Richard Fuller
Main Page: Richard Fuller (Conservative - North Bedfordshire)UK Steel Industry
Richard Fuller Excerpts
Ms Eagle
My hon. Friend is absolutely right. I hope that the Secretary of State is taking note.
The loss of our steel industry would worsen our already record-breaking trade deficit, which is now the worst since 1948. The value of the goods and services we import now exceeds the value of those that we export by £32.7 billion. The loss of steel and our current exports of steel combined with the need to import far more steel would make this barely sustainable record deficit even worse.
Beyond the economic cost, there would also be an intolerable social cost. There are 15,000 jobs directly at stake in the industry and a further 25,000 jobs at stake in the wider supply chain. These are the kind of high-skill, high-paid jobs of which we need to see more. The end of steelmaking in the UK would be devastating for 40,000 workers and their communities. Some people have highlighted the potential costs of intervening to save the steel industry, but I believe the costs of letting steel fail are far greater.
Richard Fuller (Bedford) (Con)
I do not want to pre-empt what the hon. Lady may say, but will she confirm that it is the policy of Her Majesty’s Opposition that the steel industry should be nationalised, and should remain in public hands until it can successfully go back into private hands?
Ms Eagle
What needs to be done is what is necessary to preserve, restructure and ensure the survival of our steel industry for the future. That is the Government’s job. We will be as supportive as we can—I shall set out some parameters later in my speech—but this is about the Government getting their act in order. The Opposition are holding the Government to account for their actions, rather than just their words. That is what this debate is about.
Sajid Javid
We should always be driven by the evidence. The 99% fall in imports year on year, resulting from the tariff, suggests that it is effective, but we should always keep the situation under review and ensure that it remains effective.
Richard Fuller
My right hon. Friend mentioned the action that the Government have taken on procurement and their response on tariffs and power. Yesterday, he talked about Government co-investment. Will he please take this opportunity to clarify what is meant by that?
Sajid Javid
My hon. Friend will know that that comment related to Tata’s decision to sell its strip products business. What I said was really to show that when the Government say that we will consider all options to help create a long-term, viable business with a commercial operator, that would be such an option. The key point is that any co-investment would have to be on commercial terms. Investment can take a variety of forms, such as debt, but what I said was a demonstration of all the options that the Government are considering. I will move on to say a little more about Tata strip products in a moment.
Richard Fuller (Bedford) (Con)
It is a pleasure to follow the hon. Member for Aberavon (Stephen Kinnock), but it is unfortunate that his speech veered towards the critical, rather than the constructive. However, he can be forgiven, because he is one of many MPs speaking in this debate with a significant steelmaking presence in his constituency.
My constituency is not one of those constituencies, but in Parliament we talk as one community for all our constituencies, and discuss how different constituencies and communities can reach out to communities that are severely affected when things go wrong in an industry or because of a natural disaster. Let me repeat that the issues in the steel industry are not going to go away. We face many years of brutal competition in the global steel industry. If my right hon. Friend the Secretary of State and his team can, over the coming months, successfully find long-term solutions for steelmaking plants in Motherwell, Scunthorpe and Port Talbot, that will be a significant achievement in these times.
As someone who does not have a steelworks in his constituency, I believe it is important to discuss what the rules ought to be on what is fair for communities across the country. The OECD in its report last year on the steel industry said:
“In competitive economies, it is the responsibility of the steel companies themselves to identify ways to adapt to changing market conditions.”
We have to accept that many steel companies in the UK have failed to do that. The OECD goes on to say:
“The role of governments should be to allow market mechanisms to work properly and avoid measures that artificially support steelmaking capacity.”
The OECD understands the ways in which developed and developing economies can prosper, and it is important that the Government bear those words in mind. It is also important—and I should like to hear from my right hon. Friend the Minister for Small Business, Industry and Enterprise on this in her closing speech—that while we prepare for the best we also prepare for the worst. I should like to know what the Government are doing to prepare support for Port Talbot if all their best efforts to save the steelworks do not come to fruition. May I make one point from my memory of the coal-mining communities in the 1980s? The Government can never give enough support to communities that rely on a single industry.
Richard Fuller
No, this is a lesson that we all need to learn. [Interruption.] If the right hon. Lady stops chuntering, I can make a point with which she might agree. Lessons have been learned from the 1980s, and in communities with a significant concentration of industries the Government always have to do more than they think they have to do.
Duties have been mentioned a number of times, so let us clear up the lesser duty rule. The point, as my right hon. Friend the Secretary of State said, is whether the duty is effective. We follow the lesser duty rule, and in the three instances that he mentioned, import penetration has all but disappeared. Giving up the lesser duty rule is not about stopping more steel coming in, but about raising prices on those products. If a 14% tariff is increased to 50% when imports are eliminated that will result in inflationary pressure from the steel industry to other markets, and might be regarded as supporting subsidies from one part of the steel industry to another. It is not right to give up the lesser duty rule, which is the underpinning of the World Trade Organisation, and to take the US approach of zeroing in on tariffs.
On the 267% tariff that America imposed on Chinese cold rolled flat, it was part of the same US decision that imposed a 31% tariff on Tata steel. Tit for tat on trade tariffs does not work.
David Mowat
Does my hon. Friend have a view about why Chinese dumping affects the UK industry much more than the German and Dutch industries? Indeed, Tata is trying to consolidate in Holland. Why have we been affected differently?
