Steel Industry

Debate between Iain Wright and Mark Tami

Wednesday 14th January 2015 Commons Chamber

[Mr Wright]

I thank my hon. Friend for mentioning Community, which is a fantastic trade union that wants to secure the long-term viability of the steel industry and is working hard to make sure that that happens. Its keenness to work with the work force, with management and with Government to ensure that we have a future in the UK steel industry is second to none, and I pay tribute to it.

As my hon. Friend said, this is not a sunset industry—steel cannot be seen as that. This is an industry that has, and should have, a future. Internationally, the acceleration of globalisation in the first half of this century provides rising demand for steel products, especially for long products, which I will refer to later. The World Steel Association has estimated that global steel use will rise from about 1.5 billion tonnes a year now to about 2.5 billion tonnes in 2050. Within that rising demand for steel, we see process innovation, technological developments, increasing efficiency and sustainability, and pressure to increase the added value of steel products by making them stronger, lighter in weight, less resource-intensive and more flexible in their uses and reuses. Those developments can be powerful drivers of comparative advantage for the UK steel industry.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend will know that added value is key to the products that are made at Shotton. Does he accept that energy prices in this country are holding back some of the potential opportunities for expansion, because steelworks are finding it very difficult to compete with other countries in Europe and throughout the world?

[Mr Wright]

My hon. Friend has raised time and again the need for a level playing field for energy costs, as have other hon. Friends, and I will want to focus on that.

Our motion hopes to secure the support of the whole House by, crucially, recognising the importance of the steel industry. We must work in a long-term way to address the issues and challenges, whether in energy costs or other matters such as skills, research and development and innovation, to ensure that steel has a prosperous future, providing important highly skilled, well-paid jobs as part of a modern, open and innovative economy. To achieve that, we require a joint vision from industry and Government as to the importance of the industry, with an active policy that addresses the challenges and works with industry and all of Government in a co-ordinated way.

All too often, however, Ministers give the impression that the steel industry is not a priority. Their deeply unhelpful approach to the sector ensures that steel firms have to fight a battle on two opposing fronts, which undermines the future prosperity of UK steel. On the one hand, the Government offer the industry a laissez-faire approach—they say that its corporate ownership, capability and capacity, and product pricing are entirely up to the market—but on the other hand, they are intervening in the steel and metals sector in a purely negative way. By imposing additional burdens on the steel industry, they are tying steel producers’ hands behind their backs, removing the gumshield from their mouths and then pushing them back into the ring of the global marketplace. Such an approach to the future viability of the UK steel industry cannot work.

--- Later in debate ---

[Mr Wright]

That is an important point, and ensuring co-ordination across the United Kingdom in things such as tax systems and procurement measures is vital. As part of a proper industrial policy, we must champion free trade and try to stamp out unfair trade. As part of that co-ordinated response, the Government should be working with other partners. We are concerned—my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) has already touched on this—that China and Turkey are subsidising their steel exports, making it impossible for UK and European steel products to compete on a level playing field, and domestic steel production suffers.

Imports from China now account for more than a third of the UK domestic steel market, and they are growing substantially year on year. I pay tribute to my hon. Friend, who has been particularly robust on that matter. We are calling for the Government to take decisive action within the European Commission and the World Trade Organisation to clamp down hard on unfair trade from other nations, but there is precious little evidence that the Government are standing up for steel and pursuing such an approach. What are they doing to ensure that fair change? The large increase in Chinese imports in recent years also includes steel reinforcement for concrete, or rebar. China has significant excess capacity in that product, and as such is exporting it to Europe. That particularly affects Celsa Steel, which is based in Cardiff, and my hon. Friend has been an extremely strong and assiduous champion for steel jobs and that firm in his constituency.

The Secretary of State may recall that I asked him a question on this issue during questions to the Department for Business, Innovation and Skills last year. As my hon. Friend has said, there is concern about traceability within the supply chain and the failure to comply with British standards—I am sure my hon. Friend will catch your eye during the debate, Mr Deputy Speaker, but I want to flag up the issue because it raises serious questions about the structural integrity of buildings and infrastructure. In answer to my question last November, the Secretary of State said that he was in the middle of an inquiry into whether the testing process operates effectively. Will he update the House on that inquiry, as well as on its findings, recommendations and actions?

I mentioned the potential of domestic markets in energy, construction and infrastructure that UK steel producers could tap into, but far too often—I think the House is united on this—British-based steel manufacturers miss out. I have already mentioned the £790 million contract for the Forth road bridge. In the North sea we have the largest offshore wind market in the world, and a supply chain that runs along the east coast—including Tata’s pipe mill in my constituency—that is ready and eager to make the steel. Tata’s offshore processing centre in Hartlepool is geared up to provide steel tubulars and line pipe for wind turbines and their foundations.

