UK Steel Industry

Holly Mumby-Croft Excerpts

Monday 14th September 2020 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

I am grateful to have the opportunity tonight to talk about some of the challenges and the opportunities facing our steel sector, both as co-chair of the all-party parliamentary group on steel and metal related industries along with the hon. Member for Scunthorpe (Holly Mumby-Croft) and the secretary, my hon. Friend the Member for Aberavon (Stephen Kinnock), and on behalf of my constituents who work in Tata’s Llanwern site and Liberty Steel in Newport East.

I pay tribute to all those who work in the UK steel industry. They are a dedicated and highly skilled workforce, making world-class products.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I am proud to have spent eight hours in our local steelworks in Scunthorpe in the recess. Choosing to do it on the hottest day of the year was perhaps not my finest move, but I agree with the hon. Member that our steelworkers are incredibly hard-working, dedicated people, and it is hot and difficult work. I hope that she will join me this evening in calling for the Minister to consider setting targets for the amount of UK steel used in public projects; for steel specifications to be published using UK norms; for the long overdue steel public procurement pipeline to be published consistently; to push for other Departments to sign the UK steel charter and for Government-linked projects such as HS2—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I suspect that there might be quite a few interventions in the debate. It is only half an hour, and it is the debate of the hon. Member for Newport East (Jessica Morden). I hope that any interventions will be short.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)]

I congratulate the hon. Member for Newport East (Jessica Morden) on securing this evening’s debate. She has been a passionate advocate for the UK steel industry, including in her role as co-chair of the all-party group on steel and metal-related industries. Clearly, this sector is important to the United Kingdom and testament to that is the number of colleagues who are present in the Chamber at 11 pm on a Monday night. One colleague who is unable to intervene or speak tonight is my hon. Friend the Member for Corby (Tom Pursglove). Although he cannot make his voice heard in this place, he certainly does on behalf of his constituents who work in the important steel industry in his constituency.

This debate represents a welcome opportunity to discuss the UK steel sector, which will continue to play a critical role as a foundation industry as we secure our economic recovery and long-term prosperity following the impact of the coronavirus. Madam Deputy Speaker, you will know that the steel sector provides well-paid, highly skilled jobs, as we have just heard from the hon. Lady. It also plays a key role in critical UK supply chains across many important parts of the UK economy, including automotive construction, power generation and, of course, defence.

Earlier this year, we welcomed the acquisition of British Steel by Jingye following a period of insolvency.

[Holly Mumby-Croft]

Will my hon. Friend give way?

[Nadhim Zahawi]

Very briefly, because I have a lot to get through tonight.

[Holly Mumby-Croft]

I just want to say that the constituents in Scunthorpe regularly mention to me the support that they receive from the Government. Does my hon. Friend agree that support for other steel plants such as Celsa is vital?

[Nadhim Zahawi]

It certainly is and I hope that I can cover that in the time that I have left to me.

Both officials and Ministers invested considerable time and effort in closing the deal with Jingye and the planned £1.2 billion investment that will go into the operations of British Steel. I hope the hon. Lady agrees that this represents a huge vote of confidence in the UK steel industry and the high-quality steel produced here in the United Kingdom. Notwithstanding this positive outcome for British Steel prior to the pandemic, the global steel industry was already facing significant headwinds. This included demand slowing across developed economies and persistent global excess production capacity, which depresses prices and harms the profitability of UK steel producers.

In the past few days, Tata Steel has published its accounts, which show a challenging position across its UK and European operations. While it is not appropriate for Ministers to comment on the performance of individual companies, I wish to reassure the hon. Lady that we continue to work very closely with the entire UK steel sector and the trade unions, and that we understand the challenges facing the industry in the UK.

While the coronavirus has come at a challenging time for the industry, we have been working intensively over this period to ensure that the UK steel industry has been able to access the support that it needs since the start of the covid-19 pandemic The Government have set out a far-reaching package of support to protect jobs, incomes and businesses across every part of the economy. Those working in the steel industry have been among the 9.6 million individuals across the country who have been able to access the job retention scheme. The scheme has protected people’s livelihoods in the industry and ensured that steel manufacturers have been able to retain high-skilled staff while managing the impact of reduced demand caused by the pandemic.

Importantly, we have worked closely with the steel industry representatives over this period to ensure that the furlough scheme—the job retention scheme—was sufficiently flexible to accommodate some of the real key asks from the industry and from the unions to meet the changing requirements of the industry as the wider situation evolved. I have been engaging personally on a regular basis with companies, trade associations, and, of course, the trade unions to gather their feedback. Direct input from the steel sector has helped to shape a number of our covid-19 support schemes. The coronavirus large business loan interruption scheme, the tax deferrals and the trade credit reinsurance scheme, which we launched with £10 billion, clearly came through as a result of that particular engagement with the industry. They were developed rapidly in response to that particular challenge faced by companies in the industry.

In addition to those far-reaching economy-wide schemes, we have committed to consider bespoke support on a last-resort basis where a viable company of strategic importance has exhausted all other options available to it. The House will be aware—the hon. Member for Newport East mentioned it—that such circumstances apply to Celsa Steel, which is a critical supplier to our construction industry. Government support in that case secured over 1,000 jobs, including 800 positions at the company’s principal site in south Wales. Commercial confidentiality prevents me from setting out further details on that case, or indeed from commenting on any discussions we have had with individual steel companies over this period. However, I hope that hon. Members agree that that is a clear signal from the Government of our continued commitment to the UK steel industry and the 30,000 individuals who are employed in the sector.