(1 year, 9 months ago)
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My hon. Friend, once again, nails the position that we are in. I know that the steel sector has such fantastic champions across the House. Since I have been in post, which is not very long, I have attended several meetings, briefings and debates in Westminster Hall, so I know it has fantastic champions, and it is a shame that those champions are feeling let down today. What is extraordinary is that there is a huge amount of growth coming down the line for steel. Demand for UK steel is expected to rise by 20%. Significant commercial opportunities are coming down the line. Once again, because British Steel has such fantastic champions and we have such superb MPs across the House, including my hon. Friend, they have been able to win some substantial deals for the sector. He mentioned steel safeguard measures. In 2022, we extended all 15 steel safeguard measures and agreed an extensive solution to the US section 232 tariffs, significantly increasing US market access for UK firms. The steel sector could not have better steel champions and, like them, I feel a bit let down today.
The point that was made relentlessly by hon. Members in last week’s steel debate, and we really appreciate what hard news this is for steel workers today, is that high production costs mean that UK steel is unable to be competitive in the international market. The Government support is not as generous as other countries’, and some of the list that the Minister read out is older money and it is across industry, not just for steel. So does the Minister understand that a long-term plan is needed to give our industry confidence?
Because we have invested so much in renewables, we know that there will be better energy costs coming down the line, but we have had £800 million for the steel sector since 2013. We know that policy is being reviewed, and we are going to make sure that support is just as substantial going forward. The UK offers a great place to have a steel sector, and we know that there are opportunities for growth. We know there is going to be a 20% increase in UK contracts, we are looking at procurement and we have a fantastic skilled workforce. There is support to help decarbonise and take away some of the costs of emissions, too. Support has been available—up to £800 million—and support will continue to be available.
(1 year, 10 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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I beg to move,
That this House has considered the contribution of the steel industry to the UK economy.
It is a pleasure to serve under your chairmanship, Mr Pritchard, and to lead today’s debate. My hon. Friend the Member for Aberavon (Stephen Kinnock), a Welsh Labour colleague, secured the debate and was due to lead it, but he has been waylaid by his Front-Bench duties on the Economic Crime and Corporate Transparency Bill. He is an excellent chair of the all-party parliamentary group for steel and metal related industries. He represents the UK’s biggest steelworks—in Port Talbot—and I know that he will take a keen interest in today’s debate and wishes that he was here. Before I begin, I declare an interest: I am a member of the Community and GMB trade unions, both of which represent steelworkers in my constituency so ably, as does Unite. I refer Members to my declaration in the Register of Members’ Financial Interests.
I am incredibly proud to represent a steel constituency; for well over a century, the industry has been at the heart of the communities that I serve, and of constituencies represented by Members present. It is good to see interest from Members on both sides of the House. The contribution of the steel industry to the UK economy is the title of the debate, but the immense contribution of this vital strategic industry is, in a sense, undebatable. Our steel sector employs 34,500 people directly in the UK and supports a further 43,000 in supply chains. Steel salaries are 45% higher than the UK national average and 59% higher than the regional median in Wales, Yorkshire and Humberside. It goes without saying, then, that the steel industry should be at the heart of any levelling-up agenda worth the paper it is written on.
The workforce is a winning combination of highly skilled, experienced workers who have honed their expertise over decades of dedicated work, and a healthy influx of younger steelworkers eager to work in an industry that is at the cutting edge of innovation. Even in the face of the considerable challenges that the industry faces, which I will talk about today, steel still has enormous pulling power for young workers who are looking to build up skills that will last them a lifetime. That is clear to see at Tata’s Llanwern steelworks in my constituency, where the average age of the workforce has fallen from 53 to 32 in recent years. There is a new generation of workers who, like so many before them, are hugely proud to be steelworkers. We must look after them.
Directly and through supply chains, the steel sector adds £5.5 billion to UK GDP and makes a £2.4 billion direct contribution to the UK’s balance of trade. It underpins our entire manufacturing base, and steel is an essential material for the construction, energy, aerospace, defence, engineering and packaging sectors. Some 96% of Network Rail’s steel is sourced from British Steel in Scunthorpe; 250,000 tonnes of steel from Celsa in Cardiff will support the building of Hinkley C nuclear power station; and Liberty Steel produces critical parts for aircraft engines and wind turbine gears. Nearly all 1p, 2p, 5p and 10p coins originate from steel made at Tata in Port Talbot, and Tata Llanwern produces world-class automotive steel for the likes of Jaguar Land Rover and BMW.
My hon. Friend is making an excellent speech. She rightly mentions the Celsa plant in my constituency and the critical role that steel plays in so many of our industries and in manufacturing. Does she share my frustration that we seem to have been going round the houses for the last 10 years, particularly on the critical issue of competitive energy pricing? We have seen something like 12 steel Ministers during that time. That is not to disparage the current Minister, whom I like immensely on a personal level, but we need consistency and action on the critical issue of energy prices.
I thank my hon. Friend, who is a champion for steel in his constituency, where Celsa is based. I wholeheartedly agree that we have been going on about energy prices for so long—it is a theme that I will come to later in my speech—and I thank him for his contribution.
First, I apologise for being a minute late. My hon. Friend’s last point is crucial. All these pots of money that are available are obviously welcome, but for Shotton and the whole steel industry, we need a long-term plan with long-term investment. There is a lot of talk about companies investing, but they will invest only if they can see a future, and if all we are doing all the time is just buying a bit of time here and there, until steel drops out of the news again, that is not a plan. We really need a long-term plan.
I thank my right hon. Friend for that intervention. Yet again, I agree wholeheartedly with him. He is a fantastic advocate for Shotton, and he is exactly right: we need a long-term plan for steel.
