Angela Eagle
Main Page: Angela Eagle (Labour - Wallasey)UK Steel Industry
Angela Eagle Excerpts(8 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ms Angela Eagle (Wallasey) (Lab)
I beg to move,
That this House notes the crisis in the UK steel industry; calls on the Government to support tougher EU action to ensure a level playing field and prevent the dumping of Chinese steel, to support scrapping the lesser duty rule which prevents higher tariffs being imposed that reflect the actual margin of dumping and to examine the implications of granting China Market Economy Status for the EU’s ability to tackle unfair trade; and further calls on the Government to publish a full industrial strategy which includes a procurement policy which commits to using British steel wherever possible for publicly-funded infrastructure projects and which supports industrial supply chains across the UK.
Britain’s steel industry is in crisis, and despite the warning signs flashing red, the Tories have had to be dragged kicking and screaming to come up with any kind of response. So far, it has been far too little and far too late. More than 5,000 UK steel jobs have been lost over the past 12 months. Redcar has been abandoned, the blast furnace and the coke ovens destroyed by this Government’s shameful complacency and inaction. Tata Steel has announced the loss of 1,050 jobs this year alone, and there are worrying signs that the entire industry in the UK is hanging by a thread.
This is a vital foundation industry for the UK which, after all, was the world’s first industrial nation. Our steel communities are looking to Parliament to support them in their hour of need and we must not let them down. Steel production is worth £9.5 billion to our economy, £5 billion of that in exports, at a time when we have a deteriorating trade deficit.
Mark Pritchard (The Wrekin) (Con)
The hon. Lady speaks of this time of need. I grew up just a few miles from Port Talbot steelworks and played very poor rugby as a scrum half at a school close by. At this time, is it not better that all parties work together for the good of the British steel industry, rather than making party political points, when it is pretty obvious that the steel industry globally has changed not only in the past year, but over the past two decades?
Ms Eagle
I will be the first to work with Government Members, and I hope that by the time we have listened to the Business Secretary’s reply we will have something that we can all cheer.
The British Chambers of Commerce recently found that export growth continued to slow at the end of 2015, with manufacturers struggling in particular. In the words of a former Conservative Trade Minister, the Government’s own export target is “a big stretch”. The Government have obviously been asleep at the wheel. Ahead of the Budget next month, the Government must acknowledge that on their watch domestic structural weaknesses in the UK economy have been allowed to persist and that they are now in danger of holding Britain back.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Does my hon. Friend agree that the Government have also been asleep at the wheel when it comes to the crucial issue of procurement? Will she join me in commending the Daily Mirror for its Save Our Steel campaign, which has been shining a light on defence procurement, in particular, and found that Swedish steel is being used in the Navy’s newest warships?
Ms Eagle
I certainly agree with my hon. Friend’s observations and share his surprise that Swedish steel is being used in Ministry of Defence contracts in quite that way. I note that it appears to be a Conservative donor company that was doing that work. I join him in commending the Daily Mirror for its fantastic Save Our Steel campaign, which has highlighted the very real effects of the current crisis on steel communities up and down the country. Long may it continue to help us campaign to save this vital industry.
In the light of all that, why has the Government’s response to the steel crisis been so complacent and ineffective to date? Perhaps it is because we have a Business Secretary who is ideologically indisposed to taking any worthwhile action as he does not actually believe in the concept of Government action at all. Perhaps it is because we have a Business Secretary who has read far too much Ayn Rand and thinks that markets should somehow just be left to look after themselves. Perhaps it is because we have a Business Secretary who will not let the phrase “industrial strategy” even pass his lips.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Is my hon. Friend concerned that the Business Secretary will write letters supporting the need to deal with dumping and to increase tariffs, but, when it comes to reality rather than rhetoric, is part of a Government who are one of the ring leaders in the EU Council preventing any increase in tariffs?
Mrs Madeleine Moon (Bridgend) (Lab)
Today in Defence Questions it was said that British steel companies had not tendered for defence contracts—for example, for the building of frigates. If it is unattractive for British companies to tender, is it not important that the Government explore what is happening in our contracting? There is a problem there—a gap between what is said and reality—that should be explored.
Mark Pritchard
I thank the hon. Lady, who is being generous in giving way—I believe in mixed rugby teams, so she is welcome on the pitch anytime. It so happens that 26 British companies were asked to tender for the offshore patrol vessels to which the hon. Member for Bridgend (Mrs Moon) referred, but only one did, so only 20% of the steel for those vessels will be British. Surely she agrees that it is not for the Government, or indeed for the Opposition, to promote and market individual steel companies, whether British or not; it is for those companies to market themselves, and it is for the Government to set the framework in which they can do the business.
