UK Steel Sector: Supply Chains

Sarah Champion Excerpts

Wednesday 9th June 2021 Westminster Hall

[Sarah Champion (Rotherham) (Lab) [V]]

It is always a pleasure to serve under your chairmanship, Sir Graham. I am very frustrated that we are here once again; I hope my speech will explain why. The British steel industry has huge potential, but the long-term failures of the Government to address the underlying issues continues to hold it back. Since I was first elected in 2012, steelworkers in my constituency have faced a seemingly endless cycle of crises with lingering uncertainty, not only for them but for all those throughout Rotherham, where the local economy and people’s livelihoods depend on the sector. That uncertainty has continued with Liberty’s announcement that it is selling its speciality steels division, which includes the narrow strip mill at Brinsworth in my constituency.

Throughout the recent difficulties at Liberty, the Government have promised much but, to date, delivered little in the way of practical support. That cannot continue as the sale progresses. Any sale must safeguard the long-term future of the plant and must hold Sanjeev Gupta true to his word that no plant will close on his watch. Liberty must run a transparent sales process and engage with all concerned parties, including the trade unions. The Government must carefully scrutinise any deal and ensure that it includes clear safeguards for the future of both the plant and the steel jobs. They are crucial assets to our economy and they cannot be lost as the result of a fire sale to secure finances for GFG’s other businesses.

While the sale of speciality steel is concerning, Liberty’s ongoing commitment to its Aldwarke plant in Rotherham is encouraging. The plant can lead the way in our drive to decarbonise our steel industry. Decarbonisation presents challenges but also offers huge opportunities to grow our economy and create new green jobs, but that would take sustained support from the Government and a viable long-term plan—something that, to date, has been lacking.

I urge the Government to recognise this opportunity to work with the industry to create the greener future we all want to see. None of that can happen while the Government continue to shy from confronting the sector’s underlying issues—issues that are well understood, but remain unaddressed. The Government had long argued that EU rules prevented state aid for the steel sector. Those rules no longer apply, and it is high time that the Government developed their own system to regulate subsidies and support investment.

The public sector is British Steel’s largest single customer. Tendering processes must consider the impact on domestic jobs, as already seen in France and Germany. I see no reason why this Government’s procurement process cannot favour UK-produced steel, not least because it is the best in the world.

With British Steel paying an average of 86% more for electricity than its competitors in Germany, action on damaging high energy costs is essential if the industry is to hope to compete on an even footing. We must also defend our industry from being overwhelmed by cheap foreign imports. It is deeply disappointing that the Trade Remedies Investigations Directorate is arguing to slash safeguards on nine out of 19 product categories, which runs the risk of cutting the industry off at the knees. I urge the Secretary of State to reject its recommendations.

The steel industry can have a bright future if the Government engage with these issues and work with the industry to provide the support that it needs to grow and thrive. However belatedly, I really hope the Minister will listen and that the Government will act to protect our steel industry.