ICL Boulby Potash Mine

Tom Blenkinsop Excerpts

Monday 27th February 2017 Commons Chamber

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

It is appropriate on this day, the 117th birthday of the Labour party, that we debate mining, miners’ welfare, health and safety and the issues around the Boulby potash mine in my constituency—a constituency, of course, that has a proud heritage of mining in East Cleveland, primarily around the ironstone mines and villages such as Guisborough, Slapewath, Skelton, Boosbeck, Loftus and Brotton, to name but a few—and the history of men such as Joseph Shepherd, who was the first Cleveland miners association union representative back in the 1870s, and who helped to establish the Labour movement in those mines among the Primitive Methodists in East Cleveland and north Yorkshire, who primarily made up the workforce there. As the Labour party is a party of miners, it is appropriate today that they be talked about on our party’s birthday.

I am grateful for the opportunity to debate an issue that matters to me and so many of my constituents. I hope to raise questions about the recent accidents on site, which my constituents still need answers to, and to highlight the challenges facing the mine in the future.

Mining has both a proud past and, I believe, a viable future in East Cleveland. Ironstone mining was, as in other areas of the country, the original foundation of the local economy in East Cleveland. The booming mines of the late 19th and early 20th centuries drew in workers from across the country and led to the struggle for improved wages and conditions that shaped the Labour tradition of which we on these Benches are humble representatives today. However, mines from Charltons to Skinningrove closed throughout the last century due to the quality of the ironstone they were mining and imports coming in that had less sulphur, but mining was not lost and Boulby potash mine in my constituency is still in operation.

Despite this decline, my constituency still currently, and proudly, has the highest number of miners in the UK. The potash mine at Boulby has been an important part of East Cleveland’s economy since it was sunk in the 1970s by ICI. Families’ destinies have been dependent on mining, and Boulby mine at its height employed over 1,000 people in high-paid and high-skilled jobs—jobs that, unfortunately, are all too rare in the Tees valley.

About 80% of the mine’s workforce live within a 12 mile radius of the site. It is not only the people of East Cleveland that the ICL site serves; it also serves this country’s farmers. Potash is mainly used in fertilisers, and the Boulby mine supplies over half of the UK’s potash. However, the site is not without its problems, and I want to go into the history of the safety concerns, some of which are recent.

The mine’s safety record is chequered to say the least. It is a deep mine and is a dangerous place to work. Some places go two miles under the North sea and temperatures can be as high as 50°C. There is huge heavy equipment, with massive vehicles, and in the potash section it is a very different type of mining from the traditional methods of coal mining where seams are cut out of the coal seam. Potash is a much harder material, especially polyhalite, the new product that Boulby is mining.

In 2007, a worker at the mine, Darren Compton, was killed by a falling rock. In 2012, an employee at the mine suffered broken ribs and a punctured lung after a hose burst and threw him against a skip. Months later, an employee was seriously injured by falling debris. In 2013, the site’s mines rescue technician and co-ordinator was fired after failing to ensure that enough employees were trained rescue workers and that safety equipment such as breathing apparatus was working. Worryingly, he claimed at his tribunal that this was “accepted practice” at the site and that he was unaware of the safety requirements he had broken.

In 2014, there was an underground collapse in the mine, but fortunately no one was hurt. In 2015, some 220 redundancies were announced and 140 contractors’ posts were abolished. In February 2016, a miner tragically took his own life in the mine. In April, an underground fire at the mine hospitalised seven employees. In June, a popular employee who was well respected by colleagues and managers, John “Richie” Anderson, was killed in a gas blow-out on the site. In August, a further 140 redundancies were announced, with more planned, and a contractor on the site was airlifted to hospital after suffering life-changing burns following an electrocution. In December, a mine tunnel flooded, although thankfully no one was injured.

The mining industry is difficult and dangerous, as the miners at Boulby know only too well. As these examples show, the mine’s safety record is not an unblemished one, and the nature of the mine—the second deepest in Europe—makes it a difficult place to work and manage. It will continue to be difficult. Everyone—the workers, their families, ICL and myself—wants the mine to be prosperous and to succeed, but there are actions that must be taken on these safety issues by both ICL and the Government in order for that to happen.

In one particular case, fire broke out underground. I cannot go into detail, because legal action is taking place, but the men involved escaped with their lives only due to their own actions. There was no health and safety process in place. Many of the men had written their wills because they believed that they would not leave that mine. At some point, I would like to go into more detail about that case. I cannot do so now because of the legal action that is pending, but I wanted to put this on the record.

Workers at the mine must ultimately have confidence in the safety procedures that are in place, and they should be able to have a say when they have concerns. ICL must have a closer working relationship with the unions that represent workers at the plant, especially in relation to safety at the site. Giving the unions input into the process will build confidence in procedures and give workers a better opportunity to voice any concerns.

There are also questions that the Government and, in particular, the Health and Safety Executive must do more to answer. How have the recent redundancies affected safety at the mine? I understand that work patterns have been altered and lengthened to compensate for the redundancies, and the Health and Safety Executive accepts that longer shift patterns increase the risk of errors, accidents and injuries. I am also concerned that some of the workers injured in these incidents have returned to work before they are fully recovered due to the inadequate sick pay they receive while off work, thus potentially increasing the risk of further accidents. Furthermore, the Government need to revisit the funding that they give to the HSE, especially in relation to COMAH—control of major accident hazards—site workplaces. However, even if those steps are taken and safety at the site is improved, more needs to be done to ensure the future of ICL and the good jobs that it provides.

The main threat to the future of the mine is the falling potash price. It has roughly halved since 2012, although prices stabilised and recovered slightly from the end of 2016. ICL has taken action in response to the change in prices, slowing potash extraction and turning to the innovative product polyhalite and other minerals vital to fertilisers. ICL is competing with other producers of potash around Europe and the world. Some, such as Russia and Belarus, are not concerned about fair trade and have sought to undercut the world market. Others, such as China, use their power to force prices down.

As with so many British industries competing in a globalised world, the UK potash industry’s future will depend on our post-Brexit trade arrangements. I have said before in this House that although I welcome the Government’s commitment to free trade, I am concerned that their desire to remove trade defence measures post-Brexit will leave our industries exposed not to free competition—which all industries understand is a reality of a globalised world—but to unfair dumping and market manipulation. We have seen that the Government are unwilling to stand up to China on steel dumping and that they seem willing for industries to pay the price for any trade deals post-Brexit. I hope that they will consider the miners of East Cleveland and ensure that any new post-Brexit trade deals provide the ICL Boulby potash mine with a level playing field on which to compete.

As well as the supply of potash, polyhalite, and the rock salt used to grit our roads, the mine is important for several cutting-edge research projects via the Boulby Underground Laboratory. The mine is 1200 metres deep, meaning that it is among only a handful of locations that offer the opportunity to conduct ultra-low background and deep underground projects, including experiments relating to dark matter and radioactive substances. As well as contributing to our position as world leaders in science research, that could have applications in the defence and environmental industries. Indeed, given the depth of the mine and its closeness to Hartlepool nuclear power station, the site has potential to be used for a joint American-British defence project on the monitoring of nuclear proliferation and potentially threatening states.

The ICL Boulby potash mine is not just the only remaining part of East Cleveland’s proud mining tradition, but a business that provides well-paid jobs to my constituents. However, it has challenges, most obviously and urgently around safety. The loss of John “Richie” Anderson and the hospitalisation of other workers in the mine demand further action by ICL and the Health and Safety Executive to ensure that everything is being done to keep the people of East Cleveland safe. While the fall in the pound has no doubt helped potash exports, Brexit also poses challenges, not least because it has the potential to increase the mine’s exposure to unfair international competition. There are opportunities in linking the mine’s future to a sector plan for the agriculture sector as part of an industrial strategy, strengthening protections against unfair trade post-Brexit, and potentially improving market conditions. I hope that the Government will do everything they can to help my constituents, whose communities are so linked to the future of Boulby potash mine.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate on such an important matter and on his work, which I read as part of my preparation for this debate, over several years to draw attention to some of the issues that he has raised tonight, notably the worrying health and safety record of the Boulby mine over recent years. I will return to health and safety later on.

The Government recognise the importance of the potash industry to the hon. Gentleman’s constituency and to the wider region. It is inextricably woven in the industrial fabric of the north-east but, as he said, the Boulby mine has faced difficult market conditions in recent years. Revenues and profits in the industry have been hit by low global potash prices, mostly as a result of greater competition in the global market, but some of that competition has not been what we would call free and fair. According to analysis by the market experts, IBISWorld, exports currently form more than a quarter of the industry’s revenue, so UK miners are exposed to global price volatility. The situation has been exacerbated by over-supply, which is unlikely to go away in the short term.

The job losses at the mine since 2014 have clearly come as a major blow to the employees concerned, their families and the communities in which they live. The rapid response service has delivered a number of redundancy briefing sessions to Boulby employees to help get workers back into employment as quickly as possible. In addition, the National Careers Service delivered support with CV writing, digital job searching, interviewing skills, and one-to-one appointments for rapid response funding applications.

However, with the production of polyhalite emerging as a key product of the UK industry, output from the UK is expected to expand in the next five years. I am pleased that ICL, which operates the Boulby mine, is now planning over the next five years and beyond to expand its output of polyhalite—a naturally occurring and highly sought after form of potash seen as a superior fertiliser. I understand that Boulby and the areas to the south have a near monopoly on this mineral resource, and I hope that that will be a great advantage for the area in the coming years. In fact, polyhalite is expected to overtake potash as the key product of the industry after 2018, and I hope ICL’s long-term commitment will result in a brighter long-term future for the mine and its employees.

[Tom Blenkinsop]

The Minister is correct that the industry is looking at polyhalite overtaking potash as the main product to sell to the market. Polyhalite is an incredibly hard material and is much more difficult than potash to mine. Extra help to market the product is therefore needed as the industry adapts to it. Has the Minister taken on board my comments about how polyhalite can be incorporated into the industrial strategy and marketed as an industrial product to the world’s agricultural producers?

[Margot James]

I certainly have taken that point on board. I appreciate that polyhalite is mined only from a layer of rock more than 1,000 metres below the North sea, below the potash seam at the Boulby mine, making it very much more difficult to access. I would welcome the industry’s contribution to discussions on how the industrial strategy that we are developing with the north-east in mind could benefit this emerging sector. It is a challenger sector and very much deserving of our attention as we roll out the industrial strategy.

I have quite a lot of information, so I will be selective. I was shocked by what I read about the health and safety concerns. I have spoken to the Health and Safety Executive, and we have a representative among the officials in the Box this evening who has travelled down from Bootle for this debate.

The Government take health and safety at work very seriously and fully support the HSE’s efforts to ensure that Great Britain remains one of the safest places to work in the world. There have been six significant incidents at the mine in the last two years—although, as the hon. Gentleman says, there is a longer record of safety concerns—resulting in the fatality he mentioned, three serious injuries and 14 workers being placed in potentially life-threatening situations. The HSE has found inadequate risk assessments, poor procedures and a failure to implement procedures designed to tackle the root causes of the problems.

I take this opportunity to express my heartfelt condolences to the family of Mr John Anderson, who was tragically killed while working at the mine on 17 June 2016, and to the other workers who have been injured or distressed as a result of accidents or incidents at the mine in recent years. All the incidents have been, and some are still being, thoroughly investigated by the HSE’s mines inspectors, whom I know the hon. Gentleman has met, and the HSE has called on additional specialist input, such as on human factors, where necessary. I assure the miners that the appropriate action either has been taken or will be taken. Should the HSE’s current investigations provide evidence of the management’s actions falling short of legally required standards, the HSE will not hesitate to prosecute ICL. Indeed, I believe that the HSE is preparing to launch prosecutions relating to the trapping incidents in April 2015—that is one example.

The HSE and the industry will continue to work together to improve safety performance. The hon. Gentleman mentioned the role of trade unions, which I understand have been very constructive and very dedicated to improving safety standards, and they will be a vital partner in that process.

