Protecting Britain’s Steel Industry

Emily Thornberry Excerpts

Monday 21st June 2021 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I beg to move,

That this House believes the British steel industry, and the livelihoods and communities it supports, should not be undermined by unfair competition from overseas; regrets that the Trade Remedies Authority has not accounted for the interconnectedness of the British steel industry, nor the impact of safeguard tariffs being maintained in the US and EU, when recommending the abolition of nine of the 19 existing safeguards on steel products; accordingly requires the Government to take urgent action by legislating to allow Ministers to reject the Trade Remedies Authority’s recommendation and temporarily extend the current safeguards; and orders that, at the sitting on Monday 28 June, Standing Order No. 14(1) shall not apply, and that precedence at that sitting shall be given instead to any Business of the House motion in the name of the Leader of the Opposition which may be moved at the commencement of public business that day to make provision for urgent legislative action to protect the vital interests of the British steel industry.

The motion before us disagrees with the recommendations of the Trade Remedies Authority to revoke half the current safeguards protecting our nation’s steel industry against potential floods of cheap imports. It requires the Government to bring forward emergency legislation, allowing them to reject those recommendations and extend all the current safeguards before they expire on 30 June. Finally, it makes provision for the Leader of the Opposition to enable the emergency legislation to be considered next Monday if the Government fail to do so themselves.

It is a pleasure to open this debate. It is a testament to the urgency and importance of the issues before us that so many Members have registered to speak. For that reason, I will not be taking many interventions. I believe that there are 24 Labour Back Benchers alone who want to contribute.

We all recognise that the livelihoods and futures of steel communities across our country will be directly affected by the decisions taken in Westminster this week, but it is the motion before us tonight that creates the possibility that those decisions will be the right ones. That is a heavy responsibility on our shoulders and it is therefore incumbent on us all to treat this debate with the seriousness that it deserves. That is why it is a source of regret that the one person whose decisions will matter above all in Westminster this week—the Secretary of State for International Trade—has chosen not to be here this evening.

After all, it is the Secretary of State’s Trade Remedies Authority—appointed, empowered and inspired by her—that has made the misguided recommendations that have led to this crisis. It is her powers in relation to those recommendations and her freedom to take other issues into account which are the subject of the motion before us today. Most fundamentally of all, it is her general approach to trade policy and her specific attitude towards the future of the steel industry in Britain that is crucial in determining the final decision that is taken on the retention of these safeguards.

If it were me standing in the Secretary of State’s position, I would want to be here this evening to listen to what the representatives of Britain’s steel communities have to say, particularly as some of those representatives are sitting on her own Back Benches. In her absence, I am going to use my opening remarks to look through each of the three issues I mentioned in turn—first, the role of the Trade Remedies Authority; secondly, the powers of the Secretary of State; and, thirdly, the decisions she now has to take—and try to develop a consensus in this House not just in support of this vital motion, but on how the Secretary of State should approach the crucial days ahead.

Let me start with the role of the Trade Remedies Authority and the reason for its flawed recommendations. There is nothing worse, in life or politics, than people being wise after the event, but in respect of the Trade Remedies Authority it is very much a case of predictions coming to pass. Four years ago, my hon. Friends the Members for Brent North (Barry Gardiner) and for Sefton Central (Bill Esterson) warned the Government consistently during the first attempted passage of the Trade Bill that their vision for the new TRA was misguided. Exactly 13 months ago, when the Trade Bill returned for a second time, I stood at this Dispatch Box and followed their previous lead, describing the TRA as

“a vital body with a vital task”

but one that was not representative of the business and workers that it was being set up to defend. “No wonder”, I said 13 months ago,

“there are such concerns and suspicions that the Government’s true agenda for the TRA is not to defend Britain against underpriced imports, but somehow to balance the damage they do to domestic producers against the perceived benefits for domestic consumers.”

I said back then:

“That is not the job of the trade remedies authority.”—[Official Report, 20 May 2020; Vol. 676, c. 616.]

