Oral Answers to Questions

Stephen Kinnock Excerpts

Tuesday 30th April 2019 Commons Chamber

[Greg Clark]

If you want to be the party of workers, you need to be the party that creates work. There are 1.5 million more people employed in work as a result of this Government’s policies, and of course we want to make sure they are in good jobs. The effort of our industrial strategy is to drive up productivity, which is necessary if pay rates are to increase over time. The hon. Lady should acknowledge the reforms, brought in partly as a result of the Matthew Taylor report, that have closed the Swedish derogation, which her party failed to close over 13 years in office.

[Stephen Kinnock (Aberavon) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Nearly 30 years ago Margaret Thatcher made a speech at the UN General Assembly in which she described

“what may be early signs of man-induced climatic change.”

Ever since then, the UK has continued to lead the world on this issue. The UK, yet again, broke its coal-free power generation record, which now amounts to more than three and a half days without any electricity being generated from coal, over the weekend—the longest period since the industrial revolution in which coal has not been burned for power in this country.

Later this week we have another seminal moment in which the independent Committee on Climate Change will report back, at the Government’s request, on how we can set a date to achieve net zero emissions—once again, this country is leading the world on climate change.

[Stephen Kinnock]

I am sure the House will wish to join me in paying tribute to the management, the workforce and the emergency services who dealt so effectively with the explosion at the steelworks in my constituency on Friday. We wish the two men who received minor injuries all the best.

The predecessor of the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Pendle (Andrew Stephenson) promised the last meeting of the all-party parliamentary group on steel and metal-related industries that he would host a meeting of steel sector stakeholders, supply chains and steel MPs to discuss the failure to develop a steel sector deal. Will the Minister now commit to honouring that commitment and to meeting us as soon as possible?

[Greg Clark]

First, I join the hon. Gentleman in paying tribute to the workers at Port Talbot and to the emergency services, which responded with characteristic bravery and dispatch to deal with that very worrying incident. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle (Andrew Stephenson), and I spoke to the company and the trade unions the next morning, and we are all relieved that the situation was not worse. Of course, we send our sympathies to the workers affected.

As the hon. Member for Aberavon (Stephen Kinnock) knows from an earlier answer, we are clear on the importance of the steel sector for the future of manufacturing generally, and I take a personal interest. These are early days for the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle, but I know he shares my enthusiasm, and perhaps we can both come to that meeting.

Mineworkers’ Pension Scheme

Stephen Kinnock Excerpts

Thursday 14th February 2019 Commons Chamber

[Stephanie Peacock]

I thank my hon. Friend. As a former miner, he speaks with passion and has done over many decades, and he is absolutely right. It is blatantly unfair that those who have spent a life working literally at the coalface will be left to struggle in retirement, when the Government can instead help the near 160,000 former miners still affected. This is their money, and I appeal now to the Minister to do right by them.

[Stephen Kinnock (Aberavon) (Lab)]

I thank my hon. Friend, and as the grandson of a coal miner, I know that the speech she is making is so important for the communities that we represent. When the Prime Minister took over, she stood on the steps of Downing Street and said that there are “burning injustices” affecting our nation. Does my hon. Friend agree that this is one of those burning injustices? If the promises that the Prime Minister made are to mean anything at all, this wrong must be righted immediately.

[Stephanie Peacock]

My hon. Friend is absolutely right: it is totally unfair. That is why I ask the Minister to dispel the concerns that I briefly touched on earlier and protect the bonus element of the members’ pensions, which will prevent real-terms losses to pension value in times of poor investment return. Most importantly, is she prepared to amend the surplus sharing scheme and meet the coalfield MPs, the scheme trustees, members and the National Union of Mineworkers to discuss a revision, including consideration of the recent NUM-commissioned report that suggested a 90:10 split in favour of the miners?

Miners and their families in this country had their way of life ripped apart. They were branded “the enemy within”. Men were imprisoned because they were fighting for their jobs. Women ran soup kitchens because they were fighting for their community. Spirits were bruised but never broken. Tragically, too often our miners were let down. The unfairness of the scheme must not—cannot—be allowed to stand as the final chapter in that dismal history. Retired miners have waited long enough for the only thing they ever wanted: their fair share.

2015 Steel Summit Commitments

Stephen Kinnock Excerpts

Tuesday 10th July 2018 Westminster Hall

[Anna Turley (Redcar) (Lab/Co-op)]

I beg to move,

That this House has considered progress on 2015 steel summit commitments.

It is a pleasure, as always, to serve under your chairmanship, Sir David. I am pleased to have secured this debate, which comes almost three years on from the 2015 steel summit. At that summit, in the midst of the steel crisis, steel producers, steelworkers, trade unions and parliamentarians came together with Government to discuss the challenges facing the industry and the support needed to at least level the playing field. We were not looking for special favours or advantages, just a fair environment so that British steel makers were not fighting against state-subsidised steel from east Asia or excessive energy costs compared with our competitors in Europe.

My constituents in Redcar felt the sharp end of that battle when the SSI steelworks and coke ovens were closed. Cheap Chinese steel had put the works under strain from falling prices, but it was Government inaction, in the face of pleas from parliamentarians, industry and the Community trade union, that left the works in a battle for survival. The closure wiped out 3,000 jobs and many more in the supply chain, rippling across our local economy.

Redcar is resilient and we are fighting back, but many families continue to struggle, working on lower wages in insecure jobs, working away or not working at all. Many come to my surgeries or visit the local citizens advice bureau, struggling with mortgages and personal debt. I do not repeat that story to dwell on the past, but to highlight why it is so important that the steel industry gets the support it needs to thrive. We cannot countenance any more reductions in steelmaking capacity in the UK after the loss of 175 years of steelmaking on Teesside. We cannot be complacent, as before, about the loss of any more steel jobs.

To return to the 2015 summit, there was a united request in the form of five asks, or five areas where the industry was struggling to remain sustainable, often because we were at a disadvantage compared with our competitors around the world. We were playing fair, but the playing field was tilted against us. I am speaking in the past tense, but sadly not enough progress has been made on those asks since 2015. The playing field is still uneven and tilted against British steel. While the existential urgency of the 2015 crisis may have passed, my town stands as a warning of what can happen if complacency sets in and the industry is not given the support it needs to survive.

[Stephen Kinnock (Aberavon) (Lab)]

On the point my hon. Friend has made about what happened in Redcar, does she agree that the closure of the blast furnace and coke ovens there was an act of industrial vandalism that led to the loss of a strategic asset for our country? Does she also agree that the steel industry needs to be seen as a strategic asset and in the context of our national security?