I am grateful to the hon. Lady for giving way; she is being very generous with her time. She made the very important point a few moments ago that steel is at the heart of many of our growth industries. Does she agree that a growth industry for the future is green energy, and that whether we are talking about floating offshore wind or other forms of marine renewables, steel will be at the heart of them? To that end, does she welcome the agreement struck between RWE and Tata to explore the use of Welsh steel in the nascent floating offshore wind industry? Does she also agree that we need Government to be part of the discussion of how we support the growth of new green industries and ensure that British-made steel is at the heart of them?
I thank the right hon. Member for that intervention. I wholeheartedly agree; I am agreeing with all the interventions! He anticipates my next point, because I was about to say that steel will be integral part of the UK’s journey to reach net zero. Without a thriving steel industry, there can be no transition to a low-carbon economy that supports a range of industries, from automotive to nuclear and renewables, which he mentioned.
I am very grateful to the hon. Lady for giving way; she is being very kind in taking interventions. There have been suggestions that a closed-loop cycle could be created in south Wales, whereby floating offshore wind is used not only for electricity but to make green hydrogen for heavy industry in the area, including, of course, steel production. Contracts for difference could be used to support such a relationship. Will she join me in asking the Minister to clarify how the contracts for difference scheme could be adjusted, so that it supports renewable energy hubs that use multiple technologies, and to assess how such projects could be linked? The important words there are “multiple technologies”.
I thank the right hon. Member for that very important intervention. She gave an example, as did the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), of how we can use our steel in these projects, and I hope that the Minister will refer directly to that point when she responds to the debate.
These interventions prove that we simply cannot decarbonise the economy without decarbonising steel. As Tata has highlighted, almost every aspect of the UK’s decarbonisation plan is steel-intensive, with 10 million tonnes of steel being required over the coming years for offshore wind, solar, nuclear, hydrogen, and carbon capture and utilisation storage projects. The “Britain, we need our steel” campaign was launched by the Community trade union and union partners in 2020. It is not just a slogan; it is a statement of fact.
Today’s debate comes in the context of the recent worrying news from Liberty Steel, which has announced that it will idle its steel plants in my constituency and at the Tredegar site in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith). The primary production plant in the constituency of my hon. Friend the Member for Rotherham (Sarah Champion), who is also an excellent advocate for steel in her area, and the Performance Steel supplier in the constituency of the hon. Member for West Bromwich East (Nicola Richards), are among the other sites affected.
In a written response to me last week, the Secretary of State for Wales mentioned that he had spoken to Cabinet colleagues about the situation at Liberty and what it means for the workforce, and said that the Government stood ready to provide support. Any updates on that written response that the Minister can provide would of course be welcome to us and, more importantly, all those working at the plants, who are worried about the future. We must not underestimate the uncertainty that they will feel following the news about Liberty.
Of course Liberty has its specific issues, and the Community union is seeking answers from the company about how the latest announcement squares with previous commitments to invest in the business and ramp up production in Newport, Tredegar and elsewhere. It is clear, however, that there is a wider context, and that Liberty’s announcement again demonstrates the precarious outlook for the steel industry more widely. Indeed, the company specifically cited energy costs as a factor in the decision that it made this month.
The same is true for British Steel in Scunthorpe, which is paying nearly £1 million a day for electricity, the cost of electricity having risen tenfold since 2021. There is still real uncertainty about the situation of British Steel, and I am sure that the hon. Member for Scunthorpe (Holly Mumby-Croft), who is here, will speak about that shortly. I hope that the Minister can provide updates. It is imperative that talks between the company and the Government continue, and reach a successful outcome that ensures that steelmaking at Scunthorpe continues and decarbonises.
As Community has highlighted, the cost of Government inaction, in terms of job losses, employment support, and the loss of a vital strategic foundation site, is incalculable. The sky-high energy costs facing the steel sector are by no means a new issue, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said. It is one that I and other Members representing steelmaking constituencies have raised with 12 different steel Ministers since 2010, including six in the last three years alone. It is difficult to establish a long-term relationship when our steel Ministers change so often. I also like the Minister personally, but I make that point.
Over recent years, Opposition Members will have lost track of the number of times we have had to highlight the energy cost disparity, which remains a blight on the competitiveness of UK steel producers compared with their continental counterparts, particularly those in France and Germany. Indeed, UK Steel research shows that British steel producers paid twice as much for electricity last year as German counterparts, hitting competitiveness.
The UK Government’s response to this over the years can be described as piecemeal at best. The energy bills discount scheme announced by the Treasury earlier this month confirmed that there would be at least a continuation of energy price support for businesses until April 2024, removing fears of a March cliff edge—an uncertainty that the Government allowed to fester through the tail end of last year.
However, it is important to note that the support for energy-intensive industries outlined by the Exchequer Secretary to the Treasury falls far short of that provided by competitor countries. That is the point. For example, the German Government have guaranteed their steel industry an electricity price of €130 per MWh for 2023. In contrast, the Treasury’s announcement on non-domestic energy support earlier this month provides our steel industry with a discount only to electricity prices higher than £185 per MWh. That means that UK steelmakers will stump up an estimated 63% more than their German counterparts for electricity.
UK Steel has rightly been critical of what the UK Treasury has on offer, saying that its
“reforms significantly narrow the help that Government will provide”,
and that Ministers are
“betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices.”
For a decade, British steelmakers have continually been asked to compete with one hand tied behind their back. That is why Labour’s £1 billion contingency fund to help energy-intensive industries, such as steel, deal with energy costs is crucial. It goes far further than this Government’s proposals and is vital.
The £800 million toward energy costs that the Minister mentioned in previous meetings is not all for the steel sector. In any case, it is not a new package of support. It relates to a package introduced under the coalition Government between 2013 and 2015, which was pushed largely by the Liberal Democrat-operated Department for Business, Innovation and Skills. In any case, the support referenced is significant less than the £1 billion contingency fund that Labour has suggested.
