UK Steel Industry

Tom Blenkinsop Excerpts

Thursday 21st January 2016 Westminster Hall

[Nic Dakin]

My hon. Friend is absolutely right. One of the pressures for the steel summit was the awful news of what happened in Redcar, which really focused minds.

To be fair to the Government, in many ways we have a good Minister. She puts her shoulder to the wheel and tries to move things forward. I am sure that the situation is as tough for her inside Government as it is for us outside, but one of the Opposition’s jobs is to push even harder from outside—that is our responsibility.

Let us look at the five asks. Things have been delivered on energy costs, although the Government promised delivery of the mitigations three years ago, so it took them three years. That is not a track record of fast delivery; on the other hand, it is welcome that that delivery has taken place. There is still more to do. The funding from the energy mitigation is still not immediately getting to the people it needs to reach, so that one has still not been forced through completely, although it is welcome and the Government’s movement on that should be recognised.

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

Beyond the five industrial asks, which my hon. Friend is going into, another issue is the timeline for Long Products. Before Christmas, in autumn last year, the chief executive of Tata Europe, Karl-Ulrich Köhler, put a specific timeline on when Tata would say whether it would own, or not, every single Long Products site—that includes Dalzell, Clydebridge, TBM, Skinningrove, and Scunthorpe and all the sections within—and that was April this year. What does my hon. Friend think that the Minister feels about the pressing timeline, as well as the five industrial asks?

[Nic Dakin]

That timeline is pressing and the Government will be as alert to it as everyone else is in the Chamber or, most importantly, among our constituents. It is good to remind us of the timeline, because it is there and the clock is ticking.

The second industrial ask is about supporting local content in major construction projects. Again, the Government are to be congratulated on making progress. Much stronger guidance is now in place, which has the potential to make real changes. I stress “has the potential” —we need to see the guidance driven through, so there is a job for Government to do: to force it through. As my hon. Friend the Member for Aberavon said, this needs to be driven through Government and other contractor organisations, otherwise it will remain a nice bit of guidance sat on a shelf somewhere, which will be no good to anyone. Although we recognise that the Government have moved forward on that, they need to move further—the job is started, but not done. The energy costs job was started, but it took us three years to get it done, so we need to keep up the pressure and keep our shoulders to the wheel.

The next industrial ask is about business rates and finding a way of not penalising capital investment in energy-intensive—or any other—industries. The Government admit that they have kicked any review of business rates into the long grass, but the issue needs to be addressed urgently. Business rates in the UK are up to 10 times higher than in France or Germany, which is significantly anti-competitive.

Let me turn to the industrial ask about taking anti-dumping measures. As my hon. Friends have said, the Government have been slow to get behind the wheel and get good trade defence instruments in place. At the moment the concern in Europe is about the issue of a profit margin of 1.5%, because that is a dangerous line to pursue and would not be beneficial to steel producers in the UK or elsewhere in the EU. I hope the Minister will encourage the Secretary of State to phone Commissioner Malmström to make the UK’s position clear about the need to support anti-dumping. Perhaps he has already called her, in which case it would be positive to hear what the Minister can report.

My hon. Friend the Member for Aberavon has already said much about the threat to the UK if market economy status for China is not handled properly. The UK needs to put itself in a leadership role in Europe. The Minister often shows leadership in the House of Commons on many issues, and she and her colleagues need to show that sort of leadership in Europe to ensure that the UK steel industry has a decent future.

Finally, support for research and development and environmental improvements is a big area of need. We need the Government to look at ways in which investment can be made so that the UK steel industry produces the right quality and type of steel to win the contracts of the future. That needs investment in R and D and in future skills, and that needs to happen now. We cannot wait until those opportunities are there; we need to be in a position to take advantage of them.

I hope the Government are looking at ways to make grants available or at using contra-cyclical loans or other imaginative ways to allow such investment to take place. Unless that happens, there will not be a UK steel industry in the future. As my hon. Friend the Member for Aberavon said in his summing up, we need a steel strategy that takes those industrial asks into account. We have ticks in boxes that show that that has started, but we now need to move that forward and get it finished. That needs more time and effort from all of us in the Chamber, including the Minister.

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[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.