Ms Eagle
I am just getting the idea of a mixed rugby team out of my mind so that I can address the hon. Gentleman’s point. I think that it rather makes the point that the Government need to do more than just change technical criteria. They need to take a root-and-branch look at what is actually happening in our steel industry, and an industrial strategy would assist them in doing that. We need to do what we can to ensure that any blockages are removed so that we can give our steel communities the best chance to take maximum advantage of the procurement opportunities available in this country.
Stephen Doughty
That is absolutely crucial. Does my hon. Friend agree that there is a pattern of behaviour here? We have seen foreign steel used in the Tide class tankers, in the scout vehicles and in the aircraft carriers, we have no commitments on the frigates, and we have also heard about Swedish steel being used. That pattern of behaviour across all defence procurement needs to be investigated.
Andy McDonald (Middlesbrough) (Lab)
On investment in steel, does my hon. Friend recognise that there is an opportunity to invest in a catapult centre in my constituency and in that of my hon. Friend the Member for Redcar (Anna Turley)? That would be a major investment that would take steel forward. That opportunity ought to be embraced, but it is being dismissed out of hand—[Interruption.] The Minister for Small Business, Industry and Enterprise says from a sedentary position that it is not, so I am glad that she is embracing the concept.
John Redwood (Wokingham) (Con)
I agree with the hon. Lady; we need a streel industry and there needs to be cross-party working to try to find the way forward. What does she think the Government could do to try to get more steel orders? The main problem is that there just is not enough British steel being bought.
Ms Eagle
One of the first things we have to do is stop the tsunami of unfairly traded and dumped Chinese steel, which is preventing fair trade and competition in the market at the moment.
The Opposition have had to drag this Government kicking and screaming to the House on no fewer than 12 occasions since 2014 to try to force them to turn their warm, sympathetic words on steel, which we all recognise they use, into effective action. Today, here we are doing so once again. The Opposition motion calls on the Government to stop using the European Union as an excuse for their own inaction. It asks them to support a more effective response to the dumping of Chinese steel, which threatens to decimate UK steel production. It calls on the Government to take tougher action to secure a level playing field for our industry.
Mark Spencer (Sherwood) (Con)
I understand the point that the hon. Lady is making, but I hope she will recognise that the Government have to work within the European Union’s state aid rules.
Ms Eagle
Far be it from me to suggest that the Government should operate outside EU state aid rules; I simply do not think that they are being sufficiently inventive or creative with the rules as they are at the moment. Had they been more interested, perhaps we would not have had to drag them to the House 14 times to keep the pressure on.
Huw Irranca-Davies (Ogmore) (Lab)
I apologise for my voice—I shall have to whisper.
I have been on the doorstep with steelworkers in my constituency, and, in a spirit of working across these Benches, all I want to be able to say to them is that the Minister has been to Brussels and demanded the highest possible tariffs—the sort of tariffs the Americans have. Then I can say that, in line with the proposals being put forward by the Welsh Government, we are doing everything we can to make sure we have a steel industry in this country—this year, in five years, in 10 years and in 50 years. Does my hon. Friend agree that if we do not have those tariffs, we risk losing the steel industry?
Ms Eagle
Again, I agree. In this moment, we all have to do the most we can to preserve a future for the UK steel industry.
Our motion calls on the Government to take tougher action to secure a level playing field for our industry by working in partnership with our European neighbours. As part of the largest economic bloc in the world, Britain is in a much stronger position to stand up to those who refuse to play by the rules of the game, damaging our future economic prosperity and putting at risk the jobs and livelihoods of families in our close-knit steel communities. We need a Government who are willing to make that case by standing up to China.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Does my hon. Friend agree that the issue affects not only the steel industry but ceramics? It will cost more than 2,500 jobs in my constituency, unless we send a clear message, as the Minister has said, that China does not meet the criteria for market economy status?
Ms Eagle
I am coming to that later in my remarks, but my hon. Friend is exactly right: all energy-intensive industries are affected, and ceramics is one of them.
If they are accurate, I welcome the media reports from today’s European Union Competitiveness Council, which appears to have agreed that the Commission should accelerate anti-dumping action. I look forward to much more detail from the Secretary of State when he responds to the debate on what that will mean in practice. Until then, we must judge the Government on their actions to date.
