UK Steel Industry

Philip Hollobone Excerpts

Tuesday 9th July 2019 Westminster Hall

[Several hon. Members rose—]

[Mr Philip Hollobone (in the Chair)]

Order. The debate can last until 5.30 pm, and I am obliged to call the Front-Bench speakers no later than seven minutes past 5. The guidelines are that the SNP spokesperson may speak for five minutes, the Opposition spokesperson may speak for five minutes and the Minister may speak for 10 minutes, while Mr Dakin will have two or three minutes at the end to sum up the debate. However, our afternoon will be interrupted by Divisions in the House, which are expected at 4.58 pm, so the debate is likely to finish later than 5.30 pm. Six Members wish to speak—a galaxy of talent and knowledge about the UK steel industry. Therefore, each speaker may speak for no more than four minutes, beginning with Simon Clarke.

--- Later in debate ---

[Jessica Morden (Newport East) (Lab)]

I thank my hon. Friend the Member for Scunthorpe (Nic Dakin) for securing yet another debate about steel, for chairing the all-party parliamentary group on steel and metal related industries, and for being such a thoughtful and passionate advocate for our steel industry, and particularly his steel community, in difficult times. Steel workers in my constituency will be feeling for the steel workers in his constituency as we wait to hear about British Steel.

I pay tribute to steel workers and unions in my area, who have such pride in their industry and have made such sacrifices over recent years in this cyclical business. The communities of east Newport and over to Caldicott have been built on that pride. Most people have family or friends who have worked in the industry, but the current generation of steel workers live with the constant threat that their jobs are uncertain. They look towards Bridgend and what happened to Ford workers; they are understandably concerned and worried about problems in the automotive sector. That is not just because of the bonds of working in that industry, although that bond is real—Tata Steel’s Zodiac plant at Llanwern and the auto-finishing line depend on securing work from the automotive sector. We need the Government to urgently do all they can to ensure that our steel and automotive industries are open for business.

It is often said in such debates, but it worth repeating that steel is a foundation industry and a national asset. For our manufacturing industry and our economy to thrive we need our own steelmaking capacity. We must not neglect this foundation industry and end up importing our steel. My hon. Friend the Member for Scunthorpe reminded us in a recent debate, and again today, that the strongest economies in the world—the USA, China and Japan—have the strongest steel industries. We currently come in at number 30, and we must not fall further down the table.

I want to talk about Tata Steel’s Cogent Orb works in my constituency, which has been making steel since 1898. The 350 steel workers at Orb make electrical steel that has the potential to be used as the high-quality grain-oriented steel required to build electric vehicle motors. The automotive industry has been calling on the Government to support the production of a high volume of batteries required to support EV production in Britain and avoid the risk of importing from abroad. [Interruption.]

[Mr Philip Hollobone (in the Chair)]

Order. I am sorry to interrupt the hon. Lady.

[Jessica Morden]

That is okay. I was just finishing.

[Mr Philip Hollobone (in the Chair)]

A Division has been called in the House. The hon. Lady has one minute and 45 seconds to finish her speech when she comes back from the Divisions. I understand that there will be multiple Divisions, so we will resume 10 minutes after the last Division.

--- Later in debate ---

On resuming—

[Mr Philip Hollobone (in the Chair)]

Jessica Morden has one minute and 39 seconds left.

[Jessica Morden]

Thank you, Mr Hollobone. I was talking about Cogent Power and the potential in the electric vehicles industry, because demand for electric vehicles is only going to grow and we have a fantastic opportunity with that company to get in on the cutting edge of that new industry and to develop a supply chain for it. But these are smaller companies and will need the Government to help to bring the supply chain together. The Orb works is the only plant in the UK capable of making the steels and is therefore a strategically important business that can support the Government’s industrial strategy in relation to electrification. We must take advantage of that new industry. I visited Orb recently and have invited the Secretary of State for Wales. I would be very keen for the Minister from the Department for Business, Energy and Industrial Strategy also to visit when he is in Newport, which I think might be fairly soon. That plant must be able to take advantage of that opportunity, but we need the Government’s help for that.

As well as Llanwern and Orb, Liberty Steel is based in my constituency. Liberty bought the old Alphasteel plant in 2015, and Sanjeev Gupta has announced that it has now become one of the largest steel producers in Europe, with a global footprint employing 30,000 workers. It appreciates that steel is a cyclical business and needs investment to get it through the cycles in order to make money. It is working on a model of an exciting bright future for steel, but it too asks the Government to deliver on the industrial strategy with a delivery taskforce to support and drive the investment that we need, particularly in the green steel area.

