(8 years, 6 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
16:09 - The House divided: - Ayes: 280 / Noes: 307 - Question accordingly negatived.
Mr Speaker
I advise the House that I have selected the amendment in the name of the Prime Minister.
Ms Angela Eagle (Wallasey) (Lab)
I beg to move,
That this House believes that the UK steel industry is of national strategic importance and should be supported by the UK Government; notes that the UK steel industry is in crisis and that the recent closure of SSI in Redcar has resulted in 2,000 direct job losses, with a further 1,000 contractor jobs lost and 6,000 jobs to be lost in the local supply chain, the announcement by Tata Steel that they will no longer produce steel plate at Dalzell, Clydebridge and Scunthorpe has resulted in 1,170 job losses, and that 1,700 jobs are at risk as Caparo Industries has gone into administration; recognises that for every direct steel job lost a further three indirect job losses will follow; further notes the vital importance of the steel industry to those local communities it serves, the proud industrial heritage of Britain’s steel towns and the very real threat to these parts of the country should the steel industry disappear; and calls upon the Government to take immediate action to protect the steel industry, including immediately implementing the Energy Intensive Industry Compensation Package, taking action with the EU Commission on antidumping measures, looking at temporary action on business rates, reviewing how regulatory frameworks impact the industry, and promoting local content and sustainability in procurement contacts, and for the Government to publish a full industrial strategy including what level of capacity the Government envisages is needed in the steel industry, so as to safeguard this vital strategic asset.
Labour has secured this debate because the British steel industry is in full-scale crisis, and before they were pushed the Government seemed unwilling to do anything practical about it. In the last three weeks, 2,220 employees in Redcar have lost their jobs, 3,000 on-site contractors have been laid off, and 6,000 further jobs will be lost in the local community. The hard closure of the site means the effective destruction of its steelmaking assets, including what was the second largest blast furnace in Europe. The Government’s refusal to help has effectively ended 170 years of steelmaking in Redcar, destroying specialist local skills and condemning the community to a bleak future. Tata Steel’s announcement about the closure of its long products business in Scunthorpe, Dalzell and Clydebridge has cost 1,170 jobs, and effectively ended steelmaking in Scotland. The news that Caparo Industries has filed for administration means that 1,700 more jobs are at risk across the country.
Alongside the tragedy of each job loss, and the ramifications for supply chains and local economies, there is a real worry that the UK’s steelmaking capacity is being sacrificed on the altar of laissez-faire economics by a Government who simply will not act to preserve our country’s strategic assets. Labour contends that steelmaking in the UK is an industry of national strategic importance and should therefore be supported by the Government.
Steel is important for UK manufacturing as it helps our balance of payments, and it is vital for our defence and security. If we are about to embark on the huge infrastructure investments that the Chancellor is so fond of boasting about, surely we should ensure that UK steel has every chance to compete and win those contracts. To do that, we must ensure that the UK steel industry still exists when those contracts come up for competition. As the industry has lurched deeper into this wholly foreseeable crisis, the Government have been quick to come up with expressions of sympathy, but noticeably reluctant to take any decisive action.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
My hon. Friend will be aware that concerns about the challenges facing the steel industry have been raised repeatedly in this House—I think there have been 10 debates—and there have been repeated questions, meetings, exchanges with officials from the Departments for Business, Innovation and Skills and of Energy and Climate Change, and others, for more than two years. Is she surprised, as I am, that it has taken until today for the Business Secretary to get on a train to Brussels and try to sort out this mess?
Ms Eagle
I certainly am surprised. If the Business Secretary needs an Opposition day debate to encourage him to do his job by going to Brussels and talking to the Commission after years of not doing that, we will secure more such debates and persuade him to do his duty, which he should have been doing in the first place.
Anna Turley (Redcar) (Lab/Co-op)
I was proud to secure a Backbench Business Committee debate on the crisis in the steel industry. It took place just one day before the Redcar steelworks paused production, yet we were accused by the Minister for the northern powerhouse of “showboating”. Does my hon. Friend think that that is an appropriate description for a parliamentary debate?
