Nicholas Dakin
Main Page: Nicholas Dakin (Labour - Scunthorpe)
Nic Dakin (Scunthorpe) (Lab)
We have been privileged to hear a masterclass from the hon. Member for Southend West (Sir David Amess)—I will call him the hon. Member for the city of Southend—on how to speak in the end-of-term Adjournment debate. I am a mere apprentice to his great talent.
I take this opportunity to pay tribute to steelworkers and their families across the country, and across the ages, for their contribution to our nation. They have been in the vanguard of its growth, prosperity and development. They are amazing men and women, and they have had some tough times and tough years. The last few weeks have been some of the toughest. Yesterday, British Steel, which employs 4,500 people in Scunthorpe and across the local area, with probably 20,000 people working in the supply chain, went into compulsory liquidation. Steelworkers and their families, the contractor base and people who work in the supply chain will understandably be worried and concerned, as I am. But I know that we have a good business, and the country needs this business. Despite the challenge, I am confident about the future.
A few months ago, after a public fundraising campaign, a statue dedicated to steelworkers across the ages was unveiled in Scunthorpe town centre. That iconic statue is a beautiful piece of public art, and people swarmed to the town centre from across the community to recognise it. It demonstrates how the industry cuts through everything that the local area is about.
Steelmaking and steelworkers belong to place. Place is very important in our past, present and future. Many new industries, including digital industries, have been established, and it is good to see that, but they are not as located in place; they can move quickly and freely across boundaries and countries. That creates a huge challenge for us all as policy makers. Place is important, and steelmaking has helped to create the place of Scunthorpe. The discovery in the 1850s of iron ore resulted in iron ore being mined for a long while and eventually led to the building up of the steel industry.
Jim Fitzpatrick
I am pleased to hear about the steelworkers’ monument that the hon. Gentleman has just mentioned. There is a firefighters’ memorial at St Pauls and a construction workers’ memorial at Tower Hill, but they have been there for only 20 years. It is important that we recognise the contribution of ordinary men and women—that may be in their industry, rather than as individuals—so I am pleased to hear that there is such a memorial in Scunthorpe for steelworkers.
Nic Dakin
And memorials to people who have helped to build this country; and memorials that include women as well as men. Most memorials to women in this country are actually to Queen Victoria, but the memorial in Scunthorpe includes a female steelworker and a male steelworker, recognising that it is through men’s and women’s work across the ages that this country has been built.
Steelmaking is the beating heart of the community that I am proud to represent. It is what gives the community its character and strength. Everyone has friends or family members who work in the steel industry or its supply chains. It provides high-skilled, well-paid jobs that drive the local economy, and has always been passionate about and committed to apprenticeships, training and investment—investing in community causes and the community effort. The supply chain and the contractor base are also hugely important.
As my hon. Friend the Member for Gateshead (Ian Mearns) said, this is not just an industry that is important to places around the country; it is an industry that is important to our country and it is part of our national asset. The strategic value of the steel industry is massive. It is a foundation industry that underpins our manufacturing and economic performance. If we are serious about being an independent and modern country, we need to have our own independent steelmaking capacity so that we have defence and infrastructure security, otherwise we are vulnerable to the whims and vicissitudes of others.
The strongest economies in the world have strong steel industries. Look at the countries with the strongest steel industries: No. 1—the USA; No. 2—China; No. 3 —Japan; No. 7—Germany. The UK currently comes in at No. 30. Do we want to drop further down the league table? No, we do not. If we are serious about punching above our weight and being a leader in the world, we cannot slip further down that league table. If we want to be a proud, modern, independent nation, we need to have our own independent steelworking capacity.
People care about steel, and we can see that in the response to the current crisis. Outside this House, there is a consensus that our steel industry is necessary for our future as a nation. Inside this House, we saw the solidarity expressed from all corners of the Chamber yesterday. I pay tribute to all colleagues in the House for speaking strongly with one voice about how important this industry is, and for saying that we need this industry for our national strength and national benefit. There was a chorus of support across the House for the Business Secretary in his commitment to find a positive outcome through the current set of challenges, and a willingness to explore, from all corners of the House, whatever future ownership models are necessary to secure our industry for the future. One voice, one message—to save our steel because we need it for our nation’s future.
