UK Steel Industry

Helen Goodman Excerpts

Thursday 17th September 2015 Commons Chamber

[Anna Turley]

My hon. Friend is absolutely right that there has been an ongoing discussion about that issue for a long time. The Government have taken some steps, which I will mention in a moment, but there is much more that they can do and they have promised things that we are still waiting to see delivered.

I am glad to hear that the Minister is going to China next week to discuss the dumping of steel, which is affecting producers around the world. There are, however, several UK-specific issues that are having a detrimental effect on steel production in the UK and that it is within the Government’s power to resolve. Action by the Government today could give the British steel sector the chance to stay alive in this fiercely competitive global market.

Research that I have undertaken in partnership with UK Steel has shown that the steel industry in the UK is disadvantaged to the tune of £431 million a year compared with our global competitors as a result of the exchange rate, energy policy costs, air pollution targets and business rates. I am sure that the Minister would agree that we want the UK to be the place to do business and that we do not want to penalise our own manufacturers.

[Helen Goodman (Bishop Auckland) (Lab)]

What my hon. Friend says about the exchange rate is right. Of course, the exchange rate has appreciated by about 20% in recent months. Will she say whether that has made the situation worse?

[Anna Turley]

It certainly has made the situation worse. I believe it has added approximately 10% to the prices of the UK steel sector.

I come before the House to call on the Government to act on the factors that I have outlined. I will set out five key actions that the Government could agree to today to demonstrate their commitment to the British steel industry. First, they must fully implement the energy-intensive industries compensation package well ahead of the committed date of April 2016. Energy-intensive industries in the UK are exposed to far higher costs than those elsewhere and face a total cost of £430 million this year.

The package of compensation and exemption measures that were promised over the course of the last Parliament would place the UK industry on a level playing field with its EU counterparts. If the package were in place today, it would have reduced costs from £30 per megawatt-hour to £7 per megawatt-hour. Instead, with compensation available for only a small proportion of the policy costs, energy-intensive companies continue to be exposed to upwards of 70% of them. It is imperative that the spending review announcement allays those worries and confirms the budget for the package. Energy prices for UK steel producers can be more than 50% higher than for our main European competitors.