
The Government decided that they would open this deal—this two-tier tax system for India—at precisely the same time as hiking their jobs tax on every single British worker. I am happy to be rebutted or corrected, but by my calculations, under this agreement it could be up to £10,000 a year cheaper to hire a software developer on an average British salary from India than to hire someone from Britain for the same role, as employers will not be liable for those national insurance contributions. These are big numbers, and this will mean a big disadvantage to hiring an identical British worker at a time when there are 9 million people of working age not in work and when unemployment is rising—in fact, it has risen every month under this Government.
Andrew Griffith
I am glad to hear agreement across the House on the desire not to have a two-tier system. We all understand the need to pay our taxes to support our public services, but it will not feel right if two people are sitting cheek by jowl, side by side in the same place of employment—a factory or other work environment—but are contributing at a very different rate to the Exchequer for the public services that we all support.
Andrew Griffith
Let me finish my point, and then there will be plenty of opportunity for interventions. I will not anticipate the Minister’s point, but there are other agreements such as this in place—I want to be full and clear about that.
There are social security agreements where contributions are both paid in and taken out. We have them with the European Union, for example. They are a long-standing feature, and they were under previous Governments. Again, to be very clear and open, we also have a limited number of agreements like this with some selected other countries, including the high-skilled economies of Japan, South Korea and Chile and, to some degree, Canada. But we do not have an agreement like this of any sort with a mostly English-speaking nation of 1.5 billion people, all of whom would potentially be better off availing themselves of this arbitrage—this two-tier system—under this deal.
Astonishingly, this part of the deal was left out of UK Government communications, so not only do we have two-tier substance in terms of the economics of the deal; we also have two-tier communications. The Indian Government boasted about this element as a significant and attractive feature of the deal, but there was not a single mention of it in the UK Government communications. That, in and of itself, should send alarm bells ringing about this two-tier tax deal.
Chris Bryant
I was not going to make the point that the hon. Member went on to make—that his Government signed up to lots of similar arrangements—but I was going to respond to the intervention from the hon. Member for Dewsbury and Batley (Iqbal Mohamed). It is important that we make it clear that under the double contributions convention, a detached Indian worker and their employer in the UK would need to pay into the Indian provident fund. On top of that, they will need to pay £3,105 in NHS surcharges, and up to £769 in visa fees. On top of that, the employer would pay an immigration skills charge of £3,000, and £525 to issue a certificate of sponsorship, so I do not think that the numbers add up in the way that the hon. Member for Dewsbury and Batley was suggesting.
Madam Deputy Speaker (Caroline Nokes)
Order. The shadow Secretary of State has already spoken for longer than the Minister, which must be something of a record. I appreciate that there have been a lot of interventions on the shadow Secretary of State from Government Front Benchers, but perhaps he can draw his remarks to a close. The Minister will have ample time to make his points in the wind-up.
Oral Answers to Questions
Debate between Andrew Griffith and Chris Bryant(7 months, 2 weeks ago)
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Andrew Griffith (Arundel and South Downs) (Con)
Five Lib Dem Lords a-leaping. That is all it took for the Liberal Democrat party to throw every British business under the bus and expose them to the unimaginable liability of infinite tribunal payouts. It is hard to think of a more anti-growth, anti-job measure. On Monday, the Liberal Democrat spokesman was against, on Wednesday they were for and goodness knows where they will be tomorrow. Does the Minister agree that British business would have an entirely fair case to dismiss the lot of them?
Chris Bryant
The hon. Member seems to have lost the plot, frankly. Let me just point something out to him: what was average growth under the Tories? It was 1.5%. What is it under Labour? It is 2.2%. Which is higher? It is higher under Labour than the Tories. Average employment in the UK under the Tories was 73.8%. What is it under Labour? 75%. Which is higher? It is higher under Labour. Average inflation under the Tories was 3.2%. Under Labour, it is 1.8%—better off under us. I will just say on rights that we do not create a healthy and wealthy society if we ignore the rights of workers.
Andrew Griffith
Lyndon B Johnson said the first rule of politics is to learn how to count. The Government lost the vote in the House of Lords last night on the unemployment Bill because 144 of their own peers did not want anything to do with that Bill. One Labour peer has already resigned to join the exodus to Dubai. Tony Blair would never have brought forward this Bill because he understood the importance of growth. Will the Minister now accept the sensible compromise passed in the other place last night and today give British employers and workers the certainty they need for business to grow?
Chris Bryant
I can count; the hon. Member cannot. Let me remind him: growth under the Tories was 1.5%, and growth under Labour is 2.2%. Which is higher? It is higher under Labour, isn’t it? Why did we lose the vote last night? Because of 25 Tory hereditary peers. Why on earth would that be? Why do we think they might not be willing to support Labour? Look, it is absolutely clear that it is business that builds economic growth, but we cannot create a wealthy nation if we do not tackle poverty, and we cannot tackle poverty unless we grow the economy—just like a prosperous business cannot be built on the backs of the workers, and that is what we will never do.
Andrew Griffith (Arundel and South Downs) (Con)
Labour’s steel strategy was originally promised in spring 2025, but yesterday we learned from a written ministerial statement, snuck out without Ministers coming to the House, that the strategy will now not be published in 2025 at all—it is more likely to be spring 2026. We have no steel strategy after 18 months, there is no sight of the US tariff agreement on steel that the Prime Minister claimed to have on 8 May, and no deal with the Chinese owners of British Steel. Will the Minister give the sector the Christmas present that it wants and publish the steel strategy?
Chris Bryant
It is a bit of a cheek, isn’t it, the Conservatives coming and talking about a steel strategy when they had absolutely no strategy and did not even choose to go and visit some of the steelworks that we are talking about. There will be a steel strategy. The Under-Secretary of State for Business and Trade (Chris McDonald) has been having discussions with trade unions and industry, both downstream and the producers, and we will be producing a comprehensive steel strategy very soon. I am happy to deal with the tariff issues if there is a little time later.