Steel Industry

Anna Turley Excerpts

Wednesday 11th May 2016 Westminster Hall

[Anna Turley (Redcar) (Lab/Co-op)]

It is an honour to serve under your chairmanship, Mrs Moon. I commend my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who, as always, is bang on the money regarding the British steel industry. He brings his incredible experience and insight to the debate and I am proud to sit alongside him on these Benches.

I welcome the positive news about the number of potential buyers for Tata sites. The people of Teesside will be pleased to hear that positive news for steel communities around the UK. As my hon. Friend said, that is testament to the fact that the argument is, at last, being won. Steel is not a sunset industry and has a vital long-term role in the future of British manufacturing. It is also a positive statement that Britain can be a global leader in steel with the right support and, as other hon. Members have said, a serious industrial strategy from the Government. I am glad that the Government seem to have learnt their lesson, albeit at a terrible cost to us on Teesside.

I have spoken before about the anger still felt in Redcar that nothing was done to save our steel making from closure. We have never had answers to the questions I posed in the previous debate on the topic, when I asked why European state aid rules were a barrier to co-investing with Sahaviriya Steel Industries but are not for the companies now coming forward for the Tata sites, and why the private sector options that we put before the Minister—which would have kept the coke ovens going and mothballed the blast furnace, rather than losing our national assets for good—were not taken up. I also asked why the Government said that they could not put British taxpayers’ money into Thai banks. Why are they any different from the investors coming forward now? There is still a justified sense of anger on Teesside when people see the Government pulling out all the stops now, and feel that nothing was done for us, but I do not want to keep looking back. We must rebuild and get back on our feet, and we are doing that.

I start, as my hon. Friend did, by congratulating everyone at Middlesbrough football club—the chairman, Steve Gibson, the manager, Aitor Karanka, all the players, the staff and, of course, the fans—for a well-deserved promotion to the premier league. We are back where we belong as a premier league club in a premier league town. We now have to build on this opportunity for our global brand to show the world once again that Teesside is a great place to live, work, play and invest. Just as steel was the driving force of our former industrial might, so it can still play a vital role in our future regeneration.

I welcome the fact that the shadow board for the South Tees development corporation met for the first time yesterday. It is a strong board with a great deal of local experience and expertise, and I look forward to working with the development corporation on the future of the SSI site. That site can play a major role in job creation and the economic regeneration of the area.

I want to briefly set out two key areas where I think steel can play a key role in driving the regeneration of Teesside. The first is in relation to steel and the circular economy. While we may never be able to forge steel again without our blast furnace, there is a great opportunity on Teesside to lead the way in metal remanufacturing, refurbishment and recycling. The second area is in research and development. Like my hon. Friend the Member for Middlesbrough South and East Cleveland, I urge the Minister to give a high priority to the benefit of the materials catapult on Teesside at the Materials Processing Institute. The MPI pilot-scale electric arc furnace in Redcar is the only example of its kind in the UK and offers innovation, process development and future opportunities in the adoption of electric arc furnace technology.

[Jo Churchill (Bury St Edmunds) (Con)]

I could not agree more with what the hon. Lady is saying about catapult centres, but, for firms like Mettalis in my constituency, it would be better to incentivise R&D credits across the piece and also look at the other method of driving innovation, which would be to make the enterprise investment scheme applicable to steel as well.

[Mrs Madeleine Moon (in the Chair)]

Order. It is inappropriate for the hon. Lady to arrive part-way through the debate and then make an immediate intervention.

[Anna Turley]

I appreciate the hon. Lady’s point because I do not think it should be an either/or: we can work together on investing seriously in research and development in steel.

On the MPI facility, no other such facility in Europe possesses equal capability. Support for a materials catapult on Teesside will give British steel making the cutting edge in research and development, encouraging greater investment and resilience for the industry. The MPI, as my hon. Friend the Member for Middlesbrough South and East Cleveland has said, has had a direct approach from Sweden. We have also got experts coming from Germany, Australia and Holland. If foreign Governments and commercial operators are engaging with our researchers in the UK to future-proof their steel sectors, can the Minister explain why it is such a struggle to convince officials in the British Government? Do they know something that industry and innovation experts do not?

So those two areas show the potential that we have on Teesside for steel to play a key role in our economic regeneration. It must not be forgotten that we have a thriving chemicals industry and a dynamic port. We have the potential for more investment in energy from waste, carbon capture and storage, carbon dioxide conversion and potash mining. When oil and gas recovers, that can also play a vital role in our economy. I thank the Government for making Redcar College one of its spokes for national colleges for oil and gas. We have great opportunities. Boro have done their bit to get us in the premier league; now it is time for all of us to step up.

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[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I thank my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), a great parliamentary champion of steel, for securing this all too crucial debate. I also thank him for giving evidence to the Select Committee on Business, Innovation and Skills on 28 April, during its inquiry on the UK steel industry, as a follow-up to our December report. Yet again he gave the Committee his valuable insight and wisdom about, and experience of, the industry. Steelworkers and the steel industry could not be better represented in this place than by my friend and colleague.

Reference has already been made to trade defence instruments and market economy status, and I will not dwell on them. I want to focus on three things: time, confidence and Government action. On the question of time, I do not think anyone can be any doubt that, given the scale and relative complexity of the operations, the sale of Tata’s steel business will not be a straightforward or quick process. Such sales take years to plan and execute. Although it is welcome that there are seven bidders expressing an interest, and a firm offer is needed sometime after 23 June, due diligence and negotiations on matters such as the pension scheme will take time. Bimlendra Jha, the chief executive officer of Tata Steel in the UK, said to the Select Committee that with the kind of losses that Tata is enduring,

“urgency is important. We cannot continue to bleed.”