--- Later in debate ---

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure to serve under your chairmanship, Sir David. It was also a pleasure, as is often the case, to listen to the hon. Member for Redcar (Anna Turley), who is my friend and who speaks so passionately on these matters. I congratulate her on securing the debate. It is always good to see such a doughty group of campaigners for this vital industry.

The hon. Lady will know, as will her colleagues, that I visited her constituency and saw for myself the shock caused by the closure of what was once an exceptionally large and productive plant and the concern expressed by people who had lost highly productive jobs that were critical to the UK’s economy. She also knows that the Government, and my hon. Friend the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington), who has responsibility for the sector, want to do everything that we can to ensure the return of those jobs. She has done wonderful work in her constituency, ably supported by the hon. Member for Scunthorpe (Nic Dakin), other parts of her region and its mayor, to reopen that site as part of the new, low-carbon economy. I am in no doubt about the passion with which she speaks and of what a hammer blow that closure was for employees, their families and the whole region.

The hon. Lady is right to raise what has happened since the closure. That was clearly a momentous time for the industry, and some tough questions had to be answered by the Government and the industry, working together. There have been signs of progress. We have seen a recovery in the world price of steel. The UK has benefited from the decline in the value of our currency, which has made our exports more competitive. However, we are under no illusions about the difficulty of the international market, which we will raise with President Trump when he visits us this weekend.

We are all deeply and profoundly disappointed with the section 232 tariffs. Huge amounts of work have happened behind the scenes to try to focus the US on potentially legitimate concerns about over-capacity production in China, rather than on penalising its closest allies and their industries. Those conversations have happened—my hon. Friend the Secretary of State for International Trade and President of the Board of Trade raised it directly with the US Secretary of Commerce last week. We will continue to make the case for a UK and EU exemption to the tariffs. We have shared legal support on these exemption questions with UK firms and with the industry, and we are pressing hard on behalf of those companies for assurances on the product exclusion process.

Those are the direct impacts of the tariffs. The indirect impact can have a chilling effect on the supply chain, which we are aware of. Indeed, we voted in the EU in support of provisional measures to curb steel imports only last Thursday. We will continue to offer a doughty response, which we must do on behalf of British-based companies.

That 2015 plant closure was such a pivotal moment. We received the five asks of the steel industry, which looked not only at what could be done in the short term but also at the long-term outlook for those companies. A number of changes to the industry’s structure have happened since. Greybull Capital acquired Tata’s long products business, which is based in Scunthorpe and is now part of the British Steel group. The Scottish mills have reopened under the ownership of Liberty Steel, which also bought Tata’s speciality steel business, based in Sheffield and Rotherham.

We should all be pleased to see the Tata-thyssenkrupp venture in Port Talbot coming to fruition. I visited it myself and saw the pride in that long tradition of steelmaking. I pay tribute to the management and the unions, who worked so hard in making that deal happen. Securing those jobs was vital. The deal was accompanied by the decision to invest in the blast furnace. The company will now work to ensure the commitment that as much as possible will be done to avoid any compulsory redundancies until 2026. I have to pay tribute to the pool of highly skilled workers who are dedicated to the future of the industry. We are incredibly lucky to have them.

However, the Government have done our bit, too. We set up our industrial strategy. The hon. Member for Redcar rightly raised energy costs. The Dieter Helm review that we commissioned found that, while our energy companies pay more than some of their European counterparts, it is often because other countries decide to spread those costs to consumers’ bills.

[Stephen Kinnock]

I recommend that the Minister looks at the “Steel 2020” report produced by the all-party parliamentary group on steel and metal related industries. It contains a detailed road map on what can be done on energy, including on wholesale costs, network and transmission costs, energy efficiency aid, reform of the emissions trading system and long-term remodelling. Will she update us on what the Government are doing, and whether she has had a chance to look at the report?

[Claire Perry]

I am happy to read the primary source. I have seen many of those recommendations, which inform our response to the Helm review.

I was making the point that other countries have taken policy decisions to put the costs that would in this country be borne by industrial customers on to household bills. We have ended up in a situation in which some of our industrial energy bills are higher than average, but our household bills are lower than average. Those policy levers are difficult to change; we all support, for example, the energy price cap Bill that we will bring forward later this week.

However, as the hon. Member for Redcar pointed out, we have spent more than £250 million in compensation specifically for the steel sector and other energy-intensive industries to help to mitigate those policy costs as we transition to a low-carbon future. We successfully pressed for the introduction of trade defence instruments to protect UK steel producers from unfair dumping. We set out visibility on the pipeline going forward, which I know was a big ask from hon. Members in the room.

The Government plan to procure construction contracts that will use 3 million tonnes of UK steel over the next five years, which is enough to build 170 Wembley stadiums. I understand the comment from the hon. Member for Penistone and Stocksbridge (Angela Smith) on the Swansea bay tidal lagoon. Believe me, I worked so hard on those numbers, but to build the country’s most expensive ever power station basically to create a couple of dozen jobs was just not economically effective when compared with other opportunities in all our constituencies.

The power of Government procurement should not to be underestimated. Every Government steel contract in England is now required to consider its social and economic impact on local communities and what those decisions mean for the constituencies we are all so proud to represent.

We are grateful for the constructive proposals put forward by the steel council. I asked for guidance on this. The steel council, which I was proud to chair when I was the relevant Minister, met last in June and will meet again before September. It now meets regularly, and that is an opportunity to discuss the current challenges but also for the industry to work together. Historically, members of the industry have not sat around a table and worked together on the outlook and productivity investments; it has had a very competitive mindset. The industry working together and with Government is a very important part of the plan as we go forward.

Energy Policy

Stephen Kinnock Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

My hon. Friend is right that £700 per household across the UK cannot be justified, either for consumers in Wales or in any of our constituencies.

[Stephen Kinnock (Aberavon) (Lab)]

The Swansea Bay tidal lagoon would also have been in my constituency. I can tell the Secretary of State that today the people of Aberavon see this as yet another betrayal of the interests of the people of Wales. They also understand that the project would have had tremendous benefits for the steel industry. Will the Secretary of State today please promise to publish the cost-benefit analysis for the steel industry and the massive opportunity cost of not going ahead both for the steel industry and the steel supply chain? Will he publish that information?

