UK Steel Industry

Debate between Iain Wright and Kevin Brennan

Thursday 21st January 2016 Westminster Hall

[Kevin Brennan]

We are very grateful, despite that slight slip on your part, Mr Rosindell—it was very uncharacteristic—that you are chairing our proceedings today. You are very welcome in this Welsh-majority debate. I know that you were left off the list of English MPs the other night when we had the first vote under the execrable new English votes for English laws arrangements in the House of Commons. I hope you feel you are receiving a warm welcome from your Welsh colleagues, who would like to be on an equal basis with you as MPs. Perhaps we can change that ridiculous rule in the future.

Let us get to the debate. I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock), who made an excellent start in kicking off the debate. He speaks from great knowledge, given the location of the Port Talbot steelworks in his constituency. He described the Government’s approach to this issue as “warm words” and “frozen actions”. He made a powerful case, I thought, on the Government’s failure to act on dumping and on market economy status for China. He challenged the Minister to say how close we were to midnight in terms of the future of the steel industry, and we would very much like to hear her response.

We also had a contribution from my hon. Friend the Member for Scunthorpe (Nic Dakin), who pointed out that the situation facing the industry has got much worse since the steel summit on 16 October. He listed all the jobs lost in the steel industry since then. He speaks with tremendous expertise on the industry, and he should be listened to.

We had a contribution from the hon. Member for Brigg and Goole (Andrew Percy). In making a political speech, he seemed to be criticising politics being carried out in the House of Commons. When he expressed shock, or feigned shock, about politics occurring in this place, he reminded me a bit of Captain Renault in “Casablanca” complaining about gambling at Rick’s establishment. The hon. Gentleman, however, has a close constituency interest in the subject and, when we are not jousting across the Chamber, he works closely and across parties with colleagues in the interests of his local steelworks.

The next speech was a passionate one by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). He will be a great loss to this place when, we hope, he becomes the Assembly Member for Ogmore in the near future. He spoke well about why the Government had not introduced the necessary mitigating measures at the same time as the carbon tax. They should have been introduced at the same time, and he outlined the scale of the consequences if market economy status is awarded to China without any attempt to leverage from the Chinese an end to the dumping of steel in European markets.

My hon. Friend the Member for Newport East (Jessica Morden) sent a note to me, as she did to you, Mr Rosindell, saying that she could not stay for the whole debate. She is the Member of Parliament for the Llanwern steelworks and she, too, spoke passionately. She mentioned the work of the Community trade union and Roy Rickhuss, whom I first worked with many years ago on the Allied Steel and Wire pension problems when I first became a constituency MP. She also mentioned the work being undertaken by the Welsh Government.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made an important point about the small 9% tariff that the European Union appears to be planning in relation to rebar. That is too little and too late. I saw the Minister nodding when the hon. Gentleman made that criticism, so I hope she will tell us what the Government are doing to persuade the Commission that it has not done enough on those short-term measures. At the same time it would be nice to hear about what is really going on with the long-term reform of trade defence mechanisms and what the UK Government’s game is in that. The Minister shakes her head from time to time, but the Government have been involved in organising a blocking minority in the European Union on the long-term reform of trade defence mechanisms. If we are to have a future for our steel industry, that reform will be vital.

We also heard from the excellent Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for Hartlepool (Mr Wright), whose excellent report is available at £10 from good bookshops and Her Majesty’s Stationery Office. [Interruption.] I am sure he will tell us it is also free online. He spoke with tremendous knowledge, expertise and passion about the failure of the UK Government to push for a co-ordinated European Union approach, and about the failure to retain blast furnace capacity at Redcar, which has been lost, as he pointed out, because of the lack of effort by the Government. [Interruption.] From a sedentary position, the Minister suggests that she is considering nationalising the steel industry to achieve these aims.

