UK Steel Industry

Andrew Percy Excerpts

Monday 29th February 2016 Commons Chamber

[Sajid Javid]

My hon. Friend is absolutely right. That does not mean that it is not possible to have tariffs; of course they are possible when there is unfair trading, and that is exactly what we support. That is what the current set of rules used by the EU allows.

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

There is nothing more cruel to steelworkers, many thousands of whom I am proud to represent, than suggesting that all of the solutions to this crisis are in the hands of the British Government. For the record again, will the Secretary of State make it absolutely clear whether the British Government can unilaterally impose the tariffs? If not, will he confirm that it is for the European Union to make that decision? On top of that, is he pushing the EU for higher tariffs than those that have been imposed? It is simple—that is what steelworkers want to hear.

[Sajid Javid]

I can confirm all that to my hon. Friend, who makes his point very well. The rules are applied to all members of the European Union. The tariffs are set after an evidence-gathering process by the EU Trade Commissioner. Clearly, we all want them to be based on evidence so that it can be used to create the level playing field that we all want. My hon. Friend is correct to say that no single country can choose to change a tariff; we must work collectively through the EU rules.

Removing the lesser duty rule would have an impact. We want to address the impact of unfair trade without imposing disproportionate costs on the wider economy. We want to create that level playing field rather than a protectionist barrier. As I have already said—I am happy to say it again—where the evidence suggests it, I want to see the highest appropriate duties imposed. On rebar, which the hon. Member for Cardiff South and Penarth (Stephen Doughty) mentioned earlier, the UK industry is asking for tariffs of 20% to 30%. We support that and think that the evidence backs it, but I will never call for any action that could damage British business and hurt British consumers.

The hon. Member for Wallasey (Ms Eagle) called for an examination of the implications of granting market economy status to China. The Commission has not yet published its proposals, but, even if China is granted market economy status, the EU will still be able to take action on unfair trade practices and impose anti-dumping measures. After all, Russia has market economy status, and the EU has taken anti-dumping measures against Russia. Nor would market economy status affect the EU’s ability to tackle Chinese subsidies through anti-subsidy actions. In fact, the Commission has said that it wants to make it easier to tackle subsidies through trade defence measures.

It is clear that the Commission can do more within the existing rules, and I am doing everything I can to make sure it does so. That is why the UK has led the way in calling for more effective action. It was the UK that demanded and secured an extraordinary meeting of the Competitiveness Council to agree a European-wide approach to the crisis. It was also the UK that lobbied for an investigation into rebar dumping. We have been pressing the Commission to speed up its investigations into dumping so that appropriate steps can be taken as soon as possible. We have written to the Commission with specific proposals. We have voted to take action on seamless pipes and tubes, wire rod and cold rolled products. We have supported the Commission’s investigations into hot rolled flat products, and just last week I personally raised the issue with China’s Commerce Minister when he was in the United Kingdom.

--- Later in debate ---

[Sajid Javid]

That is why we need to use whatever evidence is available. That means working closely with the industry, listening to it and taking note of its evidence. If the industry is saying that the right level is 20% to 30%, it is worth listening to that.

We have provided support packages worth up to £90 million for communities affected by plant closures in Scunthorpe, Redcar and Rotherham. The help on offer includes retraining, support for local companies that want to take on former steelworkers, and emergency help for workers who find themselves in a financial crisis. Earlier this month, Lord Heseltine announced the creation of an interim body for managing the former SSI site in Redcar, to ensure that it reaches its full potential. Lord Heseltine is also conducting a review of inward investment in the Tees valley, as well as looking at how to enhance education, employment and skills in the area.

As for the plants that are still operating, we continue to work with the Scottish and Welsh Governments and with individual companies on their specific needs. For example, we have repeatedly made it clear that we want the blast furnaces to carry on at Port Talbot, and we are working with Tata and the Welsh Assembly Government to help to make that happen. Although this remains an uncertain time, it is encouraging that Tata Steel Europe has announced that Greybull Capital is its preferred bidder for the purchase of the Tata long products business. That is a positive step. The negotiations are a matter for the companies involved, but we remain in regular contact with Tata about its future plans. If it is successful, the sale is likely to involve some element of state financial support, on commercial terms, for the new owner.

We have set up a joint Government and industry steel council to take remaining actions forward and to work through the conclusions of an independent study into the competitiveness of the UK steel sector. I will co-chair the first meeting of the steel council on Wednesday.

[Andrew Percy]

I hope that my right hon. Friend will take note of the Tata support fund that has been launched in north Lincolnshire for those in the supply chain. On the question of likely state support for the Greybull sale, which we are all behind, will he go into a little more detail about what that might look like and at what level it might be set?

[Sajid Javid]

I fully understand why my hon. Friend has asked about that, but the discussions are commercially sensitive at this point. I am happy to reassure him that we are in deep discussions with Greybull, Tata and others, and that where we are able to help by providing support on commercial terms, we most certainly will do so.

The hon. Member for Wallasey has called for us to offer greater support to manufacturing supply chains across the UK. The Government are absolutely committed to British manufacturing. That is why we are investing in infrastructure across the country, and that is why, for example, we are totally committed to building four Successor submarines for our nuclear deterrent. Building the Trident replacement will secure our nation and secure thousands of skilled manufacturing jobs. Sadly, it was no surprise to see the Leader of the Opposition leading a demonstration against it this Saturday. Senior members of the GMB union called that

“armchair generals playing student politics”.

The crisis facing the British and European steel industry is grave indeed, but the charge that this Government are not doing all we can simply does not stick. We cannot simply increase the global price of steel or reduce the level of production in other countries.