Steel Industry

Christina Rees Excerpts

Thursday 3rd November 2016 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and my hon. Friend the Member for Redcar (Anna Turley) on obtaining the debate. I welcome the Minister to his place, and want to compliment my hon. Friend the Member for Aberavon (Stephen Kinnock) on his great speech. His constituency is adjacent to mine, and I assure the House that he and I are working together for the people who live in our constituencies and work at Tata Steel.

To say it has been a difficult year for the steelworkers of Neath and Port Talbot would be an understatement. The challenge of competing in a global market, the absence of anti-dumping tariffs, the lifting of the lesser duty rate and Brexit all conspire to create a world of uncertainty and fear. Of the 1,050 jobs lost in the UK steel industry since the year began, 750 of them have been lost from Port Talbot. That was on top of the 400 jobs lost in 2014.

Steel and the steel industry are essential to Wales and its economy, and that is particularly the case for my constituency and the people of Neath. The notion that it does not have a future is simply unthinkable. There are 575 businesses making up the steel industry, employing 31,000 people across the UK. More than 50% of those jobs are based in Yorkshire and Humberside or in Wales. However, between 1997 and 2014, iron production in Wales fell by 3,210 kilotonnes—or by more than 50%. Steel production has fallen by 25% during the past 40 years. Nevertheless, last year was a record-breaking one for Tata Port Talbot, with the plant producing 3.2 million tonnes of steel.

Decline and uncertainty are things that our steelworkers have had to deal with for many years and, being as robust as the steel that they make, they have bounced back every time, working through it all to keep our country supplied with the finest steel in the world. However, the uncertainty has taken on a new form in the shape of Brexit. The European Union accounts for more than 40% of direct British steel sales— and more, when the exports of British manufacturers are considered. Post-Brexit tariffs on British steel or an elongated trade agreement might signal the death knell of an industry already fighting to compete on a level global playing field.

I remind Members that 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. Its architects would be astonished at the current state of affairs and the UK Government’s inability to work with our European partners to prevent unnecessary competition from across the world. The latest industrial revolution taking place in China may well be the biggest of all. In 2015, the Chinese produced 804 million tonnes of steel, or 50% of the total worldwide output. The UK produced 11 million tonnes during the same year. It is a matter of not whether there will be implications for the UK steel industry as a result of Brexit but what their extent will be. If the Government do not do all they can, exports will be hit hard, output will be slashed, jobs will be lost and communities will be forsaken.

The picture painted may be bleak compared with a golden past, but I firmly believe that steel in Wales and the UK has a strong future. A future for any industry is all about adapting to change and turning threats into opportunities. The future of the steel industry is clearly about innovation, and technological innovation is in its business model. Beyond the heavy end of steel production that we all know so well, 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, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. At the heart of its work is Swansea University’s bay campus, which straddles the constituencies of Neath and Aberavon. Specific is hugely concerned about our leaving Europe, not only because of the essential funding it has received from the EU—without which it probably would not exist—but because of the potential loss of a market in which it could promote and sell its products. It is that sort of high-level innovation that needs to be harnessed and nurtured if we want to see a future for our steel industry.

[Stephen Kinnock]

My hon. Friend is making an excellent and comprehensive speech. It is important to underline the fact that the quality of the steel is possible only through primary steelmaking. It must be produced on the basis of a process that starts right up the chain with a blast furnace, not with an electric arc furnace. If we are going to take steel into the 21st century and as high up the value chain as we can, we must retain primary steelmaking in this country.

[Christina Rees]

I thank my hon. Friend for making that important point.

An innovative product is only one part of the story; we must also use the current crisis as an opportunity to change the way we do business so that a structure can be established to protect the steel industry for many years to come. What about a management-workforce buy-out at Tata Port Talbot, and perhaps elsewhere? It could be set up in the shape of a co-operative and take advantage of the benefits of a tripartite model of delivery that would also involve investment from the public and private sectors. There are many such examples from across Wales and the UK, including Tower Colliery, John Lewis, Welsh Water and hundreds of credit unions. Welsh Water’s slogan is “For Wales, not for profit”; we could apply the same principle to our other key industries, which for Wales means steel.

Co-operation, consensus and community are the founding principles of not only co-operatives but the Labour party. It is on those shared values that figures from across the Labour movement have led the development of organisations that have anchored communities during difficult times and helped to create a buffer against global economic shifts. Let us consider the possibility of doing the same in communities such as Neath, Port Talbot and elsewhere. I urge the Government to play their part in this endeavour.