[Greg Clark]

The hon. Gentleman and I engage closely with the steel industry. In fact, the steel content of the proposed lagoon would have been about a third of a month’s output of the Port Talbot plant. He knows perfectly well that one of the challenges facing the steel industry in this country is energy prices. I would have thought that he would want to take steps to reduce the burden of energy costs on businesses such as the steel industry.

Industrial Strategy

Stephen Kinnock Excerpts

Wednesday 18th April 2018 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

The British economy can best be described by the saying all that glitters is not gold. At first glance, things appear relatively rosy with modest growth, unemployment down and moderately stable consumer confidence. However, if we scratch just below the surface, a deeply troubling picture emerges, and it is a story of a productivity crisis, precipitous personal debt, a dangerous overreliance on financial services and a gaping chasm between London and the rest of the country.

I was therefore pleasantly surprised when the Prime Minister announced, in that fateful speech on the steps of 10 Downing Street, her intention to develop an industrial strategy. Wherever we look in the world, the successful countries are the ones with a Government who have been an active partner of business, using their scale, and convening capability and financial firepower, to create long-term platforms for national success. If we are to succeed as a country, we need a Labour vision of government. We need a Government who enable people and businesses to make the most of their talents, who are a true and proactive partner of business and industry, who are prepared to address the structural weaknesses of the UK economy and who are ready to tackle the causes of the malaise, rather than simply tinker with the symptoms.

There can be no doubt that the most important single cause of the huge imbalances that afflict our economy is the shrinking of our manufacturing base. In the 1970s, manufacturing accounted for around 30% of our GDP; today it stands at barely 10%. The knock-on effects of that decline have been profound. Thanks to the erosion of our manufacturing base, we have seen wealth and resources sucked into the services sector, which has been great for London and the south-east and devastating for the rest of the country.

We have seen a wholesale shift from production into consumption. We have seen a catastrophic collapse of our productivity. We have seen a massive increase in our trade deficit. And, perhaps most damaging of all for the future of our country and our politics, we have seen a fundamental sense of the communities in our industrial heartlands being left behind.

A proper industrial strategy should focus relentlessly on redressing those dangerous and deeply damaging imbalances. A comprehensive, broad-based strategy would spark a modern manufacturing renaissance across the length and breadth of our country, but what we have seen from this Government is an approach to industrial strategy that is set to entrench rather than address the imbalances. Rather than committing to a broad-based industrial strategy that supports our foundation industries and puts the foundational building blocks in place for the manufacturing base, our Government are instead intent on focusing on going into the stratosphere of space research and life sciences.

Research from Sheffield Hallam’s centre for regional economic and social research shows that the focus of the Government’s industrial strategy challenge fund is on sectors that disproportionately benefit London and the south-east. By focusing R&D on an exceptionally narrow range of sectors—healthcare and medicine, robotics and artificial intelligence, batteries, self-driving vehicles and space tech—we will end up only really benefiting the so-called golden triangle of London, Oxford and Cambridge. That is a blatant and outrageous abdication of the Government’s responsibility for the entire economy, not just for those sectors that may have certain pockets of political support.

Exhibit A in the Government’s failing strategy is its approach to the steel industry. The town I represent is the hub of our steel industry, and the Port Talbot steelworks is the beating heart of my community in Aberavon. Last September—almost eight months ago—the Government received the steel sector deal, a comprehensive plan for how we can turn the British steel industry from one that is surviving into one that is thriving. The plan would involve an additional £1.5 billion of investment over the next five years, increasing production by 40%, creating 2,000 more jobs, training 200 more apprentices a year and increasing investment in R&D. The plan has the support of companies and unions, but it has sat on a shelf, gathering dust, for eight months.

I implore the Secretary of State to confirm today when the steel sector deal will be approved, and I urge him to stop treating us like children or idiots. If the Government are giving up on the sector deal, and on the steel industry, Ministers should come clean today and say that from the Dispatch Box.

A successful industrial strategy cannot do everything for everyone, but it must do something for everyone. As things stand, this industrial strategy fails that test. If the Government really want a broad-based industrial strategy, they have to start with a broad-based manufacturing renaissance, and that starts with delivering a sector deal for the steel industry.

Sector Deal for Steel

Stephen Kinnock Excerpts

Tuesday 19th December 2017 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered the steel sector deal.

It is a pleasure to serve under your chairmanship, Sir Henry, and I thank the House for granting the debate.

Hon. Members will recall that there was a period of time when we had debates about the future of the British steel industry almost weekly. Since then, the media circus has moved on, and with it the Government’s apparent concern, focus and attention. Let us be clear: Government engagement with steel evaporated once the crisis had dropped off the front page of the newspapers. Back then, the Prime Minister was a guy called David Cameron. As we know, he was first and foremost a PR man, so when the steel crisis hit his PR instincts went into overdrive. He needed to manage the story and get it off the front page as quickly as possible. Did he ever have any intention of tackling the underlying causes of the crisis—his Government’s abject failure to push through the policy reforms so desperately needed to create a level playing field for the steel industry? No, he did not. As the debate will show, David Cameron’s successor has simply picked up where he left off.

Just over two years ago, the closure of the Redcar steelworks had a truly devastating impact on the town and community; 3,000 people were put out of work, and of those who have since found work almost two thirds have had to take a pay cut. Many other businesses in the area have struggled, because every UK steel job supports at least three more elsewhere in the economy. Three months after the closure of Redcar, Tata Steel announced more than 1,000 job losses across Wales, three quarters of them at the Port Talbot steelworks in my constituency. About a month later came the devastating news that Tata Steel planned to close or sell its entire UK business. While the then Business Secretary, now the Secretary of State for Communities and Local Government, the right hon. Member for Bromsgrove (Sajid Javid), was enjoying a nice little Easter recess jolly to Australia, I was out in Mumbai with Community Union to present the turnaround plan to the board of the Tata group.

[John Healey (Wentworth and Dearne) (Lab)]

I congratulate my hon. Friend on obtaining the debate. Does he remember—he has missed it out of his chronology so far—the national steel summit held in Rotherham? It was not just the steel towns and their MPs that felt let down, but the leaders of Britain’s major steel companies and steel trade unions who were round the table that day as well. The promises of serious attention and action to follow, which were made two years ago at the national steel summit, have not been followed through.

--- Later in debate ---

[Stephen Kinnock]

My right hon. Friend is right. That was an important milestone, but there have been so many false dawns, and warm words matched by frozen actions.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I congratulate my hon. Friend on securing the debate and on the great work that he has done over a significant period to stand up for the steel industry. On the subject of broken promises, does he agree that investment in research and development is another big issue? Across the UK generally it remains stubbornly below the OECD average. The whole sector is now asking for increased R and D investment in steel, and the Government should deliver that.

