Steel Industry

David T C Davies Excerpts

Wednesday 28th October 2015 Commons Chamber

[Ms Eagle]

My hon. Friend’s practical suggestion should be considered with great seriousness not only by the Government but by the EU.

The steel summit in Rotherham was convened only following the Backbench Business Committee debate, and it ended with more job losses and no significant Government announcements. Far from keeping the House informed as the crisis has unfolded, the Government have had to be dragged kicking and screaming to the House to answer urgent question after urgent question.

Steel is an energy intensive industry that inevitably results in extra costs being placed on it for environmental reasons, but the Government have the power to lower energy costs for steel producers through implementing the energy intensive industry compensation package immediately.

[David T. C. Davies (Monmouth) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

In a minute.

Despite being announced in the Chancellor’s autumn statement in 2011, the most substantial part of this package is still waiting to be implemented. Ministers admitted in a parliamentary question to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that they have not even bothered to raise the issue with the Commission in the last 12 months. It is clear that the Government have shown no leadership in Europe, and the Business Secretary is visiting the Commission for the first time today—better late than never I suppose, but what on earth has taken him so long? I welcome his visit, and I trust he will emerge from the Commission with some tangible progress—after all the foot dragging and inaction, it is about time he did.

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[David Mowat (Warrington South) (Con)]

rose—

[David T. C. Davies]

rose—

[Ms Eagle]

I said I would give way to the hon. Member for Monmouth (David T. C. Davies), so I will be polite and give way to him first.

[David T. C. Davies]

In the spirit of politeness, the hon. Lady and Opposition Members are absolutely right to raise this important issue, which affects many in my own constituency in south Wales. She mentioned environmental taxes. I have much sympathy with the point she is going to make, but does she not concede that it was her Government who brought in the environmental taxes in the first place?

[Ms Eagle]

The hon. Gentleman needs to demonstrate to his constituents that he is fighting for their jobs now. He needs to be putting pressure on his own Front Bench to have a proper strategy. This is a heavy industry, which is, by definition, energy intensive. The problem is that the Government do not have a strategy and are living hand to mouth trying to deal with a crisis they should have seen coming.

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[Stephen Crabb]

I am not going to engage in a tit-for-tat on this. Let us just say that the record of the previous Labour Government on steel and on manufacturing was not a stellar one.

[David T. C. Davies]

Does my right hon. Friend agree that Labour Members ought to do him the courtesy of listening to what he has to say? Does he agree that it was they who started bringing in the carbon taxes that have caused problems for manufacturing and that it is this Government who have tried to hold those taxes down?

--- Later in debate ---

[David T. C. Davies (Monmouth) (Con)]

It is a pleasure to follow the hon. Member for Newport East (Jessica Morden), not least because when I left school I started work at British Steel in her constituency. I have to declare an interest as a British Steel pension-holder. I would like to leave everyone with the impression that I was manfully firing a blast furnace, but I was actually a junior filing clerk.

I feel very strongly about this issue and about this industry, which employs so many people in Monmouthshire. We all now accept that there is a problem throughout the world—a huge glut in steel caused by falling demand and an increase in production from China. There are things that the Government can do, and I believe that they are taking the right steps. I am delighted with the idea of the Government’s using British steel as far as possible—not bending or breaking the rules, but changing them so that we can buy our own steel, in projects such as High Speed 2 and in industries such as fracking. That will be very important.

I was glad to hear words in support of the industry from across the Floor because we all have a responsibility in this matter. It is no good blaming the Government for everything; Opposition Members have to be able to challenge themselves and some of their colleagues, who are opposed to fracking on rather spurious green grounds. They should challenge those who say that we should always support everything that the European Union does, even when it makes it difficult for us to get around some of the state-aid rules.

Most importantly—this point has been made by Back Benchers in all parts of the House—we need to do something about the energy crisis. It is no good blaming the Government for that because the whole drive to push up energy prices started with Labour Members, who became persuaded, like so many others, by this idea of global warning. I wish that I had 10 or 15 minutes to outline some of the obvious falsehoods that are propagated around that issue. Suffice it to say that manmade carbon emissions are about 30 gigatons a year out of a total of 700 gigatons that arise naturally. Carbon dioxide is in natural gas, and only about 5% of it comes from man. Of that 5%, only 2% comes from the UK—a tiny fraction of the total amount of CO₂ in the atmosphere.

There has been no warming—no increase in the temperature—of this planet for the last 16 years, despite all the CO₂ that has been pushed into the atmosphere. None of the scientists can explain that; they say that the pause is caused by volcanoes, they blame other kinds of gases or they say that there is a natural pause, as Jim Skea did. The reality is that there is no global warming at the moment. The Intergovernmental Panel on Climate Change accepts that.

Why on earth, then, are we levying all these taxes on our industries? I support the Government’s coming up with a compensation scheme and freezing the carbon price floor, but I have a much better idea, which I ask Members in all parties to think about: scrap the carbon taxes. There is no point in having them if the Chinese do not have them and when we are generating only a tiny amount of CO₂. Scrap the whole lot and we will not need a compensation scheme. Allow our steel industry to compete on an equal basis with everyone else. It is not the global climate that we need to worry about; it is the economic climate.