Angela Eagle
Main Page: Angela Eagle (Labour - Wallasey)Department Debates - View all Angela Eagle's debates with the Wales Office
(9 years ago)
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Ms Angela Eagle (Wallasey) (Lab)
I beg to move,
That this House believes that the UK steel industry is of national strategic importance and should be supported by the UK Government; notes that the UK steel industry is in crisis and that the recent closure of SSI in Redcar has resulted in 2,000 direct job losses, with a further 1,000 contractor jobs lost and 6,000 jobs to be lost in the local supply chain, the announcement by Tata Steel that they will no longer produce steel plate at Dalzell, Clydebridge and Scunthorpe has resulted in 1,170 job losses, and that 1,700 jobs are at risk as Caparo Industries has gone into administration; recognises that for every direct steel job lost a further three indirect job losses will follow; further notes the vital importance of the steel industry to those local communities it serves, the proud industrial heritage of Britain’s steel towns and the very real threat to these parts of the country should the steel industry disappear; and calls upon the Government to take immediate action to protect the steel industry, including immediately implementing the Energy Intensive Industry Compensation Package, taking action with the EU Commission on antidumping measures, looking at temporary action on business rates, reviewing how regulatory frameworks impact the industry, and promoting local content and sustainability in procurement contacts, and for the Government to publish a full industrial strategy including what level of capacity the Government envisages is needed in the steel industry, so as to safeguard this vital strategic asset.
Labour has secured this debate because the British steel industry is in full-scale crisis, and before they were pushed the Government seemed unwilling to do anything practical about it. In the last three weeks, 2,220 employees in Redcar have lost their jobs, 3,000 on-site contractors have been laid off, and 6,000 further jobs will be lost in the local community. The hard closure of the site means the effective destruction of its steelmaking assets, including what was the second largest blast furnace in Europe. The Government’s refusal to help has effectively ended 170 years of steelmaking in Redcar, destroying specialist local skills and condemning the community to a bleak future. Tata Steel’s announcement about the closure of its long products business in Scunthorpe, Dalzell and Clydebridge has cost 1,170 jobs, and effectively ended steelmaking in Scotland. The news that Caparo Industries has filed for administration means that 1,700 more jobs are at risk across the country.
Alongside the tragedy of each job loss, and the ramifications for supply chains and local economies, there is a real worry that the UK’s steelmaking capacity is being sacrificed on the altar of laissez-faire economics by a Government who simply will not act to preserve our country’s strategic assets. Labour contends that steelmaking in the UK is an industry of national strategic importance and should therefore be supported by the Government.
Steel is important for UK manufacturing as it helps our balance of payments, and it is vital for our defence and security. If we are about to embark on the huge infrastructure investments that the Chancellor is so fond of boasting about, surely we should ensure that UK steel has every chance to compete and win those contracts. To do that, we must ensure that the UK steel industry still exists when those contracts come up for competition. As the industry has lurched deeper into this wholly foreseeable crisis, the Government have been quick to come up with expressions of sympathy, but noticeably reluctant to take any decisive action.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
My hon. Friend will be aware that concerns about the challenges facing the steel industry have been raised repeatedly in this House—I think there have been 10 debates—and there have been repeated questions, meetings, exchanges with officials from the Departments for Business, Innovation and Skills and of Energy and Climate Change, and others, for more than two years. Is she surprised, as I am, that it has taken until today for the Business Secretary to get on a train to Brussels and try to sort out this mess?
Ms Eagle
I certainly am surprised. If the Business Secretary needs an Opposition day debate to encourage him to do his job by going to Brussels and talking to the Commission after years of not doing that, we will secure more such debates and persuade him to do his duty, which he should have been doing in the first place.
Anna Turley (Redcar) (Lab/Co-op)
I was proud to secure a Backbench Business Committee debate on the crisis in the steel industry. It took place just one day before the Redcar steelworks paused production, yet we were accused by the Minister for the northern powerhouse of “showboating”. Does my hon. Friend think that that is an appropriate description for a parliamentary debate?
Ms Eagle
I was fairly astonished to read the comments from the Minister for what the Government call the “northern powerhouse”. He said that what has happened to Redcar was a “tragic distraction” from his work on the northern powerhouse—I had hoped that he would have seen it as part of his job to try to get the Government to take much earlier action to head off an entirely foreseeable occurrence.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend agree that the Chinese have not just started dumping steel but have been doing so for a long time?
Sir William Cash (Stone) (Con)
I lived in Sheffield for the best part of 30 years. Does the hon. Lady accept that the real decline in the steel industry started with the horrendous nationalisation of the industry by the Labour party? What steps have Labour Governments ever taken to restrict state aid in other parts of the European Union, and from countries such as Germany and others?