Nationalisation is not necessary. This is not a choice between inaction and a laissez-faire approach to the steel industry and the full-scale command economy ownership of all of the means of production in the steel industry. It is about an active industrial policy and Ministers using all the levers at their disposal, including their influence and every Government Department, including the Treasury, and using their imaginations in working with industry to bring about the saving of the capacity of this country to produce steel. That is what is at the heart of this debate. There is a question that the Minister will have to answer at some point about the Government’s view on the minimum strategic capacity that they believe they can allow the industry to go no further beyond. However, I will come to that question further into my remarks.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about blast furnaces. If there was a professorship of the blast furnace, he would be the professor. He raised very appropriate questions about what industry is doing. In his remarks, which bear reading and studying, he showed a real vision for the future of the British steel industry that the Minister would do well to listen to.

My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is also my neighbour, who is literally a doughty defender of his constituents, rightly referred to the tragedy at the Celsa plant and the deaths of two of the workers there. He also raised the big question about the strategic level at which the British steel industry should be protected. My hon. Friend the Member for Bridgend (Mrs Moon) spoke well and with clarity and passion, as always, about the human impact of the job losses at Port Talbot, and the hon. Member for Motherwell and Wishaw (Marion Fellows) spoke with sincerity about her constituents and about the impact the changes will have on them. Also, perhaps not purposefully, she showed the importance of the UK for the future of the steel industry, because for us to have a strategic steel industry there has to be a certain level of scale and integration, as my hon. Friend the Member for Middlesbrough South and East Cleveland pointed out.

Now, who have I missed out? [Interruption.] I think only one Conservative spoke and I have referred to him.

Like many people here—anyone from south Wales probably has links to the steel industry—I come from a family whose life chances were pretty much determined by and strongly influenced by the steel industry. My father was part of the group of people who helped to build Llanwern steelworks in 1962. On my birth certificate, his occupation is listed as a platelayer. He was involved in bringing the railway line that was necessary for an integrated steel plant into Llanwern steelworks, and then he stayed there and got employment at the new steelworks for the rest of his working life. Indeed, before I went to university, I had an opportunity to work at Llanwern steelworks for six months, where I worked mainly in the steel plant, but also as a platelayer, which was a rather nice rounded end to that period of my life—as a platelayer, replacing and maintaining railway lines within the steelworks at Llanwern. That is why we hear—I know the Minister understands this—the passion that comes from my hon. Friends and colleagues. They understand how steel underpinned their life chances and the life chances of their constituents and their communities. The availability of well-paid, stable employment in their areas was the foundation of the creation of the life chances of many of my hon. Friends here today.

[Mr Iain Wright]

Will my hon. Friend give way?

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[Kevin Brennan]

My hon. Friend is absolutely right. I know that the Minister understands this, but it is important to make it clear why Members feel so passionately about the importance of maintaining the steel industry both as a strategic asset to the country, and as the underpinning foundation of many of the communities we represent.

[Mr Iain Wright]

My hon. Friend is making an incredibly eloquent and moving point about how steel is in his blood, as it is in the blood of other hon. Members. Both my grandfathers were steelworkers in Hartlepool, so this is important for me personally, as well as for my local community. However, can we not fall into the trap of talking about the British steel industry as somehow in the past? It is vital to ensure that we have a vibrant and competitive steel industry for the future to make sure that we remain competitive in the world markets for manufacturing and much of our supply chain.

[Kevin Brennan]

My hon. Friend is absolutely right. One of my central points is that the British steel industry is competitive. I freely admit that the British steel industry of the past often was not competitive, often had poor industrial relations and weak management, and sometimes had, in the distant past, very low productivity. However, over the years, it has become one of the most efficient industries anywhere, with some of the best working relationships between workers and employers, because of their understanding of the common interests that bind them together, and because of the workforce’s desire to ensure that the British steel industry has a future, with them often prepared to make real sacrifices to enable that to happen. That is why we have such a competitive steel industry. The only sense in which it is not competitive is because of the issue raised by many Members today: Chinese dumping of steel at well below what it costs China to produce.

China’s steelmakers, 70% of which are state owned, are not profitable, and, according to our UK Steel briefing, are believed to lose close to $34 per tonne on all crude steel produced in China. In 2015, they produced 441 million tonnes more steel than China itself consumed. China’s 101 biggest steel firms lost $11 billion in the first 10 months of 2015. In 2003, China exported 7.2 million tonnes of steel, which was 5% of the steel trade between the main global regions; by 2015, total export levels from China had exceeded 107 million tonnes.