Ms Eagle
I was fairly astonished to read the comments from the Minister for what the Government call the “northern powerhouse”. He said that what has happened to Redcar was a “tragic distraction” from his work on the northern powerhouse—I had hoped that he would have seen it as part of his job to try to get the Government to take much earlier action to head off an entirely foreseeable occurrence.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend agree that the Chinese have not just started dumping steel but have been doing so for a long time?
Sir William Cash (Stone) (Con)
I lived in Sheffield for the best part of 30 years. Does the hon. Lady accept that the real decline in the steel industry started with the horrendous nationalisation of the industry by the Labour party? What steps have Labour Governments ever taken to restrict state aid in other parts of the European Union, and from countries such as Germany and others?
Ms Eagle
I suspect that the nationalisation of the steel industry took place before I was born, and we could have a history lesson on that. There are many examples of EU Governments who do a much better job at preserving their steel industries than this Government appear to have done so far.
Wayne David (Caerphilly) (Lab)
The House of Commons Library has produced a paper on European state aid. It states clearly that Germany, for example, gives more than twice the amount of state aid that is provided in this country. Moreover, a raft of indirect state aids are given in Germany, but this Government have decided not to do that in this country.
Lady Hermon (North Down) (Ind)
When this Conservative Government were considering devolving to the Northern Ireland Assembly the power to set their own corporation tax, they were exceedingly concerned that that would be a state aid and illegal under EU legislation. However, where there is a will there is a way, and within the Stormont House talks the Government have been able to devolve that power to set corporation tax. This Government should have the will to save the steel industry in this country, and ensure that such aid is not illegal under the state aid rules.
Geraint Davies (Swansea West) (Lab/Co-op)
On the EU helping out, does my hon. Friend agree that there is a strong case for carbon tariffs from the EU so that we do not displace clean steel produced in Britain with dirty steel produced in China and elsewhere?
Ms Eagle
My hon. Friend’s practical suggestion should be considered with great seriousness not only by the Government but by the EU.
The steel summit in Rotherham was convened only following the Backbench Business Committee debate, and it ended with more job losses and no significant Government announcements. Far from keeping the House informed as the crisis has unfolded, the Government have had to be dragged kicking and screaming to the House to answer urgent question after urgent question.
Steel is an energy intensive industry that inevitably results in extra costs being placed on it for environmental reasons, but the Government have the power to lower energy costs for steel producers through implementing the energy intensive industry compensation package immediately.
Ms Eagle
In a minute.
Despite being announced in the Chancellor’s autumn statement in 2011, the most substantial part of this package is still waiting to be implemented. Ministers admitted in a parliamentary question to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that they have not even bothered to raise the issue with the Commission in the last 12 months. It is clear that the Government have shown no leadership in Europe, and the Business Secretary is visiting the Commission for the first time today—better late than never I suppose, but what on earth has taken him so long? I welcome his visit, and I trust he will emerge from the Commission with some tangible progress—after all the foot dragging and inaction, it is about time he did.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The EU emissions trading system has already been compensated—that is an EU-wide market taxation system—and we are talking about the carbon price floor, which was introduced by the Chancellor. He did not consult industry or talk to the European Union, and he had to go to Brussels—well, we do not know whether anyone has gone there yet; we presume the Business Secretary is there today—to get compensation for a tax that this Government introduced unilaterally and without any consultation with industry. That is the issue. We are talking about a compensation package for a British tax.
Ms Eagle
My hon. Friend represents many constituents directly affected by the closure in Redcar, as does my hon. Friend the Member for Redcar (Anna Turley), and he demonstrates his knowledge of the problems faced by the British steel industry. It is a pity the Chancellor of the Exchequer did not acknowledge those problems when he came up with that policy.
David T. C. Davies
In the spirit of politeness, the hon. Lady and Opposition Members are absolutely right to raise this important issue, which affects many in my own constituency in south Wales. She mentioned environmental taxes. I have much sympathy with the point she is going to make, but does she not concede that it was her Government who brought in the environmental taxes in the first place?