On behalf of the steel industry and workers in my area, I will repeat the asks so often made in these debates. We have waited too long for a sector deal for steel. We need more and faster action on energy prices. We need more action on procurement. We also need more action on dumping and on what will happen with the trade defence instruments in Europe. I am grateful for the opportunity to take part in this debate. On behalf of all those who work in Llanwern and at Liberty, I hope that we can expect action and not more warm words from the Minister.

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

As always, Mr Hollobone, it is a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the Member for Scunthorpe (Nic Dakin) not only on securing this debate but on the last few months, when he has been such a doughty champion for his constituents and for the steel industry in this country. We are very proud of him and I know that his hard work is going to pay off.

Of course, we know why we are here today participating in this debate, which is extremely timely and important because, yet again, here we are in another steel crisis, while steelworkers sit at home, hoping and praying that they have a future and a job and a salary to continue to provide for their families. Yet again they are in a precarious situation.

To be honest, it is depressing that we are here again, because a year ago tomorrow we had a debate in Westminster Hall, this exact same Chamber, which was three years on from the 2015 steel summit and all the promises that were made then, and all the asks that we made of Government. And here we are yet again, despite having seen the devastation that my constituents bore the brunt of. We can see what happens when we fail on steel.

My constituency is still struggling. I am here today, not just to fight on behalf of the 700 British Steel workers in my constituency today but because of what happened to us three and a half years ago in Redcar. We lost 2,200 jobs immediately in SSI and another 900 in the supply chain. I always say to people, “Imagine that in London, Manchester, or Birmingham. It would be devastating. Then put that in a seaside town, or a town like Scunthorpe, and imagine the effect of that on an economy, on a society, on a community, on families and on individuals.”

We are still not recovering; we are still not there. We know the average salary of those who worked in the steelworks; we know they are good jobs. They were the highest paid jobs in my constituency. The average salary is down by £10,000 a year. Many workers have had to move away to find other employment. Some are working in British Steel on Teesside or have even gone to Scunthorpe, where yet again they find themselves back in this precarious situation.

A month ago, I met a worker who had had 13 different jobs since he lost his job at the steelworks. That is the kind of insecurity and economic disaster that happens if the Government do not step in and stand by our steel industry, and that is before we even get on to talking about the reclaiming of the site, which stands there corroding and rusting. It will cost millions to get that ready for other businesses to come in, clean it up and bring jobs. I just raise that with the Minister to say that this is what happens—this is the cost of failure.

I pay tribute to the Secretary of State, who I am sure cannot be with us today because he is probably—hopefully—travelling the world and trying to secure a deal for British Steel. I pay tribute to him, because I think he gets that. He understands and, to be fair, things are different to what they were in 2015. The Government have stepped in; they have given the indemnity to the official receiver; they have bought us some time; and they have kept the workforce paid and the asset in place. So I pay tribute to him, but I have a few requests to make of him and of the Minister who is here in his absence today.

Obviously, we know that the official receiver is bound by his legal obligations. However, I will echo the sentiments that were expressed earlier today about keeping the business together. It is vital that the Government support bidders who bid for the whole business—no more cherry-picking and no more asset-strippers such as Greybull.

It is vital that we have the investment to deal with the environmental liabilities that are so important on the Redcar site, but the importance of innovation must not be forgotten either. We cannot beat China and others on price, but we can beat them on innovation, with lighter, stronger, greener steel. And I make a pledge again to—

[Mr Philip Hollobone (in the Chair)]

Order. To be helpful to the hon. Lady, we have five minutes of Back-Bench time still to go and the remaining speaker is not here, so she can slow down rather than speed up. [Laughter.]

[Anna Turley]

I am extremely grateful to the Chair, because I was barely pausing for breath. I can get back into my stride.

Innovation is crucial. The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) mentioned the Materials Processing Institute, which is in my constituency. It is doing fantastic work. It has been around for 75 years; it was formed just after D-Day. It has a fantastic vision for innovation: new technologies, decarbonised steel, the digitisation of the steel and metals sector, and a circular economy for steel, alloys and rare metals. Those are really important innovations. If we do not support originations and businesses that are doing that work, I am afraid we will see more redundancies and job losses, and the loss of a huge amount of capacity and capability. Therefore, innovation must be at the cutting edge of productivity, and we must support innovation experts such as the MPI, which are at the heart of this.

