Tata Steel

Lord Stevenson of Balmacara Excerpts

Thursday 16th October 2014 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the Minister for repeating the Statement made in the other place. I am sure that everyone in the country will appreciate the uncertainty and anxiety that yesterday’s announcement by Tata Steel will have caused for thousands of steel-workers, their families, affected communities and firms in the metals supply chain. I hope that the Minister will join me in expressing that to those people.

As the noble Baroness said, steel is a vital foundation for much of the UK’s manufacturing supply chains. The UK is a leading global player in sectors such as aerospace, automotives, construction and energy infrastructure, and the production of steel here in the UK underpins much of that competitiveness. However, we now know that Britain’s largest steel manufacturer is preparing to sell half of its capacity. What contingencies will the Government put in place to maintain and enhance the skills and capability of that industry to ensure that they are not lost to the UK?

Secondly, what commitments have the Government obtained from the potential new owner regarding the maintenance of existing sites and industrial capability, the safeguarding of jobs and additional investment? How binding are these commitments likely to be, or are we in danger of repeating the mistakes we encountered during the Cadbury takeover? Is the Minister concerned that we have learned that the unions have not been involved in any consultation or communication with the potential new owners?

Thirdly, this matter affects England and Scotland. What discussions have the Government had with their counterparts in Scotland to ensure a co-ordinated and united response for the good of the steel industry across the United Kingdom?

Finally, do the Government have a plan for what happens if negotiations for the sale break down? It is clear that Tata wishes to divest itself of its Long Products division, so what active role are the Government taking about maintaining that capacity in the United Kingdom? Should an effective industrial strategy not consider and mitigate these risks?

[Baroness Neville-Rolfe]

My Lords, we share the concern about the uncertainty for the communities, as I made clear in the Statement. Fortunately, we have done a great deal of work on skills, including providing a stronger steel industry, which makes the prospects of a good outcome much more likely. I understand that the unions were warned about the announcement, but clearly there were constraints relating to inside information. I emphasise that no closures have been announced; this is the beginning of a possible sale. I reassure the noble Lord that we are actively engaging in discussions with both the Tata Group, the existing owner of the asset, and the Klesch Group, with which we will discuss its intentions. The Scottish angle will be attended to and is very much in our minds.