We need a Government who will support the industry in a move towards decarbonisation. We have read the reports of the £600 million that the Government have pledged, or are reported to have pledged, to Tata and British Steel this week to help with lower-emissions technology. I trust that we will get more details on this from the Minister later. I hope the negotiations continue and progress with urgency, and that any plan to decarbonise will be fully consulted on and agreed with the unions to ensure a just transition for the workforce. However, it is important to note that the support arrived significantly later than the support for other European countries did, and is significant lower. For example, the German Government have already spent €8.5 billion towards greening their domestic steel industry, and the French Government have spent €2.2 billion. British Steel Scunthorpe’s multi-union chair, Paul McBean, put it well in his recent interview with The Yorkshire Post, saying:
“We are the only country being told to go green and (with) no help.”
I look forward to the Minister’s response on that point about the adequacy of what is on offer.
It is clear that the steel sector is committed to the transition to net zero, but needs a long-term policy framework to make that a reality without penalising steelmakers with gargantuan carbon prices in the interim years. As things stand, rising carbon costs are eating into any available capital that steel companies may have to invest in decarbonisation. That is completely counterproductive, and we need the Minister to act on it. That is a key point.
The Government have spoken about a roughly £1.5 billion package of support schemes for the industry. However, it is important to note that those schemes are spread across many industries, so £1.5 billion does not translate into very much direct capital support for the steel sector. In particular, the £1 billion carbon capture, utilisation and storage infrastructure fund is not money provided to steel companies to support CCUS on site, but investment in pipelines and storage that may at some point be used by steel companies—it is far from a certainty. For example, Welsh steel plants will not be using that infrastructure even if they opt for carbon capture, as it is all for the North sea. Let us not forget the £250 million clean steel fund promised by the Government led by the right hon. Member for Maidenhead (Mrs May), which disappeared without trace.
Labour’s proposed £3 billion green steel fund represents a potential way forward—not a sticking-plaster emergency bail-out, but a plan to work with industry, investing alongside it over the next 10 years. If this Government will not take action, we will.
I also urge the Minister to look at proposals for a carbon border adjustment mechanism. The costs of the UK’s emissions trading system have spiralled over the past two years. Compliance costs for the sector reached £120 million last year, which is equivalent to 60% of the average annual capital investment of the sector, and are set to get much worse. A carbon border adjustment mechanism would create a level playing field by applying carbon prices at the border equivalent to those faced by domestic producers, ensuring that imported steel does not have a price advantage. The Community union has highlighted that such a mechanism would also support the decarbonisation of steel production, as it would allow steelmakers to produce low-emission steel without being out-competed by high-emission, lower-cost imported steel.
I thank my hon. Friend for her generosity in giving way again. I should also put on record my membership of the GMB, and past interests involving the GMB and Community.
On the subject of that transition to green steel, my hon. Friend will know that the Celsa plant uses an electric arc furnace—it is producing green steel from scrap. Does she agree that if we are switching to scrap-made steel, we need to ensure not only that there are adequate supplies of scrap in the UK, but that we do not suddenly all start producing the same product? Celsa predominantly produces rebar; we also need the flats, the sections, and all the other products that the UK currently provides so excellently.
My hon. Friend makes an excellent point—I cannot top it, really. I hope the Minister has heard it.
Procurement policies also need to be updated. For every 1,000 tonnes of steel produced in the UK, 4.2 direct jobs are created, with a further 6.6 jobs created in the supply chain. It is understandable, then, that Make UK found that 68% of the UK public think that public infrastructure projects should prioritise the use of UK-made steel wherever possible, yet the Government have a pretty poor track record in this area. The most recent example was last month’s announcement that a £1.6 billion contract for steel for three fleet solid support vehicles was awarded to a Spanish consortium. That is just one case, but there have been too many missed opportunities for the steel industry. We cannot let that carry on.
As I mentioned earlier, green infrastructure projects will need literally millions of tonnes of steel by the end of the decade. The UK Government’s own steel public procurement pipeline data, released last June, states that offshore wind projects alone will require some 5.3 million tonnes of steel within five years. We need the Government to commit now to maximising the procurement of British steel for all those upcoming projects, a move that Make UK estimates could boost the UK economy by as much as £4 billion and support 11,000 British jobs in steel companies and their supply chains. As the Community union’s general secretary Roy Rickhuss has rightly said,
“The green energy revolution presents a huge opportunity to build a robust British supply chain based on the supply of top-quality domestic steel.”
The events of the past two years tell us that Britain cannot rely on fragile global supply networks for strategic goods, and that if we want to go green, it is nonsensical to transport steel from the other side of the world.
On that point, I welcome that the Government themselves have acknowledged that, in the area of energy supply, the country has
“drifted into dependence on foreign sources”.
We agree, and I echo Roy Rickhuss by calling on Ministers to not make the same mistake when it comes to steel, a sector of such vital strategic importance to our sovereign capability and our national security. Alun Davies, a stalwart of Community in south Wales, puts it succinctly:
“There is a clear choice facing this Government—either they back our workforce and our industries or they choose to offshore thousands of good jobs to other countries.”
The industry really is at a cliff edge. I have said that in meetings. That is not crying wolf; this is not a made-up situation. It really is at the 11th hour. Unless we really step up to the mark and invest, will we lose not only the industry but the confidence of the supply chain and the customers, who will start questioning whether some of these plants will be around this time next year. Something has to change now.
My right hon. Friend is exactly right: the steel industry is at a particularly precarious point and the purpose of this debate is to highlight to the Minister the need to act quickly.
On procurement, it is high time that the UK Government started setting more ambitious targets for the use of UK steel in public projects and for all initiatives and schemes supported by public funds. Ultimately, they must devise policies to deliver those projects and grow the economy. Other countries have shown that they are not afraid to support their manufacturing sectors in the green transition. For example, in the USA, the Biden Administration’s Inflation Reduction Act uses the tax system to reward American manufacturers that invest in and use American manufacturing supply chains.