Our motion calls on the Government to stop blocking reform of EU trade defence instruments, which would enable defensive tariffs to be imposed much more quickly and at a level that would actually prevent imports of unfairly traded steel products from China. The Government should support the scrapping of the lesser duty rule, which is preventing tariffs from being set at a level that will actually deal with the problem. After months of agitation and a massive increase in Chinese imports, especially to the UK, the European Union has finally set its tariff on a particular product—Chinese rebar—between 9.2% and 13%. Meanwhile, the USA has introduced defensive tariffs of 66%, and they were operating 45 days after the start of its investigation. To work, tariffs have to be high enough to deal with the problem—the EU tariffs are not.
It is important to make it crystal clear that we are objecting to blatant and unfair dumping, not to free trade, which the Opposition support.
Richard Fuller (Bedford) (Con)
I am interested in what the hon. Lady is saying, but does she not feel the chill wind of the 1930s, which saw the infringement of free trade as people eagerly moved to impose tariffs? Over the last 10 years, China’s share of world trade in steel has grown from 30% to more than 50%, so whatever the tariff, there will be further calls for higher tariffs, with consequential disadvantages for all.
Tom Blenkinsop
My hon. Friend is absolutely right. The point is that this is not an example of free trade. China is in breach of World Trade Organisation rules, and it is exploiting export subsidies to such an extent that the Americans are looking at tariffs of more than 200% on Chinese steel. That is not unprecedented: back in 2004, the Bush Administration brought in similar tariffs of about 25% on European steel.
Ms Eagle
My hon. Friend is exactly right: we have to distinguish between free trade, fair trade and unfair trade, and what we face with Chinese steel imports is clearly unfair. Dumping is unfair, and it is threatening the very existence of the UK steel industry. Everyone in the House knows that once steel facilities have gone, they cannot easily be put back. We have to protect our industry’s capacity to exist, and perhaps to do better in future, when world conditions have changed. If we do not bear that in mind, we will lose the lot, and we will regret it.
Richard Fuller
The hon. Lady will find that there is a lot of understanding across the House for the point she makes. My point is just that, over the past 20 or 30 years, we have become reliant on China producing many things, and the hon. Member for Stoke-on-Trent North (Ruth Smeeth) mentioned ceramics. My concern—perhaps the hon. Member for Wallasey (Ms Eagle) can address this—is about where we make the distinction in terms of the tariffs we impose. Does she not have the slightest concern that a series of such issues may come up in sector after sector because of the growing reliance over the last few years on Chinese exports?
Nic Dakin (Scunthorpe) (Lab)
My hon. Friend is setting out her stall very clearly. Does she not agree that it is particularly important that there is fair trade when a strategic foundation industry that is important to manufacturing, defence and other core activities is being challenged in this way?
Mark Tami (Alyn and Deeside) (Lab)
Shotton steelworks, which produces “galv” and coated products, relies on Port Talbot for its supply of steel. Although Shotton is a profitable plant, if Port Talbot were to go, it would not be easy to find a good-quality supplier of steel at the drop of a hat.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the hon. Lady give way?
Jonathan Edwards
I am grateful to the hon. Lady, who has been extremely generous in giving way, and I am more than happy to support the motion. Is she aware of the work of the devolved Government of Wallonia in Belgium, who have a strategy to protect their steel industry, encompassing an investment fund, an innovative research plant and clear protective measures for steelworkers? Should the Labour Welsh Government pursue a similar strategy?
Ms Eagle
The hon. Gentleman has pointed out that, in some places in Europe, there may exist an industrial strategy, and we could do with one in this country.
Far from fighting for the UK’s interests, as they would have us believe they are doing, the Government are actually a leading part of a group of EU countries that have moved to block reform of the lesser duty rule. Let us look at the record to date. The European Commission proposed strengthening trade defence instruments in April 2013 to protect Europe from Chinese dumping. That was endorsed by the European Parliament in February 2014. It was then blocked in the Trade Council in November 2014. It was the UK Government who successfully assembled a group of 15 other EU countries to oppose that crucial reform. The Government objected primarily to the abolition of the lesser duty rule and to giving the Commission the ability to initiate anti-dumping proceedings on its own. Perhaps the Business Secretary will let us know whether today’s apparent agreement changes that stance? If it did, that would be most welcome, and it would certainly be a departure from the recent past.
When the Business Secretary was asked, in evidence to the Business, Innovation and Skills Committee recently, about the Government’s blocking of reform, he said:
“If duties are applied that are disproportionate, it would have an impact, in Britain and elsewhere”.
However, Chinese dumping is having a devastating impact in Britain now. We do not need disproportionate tariffs; we need tariffs that will be effective and duties that will prevent the damage caused by illegal dumping. The Government should be arguing for such duties, not conniving with 15 other EU countries to block them.