[Stephen Kinnock]

My hon. Friend makes an important point. I think that in the minds of some Ministers, and others in the House, steel is seen as metal bashing and an almost primitive industry, but in fact it is at the cutting edge of many innovations that we desperately need to drive our economy forward. If we are serious about getting a broad-based manufacturing renaissance, it must start with investment in the steel industry.

It was clear that Tata’s initial preference was to close the business down rather than sell it, but thankfully we managed to persuade the company to shift its position from closure to sale. Thanks to the magnificent professionalism and dedication of the workforce and steel unions, the turnaround plan began to kick in. The performance of the business dramatically improved, and from a fire sale we got the slow burn that eventually morphed into Tata’s decision to remain. However, that happened only after the workforce, facing the prospect of either the closure of the Port Talbot works or the closure of their pension scheme, voted for pension restructuring. They put the future of their industry, livelihoods and communities before all else. Steelworkers and steel communities are like no others. If my hon. Friend the Member for Redcar (Anna Turley) were well enough to be here today, she would have told us of the incredible strength and resilience of her community, which has stood firm, united and resilient, just as she has fought tooth and nail for it since the closure of the works.

There have been many ups and downs in the British steel industry in the past few years, but three things remain constant. The first is the relentless passion and commitment of steelworkers and their communities, exemplified by the delivery of the turnaround plan and the vote on the restructuring of their pension scheme. The second is the Government’s indifferent and incompetent attitude, and the third is the key policy asks of the industry—business and workforce—which have remained fundamentally unchanged for well over two years. We have discussed those policy asks many times, but it would be remiss not to take the Minister through them, as this is her first time attending such a debate.

To take trade defence first, we asked the Government to stop blocking reform of the lesser duty rule, which means tariffs that we can impose on illegally dumped steel are capped at 16%, while the Americans can impose far higher duties. The Trade Bill is set to transfer the lesser duty rule to UK legislation after Brexit. We asked for meaningful action against illegal Chinese dumping, with proper trade defence instruments. However, as steelworkers were being shown the back door, No. 10 was rolling out the red carpet for Beijing. What was the result? We can now add the challenge of illegally dumped Russian and Turkish steel to that of Chinese steel.

Secondly, on business rates, there have been five Budgets in the past two years, and not one has acknowledged the industry’s concerns about the way business rates inhibit investment and hold us back from investing in plant and machinery; so of course no remedy has been proposed.

Thirdly, on the question of procurement, which I have been working on extensively with my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), the Government have utterly failed to translate their rhetoric into reality. The public interest test that they introduced proved inadequate. Our calls for a longer lead-in time for central Government contracts have fallen on deaf ears. The Government have resisted transparency, dumping the idea of mandatory reporting and refusing even to gather and hold the relevant data, let alone provide it to us whenever we have asked. Foreign steel has continued to be used on iconic projects such as the repair of Big Ben, the new Firth of Forth bridge, the new Type 26 frigates and all sorts of smaller refurbishment and development projects around the country.

On the most vital of issues, energy prices, there has been some tinkering at the edges but no attempt at all to tackle the root causes of our ludicrously uncompetitive energy costs. The Government found a chaotic resolution to the EU emissions trading threat—something that would have cost the steel companies tens of millions of pounds, owing to the mishandling of Brexit—but they have singularly failed to clear changes to the feed-in tariff and renewables obligation opt-out. On the central issue of energy pricing, which means that UK producers’ energy costs are more than 50% higher than those of our European competitors, nothing has been done, and it appears nothing will be done.

That brings me to the very matter that we are here to discuss: the sector deal for steel, which hinges on the issue of energy pricing. After publishing the industrial strategy White Paper, the Government asked all industries to present their sector deals—comprehensive packages about how their industry would work within a national industrial strategy. The steel industry did just that, by presenting a sector deal to Ministers that met all the requisite criteria back on 7 September.

That deal would see a 50% increase in investment, from £200 million to £300 million per year—an additional £1.5 billion of investment over the next five years. It would increase production capacity by 40%, from 10 million tonnes to 14 million tonnes a year. It would create 2,000 jobs, and would see 200 more apprentices trained every year. It would develop a low-carbon roadmap, and help to deliver a more efficient electrical system, almost doubling the industry’s demand-side response. It would see the industry pump an extra £30 million investment a year into R and D, which is an area, as my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) pointed out, in which the UK is traditionally weaker than our rivals.

In return for all that value, all the steel industry asks is that the Government match the R and D funding, helping to establish the future steel challenge fund, which would bring together the steel value chain, from automotive to aerospace and from renewables to construction, to work in partnership towards a cohesive industrial strategy and a new kind of growth, unlocking exciting innovation and new opportunities. The deal asks for Government help in facilitating investment by providing access to commercially competitive loans, providing capital investment grants or innovative tax discounts linked to investment. Essentially, that would help the industry to unlock the monopoly on investment held by property speculators and quash the myth that investing in industry is risky.

Crucially, the linchpin on which all this untapped potential rests is energy prices. Our steel producers have to pay 55% more than their German competitors and 51% more than the French, which adds up to an additional cost of almost £50 million a year. As the sector deal makes clear, if the steel industry gets the help it needs, it will put every penny and more of that £50 million back into the industry, creating jobs, increasing capacity, innovating and creating new opportunities and value.

[Nick Thomas-Symonds]

Does my hon. Friend agree that there is wide support for the sector deal right across the steel sector? It makes sensible and innovative proposals. Why do the Government not simply adopt it?

[Stephen Kinnock]

I agree with my hon. Friend. The sector deal has been submitted under the umbrella of UK Steel and EEF, but with the full participation and support of Tata Steel, British Steel, Liberty Steel, Celsa Steel and a number of other key players in the sector. The steel industry really speaks with one voice on this.

Without a cost-competitive energy environment, steel companies cannot invest in the future, and the industry can survive only when it has the potential to thrive. Steel is too important a product for our economy, our security, our communities and our standing as a nation for us to have to rely on others for it.

[Jim Shannon (Strangford) (DUP)]

The fact that the UK produced some 8 million tonnes of steel in 2016, while China produced 808 million tonnes shows a vast difference. Does the hon. Gentleman agree—I think he is basically saying this—that it may now be time for the Government to enter into negotiations with the companies and also the unions to ensure that we have a manufacturing base for steel in future? We will not have one unless the Government act. It is time that they did.

