Steel Industry

Jessica Morden Excerpts

Wednesday 16th October 2024 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mrs Harris. I declare an interest as a member of the Community and GMB unions and as chair of the Community parliamentary group.

I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing what I think is the first debate on steel in this Parliament. We have had many debates on steel during the Parliaments in which I have been here. I of course agree that the steel industry is of the utmost strategic importance to this country, our economy and our security, and we must cherish it. It is vital that we protect it. I draw the hon. Gentleman’s attention to the very active all-party parliamentary group for steel and metals-related industries, which has fought for our steel industry for many years. I hope he will take an interest in that group and play a constructive part in it in the months ahead.

I chose to ask the Prime Minister my first question of this Parliament about steel and the need for the new Government, who I know are very serious about steel— we have inherited a very difficult situation—to work in partnership with businesses and trade unions to secure a transition that is right for the workforce and delivers economic growth. Because of our past, we in Wales know well that deindustrialisation can be devastating for our communities. In his reply to me the Prime Minister confirmed that he understands that we need our steel in this country and need it made in this country, and we are going to need more, not less. We need steel to deliver our green infrastructure. It is the duty of the Government to ensure that jobs, communities and people are not ignored in the transition.

[Alex Ballinger (Halesowen) (Lab)]

I thank my hon. Friend for giving way and the hon. Member for Boston and Skegness (Richard Tice) for securing this important debate. The west midlands region is the third largest region for the steel industry, with 5,000 jobs generated there. In my Black Country constituency of Halesowen, many jobs are in the steel sector, including at Crosby’s forge, which I was lucky enough to visit a few months ago. Although I support the green transition, does my hon. Friend agree that a decision is needed to consider what is right for the workforce in the steel industry? Any decision should safeguard the future of the steel industry in the west midlands.

[Jessica Morden]

The steel industry is important for many of our communities and, as we know, on average jobs in the industry pay more in the communities that really need them, such as mine in south Wales and my hon. Friend’s. I agree that our communities and the downstream industries that depend on steel should have a fair and just transition. I look forward to working on this issue with the new steel Minister, my hon. Friend the Member for Croydon West (Sarah Jones), and with the steel unions—Community, GMB and Unite—which stand up strongly for their workforce, have worked incredibly hard for their members, and understand the value of those jobs, as well as with the trade body UK Steel.

For us in Wales, and clearly in Scunthorpe too, it has been an extremely challenging time for the steel industry. The deal for Port Talbot inherited from the last Government means support for the new electric arc furnace to secure the long-term future, but the closure of the blast furnaces means heavy job losses. The new Government’s deal is better than the plan announced by the last Government in September 2023—it sees improved redundancy packages and training, as well as more commitments on investment —but if this Government had been able to start negotiations even a year earlier, I have no doubt that they would have got an even better deal.

Over the last 14 years, Members who represent steel communities, including my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock), fought hard for investment and an industrial strategy for a fair transition—or simply for any kind of plan—from the Conservative Government, but we were fighting a Government who had no industrial strategy, just occasional sticking-plaster solutions. There was a revolving door in the Department that saw 12 steel Ministers come and go. That was a dereliction of duty that left the steel industry in an extremely perilous position. It was woeful neglect.

I am pleased that the new Government acknowledge the scale of the challenge. Labour Members have never believed that decline is inevitable; we want to see the industry not just adapt but thrive. I welcome the Secretary of State’s announcement that there is to be a steel strategy in the spring. I look forward to Members being part of it and to the Government giving us a long-term plan, which we have desperately needed.

I am proud to have represented Llanwern steelworks as the constituency MP for almost 20 years. I pay tribute to the workforce and the trade union reps, who have been through phenomenally difficult times but are passionate and committed to what they do. We produce world-class products in Llanwern. Our automative steel is fantastic. I hope that the commitments on investment in Llanwern that the new Government secured in their deal with Tata will keep the site and its world-class workforce at the cutting edge of steelmaking. Llanwern is a living example of the potential that investment and innovation can bring to our industrial heartlands. In recent months it has reached a new output record of 14 kilotonnes in a week, following the introduction of new technology on the ZODIAC—zinc and other developments in alloy coatings—galvanising line.

I come to my asks. UK steelmakers need competitive electricity prices. As I have said many times in debates on steel over the years, they pay 50% more than competitors in France and Germany, and that adds £37 million to UK steel electricity costs. Will the Minister address that when she responds to the debate, and at least commit to tracking the disparity between countries? We must address the issue of the UK carbon border adjustment mechanism. UK Steel asks that we move forward the implementation in line with the EU, which is implementing it in 2026, lest displaced steel from the EU flood into the UK.