Ms Eagle
I suspect that the nationalisation of the steel industry took place before I was born, and we could have a history lesson on that. There are many examples of EU Governments who do a much better job at preserving their steel industries than this Government appear to have done so far.
Wayne David (Caerphilly) (Lab)
The House of Commons Library has produced a paper on European state aid. It states clearly that Germany, for example, gives more than twice the amount of state aid that is provided in this country. Moreover, a raft of indirect state aids are given in Germany, but this Government have decided not to do that in this country.
Lady Hermon (North Down) (Ind)
When this Conservative Government were considering devolving to the Northern Ireland Assembly the power to set their own corporation tax, they were exceedingly concerned that that would be a state aid and illegal under EU legislation. However, where there is a will there is a way, and within the Stormont House talks the Government have been able to devolve that power to set corporation tax. This Government should have the will to save the steel industry in this country, and ensure that such aid is not illegal under the state aid rules.
Geraint Davies (Swansea West) (Lab/Co-op)
On the EU helping out, does my hon. Friend agree that there is a strong case for carbon tariffs from the EU so that we do not displace clean steel produced in Britain with dirty steel produced in China and elsewhere?
Ms Eagle
My hon. Friend’s practical suggestion should be considered with great seriousness not only by the Government but by the EU.
The steel summit in Rotherham was convened only following the Backbench Business Committee debate, and it ended with more job losses and no significant Government announcements. Far from keeping the House informed as the crisis has unfolded, the Government have had to be dragged kicking and screaming to the House to answer urgent question after urgent question.
Steel is an energy intensive industry that inevitably results in extra costs being placed on it for environmental reasons, but the Government have the power to lower energy costs for steel producers through implementing the energy intensive industry compensation package immediately.
Ms Eagle
In a minute.
Despite being announced in the Chancellor’s autumn statement in 2011, the most substantial part of this package is still waiting to be implemented. Ministers admitted in a parliamentary question to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that they have not even bothered to raise the issue with the Commission in the last 12 months. It is clear that the Government have shown no leadership in Europe, and the Business Secretary is visiting the Commission for the first time today—better late than never I suppose, but what on earth has taken him so long? I welcome his visit, and I trust he will emerge from the Commission with some tangible progress—after all the foot dragging and inaction, it is about time he did.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The EU emissions trading system has already been compensated—that is an EU-wide market taxation system—and we are talking about the carbon price floor, which was introduced by the Chancellor. He did not consult industry or talk to the European Union, and he had to go to Brussels—well, we do not know whether anyone has gone there yet; we presume the Business Secretary is there today—to get compensation for a tax that this Government introduced unilaterally and without any consultation with industry. That is the issue. We are talking about a compensation package for a British tax.
Ms Eagle
My hon. Friend represents many constituents directly affected by the closure in Redcar, as does my hon. Friend the Member for Redcar (Anna Turley), and he demonstrates his knowledge of the problems faced by the British steel industry. It is a pity the Chancellor of the Exchequer did not acknowledge those problems when he came up with that policy.
David T. C. Davies
In the spirit of politeness, the hon. Lady and Opposition Members are absolutely right to raise this important issue, which affects many in my own constituency in south Wales. She mentioned environmental taxes. I have much sympathy with the point she is going to make, but does she not concede that it was her Government who brought in the environmental taxes in the first place?
Ms Eagle
The hon. Gentleman needs to demonstrate to his constituents that he is fighting for their jobs now. He needs to be putting pressure on his own Front Bench to have a proper strategy. This is a heavy industry, which is, by definition, energy intensive. The problem is that the Government do not have a strategy and are living hand to mouth trying to deal with a crisis they should have seen coming.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that there is no strategy across the country? For example, Govia Thameslink is about to have new trains built for 2018, for the Hornsey depot in my constituency, yet there seems to be no attempt to get it to purchase steel from our own steelmakers.
Ms Eagle
My hon. Friend comes up with yet another example of the lack at the heart of this Government. They do not seem to believe we should have an industrial strategy. Therefore, as these contracts come up, they seem to be living from hand to mouth without actually having a coherent and proper strategic approach to use the power of government procurement to try to preserve UK jobs.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend agree that there can be absolutely no doubt that the Conservative party does not believe in an industrial strategy? The Secretary of State for Business said in an article in the Financial Times not four weeks ago that he does not like industrial strategy. Does she not agree that that is an absolutely disgraceful statement for a Secretary of State to make?
David Mowat
The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is right: the carbon tax floor is a bad tax and a tax on manufacturing, but so, too, is it true that in every one of the five or six occasions in the previous Parliament when we debated energy prices, Labour Members voted for higher energy prices. In particular, in December 2012 they were led through the Lobby to vote for the accelerated closure of the British coalfields in advance of anything happening in Europe. The carbon price floor is a unilateral tax, because the EU abandoned the emissions trading system and left us acting unilaterally in this regard.
