UK Steel Industry

Nicholas Dakin Excerpts

Thursday 21st January 2016 Westminster Hall

[Nic Dakin (Scunthorpe) (Lab)]

Does my hon. Friend agree that, to ensure that UK steel is in a position to gain such contracts in the future, it is important that skills and new technologies are in place? There is a role for Government in that, too.

[Stephen Kinnock]

I agree entirely. There are two elements to this crisis. One is the short-term perfect storm that we are facing. The lack of Government support for building the industry’s resilience is a major contributing factor to that. The other element is equally worrying in many ways: the complete absence of a long-term strategy—nothing on research and development and innovation, nothing on investment, nothing on building our skills base and nothing on the long-term sustainability of such a foundation industry. As long as that long-term strategy is missing, short-term action will simply be treading water and running to stand still. We are in desperate need of a Secretary of State for Business, Innovation and Skills who is prepared to use the words “industrial strategy” and then to do something about it. The issue of market economy status for China is a chance for the Government to stand up for British jobs, for British industry and for Britain.

Finally, all those failures clearly come together into a single issue, to which my hon. Friend referred: the absence of a long-term industrial strategy for the steel industry, with a commitment to strategic investment in skills, infrastructure, energy, and R and D. Why have the Minister and her Department still not produced such a strategy—a strategy to save British steel, to save British jobs and to save communities such as mine? In the first half of 2015, the Minister almost never appeared in public without talking about her Government’s “long-term economic plan”. She now has the chance to show that that was not all hot air. Now is the time for the Government to produce a long-term plan for steel.

Back in October I said it was 10 to midnight for the British steel industry. I finish by asking the Minister what time she thinks it is now.

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[Nic Dakin (Scunthorpe) (Lab)]

Thank you, Mr Walker. It is a privilege to speak in this debate—yet another one on steel in this House. I apologise that I will have to leave part way through the debate for a meeting elsewhere about steel in Scunthorpe. The hon. Member for Brigg and Goole (Andrew Percy) is coming as well, so we give our apologies.

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing the debate and on his good opening speech. As he said, the campaign for the steel industry has been going on for a long while—the challenges facing the industry are not new at all. We have known about them since I was elected in 2010. Even since the steel summit in October—to give credit to the Minister, she was largely responsible for taking the energy from both Government and Opposition Members and moving the summit forward—the situation has become much worse. At the end of the summit we learned about the loss of jobs at Long Products, including in Scunthorpe. Since then we have had job losses in Rotherham and at Caparo Merchant Bar, and this week in south Wales and at Forgemasters in Sheffield. Things are getting significantly worse, not better, so the Government need to step up even more to the plate than they have done so far.

[Anna Turley (Redcar) (Lab/Co-op)]

I, too, congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important and timely debate. My hon. Friend the Member for Scunthorpe (Nic Dakin) referred to the steel summit in October. Does he agree that there were five very specific asks on that day that the Government could have implemented on the next Monday morning? Instead, they set up working groups, which appear to be little more than talking shops. Concrete action has been extremely limited.

[Nic Dakin]

My hon. Friend is absolutely right. One of the pressures for the steel summit was the awful news of what happened in Redcar, which really focused minds.

To be fair to the Government, in many ways we have a good Minister. She puts her shoulder to the wheel and tries to move things forward. I am sure that the situation is as tough for her inside Government as it is for us outside, but one of the Opposition’s jobs is to push even harder from outside—that is our responsibility.

Let us look at the five asks. Things have been delivered on energy costs, although the Government promised delivery of the mitigations three years ago, so it took them three years. That is not a track record of fast delivery; on the other hand, it is welcome that that delivery has taken place. There is still more to do. The funding from the energy mitigation is still not immediately getting to the people it needs to reach, so that one has still not been forced through completely, although it is welcome and the Government’s movement on that should be recognised.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Beyond the five industrial asks, which my hon. Friend is going into, another issue is the timeline for Long Products. Before Christmas, in autumn last year, the chief executive of Tata Europe, Karl-Ulrich Köhler, put a specific timeline on when Tata would say whether it would own, or not, every single Long Products site—that includes Dalzell, Clydebridge, TBM, Skinningrove, and Scunthorpe and all the sections within—and that was April this year. What does my hon. Friend think that the Minister feels about the pressing timeline, as well as the five industrial asks?

