EU Referendum: UK Steel Industry

Christina Rees Excerpts

Wednesday 13th July 2016 Westminster Hall

[Christina Rees (Neath) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Gillan. I thank my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for securing this important debate.

It is widely accepted that steel and the steel industry are essential to Wales and its economy, which is particularly the case for my constituency and the people of Neath. Tata steelworks in Port Talbot and Trostre are places where hundreds of my constituents go to work every day. As products of the industrial revolution, both coal and steel have been the beating heart of Neath for more than a century, defining its communities and those who have had their lives touched by those industries.

Of the 1,050 jobs lost in the UK steel industry since the year began, 750 have been lost from Port Talbot—and on top of the 400 jobs lost in 2014. The extent of this decline could have been slowed, shrunk or even prevented had the Tory Government taken up the offers of support that have come from Europe. The forerunner of the European Union, the European Coal and Steel Community, was set up not only to cement peace, but to help economic growth by pooling resources and preventing unnecessary competition. Such planning and collaboration saw the UK steel industry become world leading not only in size but in quality.

The latest industrial revolution taking place in China may be the biggest of all. In 2013, China produced 779 million tonnes of steel, or 48% of worldwide output. The UK produced 12 million tonnes. But as members of a strong European Union, we were in a position to embody the very reason for the EU in the first place: strength in numbers, collective planning, a common purpose. Had the UK Government allowed, we could have installed anti-dumping tariffs on Chinese steel. We could have lifted the lesser duty tariff and applied for crucial EU funds, which would have shored up the industry during these difficult times.

More than half of UK steel exports are to the European single market. What will happen to those exports as a result of the recent referendum? I fear that the impact of tariffs or an elongated trade agreement may signal the death knell of an industry already fighting to compete on a level global playing field. The UK steel industry has declined by 42% between 1990 and 2014 in real terms. Economic output in 1990 was £2.7 billion compared with £1.7 billion in 2014. How can we halt this decline without the support of our European partners, automatic access to a ready-made single market, or the potential of additional funding to tackle rising energy costs and environmental commitments?

We also have organisations that innovate and produce high-tech products that are changing the way we view steel. Neath Port Talbot is home to a company called SPECIFIC—Sustainable Product Engineering Centre for Innovative Functional Industrial Coatings—which uses Tata coated steel to make world-leading, innovative technologies that produce, store and release energy. SPECIFIC is hugely concerned about the prospect of leaving Europe, not least because of the essential funding it has received, without which it probably would not exist, but also because of the potential loss of a market where it could promote and sell its products. And let us not forget the steel that we import from the EU, which makes up 69% of our imports: it is not made in the UK, but is vital to many key industries that produce specialised products, infrastructure and new construction projects.

It is not a matter of whether Brexit will have implications for the UK steel industry, but the extent of them. Exports will be hit hard, output will be slashed, jobs will be lost and communities will be forsaken. I fear for the future of the UK steel industry in a UK outside the European Union, and I call on the Minister and the Government to do all that they can to protect it.

[Mrs Cheryl Gillan (in the Chair)]

Thank you. We will now move to the wind-ups.