Protecting Britain’s Steel Industry

Jacob Young Excerpts

Monday 21st June 2021 Commons Chamber

[Emily Thornberry]

The hon. Gentleman is quite right, and I will be developing that point in a few minutes.

[Jacob Young (Redcar) (Con)]

Will the right hon. Lady give way?

[Emily Thornberry]

I will take one more intervention, especially from the hon. Gentleman whose constituents will want to know what he has to say this evening.

[Jacob Young]

I thank the right hon. Lady for giving way. Can she be clear in the point that she is making? Is she questioning the independence of the TRA and would she rather have a politically affiliated body determining trade policy?

[Emily Thornberry]

I would rather that we had a body that looked after the hon. Gentleman’s constituents and defended the steel industry.

Even so, let us not forget a fundamental flaw at the heart of the TRA’s recommendations: the failure to understand that the safeguards put in place by the EU were deliberately intended to provide comprehensive protection across the steel industry as a whole, recognising that if one product line is exposed to cut-price imports, the competitiveness of the whole industry is immediately undermined. The TRA has either not understood that basic concept or has deliberately chosen to ignore it. Either way, I defy anyone in this House tonight to argue that the TRA’s recommendations must be considered sacrosanct either because of its objectivity or because of its expertise. I am afraid that if Members read the Financial Times interview or studied its conclusions on steel safeguards, it is clear that the TRA has been found sorely lacking on both fronts, as many of us predicted that it would

That brings me to the second of the three major issues before us this evening. If the TRA’s recommendations are flawed, what can the Secretary of State do about it? As the House will be aware, as the legislation stands, it does not allow the Secretary of State to reject the TRA’s recommendations in order to retain the existing state safeguards. The motion before us proposes emergency legislation, allowing the Secretary of State to do exactly that. The reason that we would argue that such an unusual move is a necessity is not just because of the urgent need to stop those steel safeguards expiring at the end of the month, but because this review process has exposed three fundamental problems in the remit of the TRA’s investigation that cannot have been intended by Parliament.

First, it makes no sense whatsoever for the TRA to look at the UK’s safeguards on steel in isolation from what the rest of the world is doing with theirs and from what is happening in global steel markets. Let us consider the position that we are at present: eight of the world’s 10 largest steel markets have safeguards currently in place, with the US and the EU recently confirming that they are certainly keeping theirs. At the same time, China is heading towards the 1 billion tonne mark for annual production and still has more than 300 million tonnes in spare capacity. In that context, it would be utter madness to remove half our current safeguards and expose our country to a flood of cheap imports from China and elsewhere at exactly the time that those suppliers are desperately hunting for an unprotected market. Yet the TRA has not given any consideration to the international context, because it is apparently not in its remit to do so.

Secondly, it makes no sense whatsoever for the TRA to conduct an economic test on the need for these safeguards that does not take into account the impact of removing them on the 34,000 well-paid, good-quality skilled jobs for steelmakers in Wales, Yorkshire and Humberside, the midlands, the north-east and elsewhere, and the 42,000 more in supply chain roles. These are exactly the kinds of jobs in exactly the kind of communities that the Government keep telling us are essential to level up our country, and yet the direct threat to those jobs and communities that dropping our safeguards would create is not one of the factors considered by the TRA, because it is apparently not in its remit to do so.

Thirdly, it makes no sense whatsoever for the TRA to make recommendations affecting the British steel industry without considering the knock-on implications for our defence procurement programmes, for the construction of critical national infrastructure, and for the delivery of our net zero emission targets. All those major considerations for the Government will be dramatically altered depending on whether we are producing the majority of our steel we need here in Britain or importing it from abroad. Yet the potential impacts of its recommendations on those different areas were not among the factors considered by the TRA, because apparently it was not in its remit to do so.