It is impossible for the highly competitive and efficient British steel industry to compete with a state entity of that size—the country contains one in five of the world’s population—that is determined to use that capacity to kill off its competitors and to destroy the British steel industry. That was what was going on while Ministers were talking to Chinese officials when they were over in the autumn. At the same time as its officials are smiling and talking about future trade deals, China is pursuing a policy of deliberately killing off the British steel industry.

Trade Union Bill

Debate between Iain Wright and Kevin Brennan

Tuesday 10th November 2015 Commons Chamber

[Kevin Brennan]

The hon. Gentleman must be a mind-reader; I am coming on to that shortly.

[Mr Iain Wright (Hartlepool) (Lab)]

rose—

[Kevin Brennan]

I give way to the Chairman of the Select Committee, whose expertise it will be interesting to hear.

[Mr Wright]

Following on from the points made by my hon. Friend the Member for York Central (Rachael Maskell), does the shadow Minister agree that the hallmarks of a good, productive, innovative economy are collaborative, harmonious industrial relations? The likes of Airbus with Unite, and Community throughout the beleaguered steel industry, will help to make sure that we can stay competitive. Trade unions are good for not just individual workers but for a modern, productive economy.

[Kevin Brennan]

Yes, and they would be part of an industrial strategy if this Government believed in one, but instead, the Government are basically walking across the street to pick a fight where no provocation exists.

Green Investment Bank

Debate between Iain Wright and Kevin Brennan

Thursday 29th October 2015 Westminster Hall

[Mr Wright]

The hon. Lady pre-empts the rest of my speech. I wanted to start with the glass half full, the positives and the promise; I now come to the buts. I have real concerns about the future of the Green Investment Bank, precisely because of what she has outlined.

As the hon. Member for Beverley and Holderness said in his opening remarks, the Government’s announcement in June of their intention—though they were vague about their plans—to privatise at least part of the bank raised the prospect of a number of risks. I was sufficiently concerned to use my first question on the Floor of the House as Chair of the Select Committee on Business, Innovation and Skills to ask the Secretary of State about his plans for the Green Investment Bank. Moreover, the Government have tabled an amendment to the Enterprise Bill, which is in Committee in the other place, that would repeal fully part 1 of the Enterprise and Regulatory Reform Act 2013, thereby completely removing the green purposes of the bank.

I agree with the hon. Member for Beverley and Holderness that the bank’s resources need to be scaled up and that it should be allowed to borrow. The Environmental Audit Committee report on the Green Investment Bank in the previous Parliament claimed that it was necessary for it to raise extra capital as a real bank can. I fully agree. However, the method proposed by the Government is questionable. In particular, we must ask—as the hon. Member for Brighton, Pavilion (Caroline Lucas) has just asked me—whether any loss of legislative protection for the bank’s green purposes would also mean the loss of safeguards.

I do not think that the Minister will be able to reassure us this afternoon. If the purposes are removed from the statute book, no subsequent private owner can give any such safeguards whatever. I will come back to the Government dilemma over Office for National Statistics classification and ensuring safeguards, but the fact that at the moment the Green Investment Bank can state, on its website and in all its publications, that it is “wholly owned” by Her Majesty’s Government provides confidence and certainty for investors in the low-carbon economy, which remains at an embryonic stage.

Coupled with policy announcements since the general election, such as changes to solar panel feed-in tariffs, onshore wind capability and planning approval, along with other things, it is difficult to avoid the conclusion that the Government are abdicating from any wish to lead in the global low-carbon economy. That is a real tragedy, not only for green issues, but for our future economic and industrial shape and for what modern industry and employment opportunities will look like.

[Kevin Brennan]

As I was explaining to my hon. Friend, I have been reading his 6,000-word speech in Committee on the bank. In discussion of the Bill that set it up, he said that it would not be a green investment bank, but only a fund, if it did not have the ability to borrow. In essence, the Government want, as we all do, the bank to be able to borrow, but that makes no difference. Whether it is in the public or private sector, the bank’s ability to borrow will mean that such borrowing goes on the Government’s books, unless they take the trouble to repeal the essential protection in legislation. As a result, therefore, is the proposal not fundamentally undercut and in need of revisiting?

