EU Referendum: UK Steel Industry

Nia Griffith Excerpts

Wednesday 13th July 2016 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I am pleased to see the Minister in her place. I hope she is going to advocate and fight for us under the new Prime Minister.

Business needs certainty. Investment depends on certainty about access to the markets and about the stability of the currency. We need clarity on the timetable and process for Brexit. We need to know what sort of deal the Government intend to seek and we need very close dialogue between them and the steel industry so that steel companies know exactly what they are facing.

It is a particularly difficult time for the steel industry, so it is vital that steel companies are given every possible guarantee of support and confidence so that they keep the industry here in the UK. We need the Government to make safeguarding the steel industry a top priority. With all the uncertainty of the future—uncertainty about access to the markets and the price that we could have to pay for imported steel—it is vital that we keep our own steel industry here, both for security and to support our manufacturing industry.

Those advocating Brexit spoke of the opportunities it would offer to set our own conditions, but with that comes responsibility. The Government can no longer blame the EU. We need a Government who create the most favourable conditions possible for our steel manufacturers. They are now in direct competition with steel manufacturers around the world, so it must be made better for them to invest here in the UK than anywhere else.

We need urgent action on energy prices. As has been mentioned, the carbon floor tax could be dealt with straightaway. It was unilaterally imposed, but we then sought state aid to offset its effects. We can do something about that instantly, but more than that I support the request by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for innovation. We need much more direct investment in innovative projects wherein the energy plant is linked directly to the steel plant, thereby keeping energy costs right down. We need Government help and intervention to make that happen.

We need speedy and targeted protection against Chinese imports. If we see that something is in direct competition with one of our products, let us act immediately so that we can protect our production lines. We also need much clearer incentives for research and development and for improvements to plant. We need a system of capital allowances and business rates that does not penalise plants that are trying to improve, increase their energy efficiency and be future leaders in their sector.

We need a really clear industrial strategy for the wider opportunities for the steel industry. We need to know exactly why we are producing the steel, what it is for and how it links into our manufacturing chain. In order to protect that chain, we need to keep steel production in the UK. We have heard warm words about public procurement, but we have yet to see real delivery. We need our supply chains to go directly into the projects that have been mentioned, many of which have not yet started.

I have particular fears for Tata Steel, which has a plant in my constituency, one in Port Talbot, and others throughout the UK. We are very worried indeed about what might happen in the talks with ThyssenKrupp. It is a very large conglomerate, and we have previously seen it decide that it just does not want to do certain things anymore and then pull out of certain sectors and close down all the factories. We have seen that happen with some of its car plants. I can easily imagine a scenario in which ThyssenKrupp simply hoovers us up, then closes us down and moves all its steel manufacturing to continental Europe. The Welsh Government will do their best to provide support, but I implore the Minister to make sure that it is an absolutely no-doubt decision for ThyssenKrupp to keep its UK sites open, or that we have other options to explore for keeping our steel manufacturing here.

It is vital that every potential obstacle is removed and that the best conditions are provided to encourage investment in our steel industry—investment for the future that will last. We need to ensure that we have a steel industry and a manufacturing industry, that we use our steel for procurement, and that we have the security of producing our own steel.