UK Steel Industry

Stephen Kinnock Excerpts

Thursday 21st January 2016 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered the future of the UK steel industry.

It is a pleasure to serve under your chairmanship, Mr Walker. I thank the Backbench Business Committee for granting this important debate. I also thank the Minister and all my colleagues for coming to support it—it is a fantastic turnout.

As we all know, this has been a big week for the British steel industry—but, unfortunately, for all the wrong reasons. Yesterday, jobs were lost at Sheffield Forgemasters, and the week began with Tata Steel’s announcement of more than 1,000 job losses across the country. That was bad news for everybody, but it was particularly devastating for my constituency, where the Port Talbot steelworks are located. Some 750 people who woke up with a job at the Tata steelworks in Port Talbot on Monday morning no longer have a job. The steelworks are the beating heart of the economy and the community in Port Talbot, and the job losses will affect not just those being made redundant, or those in connected industries, but their families, their friends and the entire community.

What immediate action will the Government take to support those who have been made redundant? There will need to be training and support so that they can make the transition into other jobs, and the local community will need help to support those affected and their families, as well as those in connected businesses. If the Government do not act, my community will pay the price for generations to come.

However, this is not just about Monday’s announcement. The Government must act to support the steel industry and to prevent further job losses, and they must do so now. There are a number of things that I, my colleagues inside and outside this Chamber and, most notably, the Community union and Tata Steel itself want to know. We want to know why the Government have done nothing. They have talked a big game, but their warm words have been matched by frozen actions.

First, we have called for changes in UK business rates, which are up to 10 times higher than those of many of our European competitors. Will the Minister commit to consulting the Welsh Government and other devolved bodies on cutting business rates for capital-intensive industries such as steel by removing plant and machinery from business rate calculations?

Secondly, the promised Government compensation for energy-intensive industries has still not materialised. In the light of Monday’s announcement, will the Minister commit the Government to the more rapid implementation of measures on energy-intensive industries and to a deadline by which moneys will actually be available? We cannot have more of the cheque being lost in the post.

Thirdly, on procurement, we asked the Government to introduce guidelines that properly recognise social issues, local value for money and local content in projects with a major steel component. However, all that their November procurement policy note says is that steel requirements should be “openly advertised” to allow UK firms to compete. Will the Minister explain why they will not go further in using Government procurement to support the British steel industry?

[Paul Flynn (Newport West) (Lab)]

Can my hon. Friend begin to understand what got into the Government’s mind when they handed over the nuclear industry in perpetuity to the Chinese? Because of their infatuation with them, they are allowing them to prosper, while our industry crumbles. We have a policy of deindustrialisation, with our industry being colonised by the Chinese.

[Stephen Kinnock]

I pay tribute to my hon. Friend’s long and illustrious history in the steel industry. He was a steelworker himself, so he speaks with particular experience and expertise. I absolutely agree with his point about the nuclear industry. I would bring everybody’s attention to the outrage of EDF telling a well-known British steel producer that it was not allowed to tender to make turbines that it is absolutely qualified to provide, thus denying it the opportunity of a multimillion-pound contract. The idea that this country’s procurement policies are somehow changing is a myth, and that experience of EDF and that steelmaker is a case in point.

[Andy McDonald (Middlesbrough) (Lab)]

While my hon. Friend is on the issue of procurement, will he say whether he is as dismayed as I am that the Ministry of Defence is commissioning steel hardware from Scandinavian plants? Does that not speak to a lack of joined-up thinking and a lack of Government focus on innovation, and on research and development, into new products needed by the MOD?

[Stephen Kinnock]

My hon. Friend makes an excellent point. What is interesting about the MOD angle is that we are talking about national security. The steel industry plays a critical role as a foundation industry, whether we are talking about the homes we live in, the offices we work in, the knives and forks we use to eat our meals or the incredibly important contribution the industry makes to our armed forces across the world. This is, therefore, not just an issue of the economy or of pounds, shillings and pence. Our national security is at stake.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

I, too, congratulate my hon. Friend on securing this important debate. Is he aware of the contribution that steel makes to the submarine supply chain? That led the Community union to argue forcefully that the Labour party should continue to support it. Furthermore, Graham Honeyman, the managing director of Sheffield Forgemasters, is clear that the company cannot survive if it loses the order for the Successor submarine programme.

[Stephen Kinnock]

My hon. Friend makes an excellent point. He will be aware that a debate is taking place in the Labour party, but I can assure him of which side of that debate I fall on. There are a number of reasons why I fall on that side of the debate, but saving our manufacturing industry—up to 20,000 jobs rely on the nuclear programme to which he refers—is critical. I will certainly contribute forcefully to the debate in our party from that perspective.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I congratulate the hon. Gentleman on securing the debate. The estimated capital cost of Trident could be up to £165 billion. Is he seriously saying that if the UK Government redirected that amount of capital investment, we would be able to produce only 20,000 jobs?

