Britain’s Industrial Future

Bill Esterson Excerpts

Tuesday 15th November 2022 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I would like to start by giving apologies on behalf of the shadow Secretary of State, who is unable to be here today for personal reasons.

The motion in my name and in the names of my right hon. and hon. Friends should be self-evident. We want to see the great British industries that have shaped our nation last long into the future, securing our transition to net zero while bringing the jobs and skills so desperately needed in many of our communities. Those skills need to be skills of the future. That is why Labour is committed to 100,000 extra apprenticeships each year and flexibility in the use of the apprenticeship levy to support the training of existing workers. This Government claim that they want to level up the country, but can they deliver well-paid jobs in the areas of the country that they claim to care about? Sadly, it seems that those promises, as we have seen with so many other Conservative promises, are simply not worth the manifesto they were written on.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

Will the hon. Gentleman give way?

[Bill Esterson]

I will give way shortly.

Today, many of our industries, including steel, car manufacturing and shipbuilding, are facing an existential threat from spiralling energy costs, cheap imports and inflation. To make matters worse, they are also facing an indifferent Conservative Government. While other nations have had the foresight to retain a competitive advantage and invest in future technologies, here in Britain the Conservatives are happy to watch decades of expertise and reputation go abroad, along with the high-quality jobs that underpin our industrial communities.

Before the Minister blames international challenges, let us just remind Conservative MPs that this country is uniquely exposed to global economic problems. That is why the Bank of England has described UK-specific factors as behind the high interest rates that threaten homeowners and businesses with higher borrowing costs. The Conservatives have presided over 12 years of low growth, low investment and low productivity. Business investment under this Government is the lowest in the G7. We are the only G7 country where the economy is contracting, and the only one where the economy has not recovered to pre-pandemic levels. The Conservatives crashed the economy and they do not have a plan for recovery. Meanwhile, according to the latest Office for National Statistics business survey, a fifth of businesses say that uncertainty about demand and business prospects is holding back their investment plans. We can see what the former Chancellor meant when he used the phrase “vicious cycle of stagnation”.

[Mark Tami (Alyn and Deeside) (Lab)]

Does my hon. Friend agree that, although other European countries have recognised the energy costs facing the steel industry, this Government have done absolutely nothing about them? It is a major problem facing the industry. Although the long-term future might be hydrogen, as we hope it is, it will not happen without the Government—hopefully a Labour Government—putting in the investment needed to ensure it happens.

[Bill Esterson]

My right hon. Friend is right to speak on behalf of the steel industry, which faces an existential crisis and may well depend on a Labour Government coming to the rescue.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Does my hon. Friend share my frustration that the Government are playing hokey-cokey with Northern Powerhouse Rail, first putting it in their manifesto and then taking it out under Boris Johnson, then putting it in under Liz Truss and taking it out again under Rishi Sunak?

[Emma Hardy]

I apologise, Madam Deputy Speaker.

Does my hon. Friend the Member for Sefton Central (Bill Esterson) agree that, if we want to deliver an industrial strategy, we need Northern Powerhouse Rail to be delivered in full?

[Bill Esterson]

I completely agree with my hon. Friend. She is confused because we have had so many Conservative Prime Ministers in the last few weeks that it is hard to keep up. Like her, I want to see Northern Powerhouse Rail linking my constituency on the west coast with her constituency on the east coast, providing economic benefits all the way along the route.

[Jonathan Gullis]

Will the hon. Gentleman give way?

[Bill Esterson]

I will give way. Perhaps the hon. Gentleman will apologise for supporting a Government who crashed the economy.

[Jonathan Gullis]

The hon. Gentleman said he would come back to me when I sought to intervene on his talk of jobs in areas that we promised to level up, such as Stoke-on-Trent. He will, of course, welcome the 500 brand new Home Office jobs that have come to Stoke-on-Trent thanks to the Conservative Government, the 9,000 jobs that have been created thanks to the Conservative-led Stoke-on-Trent City Council under Councillor Abi Brown, and the 1,700 jobs at Chatterley Valley West that the Labour council opposed in May’s elections.

[Bill Esterson]

Unfortunately, the hon. Gentleman does not understand that 12 years of low growth, low investment and low productivity mean that places like Stoke-on-Trent have been hit very badly by this Conservative Government.

Where has 12 years of Conservative Government left British industry, not least in places such as Stoke-on-Trent? Manufacturing has seen the worst output over three months since the 1980s. Anyone who genuinely wants to turn around the UK’s poor economic performance cannot discount the role of industry in our economic growth. It is not a question of being either a service-led or a manufacturing-led economy. Successful economies are a combination, and successful industries are a combination, too. Good manufacturing depends on the services that support production.

Labour knows the value and understands the crucial role of our industrial base in delivering economic growth, which is why we have outlined our industrial strategy to give businesses certainty that they can invest alongside Government to safeguard our world-class industries. Economic strength needs partnership between Government and market, and between business and worker. Our new industrial strategy has partnership at its core, because partnership is how we ensure strong, secure growth and a fairer, greener future.

