UK Steel Industry

Jim McMahon Excerpts

Monday 29th February 2016 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Newport East (Jessica Morden), who speaks with great passion about the impact of the steel industry on her constituents. It is very much the same for my constituents, who are currently going through 900 job losses. Coming down here this morning, I found myself on the same train as Ian Smith and Paul McBean, the leaders of the Community union in Scunthorpe. I pay tribute to them for the work that they have done, alongside Martin Foster of Unite and, indeed, all the steelworkers and their families in Scunthorpe, in going through this very difficult time and leading the way forward. It is good that there are ongoing discussions with Greybull Capital about the future of the works. I commend everybody who is supporting those discussions, including those in Government. These are difficult times and we will face a very difficult future, whatever it is, so it is important that those discussions are successful.

I want to give a sort of half-term report on the Government’s progress so far on the industrial asks. The Minister, for whom I have a lot of regard, is fond of saying, “We have delivered, largely, on these asks”, but I think she will recognise, along with me, that it is a job started but still to be finished. First, on business rates, the Minister herself recognises that there has been little progress, but points us with a mischievous twinkle in her eye to the forthcoming Budget. I hope that twinkle bears dividends in the end and we see some movement on business rates.

Secondly, on energy costs, it has taken over three years for us to get delivery on the mitigation for the carbon floor tax, which the Government unilaterally applied. As my hon. Friend said, the money is still not in the coffers of the steel makers. On energy costs, I would appreciate it if the Government looked at the flawed EU emissions trading system proposal to see what can be done about it. It needs to be offset against indirect carbon costs, because otherwise it will do further damage to the UK steel industry through carbon leakage to other parts of the world and will fail to deliver what it is intended to do.

Thirdly, the Government are to be congratulated on bringing forward new procurement guidelines, but frankly, guidelines are not worth the paper they are written on unless they have an impact on how the Government and their contractor base deliver. There are a few tests we can apply. We can look at what is going on in defence; many Members have alluded to the issues there. I was pleased that a Defence Minister said today that there was a desire to push the guidelines down the procurement pipeline, but the Government need to push hard to make the difference that we need. I commend to them the work that Network Rail does, because we have there a pipeline of best practice that needs to be matched in other industries.

On renewables, DONG Energy has just got the contract for developing Hornsea Project One. However, the test will be whether UK taxpayers, through the very generous contract for difference deal, and UK energy bill payers, are financing the delivery of renewable wind farms built with UK steel or with other steel. The Government need to keep their eye on that, because it is a real test of their procurement rules.

The job has begun and it is, in theory, going in the right direction, but unless it has an impact it will be worth nothing. I know that the Minister wants to see impacts, so I will be interested to hear how she is going to ensure that the great expectation she has given us is delivered on.

[Jim McMahon (Oldham West and Royton) (Lab)]

This has been a fascinating debate. Members might ask why an MP from Oldham is present in a debate about steel—we do not have a steel industry to speak of—but I have seen the demise of manufacturing in my community. When we talk about numbers in this place, we have to relate them back to the families affected. Communities are destroyed when industry disappears. We have heard time and again about the interventions that could be made, and my hon. Friend has made a fantastic point about them, but does he have any faith in this Government to deliver on them?

[Nic Dakin]

It is the Government’s duty to deliver, and we have to work with them to make that happen. As my hon. Friend the Member for Wallasey (Ms Eagle) said right at the beginning of the debate, they have been dragged kicking and screaming towards delivery. We need them to deliver faster, because our communities, the steelworkers and their families do not have the time to wait. That is why the Government need to step up to the steel plate and deliver before it is too late.

The fourth issue is dumping by communist Chinese. If I had said 20 years ago that a Government would be in hock to communist China in undermining our manufacturing base, people would have said, “That’s what you’d expect from the Labour party,” but it is a Conservative Government who are doing it, which is remarkable—they are in hock to communist China. We need to take action on the lesser duty rule. The Secretary of State said that the Government can take action in other ways, but we need more details of how they will take action against Chinese dumping, to make sure that there is a fair and level playing field. Nobody wants benefits; all we are asking for, on behalf of our industries, is a fair playing field, and that is what acting on the lesser duty rule will achieve.

Many Members have spoken at great length about market economy status. During Foreign Office questions last week, I was pleased to hear the Foreign Secretary repeat the commitment that market economy status would be determined and seen through the prism of steel. I would be grateful if the Minister could confirm that unless China delivers on steel in the way that it should, it will not get market economy status.

