EU Referendum: UK Steel Industry

Debate between Stephen Doughty and Marion Fellows

Wednesday 13th July 2016 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

Thank you, Mrs Gillan. It is a pleasure to serve under your chairmanship. I thank the hon. Member for Cardiff South and Penarth (Stephen Doughty) and congratulate him on securing this debate. I am sorry if I repeat anything but, as he said, we have all been repeating and repeating ourselves about the state of the British steel industry, certainly since I came to Parliament.

We have had good news in Scotland: we had a Scottish steel taskforce and the former Tata plants are now in the hands of Liberty Steel, which at the moment is recruiting for new workers. That is a fairly good news story from Scotland, but it is only thanks to the fact that the Scottish Government have put steel at the heart of their industrial strategy and have an industrial plan.

The situation we now face is probably one of the most difficult in our post-war history, and what we do now will have serious consequences for our future. The pound is plummeting and investment is going elsewhere. The experiment with an EU referendum to satisfy Tory Back Benchers has completely backfired and it is now apparent that there is no plan—not only no industrial strategy, but no plan for going forward with Europe. Where will the UK be in terms of its European status? Will we completely Brexit? Will we be part of the European Free Trade Association? What will happen? We do not know, but I know that there is a serious plan in Scotland and the First Minister is working tirelessly with her Cabinet and with Scottish officials to speak to European partners because, as we all know, Scotland voted to stay in and we want to be in Europe—we are European to our very core.

I want to completely refute what has been said about the Aberdeen western peripheral route. I can inform the Chamber that the subcontract for steel reinforcement was recently awarded to BRC, which is situated just outside my constituency and which is the UK’s largest supplier of steel reinforcement. The steel for that contract is produced in Newport; some of it requires cutting, and that process is undertaken in Newhouse, which has a postal address in Motherwell but unfortunately is not in my constituency—it is in the constituency of Airdrie and Shotts. Indeed, all steel for the Aberdeen western peripheral route project has so far been procured and processed from suppliers based in the UK. More generally, more than £350 million in subcontracts has been awarded for the Aberdeen western peripheral route project, of which £115 million has been sourced in Scotland itself.

[Stephen Doughty]

I find that information very helpful, but will the hon. Lady say where the steel was actually manufactured—not where it was processed but where it was actually created?

[Marion Fellows]

Let me say that we do not manufacture steel in Scotland, but that goes back to when the Tories closed Ravenscraig in 1992. We roll steel in Scotland; we deal with plate. [Interruption.] The hon. Gentleman is chuntering from a sedentary position; I hope I can continue.

UK Steel Industry

Debate between Stephen Doughty and Marion Fellows

Thursday 17th September 2015 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Let me start by thanking the Backbench Business Committee for granting this important debate and enabling Members across the House to stand up for steelmaking across the UK. I thank the hon. Members for Corby (Tom Pursglove) and for Rutherglen and Hamilton West (Margaret Ferrier) and, most particularly, my hon. Friend the Member for Redcar (Anna Turley), alongside other Members from all parties, for working so hard to secure the debate. I also thank Roy Rickhuss and his team at Community union for their work. I thank Paul Simmonds, the Community representative at Celsa in my constituency, and all those in UK Steel and other bodies that are standing up, making the arguments and supporting us all in our efforts to secure a sustainable future for steel in this country.

This debate comes at an absolutely crucial time for the steel industry and for the country. As Community has said, we are at an historic crossroads. Decisions taken in the months ahead by the Minister and others in the Government will be crucial in determining whether there is a sustainable future for steel in this country. From Shotton to Cardiff, from Skinningrove to Llanelli, from Scunthorpe to Middlesbrough, and from Newport to Redcar, steel producers are facing clear and present dangers that show no sign of abating.

I want to pay tribute to a number of outstanding contributions made in today’s debate. My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke powerfully about the potential risks that the current challenges pose not only to the steel industry on Teesside, but to incredible projects such as the Teesside Collective. I attended a meeting with the Teesside Collective the other day, and the work it is planning to pioneer in carbon capture and storage could be seriously at risk. The hon. Member for Corby spoke about the history of steelmaking in his constituency and its importance to his constituents.