[Mr Charles Walker (in the Chair)]

Order. I am not allowing Members to get into a debate on Trident. Mr Kinnock, can you continue, please?

[Stephen Kinnock]

Thank you, Mr Walker. I defer to your better judgment, but I would be more than happy to continue that debate outside the Chamber.

In the light of what we are discussing, will the Minister explain why the Government will not go further in using Government procurement to support the British steel industry? It is one thing to put in place procurement guidelines, but driving the message home across Government, let alone the private sector as well, is another matter. Words are easy, but actions are far more difficult, and those actions require leadership. With Hinkley Point B, the Government have a real chance to show leadership by using procurement to support British industry. However, they seem to be squandering that opportunity, with no British steel due to be used on the project.

I would also like to ask the Government about the Swansea bay tidal lagoon. First, they need to get on and approve the project—each day of delay is costing months or years of progress on it. However, I also ask them to show some leadership and to commit to sourcing all the steel for the turbines, or as much of it as possible, from the United Kingdom steel industry. The tidal lagoon not only provides the entire Swansea bay area with job opportunities, which are desperately needed in the light of Monday’s announcement, but supports local jobs at the Port Talbot Tata Steel plant.

British steel is among the highest-quality steel in the world, and we should make better use of it. British-based certifiers have among the most robust standard regimes, particularly on environmental and social impact, so it is unusual to say the least that the Government appear to favour BES 6001, rather than the far more robust BS 8902, as the standard for reinforcing steel. No Chinese steel meets the stringent quality and sourcing criteria of BS 8902, so its adoption as the Government standard would help to protect against Chinese steel dumping and support high-quality British steel.

The fourth area on which we have repeatedly called on the Government to act is the dumping of Chinese steel on the British market, which is the greatest challenge facing the British steel industry. The Secretary of State for Business, Innovation and Skills is no fan of the European Union, but he seems to be a fan of hiding behind it. The Secretary of State and the Minister know that far more can be done to support the steel industry without the Government’s breaching state aid rules. The Government must work with Europe to deal with the issue of Chinese steel dumping. Last year, China produced 441 million tonnes of steel more than it consumed, much of which was dumped in the UK.

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

My hon. Friend is making an extremely strong speech. I congratulate him on securing this debate. Given that a number of us have been raising the issue of Chinese dumping and providing detailed statistics and examples for years, not just months, is he surprised that the Government have taken so long to take action?

[Stephen Kinnock]

I am surprised. I believe that the Secretary of State had to look up Brussels on a map to work out how to get there last year.

The critical point is that the European Union sets the rules of the game, and it is up to the member states to invoke those rules and deploy defensive trade instruments. I would like to share something with my hon. Friend. I read a very interesting interview from 2012, which was posted on Twitter by Laura Kuenssberg. She interviewed the then managing director of Tata Steel in Port Talbot—[Interruption.] I know my hon. Friend is well acquainted with it. I apologise for that connection; I assure him that it was completely coincidental. Guess what the managing director of Tata Steel asked for? He asked for action on anti-dumping, on high energy costs, on public procurement and on business rates. We have had four years of inaction, and here we are again. It is like a nightmare version of “Groundhog Day”.

[Huw Irranca-Davies (Ogmore) (Lab)]

I commend my hon. Friend for securing this debate and for the way he is outlining the practical things that can be done. May I draw Members’ attention to the House of Commons Library assessment of the state aid interventions by other European countries, which are within the rules? We are allowed to do that. Germany’s bona fide support—it is not giving handouts—for its industry is twice the level of the UK’s. Does my hon. Friend agree that we are not doing what we can for the steel industry?

[Stephen Kinnock]

I agree entirely. I feel that our Government are not acting as they should because they are driven by a dogmatic, laissez-faire ideology that has nothing to do with standing up for British steel, British industry and the British economy. That laissez-faire ideology will never enable us to act as we should.

[Kevin Brennan (Cardiff West) (Lab)]

It is worse than standing still. Over the past few years, the British Government have led a blocking minority on further reform of trade defence mechanisms. They are still doing so, despite Ministers’ denials in the Chamber. The Minister should explain to the House and the country why they are doing that.