Our plans for a national wealth fund to invest in our great industries will play a crucial role, alongside businesses and trade unions, in delivering the certainty that investors and workers need. Labour’s plan will bring businesses, workers and trade unions together to safeguard the future of an industry that is the pride of communities across the country. I am talking, of course, about steel.

What we need is not crunch crisis talks and random nationalisations but investment in our great industries, with a real plan to secure our steelmaking future through a partnership to invest in the technology that our steelmakers need to export green steel around the world. But for 12 years the Conservatives have failed to back Britain’s steel industry. The Government have let the industry decline, with jobs offshored and communities damaged. While Governments around the world have been committed to their domestic industries, with long-term strategic investment in green steel production, the Conservatives have failed to invest in the transition, have attempted to weaken safeguards that protected our steelmakers from being undercut by cheap steel imports and have splashed tens of millions of pounds on imported steel to build British schools and hospitals.

Labour will make different choices. We will put UK steel at the heart of our wider industrial policy, building British wind turbines and railways, and investing in carbon capture and storage, and hydrogen infrastructure. I wrote to the Secretary of State two weeks ago about the concerns of the steel industry in this country. As he has not replied to my letter, perhaps the Minister winding up this debate will tell us what action the Government are taking to support this core industry.

[Holly Mumby-Croft (Scunthorpe) (Con)]

Would a Labour Government be looking to support the steel industry in the same way as Labour did between 1997 and 2010: by halving the number of workers in the industry?

[Bill Esterson]

The hon. Lady should perhaps take more care about how the Chinese are threatening to pull the plug on steel production in her constituency right now.

[John Penrose (Weston-super-Mare) (Con)]

The shadow Minister mentioned green steel. Do the Labour party’s plans include anything to do with a carbon border adjustment mechanism, which would, not just for steel, but all heavy energy using industries, level the playing field between British energy users, particularly manufacturing industries, and their cheaper competitors elsewhere in the world, who have cheaper energy costs? Is that part of the Labour party’s plans?

[Bill Esterson]

Perhaps the hon. Gentleman should be asking the Minister that question rather than me. [Interruption.] He has told me he is going to ask the Minister in a minute, and I look forward to the answer. Our view is that we have to respond to the fact that the EU is already doing this and we are clearly going to have to take action to safeguard the steel industry in this country. So I would be very interested in what the Minister says and whether it is consistent with what I have said.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. Does he agree that what Conservative Members seem to be failing to recognise is that they have had 12 years to deal with the massive disparity in electricity costs between ourselves and our nearest competitors? There has been a total failure to have a procurement strategy that works for the UK steel industry and a complete absence of any action to support the transition to net zero. So rather than us take any lectures from Conservative Members, it is time they showed some humility and actually started to take some decisions about this vital foundation industry.

[Bill Esterson]

I am extremely grateful to my hon. Friend, who has led the steel MPs on this side of the Chamber, and has often led cross-party as well, in fighting the cause of steel communities. As he says, a core foundation industry is crucial to jobs and prosperity; to our national defence and security, with its role in procurement in defence; and to decarbonisation for climate security. It is right that we should be supporting our steel industry and our other core industries.

[Jessica Morden (Newport East) (Lab)]

Does my hon. Friend agree that it has not helped that since 2010 we have had 11 Ministers responsible for steel, including six in the past few years alone? It is impossible for the industry and unions to have an ongoing dialogue with the Government for a long-term vision for steel.

[Bill Esterson]

My hon. Friend is absolutely right about that, and I suspect that even if Ministers will not admit it publicly, they would say so privately too. I mentioned that I wrote to the Secretary of State two weeks ago. I am disappointed that I have not had an answer sooner, given the scale of the challenge and the emergency facing so many parts of the steel industry.

[Holly Mumby-Croft]

The hon. Gentleman mentions the letter that he wrote two weeks ago. I am grateful to have that support even if it is only a letter and very late in the day. Can he set out in a little more detail what else he has done? In particular, can he say what he did to help with the two extensions of the safeguard, because I do not remember discussing that with him at the time?

[Bill Esterson]

I would have hoped that, as a Conservative MP, the hon. Lady would have been talking to her own colleagues. I hope that her ministerial colleague will have heard what she said, and that she will join me in calling on him to respond to the requests of the steel industry. [Interruption.] The hon. Member for Stoke-on-Trent North (Jonathan Gullis) can sit there and heckle all day—he does quite a lot of that—but the honest truth is that we do need cross-party working to deliver for steelworkers. I am happy to support the call of the hon. Lady, as I am the calls of my colleagues who have spoken in this debate.