[Tom Blenkinsop]

rose—

[Andrew Percy]

I will give way to the hon. Gentleman because he has not given a speech.

[Tom Blenkinsop]

I thank the hon. Gentleman for giving way. The Government’s policy is to support China’s market economy status, whether inside the European Union or outside. Of course, that comes after the recent negotiations in Paris, at which China promised to meet its own internal emissions trading scheme. The Government’s position is to support market economy status before China implements any reduction in production or emissions, but I think we should use MES as a leverage tool before any agreement.

[Andrew Percy]

As I think the Minister said in the statement on Monday, the Government have not determined what our policy will be, and it is a matter that will have to be decided at a European level, anyway.

I agree with the comments that the hon. Member for Scunthorpe made about R and D. I do not need to repeat them, but I would have said something similar. There has already been some political knockabout and, as the Minister reminded us on Monday, Labour’s record on steel is not necessarily great either. The steel workforce was halved and, during Labour’s period in government, we lost workforce and plant in Scunthorpe and thousands of steelworkers were sacked.

Trident is really important for the industry. That is a message to the Labour party—its more sensible Members will understand its importance. An important issue raised by the hon. Member for Penistone and Stocksbridge (Angela Smith) at the steel summit was our position on the future of fracking and whether it provides a market for the steel industry, as it has in the United States. I am somewhat in two minds about fracking, not least because there are eight potential sites in my constituency at the moment. We need to get a grip on that industry and make a decision on where we are policy-wise.

I will end by thanking the Minister. When she has come to Scunthorpe and met us, it has always been on a cross-party basis. I was disappointed to see the Leader of the Opposition appear at a meeting that we were not invited to. When the Minister has visited, the hon. Member for Scunthorpe has always been invited. Clearly, a political game is going on there. That is not what steelworkers need. We do not need people coming up and giving simple platitudes, saying, “The Government can just do more.” Things are not that simple. The Government have committed to us to do everything they can. I am pleased to hear the Prime Minister talk about Scunthorpe being of strategic importance to the United Kingdom.

There will always be politics in this place, but visits such as the one made by the Leader of the Opposition, who turned up to the constituency and gave steelworkers a false impression of the simplicity of the issue, are not fair to anybody—especially not steelworkers. We have to remain on the same page on this issue. I welcome the work that the Government have done. There is more to be done, as I think the Minister understands, and we hope that everything will be done to support the sale to Greybull Capital.

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[Huw Irranca-Davies]

Indeed; my hon. Friend makes a wise point. I commend the Government for their high-level negotiations at COP21 in Paris—tremendous. The UK led the high-level coalition of ambition. The EU led as well, and yet we could end up in a situation in which we are not only offshoring jobs, but offshoring them to countries that do not have the same standards of energy efficiency that we have at Tata Steel in Port Talbot and throughout the UK. It is in the interests of the climate to keep those jobs here in this country.

[Tom Blenkinsop]

There is another interesting factor here because if we look at Tata’s profits right up until the financial year 2007-08, nearly every slab coming off each site that Tata owned was being absorbed by the world market. China was consuming so much steel during the 12% to 13% growth period that the argument that China has been eroding British jobs over the past 20 or 30 years is false. This is a very recent phenomenon—it is in the past four years—and measures need to be taken now.

[Huw Irranca-Davies]

Indeed. I believe that if any Government Minister could batter down doors and argue for a fully engaged, fully proactive and serious strategy that looks at the steel industry five, 10 and 20 years hence, this Minister could do it. I sense she is trying to do her best, but I suspect she is having some arguments thrown back in her face by others.

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[Mr Wright]

That is an absolute disgrace. We should all, regardless of where we sit and to which party we belong, be identifying steel as a major and important foundation industry for the British manufacturing base and having a co-ordinated approach to ensure that we can safeguard and retain those assets and, crucially, those skills as much as possible. If we are moving towards the high-value-steel end, where we are producing steel, metals, and materials that are stronger, more flexible and lighter, we need the skills to be able to do that. The 2,000 people in Redcar are not coming back to the steel industry. The 750 people in Port Talbot will in all likelihood not come back to the steel industry. And the hundreds of jobs in the steel industry that have been lost in my constituency will not come back. That is to the detriment of the British manufacturing base and the future competitiveness of the UK steel industry.

