Steel Industry

Debate between Andy McDonald and Iain Wright

Wednesday 14th January 2015 Commons Chamber

[Mr Wright]

My hon. Friend is absolutely right. It was a serious, strategic, targeted investment that was based on a credible assessment of what would be required in our future industrial capabilities. As someone who has a nuclear power station in his constituency and who wants to see the supply chain in steel and other parts of industry thrive as a result of a new generation of nuclear power, I think it is important that we look at this issue in a co-ordinated manner.

I want briefly to conclude my remarks about the long products division. I do not want to see assets stripped away from the UK by a buyer, so I have some questions that I hope the Secretary of State will answer when he responds. What guarantees will the Government extract from any potential buyer of the long products division on the safeguarding of jobs, additional investment and the maintenance of existing sites, such as Scunthorpe, as places where steel is made? Is any such deal contingent on grants and funding being provided by the Government, and what would those be?

The Secretary of State will be aware of the UK’s national trade union steel co-ordinating committee, which is made up of representatives of Community, the GMB, which is my union, and Unite. It has hired the consultancy Syndex to look at alternatives to Tata’s selling its long products business. What support is being given to that work, and what pressure will the Government put on all the parties concerned to ensure that any recommendations in the Syndex report are considered and acted on?

[Andy McDonald (Middlesbrough) (Lab)]

My constituency exists because of iron and steel, and many of my constituents continue to work in the Teesside plant. Does my hon. Friend agree that the Community union has at its disposal incredible expertise and knowledge about processes and markets in the industry? We would be foolish to ignore that resource. It should be exploited to the full as we try to preserve the long products division of Tata Steel.

[Mr Wright]

My hon. Friend is right. I would like to class him as a good friend, and I take great pleasure in pointing out that West Hartlepool was a thriving industrial port at a time when his area was just sand dunes. I appreciate, however, that his area was later nicknamed “Ironopolis” and was an important part of the iron and steel industry in the 19th century. He makes an important point—why would we remove assets, both physical and intangible? Why do we not exploit the real talents that lie within the trade union movement and the work force to ensure that we have a real future for the steel industry?

With regard to the ownership of the long products division, the Government say, “Let the market decide”. However, they are intervening in other areas, producing an uneven playing field for British-based producers, to the detriment of the UK steel industry’s competitiveness. Nowhere is that more acute than in the field of energy costs, as has been pointed out time and again, including by my hon. Friends the Members for Alyn and Deeside (Mark Tami), for Middlesbrough South and East Cleveland, for Scunthorpe, for Newport East (Jessica Morden) and for Llanelli (Nia Griffith).

The future of the steel industry should prioritise low carbon and sustainability, and the task of an industrial policy is to assist the sector in the transition. It should not happen in a way that forces UK steel producers out of business or away from these shores. We should not get into a ludicrous situation where there are higher global carbon emissions because we are importing more and more of our steel requirements from countries with reduced regulation.

Steel costs more to manufacture in the UK than in European neighbours, often by as much as 25% to 50%, because the French and German Governments have prioritised the steel industry as being vital for manufacturing, have not imposed cost burdens on it and have worked to mitigate any pressures quickly. In contrast, the UK Government’s response has been half-hearted and slow, reflecting the lack of priority that they give to the steel industry.