UK Steel Industry

Kevin Brennan Excerpts

Thursday 21st January 2016 Westminster Hall

[Stephen Kinnock]

I agree entirely. I feel that our Government are not acting as they should because they are driven by a dogmatic, laissez-faire ideology that has nothing to do with standing up for British steel, British industry and the British economy. That laissez-faire ideology will never enable us to act as we should.

[Kevin Brennan (Cardiff West) (Lab)]

It is worse than standing still. Over the past few years, the British Government have led a blocking minority on further reform of trade defence mechanisms. They are still doing so, despite Ministers’ denials in the Chamber. The Minister should explain to the House and the country why they are doing that.

[Stephen Kinnock]

An explanation would be very much in order. My hon. Friend makes a very interesting point about something I will come to shortly: market economy status for China. How is it possible for the Government to justify on the one hand saying, “We are standing up for British steel and British industry,” and on the other being China’s chief cheerleader in Europe and actively agitating for it to have market economy status? I look forward to the Minister’s explanation of that entirely illogical and unjustifiable position.

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[Kevin Brennan (Cardiff West) (Lab)]

Thank you very much, Mr Rosindell. It is not the first time I have been called Kevin Barron, even though that is not my name. On one occasion I was briefly knighted by the Daily Mail online, much to my surprise. I am not Sir Kevin Barron; I am much more shovelry than chivalry.

[Andrew Rosindell (in the Chair)]

Order. I apologise.

[Kevin Brennan]

We are very grateful, despite that slight slip on your part, Mr Rosindell—it was very uncharacteristic—that you are chairing our proceedings today. You are very welcome in this Welsh-majority debate. I know that you were left off the list of English MPs the other night when we had the first vote under the execrable new English votes for English laws arrangements in the House of Commons. I hope you feel you are receiving a warm welcome from your Welsh colleagues, who would like to be on an equal basis with you as MPs. Perhaps we can change that ridiculous rule in the future.

Let us get to the debate. I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock), who made an excellent start in kicking off the debate. He speaks from great knowledge, given the location of the Port Talbot steelworks in his constituency. He described the Government’s approach to this issue as “warm words” and “frozen actions”. He made a powerful case, I thought, on the Government’s failure to act on dumping and on market economy status for China. He challenged the Minister to say how close we were to midnight in terms of the future of the steel industry, and we would very much like to hear her response.

We also had a contribution from my hon. Friend the Member for Scunthorpe (Nic Dakin), who pointed out that the situation facing the industry has got much worse since the steel summit on 16 October. He listed all the jobs lost in the steel industry since then. He speaks with tremendous expertise on the industry, and he should be listened to.

We had a contribution from the hon. Member for Brigg and Goole (Andrew Percy). In making a political speech, he seemed to be criticising politics being carried out in the House of Commons. When he expressed shock, or feigned shock, about politics occurring in this place, he reminded me a bit of Captain Renault in “Casablanca” complaining about gambling at Rick’s establishment. The hon. Gentleman, however, has a close constituency interest in the subject and, when we are not jousting across the Chamber, he works closely and across parties with colleagues in the interests of his local steelworks.

The next speech was a passionate one by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). He will be a great loss to this place when, we hope, he becomes the Assembly Member for Ogmore in the near future. He spoke well about why the Government had not introduced the necessary mitigating measures at the same time as the carbon tax. They should have been introduced at the same time, and he outlined the scale of the consequences if market economy status is awarded to China without any attempt to leverage from the Chinese an end to the dumping of steel in European markets.

My hon. Friend the Member for Newport East (Jessica Morden) sent a note to me, as she did to you, Mr Rosindell, saying that she could not stay for the whole debate. She is the Member of Parliament for the Llanwern steelworks and she, too, spoke passionately. She mentioned the work of the Community trade union and Roy Rickhuss, whom I first worked with many years ago on the Allied Steel and Wire pension problems when I first became a constituency MP. She also mentioned the work being undertaken by the Welsh Government.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made an important point about the small 9% tariff that the European Union appears to be planning in relation to rebar. That is too little and too late. I saw the Minister nodding when the hon. Gentleman made that criticism, so I hope she will tell us what the Government are doing to persuade the Commission that it has not done enough on those short-term measures. At the same time it would be nice to hear about what is really going on with the long-term reform of trade defence mechanisms and what the UK Government’s game is in that. The Minister shakes her head from time to time, but the Government have been involved in organising a blocking minority in the European Union on the long-term reform of trade defence mechanisms. If we are to have a future for our steel industry, that reform will be vital.