With steel safeguards expiring in 2026, we must work with the industry to address the issue of global overcapacity. This year alone, China is expected to export 100 million tonnes of steel—equivalent to the entire UK steel supply for 13 years. That is a significant threat with the potential to impact any Government support for the industry elsewhere. I also hope that procurement will be at the heart of the steel strategy. With this Government’s ambitions for house building, new energy projects, wind turbines, and offshore and onshore wind, we will need lots of steel. Let us make sure that it is UK steel.

Steel is vital to any climate solution, and steelworkers themselves accept the need to decarbonise, but they need to partner with a Government who are committed to a just transition. I know that with this steel Minister, my hon. Friend the Member for Croydon West, we can all work together to ensure that.

--- Later in debate ---

[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Harris.

I thank and congratulate the hon. Member for Boston and Skegness (Richard Tice) for securing this debate in Westminster Hall this morning. I also thank everyone who has contributed to it, particularly the hon. Member for East Londonderry (Mr Campbell), whose intervention will potentially go down in history as one of the most innovative ways to participate in a debate on steel, and my hon. Friend the Member for Brigg and Immingham (Martin Vickers) for his superb contribution.

Just a few weeks ago, I challenged the Minister in the main Chamber on the Government’s approach, not just to Port Talbot but to the UK’s entire steel industry, yet just a couple of weeks later we are on the cusp of Scunthorpe steelworks potentially closing completely by Christmas, despite the owner’s clear ask to the Government to safeguard what amounts to thousands of jobs and a vital component of our economic security. If we let Scunthorpe close, on top of Port Talbot, we risk becoming dependent on cheap imports, particularly from China.

Although I understand that the Chancellor and the Prime Minister have had some issues understanding their own manifesto commitments of late, surely the Government cannot possibly have dropped their clear commitment to steel in their manifesto. Surely not, given that 90% of Network Rail steel is sourced from Scunthorpe, and that Liberty and British Steel support more than 3,500 highly-skilled jobs there—those people are dependent on the commitment that the now party of government made in their manifesto. I understand that the Government’s talks with the owners have already stalled and broken down—not the best start for the Secretary of State and the Minister. I remind hon. Members that, less than a year ago, when in opposition, the Secretary of State said that the drive for green steel must mean more jobs, not fewer, but the reality on the ground today is fewer jobs in steel in our country.

The Minister knows that Scunthorpe is now the only site in the UK with the ability to produce virgin steel. If she allows it to close on her watch, we will be left open and vulnerable to cheap imports from China, and that must not be allowed to happen. Equally, I understand that the Government are not prepared to support virgin steel manufacturing while new electric arc furnaces are being commissioned and are coming online. Is that correct? If so, how does it chime with the Secretary of State’s previous commitment that decarbonisation must not mean deindustrialisation?

With the import of coking coal due to end this month, and the possible closure of the Scunthorpe plant completely by Christmas, resulting in thousands of job losses, time is running out. The Government simply must get a grip of the situation. The loss of that vital industrial and economic asset will result in 5,000 job losses across the supply chain and the end to steel production for the first time since the start of the industrial revolution.

Given the choice in front of them, the Government must take responsibility not just for Scunthorpe but for the downstream impact on our shipbuilding industry, the defence sector and, as the hon. Member for Boston and Skegness said eloquently, the production of the wind turbines that, on the other hand, the Government are encouraging—in fact, one of their first acts was to end the ban on onshore wind. They cannot have it both ways: if they want to have their cake and eat it, they need to support the steel sector. The Government have already let Harland & Wolff down. Will they do the same with the whole of the steel sector?

The Government’s plan seems to be to divert imports of steel from China through Brazil to give the impression that this is somehow an innovative solution. I am afraid there is nothing innovative about this Labour Government’s approach. They are masking their failure to secure a future for our steelworkers and our economy as a whole, and at the same time they are risking our national security in the face of growing threats from, among others, China.

[Jessica Morden]

Will the Minister give way?

[Greg Smith]

I am not quite a Minister yet, but I will give way.

[Jessica Morden]

The shadow Minister talked about taking responsibility, but will he take responsibility for the fact that for 14 years we had no industrial strategy, no steel strategy and endless steel Ministers? Labour Members begged to have any kind of strategy for steel. Therefore, the situation that this Government inherited just a few months ago is the responsibility of the previous Government.