UK Steel Industry

Richard Graham Excerpts

Monday 29th February 2016 Commons Chamber

[Sajid Javid]

I know the hon. Lady feels passionately about the matter, but it is important to get the facts right. On rebar, the European Commission has so far come up with tariffs of between 9% and 13%. The industry is asking for 20% to 30%, and we support that. I hope she will also support that.

The fifth and final ask was lower business rates. A Treasury review of those is ongoing, and I hope that it will be concluded ahead of next month’s Budget.

[Richard Graham (Gloucester) (Con)]

Before my right hon. Friend comes to his last point, in answer to the question raised earlier about MOD procurement, my understanding is that on the two Queen Elizabeth class aircraft carriers, 77,000 out of 82,000 tonnes of steel was UK-sourced. Will he confirm that figure?

[Sajid Javid]

I think those numbers are right. Well over 90% of the steel was British, and that is exactly what we want to see. National Rail is using 98% British steel in major infrastructure projects, and more than 95% of the products used in the Crossrail project—the largest infrastructure project in Europe—are British. That is exactly what we all want to see.

--- Later in debate ---

[Richard Fuller]

If I may, I would like to address that point directly in a few minutes.

Free trade is a global good. It enriches us. It broadens choice. Free trade, by bringing people of the world together, makes us safer. We have a responsibility, even in these difficult and straitened times, as the hon. Gentleman says, to protect free trade. Those of us here in the United Kingdom have a special responsibility to protect free trade, because we have been one of the major proponents of free trade over the past century and a half. That is something worth protecting and worth bearing in mind at all times.

The hon. Member for East Lothian (George Kerevan) asked whether we should, essentially, toughen up in these special times with China. I think we are seeing indications that China understands it needs to toughen up as well. China has said—I am not an apologist for China; trust me, I like the other china—that it wishes to reduce its productive capacity, with one quarter of its production being taken out of commission. It is planning to reduce employment in this sector by 400,000 jobs. China is taking steps that indicate that it sees a responsibility to satisfy not just its own consumption and demand but its responsibilities in the global economy. Members should bear those thoughts in mind as they come to their conclusions.

[Richard Graham]

My hon. Friend’s defence of free trade is admirable, but he is not suggesting, is he, that the Government are wrong to look at various ways of mitigating the problems that the steel sector is facing, in particular with regard to energy and on procurement?

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

The gulf in understanding between those on the two sides of the House is rarely more obvious than when we talk of heavy industry. It is clear that the Government, with all the good will they may have towards the industry, are in alien territory. The best they have been able to produce today is not a man or a woman of steel, but someone who lived within sight of a steelworks. I speak with a little authority on this, because I started working in the steel industry in 1955 and was still there 30 years later.

There is a feeling of grief about the terrible destruction of the steel industry. People have talked about the scars on the countryside. It is painful to see areas that were once breathing fire and steam—where there was life, prosperity and energy—now wastelands of rubble and brambles. The real suffering is felt by those who worked there. They suddenly find that their often unique skills, the scrap of dignity around which they built their self-regard and their life, have been stripped away. They live the final years of their lives lacking that sense of self-respect, their ability to have the prosperity they expected torn away. I am very proud, with my hon. Friend the Member for Newport East (Jessica Morden), to represent Newport, which relied on the steel industry for 150 years. It has suffered terrible losses.

I want to make a point about different attitudes. It is extraordinary how the Government have been seduced by Chinese communists, and how they are allowing the future of our industry to be colonised by the Chinese. It is unbelievable. We look back with amazement to see what we have done. We have mortgaged the future of our nuclear industry in perpetuity to a Chinese company. So that we can have the Hinkley sprat, we have given them the mackerel of Bradwell and the other power stations of the future. Something has happened with Hinkley Point and it is about time the House woke up to it. A former Secretary of State for Energy has written a book. He said on the “Today” programme this morning that Hinkley Point is a dinosaur. In the past fortnight, articles in the Financial Times and The Economist have said that it does not make sense to proceed. It is a basket case. It is a disaster in the making. All the sensible investors, including Centrica, which invested £200 million, have gone, and all that is left is this cheap, Chinese money and EDF.

Where is EDF? EDF had a debt of £37 billion, and if it were not a nationalised company, it would be bankrupt. It is pulling away because the technology planned for Hinkley Point is a dinosaur—it has never worked anywhere. The EPR reactor in Finland should have been producing electricity seven years ago, but it is not, and there is no sign of it doing anything. It is the same with the Flammanville EPR. It has a major fault; there is a split in the steel in the vessel. The whole thing might never happen. These huge sums are at stake, yet the Government go blindly on in their belief in nuclear power. There is another side to this, too.

[Richard Graham]

rose—

[Paul Flynn]

I would rather not give way; too many people want to speak.

One man has a belief in a different kind of energy. Mr Sanjiv Gupta recently rescued hundreds of jobs in the constituency of my hon. Friend the Member for Newport East. He believes in tidal energy. His company is without any debts and is free to spend its money anywhere. It has already saved jobs and it plans to create at least 1,000 new jobs, and the investment is based on tidal energy, not on the myths of Hinkley Point that will never happen, but on the tide, which flows up and down, washing the walls of Hinkley Point and our constituencies. It is the second highest rise and fall of tide in the world, with massive untapped power. It is clean, British and the source of power is freely available to us. It is entirely predictable and it is virtually eternal: it will go on for all of human time. The power is vast. If it is combined with pump storage schemes, when the tide is producing energy that is not required, it can be used to pump water up to the valleys, so it can become entirely demand responsive.

There are two views on the issue. We know that the problem with the steel industry now and in the future is that it needs prodigious quantities of energy, and until we get entrepreneurs with imagination who believe in the practicalities of life, there will be little chance of progress.

Let me make one final point. I was somewhat provoked to make it when I heard that the farmer Andrew R. T. Davies, who is the Opposition spokesman in the Welsh Assembly, has announced that he wants us to come out of Europe. The only advantage I can see of coming out of Europe is that it would allow us to look at the subsidies that all the farmers get, averaging £220,000 per year per farmer in Wales. If we come out of Europe, the question must be asked how we could possibly go on investing 30% to 40% of the total budget of the European Union in an industry that produces less than 2% of our gross national product—an industry that is in serious trouble, and is not competitive. Yet what is the attitude of the Government? They want to save it, and they will put through any kind of subsidy. It will be unlimited, because this is a party in which farmers are grossly over-represented and from which steelworkers are entirely absent.