Steel Industry

Ian Swales Excerpts

Wednesday 14th January 2015 Commons Chamber

[Ian Swales (Redcar) (LD)]

When I was elected in 2010, I became the representative for the large steel complex in the Redcar area—the Tata long products business, based on the Lackenby beam mill and the then mothballed Tata iron and steelmaking facilities at Redcar. I was delighted that in my early months here we managed to get a deal to have the plant taken over. Many people were involved in that, particularly a very constructive group of trade unionists; Geoff Waterfield has been mentioned, and I have no problem mentioning him again. The iron and steelmaking facilities had suffered neglect and under-investment for decades.

The integrated plant suffered a big blow in 2001 with the closure of the coil plate mill and had been slowly dying. I am delighted to see that it has restarted and I am pleased that SSI—Sahaviriya Steel Industries—has invested £1.5 billion in the site to help deal with some of that under-investment and to put pulverised coal injection on to the plant. The company has plans to do a lot more, particularly in respect of energy. Only this week the chief executive gave a very positive report to the press; despite the financial problems, the corner is being turned. It was particularly pleasing to see the recruitment of 21 apprentices and six graduate trainees recently.

I will not repeat all the points in the motion. I am pleased with the common-sense measures and played a role, I think, in ensuring that the Government will not oppose the motion. However, I want to talk about a couple of things that are not in the motion. The allowances under the EU emissions trading system are inadequate for the plant in Redcar. The way that the reference period has been established means that the business has to pay extra for emissions trading, and, in fact, the allowances are declining. We need to deal with that anomaly.

The EU is imposing best available technology on steel plants, which is, in a sense, a good initiative. Levelling up to the level of the best is especially good around emissions in the area. My constituents in Dormanstown will be delighted about that. However, the amount of investment required will take time. I draw a parallel with the clean-up of the River Tees, which was a dead river when I moved to Teesside in the 1970s. It now has salmon back, but that did not happen overnight. There was a constructive arrangement between the companies involved and the Department for Environment, Food and Rural Affairs, or whatever it was called in those days, to pace that work. We need to have that same approach on best available technology.

I mentioned Lackenby beam mill. This is an incredibly uncertain time for the workers and their families, and I certainly feel for them. The Secretary of State has visited the plant where the workers proudly told him that nine out of 10 of the world’s tallest buildings have beams from that mill. On the day he visited, they were making beams for the new World Trade Centre. That plant remains a very attractive proposition for whoever owns it.

The Secretary of State mentioned exports. The complex in my constituency is almost entirely export related. Sahaviriya Steel Industries is selling not just to Thailand but to the US, Turkey and even Germany, so producing high-quality goods is one way to survive. A lot has happened. Manufacturing is reviving after being halved under the previous Government. We have sector strategies. I hear what was said about foundation industries, and I am delighted to have pushed for the chemistry growth partnership. The steel industry may be able to propose a partnership with the Government that makes sense.

I welcome the direct support for the Tata research centre at Grangetown, which deals with high-temperature research in partnership with the Centre for Process Innovation, part of the high-value manufacturing catapult. It is now turning that centre into a material institute, with support from the Institute of Materials, academia and others.

The Tees Valley city deal majors on the Teesside industrial complex. Its wish to develop carbon capture and storage will be hugely beneficial for the steel industry. The Government set the climate for the industry. They need to have a strategic view of steel for security reasons. There are no Members in this House who have lived through a world war. There are perhaps those who were born in one. The steel industry is a strategic necessity for a country such as the UK and that needs to be factored into any thinking.

What my constituency shows is that if a company has the right products, a great work force, constructive trade unions, a supportive community and long-term investors, it can still run a successful steel business in this country.