Ms Eagle
The hon. Gentleman needs to demonstrate to his constituents that he is fighting for their jobs now. He needs to be putting pressure on his own Front Bench to have a proper strategy. This is a heavy industry, which is, by definition, energy intensive. The problem is that the Government do not have a strategy and are living hand to mouth trying to deal with a crisis they should have seen coming.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that there is no strategy across the country? For example, Govia Thameslink is about to have new trains built for 2018, for the Hornsey depot in my constituency, yet there seems to be no attempt to get it to purchase steel from our own steelmakers.
Ms Eagle
My hon. Friend comes up with yet another example of the lack at the heart of this Government. They do not seem to believe we should have an industrial strategy. Therefore, as these contracts come up, they seem to be living from hand to mouth without actually having a coherent and proper strategic approach to use the power of government procurement to try to preserve UK jobs.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend agree that there can be absolutely no doubt that the Conservative party does not believe in an industrial strategy? The Secretary of State for Business said in an article in the Financial Times not four weeks ago that he does not like industrial strategy. Does she not agree that that is an absolutely disgraceful statement for a Secretary of State to make?
David Mowat
The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is right: the carbon tax floor is a bad tax and a tax on manufacturing, but so, too, is it true that in every one of the five or six occasions in the previous Parliament when we debated energy prices, Labour Members voted for higher energy prices. In particular, in December 2012 they were led through the Lobby to vote for the accelerated closure of the British coalfields in advance of anything happening in Europe. The carbon price floor is a unilateral tax, because the EU abandoned the emissions trading system and left us acting unilaterally in this regard.
Julie Elliott
Does my hon. Friend agree that the carbon price floor was a tax introduced by the previous Conservative-led Government, and that it is an entirely revenue raising tax that does absolutely nothing to contribute to combating climate change?
Ms Eagle
Yes, I do.
Rather than hiding behind the European Commission, why do the Government not take action first on energy-intensive industry payments and get retrospective approval later? That is what Germany did with its Renewable Energy Act 2012. It provided support to producers of renewable energy from January 2012. It did not submit the Act for prior state scrutiny. It let the Commission investigate and then state aid approval was received in November 2014, two years after it had first provided support. Why can our Government not look after the interests of UK steel in the same way? It is hard to avoid the conclusion that the Government have been so slow to act because they have an ideological aversion to any Government intervention. We have a Secretary of State who will not let the phrase “industrial strategy” cross his lips.
We on the Labour Benches support international trade, but free trade must also be fair. China is currently responsible for a tsunami of cheap steel, which is being dumped on European markets. The UK should be at the forefront of demanding rapid and effective action to stop it.
Andrew Gwynne (Denton and Reddish) (Lab)
We are not just talking about the here and now, but the longer-term economic vision for the country. As sure as night follows day, the steel price will recover at some stage and we could find ourselves without a steel industry and be wholly beholden to other countries.
Ms Eagle
My hon. Friend makes an extremely important point. The steel industry is very cyclical in nature. During the hard times and the downturns, it is very important to try to act to preserve assets of strategic importance to our country, so that we can take advantage of the upswing and the recovery when it comes.
China is currently responsible for a tsunami of cheap steel products. Last week’s Chinese state visit is over and done with, so I hope the Business Secretary will be making the case in Brussels today that we should act rapidly to stop the dumping of Chinese steel products in Europe. The scale of the new Chinese imports and the speed of their arrival is staggering. Its surplus production is nearly twice the annual production in the entire EU, and it is increasingly finding its way here. Chinese rebar has grown from having zero presence in the UK market in 2013 to comprising 37% of it a year later. There are quality concerns with some imported Chinese steel. We also know that Chinese steel production causes more environmental damage than UK production, so it is a false economy to allow it to continue.