If this Government will not take action, the next Labour Government will. I am pleased that my party is committed to asking every public body to give more contracts to British firms, big and small. We will use stretching social, environmental and labour clauses in contract design to raise standards, and we will spend and make more in Britain. We are committing to making, buying and selling more in Britain. We will lead a culture change in Government, putting the growth of local industries and economies first and reviewing the pipeline for all major infrastructure projects to explore how to increase the materials made in Britain. We will also upskill workers to get the jobs for the future. That is the kind of vision that industries such as steel and our country need.
It is worth flagging up the continued risk of melted and poured Russian steel entering the UK via third countries. Although the UK has banned finished-steel imports from Russia and placed a 35% tariff on semi-finished steel from Russia, loopholes in the sanctions means that Russian steel that is re-rolled in the EU or Turkey and exported into the UK is reclassified as EU or Turkish-origin material, circumventing the ban and the tariff. That means UK consumers, including public projects, are unwittingly importing and using Russian steel. It is wrong as a point of principle and it has damaging consequences for the UK market. I echo UK Steel’s call for the Government to tackle that by applying sanctions on all steel that is melted and poured in Russia, regardless of whether it has been re-rolled in a third country.
At the Dispatch Box earlier in the month, the Prime Minister told the hon. Member for Scunthorpe that the Government
“remain committed to a thriving UK steel industry.”—[Official Report, 11 January 2023; Vol. 725, c. 557.]
Steel workers and steel communities throughout the country will understandably have taken that with a heavy pinch of salt. For our steel industry, the past decade has been characterised by neglect and a lack of vision for the future. The loss of skilled jobs at the SSI plant in Redcar and the Orb works in my constituency of Newport East were tragic cases in point. Orb was the last steel plant in the UK producing electrical steel, and it needed investment of about £50 million to be saved. The Government did not listen and did not let it be saved, and the opportunity was lost. That is heartbreaking. The next decade must be different, not just for our steel industry but for our energy security and a greener economy, both of which are utterly dependent on a healthy steel sector.
We need answers today. I hope the Minister will update us on her engagement with Tata, British Steel, Liberty Steel and Celsa Steel. I hope she will acknowledge that the current level of support for UK steelmakers in respect of energy costs and decarbonisation is not enough, and I hope the Government will commit to doing much more. The era of warm words has bitten the dust and the time for meaningful strategic action has come. Just like levelling up, the industrial strategy part of the Department for Business, Energy and Industrial Strategy’s title should not just be a handy buzz phrase; it should be a central, defining mission of the Government.
Instead of sticking plasters, we need a long-term plan. If the Conservative party is not up to the challenge, Labour stands ready to fill the gap and ensure that the steel industry has the bright future it needs and deserves.
When I came to this debate I was not planning to make a contribution—I was planning just to make an intervention about green industries and the role that British Steel can play in them—but having listened to some of the contributions I would like to make two broad points, one looking backwards and one looking forwards.
My backward looking point is in response to the remarks made by the hon. Member for Newport East (Jessica Morden). She made a very good speech and I agreed with a lot of the important points she made, but I want to challenge the Opposition narrative that over the last 12 years the UK Government have pursued a deliberate policy of neglect of the steel industry.
I had the privilege of serving as a Minister in 2012, and it was not just Liberal Democrats fighting for steel at that time: many Conservative Ministers were fighting for the steel industry. I was in the Wales Office, putting together working groups and roundtables of energy-intensive industries, meeting officials at BEIS’s predecessor Department and looking at the energy costs of intensive energy users. There was a big focus on the needs of steel, particularly from us in the Wales Office because steel is so important to the Welsh economy and to our identity. Some of the contributions made by Members from other parts of the UK testify to that point in relation to their own communities.
There was a focus on steel in the early years of the coalition Government, and I believe that has continued until the present day. I do not remember a time when Ministers were sitting on their hands when it came to discussions about steel. I remember, during my short stint at the Department for Work and Pensions, being lobbied by Tata to sort out its pension problems and offload its obligations to British Steel pension holders.
It is almost like we have bounced from crisis to crisis in terms of discussing steel, but at no point did I honestly detect that the Government were asleep at the wheel. There have been a succession of different BEIS Ministers, Chancellors and Prime Ministers, but steel has always been a subject that has been able to attract attention from the top of Government, including from the Prime Minister’s office.
The hon. Member for Newport East made an important point, which I kind of agree with, about overall industrial policy. Going back even further to when Labour was in Government, we have not been good enough as a nation at protecting domestic supply chains and local content, and that point extends to the steel industry.
There may have been discussions about steel but there was very little by way of action. Will the right hon. Member acknowledge the huge disparity between what we pay for our energy and the way that other European countries help? There has been no action to address that.
I accept that point. I remember bringing representatives of Celsa Steel from the constituency of the hon. Member for Cardiff South and Penarth (Stephen Doughty) to meet various Ministers at different points during that period of government. Celsa was incredibly open about opening its books and showing costs to Ministers. The point that Celsa made, when we put in place the support scheme for energy-intensive users, was about the disparity with competitor countries. That is a valid point that the Government should address. We are in an intensely competitive steel-production environment.
I come back to my point. Some Opposition Members hope to be in Government in a couple of years’ time as Ministers. They will have a string of companies knocking on their doors continuously asking for support and help. The trade-offs they will need to make, with regard to responsibility to taxpayers and the public finances, will be difficult. Difficult decisions need to be made. In the case of steel, at times the global challenges have felt so big that the amount of support being sought was almost unlimited. Ministers need to make difficult decisions, but I accept the point made by the hon. Member for Newport East that we need to look at the disparity with international competitors.
I thank all Members for coming along. We have agreed that this is a critical time for steel. I welcome the new steel Minister to her role. I welcome the talks; I think they are a step in the right direction. I also support Community’s call for steel companies to reconsider any plans for restructuring while those talks are ongoing and before we know what future support there might be. I say to the Minister that we need more data on procurement, so perhaps she can provide that—
Order.
Motion lapsed (Standing Order No. 10(6)).