[Stephen Kinnock]

An explanation would be very much in order. My hon. Friend makes a very interesting point about something I will come to shortly: market economy status for China. How is it possible for the Government to justify on the one hand saying, “We are standing up for British steel and British industry,” and on the other being China’s chief cheerleader in Europe and actively agitating for it to have market economy status? I look forward to the Minister’s explanation of that entirely illogical and unjustifiable position.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I want to reflect on the fact that Ministers are so terrified of the EU state aid rules, but seem to have breached EU public procurement rules by failing to tender for Hinkley Point C. Will my hon. Friend reflect on that discrepancy?

[Stephen Kinnock]

My understanding is that a very prominent and well-known producer of British steel has been informed by EDF that they are not allowed to tender on the basis of what appear to be spurious health and safety grounds. I encourage the Government immediately to carry out an independent evaluation of why that producer was not allowed to tender. Let us hear it from an independent evaluator, because at the moment it is somebody’s word against somebody else’s. It is the Government’s responsibility to step in once again and stand up for British industry, rather than sell it off to foreign bidders.

The rise in the market share of Chinese rebar, which went from zero four years ago to 45% of the UK market now, can be explained only by Beijing’s distortion of the market. Some 70% of Chinese steelmakers are state-owned, and the remaining 30% benefit from tax rebates that amount to a state subsidy. We are asking the Government not for special treatment for British steel, but for a level playing field and action to correct the market distortions. We are seeing not the forces of supply and demand working away, but a marketplace that has been hijacked by subsidised Chinese state steel that has been dumped in a previously perfectly well-functioning marketplace.

The Government should take action and show leadership, but they have been asleep at the wheel. Will the Minister explain what action the Government will take against Chinese dumping? Specifically, can she tell us whether the British Government support China’s being granted market economy status? A yes or no answer will do fine.

Just over a week ago, the Foreign Secretary said on the Floor of the House that

“it is through the prism of steel”—[Official Report, 12 January 2016; Vol. 604, c. 694.]

that Chinese market economy status should be judged. On that basis, we should say a clear and resounding no to market economy status for China. Time and again, the Government have acted as China’s chief cheerleaders in Europe—particularly on market economy status. They know that MES will cost British jobs and limit our ability to impose tariffs on dumped goods, but they are more interested in cosying up to China and making Britain, in the Chancellor’s words, “the western hub” for Chinese trading.

[Andy McDonald]

I am grateful to my hon. Friend for giving way yet again; he is being very generous. Does he share my concerns about the prospects for HS2? We hear that the Chancellor has had active discussions with the Chinese about the steel that will be used in that project.

[Stephen Kinnock]

I have heard the Minister and many of her colleagues assure us on the Floor of the House that a large portion of the steel used in the HS2 project will be British. I can only go on the Minister’s words. We shall see, as we have seen before, whether the Government’s words and actions match up.

[Nic Dakin (Scunthorpe) (Lab)]

Does my hon. Friend agree that, to ensure that UK steel is in a position to gain such contracts in the future, it is important that skills and new technologies are in place? There is a role for Government in that, too.

[Stephen Kinnock]

I agree entirely. There are two elements to this crisis. One is the short-term perfect storm that we are facing. The lack of Government support for building the industry’s resilience is a major contributing factor to that. The other element is equally worrying in many ways: the complete absence of a long-term strategy—nothing on research and development and innovation, nothing on investment, nothing on building our skills base and nothing on the long-term sustainability of such a foundation industry. As long as that long-term strategy is missing, short-term action will simply be treading water and running to stand still. We are in desperate need of a Secretary of State for Business, Innovation and Skills who is prepared to use the words “industrial strategy” and then to do something about it. The issue of market economy status for China is a chance for the Government to stand up for British jobs, for British industry and for Britain.

Finally, all those failures clearly come together into a single issue, to which my hon. Friend referred: the absence of a long-term industrial strategy for the steel industry, with a commitment to strategic investment in skills, infrastructure, energy, and R and D. Why have the Minister and her Department still not produced such a strategy—a strategy to save British steel, to save British jobs and to save communities such as mine? In the first half of 2015, the Minister almost never appeared in public without talking about her Government’s “long-term economic plan”. She now has the chance to show that that was not all hot air. Now is the time for the Government to produce a long-term plan for steel.

Back in October I said it was 10 to midnight for the British steel industry. I finish by asking the Minister what time she thinks it is now.

[Several hon. Members rose—]

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[Andrew Percy (Brigg and Goole) (Con)]

It is a pleasure to serve under your chairmanship, Mr Walker. I was not planning to speak, for the reason given by my neighbour, the hon. Member for Scunthorpe (Nic Dakin), but I could not deny the Chamber the opportunity to have some wise words put on the record—that may be a subjective statement, but I agree with it. Like him, I will have to pop out of the debate at 2.30 pm to go to a meeting organised by Baroness Redfern with Greybull Capital, which will hopefully take over the site at Scunthorpe. We may be back with some asks from them for the Minister before the end of the debate—who knows?

