UK Steel Industry

Debate between Tom Blenkinsop and Stephen Kinnock

Thursday 21st January 2016 Westminster Hall

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

I do not intend to take up too much time, because there are hon. Friends wishing to speak who have had job losses in their constituencies in the last week or so in the ongoing steel crisis. However, I do want to pay tribute to my hon. Friend the Member for Aberavon (Stephen Kinnock) and to the Backbench Business Committee for allowing us to have the debate. I also praise my hon. Friend the Member for Hartlepool (Mr Wright) for his excellent speech, and the fantastic BIS Committee report on steel. That excellent piece of work illuminated many points that we needed to look at and raise. It is because the all-party parliamentary group for the steel and metal related industry is one of the most effective APPGs in Parliament, especially for using Parliament’s time to raise issues in the steel industry over the past four or five years, that so many Members have spoken today on this important issue.

In the past week there have been redundancies in Port Talbot, Llanwern, Hartlepool, Trostre, Corby, Sheffield and South Yorkshire. As a former union officer for the trade union, Community, I know some of those sites well and some of the people individually. The redundancies come off the back of a situation relating to Tata long products and, of course, the well documented and tragic events in Redcar at SSI.

I pay tribute to my hon. Friend the Member for Newport East (Jessica Morden), who raised a lot of issues about strip products. I will go into a few issues that my colleagues have gone into, but I want to check what industry is doing. I will be making critical comments about what the Government have and have not done but, as a trade unionist, I still wear my trade union hat and I still want to question what industry is doing. Employees trust employers to hang in there. I know that is very difficult for the industry at the moment. The five industrial asks are acute and critical, but I often ask myself what Tata—just one example—is doing regarding its relationship with this country.

I ask myself about Tata’s integrated industrial strategy in relation to Port Talbot, Llanwern and its own automotive sector. Jaguar Land Rover, as well as the rest of the automotive sector, is growing, developing and doing well but, irrespective of the fact that both companies are owned by the same parent company, one does not necessarily procure from the other. The Government have to step in and, not necessarily force, but certainly induce and use clever mechanisms to try to encourage ways and means by which that relationship could be bettered for workers in the steel industry. I find it hard—I am sure that colleagues do too—to make the argument that a parent company is not procuring from its own site. It is for not just the Government, but the very industries that sit in our nation to justify their industrial actions and procurement policies.

I have spoken at the Sheffield rally, as have my colleagues. A year ago, I managed to get our Front-Bench team to lead the debate on the UK steel industry. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) spoke from the Front Bench in that landmark debate. I believe that the issue of steel had not been brought forward as an Opposition day debate for some time, so it was a significant indicator of how bad the situation was getting.

[Stephen Kinnock]

On chronology, we hear very often from the Government that all the problems have existed for a long time and that many were building up on Labour’s watch from 1997 to 2010. I accept that point, but there was no Chinese rebar in the British market in 2011. Today, 45% of rebar is Chinese. In the past four years we have seen a total absence of action. The Government have been asleep at the wheel and the crisis has come to a head. It is important, for the record, that we recognise that the situation has come to a head over the past three to four years.

[Tom Blenkinsop]

Until 2008, which was a big year for the steel industry, profits were massive. Everything coming out of any plant was getting bought up. The demand in the world was so high because it was driven by Chinese growth. Any bit of steel—slab or whatever—was being absorbed by the Chinese market. Steel producers made very good profits, as did their workforce, who made very good bonuses. I remember negotiating terms and conditions, and pay and pensions for those workers at the time and they did very well.

The anticipation after that was that the lull in the market would pick up at some time but, if anything, it has remained the same. It has flatlined—never picked up. It is usually an indicator of world economic performance, and nothing has happened. In many ways, the best-laid plans always go awry. The real issue is the ability of Governments to react. For some time now, there has not been a proper reaction. There has just been an expectancy or a desire—a hope and a prayer—that the market would pick up again. If anything, it has been quite clear that the domestic policy in China has been to prop up its own industry while that market stays at such a low, with ever-increasing production and increasing emissions.

We must talk about the backdrop. The big factor, as my hon. Friend the Member for Hartlepool mentioned, is the “sheikhs versus shale” argument. There is a global, geopolitical war going on between oil and shale gas, as well as the onstream effects of renewables. They have forced down the price of oil, which has been a key factor for steel, whether that is in procuring contracts or gaining work, particularly at Hartlepool or Corby, where tubes are made.

There is a mismatch, in that the new markets developing for potential steel contracts and the R and D that could be invested in them differ very much from the steel sites that already exist. If we are looking at the new future for a tube site, it is more than likely going to be non-conventional onshore or offshore gas. The industry —we will be talking about this next week in a separate debate—requires a different type of tube, which is non-welded. There are no non-welded tube sites in Britain. At some governmental level, there has to be liaison with industry to find out what new industries are coming and to ask whether we are investing and helping those industries or potential suppliers to put in the new factories that will supply the product they require to develop that market.

This is the issue: steel or a steel strategy is one thing; what we really require is a real, integrated industrial strategy. That strategy should look across the piece and across regions to work out who needs to liaise with who to make whatever happen in the future. It should identify which industrial partners to bring on board and what they want to see, and ensure that investment is solid and sound and that we bring investors along with us to make those decisions work in our nation’s favour. There just does not seem to be any of that.