[Stephen Kinnock]

I absolutely agree with the hon. Gentleman. As I will come on to explain, the sector proposal is the litmus test for the Government. We have had years and years of warm words, but this really is the moment to see whether the Government are serious about providing the support they say they want to provide.

Steel enables transport, construction, manufacturing, energy and consumer goods—you name it, Sir Henry, and if steel is not in it, it was almost certainly used to make, process or transport it. Steel is truly a foundation industry, and demand is growing. The report published last week, “Future Capacities and Capabilities of the UK Steel Industry”, showed that, by 2030, domestic demand for finished steel products will have grown by almost 2 million tonnes. That leaves almost 7 million tonnes of domestic demand to be met by the UK steel industry, which equates to a £3.8 billion opportunity per year.

That value is even greater if we consider all that steel goes into. Almost half the content of all cars built in the UK is British steel. In researching the “Steel 2020” report by the all-party parliamentary group on steel and metal related industries last year—I have a copy with me; I am sure the Minister has already read it, but I would be happy to hand it over—we heard from leading figures in the car industry that the presence of a successful domestic steel industry is a key determinant of where steel is sourced.

Steel is vital to the future of UK car manufacturing and innovation. Take the much-vaunted electric and self-driving cars, which were championed by the Chancellor in last month’s Budget. Along with the normal steel content of any car, what do hon. Members think their batteries are cased in? Steel. If we are to invest billions in that new technology, why on earth would we not invest in the capacity to monetise those innovations? If we do not have the capacity to manufacture, or the capacity to produce the steel for the batteries and the machines that manufacture them, we will lose out. The steel will be Chinese. The manufacturing and machinery will be German, and we will have spent billions on an idea that sees profit not in Port Talbot, Sheffield or Redcar, but in IJmuiden, Tangshan or Duisburg.

Despite investment in R and D falling by 90% over the past 25 years, the UK steel industry is still at the cutting edge. More than two thirds of steel produced in the UK today did not even exist a decade ago, so we should not let anybody tell us that steel is a sunset industry. It is an industry that is building a Britain for the future, which is why a go-ahead for the sector deal is vital. It is also important because steel is the ultimate economic and social multiplier. For every £1 of public investment in steel R and D, the return averages between £6 and £16. That means the £60 million transformation fund in the sector deal could add up to £960 million for the UK economy. I do not know about you, Sir Henry, but investing £60 million for almost a £1 billion return feels like a pretty good investment to me.

On average, steel jobs pay 40% higher than the average in the steel heartlands of Wales and Yorkshire and the Humber. Every steel job supports at least three further jobs in the local community and the national economy. Losing the steel industry would devastate towns such as Port Talbot, but the knock-on effects would be equally catastrophic. If the Port Talbot steelworks were to close, it would cost 40,000 jobs across Wales and the UK, costing the Government a total of £4.6 billion in benefits and lost tax revenue and reducing household spending in the economy by £3 billion over 10 years.

If we were to reshape the energy market, as the steel sector deal calls for, the most it would cost would be the equivalent of 57p per household per year. That is 57p a year against almost £8 billion in lost spending, tax and benefit payments if things were to go wrong. Once again, Sir Henry, that looks like a pretty good return on investment to me. There is a golden opportunity, with huge potential for growth. We should all applaud the Government for crossing the Rubicon and accepting the need for an industrial strategy, but the fact of the matter is that, if the Government fail to support the sector deal, that strategy will not be worth the paper it is written on.

Speed is of the essence. Steel companies only have so much capital to invest. That capital is spread across their global businesses, and if they cannot invest it here and now, it will go elsewhere. That is the nature of the beast. We have already seen Liberty spend almost £1 billion in Australia, and there are reports that British Steel—formerly Tata Long Products—is looking at an Italian plant. The clock is ticking and time is running out.

With the uncertainties of Brexit, the Government should be biting the hand off of anyone willing to invest at this time. Instead, steel companies have been fobbed off with all sorts of excuses. They submitted the sector deal on 7 September, but were only granted a meeting with the Minister at the very end of November—hardly the behaviour of a Government serious about supporting this foundational domestic industry. The fact is that the Government’s failure to engage on the steel asks set the tone. The sad reality is that trust between the Government and the steel industry has been shot to pieces. Warm words are no good to anyone if they are matched only by frozen actions.

[The Minister for Climate Change and Industry (Claire Perry)]

I must correct the hon. Gentleman on a factual point: one of my very first acts as Minister was to visit the steelworks in his constituency and close by. I met the council formally to discuss the shape of the sector deal and subsequently three times after the presentation of the sector deal, and I have met and spoken to the companies on numerous occasions. He really must correct the record, because it is simply not true to say I only engaged with the sector after the sector deal was submitted.

[Stephen Kinnock]

I thank the Minister for her intervention. Conversations, visits and meetings are excellent, but the fact remains that the sector deal was submitted on 7 September, and a meeting was not granted with the steel industry until the very end of November. As the clock is ticking, the decisions about investment next year are drying up. It would be great to see rhetoric matched with reality.

An industrial strategy is not built on good will. A business cannot be built on Whitehall bluster, and communities cannot be sustained on platitudes. We all understand that an industrial strategy cannot do everything for everyone, but if the Government are serious about rebalancing our dangerously skewed economy, they must surely start by investing in the steel industry. With the steel sector deal, all that is being asked for is a small amount of help to unlock tremendous potential, create thousands of jobs and add hundreds of millions of value to the economy. Instead, the Government seem to be more interested in investing in robotics, medicine, life sciences and driverless vehicles. I am sure that those emerging industries are vital, but they are all concentrated in the south-east of England. Is that really going to support the broad-based manufacturing renaissance that our country so desperately needs?

Steel workers the length and breadth of Britain have shown that they will make every sacrifice, and the industry has dug deep too. It is the Government who have been found sorely wanting. Steel communities are a hardy bunch, forged in the white heat of our industry and from parts of the country that are well used to being forgotten, neglected and ignored by successive Tory Governments. They know how to take bad news on the chin, and they certainly prefer to be treated like adults, with honesty and clarity as opposed to the obfuscation that has become the hallmark of this Government.

