Madeleine Moon
Main Page: Madeleine Moon (Labour - Bridgend)UK Steel Industry
Madeleine Moon Excerpts(8 years, 4 months ago)
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Mrs Madeleine Moon (Bridgend) (Lab)
We have had an amazing debate. I thank my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing it, and for the leadership he has shown to Members from south Wales who are deeply concerned about what is happening.
The Select Committee on Business, Innovation and Skills has produced one of the best reports on the future of the UK steel industry and the Government’s response to the crisis that we could have asked for. It sets out everything clearly and succinctly. What I do not understand is why the Government are not grabbing it with both hands and running with it, saying, “Here’s the template. We know what to do; let’s get on with it.”
We have also had wonderful support from the UK steel industry in its briefings. Dear God—if any of us needed a clear example of what is happening in the world of steel, the briefings have laid it out succinctly. The charts are brilliant and demonstrate the decline that has been coming over the years, growing and growing and being ignored, and the crisis that is now upon us.
Perhaps one night I too will be able to go for a pint with my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and find out the totally fascinating character that I am told he is—a raconteur on the issue of blast furnaces. I look forward to that drink and conversation.
My constituency of Bridgend is right next door to Aberavon. One of my communities, which used to be a large council estate, in North Cornelly, was built to house workers for the newly established steelworks of Port Talbot, when it was expanding. I live in Porthcawl, and the town is full of people who used to work in the steel industry and who chose to retire there having worked in that industry. I was in a meeting on Friday with the First Minister, talking about how we would be dealing with the crisis—that is what it is. I hope the Minister takes on board what a crisis it is for ordinary families across south Wales.
Among the people who came to see me was a lady called Jen Smith. She has emailed me and talked to me about the issue, and about her fears. Her son works at the steel company. He has just bought his first house. She is worried about what will happen to his family and home if he loses his job. The family had plans to work on the house and develop it. They had a plan for perhaps a new kitchen or bathroom, and for decoration. All the small companies that my hon. Friend the Member for Ogmore (Huw Irranca-Davies) mentioned will lose that work; so it is not just the steel industry—everyone else in the south Wales business community will be devastated by the job losses. There is an impact on people’s sense of security and worth. Their trust that work will be there for them in future has been undermined. That is the huge worry that we are here to talk about: not just the steelworks but the confidence of people in Britain that manufacturing jobs are safe jobs. That is a huge and frightening problem.
The excellent report from the Business, Innovation and Skills Committee, which I cannot commend enough, talks about steel being supplied to
“multiple strategic manufacturing and construction supply chains”.
I spend a lot of my time talking about defence and security issues, and in that context we often talk about the importance of sovereign capability: the things that Britain needs to maintain, to be safe and secure—things that we cannot let go. I have to ask Members whether they can imagine Britain in 1913 and 1914 saying, “We can let the steel industry go. We can allow our capability to manufacture our own defence capability slip.” No, they cannot imagine that.
Stephen Doughty
My hon. Friend makes an incredibly important point about national security capability. Celsa in my constituency produces rebar, which is used in reinforcing steel, and that is often used to reinforce important buildings. I know that Celsa tests it rigidly, and knows exactly what goes into it. There is regular testing—I have seen the steel being tested. How will we have those assurances if we import stuff from China, where there are not the same safeguards, particularly in relation to defence and security projects?
Mrs Moon
I absolutely agree with my hon. Friend, who has done valuable work fighting for his constituents, to make sure our cherished and valued capabilities stay within our national infrastructure. I cannot imagine how we would have fought the second world war if we had not had our steel industry and been able to manufacture the steel that kept our fleets and troops going, and our tanks rolling across the countryside.
We must stop thinking of the issue in terms of China and its need to dump its excess supply of steel on the European market. I understand what China is doing. It faces its own economic crisis and needs to keep its workforce going, because it does not want instability.
Stephen Kinnock
We understand, of course, that the Chinese economy needs to grow, and China has every right to do that, but does my hon. Friend agree that potentially there is an agenda about dumping? That agenda is to dump the steel, drag the price down, kill the British steel industry and, as soon as that has happened, move in and put the prices up: profits go back up and we are nowhere to be found.
Mrs Moon
My hon. Friend has stolen my best line. That is exactly where I was going in my speech. The dumping is helping China in the short term to keep a workforce going, but let us be honest: it has a long-term agenda of destabilising not only the British but the European steel industry. We are our own worst enemies, because we are allowing that to happen. It is time we were realistic and said no. There are opportunities that we can take, and there is a simple one: we can say no to the Chinese market economy status. We can say that; we can do that; we can fight for that. I do not understand why we are not doing it.
Huw Irranca-Davies
I referred in my speech to the Washington-based Economic Policy Institute, which looked at the scale on which jobs would be lost if we gave pure unilateral market economy status to the Chinese. The work also showed that the impact could be as much as 1% or 2% of GDP across the European Union. If that is not cause for Ministers to go out and argue and play hardball, what is? It is a question of jobs and economic growth—all of that. There is a time when we must stand up. If we agree that the issue is strategically important, we fight for it tooth and nail.
Mrs Moon
What is inspiring today is the fact that we are all here doing that—fighting tooth and nail. I know the Minister. We have worked together on defence matters and have a history of sparring across the Chamber, but we also have a history of working together constructively. I hope we are able to carry that on, because there is an unfairness of status in this situation. China can ignore climate change in a way we cannot. It is not bound by the high cost of energy, because it subsidises its companies in the use of energy. It has quadrupled its output of steel since 2000, so its plan has been quite a long-term one. We must deal with the market distortion and think about how we protect our own industries.
The wonderful Business, Innovation and Skills Committee report points out that over the past four decades production in the UK has fallen behind production in France, Spain, Italy and Germany, and that, in those countries, support within the European rules has protected their critical steelmaking skills and industries, helping them to withstand some of the global competition much more efficiently and effectively than we have in the UK. It is important that we look at the five asks. Those are not the Labour party’s five asks. They are the steel industry’s five asks. The issue is not a party political one. The steel industry says, “Give us these, and we have the opportunity to move forward.”
On business rates I want to raise one issue. I was deeply concerned about this at the statement on Monday. My hon. Friend the Member for Blaenau Gwent (Nick Smith) and I both raised the issue of assistance in terms of business rates. The Minister replied, saying, in relation to the Welsh Assembly: “They wanted that”—business rates—
“as part of their devolution settlement, of course. There is a good argument that if one gets what one asks for, one has to take the consequences.”—[Official Report, 18 January 2016; Vol. 604, c. 1144.]
Well, the Welsh Assembly cannot make the changes to business rates that will bring the exemption for plant, equipment and machinery, which is what we are asking for, and therefore we need the Minister to address that issue and take it forward constructively.
Mrs Moon
Because the legislation is primary legislation that will come out of the Westminster Government.
I do not want to take up additional time, Mr Rosindell, but if we can meet the five asks, we can save an industry that we all know we need, not only for this country’s economic future and economic stability but for its strategic defence and security.
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.
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.