Budget Resolutions and Economic Situation

Stephen Kinnock Excerpts

Tuesday 21st March 2023 Commons Chamber

[Michael Gove]

I look forward to the intervention from the hon. Gentleman who represents the energy-intensive steel town of Port Talbot.

[Stephen Kinnock (Aberavon) (Lab)]

I thank the Secretary of State for giving way; he is being very generous. He talks about the importance of jobs and energy-intensive industries. Is he aware that Labour has committed to a steel renewal fund, which will facilitate the transition from blast furnace technology to electric arc furnace technology, which is vital for the future of the Port Talbot steelworks in my constituency? Can he set out whether his Government have anything like that sort of plan? Is he aware of the fact that Tata Steel has said that if the Government do not make up their mind as to whether they will support our steel industry by July, it will close down one of the blast furnaces?

[Michael Gove]

First, the hon. Gentleman is a fantastic advocate for his constituency and the steel sector. Secondly, as far as I know, the Labour proposals that have been put forward, which we welcome, are not funded. [Interruption.] No, I do not believe they are. Thirdly, it is the case that if we are to have a sustainable steel industry, we need to move towards its decarbonisation and a bigger role for hydrogen, but no scientist and no one in the steel industry thinks that will be an answer tomorrow.

As has been pointed out, we will need, alongside the development of those technologies, to ensure diversity of supply of the different types of energy needed in steel production. That is why the independent planning inspector said to the Government that we should go ahead with a new coalmine producing coking coal in Cumbria, and it is why the Opposition, without even having read the planning inspector’s report, once again put ideology before jobs and growth in rejecting it. I will always listen to the hon. Gentleman when it comes to the steel industry, but I will not take lectures from Opposition Front Benchers when they set their face against precisely the type of jobs that will help sustain steel for the future.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

The United Kingdom was the cradle of the first industrial revolution. The opportunity for us to be the cradle of the green industrial revolution is there for the taking. But there is absolutely nothing in this Budget that supports that goal. Labour’s game-changing green prosperity plan is the ultimate example of a policy that will deliver on that opportunity, and will pay for itself in the long term by driving growth and creating good jobs, thereby expanding the tax base. We will double onshore wind, triple solar power and quadruple offshore wind. We will launch Great British Energy, making Britain energy secure and creating as many as 1 million good jobs across the UK in the process. We will insulate 19 million homes and invest in a £3 billion transition for green steel.

The Labour party knows that every leading economy has a strong and healthy steel industry, so it is deeply concerning that of the leading economies, only Britain has a declining steel industry. It is deeply troubling that there is nothing for steel in this Budget. We know that more steel will be required in the net zero economies of the future than there is today. That creates a huge market opportunity for British steelmakers across the globe. We know that UK steel companies employ 35,000 in good, well-paid jobs well above regional pay averages, and 45,000 more in our supply chains. We know that steel underpins our defence sector and our nation’s economic resilience, in an age of turbulence where authoritarian regimes are a threat to our supply chains and our democratic values. We know that if the Government continue to sit on their hands, tens of thousands of jobs could be lost and our country’s resilience will be in tatters.

We on the Labour Benches recognise the scale of the challenge. Steel companies in Canada, Germany and Spain are receiving up to £1 billion per plant to decarbonise, yet the British Government’s offer to our steelmakers is a fraction of that. It is therefore unsurprising that Tata Steel, owners of the biggest steelworks in the UK in my constituency, has reportedly given the Government until July to approve its investment offer, due to growing concerns that competitors in mainland Europe are getting ahead of us in the drive towards green steel. If the Government continue to dither and delay, we could see the closing down of one of the blast furnaces, which would be truly a hammer blow for our Port Talbot steelworks.

Labour’s message to Tata is clear: the cavalry is coming. A Labour Government will deliver on the clean steel fund. Perhaps there is not time to wait. Our message to the Conservative Government is also unambiguous: we need action now. They must not once again betray industrial communities such as the one in my constituency. They must step up to the mark, deliver for green steel and make up their mind. Do they believe that the UK should have a steel industry, or do they not?

