Steel Industry

Jessica Morden Excerpts

Tuesday 14th October 2014 Westminster Hall

[Tom Blenkinsop]

My hon. Friend has been banging that drum since he was elected in May 2010. My fear is that we are reaching a critical point where not only the steel industry but all energy-intensive industries are begging for help. They are trying to compete in the world as best they can, with the best forms of technology, and they are driving costs down as much as they possibly can. However, when Government policies make it harder and harder for them to exist on UK soil, it is no surprise that there have been reconfigurations in the steel industry across the European market.

[Jessica Morden (Newport East) (Lab)]

I agree with all the points that my hon. Friend has made. In constituencies such as mine, where Tata Steel and its employees have worked incredibly hard over the past few years to become more efficient and weather the storms, we would like the Government to appreciate that the economic environment is still very challenging in the UK and internationally. We do not want the Government to think that things are getting better; there must be more focus and no complacency, so that we can continue to look at issues such as energy.

[Tom Blenkinsop]

The Government need to understand not only that the industry has had to adapt, but that the work force has had to adapt for long periods of time. Before I entered the House, I was a trade union officer for Community, formerly known as the Iron and Steel Trades Confederation, which represents workers in the production side of the steel industry. I am still a member of that union, and that is a declarable interest. Since 2008, those men and women have been on short-time working, have accepted changes to their terms and conditions and, in some cases, have accepted pension changes. They have done so in the hope of maintaining an industry in their community, whether in south Wales, the central belt of Scotland, south Yorkshire, Sheffield, Corby, the east midlands, the north-east of England or Scunthorpe. The workers have all taken such penalties to help to maintain an industry, so that their sons and daughters have jobs in the future. Until Government policy recognises and matches the daily sacrifices made by individuals on the ground, those hurdles will not be overcome. I stood by that opinion as a trade union officer, and I stand by it now as an elected Labour MP.

To be slightly more parochial, the north-east is, per capita, the most energy-intensive region in the UK. All the while, UK generation capacity is decreasing rapidly, and the margin of spare capacity has not been this low for decades. However, the north-east enjoys an embarrassment of riches in the energy sector, from offshore wind to coal, electric vehicles, energy from waves, carbon capture and storage, coal gasification, biomass and biofuels. The list goes on and on. Competitive energy prices and secure energy supplies are vital to the future of the steel sector in the UK. Inaction and uncertainty only put off investors and limit job creation.

It is not all doom and gloom. The UK steel industry continues to be a proud and important part of the industrial backbone on which our economy was built and on which it will almost certainly rely as it adapts for the future. Steel is a vital foundation for many of the UK’s strategic supply chains. The UK leads the world in sectors such as automotive, energy, construction and aerospace, and UK steel is integral to all those sectors. Will the Minister comment on any contingencies that the state has put in place in case our supply chain is undermined or put in jeopardy? Security of supply and UK expertise are vital for infrastructure delivery, especially —I cannot emphasise this enough—for projects that require large and unique product types. Outsourcing is unsustainable if we are to have the ability reliably to deliver major programmes, and in terms of the logistical impact on the UK.

The steel industry has an important role to play in clean production technologies. Wind energy is a good example, because every part of a wind turbine depends on steel. The indirect benefits of the sector are significant with, for example, two to three jobs in the broader economy dependent on each job in the metal sector. Realistically, it is the truest form of a balanced economy, because its impact is spread across the UK, and is significant outside London and the south-east. To ignore not only the role steel has played in the development of our nation but its potential to secure our nation’s future, would be shameful.

As I mentioned at the beginning of my speech, steel has a proud history. I believe that it has a strong future, but that will not be the case unless the Government do everything they can to back the industry. The Minister’s own father was a great advocate of the steel industry and wrote an excellent text on the matter. My predecessor, the late Dr Ashok Kumar, remarked that it was probably the best book ever written on the steel industry. I hope that the Minister’s response will be as good as his father’s text.