Protecting Britain’s Steel Industry

Jerome Mayhew Excerpts

Monday 21st June 2021 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

The TRA’s sole function is to look at data and decide whether to impose trade restrictions to protect the UK steel market from unforeseen surges of imports to ensure fair trade. It is not there to put up protectionist barriers to international trade. Its recommendations are based on detailed research into the UK steel market. So it is not so much the data that Labour challenges—as was made clear earlier this evening, it is the terms of reference given to the TRA. Let us be clear: Labour wants to move to outright protectionism.

Extending tariffs that are not justified by the data shifts the debate from ensuring fair competition, which drives long-term economic growth and prosperity, to outright protectionism, which corrodes markets and makes us all poorer. That is particularly the case with a foundation product such as steel. Labour wants to put up the price of steel for all the manufacturers of the United Kingdom, making their products more expensive and then less competitive. What does Labour suggest when they struggle against cheaper imports—more protectionism? Even its current proposal is so extreme that it would require us to leave the World Trade Organisation. What next? These are the economics of the Soviet Union.

The Government are right to focus on defending fair competition while supporting our steel industry to adopt low-carbon energy sources as we move toward renewable supplies, supporting our producers to the tune of £500 million since 2013 so that our cleaner energy does not disadvantage them. In the long run though, we need to move away from clumsy and expensive state support. Rather than costing our Treasury money to compensate industry, a carbon border adjustment mechanism would raise income from high-carbon imports, providing funds to invest in our own decarbonisation plans. Those are supports that can work within WTO rules, not in flagrant breach of them, as Labour wants.

No longer will our exports be penalised by relatively high energy costs or be undercut in our domestic market by dirty imports. Such a mechanism will allow us to price carbon realistically, unleashing the power of the free market to nose out lower-carbon alternatives as part of the unending price war that real competition brings. That is the kind of policy framework that a serious Opposition would be proposing. If the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) wants to modernise the Labour party, he should start with the Soviet dinosaurs in his BEIS team.