UK Steel Industry

Melanie Onn Excerpts

Tuesday 9th July 2019 Westminster Hall

[Nic Dakin]

My hon. Friend makes an important point. Certainly, steelmaking is predominantly in the north, and better investment in procurement pipelines would help to address the inadequacies to which she draws attention.

Sadly, British Steel is in liquidation, and Tata is determining the direction of its UK business in the light of the failure to progress the merger with Thyssenkrupp. We face serious questions about the sector’s future. Other steelmakers, such as Celsa and Liberty, also look to the Government to confirm their commitment to the steel industry.

[Melanie Onn (Great Grimsby) (Lab)]

I congratulate my hon. Friend on securing this important debate, which affects many of my constituents, who are just along the A180 from his constituency. Has he had any discussions about the impact of losing the steel industry in Scunthorpe and about the wider impact across the south bank, which has many of the jobs in the supply chain?

[Nic Dakin]

My hon. Friend makes an important point: there are 5,000 direct jobs in the Scunthorpe area, in Teesside and elsewhere in the UK, but also 20,000 jobs in the supply chain. Steel is a significant employer, as well as a significant strategic asset for the UK. All the work that everyone is doing is to ensure that the whole business progresses under a new owner, which is the direction we all need to remain focused on, across the House and across the country.

The British Steel workforce in Scunthorpe, the north-east and elsewhere has responded brilliantly at a time when everyone working for the company sees their future in the balance. Workers, trade unions, the management team and the supply chain must be congratulated on keeping the show on the road in such difficult times. The magnificent outputs that they are achieving show what a sound business this is, still producing world-class steel day after day. British Steel has a strong strategic plan in place, externally validated by top-tier management consultancy McKinsey.

The Government have made all the right noises. The Secretary of State and the Minister showed real leadership in putting in place the indemnity that allows the business to continue as a going concern. When local cross- party MPs met the Prime Minister, she made clear her Government’s commitment to finding a sustainable future. The Secretary of State’s chairing of the British Steel support group’s weekly meetings is valued by all stake- holders. However, we are now reaching a crunch time, when warm words need to be matched with further actions to close the deal with prospective buyers.

Assurances may need to be given about the environmental liability—a no-brainer, as the liability is likely to fall to the Crown anyway if the business fails. On future carbon credits, the Government will need to show the flexible thinking that they have already shown in their dealings with Greybull Capital. Other things for the Government to look at might include loans to support investment and so on. To be helpful, will the Minister confirm that the Government, while being mindful of the need to act within the law, will do all they can proactively to close the deal with those bidders the official receiver believes can take the business forward?

Over the past few years, we have bounced from one steel challenge to another. Too often, steel policy responds to the urgent needs of the now, but fails to set out a strategic future path for this crucial foundation industry. In 2015, Sahaviriya Steel Industries in Redcar closed, meaning that the UK’s strategic steelmaking assets there are now lost forever. The cost of cleaning up the site, alongside the human cost of huge job losses at the heart of the northern powerhouse, will be with us for a very long time.

Instead of lurching from one crisis to another, the UK needs a Government that will put a plan for steel in place by responding positively to the five strategic asks made by steel MPs, trade unions and employers with one loud, consistent voice. First, the threat of a no-deal exit from the European Union is what sparked the current crisis, and anyone who talks blithely of a no-deal exit risks steel jobs and livelihoods throughout the supply chain—no deal risks no steel—so we need a positive new relationship with the EU to give certainty on the timely provision of UK-specific quotas within the EU steel safeguards. That should be a major first priority for the new Prime Minister when he takes up his post.