For both those reasons, action to tackle dumping is vital and long overdue. Perhaps the Minister can tell us, when she winds up, what she managed to achieve during her recent visit to China. I can tell her that both the leader of the Labour party and I raised this issue with Premier Xi and his delegation during the recent state visit to London. Did she raise it during her visit to China? If so, what are the Government actually going to do about the huge amount of imports and the dumping? When it comes to acting on China specifically, perhaps the Government should be less interested in selling off our nuclear industry and more interested in standing up for the strategic interests of the UK.
Standing up for British steel means standing up for the high-quality skills that have built some of the UK’s, and indeed the world’s, most iconic landmarks. British steel built Canary Wharf, the new Wembley stadium and Sydney Harbour bridge, and it will be building the Freedom Tower in New York. We should all be proud of what the UK steel industry has achieved, but the Government cannot treat it as some relic of the past; it has to be a vital part of our country’s future. That is why the Government must do more—much more—to see the industry through these tough times and prepare it to seize future opportunities. The Government should publish an industrial strategy for steel and be open about how they envisage maintaining the strategic steelmaking assets in this country during hard times. It is only firm action now that will guarantee any future at all for UK production.
I commend the campaign by the Daily Mirror, which is setting out daily the compelling case to save our steel. Just in case Ministers were in any doubt about the urgency, Gareth Stace of UK Steel has today described the industry as being like a patient on the operating table “likely to die” without help.
Community, the main steel union, has called for an urgent meeting with the Business Secretary because of the ongoing threat to jobs, as it has emerged that no representative of the workforce, be it Community, the GMB or Unite, has yet been invited on to any of the working groups set up after the steel summit. [Interruption.] The Minister says there is no need to invite representatives of the workforce on to these working parties. Ministers should meet the workers from steelmaking communities, including Teesside, Lincolnshire, Yorkshire and south Wales, who are lobbying Parliament to hear at first hand, as I have, the real cost of Government inaction.
The Prime Minister claims the Government are acting on procurement. Just yesterday, the Minister told the Business, Innovation and Skills Committee:
“I would say buy British because it’s quality.”
However, the inadequacy of the Government’s response was laid bare on the very same day, when it was revealed that the Government had just spent more than £3 billion on three new Royal Navy ships and 589 Scout specialist vehicles for the Army, which will use imported Swedish steel.
Mr Kevan Jones (North Durham) (Lab)
The Minister is a former Defence Minister, and her own Department announced this year the new £200 million icebreaker for the polar research undertaking. I tabled a question to the Minister for Universities and Science, who could give no commitment from the Business Department that the ship, which is being built at Birkenhead, would use British steel. Is that not a great example of where the Department could put its money where its mouth is?
Ms Eagle
I hope we can get some progress on procurement, not least from BIS, which is contracting out the icebreaker research vessel as we speak. Otherwise, all of this is a missed opportunity. The UK steel industry needs action, not good intentions. The Government need to act much more effectively on procurement, and if they do, we will support them, but we will judge them on the contracts awarded that guarantee a future for UK steel; we will not judge them on warm words or grand but meaningless press releases.
The Government should explore the scope for acting temporarily on business rates. Failure to act is not cost-free, as the hard closure at Redcar demonstrated. With redundancy costs and employment support of £80 million and on-site clean-up costs running into hundreds of millions of pounds, it might well be that in the long run strategic support is far better value than the cost of total closure.
Last week, the Business Secretary said that the Government would
“do everything within their power to support”
the industry, and he said to our steel communities:
“We will not abandon you now, in your time of greatest need.”—[Official Report, 20 October 2015; Vol. 600, c. 815.]
The Prime Minister had previously stated that the Government would
“do everything we can to keep steelmaking in Redcar.”—[Official Report, 16 September 2015; Vol. 599, c. 1046.]
The Government then abandoned the people of Redcar by refusing to mothball the plant and save the assets, which would have kept alive the possibility of a return to steelmaking in the future. In fact, the Minister said yesterday in evidence to the Select Committee:
“It needed that awful moment in Redcar to concentrate all political minds in Government”.