I urge the Minister to stop taking us for a ride. All the indications are that the Government really could not care less about the future of the British steel industry. If that is the case, they should just say so. Please stop stringing us along, and stop promising to do something about energy prices, dumping, procurement and business rates while in reality having no intention whatsoever to act. Please level with us today on the sector deal. Just tell us here and now whether or not the Government are minded to support it. If they are not, it is clearly better to know that now, so that no more of our time and energy is wasted. We know that the previous Prime Minister and Business Secretary only got involved when they realised they had a brewing PR disaster on their hands. We hoped that this Prime Minister and this Business Secretary would be different, but the sad reality is that the Government lost interest once the media circus moved on, so we are back to square one.

The toxic combination of complacency, indifference and incompetence is back with a vengeance. Eleven months ago, the steel APPG produced “Steel 2020”, which provides a road map for the industry’s future. Eleven months on, we are still waiting for the Secretary of State to give us a date for a meeting to discuss it. Over recent weeks, we have seen unscrupulous financial advisers swooping in like vultures to exploit steelworkers while the Government stand by and do nothing. Now we see a comprehensive, exciting offer from the steel industry, backed by the trade unions, sitting on the shelf and ignored for three months. I would say that that is shameful, but I wonder whether the Government are capable of feeling that emotion.

I implore the Minister again to level with us. If she will not help, she should just say so, and the Government should stop wasting our time and giving us false hope. Let us get on and fix what we can ourselves, because right now, the Government are only holding us back. I desperately hope that the Minister will stand up and prove all my suspicions wrong. In fact, I am praying for it, because it is my constituents’ lives and livelihoods that are at stake. I will finish by saying to the Government that they have a choice: they can either be part of the solution, or they can continue being part of the problem. Now is the time to choose, and this sector deal is the litmus test.

[Several hon. Members]

rose—

--- Later in debate ---

[Stephen Kinnock]

On that point, does my hon. Friend agree that, given that the Hendry review was completed almost a year ago, it is almost impossible to understand why we are still waiting for the Government’s answer on the recommendations in that review, which are vital to the south Wales economy, not least the steel industry?

[Jessica Morden]

My hon. Friend is right to make that point. The project has huge potential, not only for Swansea bay but for other areas of Wales—there is the potential for tidal lagoons in places such as Newport—so we must keep pressing the Government. We do not understand why the decision has not been made yet.

There has obviously been disappointment in the steel sector that its own proposal for a sector deal was not among those being talked about, especially given that, as my right hon. Friend the Member for Wentworth and Dearne (John Healey) said, discussions have been ongoing since the crisis in 2015-16, when the Secretary of State invited the sector to work with him to come up with a vision for a modern, sustainable steel sector. We look forward to hearing from the Minister today about what she can do to work with the industry and all of us to ensure a sustainable future for steel.

--- Later in debate ---

[Stephen Kinnock]

I congratulate all hon. Members present on an excellent debate. We should remind ourselves of the purpose of the industrial strategy. It is about rebalancing the British economy, from services to manufacturing, from consumption to production, from debt to surplus. None of those aims will be achieved unless we have a thriving and productive steel industry, and for that to happen we need a radical remodelling of the energy sector, and to develop a post-Brexit trade policy and deliver on the sector deal.

Since I entered Parliament in 2015, Labour MPs have raised the issue of steel almost 300 times, and every time we have heard the same set of platitudes in response: “We’re continuing to review”; “We’re having meetings”; “We’re going on visits”; “We’re having roundtables”. Nothing ever seems to change. I hope, therefore, that we can be forgiven for allowing our concern and frustration about the future of our communities to bubble to the surface. That has nothing to do with party politics. It has to do with the future of an industry that will enable the industrial strategy. We hope, therefore, that in 2018 we can turn the page and move from rhetoric to reality.

Question put and agreed to.

Resolved,

That this House has considered the steel sector deal.

Oral Answers to Questions

Stephen Kinnock Excerpts

Tuesday 7th November 2017 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

Imminent changes to the operation of the EU emissions trading system register are likely to invalidate UK-issued carbon allowances from the start of next year. These measures, which have been brought about by Brexit, will have a significant impact on the steel industry. Will the Minister let us know what contingency measures are being taken to mitigate this impact in the event that an agreement cannot be reached with the European Commission on this issue in time?

[Claire Perry]

The hon. Gentleman is right to raise this important issue. He will be reassured to know that there are active conversations going on between my Department and the European Commission. He presents the absolute worst-case scenario, which we are confident that we will not reach.

Oral Answers to Questions

Stephen Kinnock Excerpts

Tuesday 12th September 2017 Commons Chamber

[Greg Clark]

I will indeed and I am grateful to my hon. Friend for his championing of those investments. We already have an outstanding reputation in the automotive sector through our leadership and investment in both electric and automated vehicles. Ford, for example, has announced that its European smart mobility research will be based in Britain, and Nissan is conducting its automated vehicle testing in the UK. Our code of practice for testing new technologies is globally recognised as the best in the world. We have a successful motor industry and we want it to be stronger still.

[Stephen Kinnock (Aberavon) (Lab)]

On 20 February, the Secretary of State said that he would release the famous letter to Nissan

“when it is no longer commercially confidential”. —[Official Report, 20 February 2017; Vol. 621, c. 784.]

Will he explain whether that will be in 2017, 2018, 2019, or sometime thereafter?

[Greg Clark]

Yes, I will release the letter. The hon. Gentleman reminds us of the fact that the investment Nissan is making in Sunderland has secured 7,000 jobs on that site and nearly 50,000 jobs in the supply chain. It was a very welcome investment. We need to respect Nissan’s confidentiality, but I have made a commitment to the House that, when it no longer applies, I will certainly release the letter.

DRAFT National Minimum Wage (Amendment) REGULATIONS 2017

Stephen Kinnock Excerpts

Tuesday 14th March 2017 General Committees

[Margot James]

That is a fact—I am sorry if it displeases the hon. Gentleman. I accept what he says about the future projections—I am not going to start arguing with the OBR—but I am afraid that if he has his way and brings in a national minimum wage of £10 an hour overnight, that will result in more unemployment, which would set people’s chances back.

[Stephen Kinnock (Aberavon) (Lab)]

Will the Minister give way?

[Margot James]

I am sorry; I am going to carry on.

I want to deal with the extra £2 an hour, which is the same point as the one about raising the national living wage to almost £10 an hour. The hon. Member for Walthamstow made a very powerful speech. I completely accept that £2 an hour would make a big difference to people’s lives at the lowest end of the income scale. We want to get there as quickly as we can. The UK’s lowest earners have at least received the fastest pay rise in the last 20 years and their earnings have grown faster than other people’s further up the wage scale. More than 6% is the largest increase among the low paid for the last 20 years. Those figures are independent of Government.

