British Steel Industry

Jamie Wallis Excerpts

Tuesday 10th March 2020 Westminster Hall

[Dr Jamie Wallis (Bridgend) (Con)]

Thank you for giving me the chance to speak in this important debate, Sir Charles. It is a pleasure to speak under your chairmanship. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing the debate just before the Budget, which is the right time to discuss this important issue. He is right to highlight that the steel industry plays a crucial role in our economy; that cannot be argued against. It is also important to note steel’s regional impact. Steel is particularly important in south Wales. The Tata steelworks provide a massive economic boost beyond the Aberavon constituency in which it resides. People live and work in Tata from right across south Wales, including my constituency of Bridgend.

Wales is the UK region that employs the second largest number of people in the steel industry, and it has been reported that Tata pumps about £200 million a year into the Welsh economy in wages alone. That does not take account of the wider effects on local businesses and the local supply chain, many of which link their success to the presence of Tata in south Wales.

A recent study by Cardiff University found that the total economic impact of Tata in Wales was approximately £3.2 billion. We must remember why that is important. Many communities in Bridgend and the neighbouring constituencies are among the poorest in the country. Any industry with such a dramatic economic footprint deserves our full attention and support. Our prosperity relies on thriving businesses big and small, so we must do all we can to keep them there.

The steel industry in Wales and right across the UK has gone through some real difficulties in the past few years. The hon. Member for Aberavon mentioned the decline and the difficult years, including the 32% fall we saw in 2016—the largest fall since 2008. While the economy as a whole may have recovered since the 2008 crash, steel has not kept pace. UK steel certainly requires more support.

One of the biggest challenges currently facing the UK steel industry is over-supply in the market, driven mostly by China. The figures speak for themselves: China produces about 928 million tonnes of steel, compared to just 7 million tonnes in the UK. The most notable effect of that is to drive down the price and make it more difficult for British companies to be competitive in the marketplace. I am therefore pleased that the UK Government supported anti-dumping measures to address cheap Chinese steel imports, ensuring that British steel, which, as we all know, is the highest quality steel in the marketplace, can remain competitive.

Another vote of confidence in the UK steel industry is the recent sale of British Steel to Jingye, which will protect 3,200 jobs in the Scunthorpe and Teesside areas. I put on record my congratulations to the UK Government for the work they undertook to finalise that sale, which is a vote of confidence in the UK steel industry. Britain and the world will always need high-quality steel and there are tremendous opportunities over the coming years. The opportunities for growth are substantial, with the potential for £3.8 billion of domestic sales for UK producers.

The UK Government have also taken wide-ranging action to support the industry, including: more than £300 million of relief for electricity costs since 2013; public procurement guidelines, with annual reports on the proportion of public sector steel bought from British firms; and details of a steel pipeline on national infrastructure projects worth around £500 million over the next decade.

Although I hope that the future is bright for the UK steel industry, particularly in Wales, we always can and should do more. I hope that the Government, as well as Members across the House, will work to ensure that British steel companies are at the front of the line for national infrastructure projects such as High Speed 2, and that British steel is at the heart of the Government’s levelling up agenda as well as our international trade deals so that the whole world can access the high-quality steel that only the UK can produce.