Steel Industry
Lee Anderson Excerpts(1 month, 1 week ago)
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Martin Vickers (Brigg and Immingham) (Con)
It is a pleasure to see you in the Chair, Mrs Harris. I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing this timely debate.
Part of the British steel site at Scunthorpe falls within my Brigg and Immingham constituency, so needless to say I take a keen interest in its future. The site is known across the country and further afield for the steel it produces, which is top-quality virgin steel made from raw materials. This method of production results in products used for rail tracks and tyre wire, all the way to cruise ships and the Shard. British steel can be found all over the world. The steelworkers who make this world-class product are understandably proud of the skills they possess.
There is widespread, cross-party agreement that steel is incredibly important for everything we do, from defence to growth, which the hon. Member for Newport East (Jessica Morden) mentioned. If anything can be defined as a core industry—one of genuine strategic importance—it must be steel.
Workers and their families in my constituency and across northern Lincolnshire are incredibly concerned. They have heard rumours and seen press reports in recent weeks that suggest an early end to the imports of coke, the imminent closure of blast furnaces and escalating plans to import steel from the other side of the world to replace the products they make. Understandably, they want to know once and for all whether the rumours are true. They want certainty on whether the plan is to keep the blast furnaces running at least until electric arc furnaces are fully operational—does that still stand?
Prior to the election, Labour candidates stood on a platform of support for the UK steel industry, and billions of pounds were pledged. My constituents have not forgotten what they were told. They want to know where those billions are going and they want to see them spent in Scunthorpe. Will the Minister level with workers at the Scunthorpe site and set out exactly what this Government’s intentions are? Do they want to keep a domestic steel industry, like many countries around the world, or do they not?
The absolute least that the workforce at Scunthorpe deserve is for the Government to be completely frank with them on this issue. Do the Government value the work of steelmakers in Scunthorpe? Do they value the strategic capability of our nation to make our own steel? Do they want to keep domestic steel production for use in infrastructure and defence? How and when are they going secure that? If they cannot answer yes to those questions, can they explain what is so exceptional about the UK that means we cannot aspire to maintain a steel industry? The reality is that maintaining a steel industry will always demand support from the public purse. Without a steel industry, we are in effect admitting that we no longer aspire to be a major manufacturing nation and accepting that we do not value the defence industry.
In discussions on steel there are those who like to criticise the efforts of the previous Government. Although I do not want to spend the short time I have on political point scoring, I do think it is worth setting out some of the realities. The Conservative Government extended trade tariffs on steel products twice in the last Parliament; they did this having listened to MPs and businesses. It is a fact that they brought forward measures to help energy costs, and that they paid workers’ wages at Scunthorpe for many months to maintain jobs, skills and the site itself during the sale of the business five years ago. These were tangible, proactive decisions made by a Government who understood the importance of steel to our nation.
The former Member for Scunthorpe, Holly Mumby-Croft, mentioned steel over 200 times in questions and debates during her time in the House. I recognise that the current hon. Member for Scunthorpe (Sir Nicholas Dakin) is a Minister, meaning, I presume, that he supports the Government’s policies in relation to the steel industry. If his mailbag is similar to mine, he will know the scale of anxiety across the whole area. Just last week he was calling for a deal at Scunthorpe similar to the one in south Wales, where thousands of workers are set to lose their jobs. I want to see a policy that supports jobs, produces top-quality steel and supports the whole supply chain, which Scunthorpe relies on.
Under the last Labour Government, steel production and jobs halved in the UK. Will the Minister reassure workers at the Scunthorpe site that this Labour Government do not intend to repeat that legacy? I understand that the Minister is involved in current negotiations and will not be able to share all the detail the discussions. If that is the case, can she at least give the workers some clarity on when she expects there to be an announcement on the future of the site? Will she also reassure residents that she is working with North Lincolnshire council’s leader Rob Waltham, who proactively travelled to China a few weeks ago to meet the owners in person? He is taking a front-and-centre role in putting together a masterplan for the site to ensure that jobs and opportunities are brought to the area. He must be fully supported by the Government in that work; will the Minister confirm that that support will be offered?
I am conscious that there are those who will challenge the continuation of blast furnace steelmaking on environmental grounds, but it is quite clear that ending the production of virgin steel in the UK, and then importing virgin steel from abroad, would simply be offshoring our own emissions and adding the emissions involved in the transport of the steel to the UK. We should certainly not consider patting ourselves on the back for making environmental improvements if the Government’s plan is simply to allow the same or worse levels of emissions to be created elsewhere and for the steel then to be brought to the UK on diesel ships.