On granting market economy status to China as part of its ongoing acceptance into the World Trade Organisation, the Chinese Government regard this as an automatic thing, but it certainly should not be. In fact, as many in this House will know, this status is granted only when the economic conditions in the country concerned have developed in such a way that it can be shown that prices and costs are genuine and can therefore be used to determine trade defence disputes. China currently meets only one of the five criteria required for this status to be granted, and yet the UK Government support granting market economy status to China as early as the end of this year.
Why is this? We already know that the Chancellor continues to be almost embarrassingly desperate to be China’s new best friend, but he must not pursue his infatuation so far that it excuses its unfair trade practices. Granting market economy status to China in the absence of important safeguards would significantly diminish the capacity of the EU to guard against Chinese dumping, which has the potential to destroy the UK steel industry, so it must not be granted until the criteria are objectively met. Will the Secretary of State tell us more about why the Government appear to have made their mind up already on this important issue in advance of the forthcoming assessment by the EU Commission? Surely they are not so intent on cosying up to China that they have left all judgment behind.
The Opposition motion calls on the Government to publish a full industrial strategy that is designed to support and grow our manufacturing sector, not just stand by as it is threatened by unfair competition. This should include a proactive procurement policy committed to using British steel wherever possible for publicly funded infrastructure projects and supporting industrial supply chains across the UK. Nothing less will do. In the forthcoming Budget, Labour would support the Government doing more on business rates and exempting new industrial equipment. An industrial strategy must be forward-looking and support our wider industrial base and its supply chains. That is why Labour would also support the Government in going further to develop a materials catapult to drive early-stage investment in this crucial area—an idea that has support from industry and business organisations such as the CBI. Labour Members certainly support it, and I hope that come the Budget we will hear from the Government that they support it too.
The Government are always keen on asserting that they have changed the procurement rules as one of the five steel industry asks that the Minister for Small Business, Industry and Enterprise blithely asserted during the recent urgent question on 18 January had all somehow been delivered. However, these new rules do not seem to be having any impact on actual outcomes. There is no sign that these modest technical changes are making any difference to the awarding of Government contracts to help our domestic industry. Perhaps that is because the new guidance merely states that steel requirements should be “openly advertised” to allow UK firms to compete. Britain’s steel industry needs a real champion in Government, but the Minister excuses the omission of British steel in projects like Hinkley Point C by claiming wrongly that UK steel does “not have this capacity”. I am beginning to worry about her connection with reality, especially after her appearance on “Pienaar’s Politics” yesterday when she claimed that there is no Tory infighting over the European Union and denied that the Prime Minister had attacked the Mayor of London in a speech last week. I do not know which planet she is on, but it is clearly not the same one that the rest of us inhabit.
The Conservatives have left our economy insufficiently resilient to global threats and not in a high enough state of readiness to seize on future opportunities. If they are to lay solid foundations for our future prosperity as a nation, they have to support our foundation industries. Decisions taken now will chart our economic fortunes for the decades to come. The UK steel industry does not need warm words from this Government: it needs effective action. Our steel communities need it, our economy needs it, and Labour Members demand it.
Sajid Javid
Let me say more about tariffs and then I will take some more interventions. Punitive tariffs and sky-high duties always seem like a nice, easy solution, but the truth is that excessive, protectionist trade tariffs simply do not work. Although they provide a short-term boost for the protected sector, they inevitably cause long-term harm to the wider economy. They drive up prices.
Ms Angela Eagle
We are not calling for protectionism; we are calling for tariffs that prevent unfair trade. When the right hon. Gentleman talks about protectionism, it is important that he distinguishes between dumped and unfairly traded products—which must have high tariffs so that they can be blocked before they destroy our industry—and fairly traded products. We agree with him. We are not against free and fair trade.
Sajid Javid
If the hon. Lady means what she has just said, which is that she wants a level playing field, we are in agreement, but the entire argument she made moments ago was for punitive tariffs, which would drive up prices for businesses and consumers and risk potentially ruinous retaliation from other nations. Artificially over-inflating the price of imported steel would have a hugely damaging effect on British companies further up the manufacturing chain. Of course, I would like to see such companies using British steel rather than cheaper, lower quality imports, and let me take this opportunity to urge them to do so. However, forcing them to buy British steel by making imported steel prohibitively expensive is not the way to make that happen. Higher duties on imports of raw materials eventually mean higher prices paid by manufacturers and consumers alike, putting countless more jobs at risk.