Steel Industry
Debate between Stephen Doughty and Margaret FerrierWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It is an honour to serve under your chairship, Mrs Moon. I thank the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) for securing this important debate. His commitment to our steel industry is unwavering, and it is a pleasure to work alongside him and all the other members of the all-party group on steel.
With a steel finishing plant in my constituency, much of my parliamentary time since becoming a Member has been dedicated to this subject. Fortunately, the future of that plant, and the plant in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows), is known. I once again put on record my appreciation of the unions, the workers and the Scottish Government, and also of Tata and Liberty House. The task of saving Scottish steel was not an easy one, but we on the Scottish steel taskforce rose to it. The future of the industry in the rest of the UK, although not a certainty, looks more promising than it did a number of weeks ago. With seven bidders now interested in taking over Tata Steel’s operations, I hope that colleagues around this room will soon be celebrating the saving of industry and jobs in their constituencies.
Stephen Doughty
I am glad to hear those words of support for the steel industry in the rest of the UK, but obviously we need action as well. Can the hon. Lady explain the apparently advanced stage of negotiations with Turkey for 10,000 tonnes of rebar and a £12 million contract for the Aberdeen bypass? That rebar could be bought from UK suppliers. Does she have any information on that, and does she agree that we need to do everything possible to ensure that UK suppliers are used?
Margaret Ferrier
More than £115 million has already been awarded to subcontractors based in Scotland, and with an estimated £60 million of subcontracts still to be advertised during the construction phase through the Public Contracts Scotland website, there is still plenty of opportunity for other UK-based companies to bid.
As Members will no doubt be aware, however, the celebration will be short-lived. The steel industry still faces some fairly hefty challenges, and it is up to us to continue piling pressure on the Government to ensure that the correct measures are taken, to safeguard the industry and protect jobs. It would be remiss of me not to recognise the measures that the Government have so far taken. Efforts have been made to help steel and other energy-intensive industries, for which we are all grateful. More undeniably remains to be done, and it is not only about taking action; it is about a shift in the Government’s thinking. In Scotland, the approach is to view steel as a vital strategic asset. The Scottish Government have outlined their vision for the industry and, in doing so, their commitment to it. As resilient as our centuries-old steel industry has been, it will survive only with the proper support. That means taking steps to address the unfair playing field of the global market. The industry wants the anti-dumping investigation process to be hastened—it is much more rapid in the United States than in the EU. I would like the UK Government to take UK Steel’s recommendation on board and, through the European Council, work with the Commission to set out a clear action plan and timetable for changes to speed up the process.
Action must also be taken on the lesser duty rule. We are clearly at an impasse between what industry has been calling for and what the Government are prepared to do. UK Steel has made pragmatic suggestions of ways to change how tariffs are calculated without necessarily scrapping the rule. I would like the Government to engage with it to find a steel sector solution that will ensure that future duties are robust enough to tackle unfair imports.
As I have mentioned many times, we continue to head towards market economy status for China, without properly addressing the dumping issue. The industry has issued grave warnings that that could lead to serious job losses across many sectors, and I would like a proper response from the Minister about how China can be given market economy status while the effectiveness of the EU’s trade defence instruments is preserved. I would also like to know more about what further action has been taken on energy costs. We are at a disadvantage compared with other European countries, and I should like a full and frank response on how wholesale costs are to be brought down.
UK Steel Industry
Debate between Stephen Doughty and Margaret Ferrier(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I would like to put on record the fact that it I am delighted to be able to participate in the debate today, having been one of the lead Members to make representations to the Backbench Business Committee, along with the hon. Member for Redcar (Anna Turley). I would like to thank all those who supported the application, and all those who are attending and contributing today. I, too, am glad to see that we have a Minister here today who is listening to us on this issue.
I know all too well the challenges facing the steel industry. Tata Steel’s Clydebridge plant lies in my constituency, and its sister plant, Dalzell, is in the neighbouring constituency of Motherwell and Wishaw. Those two plants are part of the Tata Steel long products business.
