Steel Industry

Debate between Anna Turley and Iain Wright

Wednesday 11th May 2016 Westminster Hall

[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.

Local Government Funding: North-East

Debate between Anna Turley and Iain Wright

Tuesday 1st March 2016 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship again, Sir David. I congratulate my hon. Friend the Member for Darlington (Jenny Chapman) on securing this crucial debate.

My hon. Friend is right to say that the provision of good local services can make or break communities. Everybody benefits from good local provision, and many people rely heavily on having access to council services. They can be a civilising force for good: keeping the streets clean, providing a pleasant and safe local environment, helping to spread knowledge and culture through the provision of libraries and arts services, and keeping the vulnerable safe through high-quality and caring adult and children’s services. In my area of the north-east, where economic activity and prosperity are perhaps not as advanced as in other areas, the provision of good local services is needed more than ever. Such provision requires adequate funding for local authorities, but it is fair to say that in this debate and elsewhere the Labour party has demonstrated conclusively that good, adequate funding for local services in the north-east simply is not happening.

Areas of deprivation have suffered more cuts to council funding than more prosperous areas. Inner-London boroughs, metropolitan areas and, yes, councils in the north-east have seen disproportionately harsh cuts. In the last Parliament, Hartlepool Borough Council’s grant was reduced by 40%. In the 2010 index of multiple deprivation, Hartlepool is the 24th most deprived local authority out of 354 areas in Britain. That is an improvement from the IMDs of 2007 and 2004, in which my borough was, respectively, the 23rd and 14th most deprived local authority, but we still have enormous challenges in Hartlepool, as we do elsewhere in the north-east.

Given the austerity programme since 2010 and the severe knocks to the local economy brought on by crises in the oil and gas and steel industries—we had an important debate on the steel industry in the Chamber last night; the Minister responsible for the northern powerhouse could not be bothered to turn up to that either—further deprivation in my borough and elsewhere is inevitable. I see it every day in desperate correspondence from my constituents.

[Anna Turley]

Will my hon. Friend give way?

[Mr Wright]

Yes, but before I do, I pay tribute to my hon. Friend for the work she has done for the steel industry. Her area, like mine, has suffered enormous rises in unemployment. In Hartlepool, unemployment is two and a half times the national average; I dread to think what it is in Redcar.

[Anna Turley]

I appreciate my hon. Friend’s tribute to our area’s fight. Does he share my dismay that although it is nice of the Government to give us £50 million towards retraining and reskilling, that will not even come close to covering the £90 million our local authorities have lost over 10 years? The local authorities would have been in a far stronger position to react to a crisis had the Government not stripped them to the bone.

[Mr Wright]

My hon. Friend is absolutely right about services having been stripped to the bone: there is nothing left to cut. Local authorities can really only consider what they can manage to do and the minimum amount required of them in respect of statutory services.

Along with other local authorities, Hartlepool had a tough deal in the last Parliament, but it is going to get tougher in this one. Hartlepool Borough Council was established when unitary authority status was granted 20 years ago. The coming financial year is set to be the most difficult that the borough has ever faced, with a budget that is £8.274 million less than last year, representing a year-on-year reduction of 19.6%. That reflects the combined impact of a further £4.474 million cut in Government revenue support grant, which is a year-on-year reduction of 19.7%, and the permanent reduction in the rateable value of the nuclear power station—the Minister has heard me discuss this before—which reduces business rates income by £3.8 million year on year, in perpetuity, equating to a reduction of 19.4%. Over the lifetime of this Parliament, to the year 2019-20, Hartlepool faces a combined settlement funding assessment cut of 27%. Every single local authority in the north-east will experience cuts, from 35% in Northumberland to 25% in Sunderland. By the end of this Parliament, Hartlepool, and local authorities in the north-east in general, will have experienced nine consecutive years of funding cuts. That is unprecedented.

My hon. Friend the Member for Darlington mentioned further pressures on health and education, where we have challenges in our region. Will the Minister comment on public health funding budgets, to which further cuts will be made over the next four years? Additional cuts will be phased in at 2% in 2016-17, 2.5% in 2017-18, and 2.6% in 2018-19 and 2019-20. On top of that, from 2017-18 the Government will cut £600 million from the national education services grant, which equates to a cut of 74% over the lifetime of this Parliament. That will have enormous effects on how local authorities can help education provision in the north-east.