(1 year, 10 months ago)
Commons ChamberAs my hon. Friend the Member for Rotherham (Sarah Champion) said, high energy costs and competitiveness were cited by Liberty Steel when it also announced the idling of the Newport site, which is really hard news for the dedicated and skilled workforce there. No more warm words from the Government: what will the Government practically do to work in partnership with our industry, as other European countries are doing—and they are far more generous, which is the point here—to ensure that this key strategic industry is competitive?
The Government have worked very hard with the steel industry, to the sum of hundreds of millions of pounds, and will continue to do so. We do recognise the strategic importance of steel, and we also recognise that energy prices are very high. As I mentioned to the hon. Member’s colleague, the hon. Member for Rotherham (Sarah Champion), a moment ago, we have already consulted on and will be in a position to say more soon about greater discounts in the energy-intensive industries, but we need to work together to make sure we can deliver that, and I look forward to extending the invitation to her as well.
(2 years ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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My hon. Friend is absolutely right—it is about protecting UK interests. I know he has great expertise on the issue from the Business, Energy and Industrial Strategy Committee, so he understands what he is talking about. It is very important, for example, that the critical mineral strategy is supporting throughout, including with semiconductors. In the end—I think the whole House will agree with this—if there is a trigger that requires us to take national security measures, and if we judge that the bar has been hit and we are concerned enough, not to take remedying action would clearly be a dereliction of duty. That is the reason we have stepped in and acted. All the other points are right. We want to see the continuation of semiconductor production, but we must take national security first. My hon. Friend is absolutely right about that.
Well done to my hon. Friend, and neighbour, the Member for Newport West (Ruth Jones) for securing this urgent question. Many of the 500-plus employees live in Newport East have been in touch over the weekend. I reiterate the great uncertainty that they now feel as a result of this decision. One would have thought that at least one of this year’s three Secretaries of State for Business, Energy and Industrial Strategy would have met the company to understand the impact of this decision on people’s lives. The Secretary of State has not answered the question, so I ask again: what is he going to do to protect jobs?
First, because of the process there is not quite as much freedom as the hon. Lady sets out for the Secretary of State to judge a quasi-judicial case such as this in the way she describes. I agree with her and sympathise with everybody who will be concerned about their jobs. I happen to think that their future remains bright. On the requirement for those skilled jobs, demand is very high and, through this process, as Nexperia comes back with its plan, we will be looking for a plan that helps to protect those jobs.
(2 years ago)
Commons ChamberI am extremely grateful to my hon. Friend, who has led the steel MPs on this side of the Chamber, and has often led cross-party as well, in fighting the cause of steel communities. As he says, a core foundation industry is crucial to jobs and prosperity; to our national defence and security, with its role in procurement in defence; and to decarbonisation for climate security. It is right that we should be supporting our steel industry and our other core industries.
Does my hon. Friend agree that it has not helped that since 2010 we have had 11 Ministers responsible for steel, including six in the past few years alone? It is impossible for the industry and unions to have an ongoing dialogue with the Government for a long-term vision for steel.
My hon. Friend is absolutely right about that, and I suspect that even if Ministers will not admit it publicly, they would say so privately too. I mentioned that I wrote to the Secretary of State two weeks ago. I am disappointed that I have not had an answer sooner, given the scale of the challenge and the emergency facing so many parts of the steel industry.
I am very pleased to be called in this debate to talk, like other hon. Members, about the steel industry, which is so important to, and at the heart of, the community I have the privilege to represent.
In Prime Minister’s questions last week, I had the opportunity to challenge the Prime Minister on the Government’s lack of support for the steel industry. I welcomed his recognition of the importance of the sector to the economy and our communities up and down the country. However, I worry that that was just another set of warm words from a Government who only ever seem to react to crises in the industry when things get desperate, but refuse to implement any kind of long-term plan for steel, a sector that should be the cornerstone of a forward-looking green industrial strategy. The ask was set out excellently by my hon. Friend the Member for Rotherham (Sarah Champion) earlier and has been well rehearsed in the many debates on steel we have had in this place.
We only have to look at the rate of turnover of BEIS Ministers to get a sense of just how unfocused the Government have been over the last 12 years. Since 2010, we have had 11 responsible Ministers, including six over the last three years alone. I am not sure, even today, exactly who is the steel Minister in BEIS, because there is no list of responsibilities on the website and no answers to the parliamentary questions we have tabled. Will the Minister please tell us in his closing remarks who the steel Minister is? That crude lack of continuity makes it incredibly hard for representatives from the industry—steel unions, UK Steel and parliamentarians—to engage constructively with the Government and, perhaps harder still, for the Government to develop a strategy to ensure a long-term future for an industry that is of such vital strategic importance to our sovereign capability and national security. [Interruption.] From the look of the note that has just been written, the Minister is asking who the steel Minister is.
If we as steel MPs are frustrated, that is nothing compared to how steelworkers feel. Speaking to union reps from Tata Llanwern and Liberty on Friday, there is a real concern for the future and a sense that opportunities could tragically be lost. There are huge challenges for our industry at the moment. At Tata Llanwern, the average age of the workforce has fallen from 53 to 32 in recent years. The young members of the workforce, having shone with the benefit of high-quality training, are performing everything they are asked to do, but, given the anxieties that hang over the whole sector, these young multiskilled workers are now worried about their mortgages and their futures. Some of those worries relate to immediate problems the industry is facing, including falling demand in the construction and automotive sectors. Llanwern produces world-class automotive steel for Jaguar Land Rover, which has slowed down its production. Looking to the longer term, there is also exasperation with the lack of vision shown by the Government and their failure to stump up the investment funding or work with the industry to help companies decarbonise. Steelworkers feel neglected at a time when their contribution has never been so vital to our economy. We know that the world cannot decarbonise without steel, whether it is for use in wind turbines, electric vehicles, energy-efficient buildings or other green infrastructure. The steel sector is committed to the transition to net zero, but it needs a policy framework that will support, not hinder, it. The Government must provide a solution to allow the industry to invest in decarbonisation.