We need a growing economy that can deliver good jobs that people can raise a family on. We need a single-minded commitment to investing for growth and a proper industrial strategy that will enable us to stand as a country more firmly on our own two feet, rather than being over-reliant on authoritarian regimes and dictators across the world. That is how Labour’s mission-driven Government will deliver. No more sticking-plaster solutions. Our steelworkers, who make the best steel that money can buy, are just asking for a level playing field. The Government need to step up to the plate and do the right thing.

--- Later in debate ---

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Let me begin by paying tribute to all the right hon. and hon. Members who have taken part in this Budget debate, not only today, but throughout its four days. Today, many Members from across the House, including my right hon. Friend the Member for Walsall South (Valerie Vaz), and my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell), for Ilford South (Sam Tarry), for Bolton South East (Yasmin Qureshi) and for Leeds East (Richard Burgon), have raised the issue of the cost of living crisis. Other Members have spoken about individual measures in the Budget, such as investment allowances and devolution deals.

Some Members, such as my hon. Friend the Member for Vauxhall (Florence Eshalomi), called this Budget a missed chance, whereas others, such as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), talked about the number of Labour policies adopted by the Government in the Budget. My hon. Friend the Member for Lewisham East (Janet Daby) and the hon. Member for Newbury (Laura Farris) talked about childcare. The hon. Member for Basildon and Billericay (Mr Baron) rightly warned the Government against being left behind by the measures being taken in the US and the EU to ensure the green transition.

The right hon. Member for North West Hampshire (Kit Malthouse) urged us all to have more children. Perhaps when all other growth plans have failed, that is all that is left.

The Budget is a critical part of our economic and political framework, and I congratulate the Chancellor on surviving long enough in his post to deliver one. Here we are a few days later and he is still in his post. That is a rare achievement among Conservative Chancellors of modern times.

Outside this House—indeed, on the day that the Chancellor spoke—there is significant turbulence in the financial system. Even though we debate these measures, it is imperative that the Treasury and the regulators are alive to the risks elsewhere in the system and to what other risks may be there.

The Budget was billed by the Chancellor as a Budget for growth. He opened his statement last week by asking us to give thanks that, this year, the economy is expected to shrink, but just not by quite as much as was previously thought. A flatlining economy is now defined by the Government as success.

[Stephen Kinnock]

My right hon. Friend is making an excellent speech. The Secretary of State for Levelling Up, Housing and Communities said earlier that this was a Budget for growth and that it would deliver more economic prosperity, but the reality is that the OBR said that we will not see a rise in living standards for another decade. Does my right hon. Friend agree that the Government have had their chance?

[Mr McFadden]

My hon. Friend is absolutely right. After 13 years, there really is nowhere left to hide.

Despite the Budget being billed as a Budget for growth, the UK is still experiencing the slowest recovery from covid in the G7. All the countries that make up this group had to cope with the pandemic. All of them have suffered the consequences of Russia’s invasion of Ukraine, yet Britain’s recovery is the slowest.

What is it about Conservative stewardship of the United Kingdom that makes us stand out in this way? Is it the political chaos inflicted on the country by the Conservative party, which makes a Chancellor who gets to deliver a Budget such a rarity? Is it the fact that, since 2010, our productivity growth has been the second lowest in the G7? Is it the disastrous Tory mini-Budget last year, which they would like to bury under 10 feet of concrete, but which people will not forget? It caused borrowing costs to soar, put our pension system on life support and rocked international confidence in the UK economy. Is it the former Prime Minister’s Brexit deal, which was supposed to give us global Britain but instead gave us the problem of how to send a sandwich to Belfast?

It could be all those things, but whatever the reasons, the overriding fact for our constituents is that they are still living through the biggest fall in living standards in living memory. Their money goes less far, their incomes have been squeezed and they are living in a country that is poorer than it was four years ago.