Steel Industry

Angela Smith Excerpts

Wednesday 14th January 2015 Commons Chamber

[Mr Wright]

I am pleased to see my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) in her place, because she was particularly strong early on in this Parliament on the issue of Sheffield Forgemasters. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) is absolutely right. One key thing that an industrial strategy can do is identify the opportunities in the supply chain and work with firms to exploit that potential. When the Government came in, they did nothing to help and they might have undermined a great capability in that important part of the steel industry and its auxiliary supply chain.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Will my hon. Friend give way?

[Mr Wright]

I will give way to my hon. Friend, and I pay tribute to the work that she did earlier in this Parliament with regard to Sheffield Forgemasters.

[Angela Smith]

I thank my hon. Friend. Our capability to deliver supply chain opportunities in the nuclear industry has been compromised by the Government’s decision. It was cast at the time as a cancellation of Labour’s sweeties to industries in Sheffield in an attempt to win Sheffield Central in the general election. Will he take the opportunity to deny, even now, that that was the case and to say that it had been a serious strategic investment in a key industry for the UK?

[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?

--- Later in debate ---

[Vince Cable]

I pay tribute to all the members of the community who fought for the steel works and secured the reopening by my hon. Friend the Member for Redcar and others.

Of course, this is an industry with a great many problems, which I will review in a moment, and the metal sector generally has been under great pressure. I was just trying to make the simple point that the rather self-righteous tone from the Opposition is perhaps not reflected in the historical record, so I would urge a slightly more balanced approach.

[Angela Smith]

On the subject of the Secretary of State’s record, what representations did he make to the Chancellor when the latter proposed to introduce the carbon floor price?

[Vince Cable]

My Department has been engaged in active discussions with the Treasury about the implications of the carbon price floor and other environmental measures. I was going to make the point that the principle of trying to change incentives through the tax system to discourage carbon-intensive production was inspired by the Leader of the Opposition when he held this role in government, and we have maintained that green principle in taxation. Of course, that has costs for energy users, and we have sought to deal with that through a compensation mechanism, which so far has made commitments of £3 billion. I shall explain in a moment the progress we have made on implementing that.

--- Later in debate ---

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I welcome this debate. As has been rehearsed already today, the importance of steel to the UK economy cannot be underestimated, and neither can its importance to my local economy in south Yorkshire.

Tata’s speciality steels operation, which was referred to by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), is headquartered at Stocksbridge in my constituency. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) pointed out, it nearly went under in 2008. He paid tribute to the trade unions and the management of Tata in Stocksbridge for pulling the plant around. I also want to pay tribute to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who as Minister of State worked hard, alongside the unions and Members, to secure the future of the plant.

[John Healey]

And the local councils.

[Angela Smith]

Indeed, the local councils in Sheffield and Rotherham were also involved. Of course, the plants at Sheffield and Rotherham, which work in partnership, survived. They are now back to the employment levels that they had in 2007-08. I have been told that every third plane that flies over the United Kingdom has a component that was made in Stocksbridge, which is a record to be proud of.

[John Healey]

And Rotherham.

[Angela Smith]

That’s cars.

What has happened at Stocksbridge has not happened everywhere. In October 2014, Tata announced that it was selling its long products division. We stand together. People in Stocksbridge do not want the plants in Teesside, Scotland and Scunthorpe to be sold off to Klesch. My uncle worked for 20 years at Appleby-Frodingham in Scunthorpe, but was made redundant after the steel strike. We do not want to see that happen again. We do not want to see steel plants in the UK placed in jeopardy. I am pleased that the national trade union steel co-ordinating committee, which includes Community, the GMB and Unite, has hired the consultants Syndex to look at the alternatives. What are the Government doing to support Syndex in its work, and what will they actively do to ensure that the UK retains a long products capability?

Sheffield was once the world’s biggest producer of steel. At one point, it made more steel than the rest of the world put together. We are proud of that legacy. We have heard a lot today about family backgrounds. I come from four generations of steelworkers, if not more. Not only that, but my grandmother was a steelworker who drew wires at Arthur Lee, along with all her sisters. We in south Yorkshire are very proud of that legacy, and the future of our industry matters. It matters economically, but it is also a matter of pride.

The Secretary of State spoke about the consolidation and the way in which the industry went into decline in the early ’80s. In Sheffield, we know that all too well. The memory of it is painful. We do not want to hear the history of the steelmaking industry rehearsed in the Chamber time and time again. What we want to hear is what the Government are going to do about the future of the steel industry. That matters to Sheffield. We want to see Ministers standing up for steel and, in doing so, standing up for Sheffield, Teesside, Scunthorpe, Rotherham and Scotland.

What needs to happen to ensure the future of our steel industry? There are three key things, and the Secretary of State, to give him his due, pointed out clearly what they were: dealing with Chinese imports; developing an industrial strategy, although we heard precious little about what that would be and what the Government would do to deliver it; and creating a level playing field in energy costs and so on. A lot has been said about energy costs, and I will not rehearse the same arguments, but I will mention business rates.

Business rates are five to 10 times higher in the UK than elsewhere in Europe, and complaints about the rates facing the steel industry are beginning to reach my ears in Stocksbridge on a regular basis. The review is not due to report until 2016, but the problem is pressing, so I want to hear what interim measures the Minister is prepared to deliver to relieve the steel industry. Will he consider removing plant and machinery from business rates valuation as a short-term measure?

The steel industry matters. It is a foundation industry, and our automotive and aerospace sectors rely on its future. What are the Minister and the Government going to do to secure its future?