My hon. Friend the Member for Newport East (Jessica Morden) spoke powerfully about the constructive role that workers in plants across the country have played at a very difficult time for the industry, and she spoke about the reality of job losses and relocations and the impact on families and individuals.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) made an outstanding speech that was powerful, passionate and personal and drew upon his own experience. We can be very factual in this Chamber, as we should be at times, but sometimes it is important to hear the passion and frustration that so many of us feel that these issues, which need to be dealt with urgently, are continuing unabated. We also heard a powerful speech from the hon. Member for Brigg and Goole (Andrew Percy). I am glad he agrees that we should bring forward the energy intensive industries scheme in full.

In an excellent speech, my hon. Friend the Member for Hartlepool (Mr Wright), the Chair of the Select Committee, made the key point that manufacturing matters to our economy and that these foundation industries are absolutely crucial. He rightly praised the Minister for the work that she has undertaken, but challenged her in some areas. He rightly praised the co-operation of trade unions and their members and their effort in trying to stand up for communities and workers across the country.

It would be unfair not to praise the excellent opening speech by my hon. Friend the Member for Redcar, who made a powerful case for the impressive projects that the Teesside steel plant has supported and described the deep difficulties that are facing the SSI plant in her constituency. In highlighting some of the crucial factors, she talked about the £431 million a year cumulative disadvantage for the UK steel industry. That is fundamental to this debate. We have to deal with those disadvantages to move forward.

My hon. Friend the Member for Scunthorpe (Nic Dakin) made an excellent speech in which he paid a powerful tribute to his local workers. My hon. Friend the Member for Neath (Christina Rees) also spoke, as did my hon. Friend the Member for Aberavon (Stephen Kinnock). Steelmaking is at the heart of his constituency, as in mine. He made an important point about the contribution that steel makes to defence and the importance of resolving the issues of state aid.

We also heard important contributions by my hon. Friend the Member for Newport East, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), my hon. Friend the Member for Bishop Auckland (Helen Goodman), and the hon. Member for Motherwell and Wishaw (Marion Fellows), among others.

I want to turn to the comments made by Scottish nationalist party Members—the hon. Member for Rutherglen and Hamilton West, the hon. Member for Motherwell and Wishaw, and the hon. Member for North Ayrshire and Arran (Patricia Gibson). [Interruption.] They are saying “Scottish National party”. I know that is its formal title, but it is a nationalist party, as its Members state themselves—a separatist party. Although I am glad that they share the consensus of concern across this House, and that they are here with us to express that, it is also important—I say this to the Government in Wales as well—that there is a consensus of responsibility among all Governments across these islands, including the Scottish Government.

Unfortunately there is a tendency for Scottish National party Members always to be blaming somebody else—it is always somebody else’s fault. On the Forth Road bridge—

[Marion Fellows]

Will the hon. Gentleman give way?

[Stephen Doughty]

I will in a moment, but let me make this point.

On the Forth road bridge, it is important that we deal with the facts. The fact is that if the Scottish Government had applied for the community benefit clauses as they originally could have done in the procurement process, it is possible that the work could have gone ahead with UK companies—Scottish Steel and SSI—involved early on. Instead, it went off to the Chinese, the Spanish and others. Now, eventually, some of the steel is being made in Scotland and on Teesside, and I welcome that, but it is important that Governments across the UK—

[Stephen Doughty]

I absolutely agree; that applies to the UK Government as well. It is important that the Scottish Government take full responsibility. I am glad that Community is seeking a meeting with the First Minister of Scotland and with the Welsh First Minister, Carwyn Jones, because it is important that we work on this together across the country .

[Marion Fellows]

Does the hon. Gentleman agree that it is a real pity that he is summing up this entire debate with an attack on the Scottish Government, given that there had been consensus? Members of the APPG and the Scottish National party have worked really hard to get this debate. Will he apologise?

[Stephen Doughty]

No, I will not, because it is entirely right that in this Chamber we scrutinise all comments made. As I said, it is wonderful that we have a consensus of concern, but we also need a consensus of responsibility. I am not going to shy away from raising concerns about Governments across this country. I will turn to the UK Government now.