Richard Fuller
My hon. Friend speaks very intelligently. Private companies make decisions in different markets across the European Union. I disagree with my hon. Friend the Member for Wellingborough (Mr Bone), although we agree on Brexit, as I am not sure that the EU is pertinent to the decision that will affect the steel industry. The Government have taken effective action on procurement and power. Having served on a Bill Committee on the privatisation of Royal Mail, I think that a case can be made for the Government to take action on the pension requirements for members of the British steel industry, which was a nationalised industry. There is plenty of scope, for people like me who believe in the free market, to argue that the Government can take action on that basis.
The Opposition say that they believe in nationalisation. The hon. Member for Aberavon said that he believes in nationalisation, but that it is “not a long-term solution”. Opposition Members do not know when the crisis in the global steel industry is going to end. The global capacity glut is over 30%. I am afraid that if we nationalised, we could not determine when we could return the industry to the private market. If people nationalise, they do so for as long as it takes, and I believe, although I understand why my right hon. Friend will not do so, that the Government should rule out nationalisation, which is a step too far for the British economy in supporting the steel industry.
Finally, may I put the issue of the steel industry in context? During the time that most of us will spend in the House—I am looking at older Members—we will live though a global over-supply of capacity. That will be true not just of steel but of other sectors of our economy. We need to understand and abide by the rules that have created a free trade system that has been one of the biggest supports in improving living standards around the world. Supporting WTO rules on the lesser duty tariff is important, as is avoiding a tit for tat war on tariffs. Supporting communities with a significant industry that is affected and making sure that the Government do more than they think they need to do to support those communities are part of making sure that our economy supports them. I commend the Government on their actions, and I will continue to support them critically.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
This is not just about the obvious news stories about Port Talbot or the strip industry; it involves all Tata sites, including Aldwarke, Thrybergh, Stocksbridge, Shotton, Llanwern, Orb, Corby and Hartlepool; this is a UK steel crisis.
I reiterate that Tata has to behave like a responsible seller, and we need to remind it of its antics in 2010, when Kirby Adams, the then chief executive of Tata in Europe, tried to use skulduggery to shut Redcar. We solved that problem, but it took more than two years—two years in which there was not one hard redundancy. We need to remind Tata of its previous behaviour and not see it happen again.
British steel is not a basket case, a failed industry or a sunset industry; it is a very successful industry. We had evidence of that recently, when Liberty Steel bought Dalzell and Clydebridge—integral parts of any programme for Trident renewal. Teesside Beam Mill, Skinningrove, Scunthorpe, York, Blaydon and, indeed, Hayange in France, which is part of the long products division sold off to Greybull, are another success story of assets that investors want to buy into. They also demonstrate the European aspect of the previous Corus-British Steel envelope, and we still have sites in IJmuiden and Hayange.
British steel has always relied for its totemic name on its quality and its research and development. Places such as the Materials Processing Institute in Teesside at the old labs at Grangetown, as well as the research and development capacity in Rotherham and Sheffield, when linked with blast furnaces and electric arc furnaces, gives us the ability to control the destiny of metallurgy in our nation. That means we can innovate and create new products. That must be remembered.
I am interested in the notion of co-investment, whether that is in cash terms, or whether it is about an equity stake, a loan, R and D or, more importantly, Government policy. If we are to have a real discussion in this place, we have to look at the different options for co-investment. That is not about the individual commercial parties that may be interested in purchasing, but about putting ideas on the table so that we can actually plan an industrial strategy, because we have not done that in the last five years.
Let us take the issue of Chinese dumping. This is a new phenomenon; it has been going on for four and a half years. Before that, it was not happening. The circumstances have changed, and that is why the Government have to change the way they behave on the lesser duty rule and other legislation. There are no precedents, and that is why we cannot stick to rigid dogma, or even analytical argument around World Trade Organisation rules. On co-investment, I have to question whether we are properly looking at issues such as shale gas, and whether parties are being honest about the policy on that, because we are talking about gas-intensive industries.
On carbon capture and storage, the Government have to come clean. They have pulled the rug from under energy-intensive industries on carbon capture and storage. How will they maintain energy-intensive industries—whether it is chemical processing, shale, steel, light manufacturing, glass, cement or bricks—without a proper strategy on carbon? Taxes can be implemented under the EU emissions trading scheme or unilaterally, by bringing in the carbon price floor. They did that in the Budget some years ago, and they promised to give compensation. However, they did not calculate that if they wanted to compensate people for their own unilateral British tax, they could do so only via the European Union. They had not done the requisite work; they looked at the margins that a Treasury civil servant brought forward and just applied a rule, and they are now reaping the consequences of that.
Ultimately, Port Talbot, the strip and every single other site need time. In 2010, Redcar was saved over two years; SSI had six weeks and fell. We have to give British Tata sites time so that they can be saved. We need proper definitions of co-investment for the community to discuss.
Richard Fuller
The hon. Gentleman is talking a lot of sense. On the issue of time and co-investment, the Government could provide a bridging loan that extends beyond the period for which Tata is prepared to subsidise the steelworks, until a future buyer is found. Is that the sort of co-investment that the hon. Gentleman has in mind?
Tom Blenkinsop
I thank the hon. Gentleman for his intervention and for giving me some more time. I really appreciate his comment.
Continued production is another pillar. If we are to save these sites, production has to be continuous or skills will be lost. In Redcar in 2010, the then regional development agency, One North East, along with Government agencies in Whitehall, provided a £60 million package. That came from RDA and central Government budgets. It retained people in the area on training courses while we—I was a union officer at the time—negotiated with other parties, such as Marcegaglia, Dongkuk and SSI, to get that site bought. It is vital to look at continuous production, time and other elements of co-investment, not just the cash element.