I agree with a lot of what the hon. Gentleman had to say in what was a sensible contribution, as is usual for his comments on this subject. I do not need to go into the history and value of the Scunthorpe steelworks to our area and the thousands of people who work in it, but it is vital to the economy of not only north Lincolnshire but the whole of the Humber.

I want to thank and pay tribute to the Minister, who has bitten the bullet and given us, the workers and others in the industry a lot of confidence that she is on our side in the fight to retain the steelworks at Scunthorpe. I thank her for what she has done on that. A lot of work has already been done. As the hon. Gentleman knows, we have done a lot with the Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for West Dorset (Mr Letwin), in his role in the Cabinet Office and he in turn has done a lot of work with Shareholder Executive and all the rest of it to try, with the necessary support from the Government, to facilitate the sale, which we hope will happen for Scunthorpe.

I agreed with some of the content of what the hon. Member for Aberavon (Stephen Kinnock), who opened the debate, had to say, but not necessarily with some of the political points made. It is frustrating that the energy-intensive industries compensation scheme took so long to implement and get approval for through the European channels—the Minister and I will be on different sides of a debate on Europe in a few months’ time, so I will not labour that point—but that cannot be laid at the Government’s door. We welcome that support and the approval for it. I echo the comments that we want to see that paid as quickly as possible—we are all on the same page.

As for business rates, this is not as simple as some Opposition Members have tried to make out. As lawyers have told us repeatedly at the taskforce, a bespoke package for the steel industry will not be allowable under EU rules, and a review of a more general change to industry across the UK is complex and expensive, as we all know. It is therefore not as simple—as has sometimes been presented locally—as the local council writing off business rates. It cannot do that, because that is not legal under EU rules, so we should be honest about that. It is not the panacea that some have presented it as—“If only we had action on business rates, everything would be fine.” That is not the case.

I welcome the change in the procurement rules. I remind the House that this Government renewed the Network Rail contract, which was really important for Scunthorpe. I think we will all be in agreement in wanting to see as much of the High Speed 2 work as possible, along with other infrastructure projects, delivered out of Scunthorpe. To have the knowledge that that is in the pipeline will be really important in the decision that Greybull Capital makes with regard to Scunthorpe. I therefore agree with the comments made about that.

We also need to pay tribute to North Lincolnshire Council and Baroness Redfern, who have really engaged with the Government on every level. In particular, they have made some innovative proposals on how we can make better use of what is a very large site at Scunthorpe. I always remind the hon. Member for Scunthorpe that the site is so big that it is split across our constituencies. He has all the plant, but an awful lot of the site that is not utilised lies in my constituency and it could help secure its future, whether that is through looking at a use for renewable energy or at a business and enterprise zone. The council has been open to that and it has been impressive to hear how much other parties have welcomed its approach. The Minister and everyone involved in the ongoing discussions can be assured that whatever the council can do, it will do, to realise the asset in that site, which we hope will give some comfort to Greybull, the preferred bidder at the moment.

As for Chinese dumping, we have to remember—this is sometimes lost in some of the stuff that comes from the Labour party—that this is the first Government to have taken action on Chinese dumping. That is a change in approach and it has come under this Government, which is important.

[Stephen Kinnock]

Will the hon. Gentleman give way?

[Andrew Percy]

I will not, because I have only got a few minutes and other people want to speak.

Yesterday, at the Canadian high commission I sat down with a group to discuss the Comprehensive Economic and Trade Agreement and the Transatlantic Trade and Investment Partnership. The Canadians—one of their chief negotiators was there—see such agreements as a potential mechanism for creating a defensive bloc against the practices that have been going on, particularly in the economies of that region. That is a message for the Labour party. I do not know what its official policy is, because I know technically it does not have one any more—the shadow Cabinet certainly does not have one—but on TTIP and CETA it needs to get into the right place, because they are a way to build a defensive bloc. I urge Labour to embrace agreements such as CETA and TTIP.

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[Stephen Kinnock]

The hon. Gentleman mentioned the important issue of the power plant at Port Talbot, which has a green light for its planning. I understand that construction of the plant and its operation would save between £25 million and £30 million a year on energy bills for the Port Talbot plant, so it would be a huge saving and a great boost to the plant. Does he agree that it would be welcome if the UK Government and the Welsh Government came together in a dialogue, pooled resources and gave some support to Tata Steel, both financial and in kind, to facilitate construction of that plant?