[Tom Blenkinsop]

My hon. Friend the Member for Aberavon (Stephen Kinnock) has said that if I was ever on “Mastermind”, my specialist subject would of course be blast furnaces, given that I dealt with the mothballing of the Redcar blast furnace back in 2010. That was mainly down to the expertise of the area and people such as Dave Cox, who is a constituent of my hon. Friend the Member for Redcar (Anna Turley). The real issue now—this sticks in the throat of most people—is the costs of having to maintain that site, which are about a quarter of a million pounds a week. Over the period of a year, that would have been approximately the same amount of money as it would have taken to pay for the three grades of coke that were sitting on a vessel just outside Teesport and which could have been brought in to save the Redcar coke ovens.

[Mr Wright]

Despite the fact that my hon. Friend says that his specialist subject would be blast furnaces, he is still a great colleague to go for a pint with. He makes a very important point, and I do worry about this. It is not just this Government but successive Governments who have placed short-term cost considerations over long-term value for our economy and society. That is incredibly important. For an industry that has been deemed to be strategic by the Minister, who has been a champion of this sector, the process seems to be one of chaotic yet managed decline. Can the Minister outline how much further she thinks the British steel industry will slide and what, for a strategic industrial sector such as steel, the right level of employment, capability and production is, both now and in the future?

We on the Select Committee acknowledged that the Government had recently woken up to the crisis and begun to take action, but today, exactly a month after the publication of our report and over three months after the closure of SSI and the steel summit on 16 October, no concrete steps have been taken. I am not suggesting that a silver bullet—or a steel bullet—could be fired to withstand the massive global forces affecting world steel demand and production, but swift action on the five asks from the steel industry could have provided a buffer for British-based steelmaking plants. I therefore have specific questions for the Minister with regard to some of the five asks. Can she outline how much extra cash has been provided to steel firms since the steel summit, in the light of the decision made on energy-intensive industries compensation? If steel is a strategic industry, why can a special exemption not be given for steel manufacturers in relation to business rates to retain some capacity?

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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.

[Stephen Doughty]

Signals.

[Tom Blenkinsop]

Exactly. We need to send market signals to potential investors to demonstrate that we have industries that link up with each other.

That brings me to defence. The future of sites such as Dalzell and Clydebridge in Scotland, which are linked to long products, is not certain. They produce the sonar-specific coated plate for the renewal of the four nuclear submarines, but they also produce the plate used for offshore renewable technology. That is where we have to shoot some sacred cows. There is no dichotomy between renewables—the green argument—and, say, the four nuclear submarines. Often the technologies are shared and cross over different markets.

We have to reassure steelworkers at those sites that we will be making the case for their industries and the products they make. However, their future is uncertain. Although the Government make a strong argument for the nuclear deterrent, I am not entirely sure where they are going to procure the plate from. What is the future for Dalzell and Clydebridge? Where is the sonar-specific plate going to come from if those sites are not bought and kept running? At the moment, Tata’s plan is to mothball them both. The certainty that the Prime Minister gives at the Dispatch Box about national security certainly is not there, and he has big questions to answer on national defence because those two sites do not have a certain future.

[Andrew Rosindell in the Chair]

On long products and the future of Skinningrove and Lackenby beam mill—TBM—in Redcar, we know that Greybull Capital is interested. We want those sites to have a successful future, and there is now a better prospect than under Klesch. However, I have not heard any certain clarification about long products per se. Most of what I read second hand is about the Scunthorpe site. The APPG has already pre-empted that in wanting to talk to Greybull to hear its intentions for Longs, but I want clarity for the men and women who work across all the Longs sites.

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[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.

[Tom Blenkinsop]

To return to the point about MES, there is the issue of what our allies are doing and what China demands. China wants MES almost automatically, without debate. On the flip side, there was an OECD steel committee meeting before Christmas at which nations from around the world wanted to talk specifically to the Chinese delegation about the amount of dumped steel in their markets—this is not just a European Union phenomenon; it is a global one—and China did not attend. Those factors need to be raised by the British Government with the European Union. We should be looking seriously at MES, not just taking it for granted.