--- Later in debate ---

[Kevin Brennan]

My hon. Friend will not be surprised to learn that I agree with that point. In relation to wave power, we are all very interested to see how the Swansea lagoon project proceeds. That is a very interesting development in the sustainable generation of energy; if it is a success, it could lead to even larger projects, particularly in the part of south Wales that I represent.

[Mr Iain Wright]

I agree with everything that my hon. Friend the Member for Norwich South (Clive Lewis) said. My hon. Friend the Member for Cardiff West (Kevin Brennan) is relatively new to his post. Could I urge him to read the CBI’s “The colour of growth” report? It says that we have a £130 billion share of a global low-carbon marketplace that is worth about £4 trillion. That will rise hugely in terms of the opportunities around the world, but we are slipping down the ranks. We cannot abdicate our leadership on this issue, because our prosperity as well as our environment will suffer. Will my hon. Friend have a look at that report?

[Kevin Brennan]

I most certainly will. I am sure that my hon. Friend will lend me his copy so that I can do that as soon as possible. I look forward to receiving it shortly in the post or perhaps by a more green method: he can hand it to me personally.

It is a myth that privatisation is necessary and is the only way the Green Investment Bank could go out and borrow in the marketplace. That could be done, as I understand it, under the current legislation in any case, but because of that financial orthodoxy and the desire, which I understand, for the Government to be able to say what they want to say about their deficit targets, they are extremely reluctant to allow the Green Investment Bank to do it.

As the hon. Member for East Lothian said, in a sense this is a notional concept; it is the sort of debt on the books that really is not of great concern to the City or to the markets. It is part of the obsession of the boffins at the Office for National Statistics that where the Government, in any minor way, have an influence over what an institution such as the Green Investment Bank does, by setting out to limit the types of investment that it makes in any way shape or form, it has to be counted as being in the public sector for the purposes of Government debt.

[Mr Andrew Percy in the Chair]

It is an incredibly esoteric and technical reason for requiring the Green Investment Bank to be privatised even though there is clear evidence of real problems with that process, as we have seen from today’s debate.

The decision to privatise the Green Investment Bank was announced in June. Was it a premature decision? I believe a lot of people thought it was. Many commentators expressed concern at the time. The Government were able at the time at least to give the assurance made by the Secretary of State for Business, Innovation and Skills in his written statement on 25 June, in which he said that he was going to privatise the bank:

“This should bring a number of important benefits, giving GIB greater freedom to operate across a wider range of green sectors in accordance with its green purposes, which are enshrined in legislation.”—[Official Report, 25 June 2015; Vol. 597, c. 27WS.]

A key part of the Secretary of State’s announcement, emphasised in that written statement, was the fact that the green purposes of the Green Investment Bank were protected by the legislation in which its duty to pursue them was enshrined. Obviously, something has gone horribly wrong in the meantime.

The advice from the Office for National Statistics that I referred to earlier has led the Government to say that they intend to repeal the very legislative protection that they prayed in aid when deciding to privatise the bank on 25 June. By October, they had to say, “Do you know what? That is not so important after all. It doesn’t really matter if we repeal all that to make sure that the Green Investment Bank doesn’t appear on the books.” That requires a great deal of thought, scrutiny and debate. I thank the hon. Member for Beverley and Holderness for pointing that out—and, indeed, for ensuring that we are having this debate.

I do not think it is unfair to say that so far, the Government have no answer to the question of how we can ensure that the Green Investment Bank maintains its green purposes. The letter from the Secretary of State for Business, Innovation and Skills of 15 October, in which he announced his intention to repeal the relevant measures in the Enterprise and Regulatory Reform Act 2013, offers no assurance that those green purposes will definitely be maintained. The Secretary of State does say:

“We want to ensure GIB’s green principles continue to underpin its business in future and this will form an important part of our discussions with potential investors.”