That leaves us with a fundamental dilemma: either the TRA’s remit needs to change so that it can consider the global context for its recommendations and take into account their impact on our jobs, communities and regions, our national defence, our civil infrastructure and our climate change objectives, or, alternatively, the Secretary of State’s powers need to change to allow her to weigh up all those factors against the TRA’s analysis and make a decision, with Parliament’s approval, based on our overall national interest, on what is best for Britain. Which of those two options would be better is a discussion for another day, but one thing that we should be certain of now is that the Government cannot proceed with a decision on steel safeguards on the basis of recommendations by the TRA that have not even taken into account some of the most crucial factors at the heart of that decision. On that basis alone, I hope that Members in all parts of this House will agree on the need for emergency legislation to allow the Secretary of State to reject the TRA’s recommendations, extend the current safeguards beyond 30 June, and allow time for discussion about the right course of action for the future.

I said at the outset that the third and most fundamental issue affecting our debate today is the approach of the Secretary of State herself to the future of the British steel industry and whether she will accept our invitation to move emergency legislation, if that is how we vote tonight. If you had asked me that question seven years ago, Madam Deputy Speaker, I would have said yes. Back then, you may remember, the Secretary of State burst on to the political scene with an impassioned cry for us to buy more pears, apples and cheese grown and made here in Britain, and scathing criticism of those who thought that our food production could be outsourced overseas instead. But now she reserves her fury for the British farming industry and all of us in this House who oppose the deal that she has signed to flood our market and undercut our farmers with cheap and cruelly produced Australian meat.

In the past seven years, the Secretary of State has seemingly been fully captured by the free trade dogma that insists on the right of the consumer to choose the cheapest product available from anywhere in the world and rails against any interference with that right, whether it is the maintenance of tariff safeguards to protect domestic producers, concerns about slave labour and human rights abuses, or the cruelty to animals and carbon admissions that are so often the hidden cost of cheap imports. Because the Secretary of State will have no truck with such concerns, she has become the hero of the right-wing free trade think-tanks—the ones that hanker after the supposed improvements in productivity and efficiency if only our NHS was forced to compete, the ones that openly talk about the benefits of destroying the British farming industry so as to end subsidies for wildlife conservation and free up more land for developers, and the ones that inevitably are equally scathing about Government support for the British steel industry or the retention of our safeguard tariffs.

Listen to Mark Littlewood, director general of the Institute of Economic Affairs, who said:

“It’s unsustainable for the government to prop up a steel industry which is no longer competitive internationally.”

Listen to Matthew Kilcoyne, deputy director of the Adam Smith Institute, who described Government funding for the steel industry as

“throwing…cash into a burning furnace”.

These are not some obscure figures on the fringes of public life or some right-wing rent-a-quotes trying to get their names into The Telegraph. These are hand-picked members of the Secretary of State’s own strategic trade advisory group—her personal body of external advisers, whose sole representative from manufacturing industry is not from British Steel or Make UK, but is the director of JCB construction, and guess what? He is the biggest Tory party donor.

These are the voices the Secretary of State is listening to when it comes to safeguarding tariffs, when it comes to protecting British farming and when it comes to protecting British Steel. So no wonder the two acolytes she appointed to run the Trade Remedies Authority think their job is to promote free trade rather than to defend domestic producers, and have recommended this wrong-headed decision on steel as a result, and no wonder the Secretary of State, who said last month that she would do “whatever is necessary” to protect the UK steel industry, will not even attend this debate to discuss how she might go about doing that. If she refuses to act to protect our safeguard tariffs, it will be an unconscionable betrayal of Britain’s steel communities—one that they will never forget and one they will never forgive. What will make it all the worse is that she, her think-tank allies and the Trade Remedies Authority are just plain wrong when it comes to the British steel industry. Opposition Members see a bright future for our steel communities, a green future and a future that creates wealth for our country and well-paid, good-quality jobs in our regions if we have the will to make that future happen.

[Jacob Young]

Will the right hon. Lady give way?

[Emily Thornberry]

No, I will not give way at this stage. I am going to finish the speech.

