Steel Industry

Clive Betts Excerpts

Thursday 3rd November 2016 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I, too, thank my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley) for securing this debate, and for their sterling efforts on behalf of the all-party group on steel and metal related industries, which is out today in some force.

Last week, the Community union, which does an absolutely fantastic job for its members, quite rightly praised steelworkers in a statement, saying:

“We believe the workforce should be commended, in the strongest terms, for continuing to deliver for Tata throughout this exceptionally difficult period and indeed restoring previously loss making parts of the business to profitability”.

I start with that quote because it is right that we always acknowledge what a difficult time this is personally for those who work in our steel industry. We must never underestimate the effect the continued uncertainty is having on steelworkers and their families. I know that from talking to those who work for Tata at Llanwern and at Newport Orb. A steelworker emailed me last week to say:

“We feel forgotten about and we have no news on the Government’s and Tata’s plan for the pension, no news on where we stand on the future on any proposed merger, no answer on the deficit etc. Things seem to have come to a standstill and there are no answers coming from Parliament or Tata”.

That very much echoes what my hon. Friend the Member for Aberavon (Stephen Kinnock) said at the start of his speech. Aberavon and Port Talbot’s fortunes are very much linked. I absolutely concur with what my hon. Friend said about that feeling of uncertainty and how difficult it is for people. Many steelworkers feel that their lives are on hold. I hope the Minister understands that and takes it away from the debate.

We have in this place relentless debates, questions and statements about steel. Just yesterday there were two fantastic questions at Prime Minister’s questions from my hon. Friends the Members for Cardiff South and Penarth (Stephen Doughty) and for Penistone and Stocksbridge (Angela Smith). In response, the Prime Minister said:

“This Government have stood up for British-made steel, and we have taken a number of measures”.—[Official Report, 2 November 2016; Vol. 616, c. 880.]

She also said,

“we recognise both the importance of steel and the importance of Tata in the United Kingdom.”—[Official Report, 2 November 2016; Vol. 616, c. 886.]

On the lack of clarity about Brexit, she said:

“I am very clear that what we want to achieve is the best possible deal”.—[Official Report, 2 November 2016; Vol. 616, c. 880.]

We appreciate those words, but we need more detail and more commitment from the Government, with stronger words and stronger action.

Workers in my constituency want to know that the Minister is fully engaging with the short-term urgency of the problems facing the Welsh steel industry. There are bits of good news, but the underlying problems have not gone away, as many other Members have said. We are still waiting for assurances from the Government about Port Talbot, which will affect Llanwern, and for any news on the joint venture between Tata’s strip products division and ThyssenKrupp, which could affect Orb in my constituency. If there is such news, what assurance can the Government give that commitments will be made on jobs, investment and the continuation of primary steelmaking at Port Talbot and across south Wales?

The Government lobbied against the EU imposing tariffs on the dumping of Chinese steel. The Prime Minister did not even put Chinese steel dumping on the agenda when she first met the Chinese Prime Minister. Electricity prices are still a huge issue in the UK, with a disparity of £1 million a week between the UK and Germany, which has an effect on competitiveness. As many Members have said, despite the procurement guidelines, French steel is still being imported for Trident renewal. I know we will all be watching as large infrastructure projects get the go-ahead. The Government cannot let up on ensuring that all major procurement projects—from rail to airports and tidal barrages, which will be important for places such as Newport if Swansea bay tidal lagoon goes ahead—use British steel.

As every one of my hon. Friends has said, the Nissan announcement is brilliant news, but where is the Brexit plan for the steel industry? So far, the Secretary of State for International Trade has said that he has no plans to support the steel industry with trade defence instruments. When combined with the other uncertainties Brexit has caused, that is a major concern. Brexit has many other implications for the industry, so we want similar assurances to those given to Nissan.

In brighter news, the Welsh Government are thankfully doing all they can with the powers and levers available. I very much welcome the active work of Ken Skates, the Welsh Government’s Cabinet Secretary for Economy and Infrastructure, who through Business Wales is supporting the industry through Welsh public sector infrastructure and construction projects.

