UK Steel Industry

Nicholas Dakin Excerpts

Tuesday 12th April 2016 Commons Chamber

[Sajid Javid]

The hon. Gentleman might hear more from the Minister for Defence Procurement in the coming days, but I can tell him that the two new Queen Elizabeth class aircraft carriers are being built with almost 100,000 tonnes of British steel, that Crossrail, the biggest construction project in Europe, is using almost exclusively British steel for its 26 miles of tunnels, and that 96% of Network Rail’s spending on steel rail goes directly to British firms. It buys 1,500 miles of steel rail every year from Tata in Scunthorpe. That is enough to build a two-track line from London to Edinburgh.

[Nic Dakin (Scunthorpe) (Lab)]

I certainly agree that Network Rail provides a case study in how to do procurement, and it is to be commended. However, we need to ensure that the DONG energy contract for developing the North sea wind farm, which will be the second biggest in the world, will use UK steel. What progress is the Secretary of State making with his colleagues to ensure that that happens?

[Sajid Javid]

We have had meetings with that particular company and many others in a similar situation. The hon. Gentleman will know that many of them are private companies and therefore not subject to all the rules around procurement, but there are ways of trying to encourage them to invest more in British steel, and that is exactly what is happening.

The question of trade defence instruments was raised earlier, and the hon. Member for Wallasey (Ms Eagle) mentioned the point as well. We have been working hard on this issue at EU level, and that work began long before this crisis broke. I hear a lot in this House about ideology, but I am just interested in one thing: what actually works. When evidence shows that tariffs against unfair trade will make a difference without harming British businesses or British consumers, I will always support them. That is why last July the UK voted to impose a 16% tariff on wire rod; since those duties were imposed, imports from China have fallen by as much as 90%.

In November, we voted to impose a 28% tariff on seamless pipes; since those duties were imposed, imports from China have gone down 80%. In January, we voted to impose an 11% tariff on rebar, and since then, imports of that particular steel product have fallen by a massive 99%. In February, we voted for a 15% tariff on cold rolled flat products, and that move has already reduced imports from China to almost nothing. This is real action with real tariffs and they are making a difference for British steelworkers.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

In the middle of 2014, Tata announced that it would dispose of its long products business. It has taken until this week for the conclusion of a process that involved first interest from one buyer, its pulling out and then the work that everyone—trade unions, the management team, Tata itself, Greybull Capital and suppliers, who have also had to contribute to the process—has done locally. The way forward is tough and the process is not yet complete. I welcome the Secretary of State’s statement yesterday that he would do everything possible to ensure that those matters that still need to be resolved are resolved satisfactorily, so that the sale goes ahead and there can be a future—I believe that, although different from the past, that future will be a positive one. That will be positive for all the communities throughout the long products sector, including those in Scunthorpe—the site of the largest steelworks in England, which I am proud to represent.

When the Secretary of State was first appointed I wrote to him to ask for a meeting, because I knew that the steel industry was facing a crisis. Unfortunately there were other pressures on his diary at that time. Back in September I asked the Prime Minister for a steel summit. Eyebrows were raised by Government Members then, but to the credit of the Minister and the Secretary of State, we got a steel summit in Rotherham, which helped to focus on this issue.

Let us look at the issues that we have been arguing about—I have been arguing about them for four or five years now. The Government have moved on energy costs, but that movement has been slow and laborious. They brought in a unilateral carbon floor tax, then found themselves in a mess. It has been more than three years now and the money for mitigation is only just getting into the coffers of steelworkers. Frankly, that does not give the message of confidence needed to take the industry forward. However, I welcome the Secretary of State’s comments today that he is looking at doing that by exemption rather than through the current methods. We are seeing movement, which should be welcomed.

It is deeply disappointing that the Chancellor was unable to bring us good news about business rates. Listening to what Ministers have said in many speeches, I believe that they have been fighting their corner on that. It is deeply disappointing that the Government at the highest level were unable to move on that, as it would have made a real difference. Ijmuiden, a larger plant in the Netherlands, pays less in business rates than the Scunthorpe plant. That is not right. The playing fields need levelling.

I very much welcome the Government’s movements on procurement and the production of better guidelines but, as I have said all along, the proof of the pudding is in the eating, when the guidelines are tested. I point again to DONG Energy’s development of the Hornsea project on the North sea. That is happening because of a very generous contract for difference that the UK Government have given to that private sector company. Public money is invested in that project, and the energy coming from the development will be paid for by UK taxpayers and UK energy bill payers. It will be outrageous if UK steel is not in those monopiles, blades and turbines going up in the North sea. I urge the Secretary of State to work tirelessly with his Cabinet colleagues to ensure that private companies delivering public projects also deliver on procurement for our steel industry.

Finally, much has been said about Chinese dumping. The Secretary of State’s mood music has changed on that issue, which I welcome, but the change has been very slow. We have seen action, which should be approved. We have heard from the whole steel community—from Eurofer, for example, which represents steel communities and employers across Europe—about how important it is to tackle the lesser duty rule. That would give a signal about confidence, which is what the industry needs more than anything else—and confidence not just that we are getting warm words, but that those warm words are supported by actions. Such actions should be prompt, not laggardly. Save our steel.