Energy prices remain a huge issue, with steelmakers still paying well over the odds compared with our continental counterparts. That point was made well by my hon. Friend the Member for Rotherham, who outlined the help that the German Government are giving their industry. We are not being as generous. We also need longer-term reforms to bring down electricity prices beyond the difficult winter ahead, akin to those implemented in France and Germany.
Let us not forget that the previous Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), made reduced energy costs for the steel sector an important promise during the Brexit campaign. Six years on, we are still lagging behind. On that note, the Government should also follow the EU in closing the loophole for the sanctions regime against Moscow that still allows indirect imports of Russian steel from third countries and create a UK steel innovation fund using the £200 million refund from the research fund for coal and steel.
We need Ministers to set ambitious targets for the use of UK steel content in public procurement, as has been said. This is a really important industry, with more than 76,000 jobs in the UK. As a steelworker at Llanwern said to me this week, the UK steel industry is less well equipped to weather the global storm than overseas competitors. He also said:
“in an insecure and unstable world, how can we not produce steel?”
(2 years, 10 months ago)
General CommitteesI will respond to that in my concluding remarks so that I am accurate for my hon. Friend.
The two sets of regulations will modernise the role of the certification officer so that she can continue to function as an effective regulator of trade unions and employers’ associations. It is not about constraining the ability of the unions and employers’ associations to do their valuable work. The certification officer has always operated independently of Government and that will continue.
These reforms are about giving the certification officer the tools she needs to do the job as effectively as possible and ensure that the taxpayer no longer foots the whole bill, but that unions and employers’ associations that can afford—
How is this proportionate, given that in her annual report for 2021 the certification officer stated that she investigated only 34 complaints—one complaint for every 200,000 union members—and no enforcement was taken?
The certification officer has had a number of complaints. She has investigated some and dismissed some. Yes, only one enforcement was taken, but that is not the sole purpose of her job. She does not look at that single case; there is a lot of work that leads up to that. As I say, this is proportionate. If she is not doing that much work, then the levy will be cheaper because she will not have that much to do. The levy is to cover the cost of the work. The certification officer is not having holidays to the Bahamas and making a juicy profit out of this. The levy is just covering the cost of the regulator. That is what is proportionate about it and why it is appropriate for the regulator to do it, rather than the taxpayer.
The current known cost of the certification officer as it stands is about £700,000, which is paid by the taxpayer. There is, however, a principle: trade unions are there. I have just gone through some of the huge achievements of our trade union movement—which I am sure Conservative Members agree with me about—not just in this country but internationally, for workers in some of the poorest and most squalid conditions around the world. Our internationalist trade unions have gone and done that. Now, on the other hand, we are saying that the draft regulations are not for the good of workers. Trade unions help our workforce with their rights and conditions. Therefore, the principle is that of course this should be paid for by the taxpayer.
I declare an interest as a long-standing member of a trade union. My hon. Friend is making an excellent speech. Is it worth stopping and recognising at this point that those trade unions have been flat out in supporting our nurses, shopworkers and transport workers, who have been on the frontline in the pandemic, during this difficult time?
The proposals treat trade unions like profit-making companies. Political parties do not pay for the Electoral Commission, and charities do not pay for the Charity Commission, so why should trade unions pay for their regulator?
My hon. Friend makes a really good point. No other organisation with social activities pays a levy of this sort, and it is wholly inappropriate for trade unions to do so.
This tax is unjustifiable, and is set to be grossly exaggerated by the certification officer’s own distorted valuations. The trade union levy will become the double levy, going far and beyond covering the base operational costs—the TUC estimates £415,000 in the year 2022-23. Some £1.15 million to cover £700,000 worth of costs simply does not add up. I do not know how the Government can justify that.
The levy is a double tax, with little safeguard, scrutiny or accountability. Trade unions will have to pay for potentially vexatious investigations, initiated by friends like the “TaxAvoiders Alliance”, as my right hon. Friend the Member for Warley called it, or the Institute of Economic Affairs. I know at first hand that our trade unions have a long-established reputation of complying with their legal regulations. I have been a member of the trade union movement for over 30 years. I was also an activist for over a decade before taking my place in this House—[Interruption.] Mr Davies, I think it would benefit Conservative Members to actually listen to what is being said.
I will not give way, because unfortunately I now have so little time to respond that I need to plough on.
In terms of vexatious complaints by third parties, third parties will not have a right to make a formal complaint or have them investigated, but clearly the certification officer may consider their representations in deciding whether to launch an investigation. The certification officer, unlike with a complaint from a union member, will not be required to take action in response to a third party’s concern. She will have the decision to do so. And the certification officer can conclude that she will take no action. That is why I do not believe that the arguments about the far right are relevant in this case.
In terms of the net budget that we have heard about, the £700,000, and where that money is coming from, that is the net budget, as I said. That is the money given by ACAS after accommodation, IT and a lot of the other fixed costs. It does equate currently to about £1 million; £1.15 million—that is the estimate according to our figures—is given to the certification officer, based on those current accounts. The certification officer can only charge for expenses incurred over a three-year period. Clearly, there are tests that are required, as it is a public authority, to ensure that she has sight of them at a reasonable level.
The right hon. Member for Warley talked about how the levy is calculated and who will be paying. The total levy, which is clearly needed to pay the expenses for the financial year, will be worked out by the certification officer. Approximately 50% of her time and functions relate to all organisations. That is covered in the basic levy. Small organisations will be exempt when the basic levy exceeds 2.5% of their annual income. The remaining 50% of the certification officer’s time is taken up by regulations that apply to non-federated trade unions. That will be divided out in the additional levy. The total shortfall in the amount collected by the basic and additional levies due to organisations that are exempt from paying will be divided equally among all higher-income organisations. That will support the enhanced levy. There are 21 employer associations and 40 non-federated trade unions that will be totally exempt from the levy, and 59 non-federated unions will be at that top level of the basic, categorised additional and enhanced levy.
