UK Steel Sector: Supply Chains

Bill Esterson Excerpts

Wednesday 9th June 2021 Westminster Hall

[Bill Esterson (Sefton Central) (Lab) [V]]

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this debate and on his excellent analysis of the challenges facing the steel industry. He, the hon. Member for Scunthorpe (Holly Mumby-Croft) and my hon. Friend the Member for Rotherham (Sarah Champion) referred to the problems of trade defence measures, and that is what I will concentrate my remarks on.

Last month, the Trade Remedies Investigations Directorate published a draft recommendation to withdraw half of all trade remedies on steel. If that happens, the consequences could be disastrous. During the Committee stage of the Trade Act 2021, I argued that there should be an independent body to make recommendations on trade remedies, which would also take into account domestic economic considerations, but the recent recommendations by TRID show that the regulations that were set out in its mandate, which now also govern the newly established Trade Remedies Authority, are simply not fit for purpose.

Steel manufacturing is a critical national asset. Steel produced in Britain is used to make ships for the Royal Navy and wind turbines to meet our climate obligations. The construction of a nuclear power station at Hinkley Point C is using Welsh steel, and 1.3 million tonnes of steel are required for the construction of High Speed 2. The sector directly employs more than 30,000 people, supports a further 41,100 jobs in high-value supply chains, makes a £2.8 billion direct contribution to UK GDP and supports a further £3.6 billion in its supply chains. Steel is a vital asset—we must protect it in the national interest. However, in making its draft recommendation, TRID failed to take into account the reality of the steel supply chain.

The full spectrum of measures is designed to protect the viability of steel as a whole, not just individual production lines. Removing safeguards would mean that the manufacture of steel sections, tubes, wire rods and plates in the UK becomes unviable. It seems almost certain that the European Union will retain its section 232 tariffs beyond 30 June, meaning that any global overproduction of steel will likely flood the UK, crush domestic supply and have potentially catastrophic consequences for the industry and communities here in Britain.

That existential threat to the industry is a strong argument for maintaining all existing trade defence measures for steel, but TRID, and now the TRA, is forced to prioritise the unimpeded functioning of a global market because that is what it says in the regulations which direct their decision making. The regulations do not envisage the maintenance of the safeguards that domestic producers should be able to expect from their Government—these take second place for our trade remedies body. Hence the recommendation by them for the removal of some safeguards. The economic tests which TRID and the TRA must apply, according to their own regulations, do not provide the Secretary of State for International Trade with the ability to take into account wider factors of strategic national interest when deciding whether or not to reject a recommendation from them. The Business Secretary said he was

“committed to a strategic presence of steel in the UK.”—[Official Report, 25 May 2021; Vol. 696, c. 233.]

The International Trade Secretary said that she will do

“whatever it takes to protect our steel industry.”

The two Secretaries of State must keep their promises and allow the safeguards to remain beyond 30 June while the weaknesses and trade remedies regulations are fixed—they promised to do this. Members on all sides will work with the Government to support jobs and communities. The existential threat of lifting half of the safeguards means there may be just 21 days to save British steel.