[Tom Blenkinsop]

We cannot go into detail on the cases because they need to be taken through the official legal channels before we can speak about them in any way. My main concern is that, due to the pending legal action, the sick pay period ran out for the miners involved in these cases and they felt forced to go back to work in order to have an income. My worry is that some of those miners may have been in a state of post-traumatic stress, placing other workers in potential jeopardy, but had to go back to work because they are the breadwinner for their family. Will the Government review the legislation to ensure that, pending the legal action, workers in such workplaces can seek sick pay for an elongated period?

[Margot James]

The hon. Gentleman makes a reasonable request. I cannot give him a direct answer from the Dispatch Box, but I am certainly prepared to take that request back to the Department and ask officials to review the matter. I shall write to inform him of any progress I am able to make on that issue. He describes a bad situation being made worse, potentially putting others at risk; that seems to be something we ought to review.

The health and safety law that covers underground mining was brought up to date by the Mines Regulations 2014. All the previous relevant law, some of it 60 years old and drawing from even earlier requirements, was modernised and replaced without reducing any necessary protections. That was no small task, and would not have happened without the co-operation of the industry and, as I just mentioned, the unions representing Boulby’s workers. The law is now more straightforward and, together with the associated guidance, which was also modernised, duty holders should be aware of and understand what is expected of them when it comes to operating a safe mine.

The new law places clear duties on mine operators to ensure that sufficient and effective systems for the management and control of risks are in place and being followed. We now have a single set of regulations to cover the major hazards associated with underground mining, including ground control, shafts, winding equipment and operations, inrushes, and fire and explosion, as well as effective arrangements for escape and rescue if controls fail. Those hazards are far from new, and they are well understood by the underground mining industry. As such, it is unacceptable that some standards have not been applied consistently in the management of the Boulby mine. The Government and the HSE will work together to ensure that duty holders recognise the potential for those hazards causing major harm and that they control the associated risks.

The hon. Gentleman mentioned the underground fire. I understand that improvement notices were served on Cleveland Potash Ltd, after which improvements to underground safe havens and improved communications facilities and water availability have now been put in place.

The HSE has an intervention plan for every underground mine in Great Britain, and each reflects the specific inherent hazards and the mine’s previous health and safety performance. The Boulby plans for 2016-17 and 2017-18 reflect the outcomes of the investigations into the recent incidents. HSE inspectors will base their regulatory interventions and their oversight of the mine’s health and safety performance on those plans, which I know that the hon. Gentleman has discussed with the HSE.

I have probably said all that I can about the health and safety aspects of running this mine. As I have told the hon. Gentleman, I have talked to the HSE about the issues that he has raised, and also about my concerns when I read the individual case notes of some of the people who have had terrible injuries and who have been in fear of their lives. It was clear to me from reading those notes that several of the incidents could have been avoided, and certainly could have been reduced in their effect had proper and robust safety procedures been observed and implemented at all times.

I was encouraged by the response that I received from the HSE with regard to new management at the mine as it has a far more robust outlook and is well informed by the HSE, the trade unions and the hon. Gentleman himself. I think that we can be optimistic that the future of Boulby mine, both economically and, even more importantly, from a safety perspective, will be brighter. We must get everything right for the even more risky accessing of the new mineral source, which has so much to offer his constituents and the mining community that is so important to his part of the world.

Question put and agreed to.

Steel: Preserving Sustainable Jobs and Growth in Europe

Tom Blenkinsop Excerpts

Tuesday 7th February 2017 General Committees

[Mr Hurd]

Okay. I am certainly interested to know more about that. It seems part of an ecosystem that we need to nourish in the future, because access to innovation and new ways of making and doing things will be critical to the sustainable future that we all want for this foundation sector.

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

I have a number of questions for the Minister, some of which stem from the dialogue we had with his predecessor back on 6 July 2016 in a joint sitting of the European Scrutiny Committee, the Business, Innovation and Skills Committee and the Energy and Climate Change Committee. The main issue still outstanding for me is on trade defence measures. I asked the Minister’s predecessor about China playing by the rules and wishing to acquire market economy status. I asked whether it was

“the Government’s policy, whether we are in or outside the EU, to grant China market economy status. At the moment, China, of course, loses $35 per tonne of steel it produces.”

Of course, we are talking about the Chinese state, because it owns the Chinese steel industry, which is unlike the case of any of our other competitors. I said to the Minister:

“You support the Commission’s strategy for bilateral and multilateral discussions to tackle overcapacity in the market. What specific measures so far”

could she give as evidence to demonstrate that China was

“playing by the rules and reducing that overcapacity”,

or was it playing by its own statements? All the evidence showed that it was ramping up capacity.

[Mr Hurd]

I thank the hon. Gentleman for that question. Indeed, may I pay tribute to him for his persistence on this subject? There is rarely a moment when we discuss steel when he does not raise this issue personally. Since the referendum, the Government’s objectives have not really changed: our priorities are to maximise the benefits to the UK from international trade, honour our international obligations, and take effective and proportionate action to tackle unfair trade where it arises.

The hon. Gentleman has followed more closely than I have over the years the conversations at EU level about China and market economy status. Clearly, there continue to be major misgivings about that and the continued actions of the Chinese, which is why they do not have the status, which is why they are in dispute. He will know as well as I do that before Christmas, the Commission published a proposal for a new anti-dumping methodology that will cover countries with market economy status and those without it. That proposal is well worth serious consideration, and that is what we are giving it. We want to understand the associated impacts of that. We are looking at that seriously, because it looks like a sensible response to the issue we face.

I come back to the point I made in my statement: overcapacity is a global issue. It is a major issue for the EU, but it is a global issue, which is why I think the initiatives through the G20 steel forum are important.

[Tom Blenkinsop]

I thank the Minister for that response. At about the time of that conversation with his predecessor, it was the Government’s policy to support market economy status for China. Is that still the case? Will we support that, through European channels, while we remain a member of the European Union, and until Brexit? Will we support Chinese requests for market economy status, post-Brexit? Following on from that, European funding will obviously no longer be available post-Brexit; what are the Government’s plans on trade defence mechanisms? While we remain a member of the European Union, we are subject to mechanisms that we have, in the main, opposed. What do the Government intend to have happened by this time in 2019, as regards those mechanisms?

[Mr Hurd]

On China’s market economy status, I do not have much to add to what I said. Our focus is on examining the Commission’s proposal, which we think is a sensible response to the situation. That is not without its difficulties, because there are different views in the European Council and in the Parliament, so that politically will be a challenge. However, that is where our focus is.

As for the future, post-Brexit, it is difficult/impossible for us to give the forward visibility and certainty that I understand Members want. We are where we are on that. My colleague the Secretary of State for International Trade is leading the work on future trade protection plans, and those will become clearer as we go through the Brexit process.

As I general point, I hope that we have made it clear through the industrial strategy, which is very much interlinked with the Brexit strategy, that this is fundamentally about how we strengthen the competitiveness of the British economy and important sectors within it. The hon. Gentleman knows from the conversations we have had that, within that, the steel sector is extremely important.

As I said in my statement, we have taken active steps to try to help the competitiveness of the sector through a difficult situation. There is more to be done, not least on energy costs, which I am sure we will get to, but I want to try to give the hon. Gentleman some reassurance. As we look to the post-Brexit future, although, naturally, I cannot give him the certainty and visibility he is pressing for, I hope that he takes some reassurance from my saying that we will not do anything stupid to undermine the competitiveness of the economy at this pivotal time. We have to get this right, which is why we need more time to think it through.

[Tom Blenkinsop]

One last question, if the Committee allows. On the Minister’s predecessor’s comments about outright opposition to any changes to, or retraction of, state aid rules in respect of rescue and restructuring regional aid for the steel sector, what are the Government’s views on those issues, given the debacle at Redcar only two years ago?

[Mr Hurd]

While we are a member of the EU, we play by the EU rules, and we try to be as creative and intelligent in playing that system as anyone else. As I said in my statement, we have managed to release funds in quite a strategic way. I make no comment on the past, because I was not involved in that process. Looking beyond Brexit and at the Government’s approach to using public money to support the competitiveness of key industries, that is work in progress, but the industrial strategy Green Paper is the first step.

--- Later in debate ---

[Mr Hurd]

I agree with my hon. Friend. The only thing I would add is that currencies move. Therefore, this is not necessarily a structural shift that we can rely on. It has provided some relief and some offset not only for the auto sector, but for the steel sector, as hon. Members who represent steel seats, if I can put I that way, are well aware. The message that I get from chief executives of steel companies is, “Yes, it is helping.” The picture is complicated because some input prices have increased, but either way, we cannot rely on that completely as the long-term solution for the steel sector. The sector is facing other big, structural issues, not least the massive, deep-seated problem of structural overcapacity, which we have to address. Arguably, that is even bigger and more fundamental than the issues raised by Brexit.

[Tom Blenkinsop]

Added to that, before I get to my question, there is an assumption—this was implicit in the previous question—that an object passes across a national boundary once, but of course, a tariff could be added multiple times depending on how many times the product has to go over national boundaries.

I want to revisit a question I have asked before—I asked this question to the Minister’s predecessor—on the Government’s opposition to any relaxation of state aid rules in respect of rescue and restructure and regional aid for the steel sector in the interim before we get to a change of situation in 2019. The Government said that they have

“reconsidered the arguments for relaxing the rules for steel in respect of both rescue and restructuring and regional aid. However, we are concerned that, in the context of global excess capacity”—

which is still there, of course—

“if Member States were able to offer rescue and restructuring aid, this would simply depress prices and allow inefficient plants to continue to the detriment of all.”

Of course, in that window of time, the second most efficient plant in the European Union closed—namely, Teesside Cast Products in Redcar. Does the Minister believe that that position is still logical, given the results?

My second point relates to previous rescue plans, which have worked, of course. Redcar was saved once before. Dalzell was saved as a result of Scottish Government and national Government action. There is also an argument about the saving of Scunthorpe steelworks. A mill is a lot easier to save than an integrated steelworks, but without any slab to squash at a mill, there would not be any product to squash. That shows exactly the integrated nature of steel, or rather, its British nature—rather than English or Scottish.

What lessons have the Government learned from those plans? We have seen Greybull come in and save the old long products division of Tata; Tata itself has changed its position through good interaction with the Government and trade unions, and Liberty, of course, has stepped in in a number of plants across the UK. What model have we learned from them? What lessons can we learn for a post-Brexit Britain that we can take forward and build on? What processes are the Government putting in flow to make sure that we have a materials strategy to develop a UK steel industry and attract further investment around our expertise, which is widely known across the world?

[Mr Hurd]

I thank the hon. Gentleman for a typically thoughtful intervention. On my predecessor, I think she was always logical, at least in her own mind. As for the state aid strategy, I come back to what I was saying before: we have to work through the whole set of complex, challenging Brexit issues and see where we come through, in terms of our ability to make funds available, and our strategy to support the competitiveness of our industries. That is clearly work in progress.

On Redcar, I recently had the privilege to visit the site. It was one of the most memorable and impressive ministerial visits I have ever been on. I was enormously impressed by the scale of the site and the industrial landscape that it sat in, and the clear sense of opportunity that still resides there, as well as by the people I met—not just their resilience in coping with a seismic shock, but how they had moved on from that into a determination to secure an attractive future for the site and the area.

The hon. Gentleman knows that my Secretary of State was born and bred in that area. We are determined to play what part we can in supporting a cost-effective regeneration of the site. There is clearly plenty of potential there, and plenty of players who are looking at that site and saying, “We want to be part of that. We have a vision for that site. We can see how we can regenerate it.” There are deep complexities associated with it, in terms of the costs of cleaning it up—the hon. Gentleman knows that—and there are complexities relating to charges that the Thai banks have on that, but there is a group of people who have our support and who are determined to work through all those issues. That visit simply further galvanised me into making sure that we play our full part in that process, however difficult the challenge. The site has enormous potential to be reborn as a generator of great jobs.

Motion made, and Question proposed,

That the Committee takes note of European Union Document No. 7195/16, a Communication from the Commission on Steel: Preserving sustainable jobs and growth in Europe; and notes the action taken by the Government to secure a sustainable and competitive future for the steel industry in the United Kingdom.—(Mr Hurd.)