From 2017-18, the national schools funding formula will also affect the council’s revenue budget—perhaps not directly, but it will have a negative impact on Hartlepool’s schools and reduce the public funding available in my borough. That will mean that the local authority will have to step up to the plate and try to provide further help, which it cannot provide because it does not have the available resources.

[Mr Wright]

My hon. Friend and constituency neighbour makes an important point about something that I was going to come to. The 100% retention of business rates does not help the north-east and will not help the finances of local authorities in the region. Whereas Westminster City Council, for example, could pave its streets with gold, we in the north-east will suffer enormously as a result of the 100% retention of business rates.

The switching off of the nuclear power station in my constituency for reasons of health and safety, which was quite right, means that my local authority is incredibly vulnerable to the loss of business rates. Given the make-up and structure of the north-east economy, large manufacturing businesses could end up putting local authority finance under further pressure as a result of the lack of help. Nowhere has that been exemplified more than in the closure of the SSI steelworks in Redcar.

[Anna Turley]

Redcar and Cleveland Borough Council has lost £10 million of business rates a year. On top of the impact of the cuts on services, we have lost a huge amount of business rates. If that is how the Government see the future, it is going to be deeply unfair for areas such as ours.

[Mr Wright]

My hon. Friend is right. Will the Minister respond by telling us how that will be addressed? In theory, the 100% retention of business rates is a good policy, but in practice it will further devastate local authority funding in the north-east. What sort of redistributions or transitionary arrangements will be put in place for areas such as Hartlepool or Redcar to prevent that from happening?

I want the Minister to answer directly one key point. In the previous Parliament, the coalition Government had a policy of council tax freezes. Hartlepool was the only authority in the Tees valley that implemented a frozen council tax regime for five years. Can the Minister confirm that, as a result of Government policy, that is now at an end? Is it now the Government’s formal position to ensure that council tax will go up by 1.9%? With the social care precept adding another 2%, that will mean that, starting from April, council tax payers in Hartlepool and elsewhere will face a rise of 3.9%, which they cannot afford to pay. Is the Government’s policy producing that?

In conclusion, my area has faced devastating cuts to local authority services in the past few years, but we ain’t seen nothing yet given what is going to happen during this Parliament. We are going to see the vulnerable become ever more vulnerable and our potential going unfulfilled and unrealised as a direct result of the gerrymandering in the Government’s policy on council tax funding and allocation. It is a disgrace and the Government should think again to make sure that our areas can thrive.

UK Steel Industry

Debate between Anna Turley and Iain Wright

Thursday 21st January 2016 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Walker, for what seems the umpteenth time. My mother sends her regards again—private joke.

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important debate. The situation in his constituency at Port Talbot is grave, with devastating consequences for the community he represents, the prosperity of his local economy and the entire Welsh economy. It is also another body blow for the UK steel industry, which has suffered punch after punch in recent months. Since August last year, the industry has seen 5,000 job losses. One in six of all jobs in British steel have been lost in less than six months and there have been major site closures. We have seen redundancies and reductions in capacity in Redcar, Scunthorpe and Lanarkshire, as well as further job losses this week at Port Talbot, Corby, Sheffield Forgemasters, and in my constituency at the Tata Steel pipe mill.

In response to the acute crisis facing the steel industry, in autumn 2015, the Select Committee on Business, Innovation and Skills conducted an inquiry into the Government’s response. We published our report just before Christmas, saying that at the time of publication, and as a result of site closures and job losses, the steel industry was on the verge of terminal decline. The announcements this week make a serious matter even worse and run the risk of pushing British steel over the edge and facing a truly existential threat in a matter of weeks or months.

The Committee found that although the Government identified the steel industry as being of vital importance—a point that the Minister established and reiterated during her evidence—they were not alert to the many warning systems being raised by the industry and issues that had been raised for years. We found a lack of action at EU level and a failure by UK Governments to push for a co-ordinated EU approach. Other countries have safeguarded their steel industries against the onslaught of cheap Chinese imports in recognition of the strategic importance of their domestic steel making capability. The UK has not done that, leaving this country and its steel industry particularly exposed.

