Protecting Britain’s Steel Industry

Baroness Winterton of Doncaster Excerpts

Monday 21st June 2021 Commons Chamber

[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.

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[Marion Fellows]

I thank the hon. Gentleman for his intervention. He actually did the next part of my speech, so I can move on and let more Back Benchers in.

It is quite hard to talk about global Britain when a UK foundation industry, such as steel, is being put to the wall by a Government who seem not only not to understand manufacturing but to think that it is okay to allow a foundation industry to try to compete with both hands tied behind its back. The UK Government said that they wanted to “take back control” from bureaucrats, but they are allowing the TRA, an unelected body, to make shattering decisions on the steel sector. This is a Government just like Thatcher’s Government, who closed Ravenscraig in my constituency. The UK Government have the power to protect steel jobs, but they are actively undermining steelworkers and the steel sector and risking jobs. Boris Johnson is finishing off Thatcher’s mission to destroy Scotland and the rest—

[Madam Deputy Speaker (Dame Rosie Winterton)]

The hon. Lady should not really refer to the Prime Minister by name; she should say “Prime Minister”.

[Marion Fellows]

I am sorry—the Prime Minister is finishing off Thatcher’s mission to destroy Scotland and the rest of the UK’s industrial base.

Contrast that with what the Scottish National party Scottish Government have done for steel in Scotland. The Scottish steel taskforce was set up at the same time as the UK taskforce, or a few months later, to save the Dalzell works and the Clydebridge plant. From day one, the focus was on making these plants productive again. The Lanarkshire steelworks had closed in 2015 and the Fort William smelter was poised to close before the Scottish Government interventions in 2016. The Scottish Government helped Liberty Steel to reopen Dalzell, and direct job numbers have recovered. In Lochaber, 165 direct jobs have been saved—not many, but in Lochaber, that is a huge number of jobs—and 44 new jobs were created by the GFG Alliance.

The Scottish Government and Scottish Enterprise supported Liberty’s acquisition of Dalzell and Clydebridge steelworks. Scottish Enterprise provided support through a £7 million commercial loan to Liberty Steel and the business has successfully re-entered the heavy steel plate market. Scottish Enterprise recognises the challenging environment for businesses in Scotland right now and the significant economic benefit that Liberty Steel brings in terms of jobs, the supply chain and the future safeguarding of Scotland’s steel industry. Scottish Enterprise is in discussion with Liberty Steel on repayment of the loan funding, and, of course, debt forbearance is not uncommon in the current market.

The GFG Alliance has said that its Scottish businesses are performing strongly and have access to sufficient resources for their current needs. There has been no call on the Government guarantee and the Government receive a fee from the business for providing the guarantee, and the guarantee is backed by security over its assets. In Scotland, there is political will to support the steel industry. Where is that will in the UK Government? It appears that this UK Government are happy to give a hand to their cronies, but are willing to allow steel, a foundation industry, to founder under unfair competition and high energy prices. There is a reluctance to help an industry that provides decent, well-paid jobs and that could supply steel for the green energy industry and infrastructure for recovery after this coronavirus pandemic.

Finally, will the Minister be added to the list of his predecessors who talked a good game, but refused to actually help the steel sector? Minister, we are waiting.

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[Barry Gardiner (Brent North) (Lab) [V]]

One of the reasons that I spent so many hours in Committee opposing the Trade Bill in the previous Parliament was to avoid precisely the sort of nonsense that we are discussing today. The recommendation by the TRA to remove safeguards on nine out of 19 product categories takes us back five years to the crisis that we experienced in 2016. It will leave half of steel products exposed to a flood of imports. We know this because prior to the introduction of the current steel safeguards, UK imports of steel increased by 25% between 2013 and 2017, severely undermining our own industry.

The Government failed to ensure that the TRA would protect and defend British producers. They engineered the membership of the body such that not only does the Secretary of State maintain full control of who is appointed and what its remit will be, but no voice can even be raised to temper the Government’s dogmatic fixation on what their own warped vision of free trade happens to be.

Labour tabled a series of amendments to ensure a level playing field for British industry. The Government voted down every single one of those amendments—and now where are we? We are left with a whole industry that is rightly angry and confused: confused as to why trade unions and employers were not consulted at any stage in respect of the TRA recommendations; confused as to why the TRA has shown such a lack of understanding about the interconnectedness of the industry, as assessment of product categories separately cannot provide an accurate picture of the threat of an increase in imports, nor the damage that it would cause; confused as to why out-of-date data was used that does not include volumes of smaller imports, where there was an increase in 17 of the 19 product categories that the TRA has simply not accounted for; and confused as to why, at a time when the EU and US are maintaining their safeguards, we are stripping ours away.

This decision will leave our market open to import surges just as the sector recovers from covid-19, and at a time when our exports to the EU and US will still be subject to tariffs and quotas. It is reported that the EU and the US are in bilateral negotiations to end tariffs on steel products with a deadline of the end of the year. So, well done to the Secretary of State—it looks as if she has engineered a situation where our steel exporters will not only be undermined in their own domestic market by cheap subsidised steel from China and the far east; they will also face a 25% tariff to enter the US, just as their EU competitors will face no barriers at all. The incompetence is staggering.