We have talked about whether this is compliant with the European convention on human rights. Trade unions, as I have said, play an important role in our workplace and society. It is perfectly reasonable for the Government to legislate to ensure that they act democratically, transparently and within the rule of law. We are satisfied that regulation by the state, as set out in the Trade Union Act 2016, is entirely consistent with the ILO conventions and the European convention on human rights. This is not an attack on trade unions. This is not politicisation. No aspect of the decisions of the certification officer is subject to any pressure from a Minister of the Crown, and that will not change at all. This measure is simply modernising it.
My hon. Friend the Member for Wyre Forest asked what happens to the fines. They go into the Treasury’s consolidated fund. They do not subsidise the certification officer, and neither will she be able to profit from them. That will keep things on a level playing field and she will fine people based only on what is in front of her. This provides no temptation, albeit as a public authority she should clearly not be going down that road anyway.
It has been said that a higher evidential standard should be applied to the higher fines. Clearly, the burden of proof standards are lower than those applied in criminal investigations, but this is a civil action, so they equate and are comparable to other civil payments.
Accusations have been made comparing the £1.15 million to the fraud that was talked about in the other place yesterday. No fraudulent claims for bounce back loans have been written off. In fact, nearly £2.2 billion-worth of potentially fraudulent claims for bounce back loans were stopped and recovered just last year.
We have also talked about valuing workers organising. Clearly, we on the Government side value workers organising. Indeed, we valued that in December 2019, especially when workers in Stoke organised to vote in droves for two fine Conservative Members.
Why is it that the Minister is introducing these statutory instruments today but has not responded to the e-balloting review?
(2 years, 10 months ago)
Commons ChamberI beg to move, That the Bill be now read a Second time.
I am grateful to present my Bill for Second Reading. I appreciate fireworks’ beauty, as we all do—how they can light up the sky and add magic and awe to our special occasions. I am here not to spoil the fun of fireworks, but to bring forward some common sense solutions that I hope the Government will take on board.
There is a harmful side to fireworks that must be addressed and challenged. We have spoken before in the House about the fire safety hazards, their use as weapons, and the extreme nuisance that the noise can create, but the Government are yet to bring in any meaningful regulations. We have a debate almost every year about the nuisance of fireworks, yet regulations have not followed.
In the Bill, I call on the Government to show compassion to the communities affected by the relentless use of noisy fireworks by committing to limit the volume of fireworks, increase the minimum fine for the misuse of fireworks, review the laws around the licensing of sellers, and consult with relevant charities to ensure that their reforms are informed and effective. Last year, more than 300,000 of our constituents signed a petition calling for Government restrictions on the sale and use of fireworks. One of my residents in Luton North started a petition to make fireworks silent, while more than 13,000 people signed a similar petition on the Government website to call for quieter fireworks. That is where I will start.
The current decibel limit for fireworks is 120 dB. I am not sure that many people could say exactly how loud that is, so to put it into perspective, the legal sound limit for a rock concert is 107 dB. I am painfully aware how old it makes me sound to say “rock concert”, but that is how it is described. A Formula 1 race typically reaches 140 dB. One of the loudest ever recorded sounds is a volcanic explosion that reached 172 dB. The pain threshold for humans is breached by anything above 130 dB, yet our limit for legal firework noise sits between that and a rock concert. That simply does not make sense.
I thank my hon. Friend and fellow Whips Office colleague for bringing forward a brilliant private Member’s Bill, which will be hugely appreciated by many residents of Newport East and by my local Royal Society for the Prevention of Cruelty to Animals. On the issue of noise, does she agree that we need to do something about illegally imported fireworks, which are so much noisier and more powerful, that are sold online?
My hon. Friend makes a very important point, one that I hope to come on to later in my speech, specifically in relation to licensing and tightening up licensing laws.
The Royal National Institute for Deaf People states that even a short exposure to sounds of 110 decibels to 120 decibels can cause harm to hearing. Noise-induced hearing loss damages the delicate inner ear. The effects may appear immediately or emerge over time, but either way the damage is not reversible.
(2 years, 10 months ago)
Commons ChamberI am not sure quite how to respond to that, but I remind the hon. Gentleman that there is a call for evidence on this and we are awaiting the responses to that call. Once again, I remind him of the support being given by the UK Government to renewables in Scotland: the £20 million tidal pot; the quadrupling of offshore wind capacity across the UK over the next decade; support for CCUS—all these things. It is about time he had a word with his party colleagues back in Edinburgh and got them to have a sensible energy policy when it comes to both the North sea and nuclear before he comes here and lectures us.
The steel industry plays a vital role in our economy. Through the Steel Council and regular engagements with steel industry, the Government are working with the sector to develop a plan to support its transition to a competitive, sustainable and low-carbon future.
For UK steelmakers, paying 61% more than their German competitors for industrial energy is not only a barrier to investment but a direct barrier to decarbonisation, with the future of this foundation sector being fundamental to our net zero ambitions, so when will Ministers commit to providing Government support to bridge the electricity price gap?
As the hon. Lady will know, because we have talked about it in other debates, the Government continue to look at options on this. We have very regular engagement and interaction with the steel industry, including the Steel Council, and other meetings, including ones just in the last few days. It is important to note the extensive support and help that has been given to energy-intensive industries, including the steel sector, since 2013 and beyond.
(2 years, 11 months ago)
Commons ChamberWhen I looked at the Order Paper, I thought I might be making my speech at about 9 o’clock or even later, so I am pleasantly surprised. I am willing to take interventions as we have more time.
This year in Alyn and Deeside, we are delighted to be celebrating the 125th anniversary of the Shotton steelworks, which is now under the ownership of Tata Steel. The plant employs about 800 people and is an integral part of the local community. For generations, Shotton Steel has provided secure jobs and supported the local economy, and has made the Shotton site synonymous with quality, productivity and innovation. Celebrating this significant landmark is an opportunity not only to reflect on the past but to prepare for future challenges to ensure that the Shotton Steel plant continues to flourish and that it remains a stable local employer for another 125 years. I will probably have retired by then, but you never know.