UK Decarbonisation and Carbon Capture and Storage

Tom Blenkinsop Excerpts

Tuesday 24th January 2017 Westminster Hall

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

I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on securing this debate. His contribution was really good, technically sound and showed his background in the subject.

First, let me state that carbon capture and storage is an absolutely necessary component of the solution to our energy trilemma. It offers the opportunity to meet our emissions targets, provide energy security and take advantage of the natural resources and high-level skills of our nation. It is necessary because any conceivable energy future will require the burning of fossil fuels.

I encourage anyone who doubts the significant and important role that hydrocarbons will continue to play in meeting the UK’s energy needs to read Lord Oxburgh’s report. He concludes that to meet our heating needs we must continue to rely on natural gas, produce huge quantities of hydrogen gas or supply heat through electrification, which in turn would require new fossil fuel power stations. Any of those paths will produce large amounts of CO₂ and will therefore require effective carbon capture technology to meet our environmental targets.

The main challenge in developing such essential technology is achieving value for money. As the recent National Audit Office report found, the Government’s carbon capture technology competitions did not offer that. I hope, however, that the Government accept that the technology is still necessary to meet our environmental targets and will commit to creating a more cost-effective approach to building the technology in the UK, rather than letting CCS innovation, research and expertise leave the UK and create jobs, investment and opportunities elsewhere—that the Government are willing to take on some of the risks of developing the new industry in order to reap the economic and environmental benefits down the line.

I hope that in designing a new CCS competition, the Minister will take on board the NAO report’s findings to improve clarity on the risks carried by projects and on the financing the Government are willing to commit to, as well as draw on the lessons learned through stakeholders. I also hope they will look closely at the work done by the Carbon Capture & Storage Association, which points to circumstances under which CCS technology can offer value for money—namely, the strike price of £85 per MWh recommended by the Lord Oxburgh report—from the start.

I am interested to hear what other options the Minister has considered for implementing CCS, such as the possibility of doing so as part of a business model that relies on utilising indigenous sources of hydrocarbons, such as gasified coal. In short, I hope that the Government continue to explore options for supporting this vital technology. I know there are Members from all parties who would support them in doing so.

Finally, I want to point to areas where carbon capture technology is already proving cost-effective. Carbon capture and utilisation technology captures CO₂ produced by manufacturing plants or smaller generators and uses that CO₂ to produce highly marketable green products. A British company, Carbon Clean Solutions, currently leads the world in this technology and, as I am sure the Minister is aware, has recently successfully implemented CCU technology on a commercial basis in Tuticorin, India. Carbon Clean Solutions has successfully managed to take the CO₂ produced by a chemical plant and produced soda ash, which in turn can be used to make glass, paper and a range of other products. The fact that the soda ash produced is green means it can be sold on at a premium to companies attempting to reduce their environmental footprint.

It seems bizarre that such technology, developed by a British company in co-operation with British universities and in part funded by grants from the British Government, has not been helped to take root in Britain. Although I understand that the technology does not operate on nearly the same scale or offer the same environmental impact as larger CCS projects, it also has advantages. For example, the smaller scale of the project means a smaller risk for investors. Indeed, Carbon Clean Solutions believes it requires only a guarantee on initial investment to get started in Britain, and that in turn offers the Government the opportunity to learn lessons in carbon capture technology that can then be fed into the development of larger projects.

Although the nationwide impact of CCU technology may be small, such technology could help our energy-intensive industries to reduce their emissions and give them a competitive edge. Furthermore, much of the infrastructure needed for CCU is already in place in former and current industrial areas such as Teesside. If we were to look at this project in combination with decarbonising our economy by using the gas grid, we would see a multitude of potential options for the existing energy-intensive industries to take hold of and entrench their position and also develop new green industry. That is a particular advantage, given that the NAO report highlights the “lack of supporting infrastructure” as a major barrier to investment in larger CCS projects.

Electrification obviously implies a vast amount of capitalisation—in the trillions—and a lot of capital to begin to even touch the sides of electrifying our transport, but we are the one nation in the world that has a unique gas grid that we could utilise in combination with hydrogen gas and shale gas, and using blends within the gas grid to overcome those obstacles.

Will the Minister meet me and Mr Ani Sharma, the chief executive officer of Carbon Clean Solutions, to discuss the potential of his company’s technology and how the Government can help CCU technology to mirror its commercial success in India closer to home? Carbon capture and utilisation may not have the environmental impact that successful large CCS projects would, but it can act as a stepping stone to achieving those vital CCS projects that are the only way we will be able to move towards a decarbonised energy sector.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on introducing the debate. I suspect he will quickly find that we are not on the same side, but it is important, especially in the week when the Government have launched their industrial strategy, to have serious debates in the House on current and future energy policy. Of course, no industrial strategy can sit in isolation from a realistic energy strategy.

The first point of contention I want to make is that we seem uncritically to have accepted the mantra that we must decarbonise energy production. I know people say we have the Paris agreement, climate change obligations and so on, but we also need to look behind the mantra to see what the term means and has meant, and how it currently affects households, industry and business in the United Kingdom. The old Department of Energy and Climate Change estimated that to decarbonise the electricity and energy industries effectively by 2040, we needed 40,000 offshore and 20,000 onshore wind turbines and a new fleet of nuclear power stations, and that all coal and gas use would have to be subject to carbon capture and storage. That would happen at enormous cost, and we have already seen the impact on fuel poverty.

According to the Scottish household survey, there was a 25% increase in the number of households in fuel poverty in Scotland between 2011 and 2013. In Northern Ireland, there was an increase of nearly 100%. Why? Fuel bills go up because we have decided we want to produce energy more expensively. That is the first thing we need to realise in the debate. Decarbonisation means significant costs to the economy. Of course, this is at a time when we are talking about becoming more globally competitive, and when China and India, which signed the Paris agreement, tell us that every year they will increase their CO₂ by the amount of our total CO₂ emissions.

[Tom Blenkinsop]

I understand the hon. Gentleman’s frustration, but I see what we are doing as investment. Renewables, whether photovoltaic or wind-generated energy, have the capacity to be used, for example, in the creation of hydrogen gas. There is a future in which we could create gas at zero cost, with surplus renewable electricity for the consumer. In transport network terms, the ability to spread that around the country is vast. I see it as an investment that is expensive at the moment, but whose rewards we will reap if we stick to those commitments.

[Sammy Wilson]

Of course the people who pay for that expensive investment are the taxpayers, because there is less money for other public services; electricity consumers; and workers who lose jobs in the industries that can no longer compete.

Industrial Strategy Consultation

Tom Blenkinsop Excerpts

Monday 23rd January 2017 Commons Chamber

[Greg Clark]

I agree with my hon. Friend. The creative industries, together, have some claim to be Britain’s most successful sector in recent years—they have been growing very strongly. Sir Peter Bazalgette has agreed to work with the industries to look at what they need to build on that success in the future and to continue to create the great jobs they have produced. I look forward to that work.

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

I warmly welcome the Government’s new industrial strategy Green Paper, although it implicitly admits that the past six and a half years without an industrial strategy have been wasted. Having said that, the Materials Processing Institute has made a bid to be a metals catapult, and there is no mention of carbon capture and storage. Those issues are critical to the ability of any energy-intensive industries to go forward. Of real concern is certain BEIS civil servants’ views of virgin steelmaking capacity, and certain advice going to Ministers in relation to importing steel, rather than relying primarily on British-made steel, whether that is from Scunthorpe or Port Talbot. Will the Secretary of State please get up at the Dispatch Box and rule that out?

Oral Answers to Questions

Tom Blenkinsop Excerpts

Tuesday 13th December 2016 Commons Chamber

[Greg Clark]

It is important that nuclear energy should form a key part of that. One of the pieces of neglect of the previous Labour Government is that they presided over the forecast closure of our nuclear fleet without making any plans to replace it. When I made the statement about Hinkley Point C, I also said that this would be the beginning of a new era of civil nuclear power in this country, and that is absolutely right.

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

In the week when we saw a great deal between Tata Steel and the Community trade union, largely down to Roy Rickhuss and the return of Ratan Tata, we also saw the merger of Baosteel and Wuhan Iron and Steel. What risk assessment has the Department made of market economy status for China and its effects on the British steel industry?

[Greg Clark]

I join the hon. Gentleman in paying tribute to both Ratan Tata and Roy Rickhuss, as both the company and the unions have worked constructively together, and the progress is welcome. I have, with the Minister for Climate Change and Industry, a very regular dialogue with both employers and trade unions. As the hon. Gentleman knows, we have been active in making sure that we have the right trade defences against practices where countries dump steel unfairly in the UK market.

Steel Industry

Tom Blenkinsop Excerpts

Thursday 3rd November 2016 Westminster Hall

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

I beg to move,

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

I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a member of the Community trade union. I thank my hon. Friend the Member for Redcar (Anna Turley) for co-sponsoring the debate, which is much needed to get the steel industry crisis back on the national agenda.

The steel industry is not a dead or dying industry. That is something I and colleagues here today have repeated throughout the crisis and prior to it. I know everyone here understands the importance of the industry, but some confusion persists, so I hope colleagues will understand if I reiterate why the steel industry is particularly significant to the UK.

Fundamentally, steel is a strategic and foundational industry. If the Government want to rebalance the economy away from London and to build our manufacturing sector, they simply must support the steel sector. The products of our steel industry supply the booming automotive manufacturing industry and the aerospace manufacturing industry, among others. A successful steel industry helps those industries and a weak one damages them. As well as being the foundation for other industries, steel is strategically important because it allows us to retain the capacity to build infrastructure projects, from Trident to transport to energy. It means our security, our ability to compete and our ability to keep the lights on are not dependent on other countries.

As an aside, look at the problems the French Government are having in building the Flamanville EPR nuclear reactor. In the summer, France’s nuclear safety authority found weaknesses in what I believe is Japanese-made steel in the reactor, which further delayed the project and raised safety concerns. British steel, such as that made at the main competitor to that manufacturer, Sheffield Forgemasters, is more reliable, and I hope it will be used in the similar Hinkley Point C EPR reactors. That is a simple example of the importance of using high-quality steel for infrastructure and why choosing to use British steel for such projects is not just the patriotic choice, but the best choice.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he agree that if we really are concerned about taking back control, we need control of our steel industry, so that our infrastructure is built with UK steel?

[Tom Blenkinsop]

I thank my hon. Friend for raising that point. There have been warm and welcome words from the Government about an industrial strategy. The Opposition have been talking about that for the past six years, but be that as it may, the Government are there and we want to work with them over the next few months to form that industrial strategy. There are immediate issues that need to be resolved, hopefully in the autumn statement, and there are further long-term issues in relation to an industrial strategy, how we form that strategy by sector and how the steel sector needs specific treatment in order to go forward.

The other aspect of the steel industry’s significance is the jobs it provides, the communities it forms and has formed, and the culture of which I am proudly a part. More than 30,000 people work in the steel industry, from watermen to control panel engineers and from craft workers to lab technicians. What is important is not only the numbers but where in the country those jobs are, because as well as adjusting the mix of our economy to include more manufacturing, a long-term aspiration of successive Governments has been to rebalance the economy away from London. The UK steel industry supplies more than 10,000 jobs in Yorkshire and the Humber, 8,500 in Wales, 4,000 in the west midlands, 2,000 in my own region, the north-east, and at least 1,000 in Scotland. Those regions are desperate for jobs and investment, and they have been the worst hit by the decline in manufacturing and domestic industry.

Simply put, if the Prime Minister is serious about spreading opportunity around our nation, she cannot abandon the steel industry. Steelworkers across the UK are not asking for charity, merely for access to a level playing field on which to compete with steelmakers from across the world, but in a number of ways, UK steel is fighting an uphill battle. The trade tariffs that protect American steel producers from Chinese steel are many times those in place to protect British producers. Despite limited Government assistance, energy for British steel producers remains more expensive than for our European competitors, and Government-led infrastructure projects, most recently Trident, continue to use foreign-made steel instead of British alternatives.