[Nic Dakin]

That timeline is pressing and the Government will be as alert to it as everyone else is in the Chamber or, most importantly, among our constituents. It is good to remind us of the timeline, because it is there and the clock is ticking.

The second industrial ask is about supporting local content in major construction projects. Again, the Government are to be congratulated on making progress. Much stronger guidance is now in place, which has the potential to make real changes. I stress “has the potential” —we need to see the guidance driven through, so there is a job for Government to do: to force it through. As my hon. Friend the Member for Aberavon said, this needs to be driven through Government and other contractor organisations, otherwise it will remain a nice bit of guidance sat on a shelf somewhere, which will be no good to anyone. Although we recognise that the Government have moved forward on that, they need to move further—the job is started, but not done. The energy costs job was started, but it took us three years to get it done, so we need to keep up the pressure and keep our shoulders to the wheel.

The next industrial ask is about business rates and finding a way of not penalising capital investment in energy-intensive—or any other—industries. The Government admit that they have kicked any review of business rates into the long grass, but the issue needs to be addressed urgently. Business rates in the UK are up to 10 times higher than in France or Germany, which is significantly anti-competitive.

Let me turn to the industrial ask about taking anti-dumping measures. As my hon. Friends have said, the Government have been slow to get behind the wheel and get good trade defence instruments in place. At the moment the concern in Europe is about the issue of a profit margin of 1.5%, because that is a dangerous line to pursue and would not be beneficial to steel producers in the UK or elsewhere in the EU. I hope the Minister will encourage the Secretary of State to phone Commissioner Malmström to make the UK’s position clear about the need to support anti-dumping. Perhaps he has already called her, in which case it would be positive to hear what the Minister can report.

My hon. Friend the Member for Aberavon has already said much about the threat to the UK if market economy status for China is not handled properly. The UK needs to put itself in a leadership role in Europe. The Minister often shows leadership in the House of Commons on many issues, and she and her colleagues need to show that sort of leadership in Europe to ensure that the UK steel industry has a decent future.

Finally, support for research and development and environmental improvements is a big area of need. We need the Government to look at ways in which investment can be made so that the UK steel industry produces the right quality and type of steel to win the contracts of the future. That needs investment in R and D and in future skills, and that needs to happen now. We cannot wait until those opportunities are there; we need to be in a position to take advantage of them.

I hope the Government are looking at ways to make grants available or at using contra-cyclical loans or other imaginative ways to allow such investment to take place. Unless that happens, there will not be a UK steel industry in the future. As my hon. Friend the Member for Aberavon said in his summing up, we need a steel strategy that takes those industrial asks into account. We have ticks in boxes that show that that has started, but we now need to move that forward and get it finished. That needs more time and effort from all of us in the Chamber, including the Minister.

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[Kevin Brennan]

We all like the Minister immensely, but although she sighs and she huffs and she puffs, anybody with two eyes and two ears could see and hear what was going on at Prime Minister’s questions yesterday.

[Nic Dakin]

My hon. Friend will have heard the Foreign Secretary say last week that market economy status will be judged through the prism of steel. We need to hold the Government to those words.

[Kevin Brennan]

Indeed. We need to know what is going on regarding market economy status. Let us have some transparency from the Minister. I visited Brussels last week with the shadow Secretary of State, my hon. Friend the Member for Wallasey (Ms Eagle), to talk to officials, including Britain’s European Commissioner, to whom my hon. Friend the Member for Aberavon referred, along with representatives from UKRep, officials from the Commission and Members of the European Parliament. Following that visit, it was absolutely clear to us that the UK Government have the door to Chinese market economy status wide open.

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[Nic Dakin]

The Minister must realise that the industry was promised this by the coalition Government three years ago. It still has not got it, and the expectation is that it will not have it until April.

[Anna Soubry]

As the hon. Gentleman knows, the forms have gone out and people are already bringing back their submissions. There was not a Conservative Business Secretary in the coalition Government, but there is one now—and, goodness me, what a difference it has made to getting on and getting the job sorted.