Julie Elliott
Does my hon. Friend agree that the carbon price floor was a tax introduced by the previous Conservative-led Government, and that it is an entirely revenue raising tax that does absolutely nothing to contribute to combating climate change?
Ms Eagle
Yes, I do.
Rather than hiding behind the European Commission, why do the Government not take action first on energy-intensive industry payments and get retrospective approval later? That is what Germany did with its Renewable Energy Act 2012. It provided support to producers of renewable energy from January 2012. It did not submit the Act for prior state scrutiny. It let the Commission investigate and then state aid approval was received in November 2014, two years after it had first provided support. Why can our Government not look after the interests of UK steel in the same way? It is hard to avoid the conclusion that the Government have been so slow to act because they have an ideological aversion to any Government intervention. We have a Secretary of State who will not let the phrase “industrial strategy” cross his lips.
We on the Labour Benches support international trade, but free trade must also be fair. China is currently responsible for a tsunami of cheap steel, which is being dumped on European markets. The UK should be at the forefront of demanding rapid and effective action to stop it.
Andrew Gwynne (Denton and Reddish) (Lab)
We are not just talking about the here and now, but the longer-term economic vision for the country. As sure as night follows day, the steel price will recover at some stage and we could find ourselves without a steel industry and be wholly beholden to other countries.
Ms Eagle
My hon. Friend makes an extremely important point. The steel industry is very cyclical in nature. During the hard times and the downturns, it is very important to try to act to preserve assets of strategic importance to our country, so that we can take advantage of the upswing and the recovery when it comes.
China is currently responsible for a tsunami of cheap steel products. Last week’s Chinese state visit is over and done with, so I hope the Business Secretary will be making the case in Brussels today that we should act rapidly to stop the dumping of Chinese steel products in Europe. The scale of the new Chinese imports and the speed of their arrival is staggering. Its surplus production is nearly twice the annual production in the entire EU, and it is increasingly finding its way here. Chinese rebar has grown from having zero presence in the UK market in 2013 to comprising 37% of it a year later. There are quality concerns with some imported Chinese steel. We also know that Chinese steel production causes more environmental damage than UK production, so it is a false economy to allow it to continue.
For both those reasons, action to tackle dumping is vital and long overdue. Perhaps the Minister can tell us, when she winds up, what she managed to achieve during her recent visit to China. I can tell her that both the leader of the Labour party and I raised this issue with Premier Xi and his delegation during the recent state visit to London. Did she raise it during her visit to China? If so, what are the Government actually going to do about the huge amount of imports and the dumping? When it comes to acting on China specifically, perhaps the Government should be less interested in selling off our nuclear industry and more interested in standing up for the strategic interests of the UK.
Standing up for British steel means standing up for the high-quality skills that have built some of the UK’s, and indeed the world’s, most iconic landmarks. British steel built Canary Wharf, the new Wembley stadium and Sydney Harbour bridge, and it will be building the Freedom Tower in New York. We should all be proud of what the UK steel industry has achieved, but the Government cannot treat it as some relic of the past; it has to be a vital part of our country’s future. That is why the Government must do more—much more—to see the industry through these tough times and prepare it to seize future opportunities. The Government should publish an industrial strategy for steel and be open about how they envisage maintaining the strategic steelmaking assets in this country during hard times. It is only firm action now that will guarantee any future at all for UK production.
I commend the campaign by the Daily Mirror, which is setting out daily the compelling case to save our steel. Just in case Ministers were in any doubt about the urgency, Gareth Stace of UK Steel has today described the industry as being like a patient on the operating table “likely to die” without help.
Community, the main steel union, has called for an urgent meeting with the Business Secretary because of the ongoing threat to jobs, as it has emerged that no representative of the workforce, be it Community, the GMB or Unite, has yet been invited on to any of the working groups set up after the steel summit. [Interruption.] The Minister says there is no need to invite representatives of the workforce on to these working parties. Ministers should meet the workers from steelmaking communities, including Teesside, Lincolnshire, Yorkshire and south Wales, who are lobbying Parliament to hear at first hand, as I have, the real cost of Government inaction.
The Prime Minister claims the Government are acting on procurement. Just yesterday, the Minister told the Business, Innovation and Skills Committee:
“I would say buy British because it’s quality.”
However, the inadequacy of the Government’s response was laid bare on the very same day, when it was revealed that the Government had just spent more than £3 billion on three new Royal Navy ships and 589 Scout specialist vehicles for the Army, which will use imported Swedish steel.
Mr Kevan Jones (North Durham) (Lab)
The Minister is a former Defence Minister, and her own Department announced this year the new £200 million icebreaker for the polar research undertaking. I tabled a question to the Minister for Universities and Science, who could give no commitment from the Business Department that the ship, which is being built at Birkenhead, would use British steel. Is that not a great example of where the Department could put its money where its mouth is?