In conclusion, my constituents are very keen on this debate and want the Government to do even more to deliver so that my constituents and my community can have good jobs and a good future.

--- Later in debate ---

[Anna Turley (Redcar) (Lab/Co-op)]

I am very grateful for the opportunity to speak in this debate, but I am afraid that I contribute to debates on steel with a heavy heart and a bitter taste in my mouth. I led such debates back in September to plead with the Government to intervene and to save the steel works in Redcar, but I now stand in the Chamber to represent over 3,000 people who have lost their livelihoods and their identity, and to represent a barren, silent industrial giant of a blast furnace, which still dominates the skyline of Redcar and is a visible daily reminder of this Government’s abandonment. I stand here to represent a community that feels let down, cheated and bereft. It is a tragedy that, despite representing a constituency that forged the steel that built the bridges and skyscrapers of the world in the 20th century, I stand here now, in a debate about British steelmaking, to represent a constituency that no longer makes steel. However, I am here because I owe it to my constituents, and those who fought so hard and with such dignity for our own steelworks.

I and my Labour colleagues will keep battling and fighting for steelworkers throughout the country and for the future of this vital industry. At this point, I want to pay tribute to others who are fighting so hard to save our steel—the steelworkers who have taken their campaigns to Brussels and around this country, and particularly the Community union and the Daily Mirror newspaper for their fantastic campaigns. We have to keep fighting to ensure that Britain is a country that still makes things; to make sure that our homes, our ships, our railways and our submarines are built with British steel; and to make sure that our industrial engineers have jobs and that our young people have a future where they make something more meaningful than a latte or a Subway sandwich.

Steelmaking would be an industry with a future if only it had a Government that believed in it. Steel is integral to the long-term success of our advanced manufacturing, particularly in relation to the automotive, aerospace and rail sectors and to our sovereign capability in the defence and nuclear industries. Steelmaking can be competitive in this country, and we on Teesside can still play a role. We just need the Government to take action. Teesside still has the potential to be a hub for developing new technologies, and to lead the way in the circular economy—re-engineering waste, recycling and energy recovery. Where once we may have produced carbon, now we can capture and store it or even reuse it. Where once we forged steel, we may yet be able to recycle it with electro-arc furnaces. We just need a Government who believe in us.

That is why I will continue to press the Minister—I hope that she will, in turn, press Innovate UK and, ahead of the Budget, the Chancellor—for the establishment of a materials catapult for research and innovation on Teesside, focusing on the early stage of metals development.

[Jim McMahon]

Does my hon. Friend share my concern that the Chancellor seems to spend a disproportionate amount of time speaking to the Chinese about investment to fund the northern powerhouse investment pitch book—of course, to appeal to parts of the UK that other potential Conservative leadership candidates cannot possibly reach—than supporting our own industry? Will she join me in warning Conservative Members that if our industry dies, Britain dies too?

[Anna Turley]

My hon. Friend makes an extremely important point. There is no greater testament to the lack of progress of the northern powerhouse so far than the devastating loss of steelmaking on Teesside. If the northern powerhouse means anything at all, it means jobs, industry and growth on Teesside, and on that count the Government have failed.

With the materials catapult for Teesside—the existing research and development hub, which is the materials processing industry in my constituency—the Government have the perfect opportunity to put right some of their wrongs and to help some kind of steel phoenix to rise from the ashes in Teesside. Teesside can build on its industrial strength and once more play a vital role in driving the UK’s industrial and high-tech economy of the future.

But we need a Government that will support us, a Government that will commit to an industrial strategy and a Government that, dare I say it, will invest. What we do not need are a Government that fail to play their role on the global stage, but that is what we have seen. The Chancellor has been out in China, and I can only imagine how grateful it is to him that his Government have actively blocked our European colleagues’ efforts to increase tariffs on Chinese steel in the EU by scrapping the lesser duty rule. I can only imagine how grateful it is to him that his Government are such cheerleaders for China in seeking market economy status, which would give the green light to Chinese steel flooding in. President Obama has pledged aggressive action through the trade Bill in Congress, and the US recently imposed duties of 236% on a particular grade of Chinese steel.

I, for one, am fed up with the Government and Government Members pretending that membership of the EU is the reason they cannot act. Instead, I want them to work with our European partners to impose tariffs and tackle dumping. I am frankly embarrassed that it is the UK that is leading a small group of nations in opposing higher tariffs on China because of the Tories’ ideological obsession with a market economy that sees jobs, communities and entire industries as a price worth paying for their kind of laissez-faire, unfettered global market.