So, Redcar has been sacrificed and minds have been concentrated, and now we need to know what the Government are planning to do to safeguard the future of UK steel and what is left of our steel communities. In Redcar, Scunthorpe, Clydebridge, Dalzell and Rotherham, those facing uncertainty across the midlands and Wales—men and women who have spent years developing highly specialised skills but who now have to find alternative employment in local economies shattered by steel plant closures—are waiting to see how the Government intend to deliver on their warm words.
Ian Lavery (Wansbeck) (Lab)
We saw this happen in the coalmining industry: jobs went and people were asked to retrain. It is an absolute disaster. I welcome the £80 million, but Redcar, Rotherham and the other areas have high unemployment. We can train people as much as we like, but the jobs are not there. Does my hon. Friend agree that the money should be invested in keeping the steel industry alive, instead of closing it and trying to retrain people for jobs that are not there?
Ms Eagle
My hon. Friend speaks with much passion because he has been through this process with the coal community. It is easy for the Minister to dismiss the searing experiences that our coal communities went through following decisions taken by the last Tory Government, but I do not think she should.
Tom Blenkinsop
We have to talk about the £80 million. We now know that the statutory redundancy was part of it, so that brings it down to £50 million. The northern powerhouse Minister wrote to one of his constituents informing them that the last month’s payroll would be paid out of that money as well, so it is now less than £50 million. To date, I have not seen evidence of more than £3 million—for the 50 apprentices—of the money promised. At the Steel House meeting, on the same day as the liquidation, we were informed, in front of other agencies and the press, that the vast majority of the £80 million would be new money. I know, other Opposition Members know and the Minister knows that less than £50 million of that is potentially new money. I would like to see evidence of what money, where, for who and when.
Sir Greg Knight (East Yorkshire) (Con)
On a point of order, Madam Deputy Speaker. I apologise for interrupting the hon. Lady, but the deferred Division has less than 15 minutes to run, and the ballot papers have run out. There are no papers available to vote in the deferred Division. Could you tell us what you are going to do about this and whether you will extend the period of the Division beyond 2 pm?
Madam Deputy Speaker (Natascha Engel)
I thank the right hon. Gentleman for his point of order, but I am informed that this has now been sorted and that there are now ballot papers.
Toby Perkins
I apologise for interrupting my hon. Friend, who was obviously slightly reluctant to give way. She is making an incredibly important point. One of the things that will upset so many people who recognise the damage that will be done to their communities and the people left out of work is the sense that the Government have not done all they can. They see people in other industries in competitor nations around Europe being much better supported by their Governments. Does not the fact that the Secretary of State refuses even to show up for the debate demonstrate his contempt for steelworkers in our country?
Ms Eagle
I am always happy to give way to my hon. Friend, and I am not reluctant ever to listen to him. He makes an important point about other EU countries seemingly much better able and more willing to support their strategic industries. I believe that is because they do not have the ideological qualms that this Government have about the idea of an industrial strategy.
Why will our Government not show the same commitment? We need an active industrial strategy. We need a proactive and strategic Government, not a Business Secretary in thrall to an outdated economic theory and too eager to offer the Chancellor huge cuts to his Department in a bid to burnish his Thatcherite credentials and prepare for the leadership battles ahead. Last week, the Prime Minister claimed that the Government wanted a
“strong and viable steel industry.”—[Official Report, 21 October 2015; Vol. 600, c. 948.]
Now they have to tell us what they intend to do to secure it.
The Secretary of State for Wales (Stephen Crabb)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“is concerned by the impact that recent redundancies in the steel sector could have on local communities and welcomes Government support for affected people in those communities; recognises the unprecedented global challenges currently facing the UK steel industry and agrees that all parties, including Government, opposition parties and the industry need to work together to secure a sustainable future for UK steel; and notes that the Government is in regular dialogue with the industry, including hosting a recent Steel Summit, and is taking urgent action to address both the industry's short-term and long-term concerns, including energy costs, unfair trade, the Industrial Emissions Directive and long-term procurement opportunities for the industry so as to ensure that the UK steel industry has a sustainable future.”.