Where our industry can compete and has been leading the world is in our people and our skills. It is difficult to estimate the value of the institutional knowledge and experience in Port Talbot, Stocksbridge, Skinningrove or Sheerness, but it has helped those communities to stay afloat and their steelworks to function. The Materials Processing Institute in Teesside is producing world-leading research, and has received visits from German, Slovak and Swedish Government representatives who wish to draw on our expertise in this country.

It is testament to the combination of those institutional skills, the experience of steel communities around the country and the cutting-edge research of institutes such as the MPI that the productivity of the steel industry has consistently improved over the last decades. It is for those reasons that the UK steel industry should be seen as an opportunity—a reservoir of potential—rather than, as it is sometimes called, a burden on a modern economy.

We should be wary of how quickly that reservoir can evaporate. A steel or metals industry cannot be created from scratch overnight. The average age of a steelworker is growing, and the current crisis means fewer young people are coming into the industry. Without a secure future, the skills developed over decades could be lost. Those skills are not important only for the steel industry. I recently met representatives from Metalysis—a company that uses an innovative process developed at Cambridge University to produce metal powders and alloys that will be vital for 3D printing—who emphasised to me the importance of those skills grown in the steel industry for their business. To allow that experience and research reservoir to dry up with the decline of the steel industry would not merely affect the future of steel in the UK, but would cut off our competitive advantage for the metals sector.

Rather than let that advantage disappear, we should build on that potential by creating a steel sector catapult and a metal materials strategy, through which knowledge can be shared, built upon and turned into results for British industry. I hope the Government will work with MPI and members of the all-party parliamentary group on steel and metal related industries to fashion a new bid for that catapult. That is something the Government could commit to today that would show that they are serious about the future of the industry. I hope the Minister will remark on that later.

Steel in the UK is not an odd nostalgia but a viable industry with a future. It does not need charity but access to a level playing field on which to compete. If given that access, it is reasonable to believe the industry could be the world leader it already is. There are immediate challenges, though. The five asks on energy costs, business rates, Chinese dumping and procurement have still not been fully delivered on by the Government, and they demand the Government’s immediate attention. They can be acted on now and the solutions announced in the autumn statement.

The drop in sterling and the change in global steel price is not a solid foundation on which to build the steel industry’s future. The Government must not believe that their short-term work is done. They must take action, with long-term milestones and with a long-term view, so that not only people in the House know where they stand, but investors in the industry know exactly what the 20 or 30-year view is, and associated industries that rely on steel know exactly what to expect.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Members across the House could be forgiven for thinking that the Government have assumed that, because the sense of immediate crisis appears to have passed, their foot can be taken off the brake and that we can rely on the industrial strategy emerging next spring to address the problems. Does my hon. Friend agree that that is definitely not the case, and that the Government need to keep at this, on top of it, and give it the priority it deserves now?

[Tom Blenkinsop]

I thank my hon. Friend for raising that. There are a number of issues within that general question that still hang over the industry. I am at pains to talk about the broader industry and the new, smaller companies that are emerging. The debate tends to be dominated by issues around Tata, for obvious reasons, but we need to look at how we develop smaller companies, hence our desire for the steel sector catapult to be established. Although those smaller companies have come to the fore, they have told me directly that if a steel sector catapult existed, they would have been able to get where they are now a lot quicker and with a lot less capital, which would release more capital to do other things or to develop other research and development potential. One of the most profound issues, which I will go into later on, is the British Steel pension scheme.

Producing steel is a massively energy-intensive process. Despite the Government’s policy, which compensates energy-intensive industries for the disproportionate impact of carbon reduction measures on them, British energy prices are still far higher than those in Germany and elsewhere in Europe. The steel industry is aware of the need to transition to low-carbon energy sources, but only in a way that makes business sense.

Everyone I have spoken to in the steel industry welcomes the inclusion of the energy portfolio in the same Department as the business and industry strategy portfolio. That makes sense, and it is about time it happened. However, the Department has yet to respond to the EEF’s five recommendations aimed at addressing the competitiveness of UK energy costs. Since the initial meeting with the Department for Business, Innovation and Skills on this issue in June, EEF estimates that the disparity between UK and European energy costs means the UK steel industry has paid £20 million more in energy bills than their continental competitors. What is being done on energy costs? What benefit has the sector felt since the creation of the Department for Business, Energy and Industrial Strategy?

[Mr Peter Bone (Wellingborough) (Con)]

The hon. Gentleman is making an excellent speech. Can he explain why energy costs are so much lower in continental countries than here? Is it something that we as a Government are doing wrong, or is there some other reason?

[Tom Blenkinsop]

Other colleagues may want to comment on this, but my view is that in general the energy sector is predisposed to giving the individual consumer cheaper prices, with the costs going more towards manufacturing. The consequences of that have led to some manufacturers going off grid; and a consequence of that may be higher prices for the individual consumer, as capacity cannot be fulfilled by larger consumers. In European countries such as Germany and Holland, there are discounted energy costs for large manufacturers but with the understanding that the individual pays higher bills. There is consensus, to a certain degree, that people are willing to pay higher energy bills in order to maintain manufacturing in their country so that they have a job—but that is with open political consensus. We as politicians need to talk about what type of economy we want. Do we want to move it away from finance and services back to a more balanced economy? We need to talk about that in terms of energy policy, but I will go into that issue in more depth later.

The Government can act to support the steel industry’s attempts to improve its energy efficiency and thereby cut emissions and costs by providing an energy efficiency fund. Such a fund could supply capital for companies to make improvements and efficiencies in the way they use energy, meaning they can better compete on energy prices and millions of tonnes of carbon emissions can be cut.

The second immediate challenge is that of the British Steel pension scheme. The scheme’s deficit, estimated at £700 million earlier this year, has been a major obstacle to the sale of Tata Steel sites. In response to that, the pension scheme’s trustees have asked if it would be possible to alter the scheme’s benefits in order to make it viable without a sponsor employer. The Government have been consulted on that option and on the alteration to section 67 of the Pensions Act 1995 necessary to alter the scheme’s benefits. We are yet to hear a statement on the consultation, but recently the pensions deficit has been drastically re-estimated at £50 million, due to the trustees taking advantage of the post-Brexit economic situation—I must mention that that has more to do the British Steel pension scheme’s investments in other nations’ stock, which has boosted the pension fund.

If interest rates were to rise and the scheme’s asset value continued to increase, hypothetically the trustees may wish to withdraw their request to change the scheme’s benefits, and therefore a change in section 67 of the Pensions Act may not be necessary. The compounded complications are that any change to section 67 could affect any other workplace pension scheme, and any other representative of any other constituency without a steel interest would be highly hesitant about voting for such an action. I hope we can keep in constant contact with the Minister, so that if the scheme’s benefits continue to rise, we can look at measures short of the scheme falling into the Pension Protection Fund, because that is fundamental to the existing Tata sites. The Government must act to explore that possibility, provide certainty in an uncertain situation and secure the continued viability of Tata Steel sites. The BSPS is a fulcrum of the continuation of the current Tata sites.

As well as the five asks, strategic decisions will need to be made soon by Government that have the power to end or secure the industry’s future. Those are decisions that come in the wake of Brexit. There are many implications for the steel industry of the UK leaving the European Union, from workers’ rights to an ability to attract expertise and investment from the continent, but I wish to focus on one: trade, and in particular access to markets and trade defence measures.

Earlier this week, I warmly welcomed the Government’s actions to secure investment, jobs and growths at the Nissan plant in Sunderland, via the production of the two new Qashqai and X-Trail models. That move is warmly welcome, not least because Nissan is one of the largest buyers of British strip steel, largely from Tata Steel sites. It is a shame the Government did not take the same decisive action when it came to the closure of the SSI Redcar steel plant over a year ago, which I am certain my hon. Friend the Member for Redcar will talk about. None the less, it seems the Government have reassured Nissan that it will have access to European markets tariff-free. That is fantastic news, but it is not just Nissan or the automotive industry that rely on access to tariff-free trade with Europe.

Over half of all British steel exports are to the European Union, therefore any tariffs on British goods would damage the health of UK steel. I hope the Minister will commit today to providing steel producers with similar assurances. Doing so would again demonstrate this Government’s commitment to the sector, and of course do much for those whose jobs who are dependent on the steel trade. The Nissan deal also reflects how big and powerful the industry players and the automotive lobby is as a whole. Steel requires its players to come together and command such attention. It must also gain the understanding of the auto sector and all the other industrial lobbies that the UK steel supply on their doorstep requires their clear verbal support.

Leaving the European Union presents both an opportunity and a threat in terms of trade defence measures—a threat in that it means we would leave behind the trade defence measures provided by the EU, modest and limited though they are, and an opportunity in that it allows this country to implement our own trade defences. As many here will know, the over-production of primarily, though not exclusively, Chinese steel and its dumping, sometimes at below-cost prices, in foreign markets poses a real and significant threat to industry here in the UK. Currently the EU’s tariffs on steel differ by product: the highest import duty is about 73% on heavy plate steel, whereas in the US in March duties were set at over 265%.

While Chinese production of steel did slow as global demand dipped, the latest International Steel Statistics Bureau statistics show that Chinese exports remain at a year high, with August levels being some 7% above last year. The problem is not going to go away; it will certainly re-emerge. However, this Government seem to have set their face against trade tariffs on Chinese steel, as two quotes reveal. The first, from the Chancellor, was on granting China market economy status. He said:

“Our position on China’s market economy status is that we gave certain undertakings to China and believe that we are bound to go down this route.”

Recognising market economy status for China would limit our ability to apply duties on Chinese steel, potentially opening up our markets to a flood of cheap steel, undercutting domestic producers and risking thousands of British jobs.

Commitments made to endear ourselves to China should not take precedent over commitments to steelworkers or common sense. It is obvious that Chinese steel is not made under market competition conditions, and it is also obvious that by campaigning for MES for China, the Chancellor is campaigning against the interests of British steelworkers. This may be further complicated by Brexit. If we campaign for market economy status for China—as a country, I add; that is the Government’s position—while we are in the EU, will not this Government be obliged to recognise that once we can do so unilaterally after leaving the EU? Perhaps the Minister can shed some light on that.

The second telling quote came from the Secretary of State for International Trade. During his speech to the Conservative Way Forward group, the right hon. Gentleman, now infamous for calling British business people fat and lazy, said we

“must turn our backs on…voices that tell us: ‘It’s OK, you can protect bits of your industry, bits of your economy and no one will notice’”.

That seems to set the right hon. Gentleman against any industrial strategy and certainly against trade defence measures for the steel industry. I hope that that misapplication of free trade dogma to trade with a communist country and its state-owned and subsidised steel industry does not spill over into Government policy. I hope Ministers from BEIS have explained the absurdity of that position to the Secretary of State; if not, I fear someone will have to very soon. Those two aspects of the Brexit negotiations are fundamental to any industrial strategy and I hope the Minister will outline today the conversations he has had with and the cases he has been making to the Chancellor, the Prime Minister and the Secretary of State for Exiting the European Union about Brexit and our industrial strategy.

I would like now to address my own Front Benchers. As a party, we have been vocal in campaigning to save our steel industry, and we should be proud of that, but, if our party is to help to revive the steel industry in the UK, as I hope it will, and not merely be its pallbearer, we must stop cutting off potential demand for British steel by opposing or sitting on the fence over major infrastructure projects. Heathrow will require 370,000 tonnes of steel and could support hundreds of jobs in the industry. Labour does not seem to have a settled opinion—I know mine—and we must be clear. Trident will support British jobs in the steel industry, despite the Government allowing French steel to be used in the vessels’ hulls, but Labour’s own leadership casts doubt on our commitment to this project, despite party policy and a consensus at our conference and among trade unions to accept it.

Shale gas is an example. Our party has vowed to ban the practice of fracking. The GMB union called this decision ridiculous, nonsense and madness, and my union, Community, said the decision was rushed and did not fully consider the evidence. Both unions have since signed a memorandum of understanding with United Kingdom Onshore Oil and Gas, the industry trade body. Two proud unions, with large private sector bases and affiliated to our party, are asking the party to back a proposal that would provide jobs in regions across the UK—not just jobs, but secure, well paid jobs that would help to stop our reliance on autocratic nations for our energy. It would offer people, not least the thousands of offshore oil workers being made redundant, well trained, highly skilled, long-term roles, but we have denied them that option. Shale gas would cut energy prices for the steel industry more profoundly than any tax break or subsidy. On Teesside, it would provide a gas supply to a much-needed chemicals industry at 50% less than the cost of conventional North sea gas.