The sector employs 33,000 people. It is a sector that communities and towns are built around. It is a sector that is highly innovative and has continually bounced back from crisis after crisis—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I thank the hon. Gentleman for his speech. We must move on because I need to get as many people in as possible.

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[Sarah Champion (Rotherham) (Lab)]

The decision whether to extend safeguards in steel production is the first real test of the UK’s independent trade policy. As of today, it is a test that the Government have woefully failed. The recommendation of TRID, now confirmed by the TRA, is a crushing blow to the UK steel industry, coming at a time when it faces myriad challenges, both long and short term. The recommendation will leave almost half of all UK-produced steel production categories and a third of UK-produced steel by volume at the mercy of import surges, with devastating consequences. The interconnected nature of the industry means that those consequences will be felt across the sector.

Both the US and the EU are almost certain to extend their own safeguards. In contrast, Britain stands ready to open up our own markets, leaving import challenges inevitable; at the same time, our exports will face substantial tariff barriers, placing UK-produced steel at a huge disadvantage in the global markets. For years, the Government have blamed EU rules for their own failure to provide the UK steel industry with the backing it deserves. Now, free from those rules, rather than fighting to protect our industries, the Government are using steel as the canary in the coalmine.

This decision could not come at a worse time for the industry. In Rotherham, my constituents face profound uncertainty. The crisis that has engulfed Liberty Steel has placed steel production in the town in jeopardy. Steel is central to our local economy. With more than 900 Liberty staff based in Rotherham and many more workers in the steel supply chains, its loss would be a colossal blow, but more is at stake than the economic impact. Steel is integral to our town’s identity, its pride, its heritage. Although there has been some good news recently, with Liberty reiterating its commitment to the Aldwarke plant, the decision to seek a buyer for its specialist steels arms, which include the Brinsworth narrow strip mill, is a cause of real concern.

To date, the Government have done little more than keep a watching brief. We cannot allow this to continue. The Government must play an active role to make sure that our industry is secure.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go via videolink to Grahame Morris. To reiterate, if he speaks for less than three minutes, we will get more people in.

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[Mr Toby Perkins (Chesterfield) (Lab)]

We have heard impassioned speeches on both side of the House from Members who represent steelmaking constituencies. I am really pleased that the motion from my hon. Friends also recognises the importance of those in the supply chain, because in Chesterfield, with our close proximity to Sheffield, we have a long-standing history of supply to the steel industry, and that is incredibly important.

What is slightly missing from this debate is how crucial the steel industry is not just to those people employed directly in it or those supplying it, but to manufacturing in the UK more broadly. In terms of the role of global Britain and supporting global manufacturing, having a competitive steel industry here in the UK is absolutely crucial and we must give that support. I feel that the Government do not think through the consequences of us being entirely dependent on China, in terms of our global independence. When I heard the contribution from the Minister at the start of the debate, it made me wonder if that was really the party that, just a few months ago, was claiming that they would enable us to “take back control”, because he simply stood at the Dispatch Box, threw his arms in the air and said that there is nothing that we can do. I am glad that there are some Government Members—in Stocksbridge, in Scunthorpe—who do recognise how dangerous this will be. Let us see how they vote later today and whether they do so based on the sentiments that they laid out.

Manufacturers in Chesterfield have been coming to me saying that the steel prices that have rocketed up recently and a Government who are washing their hands of any responsibility are making UK manufacturers outside the steel industry desperately concerned that they will no longer be competitive in future.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Beth Winter, who has two minutes.

[Beth Winter (Cynon Valley) (Lab)]

I come from a family of Welsh industrial workers. My father and grandfather were coalminers and my other grandfather worked for the steel industry. The steel industry is a vital part of the Welsh economy. Along with the coal industry, it is part of our industrial heritage, and I want steel to be part of our future, too. I have seen at first hand the devastation caused to communities by the closure of the mining industry and I do not want the same to happen to the steel industry. It employs thousands in jobs in Wales, and many through the supply chain, and the median salary in the steel sector is around £34,000 a year. While this may seem humble to the average Tory, it is 45% above the median salary in Wales. It provides stable, well-paid jobs—gold dust in parts of the country such as mine that have been neglected by successive Tory Governments.

The Government talk of levelling up, but we judge them by their actions, not their words. Their failure to protect and modernise the industry adequately belies the levelling-up rhetoric. Levelling up for the steel industry in Wales will be sacrificed on the altar of the Government’s uncaring pursuit of free trade agreements. If Wales is to meet its carbon emissions target, the steel industry needs considerable investment, and the UK will not achieve its target for emissions unless the steel industry in Wales is adequately financed to enable this to happen.

There are measures that this Government can take to protect the British steel industry, particularly in this post-Brexit world. Not to take those steps would be an abrogation of the Government’s responsibility to the British people. Not to invest in the necessary infrastructure for the future green industry would be a denial of their obligations to future generations. That is why I fully support this motion.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I apologise to those who have not been able to get in, but I need to start the wind-ups now.