I fear that one of the reasons why every Labour Government in history, I think, always leaves office with unemployment higher than when they entered office is that they want to escalate the pay rates before the country has earned it. I am afraid that is a recipe for more unemployment, which is a price that this Government are not prepared to pay. We would rather listen to the independent advice of the Low Pay Commission and put in place national living wage rates that protect employment, respect economic growth and what it is capable of paying people, and give the lower paid at least the best increase that they have had in the last 20 years. I want it to be more and I hope we will get to that point in future years—it could not come soon enough for me. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2017.

Steel: Preserving Sustainable Jobs and Growth in Europe

Stephen Kinnock Excerpts

Tuesday 7th February 2017 General Committees

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Wilson. The UK steel industry is of vital national interest. The importance of steel to the maintenance of resilient supply chains and to the strength of our key defence, automotive, construction and rail industries cannot be overstated. As steel is so important, and as the UK steel industry faces major challenges, the European Scrutiny Committee recommended this communication from the European Commission for debate in April 2016. The communication sets out a wide range of proposals intended to ensure that the European steel sector can overcome its short and long-term challenges.

As we prepare to leave the European Union, the development of an effective policy framework to ensure the long-term viability of the UK steel sector becomes even more important. The European framework and rules will continue to apply to the UK until the moment of Brexit, but we need some idea of UK policy thereafter. It is obviously deeply disappointing that despite our repeated reminders, the debate has been delayed for so long. Our frustration at the failure to schedule the debate at a time of crisis in the steel industry led us to arrange a joint evidence session with the Committee on Energy and Climate Change, the Committee on Welsh Affairs, and the Committee on Business, Innovation and Skills in July 2016. Despite that session, a number of fundamental questions raised by the European Scrutiny Committee at the outset remain unanswered, and they assume greater significance given events since then. I hope that the Minister will shed light on those questions today.

The first question is about trade defence. We have asked the Government why they oppose the removal of the lesser duty rule in the face of a continuing flow of cheap steel from China. The long-standing deadlock on that in Brussels was broken in December, and it now looks likely that the application of the rule will be subject to significant limits. What approach will the Government take to the UK’s future trade defence regime to ensure that our steel industry is no less protected than that of the EU?

The second issue that the European Scrutiny Committee raised relates to market economy status for China. We have repeatedly asked the Minister for the Government’s position and analysis on granting MES to China, and about whether there were any links between their opposition to limiting the lesser duty rule and wider UK-China trade and investment relations. We asked, in particular, whether bilateral and multilateral discussions thus far had had any success in addressing the challenge of overcapacity and unfair trading practices.

The third area is investment for innovation, modernisation and training. The communication highlights a number of EU funds that are available to strengthen competitiveness, innovation and training. The Committee asked the Government what steps they were taking to encourage industry to avail itself of funding opportunities and to address underutilisation. Although the Government have confirmed that the Treasury will guarantee EU funding obtained before we leave the EU, we asked them what arrangements they would put in place to ensure that the UK steel industry had access in the longer term to funds to support new technologies and modernisation, and, in other cases, to support workers facing structural change and redundancy.

Related to that is the question of state aid. In response to the Committee’s questions on what reforms or additional flexibility the Commission might be considering in respect of state aid to the steel sector, and whether the Government would support those, the Minister informed us in late October that the UK has secured state aid compensation for UK energy-intensive industries for the impact of renewables and climate change policy on electricity costs. It is pertinent to ask, then, what approach the Government plan to take to support for the steel sector once the UK is no longer bound by state aid rules.

Finally, the communication on steel highlights energy prices, the emissions trading scheme and the circular economy package, which deals with recycling. There has been much talk in the House of the effects of high energy prices on energy-intensive industries; I will leave that point to other Members to raise. The Committee asked the Minister whether the Government envisaged any short-term amendments to the ETS to address challenges faced by the steel industry. The then Minister informed us in July that the Government were not planning any amendments to the ETS in the short term, and that they were working closely with industry towards an approach that better targets the available free allowances at the sectors that need them most.

The Minister informed us in his last communication that the UK remains an active participant in the latest phase of ETS negotiations, and was hopeful that a general approach could soon be agreed. I look forward to the Minister’s briefing on the progress of those negotiations, to his comments on the approach that the Government plan to take in this area following our withdrawal from the EU, and to an informed and lively debate.

[The Chair]

I call the Minister to make an opening statement. I remind the Committee that interventions are not allowed.

--- Later in debate ---

[Mr Hurd]

I thank the hon. Lady for that constructive suggestion. Engagement with devolved Administrations is an incredibly important part of what we do, and I am more than happy to engage with her if she has specific ideas about how I should follow up her suggestion.

[Stephen Kinnock]

I thank the Minister for his comprehensive answers. The question that needs to be addressed is about the impact of Brexit and what sort of Brexit we are looking at. The Prime Minister said in her Lancaster House speech that she thinks that no deal would be better than a bad deal. That seems to indicate an openness to a WTO-type of Brexit, in which we resort to WTO rules. That is combined with an apparent ambition to get the article 50 negotiations and the future comprehensive trading relationship done within a two-year period, which seems to be a heroic assumption, to say the least.

In that light, does the Minister agree that the impact of a WTO type of Brexit would be catastrophic for the British steel industry, not so much because of the tariffs on steel, which at WTO levels look to be about 2% to 3%, but because of the automotive sector, whose fundamental role as the customer base of so much of this country’s steel industry would be wrecked by a 10% tariff on every car we are trying to export into the European Union? Will he assure us that he will press the Prime Minister and other key colleagues as hard as possible to ensure we do not have that form of Brexit?

[Mr Hurd]

I thank the hon. Gentleman for his question, which I will answer in two parts. First, although I do not blame him for this, the situation we are in precludes any Minister responding to speculation about what the outcome is likely to be. We are embarking on a negotiation, which has to play out. The Prime Minister made it clear in her speech that we are aiming to maximise access and minimise friction—the friction point has been important in the conversations I have had with the industry.

That leads me to my second point. I represent the Department for Business, Energy and Industrial Strategy. A large part of our job is to listen to business and ask two questions, the first of which is: what are your priorities and concerns in relation to Brexit, in terms of both risk and opportunity? The second question, in relation to the industrial strategy, is: what is the most pressing and important issue supporting and underpinning the competitiveness of your sector, and your ability to create good jobs and pay better wages? Those are the conversations we are having at the moment.

