Caroline Flint
Main Page: Caroline Flint (Labour - Don Valley)UK Steel Industry
Caroline Flint Excerpts
Caroline Flint (Don Valley) (Lab)
I thank the Business Secretary for taking my intervention. I hope that he will also answer the question that my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) has just asked him. On the question of procurement in relation to energy, the Government are intervening more than ever before in the energy market through contracts for difference. Has the Secretary of State looked into ensuring that when those often very generous contracts are negotiated, they contain a requirement to buy British-made steel?
Sajid Javid
I can tell the right hon. Lady that no stone remains unturned in our efforts to help sell as much British steel as possible. The hon. Member for Torfaen (Nick Thomas-Symonds) asked about the lesser duty rule, and this point is raised repeatedly by Labour Members, but Labour had no problem whatever with the rule when it was in government. Scrapping the rule altogether would cost British shoppers dear. It would raise prices on everyday items that we rely on. For example, the rule saves British shoppers £130 million on footwear in one year alone. However, I told the House yesterday that I would be more than happy to look at any ways of specifically helping the steel industry, and I hope that Members will come up with ideas during the debate. I will, of course, be listening.
Richard Fuller (Bedford) (Con)
It is a pleasure to follow the hon. Member for Aberavon (Stephen Kinnock), but it is unfortunate that his speech veered towards the critical, rather than the constructive. However, he can be forgiven, because he is one of many MPs speaking in this debate with a significant steelmaking presence in his constituency.
My constituency is not one of those constituencies, but in Parliament we talk as one community for all our constituencies, and discuss how different constituencies and communities can reach out to communities that are severely affected when things go wrong in an industry or because of a natural disaster. Let me repeat that the issues in the steel industry are not going to go away. We face many years of brutal competition in the global steel industry. If my right hon. Friend the Secretary of State and his team can, over the coming months, successfully find long-term solutions for steelmaking plants in Motherwell, Scunthorpe and Port Talbot, that will be a significant achievement in these times.
As someone who does not have a steelworks in his constituency, I believe it is important to discuss what the rules ought to be on what is fair for communities across the country. The OECD in its report last year on the steel industry said:
“In competitive economies, it is the responsibility of the steel companies themselves to identify ways to adapt to changing market conditions.”
We have to accept that many steel companies in the UK have failed to do that. The OECD goes on to say:
“The role of governments should be to allow market mechanisms to work properly and avoid measures that artificially support steelmaking capacity.”
The OECD understands the ways in which developed and developing economies can prosper, and it is important that the Government bear those words in mind. It is also important—and I should like to hear from my right hon. Friend the Minister for Small Business, Industry and Enterprise on this in her closing speech—that while we prepare for the best we also prepare for the worst. I should like to know what the Government are doing to prepare support for Port Talbot if all their best efforts to save the steelworks do not come to fruition. May I make one point from my memory of the coal-mining communities in the 1980s? The Government can never give enough support to communities that rely on a single industry.
Richard Fuller
No, this is a lesson that we all need to learn. [Interruption.] If the right hon. Lady stops chuntering, I can make a point with which she might agree. Lessons have been learned from the 1980s, and in communities with a significant concentration of industries the Government always have to do more than they think they have to do.
Duties have been mentioned a number of times, so let us clear up the lesser duty rule. The point, as my right hon. Friend the Secretary of State said, is whether the duty is effective. We follow the lesser duty rule, and in the three instances that he mentioned, import penetration has all but disappeared. Giving up the lesser duty rule is not about stopping more steel coming in, but about raising prices on those products. If a 14% tariff is increased to 50% when imports are eliminated that will result in inflationary pressure from the steel industry to other markets, and might be regarded as supporting subsidies from one part of the steel industry to another. It is not right to give up the lesser duty rule, which is the underpinning of the World Trade Organisation, and to take the US approach of zeroing in on tariffs.
On the 267% tariff that America imposed on Chinese cold rolled flat, it was part of the same US decision that imposed a 31% tariff on Tata steel. Tit for tat on trade tariffs does not work.