Protecting Britain’s Steel Industry

Ranil Jayawardena Excerpts

Monday 21st June 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena)]

New roads, track renewals, flood defences, Hinkley Point—the Government are unleashing the potential of our whole country by backing British industry and boosting Britain’s infrastructure. Steel first came to the fore as Britain led the global industrial revolution, and it is today’s infrastructure revolution, underpinned by 7 million tons of steel in the next 10 years here alone, that will see Britain lead the world into the future. Steel remains one of the pillars of British industry and one of the commanding heights of the economy to this people’s Government, and we are committed to championing free and fair trade to the benefit of jobs in every corner of our country.

The Conservatives are moving our great country on, instead of going backwards with the Labour party. We have secured trade agreements with 68 countries around the world, plus the EU, covering trade worth £744 billion last year, and we are just getting started. We are negotiating an agreement with New Zealand, we are working to join the trans-Pacific partnership and we have announced our intent to begin negotiations with India, too. This will put Britain at the heart of a new, dynamic, global trading network, as a hub for investment and exports, securing prosperity for British families and generations to come. That is important because we know that our job is to serve the British people, whether they drive a white van or a hatchback car, and whatever flag they fly from their home.

We fully agree that our steel producers and the livelihoods that they support in every part of our kingdom should be protected from unfair competition. More than that, we want them to be able to export to friends around the world.

[Lee Anderson (Ashfield) (Con)]

Under the last Labour Government, steel production in this country fell by almost 50% to its lowest level since 1934. Does my hon. Friend agree that the Labour party should look at its own record in office rather than criticising this Government?

[Mr Jayawardena]

I completely agree. Indeed, not only is my hon. Friend right, but the numbers get worse for Labour: in Labour’s last five years in charge, industrial electricity prices rose by two thirds, hitting the steel industry hard. In contrast, we have provided £500 million in relief to the steel industry since 2013 to help it to cope with high electricity costs. We have also fought hard to make sure that the industry does not have to face duties of 25% when we export to the European Union.

We are alert to concerns that China is artificially promoting state-subsidised steel. We can see the impact of such trade-distorting practices today, with the steel market 40% over capacity. The facts show that as we have stepped up to take action, the Labour party has been shuffling its feet. Despite the rhetoric today, in her very first appearance at the Dispatch Box in that role, the shadow Secretary of State for International Trade, the right hon. Member for Islington South and Finsbury (Emily Thornberry), asked my right hon. Friend the Secretary of State to make it clear to the United States that she would not agree a deal with our American friends that would constrain Britain’s ability to negotiate a deal with China. The right hon. Lady was willing to put a deal with China ahead of the deal with the United States.

Whether the Labour party has changed its policy on China or not, this people’s Government have no plans to do a trade deal with China. On the contrary, we have used our presidency of the G7 to rally an alliance of democracies in a battle for the soul of global trade. To win that battle, we want better and more modern rules at the World Trade Organisation, as well as new rules on industrial subsidies. That is why we are working under the G7 trade track, an initiative pioneered by Britain to set the agenda for WTO reform. This will be a tough fight, but it is a fight we must win. People cannot believe in free trade unless it is fair. That is why we need effective rules and tools.

Trade remedies are an important tool in our tool box, and it is right that Britain stands up for her key industries. It is right to have a robust framework in place, and we do. We said that we would get Brexit done and then move on to people’s priorities. We got Brexit done. We got a trade deal with the EU, and now we have transitioned 19 measures from the EU, plus the steel safeguard. Now that we have full control of our trade policy, we can go further to defend British industry and jobs, and take further action where necessary.

[Jim Shannon (Strangford) (DUP)]

The Minister is painting a very positive picture. Has any consideration been given to ensuring that every Government contract is carried out using only British-based steel? Not only would that secure local jobs for local people, but I believe it would send a message that has been lost in our search for a good deal.

[Mr Jayawardena]

The hon. Gentleman is right to say that we must champion British steel at every turn. Indeed, the Department for Business, Energy and Industrial Strategy has been creating a strong pipeline to ensure that advance notice has been given to industry about the 7 million tonnes of steel that will be required, so that industry can seek the opportunities that lie ahead. The safeguard measures that Labour Members talk about today are only part of the picture with trade remedies. Dare I say that it is not the first time the Labour party has not quite understood international trade?

We must remember that safeguard measures are not intended to address unfair practices, which are the subject of the motion. They are emergency measures intended to tackle unforeseen surges in imports, and they are governed by strict WTO rules. It has been the job of the independent Trade Remedies Authority to investigate whether the steel safeguard measures should be extended, amended or revoked. That independent organisation has followed the evidence, and engaged widely with importers, domestic producers and overseas exporters. Although on Twitter the shadow Business Secretary seemingly does not know the difference between independence and being part of Government, the TRA is independent. This is not the Government’s proposal, and for each commodity covered by the safeguard measures, the TRA has considered whether there is domestic production, whether there is evidence that a surge in imports has caused or threatens to cause serious harm, and whether it is in British economic interests to maintain the measure.

[Richard Fuller (North East Bedfordshire) (Con)]

The shadow Secretary of State stated that she was shocked that the TRA had not considered what the impact would be if the restrictions were removed. Under schedule 49(4)(a) of the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019, that is precisely what it must consider in its analysis. Does the Minister agree that the right hon. Lady does not know what she is talking about?

[Mr Jayawardena]

My hon. Friend makes an excellent point about the lack of attention to detail on the Labour Benches. The approach we have taken forward is in line not only with WTO rules but with our domestic legislation.

