UK Steel Industry

Peter Bone Excerpts

Thursday 17th September 2015 Commons Chamber

[Anna Turley]

My hon. Friend is right, and we are always diligent in undertaking our European obligations. All we ask for today is a level playing field with our European competitors.

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate the hon. Lady on securing this important debate. She makes the point that we are fulfilling our EU obligations but that other countries are not. Rather than trying to make those countries comply, would it be easier for us not to comply, and to protect our own national interest until the whole EU puts its house in order?

[Anna Turley]

I am afraid I disagree with the hon. Gentleman. Teesside and the north-east is wholly dependent on a huge range of support from UK business, and that is a huge part of our exports. It would be wholly detrimental for us not to be part of the European Union.

There would be a significant opportunity for the UK steel sector if the Government were to support and insist on local steel being used in major public projects and strategic operations. Locally sourced steel can have major benefits not only for the local and the wider UK economy, but as a more sustainable material than imports. Those are the national challenges for the UK steel industry and the steps that we would like the Government to take. The steel summit sought in the motion would help to set out a strategic approach for the UK industry.

Let me say something about the situation in my constituency, which brings me here today with such urgency and determination. Steelmaking in Redcar makes up 7% of the north-east’s exports, and it employs 2,000 people directly on Teesside, with another 1,000 contractors and 50 apprentices currently on site. Approximately 6,000 people are employed in the supply chains, working in the ports, carrying the coal, providing the gas, producing the parts, driving the trucks, washing the overalls, and feeding the workforce. We have already experienced the devastation of losing our plant and we cannot go through that again.

In desperation, I ask the Minister to consider the request for financial assistance from SSI UK, so that wages can continue to be paid and we can get to the 50,000 tonnes of cargo that, as we speak, is sitting on the dock a mile down the road from the blast furnace. We need such assistance so that the gas can keep pumping, the coal can load the furnace, workers can pay their mortgages and feed their families, and the proud tradition of steelmaking in Redcar can remain the beating heart of my constituency.

As I said in my maiden speech, there already is a northern powerhouse, and I am disappointed that the Under-Secretary of State for Communities and Local Government, (James Wharton), who is Minister for the northern powerhouse and a Teesside MP, is not here today. There is already a northern powerhouse—it is called Teesside. If the Government do not act today we will know that their words are hollow. In 2011 the Chancellor of the Exchequer promised

“a Britain carried aloft by the march of the makers”—[Official Report, 22 March 2011; Vol. 525, c. 966.]

Does the Minister believe in a future for UK steel? Will she act now to enable the sector to weather this storm? Can she tell the House whether the Chancellor’s “march of the makers” includes the proud makers of steel on Teesside?

--- Later in debate ---

[Andrew Percy]

Indeed. We have communicated that request directly to the Minister. I welcome my hon. Friend’s intervention.

Business rates were mentioned by the hon. Member for Redcar. Removing plant and machinery from business rates valuation would have a massive impact, because business rates are five to 10 times higher in the United Kingdom than in Europe. That has a significant impact on Scunthorpe especially, making up 49% of the annual rates at that site or £12 million per annum. North Lincolnshire council has looked at what it can do on business rates, particularly in respect of cash flow. Expecting a small local authority such as that to take a hit on business rates, and putting it in a position where, if it provides relief, it may not be able to provide services, is not fair to North Lincolnshire council. This is an issue on which the Government need to respond.

We had a positive meeting with Tata recently, at which the council said it would see whether payments could be made every two or three months instead of monthly, which would help with cash flow at the site. I know North Lincolnshire council is looking closely at that. When lawyers get involved, these things always become more complicated and there are state aid issues, but the council has assured me that it will do everything it can to help on the cash-flow issue. However, that does not deal with the issues arising from the business rates regime in the UK, compared with elsewhere in Europe.

[Mr Bone]

I apologise to the hon. Member for Redcar (Anna Turley). I think she slightly misheard what I said. On my hon. Friend’s point about state aid for the steel industry, should we not do what we think is right and worry about the EU consequences afterwards? We seem to put the priorities the other way around.

[Andrew Percy]

I would rather not worry about the EU at all, which is something on which my hon. Friend and I agree, although I am not sure the Minister or other Members agree. My hon. Friend is right. I was going to say something about that later. We tend to interpret rules and EU legislation very precisely; the insinuation is that other countries in Europe may be more flexible about that, so we should adopt the European approach—I do not say that very often—instead of our officialdom. I think that is the point that he was making to the hon. Lady—let us do what other countries do and worry about the consequences later.

Scunthorpe has enacted a number of waste reduction strategies in recent years, resulting in well over 90% of all residue material produced across the site being subject to internal recirculation or external recovery or recycling. That is in line with the requirements for green energy and sustainability, but the incentive is still not there for companies. Last year Tata stated that it was paying around £30 million more in green taxes than its competitors in France and Germany—a point which other Members have made and will continue to make.

Capturing more value in supply chains is something that Tata is asking of the Government. Promoting local content appears to be happening in other European countries. We have talked about this a great deal in relation to other sectors of the economy and I know that Ministers in the previous Parliament were sympathetic. We all seem to be in agreement that we need to promote more local content, but getting that local content seems to be complicated. We must do more in that respect, as other EU countries do.

I shall not say much more as I will just be repeating the comments of the hon. Lady. Many hon. Members wish to speak in the debate and I have probably spoken longer than I should have done—[Interruption.] I think the Minister is encouraging me to carry on, which has not always been the case in other discussions that I have had with her.

Many Members are present today for this important debate. A country that loses its steel industry is greatly disadvantaged. The steel industry is a fantastic part of our economy, providing high-skilled jobs. Any loss of that to our local economy would be devastating. These are relatively well-paid jobs in a region that has not done as well in the past couple of decades, sadly, and has become worse off compared to the rest of the United Kingdom under Governments of both colours. Many people are inspired to work in the industry, particularly by the apprenticeship programme, and we must do everything we can to protect it, not just for North Lincolnshire or Scunthorpe, but for the for UK. It is of strategic as well as economic importance. I concur with the hon. Lady and will no doubt concur with much of what is asked by other right hon. and hon. Members this afternoon. I urge the Minister, who is engaging positively with us on the matter, to make sure that the Government get behind not only Scunthorpe, but the steel industry across the United Kingdom.