[Stephen Doughty]

I agree wholeheartedly. We have already heard about a letter from Roy Rickhuss, the general secretary of the union Community, to the Minister. The letter, which he made public, says clearly:

“As you will know, it is widely understood that the UK Government has taken a decision to support China’s bid to receive market economy status from Europe. This would be a complete disaster for our steel industry, as it would make it even harder for European producers to gain protection from unfairly traded Chinese imports.”

This is not just about what we have seen, as there are also issues involving the Chinese currency. Many experts agree that the recent devaluation suggests that there is an increased chance of further growth in Chinese steel exports and dumping into markets. We have discussed this in many debates, but there is also a problem that if China is exporting all that steel, and certain other countries and Administrations around the world are taking measures to prevent imports of that steel, the impact on the UK market will be even greater.

[Stephen Doughty]

Absolutely. I would certainly be interested to hear the views of the Minister and experts within the Department for Business, Innovation and Skills about what impact that might have, and whether it is likely to increase the pressure further.

[Tom Blenkinsop]

To what extent does my hon. Friend think that the deal allowing Chinese currency to be exchanged in the City of London is affecting the Government’s decision to support Chinese MES?

[Stephen Doughty]

I would certainly be interested to hear the Minister’s response to that point. My hon. Friend rightly talked about an industrial strategy and having an overall strategic look at these industries and their interaction in the globalised economy that we face. There are tensions in government between the Treasury, BIS and the Department of Energy and Climate Change. The Minister may shake her head and wave her hands, but she knows that those tensions are there, and that there is not one voice on these matters in government. She works for a Secretary of State who, as we know, would not utter the words “industrial strategy”.

[Tom Blenkinsop]

Does my hon. Friend believe that maybe, just maybe, we need Treasury Ministers to attend these debates? Despite all the confidence that we have in this Minister, we are now in a situation in which, if we are to talk adequately about UK steel, we need to hear Treasury Ministers justifying decisions and views on things such as MES.

[Stephen Doughty]

That is important, because a whole-Government approach is needed. We saw the disjunction between DECC and BIS about the package for energy-intensive industries and the measures that were taken. The approach needs to be co-ordinated. The Chancellor has been warned repeatedly, and I have letter after letter from Celsa to him and Treasury officials. We ensured that we always kept them informed, but there was very little engagement by the Treasury.

I would be grateful if the Minister would respond to a number of questions. Given the welcome steps that have been taken on compensation, exemptions and so on, after all the changes come through, will companies be paying more tax or less? What will be the net impact of the introduction of the compensations and exemptions? This has been a key concern for the industry when big figures are bandied around. What will be the net impact on their balance sheets?

Secondly, on procurement—other colleagues have asked this, but I would also like to know—since the Government announced their various procurement measures on a UK level, has any work been given to UK steel producers that would not otherwise have taken place or that had not already been contracted? That point is crucial. Celsa played a crucial role in supplying rebar—I think it supplied some 45% of it—to the construction industry for the Crossrail project. Unless the infrastructure pipeline goes through, and without a commitment from the UK Government that major infrastructure projects—whether in defence, construction or major energy—will support UK steel, we will have a serious problem.

Finally, as the Chair of the BIS Committee and others have mentioned, what does the Minister think is the acceptable bottoming out of the steel industry in the UK? Does she have a sense of where it ends, or is this, frankly, just a managed decline? People want to know and understand the situation. If we do not have clarity of vision from the Government, we unfortunately risk continuing to be buffeted. We will lurch from one crisis and set of job losses to another, as has happened over the past few months, which we warned would happen. Can we prevent any further loss of the expertise, skill and national security provided by our steel industry, let alone the productivity?

I made this point in an intervention, but I cannot emphasise it enough. As somebody who believes in tackling global climate change, operating sustainably and having responsible industry, I find it absurd that we would offshore from this country steel jobs and production involving the most carbon-efficient methods, because that will result in more global carbon production and an increased chance of climate change, less security of steel supply in our own country, and less quality and safety of supply. Those are serious points that we must be aware of, which is why a strategic approach is required across Departments, with people all singing from the same hymn sheet.

