Protecting Britain’s Steel Industry

Jonathan Edwards Excerpts

Monday 21st June 2021 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I beg to move,

That this House believes the British steel industry, and the livelihoods and communities it supports, should not be undermined by unfair competition from overseas; regrets that the Trade Remedies Authority has not accounted for the interconnectedness of the British steel industry, nor the impact of safeguard tariffs being maintained in the US and EU, when recommending the abolition of nine of the 19 existing safeguards on steel products; accordingly requires the Government to take urgent action by legislating to allow Ministers to reject the Trade Remedies Authority’s recommendation and temporarily extend the current safeguards; and orders that, at the sitting on Monday 28 June, Standing Order No. 14(1) shall not apply, and that precedence at that sitting shall be given instead to any Business of the House motion in the name of the Leader of the Opposition which may be moved at the commencement of public business that day to make provision for urgent legislative action to protect the vital interests of the British steel industry.

The motion before us disagrees with the recommendations of the Trade Remedies Authority to revoke half the current safeguards protecting our nation’s steel industry against potential floods of cheap imports. It requires the Government to bring forward emergency legislation, allowing them to reject those recommendations and extend all the current safeguards before they expire on 30 June. Finally, it makes provision for the Leader of the Opposition to enable the emergency legislation to be considered next Monday if the Government fail to do so themselves.

It is a pleasure to open this debate. It is a testament to the urgency and importance of the issues before us that so many Members have registered to speak. For that reason, I will not be taking many interventions. I believe that there are 24 Labour Back Benchers alone who want to contribute.

We all recognise that the livelihoods and futures of steel communities across our country will be directly affected by the decisions taken in Westminster this week, but it is the motion before us tonight that creates the possibility that those decisions will be the right ones. That is a heavy responsibility on our shoulders and it is therefore incumbent on us all to treat this debate with the seriousness that it deserves. That is why it is a source of regret that the one person whose decisions will matter above all in Westminster this week—the Secretary of State for International Trade—has chosen not to be here this evening.

After all, it is the Secretary of State’s Trade Remedies Authority—appointed, empowered and inspired by her—that has made the misguided recommendations that have led to this crisis. It is her powers in relation to those recommendations and her freedom to take other issues into account which are the subject of the motion before us today. Most fundamentally of all, it is her general approach to trade policy and her specific attitude towards the future of the steel industry in Britain that is crucial in determining the final decision that is taken on the retention of these safeguards.

If it were me standing in the Secretary of State’s position, I would want to be here this evening to listen to what the representatives of Britain’s steel communities have to say, particularly as some of those representatives are sitting on her own Back Benches. In her absence, I am going to use my opening remarks to look through each of the three issues I mentioned in turn—first, the role of the Trade Remedies Authority; secondly, the powers of the Secretary of State; and, thirdly, the decisions she now has to take—and try to develop a consensus in this House not just in support of this vital motion, but on how the Secretary of State should approach the crucial days ahead.

Let me start with the role of the Trade Remedies Authority and the reason for its flawed recommendations. There is nothing worse, in life or politics, than people being wise after the event, but in respect of the Trade Remedies Authority it is very much a case of predictions coming to pass. Four years ago, my hon. Friends the Members for Brent North (Barry Gardiner) and for Sefton Central (Bill Esterson) warned the Government consistently during the first attempted passage of the Trade Bill that their vision for the new TRA was misguided. Exactly 13 months ago, when the Trade Bill returned for a second time, I stood at this Dispatch Box and followed their previous lead, describing the TRA as

“a vital body with a vital task”

but one that was not representative of the business and workers that it was being set up to defend. “No wonder”, I said 13 months ago,

“there are such concerns and suspicions that the Government’s true agenda for the TRA is not to defend Britain against underpriced imports, but somehow to balance the damage they do to domestic producers against the perceived benefits for domestic consumers.”

I said back then:

“That is not the job of the trade remedies authority.”—[Official Report, 20 May 2020; Vol. 676, c. 616.]

I stand by that statement, even more today now that we have seen this new body in action. If we were in any doubt about the misguided sense of mission that is driving the TRA, we had all the confirmation that we needed last week from the new chair and the new chief executive, who were personally selected by the Secretary of State from the senior ranks of the Department for International Trade. In their joint interview with the Financial Times, they explained that, under their leadership, the TRA would always seek to set the lowest safeguards possible, deliberately lower than any EU equivalent, and that this approach would be quite distinct from countries

“which impose swingeing tariffs to protect particular industries.”

