Steel Industry

Geraint Davies Excerpts

Wednesday 28th October 2015 Commons Chamber

[Ms Eagle]

The hon. Lady is correct. Many EU Governments manage to deal with the state aid rules far more creatively than this Government.

[Geraint Davies (Swansea West) (Lab/Co-op)]

On the EU helping out, does my hon. Friend agree that there is a strong case for carbon tariffs from the EU so that we do not displace clean steel produced in Britain with dirty steel produced in China and elsewhere?

[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.

--- Later in debate ---

[Stephen Crabb]

I am not going to take any more interventions for the time being.

The steel industry across Europe and around the world is in the midst of a crisis, the magnitude of which has not been seen in at least a generation. Chronic global overcapacity has squeezed prices to the extent that the price of certain products has halved in recent times and is expected to fall further still. European demand is still about 30% below pre-crisis levels. The Chinese economy, which has until recently been the driver behind global steel demand, is slowing down. The world is awash with cheap steel looking for markets. For some products, cheap Chinese imports have gone from accounting for 0% of the market to representing 37% of the UK market share within 18 months—that is an extraordinary growth in a very short period. Chinese steel exports roughly doubled between 2011 and 2014. That is the extremely challenging backdrop to the current crisis facing our steelworkers. It has been described as a “perfect storm” in terms of the configuration of different events and phenomena that are affecting the global steel industry, but that is why the Government remain absolutely committed to doing everything in our power to support steelworkers across Britain in the weeks, months and years ahead.

[Geraint Davies]

Does the right hon. Gentleman accept that giving the contract on HS2 to the Chinese will increase the probability that they will use Chinese steel? Moreover, if we had given that contract to a British consortium, those companies would have paid British corporation tax, British national insurance and British income tax, and they would have supported British supply chains and built British capacity for the future. Is not his laissez-faire approach, which has neglected British steel and British industry, at the root of this problem—or a large part of it at least?

[Stephen Crabb]

Forgive me for saying so, but the hon. Gentleman makes a slightly confused point. The investment going into the rail industry is creating opportunities, now and in the future—huge opportunities for the UK steel industry. The Government are determined to help the UK steel industry take advantage of those investment opportunities.