The infrastructure and sites would also require thousands of tonnes of steel. The viability of British-made welded steel pipes for fracking is currently being explored. It is vital to both Corby’s and Hartlepool’s pipe mills. The industry is moving ahead without the Labour party. We should be shaping the shale gas industry, not ignoring it for our own satisfaction. We should be making sure it is safe, that it uses British steel, that energy price cuts are passed on to steel producers and that they organise their workforce so that it can bargain collectively and secure benefits for local communities.

Blanket opposition to infrastructure projects may offer the false comfort of the moral high ground, but it is not responsible. Failing to make these choices is not the action of a Government in waiting who intend to deliver for steelworkers. As a party, we must be pro-jobs and pro-steel choices, and not just attend marches and wear badges. I hope my party will think about these issues and choose jobs over familiar, fashionable and flawed opinion.

[Geraint Davies (in the Chair)]

From one Tom to another, I call Tom Pursglove.

--- Later in debate ---

[Tom Pursglove]

I am grateful for the intervention. I certainly agree with that point and will touch on it later.

Of course, there is a particular challenge with the current tariff situation. Ministers have said consistently that one difficulty has been that some of the tariffs are bound up with other things; the impact on other things also comes into play. It would be much easier outside the European Union. We would be able to take those decisions ourselves. We would be able to take the decisions in isolation, separated out, and not have to get that wider agreement from other nation states.

[Tom Blenkinsop]

I thank the hon. Gentleman, a vice-chair of the APPG, for giving way. Whether we are in the European Union or not, that issue is resolved. On the issue of tariffs, he agrees with me; we have some consensus there, and we are willing to work together to try to build in those trade defence mechanisms. The real issue is Chinese market economy status. The Government are advocating a policy of no tariffs with China—a country that is the primary problem, in terms of dumping, in the world. That presents significant complications for the UK steel industry, and we need to work together to try to change the Government’s opinion about market economy status for China so that we can defend not just steel but manufacturing generally in Britain.

[Tom Pursglove]

Again, I am grateful for the intervention. I have consistently said that I think it is incumbent on British Ministers to make the point to the Chinese that if they want to play in the premier league, they have to play by the rules. That is fundamental; it has to be front and centre in our ongoing discussions with the Chinese Government as we try to make progress. That is absolutely right and proper. If they want to be regarded as a significant international player in trade, they have to play by the rules.

I welcomed what the hon. Member for Middlesbrough South and East Cleveland had to say about trade earlier, because I think that this issue will be crucial. What opportunities will there be to better export British steel around the world in a post-EU exit world? I ask that because the steel that this country produces is the best in the world. There is no doubt about that, and I think that we ought to be shouting from the rooftops, making the point that the steel that we produce is of that high quality, that it is good value for money because of that, and that we want to sell it the world over. I would be interested to hear the Minister’s thoughts on that.

I also want to know about some of the early cross-departmental discussions that are taking place. What is the current thinking? What is the interface between the different Departments to ensure that the steel sector is properly represented in those discussions? What work has been done to hear what the needs, aspirations and requirements are? I recognise that there will be many competing priorities at the moment, but for my constituents and me and for all hon. Members present, the steel issue is very pressing and we need to know what the direction of travel is likely to be.

On industrial strategy, I come back to the point about the emphasis of the Government. I very much welcome the shift in emphasis. The steel APPG, to a man and woman, campaigned for it. We always wanted to see an industrial strategy develop that would help to bolster the steel industry. I am proud to be part of a Conservative Government who are delivering on that, who have recognised the need for an industrial strategy that is designed to ensure that steel is properly represented in our industrial policy. That is a very big step forward; it is a step change. And I say that coming at the debate as a small-c conservative. I recognise that the Government do not have all the answers, but this is about getting the broad economic conditions right and ensuring that where there are opportunities for our industries to thrive and prosper, we try to fit all that together to ensure that it works and has the best possible outcomes.

An industrial strategy is key to ensuring that we have strong core industries in this country. We have all said for a long time that steel is fundamental to our national security. Having an industrial strategy means that policy discussion in this country focuses on that point and ensures that no community is left behind. In Corby, people feel acutely that the steel industry is what our town is all about. Our town was built on the steel industry; that is what we are about in Corby, and I think that this measure gives real regard to that. I would therefore be interested in a progress report from the Minister on where the thinking is on the industrial strategy, what engagement there has been and what opportunities he thinks that will bring for our steel towns.

On procurement, I commend the Government, because we have made enormous strides forward, working across Government, in recent months. Of course we must maximise the public sector opportunities that exist. Today we heard about the construction of a number of new prisons. I urge my right hon. Friend the Secretary of State for Justice to ensure that British steel is used. One of the sites is Wellingborough, which is 10 minutes down the road from my constituency. We can provide top-quality steel, probably within the hour, if that is what is needed to build that new prison.

We must ensure that these big, Government-backed infrastructure projects use British products, British content and British steel at every opportunity. I want to pick up the point made by the hon. Member for Middlesbrough South and East Cleveland about fracking, because Corby is one of the sites that would be strongly placed to provide top-quality steel for fracking. When the Government are looking at subsidies for renewable energy projects or any energy projects, it makes sense to hammer home the expectation that British content and British steel will be used. That should be the key condition.

However, this debate is not just about the public sector; it now has to be looked at also in the context of the private sector. I welcomed Heathrow’s commitment to use British steel in the forthcoming construction. I hope that that will lead the way in encouraging other companies and organisations around the country to use British content wherever possible. On most occasions, we can cater for their requirements, and if we do not cater for those requirements, we have the ingenuity and ability to innovate to make that happen. The industry should be given the opportunity to cater for these projects whenever possible, because it is morally right to use British steel. We have great quality and a great workforce, and we should feel the benefit in the supply chains in this country.

Earlier, there was an urgent question on air quality. In my view, it does not make sense to be bringing poor-quality steel across from other countries around the world when we can produce great steel in this country and reduce some of the transport costs and implications of shipping steel from all over the world. Overall, that must be better for air quality across the globe.

Those issues should be front and centre of what the Government, the public sector more broadly and the private sector ought to be championing. That is a key element of the debate. How does it link to the industrial strategy? That will be a very important consideration that we need to reflect on as we move forward. How does the whole thing link together to ensure that, from end to end, we do right by British steel producers?

I am a regular visitor to the Corby works and I pay tribute to all those who work there. They are incredibly talented and hard-working people. We have a remarkable workforce and we can all be exceptionally proud of that. Whenever I visit at the moment, I am asked about three key policy areas: where is Government thinking on the industrial strategy, on the EU exit and on procurement? We have to show leadership on all those points.

I am proud of Corby’s steelmaking—the quality of our product, our incredible workforce—and of our rich steel history, which is what the town of Corby is all about. I am proud of the Conservative Government for really trying to show some leadership and for listening, acting and getting out there in pursuit of solutions to help to secure the future of the industry. But I am under no illusions; I do not think this is going to be straightforward. It is not going to be plain sailing as we move to a world outside the European Union. It is going to be difficult and there are going to be bumps in the road. However, if we get out there and get the engagement right, we can have an enormously successful future chapter for our steel industry because we have got those broad policy foundations in place.

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[Angela Smith (Penistone and Stocksbridge) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friends the Members for Redcar (Anna Turley) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate. It is always timely to have a debate on steel, such is its importance to the economy, but at this particular moment, given the wide range of issues we face, including Brexit, it seems particularly timely.

I want briefly to go back to October 2015, when the SSI crisis hit TV screens. As we know, the company went into liquidation and 6,000 people lost their jobs. That is 6,000 men and women lost to the industry, potentially forever, and 6,000 families who face an uncertain future. Yet since the collapse of SSI and the problems that Tata faced earlier this year, although there have been some improvements in the conditions faced by steel producers—not least because of the 16% devaluation of the pound—there are still major problems facing the steel industry.

The Chinese dumping of steel continues, and the UK is still blocking attempts to put meaningful tariffs on that steel as it comes into Europe. It has never been about protectionism—this is a really important point. Rather, it is about effectively countering the hidden subsidies that the Chinese state has embedded in its own production of steel. I have listened to the Chinese and have heard them say they will roll out figures on their production and about how they are reducing the volumes of production, but they never, ever refer to the fact that they are effectively undercutting the global steel market by embedding subsidies in their pricing structures.

Let us not forget that we still have all the other issues that my hon. Friend the Member for Middlesbrough South and East Cleveland mentioned in his opening remarks: the five key asks that were developed some time ago by UK Steel, supported by the union Community and supported by parliamentarians across the House. My hon. Friend did an excellent job setting out the key strategic issues facing the industry at this point. I will not go through them all again, because he did that brilliantly and the case is made.

As would be expected of me, and because of the situation I face in my constituency, I want to focus briefly on the situation with the Tata holdings in the UK. Although the sale of Port Talbot has been suspended while Tata and ThyssenKrupp talk about a joint venture, Speciality Steels, which has plants in Sheffield—in Stocksbridge, in my constituency—and Rotherham, is still up for sale.

I do not apologise for rehearsing the point about the importance of the Stocksbridge plant. Members have heard me say before that the steel produced at Stocksbridge is in the top 7% of the value chain for global steelmaking. Two thirds of the aviation steel made globally is made in Stocksbridge: it makes steel for landing gear, for the Rolls-Royce engine and for the sliding doors on the aircraft body. It is an incredibly important and valued part of our steel industry. I have even heard it said—by people who frankly do not know a great deal about what goes on there—that there is effectively old-fashioned steelmaking going on in that facility, in something that looks like a shed. I know that the Minister has visited Stocksbridge and so entirely understands my point. What goes on inside that building—that very old facility—represents some of the best and most advanced steelmaking technology in the world.

I am incredibly proud of what Stocksbridge does, and I know that the community is too. We are confident that the plant will have a future and we know that the right investment plan can secure that future. It has got the vacuum induction melting facility, but it needs further capital investment if it wants not only to maintain its place in the value chain, but to move up it. That is the ambition: to move into the era of 3D printing mentioned by my hon. Friend. Stocksbridge wants to be able to produce—if hon. Members will forgive the layperson’s way of saying it—the powdered steel, which we know will enormously increase the value of what we make there. That is something like £30,000 to £40,000 a tonne initially. It is critically important that we get the right buyer for Tata Speciality Steels: a buyer who is in it for the long term and prepared to make the investment.

Recent reports about the apparent boardroom manoeuvrings at Tata are a little worrying, to say the least. Given the current instability at the global board-level at Tata, I ask the Minister what the Government are doing to ensure that the sale of Tata Speciality Steels in South Yorkshire is not compromised by the uncertainties apparent at boardroom level at Tata HQ. What communication is he having with Tata at the highest level? I do not expect the detail, or for commercial sensitivity to be compromised, but can he tell us what discussions are taking place to make sure that the sale of Speciality Steels is given the priority by Tata that it deserves?

Yesterday, during Prime Minister’s Question Time, I raised the Prime Minister’s visit to India next week. I did not really get the clear answer I was looking for, but can I now ask the Minister to commit to ensuring that the delegation led by the Prime Minister that is going out to India next week takes the opportunity to raise with Tata the business of ensuring a sustainable future for Speciality Steels and, indeed, the other Tata holdings at Port Talbot and elsewhere? In other words, what are the Government doing to support Speciality Steels, Port Talbot and the other Tata holdings in the forthcoming period?

If we are to have a successful steel industry, we need demand for steel produced both for home markets and abroad. Recently we have heard some pretty bad news about the demand for UK content even in British infrastructure projects. We all know about the recent decision to award the contract to supply the steel for the pressure hulls of the new successor Trident submarines to a French company, despite the fact that we have the capacity here in the UK and two UK firms submitted a joint bid for the work. There are other upcoming projects that could, with a bit of support and leverage from the Government, absolutely maximise the use of UK steel.