[Jonathan Edwards]

I fully agree with the hon. Gentleman. That was the point I was endeavouring to make. A one-off capital cash injection could have tangible benefits and would be a huge vote of confidence in Tata at Port Talbot and the communities of south Wales.

I challenged the Prime Minister yesterday about the huge contradiction in cheerleading the case for China to have World Trade Organisation market economy status, which would make it impossible to impose tariffs on steel, while at the same time belatedly calling for unfair price tariffs against China. Many hon. Members have spoken about that so I will move on to my next point.

The UK Government have a defining choice. Do they put the interests of the City first and deliver their wish that London becomes a centre for trading in the Chinese currency, or do they protect manufacturing workers? I hope that, for once, they will put the communities I serve before the City of London.

Port Talbot, Trostre and most of the supply chain are in a tier 1 European Union assisted area. As I told the Minister during the debate on a statement last week, the UK Government should be looking at innovative operating aids to reduce employment costs, such as a national insurance contributions holiday. State aid is permissible under EU law if there is unfair competition or market failure, as is the case in this instance. We should be taking action now and pressuring the European Commission for a derogation. We cannot afford to wait years for a decision.

Similar to what the Welsh Government are doing, the UK Government should be looking at its procurement policies to ensure that domestic steel is used in large infrastructure projects. The hon. Member for Aberavon made a valid point about EDF.

The difficulties facing the industry are not, of course, confined to Wales. The UK Government should introduce a temporary reduction in business rates for steel in England. That would trigger consequential funding for Wales, Scotland and Northern Ireland to help their industries within the devolved Government areas.

At European level, the Commission must wake up and smell the coffee. China is producing steel, selling it at below production cost and dumping it on the European market. It is a purely aggressive strategy aimed at decimating steel production in the EU. The Commission’s job is to act. We can contrast that with the response of the US Government who, according to Bloomberg, are taking steps to impose a 265% tariff on Chinese steel. As I have said, it is the UK Government’s job to press the Commission. If they refuse, my party’s call for the Welsh Government to have a direct role in EU decision-making processes to protect Welsh interests will become a battering ram.

The Commission’s investigations into Chinese steel dumping are taking far too long and its recommendations have been pitiful. For reinforced bar steel products, it recommended a measly tariff of only 9%. It is estimated that an investigation into coiled steel, which is made at Port Talbot, will take a year. The US—I am not usually a cheerleader for the US Government—takes only 45 days to conclude such investigations.

While European bureaucrats dither, Welsh workers are losing their jobs and the pace of action is simply not good enough. To those who argue that a Brexit is the solution to my complaint, I respond by telling them to look at what happened to the coal industry—we would be leaving the steel industry in the hands of a Westminster Government.

In reality, the steel industry in Wales faces massive challenges. I am informed that Tata in Port Talbot does not produce specialised products and therefore faces the brunt of the exports from China and other economies. The transition to a more modernised production system creating specialised steel will not be easy. It will require significant capital investment, but if we are serious about securing a future for steel production in Wales and across the UK, we need a range of temporary interventions to create breathing space for the necessary investment to be delivered.

In conclusion, this has been a deeply troubling week for Wales and our economy. The ongoing problems have been highlighted for a long time, yet the Labour-run Administration in Cardiff seem to stand passively by and do precious little, apart from blaming the UK Government. The Tory Westminster Government seem more interested in helping their friends in the City than in helping the working communities that I represent.

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[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I do not intend to take up too much time, because there are hon. Friends wishing to speak who have had job losses in their constituencies in the last week or so in the ongoing steel crisis. However, I do want to pay tribute to my hon. Friend the Member for Aberavon (Stephen Kinnock) and to the Backbench Business Committee for allowing us to have the debate. I also praise my hon. Friend the Member for Hartlepool (Mr Wright) for his excellent speech, and the fantastic BIS Committee report on steel. That excellent piece of work illuminated many points that we needed to look at and raise. It is because the all-party parliamentary group for the steel and metal related industry is one of the most effective APPGs in Parliament, especially for using Parliament’s time to raise issues in the steel industry over the past four or five years, that so many Members have spoken today on this important issue.

In the past week there have been redundancies in Port Talbot, Llanwern, Hartlepool, Trostre, Corby, Sheffield and South Yorkshire. As a former union officer for the trade union, Community, I know some of those sites well and some of the people individually. The redundancies come off the back of a situation relating to Tata long products and, of course, the well documented and tragic events in Redcar at SSI.