It is no secret that tariffs are fundamental to the auto sector, which the hon. Gentleman rightly identified as being extremely important to the dynamic growth potential that we want in the steel sector. It was absolutely fundamental to the conversations that the Secretary of State and I had with Nissan. He knows that, and it is entirely clear why. It is our job as a Department to do two things: first, to ensure that that is properly understood by those leading the negotiations—it is—and, secondly, to reassure large, important companies such as Nissan and give them confidence in the fact that we are going to do everything we can to support the competitiveness of the car industry and the industries that supply it. Nissan made its decision, which everyone welcomed, and there is a series of ongoing conversations with other companies in the same vein. Their concerns are understandable. It is our job to listen to them and do what we can to reassure them, because significant jobs are at stake as a result of the investment decisions they make.

[Stephen Kinnock]

I thank the Minister for that response. I have one humble suggestion, which is that a push for an interim deal—a transitional arrangement—to smooth the transition into the new form of our relationship with the EU will be absolutely critical to avoid the cliff edge.

I have a specific question on energy and some more generic points. The specific question is this. The Minister rightly pointed out that the Government agreed to provide compensation to energy-intensive industries. That was cleared by the European Commission, in terms of state aid, which was very welcome. We also know that the period of time for that energy-intensive industry compensation package expired last month. The Government put in place no contingency measures, and nothing has been done to secure a permanent exemption for our energy-intensive industries, in terms of being able to provide that aid without having to keep going back to the Commission for approval. Will he give us a specific assurance that our steel industry will not face a cliff edge in April, when the compensation package ceases, with no transition to a new arrangement, which would be disastrous? That is the specific point.

On the more general point, the APPG report was mentioned earlier—I am sure that the Minister has read it closely. I encourage him to accept our recommendations, such as publishing an annual comparison of UK steel industry energy prices with those of our competitors; completing the energy-intensive industry compensation exemption package I just mentioned; looking at wholesale costs and developing mechanisms for UK steel producers to access lower-price wholesale energy, which is a critical issue; looking at network and transition costs, which are far too high in this country; and considering aid to energy efficiency—there are fantastic opportunities, such as the off-grid generator in Port Talbot, which would use gases from the blast furnace. What are his views in that context?

Another recommendation was to do with reform of the EU emissions trading scheme, because there is a real problem around what happens in 2021. What will we do to get long-term reform? There is also the broader issue of the remodelling of our energy model. Far too much pain seems to be concentrated in our manufacturing sector. There must be a better way of distributing the costs under climate change policy, which we all welcome. The costs are far too concentrated in our manufacturing and energy-intensive industries. The Minister has said that the Government are looking to reform the energy industry, so I suggest he uses our APPG report as a starting point for that process.

[Mr Hurd]

I thank the hon. Gentleman for his suggestions. He opened with a humble suggestion—experienced Ministers know that those are the most dangerous. I will, in the same spirit, take what he said on board and feed it to my Secretary of State, whom I am seeing after this Committee, because we have a meeting with the steel sector trade unions. I make that undertaking.

On the energy costs, the assurance the hon. Member for Aberavon is seeking is one that I gave on the Floor of the House at departmental questions the other day. As he knows, we have made a commitment on compensation. We have made it quite clear that we want to move to an exemption-type scheme. He knows because he is well informed, but that process is taking longer than we expected and wanted. We will therefore continue with compensation until that is worked through. I have made that undertaking on the Floor of the House and it stands, because we totally understand the need for consistency and visibility. I hope that that is reasonably clear.

On the broader challenge, I genuinely welcome the APPG report. As the hon. Gentleman knows, it feeds into what I hope is quite a deep collaborative set of conversations between Government and leaders of the steel sector about its future. Those leaders have embraced the challenge we have set, which was that we need to move on from the language of survival, sticking plasters and muddling through, to a situation in which we have politicians and society recognising the steel sector for what it needs to be, which is an incredibly important foundation sector and part of a dynamic and valuable national supply chain. They bind to that, and the process that we are working through is informed by the capability study we funded and input such as the APPG report. That will all feed into, I hope—if the right spirit and rigour are in place—some form of sector deal in which Government and industry can set out their mutual commitment to some form of agreed common goal. That is an exciting process and I hope he welcomes it. We welcome his contribution.

In that context, and going back to what I was saying, the hon. Gentleman and the report are quite right to identify that the issue of energy costs is now a complex one. We have to move from where we are now. After a lot of sticking plasters have been applied, we still have a gap. As he said, the factors determining that are complex and relate to wholesale energy costs, our energy mix and network costs. They also relate in part to ongoing policy commitments. We need to take a bit of time and work with people who have an interest and expertise in this area, so that we thoroughly investigate all our options.

As the hon. Gentleman might expect, the Department has done a lot of work in this area, but it needs to be sweated a bit harder. Our commitment is to publishing a road map later this year to show what our strategy is. That will be informed by the review that we are setting up, which is, in part, an external challenge relating to our processes and work. This issue is of such importance that it requires a structure and process around it that leads to a strategy that is more long term than the sticking-plaster approach we have taken until now. That has not got us to where we need to be, in respect of having a level playing field for this sector and others—this is not just about the steel sector—that are, quite rightly, pushing us hard.

--- Later in debate ---

[Stephen Kinnock]

On behalf of the European Scrutiny Committee, I thank the Minister for his time today. To follow up on the additional challenges made by my hon. Friend the Member for Sheffield, Brightside and Hillsborough, we have not really talked enough today about the long-term future of the industry in respect of research and development and skills. I commend to the Minister the all-party group’s report, in which we make a number of recommendations such as establishing tripartite public-private partnerships that also involve the trade unions, to identify capability gaps so that we have the right skills for a future-facing industry.

We need low-cost loans to support R and D and innovation. We want the Government to consider intervening more in incidents of corporate failure, particularly with soft loans and with the financial underpinning that is required for things like mothballing, which needs to be far more carefully and strategically managed. We feel that there is a real need to look at the opportunity of creating a national bank for industry that would give the kind of short and long-term financial assistance that is required for research and development.

Fundamentally, it comes down to primary steel making in this country. If we are committed to primary steel making, we have to ensure that we have a blast furnace capability that is fit for the future, has maximum efficiency and is able to make as broad as possible a portfolio of products to keep the British steel industry at the cutting edge. That will require support from the Government, and it will require industry to step up, along with our friends in the trade union movement.