Every time I sit at Hartlepool United’s football ground, I can look out—it is often not worth actually watching the football—and see the fantastic Teesside wind farm project. However, less than 10% of the steel in that project was produced by UK-based manufacturers, even though there is a steel industry and supply chain literally on its doorstep. That is madness, and the Government need to work harder to address that.

I am not advocating protectionism, but I urge the Government to emphasise the importance of smart public procurement that aids the industrial and employment capability of supply chains in this country. Why do they not encourage local economic benefit clauses in public procurement contracts, as other countries in Europe do? Some of the work being undertaken in sectors such as automotives and aerospace is welcome, but the Government are failing to join up the dots with supply chain capability. Why do they not work harder to provide linkages between original equipment manufacturers and firms within the supply chain, to ensure that the needs and requirements of primes are understood, and that steel producers within the supply chain can adapt and work collaboratively? For example, when the Automotive Council identifies that £2 billion to £3 billion of additional value can be created in the UK car industry by reshoring some of that work, what is the Department doing, with industry, to ensure foundation industries such as steel, as well as chemicals and glass, can be positioned to take advantage of that great opportunity? By prioritising steel as a foundation industry, and as an essential part of industrial strategy and a vital component in the ongoing competitiveness and success of other, perhaps more visible, manufacturing success stories such as Airbus, Nissan and Jaguar Land Rover, UK manufacturing could be better placed to succeed in the future.

[Mark Tami]

rose—

[Mr Wright]

I give way to my hon. Friend, who is a passionate ambassador for Airbus.

[Mark Tami]

How many times has my hon. Friend been around factories to see very important machinery only to be told that it has had to be imported because it is not produced here any more, and that we used to produce it years ago but we no longer have the capability? That is very sad and shows where we are going wrong.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The shadow Minister has been speaking for 26 minutes and there are 13 speakers after the Secretary of State. I do not want to interrupt the shadow Minister—he is making a great speech—but I just ask him to bear in mind interventions.

Debate on the Address

Debate between Iain Wright and Mark Tami

Wednesday 8th May 2013 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

It is an honour to follow the right hon. Member for Haltemprice and Howden (Mr Davis) who, as ever, made a thoughtful and considered contribution. Speaking of thoughtful and considered contributions, let me pay tribute to the proposer and to the seconder of the motion.

The hon. Member for Mid Worcestershire (Peter Luff) mentioned engineering, and I agree with his point that Britain should regain its ambition to be a truly great engineering nation. I commend his efforts to bring more women into engineering and into the study of STEM—science, technology, engineering and maths—subjects. It is shameful that, in relation to encouraging women into engineering, this country is bottom of the league, so his efforts should have cross-party support. It is disappointing that the word “engineering” was not mentioned in the Queen’s Speech, but I hope that a long-term view will be taken on the importance of engineering to the competitive position of this country.

The hon. Member for Bristol West (Stephen Williams) made a thoughtful, considered and moving contribution. I was shocked and disgusted to hear that he prefers Duran Duran to the Smiths. While he was speaking I thought about the fact that Duran Duran’s first hit was “Planet Earth”, and it would be nice if Ministers sometimes came back to planet Earth and saw the effects of their policies in the real world and in constituencies such as mine.

Her Majesty stated that her Government would bring forward legislation

“to ensure sufferers of a certain asbestos-related cancer receive payments where no liable employer or insurer can be traced.”

The details of the proposed piece of legislation will need to be examined closely, but I warmly welcome the inclusion of the issue in the Queen’s Speech. My constituency of Hartlepool is the 16th worst affected constituency in the country for asbestos-related diseases. Incidence of mesothelioma, a legacy of our heavy industry past—especially in shipbuilding—is particularly high. Victims and their families have been denied compensation and suitable justice for far too long, often because the industry in the area has closed down, or successive firms either no longer exist or are impossible to trace. I have had tragic cases in my constituency of families not having the money to bury their husbands or fathers, because the insurance industry refused to pay out. During the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the Government did themselves no credit by requiring victims of asbestos-related diseases to surrender a quarter of the damages awarded for their pain, suffering and life-shortening illnesses to pay for legal costs. I hope that the announcement made today will help to make amends.

[Mark Tami]

Many of the people to whom my hon. Friend refers worked for sub-contractors, who have gone bust over the years. The process has been a very cruel one, and all previous Governments have something to stand up and defend, because we have let these people down. Let us hope that the legislation is of a proper nature and that we can end the misery.

[Mr Wright]

I absolutely agree with my hon. Friend. The devil will be in the detail, but I hope that we can make amends. It is only 10 days or so since we commemorated workers memorial day, when we resolved to remember the dead and fight for the living. The proposed legislation is an important part of that, and I hope that compensation, fairness and justice will be provided.