[Tom Blenkinsop]

On the Ministry of Defence contract, which occurred two years ago, when two British firms—or two UK sites—came forward with ideas for the plate steel for the hulls on the successor programme, they were actively told to go away by the MOD, as it had already procured the contract from a French site. The two British sites involved, which wanted to come together and provide a solution, just wanted a bit of time—given the time that has subsequently passed, those two sites could have provided the steel. That was another missed opportunity in a period when we were still members of the EU, and defence contracts are exempted from competition regulations.

[Angela Smith]

I completely agree with my hon. Friend. His point relates entirely to the situation with shale gas. My hon. Friend made an impassioned case for the shale gas industry earlier this afternoon, and I entirely support him in that. I support the signing of the memorandum of understanding by Community and by the GMB. We all know that the domestic supply of shale gas will help not only the steel industry, but a range of industries in the UK, because it will provide valuable feedstock for the chemicals industry, for example.

Are the Government continuing to support the development of the relevant steelmaking capacity to ensure, for instance, that UK steel will be used in developing the new industry? There have been difficulties in ensuring that the UK steel market can provide that capacity, but we know that work is ongoing, in partnership with the oil and gas industry, to get over those obstacles and make it possible for the UK steelmaking capacity to deliver the steel that the shale gas industry needs. That relates entirely to the point my hon. Friend made: will we ensure this time that we do not miss an opportunity to expand the UK steel industry and exploit new opportunities that become available, such as shale gas?

The same can be said of the Swansea bay tidal lagoon. Is the Minister providing input on the process to the so-called Hendry review? That is critically important. There are huge advantages for the UK steel industry from that project, if it goes ahead.

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

It is a pleasure to serve under your chairmanship, Mr Davies. I will endeavour to follow your instruction.

I congratulate the hon. Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley) on securing the debate. I commend the hon. Gentleman on his opening remarks, in which he showed a deep understanding of the industry. It was a genuine pleasure to listen to him. I thank the Backbench Business Committee for allocating time for this important debate.

I speak on behalf of the steel industry in Wales, which is arguably the most important component of the Welsh economy. Tata Steel Port Talbot employs about 4,000 people directly, and its supply chain is reported to sustain 20,000 jobs in Wales and to contribute £3.2 billion per annum to the economy of my country. We talk about things having national economic strategic importance, and steelmaking in Port Talbot is one of the most important components in a Welsh context.

It is almost impossible to talk about anything these days without mentioning Brexit, so I will get this point out of the way right at the start. Recent revelations about the back-room deal that the UK Government cut with Nissan highlights the Tories’ strategy to pick winners when it comes to Brexit. I will of course back any incentives that support important industries such as the automotive sector, both in their own right and as customers of the steel industry, but as other hon. Members have said, guarantees of that nature must also be extended to the steel industry, which is the backbone of the Welsh economy. My answer to the Government’s Brexit conundrum when it comes to steel is to stay in the single market and the customs union.

It is fair to say that that last time we had a debate of this nature, the mood was dark and there were genuine fears about the future of steelmaking in Wales and the UK. The reasons behind the pressures on the industry are well documented and have been restated today. Instead of repeating them, I will highlight some points made in an excellent report by Swansea University that was published in September. The report, “The sun has risen over steel town: Developing a sustainable steel industry in the UK”, was written by some of the most eminent steel experts in the UK: Professor Sridhar Seetharaman, Professor Dave Worsley, Dr Cameron Pleydell-Pearce and Mr Brian Edy. I commend them for their work.

The report puts forward a very positive prognosis for the steel industry, if supported with swift strategic Government action. The Tata Steel strip business in Port Talbot is today making a profit, performing above the ambitious levels targeted in the local transformation plan put forward at the height of the crisis last year—a plan that had been rejected as over-ambitious by the Tata board in Mumbai. That is quite an incredible achievement. However, in a session held a few weeks ago by the Economy, Infrastructure and Skills Committee of the National Assembly for Wales, evidence from steel producers and manufacturers indicated that order books, although buoyant at present, could take a turn for the worse in the second quarter of next year, demonstrating once again the huge volatility of the industry and that the next crisis could come sooner than anyone would hope. In other words, this is no time for Governments in London and Cardiff to take their eye off the ball. Therefore, the issues surrounding high electricity prices, whereby domestic steelmakers face a £17 per megawatt disadvantage compared with competitors in Germany, continue to be ones that should be urgently addressed.

The UK and Welsh Governments need to look at business rates and at what can be done to remove plant and machinery investments from rateable calculations. We need firmer protocols on procurement. As the Swansea University report highlights, only 40% of domestic demand is supplied by domestic producers. I point the finger at the Welsh Government as well in that regard. The report also highlights that a main consideration for the profitability of plants such as Port Talbot are prices of raw materials and sales prices. In 2014-15 the global weighted sales price fell by 26% due to much-documented Chinese dumping; at the same time the price of iron ore fell by 60%, which is hugely significant given that Port Talbot’s annual spend on raw materials is $1 billion.

A core aim in creating a sustainable industry, therefore, is to build resilience to fluctuations. The report clearly states that it would be logical to use a period in which conditions are favourable, like now, to make the necessary technological innovations needed to make the sector more resilient. The report makes the case that Port Talbot could evolve into a leading-edge, zero-carbon steelmaker with carbon-positive products that utilise locally generated by-products as a chemical and raw materials feedstock. It also argues that Port Talbot would have a viable future once in the hands of an owner with a long-term vision that will commit to and invest in transformational change.

Tata’s ability to deliver that much needed transformational change has arguably been hindered by its decision to vastly reduce research and development investment in its UK plants and to centralise activity at IJmuiden in Holland. That brings me to the current state of play in Port Talbot, where Tata is in advanced discussions with ThyssenKrupp about a merger of their European operations. If the Minister takes one thing from today, let him be in no doubt that the proposed merger is a real threat to the future of Port Talbot. As the Swansea University report states:

“TKS believe that capacity reduction is necessary in Europe, and Port Talbot could become a convenient sacrifice for them.”

Those are not new concerns and have previously been expressed by others and by me in this place. Unite the union made the point strongly in evidence to the National Assembly only a few weeks ago.

My constituency colleague in the National Assembly and predecessor in this place, Adam Price AM, has argued on behalf of my party that the UK Government should intervene if the proposed merger goes ahead unless there are specific guarantees about the long-term future of Port Talbot. His reasoning is perfectly valid when considering the record of ThyssenKrupp. In August 2016 Reuters reported that Andreas Goss, chief executive of ThyssenKrupp Steel Europe, had announced a new aggressive cost-cutting plan for its operations based on plant closures. It is worrying that the voice of the UK Government in Wales, the Secretary of State for Wales, is on record as saying that the proposed merger is “encouraging”.

My last point is that there is an alternative option on the table that seems to be far more encouraging in terms of achieving the long-term sustainable future we all desire. The recent news that two former rivals, Excalibur Steel and Liberty Steel, have joined forces is welcome. Significantly, the bid has Welsh Government support. This rival bid would lead to the creation of a new domestic company, probably the largest Welsh company in terms of turnover.

Liberty, of course, made its name in taking over steel operations in the UK and converting them by installing furnaces capable of recycling scrap steel. The process obviously helps to remove fluctuations from the business model, helping to create a more sustainable business. The Swansea University report indicates that 60% of steel in the United States is now produced from scrap steel by re-melting it in electric arc furnaces. The Excalibur-Liberty deal therefore offers the exciting prospect of green steel and primary steel being produced side by side, thereby helping to meet the transformative challenge set by the Swansea University report.

[Tom Blenkinsop]

Every option has to be considered in terms of Port Talbot’s future. I remember talking in a debate about whether Tata was going to retain Port Talbot, as we foresaw that changes in prices of strip and the potential profit from Port Talbot. I reiterate that Liberty is a good company that has come in, but without the production of primary virgin steel, there is no scrap steel to recycle. My concerns are about any mill rolling slab or rebar, where that steel is coming from. That goes back to the questions about Chinese imports. We need guarantees on the primary source of slab, rebar and billet.

[Jonathan Edwards]

I am grateful for the hon. Gentleman’s intervention. I was endeavouring to make the point that the Liberty-Excalibur deal potentially offers a future in which green steel, as it is called, and primary steel are produced side by side in the two blast furnaces at Port Talbot. Keeping those two blast furnaces open is vital for the viability of Port Talbot. He is completely correct.

I have a simple message for the Minister: this could be a huge success story for Wales and the UK as a whole. My last ask today is for him to agree at least to meet the leaders of the Excalibur-Liberty deal to see whether there is an option for the UK Government and the Welsh Government to put their weight behind a bid that seems to have unanimous support in Wales. Diolch yn fawr iawn.

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

It is a pleasure, as always, to serve under your chairmanship, Mr Davies. I welcome the new Minister to his place and thank him for the accessible way in which he has already met me to discuss the former Sahaviriya Steel Industries site and the future for Teesside. I also welcome the shadow Minister to her place. She represents a steel town, and we think of her husband with great fondness—he was in this place for far too short a time, but he fought hard for the steel industry in his time here.

It will be no surprise to Members here or those watching at home that I find it painful to speak in another debate on steel and to have to continue fighting for an industry that, although fundamental to the British economy, was ripped out of my constituency last year like a heart from a body. The people of Teesside remain angry and disillusioned, and rightly so. They are the ones battling to deal with the aftermath of the Government’s failure to protect Teesside’s steel industry last year. Many are still seeking work, many have had pay and conditions slashed in new jobs, many have had to move away from their home and some may never work again, but they are all resolute, determined, made of steel. They are trying to look forward, so I owe it to them to try to look forward in this debate and to keep working for the industrial and manufacturing future not only of Redcar and Teesside but of our country.

Before I do that, l also owe it to them to raise again questions to which we have never had answers and injustices that have never been acknowledged. Why were the Government not willing to take a stake in SSI or to lend it the requested £100 million to restructure and save the plant, yet willing to take a 25% stake in Tata to save Port Talbot earlier this year at the time of the Welsh elections? Why would the Government not step in to mothball the blast furnace to allow it to be relit when market conditions picked up, as they already have? Why were offers from local companies to produce foundry coke, which could have kept the ovens alive and paid for a mothballing, never accepted?

I ask all that now not just to look back. If the Minister wants to tell us to move on and get over it, I am afraid that we cannot. I look about me now at the economic picture for the global steel market and the conditions in the UK and I could weep. The SSI Redcar plant was the one with the greatest export activity in the country, so the current drop in the pound had the greatest potential to boost our exports. It may have been able to turn around the picture at the most efficient site in the country, which before Christmas 2014 was in the black.

Industry experts tell me the value of SSI’s exports to our balance of trade could now have been £1 billion, with those exports principally heading to the far east—in other words, outside the EU. I see that international expectation in the industry is that the price of steel will continue to increase. I see a new runway being commissioned for Heathrow that needs 370,000 tonnes of steel—the same as building 16 Wembley stadiums—and a company there that wants to buy British. I see cutting-edge new developments in steel in this country—two thirds of UK steel products were not even invented 15 years ago.

SSI lacked the reserves to keep the plant alive through the crisis. If only it had been supported, it would now be exporting extremely successfully. Surely if we believe in an active, interventionist Government who support this country’s industry and exports, we are an example of where they should have stepped in.

[Tom Blenkinsop]

My hon. Friend is a fantastic champion for the Redcar site, which I know well. She commands great loyalty in the town from many people and I respect her for how she has played the grim hand that she was dealt as soon as she was elected. Does she agree that the sad irony of the SSI site—the old Teesside Cast Products site—is that it was the second most efficient plant in the European Union after Dunkirk?

[Anna Turley]

My hon. Friend is right. The SSI site was not only efficient but had a fantastic workforce. An enormous amount of money was put in to bring it up to such standards. The site had everything that could have seen it playing a leading role in the steel industry. It is a tragedy that the site could not be supported to weather a few months of difficulty so that it could thrive in the future.

