Iain Wright
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Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Moon. I thank my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), a great parliamentary champion of steel, for securing this all too crucial debate. I also thank him for giving evidence to the Select Committee on Business, Innovation and Skills on 28 April, during its inquiry on the UK steel industry, as a follow-up to our December report. Yet again he gave the Committee his valuable insight and wisdom about, and experience of, the industry. Steelworkers and the steel industry could not be better represented in this place than by my friend and colleague.
Reference has already been made to trade defence instruments and market economy status, and I will not dwell on them. I want to focus on three things: time, confidence and Government action. On the question of time, I do not think anyone can be any doubt that, given the scale and relative complexity of the operations, the sale of Tata’s steel business will not be a straightforward or quick process. Such sales take years to plan and execute. Although it is welcome that there are seven bidders expressing an interest, and a firm offer is needed sometime after 23 June, due diligence and negotiations on matters such as the pension scheme will take time. Bimlendra Jha, the chief executive officer of Tata Steel in the UK, said to the Select Committee that with the kind of losses that Tata is enduring,
“urgency is important. We cannot continue to bleed.”
He would not commit to a definite timescale, nor to keeping all steel facilities in the UK open and all jobs safeguarded within those facilities until such time as a buyer is found and a deal formally done.
That being the case, the role of Government is crucial. What can the Government do to safeguard assets, capability and employment during this potentially lengthy sales process? Will the Minister articulate further the nature of any co-investment? Would the Government provide bridging finance and other help to cover the transition between Tata ownership and the new owners of the business?
Anna Turley
Does my hon. Friend share my view that it would be helpful if the Government set out some of the criteria that they are considering in relation to co-investment and support?
Mr Wright
That is crucial. Any such commitment would provide much needed confidence in our steel industry, as well. It is a foundation industry that is strategic in its importance to the economy and vital to our manufacturing base.
That brings me on to my second point: confidence. I have pushed the Minister and the Secretary of State on the matter, because it is of central importance. The Minister heard that for herself from the local management and workforce when she visited the Hartlepool pipe mill a couple of weeks ago. Suppliers and customers have the perception that the Tata steel business will not be there in a couple of months’ time, as it might have been pushed into administration. Suppliers, certainly in our part of the country, have had their fingers burned with the closure of SSI. They do not want to be an unsecured creditor in an administration situation, with the likelihood of receiving no money and being out of pocket, and the possibility that their own business will come under threat.
Customers for Tata’s steel products, especially in sectors such as energy, infrastructure and oil and gas, have very long-term horizons in their requirements. They want to be certain that their orders will be there. If they are not, they will look elsewhere. That is not in the long-term interests of the UK steel industry or the viability of Tata’s successors. Credit lines and insurance are being withdrawn, and I cannot stress how important that is. What else can the Minister do—I know that she has worked hard behind the scenes—to provide extra reassurance, further commitments and definite indicators of confidence? Perhaps that would include the public sector placing orders with Tata Steel.
That brings me to my third point, which is about Government action. Procurement is one of the industry’s requests for Government action, and that theme flows through my other points. The Minister must be aware that she has not delivered in full what could be provided for the steel industry. Everyone is aware of the massive global forces at work, with steel prices and overcapacity, but Mr Jha told the Business, Innovation and Skills Committee that UK steel manufacturers suffer from structural weakness—business rates, energy costs and procurement. What is the Minister going to do about that? We should not be looking to the past. Although we should celebrate our steel past, we should look to a future with steel as a massively important part of a modern manufacturing industry.
Several hon. Members rose—