[Anna Turley]

My hon. Friend is making some extremely important points about the role of the EU in this crisis. As the situation was unfolding in Redcar, the Government made great play of saying they could do nothing to intervene because of state aid rules. My hon. Friend will share my concern that we have had agreement from the European Commission that research and development, developing innovation, supporting training and, crucially, employment, and protecting and enhancing the environment are all grounds on which our Government could have intervened. The Government have done too little, too late for Redcar, but I hope that for other areas they will step up and use those opportunities to get through the state aid rules they hid behind in Redcar.

[Mr Wright]

My hon. Friend has been a fantastic champion of the steel industry generally, and particularly in fighting for SSI and for it to be retained. She will know that EU state aid rules are often a smokescreen for lack of political will. An excellent programme on BBC 1 this week, “Inside Out North East and Cumbria”, looked at the plant closures here and compared them with how the Italian Government could keep steel plants open. There is a lack of political will, because that could have been done. SSI could have been at least mothballed.

UK Steel Industry

Debate between Anna Turley and Iain Wright

Thursday 17th September 2015 Commons Chamber

[Mr Wright]

Absolutely. I could not agree more with my hon. Friend. He is a passionate defender of the steel industry, not just in his constituency but across the country. He is absolutely right. Industry has a part to play in that, we in Parliament have a part to play in that and the Government also have a role. Government policy is ostensibly about priorities: where to divert attention and resources relative to other things that need to be done.

Other countries recognise the role that steel plays in a modern economy. At one extreme, this can mean renationalising the steel industry, as Italy has done, to safeguard capability for the future. Other Governments try to level the playing field for their domestic industries by addressing costs, taxes, procurement policies and imports to give their domestic steel firms at least a fighting chance. I am concerned that the British Government seem to do the opposite. This is not a personal criticism of the Minister on the Front Bench, who has taken more genuine interest in the steel industry in four months than her predecessor did in four years. She is a strong champion and we welcome her to her post. However, she recognises that the steel industry is facing a perfect storm. UK-based steel firms find it increasingly difficult, if not impossible, to export their products because of overcapacity in the global market, the high valuation of sterling, and uncompetitive costs based on unilateral energy bills and disproportionate business rates. As my hon. Friend the Member for Redcar said, energy prices for UK-based steel producers are 50% higher than for our European neighbours. How can we compete on that basis?

The Government advocate a wholly open domestic market, which leaves the industry vulnerable to dumping and fails to recognise smart local procurement, undermining UK-produced steel. The steel industry has one arm tied behind its back on exports, which, because of overcapacity in the global market, is increasingly difficult, and the other arm tied behind its back on imports. It is little wonder that the industry is punch-drunk and on the verge of a knockout.

I welcome this debate and I agree with the motion’s call for a key summit, but frankly we need more urgent decisive outputs. As Roy Rickhuss, general secretary of the Community union, has said:

“The UK steel industry is at a crossroads. Either it gets the support it needs from government to give it the chance of a competitive future or it continues to be subjected to warm words from ministers in the face of increasing decline.”

I could not agree with him more. On the subject of trade unions, this House debated the Trade Union Bill on Monday. In the Second Reading debate, I said that the Bill’s provisions run the risk of a more adversarial relationship between management and unions. The UK steel industry is characterised by fantastic, positive and productive industrial relations, which we lose at our peril. The UK steel industry will decline if the Bill is passed.

[Anna Turley]

I would like to draw attention to the role played by the Community union and the workforce, when the Redcar steelworks was mothballed in 2010, in securing the plant, finding a buyer in SSI and ensuring its future. That was absolutely fantastic and is a perfect example of a great union working with all parties to secure the future of the industry.

[Mr Wright]

What my hon. Friend says is really important. Steel plays a central role in a modern economy and it is really important that we put the empirical case. In places such as Teesside and south Wales we have seen that steel is in the blood of the workers who produce the steel. There is a pride that is difficult to match elsewhere. We need to make sure it continues.

On that basis, we have a simple but fundamental question to ask. We need to decide whether, as a country, we need a steel industry. We need to evaluate whether it is vital to our future prosperity, or whether, frankly, we can let it wither on the vine and just import what we need. I hope we decide that a competitive steel industry is essential to a modern British industrial base. If we do decide that, we need decisive action from the Government now—I stress now—to help to defend its long-term future.