He would not commit to a definite timescale, nor to keeping all steel facilities in the UK open and all jobs safeguarded within those facilities until such time as a buyer is found and a deal formally done.

That being the case, the role of Government is crucial. What can the Government do to safeguard assets, capability and employment during this potentially lengthy sales process? Will the Minister articulate further the nature of any co-investment? Would the Government provide bridging finance and other help to cover the transition between Tata ownership and the new owners of the business?

[Anna Turley]

Does my hon. Friend share my view that it would be helpful if the Government set out some of the criteria that they are considering in relation to co-investment and support?

[Mr Wright]

That is crucial. Any such commitment would provide much needed confidence in our steel industry, as well. It is a foundation industry that is strategic in its importance to the economy and vital to our manufacturing base.

That brings me on to my second point: confidence. I have pushed the Minister and the Secretary of State on the matter, because it is of central importance. The Minister heard that for herself from the local management and workforce when she visited the Hartlepool pipe mill a couple of weeks ago. Suppliers and customers have the perception that the Tata steel business will not be there in a couple of months’ time, as it might have been pushed into administration. Suppliers, certainly in our part of the country, have had their fingers burned with the closure of SSI. They do not want to be an unsecured creditor in an administration situation, with the likelihood of receiving no money and being out of pocket, and the possibility that their own business will come under threat.

Customers for Tata’s steel products, especially in sectors such as energy, infrastructure and oil and gas, have very long-term horizons in their requirements. They want to be certain that their orders will be there. If they are not, they will look elsewhere. That is not in the long-term interests of the UK steel industry or the viability of Tata’s successors. Credit lines and insurance are being withdrawn, and I cannot stress how important that is. What else can the Minister do—I know that she has worked hard behind the scenes—to provide extra reassurance, further commitments and definite indicators of confidence? Perhaps that would include the public sector placing orders with Tata Steel.

That brings me to my third point, which is about Government action. Procurement is one of the industry’s requests for Government action, and that theme flows through my other points. The Minister must be aware that she has not delivered in full what could be provided for the steel industry. Everyone is aware of the massive global forces at work, with steel prices and overcapacity, but Mr Jha told the Business, Innovation and Skills Committee that UK steel manufacturers suffer from structural weakness—business rates, energy costs and procurement. What is the Minister going to do about that? We should not be looking to the past. Although we should celebrate our steel past, we should look to a future with steel as a massively important part of a modern manufacturing industry.

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[Christina Rees (Neath) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this most important debate.

Steel and the steel industry are vital to the UK, Wales and my constituency. The Tata steel plant in Port Talbot is in the neighbouring constituency of Aberavon and the Trostre plant is in the nearby constituency of Llanelli. Hundreds of my constituents go to work in those places every day. I have personal knowledge of the community that has grown up around the plants. My father worked at the site of the Steel Company of Wales, which is now Tata Steel. When I was at Cynffig Comprehensive School I played hockey for the Steel Company of Wales. It was the centre of the community. The plant put food on our plates at home and contributed enormously to our social and sporting lives. The same sense of community is felt today by the 4,500 workers and their families who still work at and depend on the plants.

A constituent of mine, Andrew, started as a technical apprentice at British Steel, Port Talbot, in 1994 and worked his way up to the role of laboratory manager. Having spent his entire working life at Port Talbot, Andrew is passionate about steel and the steel industry and is committed to its future in the local community, often championing the company and the apprenticeship schemes. Andrew has made a great many friends over the years, and many of these friendships are forged in a way that cannot happen in other industries; 12-hour shifts in a challenging environment pull people together in a way that makes them feel more like family, and when pain is felt by their colleagues it is felt by all.

[Anna Turley]

Does my hon. Friend share my view that when a community is hit by a tragedy such as this, it is incumbent on all of us—Government, Members of Parliament and everyone—to make sure that the community sticks together and that people are supported through a difficult time?

[Christina Rees]

I wholeheartedly agree with my hon. Friend. It is time to work together. The uncertainty over the past 12 months has been greater than at any time in Andrew’s 21-year career. Owing to the cyclical nature of the steel industry, there have always been highs and lows. Andrew told me about his personal experience of the past few months:

“Back at the end of 2015 I wondered how we can continue with the losses being incurred. Time and time again, Tata asked the Government for help with trade restrictions, yet, month after month we were informed that our losses were huge.”

From initial despair to waves of hope, the plant continued to operate under the most trying of circumstances.

I have asked questions in the Chamber, but I wish to press the point again. Will the Government use the current threat to the UK steel industry as an opportunity to change the way we do things, so that innovations and a thought-through structure can be established that will protect the steel industry for many years to come? Innovation is already taking shape in Neath Port Talbot. SPECIFIC—the sustainable product engineering centre for innovative functional industrial coatings—is an academic and industrial consortium led by Swansea University, involving several strategic partners, and funded by the Engineering and Physical Sciences Research Council, Innovate UK and the European regional development fund via the Welsh Government. SPECIFIC’s vision is to deliver buildings that generate, store and release their own energy, which is an example of a radical and transformative energy solution using buildings as energy systems. Steel is a key element of that, and SPECIFIC is working with Port Talbot steelworks and its downstream operations to develop functional coatings for steel, which rely on high quality steel. Together, they are creating a pipeline of products for the future that will help to ensure that we have a sustainable and competitive steel industry.

SPECIFIC and Tata are working on innovation in construction, and those products and systems, such as solar integrated roofing products and new forms of heating system, are already entering the marketplace. Steel from Port Talbot is being turned into systems in Shotton. No matter what the asset base or ownership of any future UK steel model, technology and innovation are critical, and it is equally critical that such technology and innovation are in close proximity to the major steel-making sites.