Steel Industry

Iain Wright Excerpts

Wednesday 28th October 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

Like the hon. Member for Halesowen and Rowley Regis (James Morris), I have a Caparo steel factory in my constituency. The 200 workers there are obviously facing troubled times, and it is vital that, as part of the wider steel strategy, we look into the issues affecting them.

Yesterday, we on the Business, Innovation and Skills Select Committee held an evidence session on the state of the steel industry. I am grateful to all the expert witnesses who came along and gave their fantastic evidence. Let me start with the positives. It was welcome to hear the Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry) tell the Committee that she considered the UK steel industry to be of strategic importance and enormous value to British manufacturing. Her predecessors in that post would not have said that. I fear, however, that others in Government, including the Prime Minister, the Chancellor and the Business Secretary, do not necessarily feel the same way. Therein lies the problem. We need that strategic priority in the light of the challenges facing the industry.

The UK steel industry is in grave crisis. All the expert witnesses yesterday said that they could not recall a more serious time for the survival of their industry. Since the summer, a fifth of the workforce in the UK steel industry have either lost their jobs or are at risk of doing so. The tragedy of job losses for the individual steelworkers, their families and their communities is immense, but the loss of the skills, the capability and the competitiveness in such a strategic industry will affect British manufacturing for decades. Gareth Stace, director of UK Steel, gave us a vivid description of the situation yesterday. He told us that the industry was like

“a patient on the operating table. We are bleeding very quickly and unless it’s stopped very soon we are likely to die”.

[Richard Fuller (Bedford) (Con)]

On that point, has the hon. Gentleman been struck by the relative slowness of the European Union’s response to Chinese dumping, compared with the speed of the response of the United States?

[Mr Wright]

I thank the hon. Gentleman for his comment, and I will come to that in a moment. He is a fantastic member of the BIS Select Committee, and he was incredibly supportive yesterday.

This is not necessarily a question of the Government waving a magic wand. Global forces are affecting the steel industry. I am not suggesting that the UK Government have a disproportionate influence over what is happening in the global steel industry, but there are things that they can do. The Minister rightly said that she saw steel as a strategic industry because it acts as a foundation for many other parts of the manufacturing value chain. I agree with her on that. A modern steel industry is at the heart of a dynamic and innovative economy.

I would suggest that the role of the Government is to level the playing field for British-based steel makers and ensure that they do not face costs and pressures that our competitors do not face. The role of the Government is also to go out and bat for the British steel industry on the European and world stage. Alas, it emerged clearly from our Select Committee inquiry yesterday that, despite their warm words, the Government have been slow and reactive and that, despite their protestations, they have not prioritised the steel industry in a way that its strategic importance requires.

The Government have been exposed as having been left baffled and battered by the forces affecting global steel. That is perhaps inevitable, given the scale and gravity of the challenge, but it is a challenge that the industry has been raising with Ministers for some time. Plant closures and the loss of jobs, steelmaking skills and capacity could have been lessened had the Government been more on the front foot and responded more swiftly.

I have enormous respect for the Minister, but she sounded like Elvis Presley in the Committee yesterday when she told us that she wanted a little less conversation and a little more action, please. Her words were welcome, but it became abundantly clear that, in the main, words are all we have. Words are not going to save the British steel industry.

At the steel summit on 16 October, we were provided with an excellent analysis of the state of the industry from its representatives. We were provided with a clear and achievable five-point plan on factors such as energy costs, business rates and local content in procurement projects. However, that analysis was nothing new. It has been known about for weeks and months, if not years. The Government were familiar with the asks from industry long before 16 October, so why was urgent action not taken sooner in such a strategic industry?

The Minister’s insistence on a change in policy on voting in Europe on dumping is welcome, but why did industry tell us yesterday that we in the UK were out on a limb in Europe in not acting in a co-ordinated way on cheap Chinese imports? In response to the hon. Member for Bedford (Richard Fuller), he will recall that the Select Committee was told yesterday that an astonishing 94% of all the cheap Chinese steel coming to Europe comes to Britain, at a time when our domestic industry is dying. We have put up the white flag for our steel industry in response to the Chinese red flag. That is not appropriate.

We have been left in no doubt about the gravity of the situation. We may not even have reached the bottom of the job losses and plant closures. It is not too melodramatic to measure the survival of the British steel industry in weeks rather than decades. We do not have time to reflect or reassess; the Government have to move from warm words to action, and they have to do it now.

--- Later in debate ---

[Mr Iain Wright]

My hon. Friend talks about the defence supply chain. Could she talk about the supply chain in other manufacturing sectors, particularly aerospace, automotives and offshore wind? We discussed all that in the Business, Innovation and Skills Committee, and I am concerned that the third working group on public procurement is not looking at the alignment of supply chains. What does my hon. Friend think about that?

[Angela Smith]

Indeed. Tata speciality steel is headquartered in my constituency and plays a major part in providing components for the aerospace industry. It would not exist today if it were not for the work done by the Labour Government in 2009-10, and I pay tribute to Lord Mandelson for that.

It is important to have the capability not just for the sake of our defence and security and not just because it is good for our GDP, but because we surely would not want to see our defence industry dependent for a range of its key components on steel sourced from foreign shores. That is the important point. I support the five demands laid out by UK Steel and by Community, but the Government’s response has generally been warm words and frequent reference to the law of the free market. That is not good enough.

We need to place those five demands in the context of the two strategic arguments that underpin the case for Government intervention to secure the future of the industry. First, our steel industry is one of the foundations of manufacturing. It has a critical part to play in the job of rebalancing our economy. If we want the march of the makers, we need a steel capability—it is as simple as that. Secondly, we need to maintain and develop our UK steel capability in the best interests of UK defence and security. BAE Systems wants to use UK steel—make it possible for it to use more UK steel.

I hope I have managed to convey a clear sense of the second strategic argument, and I hope the Minister will be persuaded that the Government need to act sooner rather than later to deliver the stability needed for one of our oldest and most important manufacturing resources.