The site now stands looking over the town, cold and rusting, with its future tied up in faraway wrangles between an official receiver and faceless banks in south-east Asia that show no signs of progressing. I would be delighted if the Minister had anything—anything at all—to share with us about what steps the Government are taking to wrestle the site out of the hands of the Thai banks, so that the people and businesses of Teesside can start to rebuild, invest, regenerate and bring much-needed jobs to our area.

I believe that the future for steel on Teesside did not disappear entirely with SSI. Potential inward investors recognise Teesside as the preferred location for UK investment, with its unique availability of infrastructure, supply chains, innovation support and skilled workforce, and its transport benefits through its geographical location and existing assets. Our British steel beam mill is doing fantastic work and has a great workforce. If the Government are concerned about the future of the UK steel industry, they need still to be concerned about Teesside. I have met serious potential investors who are looking closely at it, but we need the former SSI site to be liberated. Although I have come here to bat for the wider steel industry in this country and to fight for the jobs and livelihoods of steelworkers around the country, I do so on behalf of Teesside, with an anger that cannot be repressed and a determination to achieve some form of future for steel in our area.

I turn now to some broader issues. The June referendum result has huge implications for every part of our economy, and businesses from all sectors will be seeking favourable terms in the Brexit negotiations. Last week’s Nissan announcement was fantastic news for the automotive industry, and I congratulate every single man and woman at the plant and in the supply chain who sent out the message to the world that the north-east is the best place to come invest and build the cutting-edge cars of the future. We have a fantastic workforce, terrific businesses in the supply chain and world-beating research and development.

It is important that Brexit does not become a game of who can shout the loudest. Our approach to an industrial strategy as we leave the EU must benefit everyone. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is absolutely right that steel must have the same weight as the automotive industry in the decisions made about tariffs. The steel industry is still in crisis as it continues to battle with the challenges of global overcapacity, falling demand and uncompetitive trading conditions. Some progress has been made, but further reductions in steel jobs and production capacity are a possibility if action is not taken. The uncertainty of Brexit adds to the challenges.

We fought to secure this debate to ensure that tackling the risks to the future of steel remains a Government priority. Many of the industry’s asks remain unanswered. The primary importance of the Brexit negotiations cannot mean that other issues fall by the wayside. Many industry proposals to redress the huge imbalance in electricity costs for UK steel compared with our competitors have so far not been carried forward by the Government, and the delay has cost the sector an estimated £20 million since June. The Government have also not yet accepted the request for plant and machinery to be excluded from business rate calculations, meaning that French and German steelmakers continue to pay up to 10 times less in rates than their UK counterparts. I sincerely hope that the Government are considering that ahead of the autumn statement.

I have mentioned Heathrow’s important commitment to use British steel in the recently approved airport expansion. The same support for local materials must be present in other major construction and infrastructure projects, including High Speed 2 and 3, the new fleet of nuclear submarines and Hinkley Point. More than two thirds of UK steel exports went to the European Union in 2015. It is crucial that freedom to trade in the single market is maintained.

Steel is also a crucial foundation industry, underpinning the manufacturing sector as a whole, which itself relies on single market access for both the export of completed goods and the import of parts and raw materials. The assurances given to Nissan were positive for the steel industry, particularly as they are the biggest automotive customer of UK steel. However, the automotive sector has a large supply chain, and those companies need the same assurances that they will not be hit by tariffs when we have left the EU. It cannot be the case that the biggest companies who shout the loudest secure special protection.

On Teesside, every single one of our boroughs voted by more than 60% for Brexit. I spoke to lots of people during the referendum campaign who were motivated to vote leave by anger at the loss of our steelworks and the idea, wrongly pushed by the leave campaign, that inaction in Europe was to blame. They want the Government to be more active in their support for industry and to challenge unfair trading practices by China. When forming post-Brexit trade policies, the UK must implement robust anti-dumping measures to stop the flood of subsidised steel that has devastated the industry in the UK, not push the hands-off attitude suggested by one leading Brexit Minister, as my hon. Friend the Member for Middlesbrough South and East Cleveland exposed.

I also want to mention the importance of innovation to the future of the UK steel industry. Innovation is core to our domestic industry’s success. Such is the impact of British inventiveness that two thirds of steel produced here is in forms not invented 20 years ago. That is why I was appalled to learn earlier this year that officials at Innovate UK judged support for materials and metals not to be a priority for Britain. The implications of Tata’s announcement in March revealed the short-sightedness of that approach, so it is reassuring that the Government have overruled that decision. I would love it if the Minister agreed in this debate to the overwhelming evidence for a materials and metals catapult.

If we are to retain our lead, public support needs to reflect the research requirements of Britain’s increasingly fragmented industry and the principles of relentless continuous innovation by making long-term commitments advocated by UK steel experts, rather than Whitehall. I recommend to the Minister the work of the Materials Processing Institute in my constituency, which was established in 1944 to provide research to a then-fragmented industry similar to the one emerging again now.

The institute is Europe’s go-to steel and materials research expert, as my hon. Friend said, welcoming delegations from Germany, Sweden, China and elsewhere this summer to advise them on how to future-proof their domestic steel industries, which are wrestling with many of the same issues as ours. Just this week, the institute was approached by one of the world’s largest steel companies overseas to become its preferred research partner. Its proposals for long-term support to commercialise innovation have the support of Tata Steels Speciality Steels, British Steel, Celsa Steel, Liberty Steel, Albion Steel, Acenta Steel, the British Stainless Steel Association and UK Steel. I would be delighted to welcome the Minister to discuss the matter further and see the institute’s world-class facilities for himself.

Bridging all these issues is the need for a long-term industrial strategy that supports British industry and manufacturing to be competitive in the global market by creating an environment for investment, innovation and, ultimately, the creation of more highly skilled and well paid jobs. The assurances given to Nissan and the proposal for a 25% Government stake in Tata UK steel assets are two examples of a more interventionist Government prepared to support British industry, which is good to see. It is a marked improvement on their complacency and inaction during the SSI crisis in Redcar; this must be the start of a more proactive approach to industry. UK steel is still in crisis, but with the right help, its future both nationally and on Teesside can be secured.

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[Mr Iain Wright (Hartlepool) (Lab)]

May I say what a pleasure it is to serve under your chairmanship, Mr Betts? I pay tribute to and express my admiration for my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley), who have made moving, passionate and eloquent speeches that demonstrated their experience. They are huge champions of the steel industry and I am very proud to call them my friends.

We have discussed steel many times in the past few months, but many of the issues—the threat to domestic producers as a result of global overcapacity, subsequent steel price reductions and Chinese dumping—remain. We have also heard about how business rates, energy costs and procurement requirements undermine the competitiveness of the sector. The uncertainty about the ownership of much of the British steel industry and the increasing fragmentation of the sector remain important issues, not to mention the impact of Brexit and the lack of clarity about what our trading relationship with the rest of the European Union will be. However, my speech today will focus on how the steel industry can have a sustainable and prosperous future in the long term. I am not downgrading, by any stretch of the imagination, the importance of the short term or how the industry remains in crisis mode, but we need to think about how steel needs to make an important and growing contribution to our manufacturing sector in the decades to come.

Several hon. Members have mentioned changes in the Tata group. The sacking of Cyrus Mistry as chairman in the past ten days obviously raises greater uncertainty, which is never a positive for business, but it could lead to a change in strategy that could boost and safeguard Tata Steel’s operations in the UK. Last week, the Financial Times reported

“a person with direct knowledge of Tata’s plans”

as

“saying that…Port Talbot…was ‘virtually safe’ following Mr Mistry’s ousting, and that the company would invest ‘whatever it takes to make it efficient’.”

Those words are very welcome, but where do they leave the steel industry or Tata Steel’s footprint in our country? What about other parts of Tata Steel, such as the speciality products and the pipe mills in Hartlepool?

I am not expecting the Minister to provide a running commentary—a fashionable phrase at the moment—on the changes at the top, but does he accept that since putting the assets up for sale earlier this year, important parts of our steel industry remain in a state of limbo? That is bound to have an adverse effect on the recruitment and retention of skilled workers, whose skills are essential to the ongoing competitiveness of our steel industry. It will also have an impact on suppliers and customers of steel products, who may be concerned about getting paid and having the orders delivered.

With this additional uncertainty on top of global pressures, will the Minister—who I very much welcome to his place—take this opportunity to set out the discussions he has had with Tata, and can he say whether further reassurances and commitments about ongoing operations have been made?

[Tom Blenkinsop]

In addition to the removal of Cyrus Mistry and the return of Ratan Tata to the board, there is the issue of ThyssenKrupp’s sale of assets in Brazil. Its removal from the South American economy is happening at the same time as Tata’s change at the top. Will that have any effect and will the Government investigate that in conversations during the trade visit to India by the Prime Minister next week?

[Mr Wright]

My hon. Friend makes an important point. He has also mentioned the importance of a proper industrial strategy. Everybody who has contributed to this afternoon’s debate has mentioned that, so what are the Government doing to put in place a proper industrial strategy—this is very important to us on the Select Committee on Business, Energy and Industrial Strategy—and how does the steel industry fit in with such a strategy? How will the Minister’s departmental responsibilities help the steel industry? Joining business, energy and industrial strategy into one Department provides a better degree of co-ordination and should help sectors such as steel by providing consistency and the co-ordination of policy, but how will that work in practice?

Just over a year ago, on 15 October 2015, a steel summit was held. Three working groups, on competitiveness and productivity, international comparisons, and public procurement, were set up to address some of the challenges facing the industry. What is the current status of those groups? Did they survive the new Government and the change in the business Department? What are the findings arising from the work and how are they being incorporated into a proper industrial strategy? The universally well respected Community union, which has the long-term interests of the steel industry at its very heart and its core, and which is not prone to hysteria or exaggerated pronouncements, recently stated:

“After an initial flurry of activity and plenty of rhetoric we are becoming increasingly frustrated at the lack of urgency demonstrated by the UK government. To date very little meaningful support has actually been delivered—certainly we have not seen the game-changing intervention our industry desperately needs.”

That is a crucial quotation from an important stakeholder in our steel industry. Where is that meaningful support? Given the policy co-ordination under one departmental roof, how will Ministers take forward action on the energy costs that undermine the competitiveness of our industry? Crucially—this has been mentioned several times —will Ministers resolve to address the concerns raised about the business rates that disincentivise manufacturers, not just steel manufacturers, from investing in more efficient plant and machinery by raising what is essentially a tax bill?

Procurement is also a major way in which a co-ordinated industrial strategy can provide meaningful support for the steel industry. We have heard already about the hulls of the Trident submarines being built with French steel. That is immensely disappointing and really does not show a joined-up, co-ordinated Whitehall approach to industrial strategy. What lessons are being learnt from this to ensure that the British industry is able to address the needs of the customer, in this case the Ministry of Defence, and that local steel content can be increased?

On commercial operations, many hon. Members have quite rightly mentioned last week’s welcome decision that Nissan is to build the new Qashqai and bring the manufacture of the X-Trail to the factory in Sunderland. That should also provide more opportunities for local British-based steel producers.

We found in our Select Committee inquiry last year that Nissan, one of the most productive car plants anywhere in Europe, used British-made steel for three quarters of the steel content needed for the Qashqai. Vauxhall buys 50% of the steel it needs for production of the Astra at its factory in Ellesmere Port from Port Talbot. Given the strength of the UK automotive industry, what active steps are the Government taking to ensure that more of that successful sector’s requirements in metals are being provided in a competitive manner by British-based firms?

The UK automotive industry currently consumes about 17% of British manufactured steel. There is surely scope for a successful and winning automotive sector to take more of a growing pie. How are the Government identifying commercial opportunities for British steel? How are they encouraging and incentivising investment in technology and innovation and in the higher quality, higher value steel required in the automotive and aerospace industries? I hope the Minister will respond directly. The Materials Processing Institute can provide the means by which technology, innovation and support can be given to producers to make sure they can move up the value chain. That is vital.

This is not only about automotives; this week is offshore wind week. Offshore wind currently generates about 5% of the UK’s electricity needs. This will double to a tenth of electricity generation in five years. Firms in my constituency such as JDR Cables are winning great big orders in this field. The steel content for offshore wind is immense, but it is often imported from France and the Netherlands. How will we ensure that British-based and British-made steel provides steel content for the offshore wind industry? Are the Government working in the proactive and collaborative way needed in the modern industrial age to ensure that as much of the value in the offshore wind supply chain—more than £18 billion of new projects in the pipeline in the next five years—is captured by domestic content?