I stand by that statement, even more today now that we have seen this new body in action. If we were in any doubt about the misguided sense of mission that is driving the TRA, we had all the confirmation that we needed last week from the new chair and the new chief executive, who were personally selected by the Secretary of State from the senior ranks of the Department for International Trade. In their joint interview with the Financial Times, they explained that, under their leadership, the TRA would always seek to set the lowest safeguards possible, deliberately lower than any EU equivalent, and that this approach would be quite distinct from countries

“which impose swingeing tariffs to protect particular industries.”

They boasted that the TRA had already scrapped more than 50 of the safeguard tariffs carried over from the European Union, and that they intended to consider only around four cases per year where new safeguards might be required, which is a quarter of the amount being pursued each year by Brussels. They concluded that the TRA was

“suited to a buccaneering global Britain”

that would favour free trade over the protection of domestic industries. If anyone were wondering how the TRA can possibly have come to the conclusions that it has when it comes to maintaining Britain’s steel safeguards, the answer is that the men in charge are simply doing what they were appointed to do by the Secretary of State.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am grateful to the right hon. Lady for taking my intervention and for the point that she is making; I agree fully with what she is saying. Does she agree that it is the complete opposite of taking back control that the Secretary of State cannot even amend the recommendations of this authority and that, basically, it is faceless bureaucrats who are determining Government policy?

[Emily Thornberry]

The hon. Gentleman is quite right, and I will be developing that point in a few minutes.

[Jacob Young (Redcar) (Con)]

Will the right hon. Lady give way?

[Emily Thornberry]

I will take one more intervention, especially from the hon. Gentleman whose constituents will want to know what he has to say this evening.

[Jacob Young]

I thank the right hon. Lady for giving way. Can she be clear in the point that she is making? Is she questioning the independence of the TRA and would she rather have a politically affiliated body determining trade policy?

[Emily Thornberry]

I would rather that we had a body that looked after the hon. Gentleman’s constituents and defended the steel industry.

Even so, let us not forget a fundamental flaw at the heart of the TRA’s recommendations: the failure to understand that the safeguards put in place by the EU were deliberately intended to provide comprehensive protection across the steel industry as a whole, recognising that if one product line is exposed to cut-price imports, the competitiveness of the whole industry is immediately undermined. The TRA has either not understood that basic concept or has deliberately chosen to ignore it. Either way, I defy anyone in this House tonight to argue that the TRA’s recommendations must be considered sacrosanct either because of its objectivity or because of its expertise. I am afraid that if Members read the Financial Times interview or studied its conclusions on steel safeguards, it is clear that the TRA has been found sorely lacking on both fronts, as many of us predicted that it would

That brings me to the second of the three major issues before us this evening. If the TRA’s recommendations are flawed, what can the Secretary of State do about it? As the House will be aware, as the legislation stands, it does not allow the Secretary of State to reject the TRA’s recommendations in order to retain the existing state safeguards. The motion before us proposes emergency legislation, allowing the Secretary of State to do exactly that. The reason that we would argue that such an unusual move is a necessity is not just because of the urgent need to stop those steel safeguards expiring at the end of the month, but because this review process has exposed three fundamental problems in the remit of the TRA’s investigation that cannot have been intended by Parliament.

First, it makes no sense whatsoever for the TRA to look at the UK’s safeguards on steel in isolation from what the rest of the world is doing with theirs and from what is happening in global steel markets. Let us consider the position that we are at present: eight of the world’s 10 largest steel markets have safeguards currently in place, with the US and the EU recently confirming that they are certainly keeping theirs. At the same time, China is heading towards the 1 billion tonne mark for annual production and still has more than 300 million tonnes in spare capacity. In that context, it would be utter madness to remove half our current safeguards and expose our country to a flood of cheap imports from China and elsewhere at exactly the time that those suppliers are desperately hunting for an unprotected market. Yet the TRA has not given any consideration to the international context, because it is apparently not in its remit to do so.

Secondly, it makes no sense whatsoever for the TRA to conduct an economic test on the need for these safeguards that does not take into account the impact of removing them on the 34,000 well-paid, good-quality skilled jobs for steelmakers in Wales, Yorkshire and Humberside, the midlands, the north-east and elsewhere, and the 42,000 more in supply chain roles. These are exactly the kinds of jobs in exactly the kind of communities that the Government keep telling us are essential to level up our country, and yet the direct threat to those jobs and communities that dropping our safeguards would create is not one of the factors considered by the TRA, because it is apparently not in its remit to do so.