I will tell you the truth, Madam Deputy Speaker: the TRA has recommended to the Secretary of State that nine product categories of the existing safeguard measure be removed. It judged that seven of them did not meet the requirement to show a significant increase in imports. Another failed to show any risk of serious injury or injury recurring, and the other did not pass the economic interest test, with industry asking for it to be removed, as the shadow Secretary of State discovered this morning, courtesy of the “Today” programme on BBC Radio 4. The Labour party seems intent on throwing the baby out with the bath water. The TRA recommended retaining the safeguard on 10 other product categories, and that would be exposed to legal challenge if we were arbitrarily to take the sort of decision that the Labour party advocates. Does the Labour party want to leave the WTO and adopt an isolationist approach in the world? I don’t, and I won’t.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No.

In truth there is a choice between working hard, getting into the detail and defending British interests, which we are doing and will continue to do, and playing politics, as Labour Members and those on the left of our politics seem intent on doing.

It is worth remembering that the TRA was set up in 2018 under the last Government and places strict limits on the powers of the Secretary of State. Of course, the Labour party knows this, because Labour tried to curtail the Secretary of State’s powers even further. The hon. Member for Bootle (Peter Dowd), as shadow Chief Secretary to the Treasury, spoke against

“the public interest...being used as a mechanism to widen the powers of the Secretary of State.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 25 January 2018; c. 103.]

During the passage of the Taxation (Cross-border Trade) Act 2018, Labour stood against the Secretary of State being able to reject a recommendation of the TRA, but today Labour is asking us to legislate to do just that: to reject the TRA’s recommendation.

Under the legislation from the last Parliament—that dead Parliament—the Secretary of State does not have the power to change the TRA’s recommendation—

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No, the right hon. Lady has had her say.

The Secretary of State does not have the power under the law to change the TRA’s recommendation on the safeguard measure to retain measures against its advice. She possesses only a downward ratchet, which means either accepting the TRA’s recommendation in its entirety or rejecting it and seeing every part of the safeguard measure expire on 30 June. I can assure the House that the Secretary of State takes these responsibilities very seriously and will reach a decision on the recommendation and publish it before the measure is due to expire.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

I will.

[Emily Thornberry]

I am very grateful to the hon. Gentleman. Is he in favour of these recommendations? Does he think they are a good idea or not?

[Mr Jayawardena]

I will come to the Secretary of State’s position and the process that will follow in a moment, but I must be clear—

[Emily Thornberry]

That is not what I asked.

[Mr Jayawardena]

The right hon. Lady did not answer the earlier question from my hon. Friend the Member for Redcar (Jacob Young) either.

Extending the deadline for a decision is not an option, and extension of the safeguard on product categories would expose Britain to challenge from other member countries of the WTO for non-compliance with the agreement on safeguards, which, as I warned a moment ago, may lead to a WTO decision requiring the United Kingdom to revoke the measure in its entirety.

I thought the Labour party understood these principles. After all, the hon. Member for Brent North (Barry Gardiner), the then shadow Trade Minister, criticised President Trump for imposing

“protectionist tariffs that the rest of the world believes are illegal under WTO rules.”—[Official Report, 4 June 2018; Vol. 642, c. 39.]

Maybe that was Labour’s policy then and this is its policy now. Perhaps the Opposition were against the policies of President Trump then and support the policies of President Trump today. Either way, they do not have the British national interest at heart. The Labour party is showing once again that it is a protest party, lacking in competence and understanding of the issues. Labour may have changed its leader, but it poses a clear risk to our country.

Turning to our friends in Europe and America, we continue to have discussions with the steel sector to understand its concerns about the outcome of the EU’s steel safeguard review. We recognise the harm caused by the unfair and unjustified US tariffs levied on our steel industry under section 232. It is fake news to suggest that our steel industry threatens the viability of American steel producers or that it contributes to global excess capacity in the market. Trade barriers such as these are what bring the rules-based international trading system to its knees, yet that is the sort of approach that the Labour party is advocating tonight. We remain disappointed at the continued imposition of such tariffs and are pressing our American counterparts for an urgent and permanent resolution. After working to date to de-escalate the Boeing-Airbus dispute by agreeing to suspend retaliatory tariffs for five years, we now want to shift their attention to the unjustified section 232 tariffs and work with them to agree a fair, permanent resolution for British industry.

We will continue to deliver for the British people, and that is why we are reviewing the Secretary of State’s powers already, exploring and consulting on how we might legitimately be able to strengthen them. That is why we are working closely with the Department for Business, Energy and Industrial Strategy to ensure that trade remedies measures are up to date in the current context, not least following the pandemic. In the event of there being increased imports of unfairly subsidised products into the United Kingdom, we will not hesitate to take action to defend the industry using anti-dumping and anti-subsidy tariffs. That shows our resolve to improve our domestic toolkit and to use the tools at our disposal to tackle market-distorting practices, but rushing through changes to legislation, posing a risk to industry in the process, as Labour would have us do, is not the answer.

[Emily Thornberry]

Will the Minister give way?

[Mr Jayawardena]

No. We should all greatly value Britain’s reputation as a champion of global free and fair trade. We should not want to take actions that risk being found to be non-compliant at the WTO. The Secretary of State takes her responsibilities very seriously in considering the recommendation from the TRA, but the truth is that the best way forward, the right way forward, for our steel producers lies in free and fair trade. Together, we can make sure that this vital British industry enjoys a sustainable long-term future. The British people should be in no doubt: this people’s Government are backing our steel manufacturers; this people’s Government are backing the tens of thousands of jobs in the industry; and this people’s Government will continue to do so.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Scottish National party spokesperson, I remind colleagues that there is a three-minute limit on Back-Bench speeches. If colleagues take less than three minutes, more people will get in—at the moment, not everyone will get in. I should also say that if colleagues choose to take interventions, I would be grateful if they still stuck to three minutes. Thank you. I call Marion Fellows, for the SNP.