That is all very well, and I am sure that potential investors will come along and happily assent to the green purposes of the Green Investment Bank prior to privatisation. That is not the question, however; the question is what happens after privatisation. At that point, when the bank is either fully or partly in the private sector—we do not know the full details of the Government’s proposals for privatisation—how are we to ensure that it maintains its green purposes and does not, as other hon. Members have suggested, simply become yet another bank, albeit a very small bank that can easily be, and is likely to be, gobbled up by somebody else?

Although the Secretary of State says in the letter that the Government want to ensure that the green principles will be maintained, he cannot ensure that they will be. The Government can only entreat; they cannot ensure. We need to hear more about how Ministers will pursue this proposal, and how they will ensure that the green purposes remain if the current proposal is implemented. There has been no answer yet from the Secretary of State or Ministers.

I referred earlier to a written question from the hon. Member for Brighton, Pavilion to the Minister for Small Business, Industry and Enterprise. In response, the Minister repeated that the Government want a privately owned Green Investment Bank to continue the focus on green sectors, but she did not explain in any way, shape or form how the Government can ensure that it does. We need to know more about that, and I would be interested to hear more from the Minister when he responds to the debate. That absolutely central question has to be answered if we are to have any confidence in what is happening. Otherwise, the situation would seem to be a bit of an unholy mess, and we need to know how the Government will unravel it.

I will ask a few other questions, because there will be a reasonable amount of time for the Minister to respond when I have finished my remarks. Will he admit that he cannot guarantee that privatisation will not dilute the green purposes of the Green Investment Bank? Is the Government’s policy simply: “Fingers crossed”? Have the Government discussed or considered the possibility of some form of penalty for the privatised company should it depart from the green purposes currently enshrined in legislation when the legislative guarantees are removed? Can he confirm that the legislative lock on the green purpose is being repealed purely in order to get the Green Investment Bank off the books? Is that the only reason for removing that lock? Can he tell us a bit more about the stake that the Government expect to retain in the Green Investment Bank following privatisation? Some clarity on that would be greatly welcomed by the House and the country.

What about the £1.8 billion that the Government have set aside to fund the Green Investment Bank and its projects, which is yet to be committed? Do the Government intend that £1.8 billion to be committed to green projects as originally intended, or do they intend that money to be taken back into the Treasury during privatisation? If the latter, what will the Treasury do with that money? Will it simply be set aside against the deficit, or will it be used instead for other green projects and priorities? We need some clarity on that, because some of the claims made about the Green Investment Bank will ring pretty hollow if that £1.8 billion is not devoted to the purposes for which it was intended.

Can the Minister give us a ballpark figure for how much the Government expect to raise through the privatisation of the Green Investment Bank? I do not expect him to be precise, because it is impossible to be precise about that, but can he give us some idea of the parameters that we are talking about? How do the Government intend to avoid the sorts of criticisms that they encountered about the lack of value achieved for taxpayers in the privatisation of Royal Mail? I will not put it any more strongly than that, because we have raised the tone of the debate again since the partisan interventions of the hon. Member for Beverley and Holderness; I do not want to lower the tone again or tempt the hon. Gentleman out of his slumber. [Interruption.] He is not asleep; I apologise.

Steel Industry

Debate between Iain Wright and Kevin Brennan

Wednesday 14th January 2015 Commons Chamber

[Kevin Brennan (Cardiff West) (Lab)]

At the risk of repetition, I, too, come from a steel family. My father worked for more than 20 years at Llanwern, and I even managed six months there as a young man. Is my hon. Friend surprised that no one is present in the Chamber from Plaid Cymru, the Scottish National party or even the UK Independence party to debate an industry that is very important for our country?

[Mr Wright]

I thank my hon. Friend for his intervention, because I had not realised that no such representatives were in the House for this debate. Given the importance of the steel industry to the United Kingdom and the role that they could play in public procurement through various Governments and Assemblies, it is absolutely vital for them to be present.

Enterprise and Regulatory Reform Bill

Debate between Iain Wright and Kevin Brennan

Wednesday 17th October 2012 Commons Chamber

[Kevin Brennan]

Will my hon. Friend also seek an assurance from the Minister that, when in future he considers any piece of legislation containing clauses relating to copyright, never again will the umbrella body for the UK music industry be given absolutely no prior knowledge of it? Perhaps the Minister could give the House that assurance when he responds.