I should perhaps explain to the House that I am responding to this debate on behalf of my right hon. Friend the Secretary of State for Business, Innovations and Skills who is in Brussels right now having urgent and important discussions with European Commissioners to address the crisis that the steel industry faces all across Europe.
I wish to start by saying that I have total respect for constituency Members who represent steel communities and who have come here this afternoon to speak passionately and earnestly on behalf of the workers and their families who are affected by this crisis. What has been really disappointing about the debate so far is the way that the Labour party has tried to turn this into a political football. I look across at the Opposition Benches to the faces of Members who were here before 2010 and I do not recall a single one of them coming to this place and standing up to speak up for steelworkers during Labour’s term of office, when the number of steelworkers in the UK fell by a half and the volume of steel production fell by a half. I think, therefore, that the Labour party needs to show some humility on this issue.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. I think hon. Members need to calm down a little. If the right hon. Gentleman is not giving way, Members must sit down. If he is giving way, he will say so.
Stephen Crabb
I am happy to give way to the hon. Member for Penistone and Stocksbridge (Angela Smith).
Angela Smith (Penistone and Stocksbridge) (Lab)
I thank the Secretary of State for giving way. I was in this House from 2005, and Labour Members repeatedly made representations to the then Prime Minister, who listened to what we had to say. Before 2010, we did not have the carbon price floor. It is now damaging the steel industry significantly and this Government are doing nothing about it.
Stephen Crabb
I am not going to engage in a tit-for-tat on this. Let us just say that the record of the previous Labour Government on steel and on manufacturing was not a stellar one.
David T. C. Davies
Does my right hon. Friend agree that Labour Members ought to do him the courtesy of listening to what he has to say? Does he agree that it was they who started bringing in the carbon taxes that have caused problems for manufacturing and that it is this Government who have tried to hold those taxes down?
Stephen Crabb
As we debate this crisis today, we rightly make the thousands of workers in the steel industry and their families, who have faced devastating news about their jobs, and the many more who are working with the cloud of uncertainty hanging over the industry at this time, the central and primary focus of our concerns. When an individual loses their job, the pressures it creates can be a tragedy for their family and themselves. When whole communities are affected by large-scale job losses, the impact can be devastating—I completely recognise that.
Nic Dakin (Scunthorpe) (Lab)
I am pleased that the Secretary of State is now looking forward, because I, along with my colleagues on the other side of the House, have been talking about the needs of the steel industry in our community since being elected to Parliament in 2010. We need to look forward together and work together to build a better future. It just so happens that it is his Government who can make decisions now, not anybody else.
Stephen Crabb
I completely take the hon. Gentleman’s points and I pay tribute to the work he does on behalf of his constituents.
Andrew Percy (Brigg and Goole) (Con)
I wish to make a similar point to that made by the hon. Member for Scunthorpe (Nic Dakin). Although the Secretary of State is right to point out that the steel industry halved under the last Labour Government, does he agree that it would be a cruel deception for anybody to suggest that the solution to this crisis is wholly in the hands of any one Government, be they the British Government or even the European Union? Does he also agree that the best way forward is to have as much political consensus as we can across the House, just as we do in north Lincolnshire? That is the only way of ensuring that we do as much as possible at the national level and at EU level to deal with a crisis where, sadly, many of the factors are outside the control of any of those Governments?
Stephen Crabb
My hon. Friend makes an essential point about two things: the global nature of the crisis, which I shall discuss a little further during my remarks; and the need for political consensus, where it is possible. Opposition Members and Conservative Members who know me from Wales know that that is exactly the kind of approach I like to take, but it does require two sides to play—
Several hon. Members rose—
Stephen Crabb
I will take one more intervention and then I will make some progress.
Emma Reynolds (Wolverhampton North East) (Lab)
Jobs in my constituency are at risk at Caparo in Wolverhampton. I am asking, on behalf of the people there: when did the Government first see the signs of this crisis? Why has it taken them so long to do something about it? Those are the kinds of questions that my constituents are asking, because their jobs are at risk. This is not a party political thing; this is a practical thing about job losses that may be happening in my constituency and elsewhere.
