UK Steel Industry

Andrew Percy Excerpts

Tuesday 9th July 2019 Westminster Hall

[Andrew Percy (Brigg and Goole) (Con)]

I thank the hon. Gentleman—my constituency neighbour—for securing this debate; he is a genuine champion of our local area and for steelworkers in particular. Would he encourage more local authorities to sign up to the steel charter? Last week, North Lincolnshire Council’s leader got the first London authority—Bexley, I believe—to sign up. It is really important that more councils sign up to that charter.

[Nic Dakin]

The hon. Gentleman is absolutely right; to its credit, North Lincolnshire Council has shown strong cross-party unity and leadership on this issue by signing up to the procurement of UK steel. A number of local authorities across the country have done so, but many more could follow that lead, and he is right to call for that action.

All Government Departments, bodies and infrastructure projects that purchase large quantities of steel should sign up to the UK steel charter, committing to specific, ambitious actions to increase the amount of UK steel used in public projects. The guidelines should be extended to cover all major public procurement and infrastructure projects. The good practice exemplified by Network Rail and Heathrow airport should be the rule, not the exception.

The fifth ask is to use the UK’s €250 million share of the research fund for coal and steel, which is paid for by industry levies and will be returned after we leave the EU, to secure an ambitious programme of innovation for the UK steel sector. A practical use for that money would be investment in our steel sector’s future. The previous Steel Minister made a commitment on behalf of the Government to convene a steel summit to consider how to realise a steel sector deal that would take the industry, its supply chain and the country forward. Will the Minister confirm that the Government will take forward that commitment? Will he respond positively to the practical suggestions I have made about how the Government can act to back steelworkers, steelmakers and UK plc?

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[Andrew Percy (Brigg and Goole) (Con)]

It pains me to disagree slightly with the hon. Member for Rotherham (Sarah Champion)—for whom I have a high regard and whom I consider a friend—but it is simply not the case that the Government have done nothing. It is also a little rich to take lectures from Labour, under whose last tenure in government the number of people working in the steel industry halved and UK steel production fell.

It is not the case that the Government have done nothing. This Government have acted to defend the steel industry in a number of ways, whether by creating the scheme that enables the company to be reimbursed for its high energy costs, by restructuring business rates, which have a direct beneficial impact on the site in Scunthorpe, through the millions of pounds that they made available shortly before the liquidation of British Steel to cover the EU carbon credits, or through the tens of millions of pounds that the Government were prepared to put in but could not do so because an arrangement on a commercial basis, as required by UK and EU state aid laws, could not be achieved. The Government have a strong record of supporting the sector and supporting steel workers in Scunthorpe.

It was the UK Government in the EU that led demands to change procurement rules within the European Union, just a few years ago, to make it easier for us to procure UK steel. Of course, those procurement rules are still a challenge for us. The Government cannot just turn around, as some people think, and say, “We are going to use UK steel in all Government contracts.” That would be illegal under UK and EU law, and—for those who think that a no-deal Brexit is the answer to all this—it would even be illegal under World Trade Organisation rules.

Having used half my speech to slightly disagree with my friend the hon. Member for Rotherham, I will say why we need the Government to act now and set out some things they need to do.

As the hon. Member for Scunthorpe (Nic Dakin) outlined, our area relies strongly on the steel industry. Scunthorpe is a steel town; north Lincolnshire is, in many ways, a steel district. Most of the workers—the lion’s share, probably—live in my constituency. We cannot underestimate the impact of steel workers on our local economy, because these are some of the best paid and most skilled jobs we have in our area. I am not prone to hyperbole—well I am, but let us pretend I am not—but to lose them would be devastating on our local economy.

[Martin Vickers (Cleethorpes) (Con)]

Will my hon. Friend give way?

[Andrew Percy]

Of course I will give way to my neighbour.

[Martin Vickers]

My hon. Friend is, as always, erudite—that is the word I was looking for. His point about the northern Lincolnshire economy is well made, as it was by the hon. Member for Scunthorpe (Nic Dakin). Would he also acknowledge that this issue spreads far and wide? Some 150 people are employed at the port of Immingham, either by Associated British Ports or British Steel directly. Speaking as chairman of the all-party parliamentary group on rail, I can say that there are impacts not just on the supply of steel but on the movement of raw materials.

[Andrew Percy]

Absolutely. I do not need to repeat what my hon. Friend said; all that is true and demonstrates how important the industry is not just to our sub-region or region, but to the whole UK economy.

Where are we now? I thank the Minister and the Secretary of State for the positive way in which they have engaged with local stakeholders, unions, the councils and local Members of Parliament. I genuinely believe that this Government are trying to do everything they can to secure a future for the site. This is an independent procedure through the official receiver, but locally we do not want to see a partitioning off or a selling off of different parts of the business. We want to see the business sold in its entirety. For the reasons stated by the hon. Member for Scunthorpe in relation to the strategic importance of the industry, we have to continue producing steel in Scunthorpe.

The Government must stand ready to do all they can financially to support the industry. There are tens of millions of pounds that were available before the liquidation, which we have been assured remain available for any new partner on a commercial basis, as required by law. Can the Minister reconfirm that today? That would be appreciated.

We have to be honest about the situation if a buyer cannot be found. We know that we are down to a shortlist —it is good that there are number of buyers who are realistic prospects to purchase the business—but as I and other colleagues have repeatedly said, we must not be close-minded about any particular structure moving forward. Nationalisation does not get us over the problems of investment having to be on a commercial basis. That might or might not be an answer in and of itself, but it does not mean we should simply rule that option out, or the option of a public-private partnership. Every option should be considered by Government to ensure that the whole business can continue to operate.

We do not want the crumbs off the plate, as it were, and just a few hundred jobs saved if part of the business were sold separately. We want it to continue in its current form because it is so strategically important to UK plc.