Steel Industry

Debate between Tom Blenkinsop and Anna Turley

Thursday 3rd November 2016 Westminster Hall

[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.