EU Referendum: UK Steel Industry
Debate between Cheryl Gillan and Sarah Champion(8 years, 4 months ago)
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Sarah Champion (Rotherham) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I also give heartfelt congratulations to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who not only secured this debate, but has championed at every level the steel industry in his constituency and across the UK. I am very grateful for that.
The result of the EU referendum has led to unparalleled economic and political uncertainty. For the British steel industry, it has come at the worst possible time. We must not allow it to impede the work that has been done and still needs to be done to secure a sustainable future for steel. What steel needs has been explained to the Government time and time again: address the high energy costs; tackle business rates that continue to leave the industry hamstrung; commit to favouring British-produced steel in procurement; and act on the cheap dumped steel that has contributed to the severity of the crisis.
The Brexit vote may have reduced our ability to act, but we must commit to working with our European partners to ensure a co-ordinated and credible response. Tata Steel’s recent change of course in strategy for its British business in light of the referendum vote presents dangers and opportunities, particularly for Speciality Steels, which is based in Rotherham and Stocksbridge. It is a tremendous asset to the British economy.
There is an unfortunate tendency to view the British steel industry as a relic—an industrial throwback to a different economic age. That could not be further from the truth for the whole industry, but especially for Speciality Steels. Speciality Steels is a world-leading business at the cutting edge of technology and expertise. It produces steel for the most complex roles, from aerospace to motorsports. Members may have watched the British grand prix, where the cars had steel from Rotherham and Stocksbridge in them. The division’s list of customers speaks for itself, running from Rolls-Royce to Lockheed Martin and from Boeing to BAE. Rotherham also houses Tata’s research centre, which continues to develop world-leading advances in steel production and technology to meet the most difficult demands.
However, that vibrant and dynamic business cannot continue to lead the world with one hand tied behind its back. We must act on the underlying problems the industry faces as a whole. Tata’s announcement that the division is to be sold separately is cautiously welcomed. Speciality Steels is a great asset, and I am sure a number of bidders will be forthcoming, but we must make certain that the right buyer and not just any buyer is found to allow the business to continue to thrive. This can be no fire sale. I understand from press reports that there has already been some interest from potential buyers for the business. Given the new circumstances, I would appreciate it if the Minister updated us on the implications that the latest move by Tata will have on Speciality Steels in south Yorkshire.
Tata’s Speciality Steels unit could be a fantastic investment opportunity for someone. As well as producing some of the best steel in the world and being at the cutting edge of innovative and highly profitable steel products such as powdered steel, it has a highly regarded workforce in Stocksbridge and Rotherham. It will have a tremendous future with the right investment. Training and support for staff needs to be provided where necessary. Support to enable the business to weather any short-term turbulence that may result from the sale is also needed. What commitments can the Minister give to support the sale process of Speciality Steels and ensure that it is managed effectively and in a timely manner? The written ministerial statement from the Secretary of State on Monday hinted at providing financial support to help the process. Will the Minister provide details of any possible support? Also, will she place on record today that the Government stand by their commitments made on 21 April 2016, which detailed hundreds of millions of pounds of support in a package for potential buyers of Tata’s UK business?
Madam Gillan, another area of great concern has been the sizeable pension liabilities, especially the old British Steel liabilities. [Interruption.] Sorry.
Sarah Champion
Okay—I ask Members to follow that.
Does the Minister envisage separate solutions for these liabilities? Can she give Members any details of what support the Government may offer any potential buyer of Speciality Steels? It is well known that, for Speciality Steels to maintain its dominant market position, significant capital investment is needed to move up the value chain. Can the Government offer any support or loans to potential buyers of Speciality Steels to ensure that investment in innovation, and in research and development, continues at its current pace or, indeed, is increased?
Speciality Steels has a bright future, and I am confident that the right buyer will quickly come forward. I know that the city region and Sheffield and Rotherham councils are determined to do whatever they can to help the business. The Government have repeatedly claimed to be committed to steel. That commitment must not slip, despite the economic obstacles we face. With the right support and nurturing, British steel can continue to lead the world in quality and technology with a dedicated, experienced and well trained workforce. The Government must not take their eye off the ball at this critical time. I join with my colleagues in urging them to act, and act now, to safeguard a viable, sustainable and successful future for British steel production.