I am proud of what the Welsh Government are doing to respond to the immediate crisis in Wales. I am proud of what the Economy Minister said this week and I am proud of what Carwyn Jones has been doing to respond, but a fundamental change in approach on working together is needed from the UK Government, because otherwise I do not know where we are heading.

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[Marion Fellows]

No. I would like to continue at the moment.

As I was saying, we should not allow China to gain market economy status, as alluded to by the hon. Member for Aberavon. To do so would make it near-impossible for our workers to compete, pitting worker against worker in an impossible race to the bottom. Have the Government sought to address that imbalance by strangling our trade unions and attempting to repeal the Human Rights Act, all in the hope that we may finally be able to compete with the Chinese, who have an atrocious record on workers’ rights? The Tories have embarked on an ideological crusade to roll back the state and to deregulate our economy, allowing big business and executives to decide what is important to the country and what is not.

[Tom Blenkinsop]

As part of the future for Dalzell and Clydebridge, does the hon. Lady see the integrated nature of Scunthorpe, Dalzell and Clydebridge being maintained in order that we retain virgin steel creation within the United Kingdom?

[Marion Fellows]

I think there is an issue about whether Dalzell and Clydebridge will be maintained by one of the buyers as part of the deal to buy long products. That will be important, but the real issue that the plants face is rising costs, and that is what the Scottish Government have been trying hard to cover.

[Tom Blenkinsop]

I made that point because the integrated nature of long products sustains each mill. In effect, we have one site spread over a geographical distance, and in many ways that reflects the United Kingdom. That is why I am asking the hon. Lady whether she thinks it important for us to keep that blast furnace link from Scunthorpe to Dalzell and Clydebridge, through which we can help sustain virgin steelmaking in blast furnaces in the United Kingdom.

[Marion Fellows]

To answer the hon. Gentleman, I have doubts about and issues with what he says. I want production to continue, but I want Dalzell and Clydebridge to be able to continue in any case. It may be that the best route for them is another road if someone does not want to buy the whole long products division.

The laissez-faire approach is endangering our steelworks and our manufacturing base. I hope the Prime Minister, in his future negotiations on the UK’s position within the EU, seeks radical reform to state aid rules and the ability for states to favour domestic products in the tendering process. As the hon. Member for Aberavon said, the Secretary of State needs a map to find Europe while Scottish Ministers are battering on the door to represent UK fishing rights, for example, where they have real expertise and experience. I do not believe the UK Government are constrained from developing and bolstering a strong steel sector. I believe that what constrains them from saving our steel is their priorities, which are mainly raising their military profile, cutting public services and cutting tax for the richest while the poor are hammered.

The Prime Minister was willing to grant an audience with the Chinese President and Lincolnshire MPs, but when he was asked to meet Lanarkshire MPs, he gave no such courtesy. I very much enjoyed meeting the Minister in his stead, and thank her for her time. The Government show contempt for steelworkers in Scotland. In an address to the House, the Secretary of State for Business, Innovation and Skills failed even to mention the Scottish plants. More recently, the Minister referred to the UK’s steel industry as consisting basically of Scunthorpe, Port Talbot and “other bits and bobs”. Those “other bits and bobs” are a source of pride and livelihood for communities across the UK, from Motherwell to Redcar to Port Talbot.

I hope for the sake of my constituency that a new owner is found for our steelworks. The Scottish Government have gone to unprecedented lengths to secure a future for Scottish steel. I give my sympathies to people elsewhere facing a similar uncertain future. The UK Government should note that people in Scotland are watching this Parliament. The UK Government saw no issue or hindrance in bailing out bankers, but they see only roadblocks to intervening and saving our steelworks. They are allowing a core industry of my community and this country to crumble. I hold in my hand a copy of the strategic framework for supporting the steel sector in Scotland. The UK Government should have an equivalent. Do they? I don’t think so.

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[Kevin Brennan]

I fear that my hon. Friend may well be right. It is clear that the Chinese state is absorbing the losses to kill off the competition, which is why it is essential that we have a UK Government who understand that and are prepared to take the action necessary to protect the strategic asset that is the UK steel industry.