The steel industry remains a vital and essential part of our manufacturing base. It cannot and must not be viewed by anybody as a sunset industry. I hope we will see the implementation of a proper industrial strategy to ensure that the opportunities arising in the next few years are captured as much as possible by our British steel industry and that the barriers preventing a proper level playing field are addressed and resolved. That is possible only through active work by the Government, in close collaboration with the industry. With the greatest of respect, that work seems to have gone off the boil in recent months, at a time when we need it more than ever to sustain the long-term viability and prosperity of the British-based steel industry. I hope the Minister will use the opportunity today to state that the Government recognise the importance of the steel industry and will act accordingly, not only to save steel but to make sure it has a proper and fitting future in our manufacturing sector.

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[Hannah Bardell (Livingston) (SNP)]

Thank you very much for calling me to speak, Mr Betts, and I assure you that I will not keep you nearly as long as 15 minutes.

I speak today on behalf of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows), who unfortunately is unwell and so cannot be here. I represent the constituency of Livingston. While Livingston does not directly have any steel jobs, it is a traditional manufacturing constituency. Over the years while I was growing up, I saw closures of sites by companies such as Motorola and Bausch & Lomb, and the devastating impact that such closures can have on a local area, so first and foremost, I will say that my hon. Friend and I stand in solidarity with the constituencies across the UK that have been devastated by the closures of their local factories.

The quality of the debate today has been fantastic and the debate itself has been very consensual. Clearly, there will be differences of opinion on certain policy matters, but on issues such as this one we have to transcend politics and come together, to call for our vital steel industries to be protected.

Last year in Scotland, as is well known, the Tata Steel plants of Dalzell and Clydebridge faced huge uncertainty, as do many others across the UK today. The Scottish National party-led Scottish Government worked with the company, with local members of all political parties, with trade unions, with local government and with local communities, and they kept their promise of leaving no stone unturned though the work of that steel taskforce and through the work of Fergus Ewing, who was the Business Minister at the time and who has recently won an award for his work on this issue.

The steelworks of Clydebridge and Dalzell have now been bought by Liberty House and are coming back into production. They had been mothballed and I absolutely take on board the point that the hon. Member for Corby (Tom Pursglove) made about his disappointment at the lack of foresight and strategy in not supporting the mothballing of a site so that it can be brought back into production later.

For the avoidance of doubt and in case anybody wants to raise this point, as it has been raised in other debates previously, in April this year, then Prime Minister David Cameron mistakenly claimed that there was zero Scottish steel in the new Forth road bridge. That was quickly corrected by my right hon. Friend the Member for Gordon (Alex Salmond), who, as Members will know, is an assiduous pursuer of the facts, because steel from the Dalzell plate mill was used in the girders at either end of the bridge. My right hon. Friend further pointed out that the reason why there was no Scottish bidder for the main steel subcontract for the bridge was the closure of the Ravenscraig steel mill.

[Tom Blenkinsop]

The original contract let by the Scottish Government was with a Chinese company and a Catalonian company. The Catalonian company had to withdraw and it was actually Cleveland Bridge, in conjunction with Tata’s Dalzell plant, that stepped in to fill that gap. The original contract—as signed off by the Scottish Government—fell through and Cleveland Bridge, which is in Darlington, and the Dalzell plant stepped in to fill that gap. So Scottish steel was used—in fact, it was British steel, as it was slab from Scunthorpe.

[Hannah Bardell]

I will take that point on board, but the hon. Member will know that much of that steel was rolled and developed in Scotland. Nevertheless, I thank him for his clarification.

I was going on to say that one of the reasons that situation came about was the closure of the Ravenscraig steel mill by a previous Tory Government in 1992. I know that Labour Members—the predecessors of the Labour Members here today—fought hard alongside our party’s Members to save Ravenscraig. I pay tribute to all those Members who tried to save Ravenscraig.

That comment by the former Prime Minister reveals the lack of understanding about Scottish steel and indeed about steel across the UK, and the cavalier attitude with which such statements have been made about the industry. We cannot let that continue; there must be, as so many Members have said today, proper commitment from the Government.

I say that because the issues that we are discussing today are not limited to the steel industry but extend to British industry in general. Post-Brexit, the uncertainty and anxiety are greater than ever, because we have no idea what kind of deal many industries will get. We know what the car industry will get, although we do not have the detail of that deal. We do not know whether other deals will be made sector by sector, or area by area. Before the Brexit vote, we knew that the international demand for steel was falling: the OECD had said that excess global capacity was expected to widen to 645 million tonnes. Now, post-referendum, the pound is falling, so UK steel will be cheaper for foreign buyers, but as other Members have said, the cost of the imported raw materials will be higher in the long-term, which will make things very difficult.

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate and on the passion with which he spoke. He highlighted the contrast between the approach and guarantees given to Nissan and the automotive industry with the support for the steel industry. That is ironic, given that the World Steel Association has said that on average 900 kg of steel is used per vehicle. So we will be making cars in Britain but importing the steel to make them and many parts of those cars. I hope that irony is not lost on the Government and that they take this issue very seriously.

Strong anti-dumping measures are critical. They were nearly secured with our EU partners. In our view, it is indefensible that the UK Government blocked EU attempts to regulate Chinese steel. The hon. Member for Corby spoke about the importance of the all-party group on steel and metal related industries and its collaboration with others. He made a plea to Tata for more information and said that the Government’s leadership would be key. Although he is a self-professed Brexiteer, he wants better leadership. However, given that it was the UK that blocked the EU attempts to regulate Chinese steel, I am not sure how he thinks the UK will do a better job. He was not able to answer that question earlier; perhaps the Minister will be able to answer it. We are all interested to know how the UK industry will fare if the UK ends up operating under World Trade Organisation rules, as the Secretary of State for International Trade has said. To be fair, the hon. Member for Corby was encouraging his colleagues in the Government to be proactive in their industrial strategy and said they needed to champion steel.

The hon. Member for Sheffield Hillsborough spoke passionately about the speciality skills and products produced in her constituency and the importance of the Prime Minister’s visit to India next week in ensuring the future of speciality steel—

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[Gill Furniss]

The hon. Gentleman makes a very good point, but a lot of work needs to be done in the green energy industries to start with, because we really are missing a bit of a home goal by suddenly putting them on the sidelines. I am sure we will pursue that.

[Tom Blenkinsop]

On green taxes, I remind the House that the Opposition voted against the unilateral introduction of the carbon price floor by the previous Chancellor of the Exchequer. That was brought in without any conversation with the industry and without the EU’s prior knowledge. When the then Government attempted to reverse that, they were prevented from doing so by European legislation. My hon. Friend will also be aware that as well as opposing the CPF, we also put forward business cases for the industry.

[Gill Furniss]

I thank my hon. Friend for that point. Thirdly, I want to give credit where credit is due and thank the Government for the guidance published in October last year, which has put some emphasis on supporting British steel in major procurement projects. However, despite the good intentions behind that move, we are still seeing major contracts going to foreign steel manufacturers, most famously the new Trident submarines, which are being built with French steel. Had a British firm been engaged to supply the steel, more than 1,000 jobs would have been supported, but alas, that is not the case. Will the Minister commit to ending the exemption from the guidance of tenders funded through contracts for difference? Will he look at strengthening the guidance better to reflect the social and economic consequences of current procurement decisions? Will he follow the examples set by the Scottish and Welsh Governments and publish future pipelines of projects so that British steel manufacturers can prepare themselves to fulfil future demand?

Fourthly, there is the issue of trade defence mechanisms and Chinese dumping. Whatever else Brexit may mean, it is absolutely vital for the industry that we avoid any sort of punitive restrictions on access to the European market. Last year, more than two thirds of our steel exports went to EU countries and our own steel industry is closely bound up with the Dutch plant at IJmuiden. Our trade defence mechanisms depend so much on what the final Brexit deal looks like, but whether or not we find ourselves bound by the rules of the single market, it is critical that the UK stands up for fair trade globally. While we still have a voice in the European Commission, we should be throwing our weight behind the scrapping of the lesser duty rule, which is hamstringing all efforts to counteract Chinese dumping, and opposing China’s application for market economy status, which will kill those efforts stone dead. Free trade does not mean fair trade and until the Government wake up to that reality, the steel industry will never have the level playing field it is asking for.

On the industrial strategy, the difficulties that the steel industry has with energy prices, business rates, procurement problems and unfair global trading practices are all issues that the Government need to address immediately. There are swords dangling over the industry’s head, but if British steel is going to not just survive but thrive, it needs a proper long-term industrial strategy to put it on the right track for the future. I am glad that the Department for Business, Energy and Industrial Strategy has commissioned research into the future capacity and capability of the steel industry. I and no doubt all of us here are looking forward to its findings next year.

Every job in steel supports three in the supply chain and the industry really is the cutting edge of UK manufacturing. Most of the types of steel being produced were not even in existence 15 years ago. Steel will play a central role in our transition to a low carbon economy if we manage it correctly and it can continue to lead the world in terms of quality and innovation. Will the Minister reassure us that BEIS will put steel at the heart of its industrial strategy?

Steel is not a dying industry. It is not a relic of a bygone era. It may be a proud part of our industrial past, but it also has the potential to be a dynamic part of our economic future. Without it, we will not only have lost an industry—make no mistake—we will have lost our entire manufacturing base. No one is asking for special treatment; we are asking for a level playing field that will allow the industry to move forward with confidence. Four months on since we last debated this issue, the steel industry is still in crisis. I urge the Minister to show more energy than his predecessors and do what it takes to save our steel.

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[Tom Blenkinsop]

It is interesting that the Minister said that the Government’s eye was still on the ball and talked about short-term gains, but said that we should not underestimate the long-term issues of overcapacity in the industry and that the Government were under no illusions. He has reassured us that the Government are not all talk, but that action in critical areas has happened—it has, to a certain extent, but we will see more in the developing months.

The Minister refuted any assertion that the Government were an obstacle on dumping, and he said that he believed in free and fair trade, which Labour Members and certainly the all-party group warmly accept.

I agree with the Minister on energy, that there has to be a consensus on how we make progress to stabilise not only the steel industry but manufacturing per se. I am very interested in working with him, as is the rest of the APPG, on formulating an industrial strategy for Britain.

The Minister is obviously very charming. He has been warmly welcomed by my Opposition colleagues, but that will only go so far. We will be keeping a careful watch on him, his colleagues and his superiors about delivery on the promises, warm words and charm of today’s debate. We want to work with the Minister and the Government Front Benchers as much as possible, because our communities, our people and the very culture that we all come from depend on our creating success for the British steel industry and associated manufacturing industries. I thank the Minister for his response today.

Question put and agreed to.

Resolved,

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

Nissan: Sunderland

Tom Blenkinsop Excerpts

Monday 31st October 2016 Commons Chamber

[Greg Clark]

My hon. Friend needs to direct that request to the Chancellor—I will pass it on when I see my right hon. Friend in Cabinet tomorrow—but he is right to remind the House that there is a range of attributes and strengths that makes this country attractive to overseas and domestic investors. It is important that, across the whole range, we get them right.

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

I warmly welcome the Secretary of State’s statement. The news is extremely important to the north-east economy, including companies such as Nifco and Teesport in the Teesside area. Nissan is a massive buyer of strip steel in the United Kingdom. Earlier this year after the steel crisis, Nissan was hunting around for new suppliers, usually in the European Union, for that chain. We have had a disastrous experience in the north-east prior to this announcement, which stands in contrast to the SSI Redcar situation that has happened on this Government’s watch. Although it has taken six years for the Government to understand what new Labour-style industrial activism is, I very much welcome that and the statement today.

[Greg Clark]

I am grateful for the backhanded compliment. I am not sure that I would agree that this is new Labour-style industrial activism. The hon. Gentleman will know that it was a Conservative Government 30 years ago who secured Nissan for the UK, and I am proud that it is a Conservative Government who have secured its future in Britain.