Stephen Crabb
There is continuous engagement with the steel industry and there has been for a long time; we have been discussing concerns with the industry since the beginning of the coalition Government in 2010. A Labour Member made the point earlier that this crisis has been around for a long time, but the phenomenon that the hon. Member for Wallasey (Ms Eagle) described as a “tsunami” of cheap Chinese steel is very recent, and it has completely changed the global dynamics of the steel industry.
Several hon. Members rose—
Stephen Crabb
I am not going to take any more interventions for the time being.
The steel industry across Europe and around the world is in the midst of a crisis, the magnitude of which has not been seen in at least a generation. Chronic global overcapacity has squeezed prices to the extent that the price of certain products has halved in recent times and is expected to fall further still. European demand is still about 30% below pre-crisis levels. The Chinese economy, which has until recently been the driver behind global steel demand, is slowing down. The world is awash with cheap steel looking for markets. For some products, cheap Chinese imports have gone from accounting for 0% of the market to representing 37% of the UK market share within 18 months—that is an extraordinary growth in a very short period. Chinese steel exports roughly doubled between 2011 and 2014. That is the extremely challenging backdrop to the current crisis facing our steelworkers. It has been described as a “perfect storm” in terms of the configuration of different events and phenomena that are affecting the global steel industry, but that is why the Government remain absolutely committed to doing everything in our power to support steelworkers across Britain in the weeks, months and years ahead.
Geraint Davies
Does the right hon. Gentleman accept that giving the contract on HS2 to the Chinese will increase the probability that they will use Chinese steel? Moreover, if we had given that contract to a British consortium, those companies would have paid British corporation tax, British national insurance and British income tax, and they would have supported British supply chains and built British capacity for the future. Is not his laissez-faire approach, which has neglected British steel and British industry, at the root of this problem—or a large part of it at least?
Stephen Crabb
Forgive me for saying so, but the hon. Gentleman makes a slightly confused point. The investment going into the rail industry is creating opportunities, now and in the future—huge opportunities for the UK steel industry. The Government are determined to help the UK steel industry take advantage of those investment opportunities.
Stephen Crabb
I will take an intervention later.
We are providing support for those communities and families who have been affected by recent announcements. In Redcar, we have outlined a support package worth up to £80 million. We are working with the local taskforce we have established to develop proposals to support the individuals, the local economy and the supply chain. It is worth making the point that this is not a Whitehall, top-down solution; our commitment is to work with local partners to develop the right solution for those workers, their families and the communities. In Scunthorpe, we have set up a local taskforce to look at what needs to be done to support those affected and the local economy. Funding of up to £9 million has been provided to the Scunthorpe taskforce—
Mr Kevan Jones
On a point of order, Madam Deputy Speaker. I thought we were having a debate on steel today, but what we have is a Minister just reading out a civil service brief to the House. It is an absolute insult that he will not take any interventions. I know that BIS is not his own Department, so he might not understand the subject but surely the Government should have sent somebody who knows something about the subject rather than someone who is simply reading out what the civil service has given him.
Madam Deputy Speaker (Natascha Engel)
I think the hon. Member has put his point on the record. Let the Secretary of State continue.
Stephen Crabb
Madam Deputy Speaker, the hon. Member for North Durham (Mr Jones) was one of those Members I mentioned earlier who were here before 2010 and sat in silence while employment and manufacturing plummeted and UK steel production plummeted.
Moving on, we are also supporting the Scottish Government’s taskforces in Dalzell and Clydebridge. We will work with them and also continue to monitor the situation in the black country to make sure that necessary support is provided for communities and families affected by the Caparo Wire announcements.
The House understands that there are no easy solutions in the face of what are, unquestionably, incredibly difficult market conditions right now. Excess capacity in global steel is enormous—about 570 million tonnes last year, almost 50 times the UK’s entire annual production. The price of steel slab has fallen by a half in the past year alone, while fluctuating exchange rates have added further pressures.