[Mr Wright]

I absolutely agree. I will take this opportunity to wish my hon. Friend a happy birthday for yesterday—a birthday he shares with several other Members, not least the eminent Chair of the Culture, Media and Sport Committee, the hon. Member for Maldon (Mr Whittingdale). My hon. Friend made two important interventions. When he intervened on me he mentioned the lack of consultation and the surprise of important stakeholders, such as UK Music, about these provisions. That is not the way to have clarity about Government policy on something as important as the creative and cultural sectors. I hope that that is a wake-up call, because we have seen the Government do the same elsewhere, for example with the feed-in tariffs and the oil and gas tax charges. To move without any concern for what stakeholders are thinking is not in the best interests of the British economy and industry.

The second point that my hon. Friend made, when he intervened on the Minister, relates to the use of statutory instruments. I rose to say that I felt more confused as a result of the Minister’s comments than I did when I entered the Chamber today. Part of our discussions in Committee was about the fear of bundling some of these points into a single statutory instrument. The Minister must have served on a delegated legislation Committee during his time in the House and will know that the only way the House can express a view on such instruments is by voting in favour or against; there is no way we can express a view on individual provisions. Therefore, will he clarify to what extent he will be able to bundle points relating to copyright exceptions into single SIs, which would not allow the House to express our views?

I now to turn to our amendment 75, which proposes that the Secretary of State

“must have regard to any feasibility study commissioned on the licensing of orphan works in advance of the regulations being laid before Parliament.”

We are not against the concept of orphan works, as I mentioned in Committee, provided that safeguards are in place to ensure that the party that wants to use the work has undertaken a diligent search. I recognise—the Minister alluded to this—the huge benefits that could be unlocked as a result of orphan works licensing. For example, I can anticipate SMEs building new platforms and applications for the re-use of digitised content, with innovation and new business models coming forward to use the content commercially so that Britain can lead the world, enriching the research and cultural environment and thereby consolidating the UK’s position as the destination of choice, whether literally or online, in the 21st century as the place for education and research, particularly in the cultural sector.

The Bill provides the legislative framework for orphan works licensing but is, as is probably inevitable and desirable in primary legislation, high-level and somewhat vague in detail. The crucial details that stakeholders will be looking for have yet to be determined and will be available via regulations. However, it would be useful to get on the record as much certainty and clarity as possible about the Government’s intended direction of travel in order to allow the industry, including existing players and potential new entrants to the market, to start gearing up to use the licences commercially. The purpose of our amendment is to probe the Minister on his intended direction of travel and ensure that a feasibility study considers certain aspects of the policy and that the Government take these findings into account, not in a completely solid way but making sure that these matters are addressed.

Will the Minister indicate the identity of the authorising body or bodies? He mentioned it briefly in his opening remarks, but it would be useful to put a little bit more meat on the bones. What sort of time scale is he working towards? When does he anticipate that the introduction of such schemes, and the laying down of regulations as a preliminary step, will take place? What will be the scope of the orphan work licensing schemes? Will this be done on a sector-by-sector basis? Will it be based on a “specific types of work” approach, or will there be a big bang in which all possible orphan work schemes will be incorporated from day 1?

Will the Minister outline how he anticipates that any diligent search on a work-by-work basis will move forward? I am fairly sure that every such search will have to be done on an individual work basis rather than by batching works together. Am I right in that thinking, or is he considering any change in the individual works versus batch approach? Could diligent searches be re-used within a certain time period? How will the Minister—again, this is part of the feasibility study leading into the regulations—strike the balance between the rights of the licensee, allowing the licence holder to commercially use the rights arising from that licence, and the rights of the relevant rights holder? What will happen in the event that the parent comes forward? How will remuneration be worked out in such an event? Will a certain amount of time be stipulated in regulations following the awarding of an orphan works licence?

We lead the world in the cultural and creative industries, and many people will want to take that away from us for a variety of reasons. We need to make sure that we can maintain our competitive advantage. That requires close co-operation, with an active industrial sector strategy between the industry and Government. Sadly, during the passage of the Bill, that has been lacking in the provisions on copyright. I hope that the Minister has learned his lesson and look forward to his comments.