Thirdly, it makes no sense whatsoever for the TRA to make recommendations affecting the British steel industry without considering the knock-on implications for our defence procurement programmes, for the construction of critical national infrastructure, and for the delivery of our net zero emission targets. All those major considerations for the Government will be dramatically altered depending on whether we are producing the majority of our steel we need here in Britain or importing it from abroad. Yet the potential impacts of its recommendations on those different areas were not among the factors considered by the TRA, because apparently it was not in its remit to do so.

That leaves us with a fundamental dilemma: either the TRA’s remit needs to change so that it can consider the global context for its recommendations and take into account their impact on our jobs, communities and regions, our national defence, our civil infrastructure and our climate change objectives, or, alternatively, the Secretary of State’s powers need to change to allow her to weigh up all those factors against the TRA’s analysis and make a decision, with Parliament’s approval, based on our overall national interest, on what is best for Britain. Which of those two options would be better is a discussion for another day, but one thing that we should be certain of now is that the Government cannot proceed with a decision on steel safeguards on the basis of recommendations by the TRA that have not even taken into account some of the most crucial factors at the heart of that decision. On that basis alone, I hope that Members in all parts of this House will agree on the need for emergency legislation to allow the Secretary of State to reject the TRA’s recommendations, extend the current safeguards beyond 30 June, and allow time for discussion about the right course of action for the future.

I said at the outset that the third and most fundamental issue affecting our debate today is the approach of the Secretary of State herself to the future of the British steel industry and whether she will accept our invitation to move emergency legislation, if that is how we vote tonight. If you had asked me that question seven years ago, Madam Deputy Speaker, I would have said yes. Back then, you may remember, the Secretary of State burst on to the political scene with an impassioned cry for us to buy more pears, apples and cheese grown and made here in Britain, and scathing criticism of those who thought that our food production could be outsourced overseas instead. But now she reserves her fury for the British farming industry and all of us in this House who oppose the deal that she has signed to flood our market and undercut our farmers with cheap and cruelly produced Australian meat.

In the past seven years, the Secretary of State has seemingly been fully captured by the free trade dogma that insists on the right of the consumer to choose the cheapest product available from anywhere in the world and rails against any interference with that right, whether it is the maintenance of tariff safeguards to protect domestic producers, concerns about slave labour and human rights abuses, or the cruelty to animals and carbon admissions that are so often the hidden cost of cheap imports. Because the Secretary of State will have no truck with such concerns, she has become the hero of the right-wing free trade think-tanks—the ones that hanker after the supposed improvements in productivity and efficiency if only our NHS was forced to compete, the ones that openly talk about the benefits of destroying the British farming industry so as to end subsidies for wildlife conservation and free up more land for developers, and the ones that inevitably are equally scathing about Government support for the British steel industry or the retention of our safeguard tariffs.

Listen to Mark Littlewood, director general of the Institute of Economic Affairs, who said:

“It’s unsustainable for the government to prop up a steel industry which is no longer competitive internationally.”

Listen to Matthew Kilcoyne, deputy director of the Adam Smith Institute, who described Government funding for the steel industry as

“throwing…cash into a burning furnace”.

These are not some obscure figures on the fringes of public life or some right-wing rent-a-quotes trying to get their names into The Telegraph. These are hand-picked members of the Secretary of State’s own strategic trade advisory group—her personal body of external advisers, whose sole representative from manufacturing industry is not from British Steel or Make UK, but is the director of JCB construction, and guess what? He is the biggest Tory party donor.

These are the voices the Secretary of State is listening to when it comes to safeguarding tariffs, when it comes to protecting British farming and when it comes to protecting British Steel. So no wonder the two acolytes she appointed to run the Trade Remedies Authority think their job is to promote free trade rather than to defend domestic producers, and have recommended this wrong-headed decision on steel as a result, and no wonder the Secretary of State, who said last month that she would do “whatever is necessary” to protect the UK steel industry, will not even attend this debate to discuss how she might go about doing that. If she refuses to act to protect our safeguard tariffs, it will be an unconscionable betrayal of Britain’s steel communities—one that they will never forget and one they will never forgive. What will make it all the worse is that she, her think-tank allies and the Trade Remedies Authority are just plain wrong when it comes to the British steel industry. Opposition Members see a bright future for our steel communities, a green future and a future that creates wealth for our country and well-paid, good-quality jobs in our regions if we have the will to make that future happen.