I pay tribute to my hon. Friend the Member for Newport East (Jessica Morden), who raised a lot of issues about strip products. I will go into a few issues that my colleagues have gone into, but I want to check what industry is doing. I will be making critical comments about what the Government have and have not done but, as a trade unionist, I still wear my trade union hat and I still want to question what industry is doing. Employees trust employers to hang in there. I know that is very difficult for the industry at the moment. The five industrial asks are acute and critical, but I often ask myself what Tata—just one example—is doing regarding its relationship with this country.

I ask myself about Tata’s integrated industrial strategy in relation to Port Talbot, Llanwern and its own automotive sector. Jaguar Land Rover, as well as the rest of the automotive sector, is growing, developing and doing well but, irrespective of the fact that both companies are owned by the same parent company, one does not necessarily procure from the other. The Government have to step in and, not necessarily force, but certainly induce and use clever mechanisms to try to encourage ways and means by which that relationship could be bettered for workers in the steel industry. I find it hard—I am sure that colleagues do too—to make the argument that a parent company is not procuring from its own site. It is for not just the Government, but the very industries that sit in our nation to justify their industrial actions and procurement policies.

I have spoken at the Sheffield rally, as have my colleagues. A year ago, I managed to get our Front-Bench team to lead the debate on the UK steel industry. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) spoke from the Front Bench in that landmark debate. I believe that the issue of steel had not been brought forward as an Opposition day debate for some time, so it was a significant indicator of how bad the situation was getting.

[Stephen Kinnock]

On chronology, we hear very often from the Government that all the problems have existed for a long time and that many were building up on Labour’s watch from 1997 to 2010. I accept that point, but there was no Chinese rebar in the British market in 2011. Today, 45% of rebar is Chinese. In the past four years we have seen a total absence of action. The Government have been asleep at the wheel and the crisis has come to a head. It is important, for the record, that we recognise that the situation has come to a head over the past three to four years.

[Tom Blenkinsop]

Until 2008, which was a big year for the steel industry, profits were massive. Everything coming out of any plant was getting bought up. The demand in the world was so high because it was driven by Chinese growth. Any bit of steel—slab or whatever—was being absorbed by the Chinese market. Steel producers made very good profits, as did their workforce, who made very good bonuses. I remember negotiating terms and conditions, and pay and pensions for those workers at the time and they did very well.

The anticipation after that was that the lull in the market would pick up at some time but, if anything, it has remained the same. It has flatlined—never picked up. It is usually an indicator of world economic performance, and nothing has happened. In many ways, the best-laid plans always go awry. The real issue is the ability of Governments to react. For some time now, there has not been a proper reaction. There has just been an expectancy or a desire—a hope and a prayer—that the market would pick up again. If anything, it has been quite clear that the domestic policy in China has been to prop up its own industry while that market stays at such a low, with ever-increasing production and increasing emissions.

We must talk about the backdrop. The big factor, as my hon. Friend the Member for Hartlepool mentioned, is the “sheikhs versus shale” argument. There is a global, geopolitical war going on between oil and shale gas, as well as the onstream effects of renewables. They have forced down the price of oil, which has been a key factor for steel, whether that is in procuring contracts or gaining work, particularly at Hartlepool or Corby, where tubes are made.

There is a mismatch, in that the new markets developing for potential steel contracts and the R and D that could be invested in them differ very much from the steel sites that already exist. If we are looking at the new future for a tube site, it is more than likely going to be non-conventional onshore or offshore gas. The industry —we will be talking about this next week in a separate debate—requires a different type of tube, which is non-welded. There are no non-welded tube sites in Britain. At some governmental level, there has to be liaison with industry to find out what new industries are coming and to ask whether we are investing and helping those industries or potential suppliers to put in the new factories that will supply the product they require to develop that market.

This is the issue: steel or a steel strategy is one thing; what we really require is a real, integrated industrial strategy. That strategy should look across the piece and across regions to work out who needs to liaise with who to make whatever happen in the future. It should identify which industrial partners to bring on board and what they want to see, and ensure that investment is solid and sound and that we bring investors along with us to make those decisions work in our nation’s favour. There just does not seem to be any of that.

In the Chancellor’s autumn statement we heard that an announcement to the stock exchange had been made about the withdrawal of the last £1 billion to support carbon capture and storage. That is integral to any future of shale or non-conventional gas. In a world in which oil has fallen below $30 a barrel and the world market will retrench and retain fossil fuels for the current period, CCS should, in many ways—mainly because of the emissions targets that we are all now signed up to—precede renewables as the step for any nation to take to develop its power generation if, indeed, that country is going to buy in cheap fossil fuels while shale, oil and conventional gas all fight one another for customers. That is a massive opportunity for the steel sector to take hold of.