I appreciate that it is not all gloom and—I will make this point before someone intervenes on me to make it—I also appreciate the point about primary steelmaking. Liberty Steel now employs about 1,500 people, including in the steelworks in my constituency and the two Scottish steel plate mills, one of which I know opened recently in the constituency of the hon. Member for Motherwell and Wishaw (Marion Fellows). Liberty Steel also has the SIMEC Uskmouth power plant and it is involved in the tidal lagoon initiatives, which were mentioned earlier and which are very important, not only for Swansea but, further on down the line, for places such as Newport. Liberty Steel has a long-term, sustainable strategy of steelmaking in the UK and actively invests in steel, power and the downstream industries. As we heard earlier, that is all built around a green steel vision, whereby Liberty Steel is working towards producing steel made from recycled scrap metal and powered by renewable power. That is an important addition to the traditional steelmaking industry.

Finally, I take this opportunity to invite the Minister to visit Newport East to see the site in my constituency and see at first hand the plans for Liberty.

[Mr Clive Betts (in the Chair)]

It is now time for the Front-Bench spokespersons; no more than 15 minutes each, so that there are a few minutes at the end of the debate for the mover of the motion to wind up.

--- Later in debate ---

[Gill Furniss]

I thank my hon. Friend for that point. Thirdly, I want to give credit where credit is due and thank the Government for the guidance published in October last year, which has put some emphasis on supporting British steel in major procurement projects. However, despite the good intentions behind that move, we are still seeing major contracts going to foreign steel manufacturers, most famously the new Trident submarines, which are being built with French steel. Had a British firm been engaged to supply the steel, more than 1,000 jobs would have been supported, but alas, that is not the case. Will the Minister commit to ending the exemption from the guidance of tenders funded through contracts for difference? Will he look at strengthening the guidance better to reflect the social and economic consequences of current procurement decisions? Will he follow the examples set by the Scottish and Welsh Governments and publish future pipelines of projects so that British steel manufacturers can prepare themselves to fulfil future demand?

Fourthly, there is the issue of trade defence mechanisms and Chinese dumping. Whatever else Brexit may mean, it is absolutely vital for the industry that we avoid any sort of punitive restrictions on access to the European market. Last year, more than two thirds of our steel exports went to EU countries and our own steel industry is closely bound up with the Dutch plant at IJmuiden. Our trade defence mechanisms depend so much on what the final Brexit deal looks like, but whether or not we find ourselves bound by the rules of the single market, it is critical that the UK stands up for fair trade globally. While we still have a voice in the European Commission, we should be throwing our weight behind the scrapping of the lesser duty rule, which is hamstringing all efforts to counteract Chinese dumping, and opposing China’s application for market economy status, which will kill those efforts stone dead. Free trade does not mean fair trade and until the Government wake up to that reality, the steel industry will never have the level playing field it is asking for.

On the industrial strategy, the difficulties that the steel industry has with energy prices, business rates, procurement problems and unfair global trading practices are all issues that the Government need to address immediately. There are swords dangling over the industry’s head, but if British steel is going to not just survive but thrive, it needs a proper long-term industrial strategy to put it on the right track for the future. I am glad that the Department for Business, Energy and Industrial Strategy has commissioned research into the future capacity and capability of the steel industry. I and no doubt all of us here are looking forward to its findings next year.

Every job in steel supports three in the supply chain and the industry really is the cutting edge of UK manufacturing. Most of the types of steel being produced were not even in existence 15 years ago. Steel will play a central role in our transition to a low carbon economy if we manage it correctly and it can continue to lead the world in terms of quality and innovation. Will the Minister reassure us that BEIS will put steel at the heart of its industrial strategy?

Steel is not a dying industry. It is not a relic of a bygone era. It may be a proud part of our industrial past, but it also has the potential to be a dynamic part of our economic future. Without it, we will not only have lost an industry—make no mistake—we will have lost our entire manufacturing base. No one is asking for special treatment; we are asking for a level playing field that will allow the industry to move forward with confidence. Four months on since we last debated this issue, the steel industry is still in crisis. I urge the Minister to show more energy than his predecessors and do what it takes to save our steel.

[Mr Clive Betts (in the Chair)]

If the Minister would just allow a few minutes at the end for the wind-up speech, that would be appreciated.