[Jacob Young]

Will the right hon. Lady give way?

[Emily Thornberry]

No, I will not give way at this stage. I am going to finish the speech.

If we do wish to do so in Britain, we can wean ourselves entirely away from the cheap imported steel that causes 50% extra carbon emissions, and instead have a British steel industry that leads the world in the development of hydrogen steel technology and decarbonised steel production, and by doing so leads our country to the achievement of net zero. If we choose to do so in Britain, we can put home-produced steel at the heart of every defence contract and infrastructure project from warships to wind farms, and use British steel to build our way back to full economic recovery. If we choose to do so in Britain, we can make the jobs in our steel industry the foundation for creating thousands more well-paid, good-quality, skilled jobs in other communities that need them, as we apply our skills and strengths in steelmaking to the new opportunities created by the green industrial revolution.

However, to make all those things happen, there is something the Government must contribute. It is just as precious as public funding, but so much easier to provide, and that is a simple injection of certainty and stability. When our steel companies go into the world and seek investment in their future, they must be able to say with total confidence that the British Government have their back, will support them when necessary and will always do whatever it takes to defend them against unfair trade or a surge in cheap imports. That type of certainty and confidence is the minimum that our steel industry has the right to expect from their Government, and if it cannot get that from them, Parliament must seek to provide it instead.



That is the fundamental choice before us all tonight, but especially Conservative Members who may be debating with their conscience which way to vote. Will they side with the communities of Scunthorpe, Cardiff and Sheffield, who see a bright future for their industry, or will they side with the fanatics from the right-wing think tanks who see no future at all? Will they provide our steel industry with the safeguards that it needs to build for the future with confidence, or will they leave it to sink or swim in a flood of cheap imports from China?

I have no idea where the Secretary of State stands on that choice, because she has chosen not even to be here this evening, and has so far refused to take the emergency action that the Opposition have instead been forced to propose on her behalf. But if this House decides overwhelmingly to back the Opposition motion tonight and require the Secretary of State to maintain the safeguards, I believe that by sheer weight of pressure we can force her hand to do so, inject confidence back into our steel industry and forge a path for our steel communities to the brighter future that awaits them.

--- Later in debate ---

[Mr Jayawardena]

My hon. Friend makes an excellent point about the lack of attention to detail on the Labour Benches. The approach we have taken forward is in line not only with WTO rules but with our domestic legislation.

I will tell you the truth, Madam Deputy Speaker: the TRA has recommended to the Secretary of State that nine product categories of the existing safeguard measure be removed. It judged that seven of them did not meet the requirement to show a significant increase in imports. Another failed to show any risk of serious injury or injury recurring, and the other did not pass the economic interest test, with industry asking for it to be removed, as the shadow Secretary of State discovered this morning, courtesy of the “Today” programme on BBC Radio 4. The Labour party seems intent on throwing the baby out with the bath water. The TRA recommended retaining the safeguard on 10 other product categories, and that would be exposed to legal challenge if we were arbitrarily to take the sort of decision that the Labour party advocates. Does the Labour party want to leave the WTO and adopt an isolationist approach in the world? I don’t, and I won’t.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No.

In truth there is a choice between working hard, getting into the detail and defending British interests, which we are doing and will continue to do, and playing politics, as Labour Members and those on the left of our politics seem intent on doing.

It is worth remembering that the TRA was set up in 2018 under the last Government and places strict limits on the powers of the Secretary of State. Of course, the Labour party knows this, because Labour tried to curtail the Secretary of State’s powers even further. The hon. Member for Bootle (Peter Dowd), as shadow Chief Secretary to the Treasury, spoke against

“the public interest...being used as a mechanism to widen the powers of the Secretary of State.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 25 January 2018; c. 103.]

