Spring Budget: Wales

Debate between Stephen Kinnock and Ruth Jones

Wednesday 29th March 2023 Westminster Hall

[Ruth Jones]

Absolutely. My hon. Friend has made a perfect point; the Bevan Foundation in Wales is very clear and accurate in its reporting. I pay tribute to Victoria Winckler and the other staff there. That is why I welcome Labour’s mission to secure the highest sustained growth in the G7; that will be good for Wales, the Welsh economy and the people of Wales.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. On the point around growth, does she agree that a vibrant and competitive steel industry has to be at the heart of any growth strategy, and that the UK Government’s continued dithering and delay when it comes to stepping up and showing the Welsh steel industry the support that it requires is a massive issue? Does she also agree that UK Labour’s £3 billion clean steel fund is exactly what we need to ensure that we get our economy firing on all cylinders?

[Ruth Jones]

Absolutely. My hon. Friend makes a powerful point, because steel is integral to the industry and heart of Wales. In my constituency, in the last week we have had issues with a steel company, which I will be talking to my hon. Friend about shortly. We all want steel to thrive and grow in Wales.

Only with strong, inclusive growth, including in the steel industry, will Wales get the good jobs and productivity gains for which our people are crying out. It is not rocket science; in fact, it is pretty simple. Despite all the claims from the Chancellor, the Office for Budget Responsibility downgraded the UK’s long-term growth forecast; there are downgrades in each of the last three years of the forecast period. We will be the only country that will see negative growth. No other G20 economy, apart from Russia, is forecast to shrink this year. The OECD has confirmed that the UK will be the weakest economy in the G7 this year. What a ringing endorsement of 13 years of Tory Government! The blame for that lies squarely with the Tories, their Prime Ministers, and the current Chancellor—and the one before, obviously. They are the party of economic mismanagement.

It is worth noting that the average French family is now a 10th richer than their British counterparts, while the average German family is a fifth richer. After 13 years of Tory Government, and a failed spring Budget, our people are paying more, earning less and bearing the overwhelming brunt of this Conservative cost of living crisis. This Government have let down the people of Newport West, and of Wales. The spring Budget was a wasted opportunity for Wales; it delivered a tax cut for the richest and nothing for the many. It continued a Conservative agenda of delay and decline. As my constituent Dawn Jones wrote in her heart-rending correspondence:

“This should not be allowed to happen in this day and age, these conditions are not acceptable.”

The best way—the only way—to change course, to deliver for our people and to move forward is with a UK Labour Government, and the sooner the better.

British Steel Industry

Debate between Stephen Kinnock and Ruth Jones

Tuesday 10th March 2020 Westminster Hall

[Stephen Kinnock]

My right hon. Friend is absolutely right. Of course, we saw the tragedy of Redcar: once the blast furnace is turned off, that is it. In my opinion, that was an act of industrial vandalism. We must ensure that we take into account the cost of doing nothing. The cost to the Government and the British taxpayer of closing these businesses down is astronomical, so let us have a proactive industrial policy based on investment, and let us use tomorrow’s Budget to deliver that.

[Ruth Jones (Newport West) (Lab)]

I thank my hon. Friend for securing such an important debate. The uncertainty about steel production in Newport, with the closure of Orb and the ongoing nervousness at Llanwern and Liberty, has had a huge impact on jobs in my city and the surrounding areas. Does he agree that we need to secure a level playing field for UK steel producers by addressing the energy price disparity, preventing steel dumping and investing in research and development, so that the British steel sector can thrive globally?

[Stephen Kinnock]

My hon. Friend is absolutely right. This is about having a policy environment that is conducive to driving investment. Businesses are looking for a partnership with the Government. As she rightly says, the cost of energy in this country compared with what the French and the Germans pay means that our steelworkers are competing with one hand tied behind their back. They need a British Government who are on their side.

Let us not forget the tremendous value that the steel industry generates for the British economy. It produces 7.3 million tonnes of steel a year, which is around 65% of the UK’s annual requirement. It employs 32,600 people directly in the UK and supports a further 41,000 through the supply chain. It makes a £2.8 billion direct contribution to UK GDP and supports a further £3.6 billion through the supply chain, and it makes a £2.5 billion direct contribution to our balance of trade. Steel is also integral to the greening of our economy. It is used in wind turbines, tidal lagoons and electric vehicles, and of course it is far cleaner to make our own steel here than to import it from places such as China, where steel production is much dirtier and the carbon footprint of transportation is huge.

Although we can be immensely proud of the contribution that our industry and its workers make, we must reflect on the sector’s recent struggles. UK manufacturing has been in decline, dropping from 30% of GDP in the 1970s to just 9% today, and the UK’s shift towards a city-centric, service-based economy means it is now the most geographically unequal country in northern Europe. We have the richest area in the whole of northern Europe—London—but also the five least prosperous, with west Wales and the valleys the poorest of all.

Let us not forget that steel jobs are good jobs, paying an average salary of £36,000, which is 36% higher than the regional average in Wales. Port Talbot provides 4,000 such jobs. The wider supply chain benefits are even greater, and the sense of local pride that our community feels in providing the very backbone of the UK economy is immeasurable. However, since 2010 our steel industry has been abandoned by the UK Government, leaving us trying to compete with one hand tied behind our back. After 10 years of Tory austerity, our community has also been left to fend for itself as a result of the money that has been taken out of our local economy.

The lowest ebb for our local steelworks in Port Talbot came in 2016, which marked the height of the steel crisis. A number of market forces combined to set the hares running: the UK had some of the highest electricity prices in Europe, which have gone on to cost the sector £200 million since 2016; business rates were through the roof, five to 10 times higher than in France, Germany and the Netherlands; and there was increased Chinese dumping in European markets to undercut European steelworkers. At one point, the UK Government blocked the EU from taking stricter action against the Chinese.

With such little support from the Government, all that came to a head. Leading the march for steelworkers as they always do, Community and other steel unions flew a delegation to Mumbai, which I was fortunate enough to be part of. In the midst of a crisis that nearly led to the loss of 4,000 jobs in Port Talbot, our community fought tooth and nail to make Tata Steel recognise that these were real people with real families to look after, not just numbers on a spreadsheet.