After I was elected in November 2012, one of the first issues I raised with the Government was the high energy prices facing energy-intensive industries, including steel. Since then, Ministers have come and gone, but the fundamentals affecting the industry remain, and are advancing unabated. Whether it is energy prices, taxation, foreign dumping, uncertain future ownership, or a lack of clarity in the UK’s industrial and infrastructure strategies, which I raised with the Secretary of State in BIS questions yesterday, warm words at various stages have not, I am afraid, been matched with sufficiently robust or urgent action. The coming months are absolutely critical. Action by this Government will define whether steel has a sustainable future.

I say in all sincerity that I welcome the Minister’s actions on the anti-dumping measure—I hope she will take action on further such measures—as well as the constructive way in which she has approached dialogue with steel MPs and their constituents and the way she has talked about a whole series of issues. I understand that she is to visit China. I would be interested to know what she will raise during that visit and what she expects to get out of it. These are all welcome steps.

However, I must say to the whole Treasury Bench—the Prime Minister, the Chancellor, the Business Secretary and others, not just this Minister—that the time for delay is over. If there is one thing we must leave this debate with, it is the need for urgent action. We cannot delay for months and years into the future. This crisis has been building up for the past 18 months to two years, or even longer, and we have to take action now.

Let me turn to the key issues that I want the Government to address. First, on energy compensation, while I firmly believe we must drive a responsible and urgent transition to a low-carbon economy, it is completely counter-productive if we pursue policies that result in carbon leakage and higher carbon emissions globally. That simply offshores the issue to other countries. That is particularly important in relation to companies such as Celsa in my constituency and SSI, which are pioneering some of the most environmentally and energy-efficient policies and processes. It is unacceptable that that could eventually end up being offshored to places such as China.

Energy prices for UK steel producers can be more than 50% higher than for our main European competitors. While other EU countries, including Germany and France, are providing additional help to their energy-intensive industries to level the playing field, we have not had the same clarity from this Government. The Chancellor announced that he would bring forward part of the energy compensation package for steel and energy-intensive industries, which is waiting on state aid clearance. However, as UK Steel has said, the steel industry in this country is still paying 70% of the policy cost that that package sought to address. No doubt the Minister will say that the Government are providing millions of pounds in exemptions related to the taxes and levies, but the fact is that in 2015 the steel industry will pay a record level of taxes and levies. Will she confirm whether mitigating measures can be brought forward immediately, as many Members have asked? What discussions has she had with the Chancellor and the Prime Minister about reviewing the entire regime, which gets to the absolute nub of the issue? Are there other exemptions that can be considered in VAT and other areas?

Secondly, there are the foreign threats. We have heard about the massive increase in the import of unsustainably produced carbon rebar and other products over the past two years, of which Ministers are well aware. Over-production and dumping are at the heart of the issue. As I said, I will be interested to hear what the Minister hopes to achieve in China. Many non-EU countries such as China and Turkey are increasing their market share, often using anti-competitive practices with scant regard for environmental standards. I want to hear more from her on that.

UK steel companies are subject to business rates that are much higher than those paid by competitors in other European countries—in some cases up to 11 times more. What does the Minister propose to do about that? What discussions has she had with the devolved Administrations? We cannot simply wait for the wider business rates review; is there action that can be taken now?

I draw attention to the charter for sustainable British steel, launched by UK Steel and other producers, and urge support for its straightforward and very reasonable demands. Where does the Minister stand on that? Are the Government supporting it? We have heard some warm words, but can we have categorical assurances?

It is important to look at all ongoing construction and redevelopment projects. I hope that the parliamentary authorities are thinking about the steel that is being used in reconstruction and building projects here. Madam Deputy Speaker, will you pass on that message to the parliamentary authorities?

Any one of the issues raised by me and other hon. Members across the House is enough to put serious strain on any business. The Minister should be left in no doubt that the risks are real and the threats to the British national interest are intensifying. The UK steel industry needs a crucial injection of confidence, urgent and robust action, and ultimately crisis support if necessary, but let us hope that we do not get to that point.

Steelworkers and their families do not want special treatment. They do not want to posture or erect barriers to free trade in an increasingly globalised world, or to protect the industry from fair competition; they simply want to level the playing field. It is worth bearing in mind that the UK steel industry and its associated metal sector encompasses more than 24,000 enterprises, which directly employ 330,000 people and are worth more than £45.5 billion to the UK economy. If that capacity is lost, it may be lost for ever, with dark consequences not only for the employees and our communities and economy, but for our critical infrastructure and construction supply chains. The time for action is now.