Steel is one of the most productive industries, and its productivity has increased massively over the last 20 years. It is also a hugely sustainable industry. Steel is highly recyclable—one of the most recyclable products. We may be able to do more to ensure that we recycle all our steel and use the best of what we have got, but steel made in the UK reduces the carbon footprint of production, so it is a sustainable product. If we are forced to import our steel from outside the UK, that will affect our ability to reduce our carbon footprint. The upsurge in desire to do better on tackling climate change is another reason why we need our own independent steelmaking capacity. That is incontrovertible and irresistible.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
My hon. Friend is making an extremely important point about the steel industry. I am reminded of the closure of Ravenscraig in Lanarkshire in Scotland in 1992. That was a massive steelworks. I was born in 1989, and nearly 30 years on, the vast bulk of that site is still wasteland. A whole generation have grown up with the impact of that. The idea that we can just turn these industries on and off and that the people around them are not affected is totally wrong-headed. That is the economic vandalism that this Government’s laissez-faire approach is doing to communities if they do not intervene to save nationally strategic industries such as steel.
Nic Dakin
My hon. Friend makes a good point about the need to act and the cost of not acting.
We had the steel crisis in 2015-16, when we lost the SSI site in Redcar. My hon. Friend the Member for Redcar (Anna Turley) talked yesterday about the strategic assets that have been lost. The blast furnace at Redcar, which was probably the best in the country, is now of no value to the country. The blast furnaces in Scunthorpe are not only necessary for us to deliver our steelmaking capacity and contribution to the economy; they are national assets, and it would cost a huge amount to bring them back on stream. I welcome the Secretary of State’s strong comments at the Dispatch Box yesterday, when he made it clear that these national assets need to be secured for the future.
We do not want another Ravenscraig or another Redcar, because the costs are too great. My hon. Friend the Member for Glasgow North East (Mr Sweeney) reminds us that Ravenscraig is still costing the nation money, and it is the same with Redcar. The clean-up costs of these great industries are uncountable. The costs of keeping them going, keeping people economically viable and keeping our country proud and independent in what it can do are chickenfeed compared with the costs of not doing so. He makes that point extremely well.
Susan Elan Jones (Clwyd South) (Lab)
Hearing my hon. Friend speak, I recall what happened when Brymbo steelworks in my constituency closed in 1990 and part of its infrastructure was shipped to China. That was extremely traumatic for people, and sometimes it is not recognised what happens within a community when a steelworks closes.
Nic Dakin
My hon. Friend makes an excellent point. Already, during my short contribution to the debate, we see the way in which the steel industry connects with people in a way that some other industries do not. People know that this industry is a throbbing heart of the country. We need it if we are to be a proud, strong country, and closures such as the one she mentions have a detrimental impact on not only communities but the nation.
I called on then Prime Minister David Cameron to convene a steel summit in October 2015, which brought together unions, steelmakers, partners in the industry, key stakeholders and Government. At the summit, we focused on five asks. While applauding the Secretary of State for his urgent action, I am critical of the Government for not progressing those fundamental asks more strongly. There has been some movement, but not as much as we would like. Those asks need to be addressed to get the industry on to a level playing field, so that we can be not 30th in the league but battling for the top spot.
The first of the five asks was energy costs. Energy costs for the UK steel industry are much higher than those in Europe and elsewhere, and we still need to do something about that. There was mitigation through the carbon price floor tax, but it took about three years to come in. There is still a gap, and the energy required to support our steel industry is still far more expensive than elsewhere in Europe. We need to work on that if our steel industry is to move on to a level playing field where it can have a sustainable and strong future in the lifeblood of our nation.
The second ask was about procurement. The Government have taken some steps on procurement. In 2016, they brought in new procurement guidelines. It has been a struggle to make sure that that those public procurement guidelines bite and are effective. It is one thing to have something that is nice on a piece of paper, but it needs to have some traction in terms of action. Earlier this year, the Government published their analysis of where we are on that, and their own figures show that only 43% of the £158 million of procurement by the UK Government last year was produced in the UK.
Obviously, there is still work that can be done there. I am thinking of things such as the Royal Fleet Auxiliary, and would it not be good if that was all made with UK steel? I am thinking of things such as Heathrow, and I would like to commend Heathrow for the commitment it has made throughout to using UK steel wherever possible in its procurement processes, while of course meeting proper procurement guidelines. Heathrow has had the best practice in the way it has approached this, as indeed has Network Rail if we look at its performance. HS2 is another public procurement programme that could strengthen the messages it is putting out on procurement.
I was pleased on Monday to sign the steel charter, which is the work of steelmakers and the steel unions, and that the Government have also signed the charter. The charter points out that the UK Government steel procurement pipeline has been analysed as amounting to over 3 million tonnes over the next decade. That is a lot of steel: 3 million tonnes of steel is worth upwards of £2.5 billion in value. That shows the opportunity of steelmaking, and it also shows the degree of risk and vulnerability we will be exposed to if we do not have our own steelmaking capacity. I was very pleased to sign the charter, and I was pleased that the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Pendle (Andrew Stephenson), also signed it. The Secretary of State has made it very clear that the Government intend to push forward with doing everything they can to improve performance on procurement.