We also heard from the excellent Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for Hartlepool (Mr Wright), whose excellent report is available at £10 from good bookshops and Her Majesty’s Stationery Office. [Interruption.] I am sure he will tell us it is also free online. He spoke with tremendous knowledge, expertise and passion about the failure of the UK Government to push for a co-ordinated European Union approach, and about the failure to retain blast furnace capacity at Redcar, which has been lost, as he pointed out, because of the lack of effort by the Government. [Interruption.] From a sedentary position, the Minister suggests that she is considering nationalising the steel industry to achieve these aims.

Nationalisation is not necessary. This is not a choice between inaction and a laissez-faire approach to the steel industry and the full-scale command economy ownership of all of the means of production in the steel industry. It is about an active industrial policy and Ministers using all the levers at their disposal, including their influence and every Government Department, including the Treasury, and using their imaginations in working with industry to bring about the saving of the capacity of this country to produce steel. That is what is at the heart of this debate. There is a question that the Minister will have to answer at some point about the Government’s view on the minimum strategic capacity that they believe they can allow the industry to go no further beyond. However, I will come to that question further into my remarks.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about blast furnaces. If there was a professorship of the blast furnace, he would be the professor. He raised very appropriate questions about what industry is doing. In his remarks, which bear reading and studying, he showed a real vision for the future of the British steel industry that the Minister would do well to listen to.

My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is also my neighbour, who is literally a doughty defender of his constituents, rightly referred to the tragedy at the Celsa plant and the deaths of two of the workers there. He also raised the big question about the strategic level at which the British steel industry should be protected. My hon. Friend the Member for Bridgend (Mrs Moon) spoke well and with clarity and passion, as always, about the human impact of the job losses at Port Talbot, and the hon. Member for Motherwell and Wishaw (Marion Fellows) spoke with sincerity about her constituents and about the impact the changes will have on them. Also, perhaps not purposefully, she showed the importance of the UK for the future of the steel industry, because for us to have a strategic steel industry there has to be a certain level of scale and integration, as my hon. Friend the Member for Middlesbrough South and East Cleveland pointed out.

Now, who have I missed out? [Interruption.] I think only one Conservative spoke and I have referred to him.

Like many people here—anyone from south Wales probably has links to the steel industry—I come from a family whose life chances were pretty much determined by and strongly influenced by the steel industry. My father was part of the group of people who helped to build Llanwern steelworks in 1962. On my birth certificate, his occupation is listed as a platelayer. He was involved in bringing the railway line that was necessary for an integrated steel plant into Llanwern steelworks, and then he stayed there and got employment at the new steelworks for the rest of his working life. Indeed, before I went to university, I had an opportunity to work at Llanwern steelworks for six months, where I worked mainly in the steel plant, but also as a platelayer, which was a rather nice rounded end to that period of my life—as a platelayer, replacing and maintaining railway lines within the steelworks at Llanwern. That is why we hear—I know the Minister understands this—the passion that comes from my hon. Friends and colleagues. They understand how steel underpinned their life chances and the life chances of their constituents and their communities. The availability of well-paid, stable employment in their areas was the foundation of the creation of the life chances of many of my hon. Friends here today.

[Mr Iain Wright]

Will my hon. Friend give way?

[Christina Rees]

Will my hon. Friend give way?

[Kevin Brennan]

I will give way to my hon. Friend the Member for Neath (Christina Rees) first, who I forgot to mention, but who intervened on behalf of her constituents.

[Christina Rees]

I totally agree with my hon. Friend about life chances. My father worked at the site of the Steel Company of Wales. The Abbey went into the Steel Company of Wales, which moved on to Tata. When I was a schoolchild I played hockey at the Steel Company of Wales—it was the centre of the community. As for life chances, it put food on our plates at home. The threat of the closure of Trostre and Port Talbot is more than I can contemplate, given the devastating effect on communities.