During the passage of the Taxation (Cross-border Trade) Act 2018, Labour stood against the Secretary of State being able to reject a recommendation of the TRA, but today Labour is asking us to legislate to do just that: to reject the TRA’s recommendation.

Under the legislation from the last Parliament—that dead Parliament—the Secretary of State does not have the power to change the TRA’s recommendation—

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No, the right hon. Lady has had her say.

The Secretary of State does not have the power under the law to change the TRA’s recommendation on the safeguard measure to retain measures against its advice. She possesses only a downward ratchet, which means either accepting the TRA’s recommendation in its entirety or rejecting it and seeing every part of the safeguard measure expire on 30 June. I can assure the House that the Secretary of State takes these responsibilities very seriously and will reach a decision on the recommendation and publish it before the measure is due to expire.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

I will.

[Emily Thornberry]

I am very grateful to the hon. Gentleman. Is he in favour of these recommendations? Does he think they are a good idea or not?

[Mr Jayawardena]

I will come to the Secretary of State’s position and the process that will follow in a moment, but I must be clear—

[Emily Thornberry]

That is not what I asked.

[Mr Jayawardena]

The right hon. Lady did not answer the earlier question from my hon. Friend the Member for Redcar (Jacob Young) either.

Extending the deadline for a decision is not an option, and extension of the safeguard on product categories would expose Britain to challenge from other member countries of the WTO for non-compliance with the agreement on safeguards, which, as I warned a moment ago, may lead to a WTO decision requiring the United Kingdom to revoke the measure in its entirety.

I thought the Labour party understood these principles. After all, the hon. Member for Brent North (Barry Gardiner), the then shadow Trade Minister, criticised President Trump for imposing

“protectionist tariffs that the rest of the world believes are illegal under WTO rules.”—[Official Report, 4 June 2018; Vol. 642, c. 39.]

Maybe that was Labour’s policy then and this is its policy now. Perhaps the Opposition were against the policies of President Trump then and support the policies of President Trump today. Either way, they do not have the British national interest at heart. The Labour party is showing once again that it is a protest party, lacking in competence and understanding of the issues. Labour may have changed its leader, but it poses a clear risk to our country.

Turning to our friends in Europe and America, we continue to have discussions with the steel sector to understand its concerns about the outcome of the EU’s steel safeguard review. We recognise the harm caused by the unfair and unjustified US tariffs levied on our steel industry under section 232. It is fake news to suggest that our steel industry threatens the viability of American steel producers or that it contributes to global excess capacity in the market. Trade barriers such as these are what bring the rules-based international trading system to its knees, yet that is the sort of approach that the Labour party is advocating tonight. We remain disappointed at the continued imposition of such tariffs and are pressing our American counterparts for an urgent and permanent resolution. After working to date to de-escalate the Boeing-Airbus dispute by agreeing to suspend retaliatory tariffs for five years, we now want to shift their attention to the unjustified section 232 tariffs and work with them to agree a fair, permanent resolution for British industry.

We will continue to deliver for the British people, and that is why we are reviewing the Secretary of State’s powers already, exploring and consulting on how we might legitimately be able to strengthen them. That is why we are working closely with the Department for Business, Energy and Industrial Strategy to ensure that trade remedies measures are up to date in the current context, not least following the pandemic. In the event of there being increased imports of unfairly subsidised products into the United Kingdom, we will not hesitate to take action to defend the industry using anti-dumping and anti-subsidy tariffs. That shows our resolve to improve our domestic toolkit and to use the tools at our disposal to tackle market-distorting practices, but rushing through changes to legislation, posing a risk to industry in the process, as Labour would have us do, is not the answer.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No. We should all greatly value Britain’s reputation as a champion of global free and fair trade. We should not want to take actions that risk being found to be non-compliant at the WTO. The Secretary of State takes her responsibilities very seriously in considering the recommendation from the TRA, but the truth is that the best way forward, the right way forward, for our steel producers lies in free and fair trade. Together, we can make sure that this vital British industry enjoys a sustainable long-term future. The British people should be in no doubt: this people’s Government are backing our steel manufacturers; this people’s Government are backing the tens of thousands of jobs in the industry; and this people’s Government will continue to do so.