Lee Anderson (Ashfield) (Reform)
The hon. Member is making a great speech and makes a great point. Does he agree that if we are going to go down this road of net zero madness and make our steel more expensive, we should ban steel and steel products from other countries that are made in blast furnaces?
Martin Vickers
There would certainly be a case for the point the hon. Member makes. I gently point out that net zero is actually crucial to the economy of northern Lincolnshire, which I represent—I am thinking of the Humber Zero project and similar schemes.
I think you are urging me to come to a conclusion, Mrs Harris, so I will miss the next two or three pages out. I will say that whatever deal is reached now is in this Government’s hands. This an industry that, if lost, will be lost forever. I call on the Minister to redouble her efforts to secure the future of steelmaking in Scunthorpe and throughout the country. It is hard to exaggerate how crucial this is to Scunthorpe, to northern Lincolnshire and to the UK as a whole. We must bring this situation to a conclusion speedily to avoid the anxiety that workers are currently experiencing.
Chris McDonald (Stockton North) (Lab)
It is, as always, a pleasure to serve under your chairmanship, Mrs Harris, and I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing the debate. As many hon. Members will know, I have a background in the steel industry, so, rather than recite all of my interests, I simply refer people to my entry in the Register of Members’ Financial Interests.
I listened very carefully to the speech from the hon. Member for Boston and Skegness. There were a few points of difference, but, actually, there was much on which I agreed, so I look forward to him and his colleagues coming forward and supporting the Government’s steel strategy in due course.
Turning to the position in which we find ourselves in the steel industry, the Government have an unenviable task as a result of the legacy that we were left by the previous Government. I listened when the hon. Member for Brigg and Immingham (Martin Vickers) talked about the changes to tariffs made by the previous Government. They did make those changes, but they stuck rigidly to a suite of policies that denied the possibility of private sector capital investment coming into the UK’s steel industry by making it unviable. I know that well from the international investors I worked with in the industry. They were very keen to invest in the UK, but we could never get an appropriate rate of return as a direct result of policies pursued by that Government.
The Conservative Government knew that well; they knew it when the Redcar blast furnace closed in 2015 and when they stood back and let it fail for the want of the purchase of some coal. At the time, it was the most productive and efficient blast furnace in Europe. The hon. Member for Brigg and Immingham mentioned Scunthorpe; prior to 2020, the Conservative Government poured £1 billion into Scunthorpe but did not invest any of that money in transitioning to new technology that would have actually created a great future for people in Scunthorpe, and a return for the taxpayer, too. Instead, they sold the plant off cheaply.
Therefore, I do not envy the position of my hon. and right hon. colleagues in the Department for Business and Trade, who are wrestling with this legacy. Essentially, they are putting out the fires of the previous Government, and we will see, when the steel strategy has been brought forward, how we can create a bright future for the industry. We need to do that, and I support the calls to do it, but I think that the challenge is not actually about adherence to net zero; it is about adherence to a different ideology, which has been to assume that the steel industry operates in a free market and that we can treat it as such. It does not. Other countries around the world support their steel industries, so we need to create a level playing field for investment in our steel industry, too. If we do that then we can attract billions of pounds of private sector investment into our industry, as countries such as Austria, Sweden, Germany, France and so on do.
Over the past 10 years we have seen the UK steel industry collapse to the same size as Belgium’s. Surely the UK should have the ambition to at least be as good as Belgium and have a steel industry that can serve us as well as the Belgian steel industry serves its country. Of course, we can do that to compete globally and to create the products that we need for our green transition. The previous Government knew that quite well: a report on confidence and capabilities, which I co-authored, can be found on the Government website from 2017. It identified gaps in plate steels for offshore wind, seamless tubes for nuclear power and other areas as well. The previous Government made no effort to fill those gaps because, of course, they turned their back on private sector investment.
It is important that the steel strategy is brought forward in a way that will attract private sector investment and enable us to accelerate the green transition of our steel industry. Here I come to the point of difference with Opposition Members: the green transition is not an ideology, it is an economic imperative. We need to move away from blast furnaces because they are unproductive compared with the latest steel technologies. Steel plants operating electric arc furnaces are five times more productive than those operating blast furnaces.
Chris McDonald
The hon. Member chunters about it, but the most productive steel plant in the world is based in the USA. It is entirely privately funded and produces the same quality of steel as Port Talbot at the same quantity with one fifth of the workforce, because it is automated and it uses electric arc furnaces. If we get energy prices right, we can make that investment here and we can produce those steels too.