On the automotive sector, it must make sense for the Government to support workers at one of the most productive car plants in Europe. That is why the Government should be working with BMW at Cowley to give it assurances that they support electric car production in the UK. They should be working with the car industry to support the transition to electric vehicles, not sitting on the sidelines while our great automotive sector falls behind our European competitors. While we have one gigafactory in operation, Germany has five, with a further four in construction. France and Italy are set to have twice as many jobs in battery manufacturing as us by 2030. The precarious future of Britishvolt is incredibly worrying for the local economy, risking up to 8,000 jobs, but it also further jeopardises our gigafactory capacity as a country. As part of our plans for a national wealth fund, Labour will part-finance the creation of three new additional gigafactories by 2025, with a target of eight by 2030.

Turning to shipbuilding, a successful strategy means making and buying more ships here in Britain, such as the Fleet Solid Support Ships, rather than seeing lucrative defence contracts built abroad. It is, of course, a very important way of supporting our steel industry. Investing in sovereign defence capability is a matter of national security as well as being good for jobs, 6,000 of which are at the UK’s high quality shipyards from the Fleet Solid Support Ship contract alone.

A hallmark of each iteration of this Conservative Government has been to act in the heat of the moment and lurch from crisis to crisis. The revolving door of Ministers, the seemingly endless soap opera, the unedifying sight of Conservative MPs eating bugs in the jungle mask a much deeper problem. The Conservatives are unable to offer British industry the bedrock on which it needs to grow. They do not have an industrial strategy that can last the term of a Minister let alone the turn of the century. Whether that is ideological opposition—the mistaken belief that Government should get out of the way—or pure incompetence, it is clear that the Conservatives are failing British industry.

[John Redwood (Wokingham) (Con)]

rose—

[Bill Esterson]

I suspect the right hon. Gentleman is going to tell us that it is the former.

[John Redwood]

I support what the shadow spokesman says about wanting more made here; I quite agree. On the gigafactories that Labour is now sponsoring, what demands would it make of those putting forward the idea? The issue is: should they not have some customers and a plan that will work. What does he want from them?

[Bill Esterson]

The Government really should have done their own due diligence before investing. If the German, Italian or French Governments have made those investments because they have a strategic interest in their car industries, it must make sense for us to do the same here.

[Paul Holmes (Eastleigh) (Con)]

The shadow Minister outlines this Government’s failure or apparent inaction on shipbuilding in the UK, but can he bring himself today to congratulate the Government on announcing the five Type 26 frigates to be built in the UK, on the Clyde, which will mean jobs and prosperity for not only Scotland, but the whole UK. Perhaps he might like to correct the record and mention that?

[Bill Esterson]

I am grateful to the hon. Gentleman for asking the question, because it reminds us all that the Conservative Government have cut the number of ships from 13 to eight—so I would be careful about claiming that as a great big success story—and they still have not made a decision on the Fleet Solid Support Ships.

With Labour, Britain can become a global leader in producing electric cars and in self-sufficiency in renewable electricity generation. Meanwhile, the Conservatives continue to drag their feet and retain the moratorium on onshore wind. When the Prime Minister was asked about onshore wind, he answered by talking about offshore wind. It is almost as if he did not understand the difference.

Onshore wind is one of the cheapest forms of energy, and we will double its capacity. We will treble solar and quadruple offshore wind production. We will support nuclear, tidal and hydrogen, because they are all part of a low-carbon future, but not least because Labour will be an active Government, willing to champion British industry and help to create the jobs and prosperity of the future.

Our plans for renewable electricity generation will mean cheaper bills for industry and households. They are being drawn up with business, informed by the evidence presented to us by employers and trade unions alike. Partnership, planning, investment and certainty: those are the elements industry needs to succeed. They are the foundations of the framework that industry will be able to rely on alongside a Labour Government.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

On energy policy and lower energy bills, the shadow Minister mentioned nuclear power. Sizewell C nuclear power station is going to cost something like £30 billion in capital expenditure. The UK Government’s impact assessment, when the capital costs and finance and borrowing costs are taken into account, estimates that it will cost £63 billion. Does he really think that is a good way to spend money?

[Bill Esterson]

The way the Conservative Government reached the deal was not good value for money, and we certainly should not do that again, but nuclear is a key part of our transition to renewable electricity.

When I visit companies developing new technologies, they are excited by the prospects and the ideas they are developing. Whether on decarbonising air travel, installing insulation in millions of homes, as our energy efficiency plans will do, or our world-class defence companies delivering economic prosperity while keeping us safe, all the businesses I meet want to work with Government. They want a Government who offer stability and are a willing partner, who will lead the world in renewable technology, who will herald the vanguard of new electric vehicles and will supply the world with cutting-edge green steel.

The Conservatives have failed over the past 12 years. Their answer is to offer the slowest growth in the OECD over the next two years after crashing the economy. It does not have to be this way. Britain’s best years really can lie ahead. Britain really can be the best place to start and grow a business. The British Government really can be the partner to industry, ensuring that we make, buy and sell more in Britain. With our industrial strategy and our green prosperity plan, Labour will ensure that, together with business and the workforce, we really can deliver prosperity through partnership.