Steel: Preserving Sustainable Jobs and Growth in Europe

Marion Fellows Excerpts

Tuesday 7th February 2017 General Committees

[Mr Hurd]

I thank my hon. Friend for his questions. I do not think it is any secret: anyone who has dealt with the EU emerges from that process frustrated about the pace of action. That is perhaps not surprising, because getting agreement between 28 countries is convoluted. That is the reality of it; it is slow. The UK has played an honourable role in putting pressure on the system to improve. I would make a couple of observations in response to his questions. Whether the EU has been slow or not in responding, I am reasonably satisfied that we have made significant progress within that response. I cited the 41 trade defence measures that have been put in place, but more important is the impact of those measures, in terms of reductions of 70% to 90% in the level of dumped products. Slow or not, what has been put in place has clearly had an impact.

There has been some suggestion from Members on the Opposition Benches that the UK has been a drag anchor in the process, but that is not the case. We were in the lead in pointing out that provisional duties on products such as rebar and cold-rolled flat products were too low. We pressed for higher definition on that and got that. Higher duties were put on rebar from China. On 29 July, an increase from 9% to 13% was announced.

My hon. Friend talked about pace. Again, we were instrumental in pressing the Commission to conduct its investigations into cases more rapidly than usual, and there is some evidence of response to that. Driving pace continues to be a challenge for any UK Minister involved with the EU, but let us be clear about the context. There is widespread recognition across the EU, not least by the UK, that the sector has a deep structural problem with overcapacity, and it is no secret where most of the problem comes from. In that context, I doubt the EU scores anywhere near 10 out of 10, but it is certainly not at the lower end of ones and twos. There has been significant progress, and the policies put in place have had an impact.

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

It is a pleasure to serve under your chairmanship, Mr Wilson. I wanted to ask the Prime Minister—[Laughter.] I apologise, but I hope I have woken everyone up by making them laugh. I think we are all rather more tired than normal today. The Prime Minister has said that we will be outside the EU customs union and the single market. In that scenario, we will not be part of anything that the EU is doing to deter Chinese dumping of steel in the UK. Can the Minister confirm that when the UK leaves the EU, the UK tariff on Chinese steel will be consistent with the strong common tariffs that EU states are trying to set at the moment? Is he aware of any World Trade Organisation rules or regulations on tariffs that may restrict the UK’s ability to set a tariff on Chinese steel imports to deter dumping?

[Mr Hurd]

I thank the hon. Lady for that question, although it contained an announcement that might have career-limiting implications for me. I think we call it an alternative fact. She represents a constituency in which a mothballed plant is coming back to life, and I hope she welcomes that. I congratulate Liberty and all the team involved. It is a good, positive sign for the UK steel sector.

In response to the hon. Lady’s main point, which is a fundamental one, I frustratingly cannot give her the exact clarity and visibility that she and colleagues want, because we are about to embark on a complex negotiation, in parallel with which we have to work through a whole set of deep and complex policy responses to the implications of UK independence from the EU, which includes duties and future participation in the emissions trading scheme.

I come back to the point that I made to the hon. Member for Middlesbrough South and East Cleveland: we are acutely aware that we have to do everything we can in this country to maintain the competitiveness of the key industries on which many communities rely for income, jobs and skills. That has arguably never been more important as we take this big step of independence from the EU. That is our great challenge and responsibility as a Government.

[Marion Fellows]

I thank the Minister for his response, which did not give me the answers I was seeking, as he indicated. I thank him for mentioning the plant in my constituency, which was saved by a work party set up by the Scottish Government. It worked very hard in conjunction with the UK Government, and we managed to save the steel plant, for which I am eternally gratefully. It is important that we know that UK steel will be protected if and when we leave the EU.

Another issue that really affected the plant in my constituency was high electricity and power charges. The devaluation of sterling has had a big impact. We are tied to dollar prices, which makes things very difficult. Has the Minister made any assessment of the effect of that on energy costs for businesses? What support might the UK Government provide after we exit the EU?

[Mr Hurd]

I thank the hon. Lady for that question and, through her, congratulate everyone involved in what sounds like a very positive process and outcome in relation to the plate rolling mill in her constituency.

Energy costs have been front and centre of every conversation that I have had about the steel sector with leading management in the sector, trade unions and Members of Parliament who are passionate advocates of the steel industry in their constituencies. We recognise two things very clearly. First, I mentioned the £133 million, but even though we have gone a huge way to compensate the industry for policy costs, we still have not reached a point where we have the kind of competitive, level playing field that the sector and others—not just steel—are asking for, quite reasonably in the circumstances. We take that very seriously. If there were an easy answer, we would have pulled the lever, but we have removed something like 85% of the policy costs. We are now in a residual situation where the premium industrial electricity price in the UK reflects wholesale energy prices, network costs and a bit of policy cost. It is not a straightforward situation. We have said—I am sure that this is right—that we need to move on from a sticking plaster-type situation and look at the issue strategically and long term to ensure that our heavy, energy-intensive industry can compete on a level playing field.

As there is not a simple, straightforward solution that I can announce today, we announced in the industrial strategy—in case the hon. Lady missed it—that we are committed to publishing a road map later this year showing how we intend to reduce and control business energy costs. An external review looking at the opportunities to reduce the costs of decarbonisation in the power sector and heavy industry will feed into that road map. There is a very serious piece of work under way that I know from the conversations I have had with representatives of the steel sector is welcome. We are absolutely serious about it; we just need a bit of time to work through it properly, because there is not a silver bullet that we can fire today that will address the issue in a sufficiently strategic and long-term way. We take the issue very seriously, and I hope that the process we have set out reflects that.

[Marion Fellows]

Finally, will the Minister commit to contacting the Scottish Government, Skills Development Scotland and all the agencies that were involved in the steel taskforce that took part in saving the Dalzell works in my constituency? A lot of good work was done and a lot of innovative ideas were brought forward. If, as the Minister says, the Government are looking at different strategies, I think it would be useful to him to consult with people who have already applied some of those strategies.

[Mr Hurd]

I thank the hon. Lady for that constructive suggestion. Engagement with devolved Administrations is an incredibly important part of what we do, and I am more than happy to engage with her if she has specific ideas about how I should follow up her suggestion.