Queen’s Speech

Lord Morris of Aberavon Excerpts

Wednesday 25th May 2016 Lords Chamber

[Lord Morris of Aberavon (Lab)]

My Lords, as a presumptuous new MP, I commented in the Queens’s Speech debate in 1959 on the need for a bypass to serve the area of Port Talbot steel and the south Wales economy generally. I return in tonight’s debate to a greater issue: the whole future of the steel industry in Port Talbot, which is a vital part of the economy in south Wales. I am glad that the Business Secretary has found time to be present in Mumbai today, when fateful decisions may be taken, with whatever support Her Majesty’s Government are able to give. That is in contrast with the role of union leaders and my successor but one as MP, Stephen Kinnock, who were aware of the importance of the last board meeting in Mumbai. They are to be congratulated. They observed the first rule of Welsh politics: be there. The Minister’s advisers seemed not to be aware of the speed of the developments revealed, or the Minister, regrettably, put his own diary and convenience first. I welcome very much the change in his priorities, and the presence of Carwyn Jones, the First Minister.

As a junior Minister, I supervised the writing of the White Paper to bring steel into public ownership. The main reason for public ownership was the cyclical nature of the market for steel, with years of plenty followed by years of famine, as in the Bible itself. Stability was essential for British steel production.

The first question for the Government to answer is: do they believe in the need for a British steel industry? Many years ago, believe it or not, this was challenged in the Economist magazine. If we do believe in that need, what should be the basis of decisions to ensure that British steel production continues in its various forms, and who should take them?

Secondly, how have we come to a position where the whole future of steel-making in Port Talbot is under threat? Is it because of Chinese dumping, the extra costs that British steel has to bear for energy, business rating, or some other reason? Has the Commission in Brussels acted too leisurely to meet the challenge of Chinese dumping which has developed over the years, or has there been lack of direction and rigour on the part of the British Government in making representations? How does the action taken in Brussels and here compare with that of the United States, which, we are told, has increased tariffs by more than 500% and doubled those on cold rolled steel from China? How significant is the EU’s 16% provisional tariff? The Business Secretary is reported as saying that it would not be right for the EU to scrap the lesser duty rule. There it is. How do we compare with the States?

I wish the proceedings in Mumbai today well. I hope that we get something significant from them. But the problem of dumping will remain. What Port Talbot needs is a level playing field. Is it true that the Government have offered to pump in hundreds of millions by way of a loan and a 25% stake in the industry to avoid Port Talbot closing before referendum day? I marvel at how the approach of the referendum and the Government’s need not to make enemies now is having such wide repercussions, including, mercifully, the emasculation of the Trade Union Bill.

One question of general significance remains: how do major companies—this is not the only one—amass huge unfunded pension liabilities without inhibition? This particular pension deficit seems to be a stumbling block for buyers. I welcome the reported comments of Community Union that there needs to be swifter and more robust action by the EU. I tried in this House, by way of a Question, to find out when the Government first took action. The replies were unimpressive. I was told:

“The government makes regular representations to the … Commission”.

The pleas of high energy users such as the steel and paper industries were not listened to in the past. How far is a balanced view being taken of a fair energy policy for high energy users, coupled with our obligations to prevent climate change? Surely the danger of destroying whole industries should not be ignored.

Lastly, how far has a business rate for Port Talbot steel militated against its economic survival? I thought the rating for the new harbour, the basis of Port Talbot’s survival, had been fixed years ago. What happened in the intervening years? I hope the Minister will expand on his answers by letter to me, and will place that in the Library.