[Kevin Brennan]

My hon. Friend is absolutely right. I know that the Minister understands this, but it is important to make it clear why Members feel so passionately about the importance of maintaining the steel industry both as a strategic asset to the country, and as the underpinning foundation of many of the communities we represent.

[Mr Iain Wright]

My hon. Friend is making an incredibly eloquent and moving point about how steel is in his blood, as it is in the blood of other hon. Members. Both my grandfathers were steelworkers in Hartlepool, so this is important for me personally, as well as for my local community. However, can we not fall into the trap of talking about the British steel industry as somehow in the past? It is vital to ensure that we have a vibrant and competitive steel industry for the future to make sure that we remain competitive in the world markets for manufacturing and much of our supply chain.

[Kevin Brennan]

My hon. Friend is absolutely right. One of my central points is that the British steel industry is competitive. I freely admit that the British steel industry of the past often was not competitive, often had poor industrial relations and weak management, and sometimes had, in the distant past, very low productivity. However, over the years, it has become one of the most efficient industries anywhere, with some of the best working relationships between workers and employers, because of their understanding of the common interests that bind them together, and because of the workforce’s desire to ensure that the British steel industry has a future, with them often prepared to make real sacrifices to enable that to happen. That is why we have such a competitive steel industry. The only sense in which it is not competitive is because of the issue raised by many Members today: Chinese dumping of steel at well below what it costs China to produce.

China’s steelmakers, 70% of which are state owned, are not profitable, and, according to our UK Steel briefing, are believed to lose close to $34 per tonne on all crude steel produced in China. In 2015, they produced 441 million tonnes more steel than China itself consumed. China’s 101 biggest steel firms lost $11 billion in the first 10 months of 2015. In 2003, China exported 7.2 million tonnes of steel, which was 5% of the steel trade between the main global regions; by 2015, total export levels from China had exceeded 107 million tonnes.

It is impossible for the highly competitive and efficient British steel industry to compete with a state entity of that size—the country contains one in five of the world’s population—that is determined to use that capacity to kill off its competitors and to destroy the British steel industry. That was what was going on while Ministers were talking to Chinese officials when they were over in the autumn. At the same time as its officials are smiling and talking about future trade deals, China is pursuing a policy of deliberately killing off the British steel industry.

[Mrs Moon]

Does my hon. Friend agree that if we do not successfully beat this back in relation to steel, other industries will follow? It is not just about steel; it is about Britain and Europe saying no and defending our industries.

[Kevin Brennan]

I fear that my hon. Friend may well be right. It is clear that the Chinese state is absorbing the losses to kill off the competition, which is why it is essential that we have a UK Government who understand that and are prepared to take the action necessary to protect the strategic asset that is the UK steel industry.

[Tom Blenkinsop]

It is worth remembering that the Redcar blast furnace was constructed by the Callaghan Government in 1978 and 1979. There was supposed to be a second furnace, but that mysteriously disappeared after the change of Government. The current world market is effectively a free market for China, and it is interesting that the one nation with a state-owned steel industry is dominating the market. That is not a defence of a nationalised steel industry, but it is certainly something that Ministers should pore over when they consider which policies, regulation, instruments of trade defence they should be implementing in the steel market.

[Kevin Brennan]

My hon. Friend is absolutely right. I listened carefully to what the Prime Minister said about market economy status in yesterday’s Prime Minister’s questions. It was clear from his tone, demeanour and words that the Government have already made up their mind that they are going to ease the path to market economy status for China, rather than putting up a real fight for the British steel industry.

[Anna Soubry]

Oh God!

[Kevin Brennan]

We all like the Minister immensely, but although she sighs and she huffs and she puffs, anybody with two eyes and two ears could see and hear what was going on at Prime Minister’s questions yesterday.

[Nic Dakin]

My hon. Friend will have heard the Foreign Secretary say last week that market economy status will be judged through the prism of steel. We need to hold the Government to those words.

[Kevin Brennan]

Indeed. We need to know what is going on regarding market economy status. Let us have some transparency from the Minister. I visited Brussels last week with the shadow Secretary of State, my hon. Friend the Member for Wallasey (Ms Eagle), to talk to officials, including Britain’s European Commissioner, to whom my hon. Friend the Member for Aberavon referred, along with representatives from UKRep, officials from the Commission and Members of the European Parliament. Following that visit, it was absolutely clear to us that the UK Government have the door to Chinese market economy status wide open.

