Steel Safeguards

Lindsay Hoyle Excerpts

Wednesday 29th June 2022 Commons Chamber

[The Secretary of State for International Trade (Anne-Marie Trevelyan)]

With permission, Mr Speaker, I will make a statement on the Government’s final decision regarding the UK’s steel safeguards.

A strategic steel industry is of the utmost importance to the UK, especially given the uncertain geopolitical and economic waters that we are all charting. Trade remedies are one of the ways that Government can protect their businesses. Trade remedies tackle issues of dumping, unfair Government subsidies or, as in the case of safeguards, give businesses time to adjust to unforeseen increases in imports.

When we left the EU, the UK rolled over the relevant trade remedies that were already in place. That included safeguards on 19 different categories of steel imported into the UK from the rest of the world. Last year, the Trade Remedies Authority reviewed those measures and recommended keeping the safeguard on 10 categories of steel and removing it on nine. On 30 June 2021, the Government announced that they would extend the safeguard, as recommended by the TRA, on 10 product categories of steel for three years and remove it on four of the remaining nine, but that they would extend the safeguard for one year on five categories of steel to allow further time to review them.

In March this year, we passed legislation to allow the Government to take responsibility for the conduct of transitional reviews and reconsiderations of any transitional review. In March, I called in the reconsideration of the steel safeguards with the new authority. The TRA has since completed additional analysis for my consideration. I have considered its report and findings and have concluded that there would be serious injury, or the threat of serious injury, to UK steel producers if the safeguards on the five additional categories of steel were to be removed at this time.

Given the broader national interest and significance of this strategic UK industry and the global disruptions to energy markets and supply chains that the UK faces, we have concluded that it is in the UK’s economic interest to maintain these safeguards to reduce the risk of material harm if they are not maintained. I am therefore extending the measure on the five steel categories for a further two years until 30 June 2024, alongside the other 10 categories. That means that the safeguard will remain in place on all 15 categories, updated from 1 July to reflect recent trade flows.

The Government wish to make it clear to Parliament that the decision to extend the safeguards on the five product categories departs from our international legal obligations under the relevant World Trade Organisation agreement as it relates to the five product categories. However, from time to time, issues may arise in which the national interest requires action to be taken that may be in tension with normal rules or procedures.

The Government have therefore actively engaged with interested parties—including those outside the UK—on the future of the UK safeguard, and have listened to the concerns raised, including the needs of the many thousands of people employed throughout our downstream steel industry, who play a vital role in the economic life of the UK. Throughout the investigation, downstream users of steel have raised concerns about difficulties in sourcing some steel products in the UK, particularly those classified under category 12. I have listened to those concerns and am acting to protect this vital part of the economy by increasing the tariff rate quota on category 12A to ensure that it better reflects trade flows.

The Government have also decided to suspend the safeguard measure for steel goods coming from Ukraine for the next two years. The Government are clear that we will do everything in our power to support Ukraine’s brave fight against Russia’s unprovoked and illegal invasion and to ensure long-term security, prosperity and the maintenance of the world order from which we all benefit. The Government have already removed all tariffs under the UK-Ukraine free trade agreement to zero to support Ukraine’s economy. This decision means that Ukrainian steel will not be subject to the additional safeguard quotas and duty.

These are unusual times. The aftershocks of the gravest pandemic have combined with the biggest war in Europe since 1945, the spike in energy costs is creating huge stresses on manufacturing, global steel markets are facing persistent overcapacity, and the TRA’s findings provide clear evidence of serious injury or the threat of serious injury to our UK producers. The Government have a duty to use our democratic mandate to the greatest possible effect to protect the interests of the British people and provide leadership in these challenging times. On balance, we have therefore decided that it is in the vital public interest that the Government act to protect the steel sector, which is why we have taken these steps.

We believe that our approach is in the public interest. The decision has been taken collectively and with reference to the ministerial code, noting the conflict that I have outlined. It has been a finely balanced decision. Steel is a vital industry for the UK and is in constant use in our everyday lives, but the global position for steel production is challenging. The use of unfair subsidies contributes to global overcapacity, putting domestic industries at risk around the world, so the measures that I am announcing today will further support our steel industry and those who work in it. They come on the back of the Government’s having secured an expansive removal of section 232 tariffs on imports of UK steel and aluminium products into the USA, which came into effect earlier this month. The tariff-free volumes that we have secured mean that UK steel and aluminium exports to the US can return to levels not seen since before 2018.

It is important to remember that safeguards are a temporary, short-term measure. We will continue to work with international partners, alongside other Departments, to support our domestic steel sector for the long term. I hope that the House will support the Government’s stance in defending our strategically important steel sector. I commend this statement to the House.

[Mr Speaker]

I call the shadow Secretary of State.

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[Mr Speaker]

We now come to the Scottish National party spokesperson, Marion Fellows.

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

Scotland’s whisky producers have already suffered significantly from Trump-era tariffs of 25% and the current 100% tariff imposed by the Indian Government. The prospect of retaliatory tariffs from India and South Korea is alarming, especially when the Asia-Pacific makes up a quarter of Scotland’s whisky export markets. What is the Secretary of State doing to mitigate the likelihood of retaliatory tariffs that will harm Scotland’s whisky industry?

I am not going to repeat the question asked of the Deputy Prime Minister at PMQs today, but could the reason that the Secretary of State is sitting here be that she has managed to avoid scrutiny in the International Trade Committee? The House has known for weeks that the deadline for renewing steel safeguards is tomorrow. Why have the Government waited until the dying hours of this timeline before coming to the House with a decision? This does not paint a picture of a long-term organisation and strategy that is working well within the Department for International Trade. In the light of this move, and of the prospect of retaliatory tariffs from those countries I have already mentioned, the Government must now move fast to ensure that the UK can improve the level of steel exports to the EU to make up for this. Is the Department for International Trade formulating a plan to increase steel exports to EU markets? Finally, can I ask the Secretary of State if she is going to speak to the Secretary of State for Business, Energy and Industrial Strategy and look at the price of making steel in this country? That issue has been going on as long as I have been here—seven years—and even before that.

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[Anne-Marie Trevelyan]

My hon. Friend has been championing her steelworks, and we have worked closely to understand the support needed. There are already a number of examples of supports for the sector. Since 2013, more than £600 million of relief has been provided to the steel industry to help with high electricity costs. The £315 million industrial energy transformation fund is also available, and the £1 billion net zero innovation portfolio is also a really important part of the work that we are going to do. I absolutely hear my hon. Friend and I will continue to work with colleagues across Government, especially the Secretary of State for Business, Energy and Industrial Strategy, to support the steel industry, to transform it and to take on the challenges of clean steel, which is part of our net zero challenge.

[Mr Speaker]

We now come to the Chair of the Select Committee, Angus Brendan MacNeil.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The Secretary of State will of course know of the cross-party fury of my Committee as regards the constant run-around, with this morning being the tin lid. She also knows that I know that she knew she would be making this statement at least a week ago, which further underlines our fury, but I will leave that there. The UK has no known trade strategy, and it cannot export the famous prawn sandwich to any country in the world without the same, or nearly the same, weight of bureaucratic paperwork going with the said sandwich. Today we are here with the next move on steel tariffs, but the only manufactured good not seeing any tariff removal in the Australian free trade agreement on imports and exports between the UK and Australia is UK steel. Why is that? Did the Government drop the ball or is it because they have no strategy to know what they are doing from one day to the next?