Steel Industry

Baroness Redfern Excerpts

Tuesday 25th April 2017 Lords Chamber

[Baroness Redfern (Con)]

My Lords, I am grateful for the opportunity to take part in this debate in support of the future of our UK steel industry. I thank the noble Lord, Lord Mendelsohn, for initiating the debate and for his supportive words this evening and acknowledge the Government’s industrial strategy, which gives us cause for optimism—not having one would be a missed opportunity.

I declare that I am an elected councillor on North Lincolnshire Council and chair of the Scunthorpe task group overseeing the Government’s commitment of up to £9 million to support Scunthorpe steel-workers and the local economy through retraining and support for companies in the local area to grow and create new jobs.

Through the good times and the challenging times there is always a sense of spirit and community togetherness—I speak from personal knowledge, as my father worked all his life in the steel industry. Community spirit breeds a determination always to rise to the many challenges that have come along over the years, and I look forward to steel-making continuing in Scunthorpe for generations to come, creating many job opportunities and prosperity for the small and medium-sized enterprises in the supply chain.

Revitalising the steel industry is needed not simply to avert a crisis but because it also represents a great opportunity for steel, which is embedded at the heart of the UK’s high-tech future and is critical to the success of any modern manufacturing renaissance, which the UK requires to compete in a post-Brexit world.

Greybull Capital took over the Scunthorpe steel plant last year after many months of great uncertainty, and a new name emerged: British Steel. The business has developed rapidly, as the noble Lord, Lord Mendelsohn, alluded to earlier, employing hundreds of new people and securing a series of significant new contracts and capital investment of nearly £40 million.

The Business Secretary, Sajid Javid, visited British Steel for the launch on 1 June, and I am pleased to say that during the year there has been regular dialogue with government departments, including the Department for Business, Energy and Industrial Strategy and the Department for International Trade, with British Steel actively contributing to the Government’s industrial strategy.

A key strand of that transformation has seen the company placing great emphasis on engaging with stakeholders. The Scunthorpe plant employs more than 4,000 people in the UK, but it is estimated that more than 16,000 people are employed in the supply chain, working together for all to share the future successes.

Times are changing in the steel industry. Steel has been fundamental in creating iconic awe-inspiring structures around the world. Continuing that means planning for the future for our young men and women, so I am pleased to see the emphasis on training over the past year: already 140 trainees, including 57 apprentices, have been engaged. British Steel Scunthorpe has come a long way in a short space of time and has been buoyed by the pace of change. However, this is the beginning of that journey, and there are areas in which support could be looked at.

Steel is an energy-intensive industry. There is no doubt that energy is a key area and therefore continual dialogue is needed with the Government. Energy remains a major cost: the oft-quoted figure is that the industry pays £17 per megawatt hour more for electricity than some of our European counterparts, so I am pleased that North Lincolnshire Council has secured a government grant to explore ways for the steelworks to become more energy efficient. With new procurement rules, it is vital that we see regular transparent evidence that the public sector is following the new guidance.

New data published for the first time show how the Government plan to use 3 million tonnes of steel in infrastructure projects by 2020, with an emphasis on ensuring that social, environmental and economic factors are taken into account within the procurement procedure. Looking at the capacity and capability, given the fragmentation of the UK steel industry, we think it is also important that the benefits of a partnership approach, rather than having a sole supplier, are embraced. British Steel Scunthorpe wants to work together with its fellow manufacturers and thinks this should be encouraged.

As I have alluded to, times are changing in the steel industry. Steel has been fundamental not only in creating iconic awe-inspiring structures around the world but in research and development. Innovation is key to steel’s future. A great example is Zinoco, the first product of its kind to be manufactured in the world, which creates a premium coated rail product that is 108 metres in length—an excellent example of the ability of the steel plant in Scunthorpe to meet its customers’ needs. Some two-thirds of the steel produced in the UK is in forms that were not invented 20 years ago. However, more support is needed to ensure that British steel provides value to customers that imports cannot.

Business rates, too, have had a significant impact on capital-intensive industries, particularly as many of their competitors abroad pay little or no business rates, so I am pleased with the Government’s response of granting transitional relief to the Scunthorpe plant, which will save it circa £4.8 million over the next four years. Thankfully, measures have also been taken to reduce the dumping of steel.

With the implementation of a bold industrial strategy driving the UK economy forward, we must ensure that the opportunities arising in the next few years are captured as much as possible by our steel industry and that the barriers preventing a fair playing field are addressed and, importantly, resolved to bring further confidence to the business sector.

Steel-making began 127 years ago. British steel has a future. Not only that, it has to have a future. It is a strategic industry, a key foundation industry for construction, automotive, aerospace, defence, rail, oil and gas, renewables and nuclear. Steel is all around us and something we rely on every day and every hour. I wish to see “Made in Britain” stamped on steel used around the world. To those highly skilled, dedicated steel-workers I say: carry on doing what you do well for our strategic industry here in the UK—particularly in Scunthorpe, of course—now and for the future generations to come.