[Tom Blenkinsop]

It is worth remembering that the Redcar blast furnace was constructed by the Callaghan Government in 1978 and 1979. There was supposed to be a second furnace, but that mysteriously disappeared after the change of Government. The current world market is effectively a free market for China, and it is interesting that the one nation with a state-owned steel industry is dominating the market. That is not a defence of a nationalised steel industry, but it is certainly something that Ministers should pore over when they consider which policies, regulation, instruments of trade defence they should be implementing in the steel market.

[Kevin Brennan]

My hon. Friend is absolutely right. I listened carefully to what the Prime Minister said about market economy status in yesterday’s Prime Minister’s questions. It was clear from his tone, demeanour and words that the Government have already made up their mind that they are going to ease the path to market economy status for China, rather than putting up a real fight for the British steel industry.

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[Anna Soubry]

No, because I want to make some progress and to address all the points that have been made.

I do get agitated because I know the five asks regarding the steel industry. We have delivered on four and as for the fifth, which is business rates, the review continues. I hope that the Chancellor will agree with my view, for what it is worth, that rates should not rise after investments in plant and machinery which, as I have said many times, is bonkers. I hope that the representations that the Secretary of State, BIS and I make on behalf of all businesses affected by that peculiarity will advance that argument and that the Chancellor will agree with us.

Let us be honest, however, and recognise the problem: the price of steel has been tumbling. The price of slab has almost halved in 12 months. Production across the world—this is not just China—has increased, but consumption has fallen and is yet to return to pre-2008 crisis levels, so what is the Government’s priority? I will not put a figure on it, but the priority is to secure the production of steel at Scunthorpe and Port Talbot. I want to pay tribute to everybody who works in the steel sector, especially to all those workers who have so far found themselves being made redundant. We will not forget the more than 2,000 workers at SSI in Redcar and the many more in the supply chain. I and all my Conservative colleagues do not need to be patronised by being told about the huge impact that redundancies have on communities and right across the workforce, because we understand that. I pay tribute to all those who work at Scunthorpe and Port Talbot, and to those who have lost their jobs, while also remembering what is happening at Forgemasters.

Forgemasters makes steel particularly well. It effectively has a contract with the Ministry of Defence, but it is not with the MOD, in that it supplies the steel for Trident. If Opposition Members want to secure Forgemasters’ future, they need to ensure that they support Trident—that is an absolute fact.

[Tom Blenkinsop]

Will the Minister give way?

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[Anna Soubry]

With great respect to the hon. Lady, one of the things that she will find here is that when a member of a political party stands up and makes assertions about the Government when their political party is in government elsewhere, they hold responsibility and have to provide answers. Someone cannot just stand up and make bland statements saying, “We have had a look at this, and we have had a look at this. Oh, and by the way, the UK Government are absolutely hopeless and useless, but we are absolutely brilliant,” and then not have an answer when they are asked, specifically, “So, have you delivered on this? Have you delivered on that?”

[Tom Blenkinsop]

Forgemasters creates the vessels for the reactors within the four replacement submarines, and plate for their hulls is made by Dalzell and Clydebridge. The future of those steelworks is uncertain, so any commitment to four submarines is dependent on those sites unless the Government find alternative solutions, because it is sonar-specific plate.

[Anna Soubry]

I apologise to the hon. Gentleman; I specifically asked my officials for an answer to that very important point. At the moment I have not got that information, but I will of course write to him if I am able to obtain it.

Let me move on to the five asks of the steel industry made at the steel summit. On energy-intensive industries and electricity prices—absolutely delivered. Opposition Members say, “Well, they go back, and they say you didn’t do this and that,” but a lot of the delay was not the fault of any tardiness on behalf of the British Government; it was unfortunately due to the slow cogs and wheels of the European Union.

I am not going to engage in all this silly, patronising nonsense about the Secretary of State not knowing where Brussels is. Hon. Members do not do themselves much credit by taking such cheap shots. The Secretary of State went to Brussels and called an emergency meeting. He has been advancing the cause of ensuring we get the compensation signed off under the state aid rules, and I am hugely and deeply proud of that. It is because of his efforts and instructions to officials to expedite it without any further messing about that it is absolutely being delivered. Ask one—delivered.

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[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.

[Tom Blenkinsop]

rose—

[Huw Irranca-Davies]

rose—