On that point, Mr Deputy Speaker, I congratulate my right hon. Friend on securing the debate. On behalf of Llanwern steelworks, I send greetings to Shotton on its 125th birthday; Llanwern is considerably younger. Does he agree that it is important to emphasise how interconnected operations are between south and north Wales, and all parts of Wales, in the steel industry, and how important Shotton is for steel producers in south Wales?
I totally agree with my hon. Friend’s important point. Although Shotton is doing very well at the moment—touch wood—it is reliant on Port Talbot for the steel that it finishes. Without that, the business model does not work.
For decades, Shotton Steel has produced some of the finest steel products in the world. Today, as part of Tata Steel, it takes its place in a network of steelmakers that stretches across five continents with about 81,000 employees. Shotton is well known across the world for its extraordinary quality, efficiency and profitability, and is the company’s base for a unique range of metallic and paint-coated products that are widely used in the domestic appliance, construction and other sectors. Even in this digital age, steel is essential for our public services, manufacturing, military, and everyday essentials.
Shotton’s long history provides the solid foundation on which its current success is built. John Summers, born in the 1820s, ran a small business using one of the country’s first handheld rolling mills to roll puddled iron into crude steel sheets for clog nails. I must say that I was not around then.
(2 years, 12 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I congratulate the hon. Member for Stoke-on-Trent South (Jack Brereton) on securing this debate and on a very good opening speech, in which he has talked about the ceramics industry. I hope that his speech demonstrates the call for greater Government support for energy-intensive industries, including steel, which I will be talking about today, representing Llanwern steelworks and Liberty Steel in Newport East. I hope that shows that this is a truly non-partisan, cross-party campaign that we can all agree with.
I declare an interest today as a proud member of the Community and GMB trade unions, which—along with Unite—so ably represent steelworkers in my constituency and across the UK. Those campaigning unions, along with the industry trade body UK Steel and hon. Members of different parties, have long banged the drum about the need to reduce eye-watering energy prices, which hold back our steel sector. I make no apologies for doing so again today, as this is an issue that has not gone away; in fact, it has got much worse over the last year.
Even before the pandemic hit, industrial energy prices were hitting our steel producers to the tune of £50 million a year. In the five years that UK Steel has been monitoring the costs, they have cost the UK sector £0.25 billion more than what is paid by French and German producers. UK steel producers—we always quote this fact, but it is worth doing so again—still pay 86% more than German competitors and 62% more than those in France. As the hon. Member for Stoke-on-Trent South said earlier, wholesale prices are now at record highs, with electricity costs peaking in October. To put that into context on the ground, energy costs for medium-sized steel rolling mills in south Wales and across the UK have almost quadrupled over the past year. One manufacturer said to me that it was paying £130,000 a week, which has now gone up to over £500,000 a week in some cases.
There is nothing inevitable about this, as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) said in Wales questions last week. Other countries have acted swiftly to ensure that energy costs are less of a burden on steel producers. The hon. Member for Stoke-on-Trent South mentioned the Portuguese Government. The Spanish and Portuguese Governments have taken decisive steps, including reducing the extraordinary profits made by energy companies, cutting special electricity tax rates for steel, and introducing a minimum 30% reduction in network charges for industrial users. Although every economy and every country is different, such steps represent Governments making a tangible show of support for their steel sectors—an example that the UK Government should follow.
The reasons why we support our steel sector fall into even sharper focus following COP26. Indeed, there was welcome acknowledgement at the summit that the world cannot decarbonise without steel—whether it is for use in wind turbines, electric cars, energy-efficient buildings, infrastructure and much more. That is why it was all the more disappointing that nothing of note for steel was in the Budget, which UK Steel rightly called a “missed opportunity” and a “triumph of complacency”, particularly on support to help the industry to decarbonise. For example, there was nothing on industrial energy costs, even though we know that the move towards decarbonisation will require even more energy-intensive methods of steel production.
I asked the Prime Minister about this last week but did not get much of an answer, so I will put the question to the Minister: what is happening with the clean steel fund that the industry was promised? It was absent from recent announcements and last month’s net zero strategy paper, and when my hon. Friend the Member for Blaenau Gwent (Nick Smith) raised the issue in the main Chamber recently, he was referred to the industrial energy transformation fund, which is two years older than the proposed clean steel fund. It really feels like the Government do not know what is happening to it, and its absence risks adding to the growing gap between what is needed to decarbonise the sector and what is available in support.
We have also heard little from the Government on improving the procurement of UK steel—a move that would support jobs and livelihoods, benefit our economy, provide value to the taxpayer, and lower our carbon footprint. The latest Government data on how much steel is sourced for the UK includes only 160 tonnes of British steel, which is somewhat lower than the estimated 800,000 to 900,000 tonnes that the forward-looking pipeline indicated. It is not good enough, and it is about time the Government took steps to ensure the maximum economic value of public money to be spent on steel in the coming years.
It is worth saying again that the Government talk the talk on net zero and industrial strategy, but it is really not worth anything if steel is not at its core, as my hon. Friend the Member for Aberavon (Stephen Kinnock) will agree. When the Community union launched the “We Need Our Steel” campaign, the “We” it referred to was not just our world-class, highly skilled steelworkers, or communities such as mine, with industry at their heart, and all those in the supply chain. It also referred to government at all levels harnessing the potential of steel and using it to build back the economy after the pandemic, and to power a green industrial revolution.
My hon. Friend is giving an excellent speech. It appears that some Members on the Government Benches seem to see steel as a sunset industry. In fact, nothing could be further from the truth. It is at the cutting edge of innovation. New alloys are being developed all the time. We need to emphasise the fact that this is a future-facing industry.
I thank my hon. Friend. It is absolutely true to say that steel is a future-facing industry, which will help us build back the economy after the pandemic and help us power a green industrial revolution. That is as true now as ever.