They boasted that the TRA had already scrapped more than 50 of the safeguard tariffs carried over from the European Union, and that they intended to consider only around four cases per year where new safeguards might be required, which is a quarter of the amount being pursued each year by Brussels. They concluded that the TRA was

“suited to a buccaneering global Britain”

that would favour free trade over the protection of domestic industries. If anyone were wondering how the TRA can possibly have come to the conclusions that it has when it comes to maintaining Britain’s steel safeguards, the answer is that the men in charge are simply doing what they were appointed to do by the Secretary of State.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am grateful to the right hon. Lady for taking my intervention and for the point that she is making; I agree fully with what she is saying. Does she agree that it is the complete opposite of taking back control that the Secretary of State cannot even amend the recommendations of this authority and that, basically, it is faceless bureaucrats who are determining Government policy?

[Emily Thornberry]

The hon. Gentleman is quite right, and I will be developing that point in a few minutes.

--- Later in debate ---

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I was eager to take part in this debate, as steel is a subject close to my heart. I have a steel plant in my constituency: Dalzell Steelworks in Motherwell, which was saved by the Scottish Government in 2016 when it was sold on by Tata Steel. At that time, I was a member of two steel taskforces, one organised and led by the UK Conservative Government, and the second by the SNP Scottish Government. The UK steel taskforce talked a lot about the importance of steel and what it would like to do to help the industry. Despite that, Redcar steelworks and other locations closed, and approximately 20,000 steel jobs have been lost over the years.

We were told it was the fault of the EU, and there was nothing we could do about the high cost of energy or to stop the imports of cheap steel that were so dangerous to our industry in the UK. Well, here we are in 2021, and what has happened? A recent report from UK Steel shows the significant electricity price disparity the UK steel sector still faces compared with its European counterparts, paying an extra £54 million in energy costs compared with German steelmakers. Over the past five years, the price disparity has cost the sector £254 million, or 130% of annual capital investment.

The report, “Closing the Gap”, shows the huge structural barrier facing the UK steel sector as it faces the core challenges of adapting to a trading environment outside the EU and trying to recover in the aftermath of the pandemic, and embarks on the major challenge of decarbonisation. The report makes a powerful argument for the UK Government to put forward a bold programme of support for the sector, to level the playing field. Consistently higher UK electricity prices increase production costs, reduce available capital and deter inward investment, severely reducing the sector’s ability to invest. Gareth Stace, UK Steel’s director, said:

“Our new report plainly demonstrates UK steelmakers face systemic disadvantages in higher electricity prices than our competitors… Electricity is one of the biggest costs for the steel industry, it undermines our competitiveness and it damages our ability to invest… And the issue is becoming even more urgent with the growing need to rapidly decarbonise”.

UK Steel says the UK Government need to be “bold and decisive”. It would be hard to describe this Government as such in relation to steel.

Scotland did not vote for Brexit, yet the Tories are using it to remove vital protections from our steel industry. At the end of last year, the UK transitioned the EU’s steel safeguards, retaining vital protection against trade diversion and import surges for 19 steel products produced in the UK. Over the course of the past six months, as we have heard, the Trade Remedies Investigations Directorate has been reviewing the measures to see whether they should be extended. Now, the preliminary decision by the Department for International Trade is to remove a large number of products from so-called import safeguards designed to protect domestic producers from a flood of cheap imports. According to UK steel, this needs to be urgently rethought. Under Tory plans, the Trade Remedies Investigations Directorate —an arm’s length body of the Department for International Trade—recommended extending the measures on 10 categories of imports for three years from next month and suggested that measures on nine categories be revoked. The British steel industry has hit out at these plans—these are the folk who make steel, Minister—describing them as a “hammer blow” that risks damaging the sector long term. It said:

“The UK will become a magnet for huge volumes of steel imports, it is beyond worrying to consider the damage this could do to the UK steel sector and its long-term viability”.

Alasdair McDiarmid, operations director of the steelworkers’ union Community said:

“This is the first test of the government’s commitment to our steel industry post-Brexit and they’re failing it”.

UK Steel said that the removal of protections will have an adverse impact on the manufacture of steel sections across the country. It added that the measures were designed to protect the

“viability of an entire industry, not individual production lines”.

[Jonathan Edwards]

Once again, the hon. Lady is making a fantastic speech in defence of the steel industry. The key point seems to be that the US and the EU are maintaining their safeguards. We know that there is a massive oversupply of steel being produced around the world; I think the figure in 2019 was 514 million tonnes. If the British state removes our safeguards, it does not take a brain surgeon to work out where some of that steel is going to be arriving.