As many Members will be aware, the history of the steelworkers industry in Scotland, in particular in north and south Lanarkshire, is extensive. The Clydebridge steelworks was first opened in 1887, and throughout the years it has had the status of being one of the giants of industrial Scotland. The steel plates it made were used in many of the most famous ships ever built, such as the Lusitania, Mauretania, Queen Mary, Queen Elizabeth and the QE2.
From 1786 to 1978, the Clyde ironworks lay adjacent to Clydebridge and supplemented the work of the steelworks. In the Clyde ironworks, the hot-blast process was invented in 1828 by James Beaumont Neilson. This one invention led to a rapid increase in iron manufacture, and the growth of industries made Scotland a world leader in manufacturing.
Established under the Iron and Steel Act 1967, nationalisation tried to rationalise steel production and made the biggest changes to the British steel industry ever seen. Some 90% of UK steelmaking came together under the one single business, the British Steel Corporation.
Clyde ironworks was to be enlarged, and this led to the establishment of the Ravenscraig steelworks in 1954. It was based in Motherwell and had the title of being the steel capital of Scotland, and the skyline was dominated by the gas holders and cooling towers of the plant. Ravenscraig became the heart of the nationalised industry’s Scottish operations and produced its own iron in blast furnaces fuelled by Scottish coal. Iron ore was imported via a purpose-built pier terminal at Hunterston, and lime flux came from its own works in Westmorland. Ravenscraig became western Europe’s largest producer of hot-strip steel and produced slab steel for the Dalzell works, which is still there today.
On the watch of Margaret Thatcher’s Conservative Government, British Steel was privatised in 1988, a move that has left a legacy of decimation. With the privatisation came high manufacturing costs, the free market, overseas competition and a downturn in shipbuilding. This led to the closure of Ravenscraig in 1992, ending the large-scale steel making industry in Scotland. That was widely regarded as one of the biggest social and economic disasters to have ever occurred throughout the UK, and the steel industry has never been able to recover from this hammer blow.
The closure resulted in the loss of 770 jobs and another 10,000 jobs directly and indirectly linked. Ravenscraig at one point was regarded as the largest brownfield site in Europe. Fortunately, however, the Dalzell and Clydebridge plants have remained in operation under the ownership of Tata Steel Europe.
The UK steel sector currently employs about 20,000 people directly, which is just a tenth of the number who worked in it during the 1970s. Tata currently employs around 17,000 of them, down from 25,000 in 2008.
When Tata Steel suffers, the UK steel industry suffers. Tata Steel posted a pre-tax loss of £768 million in the year to the end of March, double that of the previous year. Its revenues fell, down 7.3% to £4.2 billion, and production was down to 8.2 million tonnes, due to “operational issues” at plants. Tata Steel’s liquid steel has this year declined by 2.5%.
Tata’s European branch took a heavy hit when its Indian branch lost £314 million from restructuring and impairments. Tata Steel has been slashing costs since 2007, and 1,000 staff and agency jobs have been lost since last year alone. It has been stated that these losses have been the result of high taxes and energy costs, the strong pound and cheap Chinese imports, along with other external factors.
The Chinese Government have devalued their domestic currency several times throughout the year and this move has improved the competitiveness of Chinese exports. About half of the 1.6 billion tonnes of steel made worldwide each year comes from China, which is now exporting around 100 million tonnes a year as its economy slows.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I pay tribute to the hon. Lady for securing this debate, along with other Members, and she is making a powerful case for her constituents. It is important, however, that we look at the role Governments play in procurement. She talks about Chinese exports and Chinese steel, but did not the Scottish Government choose Chinese steel to build the new Forth road bridge? Has she made any representations to her own colleagues in Holyrood about that crucial issue, because this is an issue for all of us in Governments across these islands?
Margaret Ferrier
The hon. Gentleman is incorrect. There was a bid process, and that was the result. [Interruption.] Yes, the Chinese won that process.