Stephen Doughty
Main Page: Stephen Doughty (Labour (Co-op) - Cardiff South and Penarth)UK Steel Industry
Stephen Doughty Excerpts
Sajid Javid
I will come on to trade defence instruments in just a moment.
I want to talk about the delivery of a new flexibility on emissions regulations. This was asked for by the industry and we have delivered, potentially saving the industry hundreds of millions of pounds. We have also taken action on procurement, and we have become the first country anywhere in Europe to take advantage of EU rules to make it easier for the public sector to buy British. That is on top of our proud record of procuring British steel.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Secretary of State makes much of the changes he is making on procurement. The Minister for Defence Procurement, the hon. Member for Ludlow (Mr Dunne), who is sitting next to him, told me in answer to a recent question that the Ministry of Defence did not even have full records of where it was getting its steel from for UK defence projects. How can we be sure that the Secretary of State will follow through on his commitment on procurement when Government Departments are not even keeping records and when so many UK defence projects are being made in Korea, China and elsewhere?
Sajid Javid
The hon. Gentleman might hear more from the Minister for Defence Procurement in the coming days, but I can tell him that the two new Queen Elizabeth class aircraft carriers are being built with almost 100,000 tonnes of British steel, that Crossrail, the biggest construction project in Europe, is using almost exclusively British steel for its 26 miles of tunnels, and that 96% of Network Rail’s spending on steel rail goes directly to British firms. It buys 1,500 miles of steel rail every year from Tata in Scunthorpe. That is enough to build a two-track line from London to Edinburgh.
Sajid Javid
We have led the way in taking action, which has resulted in the right tariffs, which have helped the steel industry while protecting producers and consumers. My hon. Friend will agree that when action is taken through tariffs, we want to ensure that they are at the necessary level to help the industry without hurting consumers and producers.
Stephen Doughty
While we are still on tariffs, the Secretary of State mentioned the tariff on rebar and the drop in production. Increasing the tariff in that industry is obviously crucial, but other facts are at play. Rebar exports shunted up production before the tariffs came in, so we may have seen a drop-off due to that; there are also the exchange rate differentials. Does the Secretary of State still think that the rebar tariffs are high enough or should they be even higher to deal with the changes going on in that industry due to other factors?
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.
Stephen Doughty
I was in agreement with much of what the hon. Gentleman was saying until he got on to his usual track about the EU. Celsa in my constituency is a Catalan company that operates across the whole of the EU. If we were to leave and to lose access to the single market, we would still be bound by World Trade Organisation rules on state aid and other issues. The uncertainty, damage and risk to jobs in south Wales, which he said he cared about, would be immense. It is grossly irresponsible to suggest that leaving the EU would benefit the steel industry in this country.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
First and foremost, I praise my Front-Bench colleagues for securing this debate and Mr Speaker for granting it. I also want to praise the work of the First Minister of Wales, Carwyn Jones, who has worked constructively with the UK Government to try to find a solution. He has been head and shoulders above in speaking out, along with my hon. Friend the Member for Aberavon (Stephen Kinnock) and so many others. I am proud to have him as our First Minister in Wales.
Like my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), I want to underline the point that the steel industry in this country has a future, and that future is at the heart of our future infrastructure and defence projects. Just as she is proud of the steel produced in Stocksbridge, I am proud that steel produced at Celsa in Cardiff, in the heart of my constituency, is at the heart of Crossrail and so many other construction and infrastructure projects across the UK. We must never lose sight of that. This is not an industry of the past; it is an industry of the future—if the Government get behind it fully.
I want to touch on three issues. Regardless of the welcome announcements about Scunthorpe and, I hope, Port Talbot, we still need to address the market fundamentals that have brought us to this point in the first place. They affect the UK steel industry as a whole and will continue to affect it if we do not address them. I want to flag up some of the strategic choices and risks we face, and I want to debunk some of the myths that have, unfortunately, been propagated about the role of the EU.
First, I want to mention energy, which is at the heart of the debate. We have the highest industrial electricity prices across the EU. According to UK Steel, they are 89% higher than in other EU countries. Whatever nonsense we hear about the EU being to blame, the fact is that four of the main policies causing the higher prices for industrial energy users in the UK come from the UK Government. I welcome the steps talked about with regard to exemptions and compensation, but the fact is that those prices have come from the UK Government. The hon. Member for Monmouth (David T. C. Davies) says we should not do anything about climate change, but that is not the issue. I have made the point repeatedly that offshoring our carbon emissions to places such as China and Turkey would be absolutely absurd. I ask the Government to continue to review every aspect of this tax regime and see what the net result is for industrial energy users in this country. Are they paying more or are they paying less? If they are not paying less, we will face this problem again and again and again. It is all very well talking about a compensation package, but when I went to Celsa in my constituency just a few days ago it still had not received the money. The Government have been far, far too slow to act.
On dumping and tariffs, we heard very powerful arguments about the lesser duty rule from my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and others. I reiterate the question I put to the Secretary of State earlier about the tariffs on rebar. We need to consider whether they are still high enough. He says they have gone down by 99%, but other factors are at play. I welcome what he says, but we need to keep them constantly under review.
I absolutely agree that we should not grant market economy status to China. That would be an absolute absurdity. On procurement, we have to see concrete steps. I was pleased to hear what the Secretary of State said about potential announcements with regard to the defence industry, but they should have happened a long time in advance. We have produced product after product after product without using UK steel. The Government talk about aircraft carriers, but what about the offshore patrol vessels, tankers and scout vehicles? They have not been produced using UK steel. We need to get in there and make sure that British steel is being used. I await that announcement with interest.
This is not just about the role of the Government in procurement, but construction companies. With other MPs, I have written to construction companies across the UK to ask them whether they will adhere to using UK steel in their products, and whether they will adhere to the BS 6001 standard, which uses high-quality British construction steel rebar. There is a responsibility for both Government and companies. I worry that unless we address these issues and maintain a diversity of production in our steel industry, using blast furnaces and electric arc furnaces to produce different products, we will lose capacity in certain areas. Once that is gone, it will be lost forever. Others, such as the Chinese, will come in and whack their prices up. That will also be a risk to our national security.
The EU is not to blame. It would be absurd if we took action now to save the steel industry and then dealt it another body blow by leaving the EU. The reality is that half of our exports go to the EU. If we lost the single market, they would be gone. State aid rules apply in the World Trade Organisation as well. We would have less capacity to act on dumping, working with others, than we have at the moment. The EU, working together, has delivered 37 EU measures to tackle dumping, 16 of which relate to China. It is the UK Government who have not done the work. It is with the UK Government that I place the blame, not the EU. We can save our steel, but only if we work together to do it.