UK Steel Sector: Supply Chains

Mark Tami Excerpts

Wednesday 9th June 2021 Westminster Hall

[Mark Tami (Alyn and Deeside) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham. Like everyone else, I thank my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing this very important debate today.

This year marks the 125th year of production at Shotton steelworks on Deeside, which is a remarkable achievement. I hope and trust that we will see another 125 years. I doubt I will still be here to celebrate that, but we all live in hope. Order books are good and Shotton continues to produce high-quality value-added products, which is a great credit to the workforce and the management of the plant, yet we only have to look at Shotton’s history to understand the highs and lows that the industry faces as a whole. In 1980, more than 6,500 jobs were lost on a single day— at the time, it was the largest redundancy at a single plant in the history of western Europe. Those jobs have never come back. The plant today is still efficient and profitable, but Shotton cannot function on its own—it relies on Port Talbot for its steel—just as the industry cannot function as individual plants.

The UK steel industry has been in a fragile state for many years, seemingly lurching from one crisis to another. We have a Government who talk about their support for the industry going forward, but their actions—or, rather, lack of action—tell a very different story. Only when a plant or business is on the verge of collapse do they seem to show any interest in the steel industry, and they lose interest again when the plant either is saved in the short term or has collapsed. If steel is to have a future in the UK, we need a Government who recognise that we have to have a long-term plan to support the industry.

It is no good saying simply that steel needs to modernise or decarbonise its business, or that somehow hydrogen will save the day at some point in the future. That will not happen if we do not support and maintain a viable business today. Hydrogen might well be the future, but it is some way off and we cannot just use it as an excuse to do nothing now. That means addressing what many other colleagues have mentioned—the ludicrous situation where steel manufacturers here pay 62% more for electricity than those in France, and 86% more than those in Germany. That is not a new problem; it is something we have been banging on about year in, year out, but—shock, horror!—nothing changes, nothing happens. All we are told by the Government is to take it up with Ofgem, but we all know the answer we will get. All Ofgem says is that there is nothing it can do. I would argue that Ofgem seems intent on making the situation worse, rather than better. How can we seriously expect the industry to invest in the future when it has both hands tied firmly behind its back?

We were always told that nothing could be done and that, as with so many other things, it was all Europe’s fault. The same public procurement argument was constantly wheeled out, as a number of colleagues have said. Other European countries managed to do something, but for some unknown reason we could not. Even that excuse has gone now, however, and the UK Government need to step up to the plate.

The UK steel industry supplies only about 10% of public sector current requirements. That needs to increase dramatically. The Government need to work with the industry to make that happen. The Prime Minister talks a lot about infrastructure projects, shovel-ready projects post covid. I had the pleasure of speaking in the restoration and renewal debate the other day, and I said that this place should be the very starting point of using UK steel. UK steel must be the centre of any recovery. It must be not an afterthought, but at the very heart of such projects.

We cannot carry on as we are now. We need the Government to step up and to support our industry. It needs support now.

[Sir Graham Brady (in the Chair)]

For the guidance of Members, I intend to call the first of the Front Benchers winding up the debate at 10.23 am.