I have a series of asks for the Minister. I know she is keen to help the steel industry as much as she can. Will she accelerate bringing forward the energy intensive industries package to ensure energy costs are made more competitive? Will she work across Government to remove plant and machinery from the business rates valuation for manufacturers, which acts as a massive deterrent against investment in manufacturing improvements, as well as being a big fixed cost disadvantage relative to European steel plants? Will she do more to support the industry in anti-dumping cases? She has already, in her short time in the Department for Business, Innovation and Skills, done an enormous amount. I think we are, as an industry, very grateful, but will she do more and outline to the House what she intends to do? Could she capture more value in the UK supply chain by promoting local content procurement targets, which lends capacity and capability to UK-based steel firms?

My hon. Friend the Member for Redcar knows my frustration. Overlooking our constituencies is the Teesside offshore wind farm, which presents a fantastic opportunity for steel to be part of a supply chain for an exciting offshore renewable industry that can literally power our future. The wind turbines and columns need an awful lot of steel. About 10% of the steel used in that significant local project was procured abroad—not from Hartlepool or Redcar steel mills. That is a disgrace. As a country, we need to be doing more about that; not protectionism, but making sure we safeguard the efficiencies of the local supply chain so we can have a viable future.

[Anna Turley]

Just yesterday I met Forewind, the company building the Dogger Bank wind farm a bit further out from our constituencies. That will come on stream in the next couple of years. It said to me that there will be a lot of steel involved. We have everything here on Teesside: we have the infrastructure, the skills and the steel. I hope to God that in the coming years we will have a blast furnace making the steel to build those wind turbines.

[Mr Wright]

I could not agree more. These are strong 21st century jobs in our supply chain that need to be nurtured by the Government, working in partnership with the industry. We need to safeguard that long-term prosperity.

Going back to my ministerial asks, will the Minister ensure that in sectoral strategies such as aerospace, automotive and construction—areas in which British industry is strong—she emphasises the importance of integrating material supply, which offers better synergy between the prime manufacturers and their suppliers in steel, which in turn can promote process and product innovation and efficiency, which in turn makes UK steel more competitive?

When we talk about the steel industry, there is a tendency to talk about the past. We should not shy away from our strong and proud history of, frankly, inventing the global steel industry—it is something to be proud of—but this debate should not be a history lesson. This is about looking to the future. A 21st-century, modern British economy has to have manufacturing and steel at its heart. That is what we are shouting for and demanding. I hope the whole House can unite in asking how we in Britain are going to stand up for steel.

A&E Services

Debate between Anna Turley and Iain Wright

Wednesday 24th June 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

This is the first opportunity I have had to welcome you to the Chair, Madam Deputy Speaker. I am extremely pleased to see you in what I think is your rightful place.

I pay tribute to my hon. Friend the Member for Dewsbury (Paula Sherriff) for her excellent speech. She is part of a very talented 2015 intake—far too talented for my liking, I am afraid to say. She has already demonstrated a strong reputation for standing up for her constituency—often in the face of terrible attacks—in terms of fairness, tolerance and decency in public services. She is a strong asset to this House and I welcome her.

The issue of accident and emergency services is important for Hartlepool, because we lost our A&E in August 2011. That closure has been felt very deeply by my constituents, who now have to travel to North Tees, which is some 13 miles away, for accident and emergency services. Given the appalling provision of public transport, the low level of car ownership and the relative levels of deprivation, that is too far to travel for far too many of my constituents.

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

Will my hon. Friend comment on the impact of that A&E closure on, and its implications for, areas below the River Tees, including my constituency? In South Tees, despite the best efforts of our NHS staff, waiting times have increased and the A&E target in particular continues to be missed.

[Mr Wright]

My hon. Friend makes a very important point. Having fewer A&E departments puts further strain on other parts of the system, such as A&E at James Cook hospital, and other parts of the NHS, such as ambulance services. They are queuing up outside James Cook hospital, but it does not have the throughput it needs.

It is important that A&E returns to the town of Hartlepool. Given the level of health inequality, as well as the high proportion of older people relative to the rest of the country, there is a greater risk of accidents and, therefore, I think it is fair to say, greater reliance on A&E than other areas.

To be frank—this is not a party political point—the closure was based on clinical safety factors. The number of medical staff to cover two rotas at both Hartlepool and Stockton was deemed insufficient, and the supervision of junior medical staff was deemed inadequate, as it did not meet modern guidance criteria. Additional resources will need to be provided for adequate staffing to ensure that A&E can return to Hartlepool. North Tees and Hartlepool Hospitals NHS Foundation Trust has a financial deficit of £4 million, which is expected to worsen over the coming years.