I have spoken so much about the steel sector, in relation to my local area and the whole UK. There is a positive story to be made for British steel, if we have an integrated industrial strategy. The Government could roll up their sleeves and actively engage with bodies, partners, business and finance to invest in the country. The right and adequate policy could be put down, with long-term futures secured, so that people know that their investments are sound and can deliver. However, in every single situation—for example, after the Paris climate change talks, when the world is looking at CCS as the future, and it is going to develop, the Government removed funding for it—we run away and concede the ground to competitors, which gives completely the wrong message to the industry we are talking about today.

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[Stephen Doughty]

My hon. Friend sets out clearly how the situation affects her constituents. The impact on not only the directly employed workforce in all the plants and operations across south Wales and the UK, but all those working in the associated industries, cannot be overemphasised.

While we have the steel backbone that I described, we also have steel veins and arteries running out into many other industries—related manufacturing, training and expertise, and engineering. The loss of highly skilled jobs in the plants themselves has a knock-on effect on communities right across south Wales and the UK.

I pay tribute to the trade unions and especially Community, which plays a constructive role not only in these debates, but in facilitating the relationship between us and workforces in the plants to enable us to understand what is happening on the floor of the melt shop, and in the rod and bar mill, so that we can see with our own eyes the efforts that the workforces are putting in.

I will not reiterate a lot of points that I have made in previous steel debates, whether from the Front or the Back Benches. Instead I shall emphasise several of the points that have been made and ask specific questions of the Minister. I will focus on constructive solutions. I praise the work of the current steel Minister, and the Secretary of State for Wales has been open about and engaged on this matter with me and other south Wales Members but, to be honest, a lot of this is far too little, far too late. When I was elected in November 2012, one of my first meetings was about the steel industry. The Celsa management and I went to the Department for Business, Innovation and Skills to meet senior officials and Ministers. We presented detailed and carefully constructed warnings about what was happening in the market in terms of Chinese dumping and energy costs. We presented thought-through solutions, and we wanted to work together co-operatively and in partnership to find solutions. Unfortunately, a lot of the warnings were ignored.

I think back to a particular meeting I had in November 2014 in the Wales Office with the Secretary of State for Wales and the then steel Minister, who is now the Minister for the Cabinet Office. To be fair, the Secretary of State made an effort—I genuinely think that he cares about the future of the industry in south Wales—but I am sorry to say that that was simply not matched by the former steel Minister, the Chancellor of the Exchequer and officials in the Treasury and elsewhere. There has been a constant battle between those in government who genuinely accept that there is a problem and want to do something, including the current steel Minister, and others who either act with typical Whitehall caution, saying, “Oh, we can’t do this, Minister. We can’t do that, Minister,” or are actively not interested at all and are pursuing a laissez-faire ideology.

[Stephen Kinnock]

The promises, and the lack of delivery on those promises, specifically on market economy status for China, have been a constant theme. China’s current non-market economy status will be up for review in December 2016. The first step in reaching a decision will be the European Commission making a recommendation. Does my hon. Friend agree that it is time for the British Commissioner, Lord Hill, to stand up for British interests in Brussels and to make it absolutely clear that the British Government will not support market economy status for China? Surely it is time for that promise to be made and, for once, not to be broken.

[Stephen Doughty]

I wholeheartedly agree with my hon. Friend, who is absolutely right. Such promises have been the hallmark of much of the relationship with Europe of this Government and the previous one. There has been a lack of engagement. We can argue about the reasons why, but things have not been followed through until far too late in the day. I know that the Minister will talk about the actions she took, which were very welcome—I praised her for them publicly—but that was the first action after many similar requests in terms of our relationship with Europe.

My hon. Friend the Member for Aberavon talked about market economy status, and my biggest concern is China. It is basic economics. The statistics show that Chinese steel exports have increased every year—they rose in 2009, 2010, 2011, 2012, 2013, 2014 and 2015. If we look specifically at statistics for the EU, we see an upward trend of Chinese exports since the start of 2011. In 2014, they increased by 53%. They peaked in quarter 4 of 2014 at 27.1 million tonnes, but in quarter 3 of 2015, a new record was set of 29.4 million tonnes, which was an increase of 17% in one quarter.

--- Later in debate ---

[Mrs Moon]

I absolutely agree with my hon. Friend, who has done valuable work fighting for his constituents, to make sure our cherished and valued capabilities stay within our national infrastructure. I cannot imagine how we would have fought the second world war if we had not had our steel industry and been able to manufacture the steel that kept our fleets and troops going, and our tanks rolling across the countryside.

We must stop thinking of the issue in terms of China and its need to dump its excess supply of steel on the European market. I understand what China is doing. It faces its own economic crisis and needs to keep its workforce going, because it does not want instability.