The UK is the second largest exporter of scrap in the world. That is a valuable natural resource that we could use in the UK, but we do need primary steelmaking and we need it to use the most efficient technologies. I am afraid, for those people who adhere to blast furnace technology, that that is not the blast furnace. I look forward to my hon. Friend the Minister bringing forward the steel strategy, and to supporting it and debating it further. I look forward to a bright future for steel in the UK.
Lee Anderson (Ashfield) (Reform)
It is a pleasure to serve with you in the Chair, Mrs Harris. I thank my hon. Friend the Member for Boston and Skegness (Richard Tice) for securing the debate, and for making probably the best speech so far of this Parliament—it was absolutely fantastic. Government Members are harping on about the steel strategy. I can assure them that steelworkers will be frightened to death of that strategy, because it will cost jobs and destroy our steel industry and our communities. I fear the steel strategy.
In the 19th century, this great country of ours was the world leader in steel production. Over 40% of the world’s steel was made right here in this country. I do not live a million miles away from Sheffield—15 minutes up the road—and not far away from Scunny. They were great industrial towns that drove our economy and provided hundreds of thousands of jobs, including in the wider community. They built up communities, and it is a shame that the Labour Government seem intent on destroying even more of the few communities that we have left.
Our country was built on coal and steel. Throughout the midlands and the north, we drove the industrial revolution. We used to export steel and coal, and now what are we doing? We have gone backwards. China is making over 1 billion tonnes of steel a year; we are making about 5.6 million tonnes. China, by the way, is a world leader in renewables, yet it is still opening coal-fired power stations to make steel, which it can export all around the world.
If we think about it, we are actually carbon emission nimbys. We are quite happy to import steel and products made from steel that have been made with blast furnaces from 60 or 70 countries around the world, but we say that we cannot do it here. That is hypocrisy of the highest level. I have friends who work in the steel industry and they are seeing a real downturn at the moment —they are struggling. They are struggling to pay the bills and to make their business work. The industry is in terminal decline, I fear.
The collapse of the Port Talbot steelworks means that we are now the only advanced nation in the world that cannot make its own virgin steel. It is absolutely ridiculous. We have Russia at war with Ukraine, and we are living in uncertain times. Over the past few years and during the last Parliament, we saw the problems that we had with energy supply and our dependence on foreign states for it. Now we are doing more of the same with our steel. It is beyond comprehension; it is absolute madness. We are killing off our steel communities just like we did the coalmining communities back in the ’80s—I know because I was there. I saw the impact that it had, and it still has devastating consequences 40 years later. Those communities were killed off and they are still struggling. I live there and I see it day in, day out, yet we are going to get more of the same from this Government.
Look at the coal mine in Cumbria that we want to—and should—open to produce metallurgical coal that will then help in the production of steel, which we could blend and use in blast furnaces in this country. But we seem reluctant to do that. That coal mine would produce millions of tonnes of metallurgical coal and provide 500 to 600 well-paid jobs in an area that needs them, as well as more jobs in the wider community. However, we are quite prepared to import 3 million or 4 million tonnes of coal a year into this country, rather than produce it, use it in this country and hopefully export some as well. It is absolute madness.
My hon. Friend the Member for Boston and Skegness spoke about the high electricity charges that will mean high production costs for making steel. Look at Drax power station in North Yorkshire. The electricity prices coming from there are astronomical. That is a power station that burns wood. It used to burn coal from a coal mine just a few miles down the road, but we had this great idea in this country to import wood from trees chopped down in North America. We stick them on to diesel-guzzling cargo ships, send them over the Atlantic and then set fire to them in a power station in North Yorkshire. It is absolute madness, and it will drive up the price of electricity and subsequently drive up the price of steel production. It is beyond madness.
China is getting it right; not only is it a world leader in renewables but it is making steel from blast furnaces. China is right and we should be copying its so-called steel strategy. It seems to have got it right. I agree with the five-point plan proposed by my hon. Friend the Member for Boston and Skegness but I feel that it will probably fall on deaf ears. The madness will continue. Steelworks will continue to close down and we will continue to lose jobs. We will continue to destroy communities in our great country.
Lee Anderson
Sorry, Mrs Harris. I will wind up now because I am quite angry with the madness of this place that we work in. There are families and communities out there relying on us to save their jobs, and Members opposite sit there with glazed expressions on their faces. Come the next election, people in those communities will boot you all out.