In the Chancellor’s autumn statement we heard that an announcement to the stock exchange had been made about the withdrawal of the last £1 billion to support carbon capture and storage. That is integral to any future of shale or non-conventional gas. In a world in which oil has fallen below $30 a barrel and the world market will retrench and retain fossil fuels for the current period, CCS should, in many ways—mainly because of the emissions targets that we are all now signed up to—precede renewables as the step for any nation to take to develop its power generation if, indeed, that country is going to buy in cheap fossil fuels while shale, oil and conventional gas all fight one another for customers. That is a massive opportunity for the steel sector to take hold of.

I have spoken so much about the steel sector, in relation to my local area and the whole UK. There is a positive story to be made for British steel, if we have an integrated industrial strategy. The Government could roll up their sleeves and actively engage with bodies, partners, business and finance to invest in the country. The right and adequate policy could be put down, with long-term futures secured, so that people know that their investments are sound and can deliver. However, in every single situation—for example, after the Paris climate change talks, when the world is looking at CCS as the future, and it is going to develop, the Government removed funding for it—we run away and concede the ground to competitors, which gives completely the wrong message to the industry we are talking about today.

Steel Industry

Debate between Tom Blenkinsop and Stephen Kinnock

Wednesday 28th October 2015 Commons Chamber

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

I pay tribute to Roy Rickhuss, General Secretary of Community trade union, who is in the Public Gallery. He has led steelworkers through a very dark time with dignity, great class and humour. Also in the Public Gallery are more than 40 steelworkers from across the UK, who have come here today to talk to MPs and to demonstrate their desire to see a British steel industry.

My first small point is about Chinese dumping. Yes, it is a problem, and the quality of the steel that is being dumped is poor both environmentally and on health and safety grounds, but it will get better. We can stop it now; there are provisions within the European Union on which we should now act, but the quality of Chinese steel will get better, and what do we do then? The real issue is whether we want a British steel industry. It is more about political will than it is about any organisation, institution or legislation. Do we want a British steel industry? British steel is as British as roast beef or the Union Jack; it is fundamental to our national identity.

Let us look at steel in relation to our country’s history, how we define ourselves as defenders of democracy and how we defeated fascism. It was steelworks up and down the length and breadth of this country that ensured that we could arm ourselves in those struggles. That is a story that we heard not from the men on site, but, in large part, from the women working in the industry. It is an often untold story. The arguments about the carbon price floor, energy prices, Chinese dumping and the current exchange rate are all well versed and well made.

What I wish to focus on in Teesside is the future. We are an area that can attract not just steel but other energy-intensive industries. If the Government act in the immediate and medium term to bring about those five industrial asks to defend a British steel industry, we in Teesside can buoy that up even more.

[Stephen Kinnock (Aberavon) (Lab)]

On those five asks, particularly around anti-dumping and state aid, does my hon. Friend agree that the principle that should now be applied is shoot first and answer questions later? Is it not time that we started looking at unilateral action, as we are now dealing with a crisis.

[Tom Blenkinsop]

I thank my hon. Friend for that comment and for reiterating a quote from the hon. Member for Corby (Tom Pursglove), who made exactly that point in a previous debate.

Before I get to business rates, the issues around Teesside and why SSI no longer exists, let me say that, in Teesside, we are next to the Durham coalfield, under the North sea, which could be gasified. Shale gas is coming to this country from America only because America does not have the capacity to retain it. America will stop exporting gas to this nation in five to 10 years, so we need our own gas supply. When we set that up, we need to sequestrate that gas to provide cheap energy and to remove the threat from green taxes. If we do that, we would create a renaissance of industry on Teesside and across the UK.

In relation to taxation on industry—quite apart from CPF, which is a British tax inflicted on its own industry—there are 17 English and Welsh sites that have business rate values of more than £1 million, 15 of which have outstanding rate relief applications still not answered. Since 2010, business rates for the steel sector have increased by 19% in England. Not one steel site has seen any rate relief yet. Let us compare that to the retail sector, which, in this financial year alone, has received £1.8 billion in rate relief. That is madness. That rate relief is paid for by the taxes of a steel industry that we are killing via the CPF and the lack of relief in business rates.

On the important matter of SSI, I want to ask the Minister a couple of questions. How long has the insolvency unit been monitoring what was happening in Redcar? She disclosed to me on the day of liquidation that it had been monitoring the situation for “many months”. Indeed, it anticipated that SSI, alongside other companies dealing with long products such as Caparo and Tata in Dalzell, Clydebridge and Scunthorpe, would “pop” in November. What were the red flags? Were they pensions, the lack of student loans being paid, liabilities—[Interruption.] Exactly, the Minister knew all of this, but when? At what point did it all start? What we need to know is whether it could have been pre-empted.

UK Steel Industry

Debate between Tom Blenkinsop and Stephen Kinnock

Wednesday 15th July 2015 Westminster Hall

[Tom Blenkinsop]

My hon. Friend is correct.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend mentioned business rates. As we know, the lack of investment in machinery and technology is a major reason for the United Kingdom’s productivity crisis. The steelworks at Port Talbot in my constituency invested £185 million in a new blast furnace, which led to a £400,000 increase in business rates. Does he agree that we need to have a business rates holiday until the review is completed at the end of 2015? It is urgent that we increase competitiveness and productivity.