[Stephen Kinnock]

We understand, of course, that the Chinese economy needs to grow, and China has every right to do that, but does my hon. Friend agree that potentially there is an agenda about dumping? That agenda is to dump the steel, drag the price down, kill the British steel industry and, as soon as that has happened, move in and put the prices up: profits go back up and we are nowhere to be found.

[Mrs Moon]

My hon. Friend has stolen my best line. That is exactly where I was going in my speech. The dumping is helping China in the short term to keep a workforce going, but let us be honest: it has a long-term agenda of destabilising not only the British but the European steel industry. We are our own worst enemies, because we are allowing that to happen. It is time we were realistic and said no. There are opportunities that we can take, and there is a simple one: we can say no to the Chinese market economy status. We can say that; we can do that; we can fight for that. I do not understand why we are not doing it.

--- Later in debate ---

[Kevin Brennan]

Indeed. We need to know what is going on regarding market economy status. Let us have some transparency from the Minister. I visited Brussels last week with the shadow Secretary of State, my hon. Friend the Member for Wallasey (Ms Eagle), to talk to officials, including Britain’s European Commissioner, to whom my hon. Friend the Member for Aberavon referred, along with representatives from UKRep, officials from the Commission and Members of the European Parliament. Following that visit, it was absolutely clear to us that the UK Government have the door to Chinese market economy status wide open.

[Stephen Kinnock]

Another important avenue to explore is exactly what deal the Prime Minister did with President Xi Jinping on the China visit.

[Kevin Brennan]

Indeed. I am not sure whether the Minister was party to that deal, but it would be interesting to hear what she knows about it.

As hon. Members have said, the Government must give a much clearer signal about their position on the minimum strategic capacity of the British steel industry.

--- Later in debate ---

[Anna Soubry]

I cannot give the hon. Gentleman an answer to that, but I can say that every Department needs great leadership, and I am delighted that the Department for Business, Innovation and Skills has exactly the sort of great Conservative leadership it needs.

I get slightly cheesed off at nonsense about the Government not being joined up and not working together. That could not be further from the truth. The current level and degree of co-operation within Government has never been seen before. I can give many examples of exactly where the Government are joined up. I am particularly proud of my working relationship with Ministers in the Department of Energy and Climate Change, for example. We get on well and work well together. At the moment we are looking at why too few of our steel fabricators buy British steel. We are doing a piece of work on the supply chains to see how we can ensure that British steel is bought all the way through the supply chains.

The fourth ask made of the steel industry was on procurement. We are the first EU country—

[Stephen Kinnock]

Will the Minister give way?

[Anna Soubry]

The hon. Gentleman cannot have a go until I have finished my sentence. He will have to bear with me one moment.

We are the first European Union country to use the new powers available to us to change the Government’s procurement of steel and, indeed, other materials. There are now no excuses when it comes to Government contracts for not buying British. A number of claims were made about Hinkley B and Areva. In the case of Areva, that steel is not made in Britain. I am told that at least 60% of the steel at Hinkley Point can be bought in Britain. The other 40% is not made in Britain.

[Stephen Kinnock]

We have very little time left. It is clear that the burning issue, which was raised by all hon. Members present, is market economy status. It seems that the Minister has moved off the dumping ask on to another ask.

[Anna Soubry]

indicated dissent.

[Stephen Kinnock]

I assumed the Minister had finished on dumping and ignored the most important point.

[Anna Soubry]

I am so sorry; the hon. Gentleman should read his brief better. There were—[Interruption.] No, no. There were five asks. I have dealt with four; the fifth is business rates, and I think I have dealt with that. The status of China is a new ask, not one of the original five. Let us deal with the market economy status for China. The Prime Minister has made it clear, and I think he makes a good case, that there is a good case for China to be given market economy status. This is where I get agitated with Opposition Members. I do not have a problem with people when we disagree on politics or argue about policies; I have a problem when they tell their constituents that if China gets market economy status, we will not be able to vote in favour of tariffs to stop it from dumping steel or anything else. That is not true. Russia has market economy status, but the EU is able to, and does, vote in favour of tariffs to stop Russia dumping.

For example, in the meeting I was talking about earlier, even though the task groups had come to the end of their time, we specifically looked at Russia and Iran. We are gravely concerned about the amount of steel that they are producing and about the threat of it flooding into the UK economy. So, again, we are looking at the issue of tariffs, but let me make it very clear. The Government do not make the complaint to the European Union; the complaint comes from the steel industry itself—it must raise the complaint. It is wrong for hon. Members to say to their constituents that if China gets market economy status, we are precluded from introducing tariffs. We are not, so Members should please not mislead their constituents.