UK Steel Industry

Iain Wright Excerpts

Wednesday 15th July 2015 Westminster Hall

[Tom Blenkinsop]

My hon. Friend is correct. The employees in the industry know that things could be shifted at any moment. In a globalised economy where capital can move in seconds, there is an understanding and a traditional trade union ability to get round the table and negotiate. Michael Leahy, the former general secretary of Community, always said that we believe in the force of argument not the argument of force. However, when an employer, or indeed a Government, tries to deny the democratic rights of employees in the workplace, it has to be taken into account. I hope the Minister will take that point back to her ministerial colleagues.

I mention pensions because when we are debating issues such as energy prices, productivity, emissions targets and so on, it is easy to forget that many of the communities we represent have been built from the hard work of steelworkers over generations. In the previous Parliament, I, alongside hon. Members here, pledged to stand up for steel, and that includes defending its workers, who have contributed a huge amount of their lives and expect a decent pension at the end. I do not think that is too much to ask.

The APPG members here have asked to meet the Secretary of State for Business, Innovation and Skills, and I believe that the vice-chair of the group, the hon. Member for Corby (Tom Pursglove), repeated that request in Business, Innovation and Skills questions. We would love to meet the Minister, if an audience with the APPG would be acceptable to her. We have also written to the Select Committees on Business, Innovation and Skills, which my hon. Friend the Member for Hartlepool (Mr Wright) chairs, and on Energy and Climate Change, as well as the Treasury Select Committee, asking them to investigate matters.

[Mr Iain Wright (Hartlepool) (Lab)]

I thank my hon. Friend, the chair of the APPG, for sending the Select Committee that letter. The Committee has not discussed it yet, but may I say on the record that I believe that the steel industry is vital to the future of manufacturing and the prosperity of this country? We must do all we can to ensure that it is innovative, competitive and viable for the long term. I will certainly push that point in the Committee.

[Tom Blenkinsop]

I thank my hon. Friend for that response.

We know that companies in the steel industry have already put in place future budgets for the compensation mechanism that will come through as a result of the Chancellor of the Exchequer’s previous commitments to a compensation mechanism. We need clarity and evidence to show that the Government are acting upon it. We also need the Select Committees to look into business rates, EU ETS decarbonisation, and the future of the industry in relation to skills. We have a workforce who are predominantly in their late 40s and early 50s. The issue might not be the lack of capital; it might be the age profile of the workforce. We need to take that on board and be serious about it.

We also need to look at the time it takes to train someone, whether in the processing or on the craft side. For example, I recently talked to Roy Rickhuss, the general secretary of Community, which is my trade union, and he said that it takes nearly three years to train a waterman who works in a blast furnace. That is probably the most important job in the plant: he is the guy who keeps the molten iron away from the water. Anyone who has ever witnessed a breakout, which is an unfortunate and serious event, knows how dangerous it can be. That job takes two to three years to train for. We need industrial activism, which does not just go to companies as urgent investment and does not just have public funding that supports that investment, but that looks at how we ensure that there is a succession plan for skills in the industry.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate. If there was a criticism to make, it would be that it is unfortunate that it is only a 30-minute debate. If anyone is interested in my views on this, I think it ought to be a 90-minute debate, and I would have it in the main Chamber.

It is important that we discuss the problems and difficulties that face our steel industry. I am particularly interested in looking at solutions. I want people to come forward with ideas about how we solve the many problems that we know our steel industry faces. There is no debate; we absolutely agree about the value of having a good, strong British steel industry for all the reasons the hon. Gentleman identifies.

It is right to say that we agree on the problems. We know that we have huge overproduction across the world and that that has been a real challenge for the British steel industry. We also know that there has been a marked reduction in demand. We can discuss and debate why that might be, but the harsh reality is that that reduction has taken place. I am confident, given the economic success that we have had, that demand will rise in this country. Unfortunately our economic success has not been reflected across the globe, but there will be an upturn, which is why it is important to keep steady. It will come good, even though we have overproduction, because demand will rise.

We also agree that we have a problem with the cost of energy. The steel industry is a very high consumer of electricity. We have overly high electricity prices for our industries, particularly the electricity-intensive industries, that are so heavily reliant. We call them EIIs in the Department for Business, Innovation and Skills, and the hon. Gentleman and others will be familiar with them. The cost of electricity is a serious problem for our steel industry. We must look at that, but when we do so we must understand that someone would have to pick up the bill if we were to make a move on costs to EIIs, and that may not be an attractive proposition. However, I completely understand the burden the current electricity pricing system places on EIIs—I get it.

The other matter, which was raised by the hon. Member for Aberavon (Stephen Kinnock), is business rates. I know that concerns the hon. Member for Hartlepool (Mr Wright) as well, because he was nodding with great vigour from a sedentary position, and rightly so. It is a problem. It is hugely ironic, as the hon. Member for Aberavon said, that in Port Talbot people invest huge amounts of money and bizarrely get clobbered for doing the right thing by the huge rise in business rates on the other side. Sheffield Forgemasters International in Sheffield is paying £1 million a year in business rates.

As we all know, the difficulty is that if we were to do something about business rates for our steel industry, people would ask: why not do so for all the other industries? They would all be queuing up. We are reviewing business rates. We want to listen to everyone, which is why I am happy to work with the new Chair of the Select Committee on Business, Innovation and Skills—I congratulate the hon. Member for Hartlepool on his election. We know we must do something about business rates. I want us to take a radical approach.

[Mr Iain Wright]

Those who were Members of the last Parliament will know that the new Minister is a breath of fresh air when it comes to passion for and commitment to the steel industry. In the last Parliament, the Government were working with industry to publish a UK metals strategy. Can she update the House on that work? Is the strategy ready for publication and consideration by the House?

[Anna Soubry]

I have some words on that. I have abandoned my speech, which will get me into terrible trouble with my officials, but I will read the next bit out rather than ad lib, because then I know it will be right.

I am pleased that the metals sector, including the steel industry, is developing a new national metals strategy. That has been facilitated through the Metals Forum, a grouping of 12 trade associations, including UK Steel, with which BIS has regular dialogue. The publication of the strategy will bring metals into line with other important foundation sectors, such as electronics and chemicals, which have led and developed their own strategies. We have been pleased to be able to fund some of the work, both for the strategy itself and for the initial scoping study, and we have seen some of the output that has emerged, which is of high quality. The public document is nearing completion and is likely to be published in early autumn. We expect it to provide a framework for our work with this sector in the future.

Hopefully that answers the hon. Gentleman’s question. It may not give the detail, but that document will be published in early autumn. I will just put on the record that I am, of course, more than happy to meet the groups that have been established to discuss how we can help our steel industry.

Mr Chope, how long have I got? Am I to go to 11.30 am, or are other Members able to make speeches? I think the answer is no. I am thinking of the hon. Member for Llanelli (Nia Griffith), who is on the Opposition Front Bench. Does she get a speech?