If we do wish to do so in Britain, we can wean ourselves entirely away from the cheap imported steel that causes 50% extra carbon emissions, and instead have a British steel industry that leads the world in the development of hydrogen steel technology and decarbonised steel production, and by doing so leads our country to the achievement of net zero. If we choose to do so in Britain, we can put home-produced steel at the heart of every defence contract and infrastructure project from warships to wind farms, and use British steel to build our way back to full economic recovery. If we choose to do so in Britain, we can make the jobs in our steel industry the foundation for creating thousands more well-paid, good-quality, skilled jobs in other communities that need them, as we apply our skills and strengths in steelmaking to the new opportunities created by the green industrial revolution.

However, to make all those things happen, there is something the Government must contribute. It is just as precious as public funding, but so much easier to provide, and that is a simple injection of certainty and stability. When our steel companies go into the world and seek investment in their future, they must be able to say with total confidence that the British Government have their back, will support them when necessary and will always do whatever it takes to defend them against unfair trade or a surge in cheap imports. That type of certainty and confidence is the minimum that our steel industry has the right to expect from their Government, and if it cannot get that from them, Parliament must seek to provide it instead.



That is the fundamental choice before us all tonight, but especially Conservative Members who may be debating with their conscience which way to vote. Will they side with the communities of Scunthorpe, Cardiff and Sheffield, who see a bright future for their industry, or will they side with the fanatics from the right-wing think tanks who see no future at all? Will they provide our steel industry with the safeguards that it needs to build for the future with confidence, or will they leave it to sink or swim in a flood of cheap imports from China?

I have no idea where the Secretary of State stands on that choice, because she has chosen not even to be here this evening, and has so far refused to take the emergency action that the Opposition have instead been forced to propose on her behalf. But if this House decides overwhelmingly to back the Opposition motion tonight and require the Secretary of State to maintain the safeguards, I believe that by sheer weight of pressure we can force her hand to do so, inject confidence back into our steel industry and forge a path for our steel communities to the brighter future that awaits them.

--- Later in debate ---

[Jacob Young (Redcar) (Con)]

I will confine my remarks to the three obstacles that the UK steel industry faces. The first, the subject at the heart of today’s debate, is global competition and the impact of tariffs. I wholeheartedly agree with my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates): we support free global trade, but when it comes to steel making, there is currently no free market. Almost every nation that makes steel does so with some form of subsidy or trade barrier, so we need to consider a sensible response.

This is a complex issue, and the conclusions of the independent TRA do not seem to reflect the reality of the interdependence of our industry. The current situation is to the detriment of the UK, so we need to consider how we combat that unfairness. I wholeheartedly welcome the Minister’s comments about reviewing the powers of the Secretary of State.

The second obstacle is UK procurement. It was said in our previous debate that we must build back better, but why not build back British? More than 2 million tonnes of steel are estimated to be used in HS2—let us use UK-sourced steel and make HS2 a project that benefits every corner of the UK, not just London to Birmingham. The Prime Minister’s 10-point plan requires steel for increasing our offshore wind capacity and for building electric cars, carbon capture, utilisation and storage plants and nuclear power plants—let us build them with British steel.

The third obstacle is energy pricing. I am really pleased to see the Minister for Business, Energy and Clean Growth in her place, because we have spoken about the matter many times before. In the steel and chemical industries, energy costs remain uncompetitive in comparison with the continent. These are energy-intensive industries: whether they are producing steel through blast or electric arc technology, or breaking chemical bonds to drive chemical reactions, they need a lot of energy. The problem will only increase as we switch to lower-carbon fuels, so I urge the Government to come forward with a strategy to level the playing field in this area, too.

I commend the Government for their commitment to UK steel so far. The Labour party pretends that the Government do not care about our industry, but if it were not for this Prime Minister—and this Chancellor, when he was Chief Secretary to the Treasury—we would have barely any steel left in Redcar and Cleveland. It was their commitment to seeing through the sale of British Steel in Lackenby, Skinningrove and Scunthorpe that protected the thousands of jobs that depended on it.

On his visit to Redcar and Cleveland, the Prime Minister said:

“I think British steel is a very important national asset. I think the fact that we make steel in this country is of strategic long-term importance”.

I wholeheartedly agree. I want us to be stronger. We have to be strategic. We need to continue to back our steel industry.