UK Steel Industry
Debate between Clive Betts and Angela Eagle
Ms Eagle
What needs to be done is what is necessary to preserve, restructure and ensure the survival of our steel industry for the future. That is the Government’s job. We will be as supportive as we can—I shall set out some parameters later in my speech—but this is about the Government getting their act in order. The Opposition are holding the Government to account for their actions, rather than just their words. That is what this debate is about.
Mr Clive Betts (Sheffield South East) (Lab)
On that point, we heard nothing yesterday from the Secretary of State, either at the meeting of the all-party group on steel and metal-related industries or in the Chamber, about what action the Government will take on energy costs and business rates—costs that are burdening the steel industry, and on which the Government could act, yet we have seen no sign at all that they will change their policies in these vital areas.
Ms Eagle
I hope that we will have the chance to hear about concrete action from the Government in this debate.
I was talking about the costs to the community of letting steel fail. The costs to manufacturing and the economy are high, but the costs to the workers and their communities would be much higher. We very much welcome the recent commitment from the Business Secretary to do everything he can to protect steel-making and processing in the UK, but this Business Secretary has form. Warm words are all very well, but they are worthless, as the community in Redcar know to their cost, unless they are followed up with meaningful action.
Opposition Members are in no doubt that there are huge challenges facing the UK steel industry, but we believe that it can have a strong and sustainable future, and we know that decisions made by this Government now will ultimately determine whether it does. That is why I welcome the commitment the Business Secretary appeared to make in yesterday’s statement to what he called co-investment. Perhaps he will tell us whether he is considering co-investment to save the blast furnaces at Port Talbot, because we did not get an answer to that question in yesterday’s statement.
Will the Business Secretary confirm here and now that he will avoid a fire sale of these assets, and ensure that irreversible mistakes are not made in the way that they are sold? If Tata is to act as a responsible seller, it must consider only those offers that seek to maintain both upstream and downstream assets—that is, both the strip business at Port Talbot, and the specialist business based in and around Rotherham, Stocksbridge and the rest of south Yorkshire. The Government must also make sure that enough time is made available to ensure that an appropriate consideration of responsible offers can take place. It took nine months for the Scunthorpe deal to be developed, yet Tata has indicated that it wishes to exit the UK in four months. What is the Business Secretary doing to reassure the existing customer base that their current and future contracts will be fulfilled during this period of uncertainty? The plants cannot be saved if their order books disappear.
Let me turn to a number of areas where I believe the Government can make a positive difference. The most significant cause of the crisis facing the steel industry is the dumping of huge amounts of cheap Chinese steel on the market. It is priced below the cost of production; Chinese state-owned steel companies are making billions of pounds in losses, yet they continue to pour out more and more product. UK steel producers simply cannot compete with this state-subsidised unfair trade, which is threatening to destroy the European industry as well as ours. We are not calling for protectionism, but we are standing up for fair trade, and calling for quick and effective tariffs that will help to level the playing field. The Business Secretary must abandon his opposition to the abolition of the lesser duty rule and block unfair Chinese imports.
Granting market economy status to China must not be automatic. China meets only one of the five criteria that must be met if this status is to be granted, yet the UK Government support granting market economy status to China as early as the end of this year. Action to level the playing field using trade defence instruments, and on market economy status for China, would give potential buyers of Tata’s UK steel operations the surest sign that the Government stand ready to act.
On procurement, the Government should take concrete action to ensure that UK steel producers are able to benefit from large public sector contracts. The Ministry of Defence will spend £178 billion on defence equipment over the next 10 years, yet the Conservative-led coalition Government scrapped Labour’s defence industrial strategy, which made British jobs and industries the first priority in all decisions on MOD contracts. We are now in the deeply regrettable situation of an aircraft carrier, British surface ships and armoured vehicles all being manufactured in the UK with mainly imported steel, when, with more planning, our domestic industry could have supplied those needs.
The Government must also take action on infrastructure investment. Despite all the Government public relations about this, public sector net investment in the UK will in reality be lower as a percentage of gross domestic product at the end of this Parliament than at the start, and half what it was under the last Labour Government. Of the projects announced in the Government’s infrastructure pipeline, just one in five is actually under way. For the sake of our steel industry and the wider economy, Labour calls on the Government to bring forward shovel-ready projects that require a significant amount of steel, and to ensure that the changes to the procurement rules, which the Government keep boasting about, actually begin to make a difference.