Like other hon. Members, I want to highlight the importance of the long-term issues that we have raised time and time again in this place. We need action on energy prices, business rates and procurement. I hope that the long-awaited sector deal is not a figment of our imagination and that we will live to see one for the steel sector. Sector deals are as important for our sector as they are for the many other sectors that have had a response and engagement from the Government. That would send a clear signal that the Government are committed to the steel industry and want to do business with the private sector.

I will end on Brexit. The industry has been very clear that there is no Brexit deal that would bring benefits to the British steel industry. That is just a fact. Of course, the disaster of no deal cannot be underestimated. We would see 97% of our exports subject to trade restrictions, and 25% tariffs to the EU—£1 million per day for the steel industry in this country. We would lose access to £1.6 billion of research funds for coal and steel. As my hon. Friend the Member for Scunthorpe said, no deal means no steel. The industry could not be clearer about that.

I pay tribute to the Secretary of State, and I am grateful to the Minister for coming to respond. I know that he gets it. I know that the Government are trying to do all they can for British steel, and that he understands the importance of this industry to our country, our defence, our manufacturing and our place in the world. Unfortunately, the future of this proud industry hangs in the balance once again. I look forward to the Minister doing his part.

[Mr Philip Hollobone (in the Chair)]

We now come to the Front-Bench speeches, the first of which will be from the hon. Member for Motherwell and Wishaw (Marion Fellows). The guideline limits are five minutes for the SNP, five minutes for the Opposition and 10 minutes for the Minister.

--- Later in debate ---

[Gill Furniss]

I thank my hon. Friend for his intervention. I absolutely agree, and I very much look forward to my home town of Sheffield taking up those opportunities, because it is well placed to lead a green industry.

As I was saying, we always need steel, which literally forms the fabric of everything we see. I sincerely worry that both contenders to be the next Prime Minister are advocating a no-deal Brexit. As UK Steel has clearly stated, that would be catastrophic for the sector. It could cost it £70 million and lead to further collapses.

The steel industry has many strengths and is able to thrive, but, for that to be achieved, we need the Government to commit to help. The future of UK steel can be bright, and the Government’s own analysis has identified a £3 billion opportunity by 2030, sustaining good jobs in the areas that need them the most. The news last week that Jaguar Land Rover will invest £1 billion in building electric cars in the UK was an enormous boost, with the company leading the way on electrifying the cars on our roads and signalling a commitment to a greener economy. The opportunities for end-to-end supply in that process—making the steel at home to support the building of those vehicles—could be enormous. That could support and encourage growth in the steel sector while spearheading a green revolution.

It is disappointing that the opportunity to secure a steel sector deal has never come to fruition. I am pleased to see the new Minister in his place, and I urge him to give that issue the greatest importance. The steel sector needs that deal for innovation, for user research and development, and to be there to take on exciting opportunities for the future. The steel industry is there and waiting to be helped with the challenges ahead and the opportunities to make it thrive.

UK steel companies pay 50% more in energy costs than their competitors in the EU. On procurement, we know that UK Government decisions are a hugely powerful policy tool to boost British steelmakers’ orders. The decision to use our steel for the royal fleet, mentioned, I believe, by my hon. Friend the Member for Rotherham (Sarah Champion), would be much welcomed. It would also make complete sense for our national defence. Please, Minister, look at that, because those are the opportunities that need to be put forward.

I commend the UK steel charter, which is aimed at enhancing and maximising procurement opportunities for UK steel producers. The Welsh Labour Government were the first to sign up to that commitment. They are leading the way, but Departments in Whitehall appear to be resistant to signing up. Will the Minister commit that all Departments will sign up to the charter?

On business rates, the perverse inclusion of investment in machinery, which increases a company’s business rates, is patently a barrier to investment. Some British steel companies have huge disparities in their business tax bills across their plants in Europe. For example, Tata pays a business tax bill in Wales that is 10 times that of its operation in the Netherlands. Will the Government join the Labour party in our pledge to remove machinery for steel companies from business rates to ease that burden and invite more investment back into the steelworks? I am not saying it will be easy, but what is a Government for if not to support our foundation industries and encourage their growth?

Our steel industry is fabulous, innovative, flexible and resilient, and it can thrive. Please help us to make sure it stays that way.

[Mr Philip Hollobone (in the Chair)]

In calling the Minister for steel, I think we should note the presence of the Secretary of State for Business, Energy and Industrial Strategy and encourage other Secretaries of State to attend debates here in Westminster Hall.