Ms Eagle
I hope we can get some progress on procurement, not least from BIS, which is contracting out the icebreaker research vessel as we speak. Otherwise, all of this is a missed opportunity. The UK steel industry needs action, not good intentions. The Government need to act much more effectively on procurement, and if they do, we will support them, but we will judge them on the contracts awarded that guarantee a future for UK steel; we will not judge them on warm words or grand but meaningless press releases.
The Government should explore the scope for acting temporarily on business rates. Failure to act is not cost-free, as the hard closure at Redcar demonstrated. With redundancy costs and employment support of £80 million and on-site clean-up costs running into hundreds of millions of pounds, it might well be that in the long run strategic support is far better value than the cost of total closure.
Last week, the Business Secretary said that the Government would
“do everything within their power to support”
the industry, and he said to our steel communities:
“We will not abandon you now, in your time of greatest need.”—[Official Report, 20 October 2015; Vol. 600, c. 815.]
The Prime Minister had previously stated that the Government would
“do everything we can to keep steelmaking in Redcar.”—[Official Report, 16 September 2015; Vol. 599, c. 1046.]
The Government then abandoned the people of Redcar by refusing to mothball the plant and save the assets, which would have kept alive the possibility of a return to steelmaking in the future. In fact, the Minister said yesterday in evidence to the Select Committee:
“It needed that awful moment in Redcar to concentrate all political minds in Government”.
So, Redcar has been sacrificed and minds have been concentrated, and now we need to know what the Government are planning to do to safeguard the future of UK steel and what is left of our steel communities. In Redcar, Scunthorpe, Clydebridge, Dalzell and Rotherham, those facing uncertainty across the midlands and Wales—men and women who have spent years developing highly specialised skills but who now have to find alternative employment in local economies shattered by steel plant closures—are waiting to see how the Government intend to deliver on their warm words.
Ian Lavery (Wansbeck) (Lab)
We saw this happen in the coalmining industry: jobs went and people were asked to retrain. It is an absolute disaster. I welcome the £80 million, but Redcar, Rotherham and the other areas have high unemployment. We can train people as much as we like, but the jobs are not there. Does my hon. Friend agree that the money should be invested in keeping the steel industry alive, instead of closing it and trying to retrain people for jobs that are not there?
Ms Eagle
My hon. Friend speaks with much passion because he has been through this process with the coal community. It is easy for the Minister to dismiss the searing experiences that our coal communities went through following decisions taken by the last Tory Government, but I do not think she should.
Tom Blenkinsop
We have to talk about the £80 million. We now know that the statutory redundancy was part of it, so that brings it down to £50 million. The northern powerhouse Minister wrote to one of his constituents informing them that the last month’s payroll would be paid out of that money as well, so it is now less than £50 million. To date, I have not seen evidence of more than £3 million—for the 50 apprentices—of the money promised. At the Steel House meeting, on the same day as the liquidation, we were informed, in front of other agencies and the press, that the vast majority of the £80 million would be new money. I know, other Opposition Members know and the Minister knows that less than £50 million of that is potentially new money. I would like to see evidence of what money, where, for who and when.
Sir Greg Knight (East Yorkshire) (Con)
On a point of order, Madam Deputy Speaker. I apologise for interrupting the hon. Lady, but the deferred Division has less than 15 minutes to run, and the ballot papers have run out. There are no papers available to vote in the deferred Division. Could you tell us what you are going to do about this and whether you will extend the period of the Division beyond 2 pm?
Madam Deputy Speaker (Natascha Engel)
I thank the right hon. Gentleman for his point of order, but I am informed that this has now been sorted and that there are now ballot papers.
Toby Perkins
I apologise for interrupting my hon. Friend, who was obviously slightly reluctant to give way. She is making an incredibly important point. One of the things that will upset so many people who recognise the damage that will be done to their communities and the people left out of work is the sense that the Government have not done all they can. They see people in other industries in competitor nations around Europe being much better supported by their Governments. Does not the fact that the Secretary of State refuses even to show up for the debate demonstrate his contempt for steelworkers in our country?
Ms Eagle
I am always happy to give way to my hon. Friend, and I am not reluctant ever to listen to him. He makes an important point about other EU countries seemingly much better able and more willing to support their strategic industries. I believe that is because they do not have the ideological qualms that this Government have about the idea of an industrial strategy.
Why will our Government not show the same commitment? We need an active industrial strategy. We need a proactive and strategic Government, not a Business Secretary in thrall to an outdated economic theory and too eager to offer the Chancellor huge cuts to his Department in a bid to burnish his Thatcherite credentials and prepare for the leadership battles ahead. Last week, the Prime Minister claimed that the Government wanted a
“strong and viable steel industry.”—[Official Report, 21 October 2015; Vol. 600, c. 948.]
Now they have to tell us what they intend to do to secure it.