The third ask was about business rates. The plant in Scunthorpe—this goes back to the point made by my hon. Friend the Member for Glasgow North East about the size of these industrial sites—it is actually about the size of the town of Scunthorpe itself, and is bigger than the borough of Chelsea and Kensington, so this is a big bit of land. The site in IJmuiden in the Netherlands, its sister site when we were part of Tata, is even larger—I think it is about three times as big—but the site in the Netherlands pays lower business rates than we do here in the UK. The playing field is not level, and we need to level this playing field. Despite the actions of North Lincolnshire Council to try to ensure the most effective business rates regime, the current framework of business rates means that the penalty for steelmakers is still very high.
Again, I come back to the point I made earlier about how these are businesses and industries that are in places: we cannot move the asset around the world to dodge taxes. That makes it easy for them to be taxed, but, frankly, why should these businesses be paying more of a burden than companies such as Amazon, Google and Facebook, which are fleeter of foot because their assets are of a different nature and they are not place-bound? That is a challenge, and it is one we still have. This playing field needs to be level.
The fourth ask was to take action to make sure that steel could not be dumped in the UK from markets where it is being produced at below the rate of production. To be fair, the UK Government did support the European Union in putting stronger tariffs and stronger defence instruments in place to protect steel from coming in—particularly from China, but from elsewhere as well—and that has had an effect. However, as we come out of the European Union, it is important that the Trade Remedies Authority remains vigilant on dumping, and that the current 40-plus trade defence instruments in place in Europe move across to protect our steel industry. That is particularly the case given the actions we see being taken in the United States and the problem of steel displacement, with steel that would be going to the United States trying to come into the UK and Europe.
My fifth ask was about research and development, and the environmental improvements that are needed. The Government have done some things on that, but they could do more. It is important that our steel industry is efficient compared with steelmaking elsewhere in the world. Indeed, it must become ever more efficient so that it can be part of a future green industry, and contribute to our future in an effective way.
After the new Government were elected, in 2016 they created—to applause from Opposition Members and, I hope, from Government Members—a Department that included the phrase “industrial strategy” in its title, and recognised the need for such a strategy. I had hoped for fast progress on a sector deal for steel to address some of the underlying issues, but sadly, such progress was not as brisk as one would have wished. We are still talking about the need to progress a sector deal for steel, and we now have this crisis in our midst. Had we had such a deal to address some of the underlying issues, I am optimistic that we would have been less likely to have this crisis. The Secretary of State needs everybody’s support and commendation for his efforts to ensure a positive outcome to the current crisis, but I hope that he and his team will also move forward with work toward a proper sector deal, so that the fundamental issues can be addressed.
Let me conclude by considering the current crisis and challenges. British Steel is a sound and effective business, and it has made a lot of progress over the past three years since the change of ownership. It has become much slicker. Steel is a cyclical business—enough money must be made when at the top of the cycle to get through the bottom of the cycle, but the business will make money. Steelmaking also needs a lot of investment to keep it at the edge of best production. It is a hungry business, but it is a good business.
The uncomfortable truth is that this current crisis would not have happened if we had not decided to leave the European Union, and then made a mess by not getting on with it. That has created uncertainty, in particular with the threat of a no-deal exit, which everyone in steelmaking agrees would be bad news for our ability to keep our steel industry in good shape. I shall not linger on that, however, because the important point is to focus on where we go next.
Other questions probably need to be asked. For example, people have raised various questions about whether Greybull Capital has acted as a good steward of the business, and there are concerns about why the UK appears to find it more difficult than some of our European neighbours to provide support within the state aid rules. Those questions have been raised, and the Business, Energy and Industrial Strategy Committee might wish to consider them, as that would be the appropriate vehicle to look into and scrutinise those issues.
Now is not the time for looking backwards; now is the time to look forwards. British Steel has a team in place from the official receiver to run it, and we need to keep the business going until new owners are found. From listening to the Secretary of State yesterday, I understand that his interest is to take this business forward as a going concern into the future. The management team, trade unions and the Government are working urgently with the receiver to ensure that this business goes forward strongly. Leadership at a local level is provided by the management team, led by Gerald Reichmann. The unions have also provided support, and Paul McBean, Ian Smith, Martin Foster and other colleagues have made a real difference in taking forward a difficult situation, and building a determination to ensure that this business, this industry, has a positive future.
The last thing I want to say is that I would like to thank all the people who have contacted me and the steelworkers, locally and in the supply chain, to express their support and solidarity from across the country and across the community. That means a lot to people. It means a huge amount to people that everybody cares. And because everybody cares, I am confident about our future: I am confident about steelmaking in Scunthorpe, in Teesside, in Skinningrove, in the United Kingdom in the future. The emblem on Scunthorpe Borough Council’s mast was “The heavens reflect our labours”. Let us hope the heavens are on our side as well.