[Stephen Kinnock]

Another important avenue to explore is exactly what deal the Prime Minister did with President Xi Jinping on the China visit.

[Kevin Brennan]

Indeed. I am not sure whether the Minister was party to that deal, but it would be interesting to hear what she knows about it.

As hon. Members have said, the Government must give a much clearer signal about their position on the minimum strategic capacity of the British steel industry.

[Jonathan Edwards]

The hon. Gentleman is making important points, but will he help me out with something? In November last year, at Labour’s eastern regional conference, the leader of the Labour party was calling for direct Government intervention in the steel industry. That is common sense, given the problems in the industry, yet the First Minister of Wales has completely ruled it out. As a Welsh MP, does he support the position of his leader in Westminster or that of the First Minister of Wales?

[Kevin Brennan]

I do not think that anything the hon. Gentleman said is going to solve the dumping problem we are discussing now. We all understand how Plaid Cymru works on these matters. Its only interest is not speaking up for UK steelworkers throughout England, Wales and Scotland, but trying to drive a wedge between people to make its argument for a separate Wales, which incidentally would mean, as I said earlier, along with a separate Scotland, the end of any kind of strategic capacity for steelmaking in this country.

[Jonathan Edwards]

You should be ashamed of yourself.

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[Kevin Brennan]

The hon. Gentleman does not like it up him, unfortunately, but he is going to get it if he tries that tactic on me.

I shall turn to my concluding remarks so that I can leave plenty of time for the Minister to answer the many questions that have been put. As well as answering those questions, will she explain the UK Government’s position—

[Anna Soubry]

With all the time that you have left me?

[Kevin Brennan]

The Minister has 25 minutes. Will she explain the Government’s position on the blocking minority that they have been exercising in the European Union in relation to the longer-term reform of trade defence mechanisms? She has said throughout—certainly many times from a sedentary position—that all five of the asks from the—

[Anna Soubry]

No, I did not. Do not misrepresent me. I said four of the five.

[Kevin Brennan]

Oh, now it is four of the five. The Minister has said that four of the five asks have been completely delivered. I am afraid that that is not the view of UK Steel which, in its briefing for the debate, agrees that there has been some good progress—we can all agree with that—but sets out clearly five actions that must be taken: more action on anti-dumping measures; action on the market economy status issue, which has been emphasised in the debate; bringing business rates for capital-intensive firms in line with their competitors in France and Germany—

[Anna Soubry]

Quite right.

[Kevin Brennan]

The Minister says that, but we need to know when it is going to happen. The final two actions that UK Steel called for were support for much more local content in major construction projects, and direct funding for the sector on research and development and environmental improvements. We need to hear the Government’s position on that.

In order to leave enough time for the Minister, I will finish on this point—

[Jonathan Edwards]

Will the hon. Gentleman give way?

[Kevin Brennan]

No, I will not give way. The hon. Gentleman and I can have a chat later, if he wants.

Will the Minister finally answer the question that she has been asked many times, and that I asked her in the debate in October: what is her and the Government’s view about what represents the minimum capacity for steelmaking in the UK’s strategic interests? If she can answer that question and give us clarity, everybody will be extremely grateful.

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[Anna Soubry]

The hon. Gentleman has put all that on record.

My hon. Friend the Member for Brigg and Goole (Andrew Percy) quite rightly said that some of this should be well above party politics. It is tedious that Opposition Members do not understand that they judge everyone by their own standards; the Government are genuinely not as tribal. Opposition Members—

[Kevin Brennan]

That is a tribal remark in itself.

[Anna Soubry]

Hang on. When Opposition Members, such as the hon. Member for Scunthorpe (Nic Dakin), have said to me, “I need to talk to you about the steelworks,” I have absolutely no problem. If the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who made a good speech, and the hon. Member for Redcar (Anna Turley) want to speak to me, that is no problem. If the hon. Member for Motherwell and Wishaw (Marion Fellows) wanted to speak to me immediately, it would not be a problem. My door is open to everyone, whatever their political party.