Tom Blenkinsop
The right hon. Gentleman makes an interesting point about production, but what we have in the home UK economy is 3 million tonnes of scrap steel, which we export to Turkey and China, and it comes back here in slab. Will the Government look at developing a potential strategy for electric arc furnaces on sites such as Redcar to use to create a new home market to supply the British market rather than exporting to Turkey and China?
Stephen Crabb
That is a useful and constructive point. It is, of course, the model that Celsa Steel uses in Cardiff. At the moment, we are looking at all aspects of the steel industry to identify future growth opportunities.
Mr David Hanson (Delyn) (Lab)
The Secretary of State talks about what he cannot do, so can he talk about what he can do, which is in the area of procurement? What proposals do the Government have to procure British steel products in the next 12 months to keep this business open and flourishing?
Stephen Crabb
I am coming on to exactly those issues. We all have to acknowledge and be honest about the fact that there are limits to what we can do in response to the economic realities facing the steel industry. I see Opposition Members shaking their heads, but I make the point again—they need to step back and be honest about the realities of a global steel crisis that is affecting steel manufacturers across north America and all across Europe.
Nick Thomas-Symonds (Torfaen) (Lab)
I grew up in a steel-working family and have constituents who work in Llanwern. Will the right hon. Gentleman accept what is being said to me—that there is not an acceptance that the Government have done enough? There are social as well as economic consequences. There are huge problems in the global steel industry currently, but is this not the very moment for protecting our foundation steel industry and keeping it for the future?
Stephen Crabb
I do not disagree with the hon. Gentleman’s point. That is exactly why my right hon. Friend the Business Secretary is talking to European Commissioners right now and exactly why we have set up a programme of working groups to look at all aspects of how the UK steel industry functions to identify future growth opportunities and help the UK industry to take advantage of them. Where we can, we want to protect, as the hon. Gentleman describes it, the foundation of a strong UK steel sector.
We cannot influence the price of steel and we cannot fix foreign exchange rates. The rules governing state aid to the steel sector are very strict. The UK steel industry signed up to those state-aid rules for a very good reason: the rules help secure a level playing field for UK steel within Europe. Within those strictures, we have done—and we are doing—all we can to help the steel industry at this very difficult time.
Mr Peter Bone (Wellingborough) (Con)
I am grateful for the way in which the Secretary of State is conducting his speech and not making party political points. That is good news.
On this specific point, the Government believe they can introduce compensation; the Prime Minister said that from the Dispatch Box today. If we believe that is within state-aid rules, let us just get on and do it—even if the European Union says no. We can worry about that consequence afterwards.
Stephen Crabb
We are pushing for a quick decision on the state-aid decision. Labour Members have referred to the German example. I have looked at it: Germany had a pre-existing scheme set up. When the new state-aid rules kicked in, that prevented other European countries from implementing a scheme on their own prior to seeking state-aid rules. That is why we have gone to get state-aid approval prior to bringing forward the compensation package.
Stephen Crabb
The hon. Gentleman represents a steel constituency, so I give way to him.
Stephen Doughty
The Secretary of State is well aware of these issues, as I raised the issue of state-aid clearance with him and Celsa on 11 November last year. Will he confirm whether the state-aid clearance for the steel industry, which the Government say has been a top priority, has actually been at the top of the UK Government’s state-aid clearance priorities at any point in the last 12 to 24 months—and is it now? It is all very well talking about what the Secretary of State is doing today, but has that been at the top of the priority list for the last 12 months?
Stephen Crabb
We have absolutely been pushing for state-aid clearance on this. It is really important. As my right hon. Friend the Prime Minister made clear today, as soon as that state-aid clearance is given, we will start paying the compensation to steel companies. It is worth pointing out that we have already paid out £50 million to a number of steel companies to compensate them for additional energy costs arising from environmental and climate change policies, a lot of which were imposed by a previous Labour Government.
Several hon. Members rose—
Stephen Crabb
We are taking action to tackle unfair trading practices. We have already supported and voted for the renewal of anti-dumping measures at an EU level and lobbied for an investigation into cheap imports of reinforcing steel bar. We lobbied the EU because the steel industry raised its concerns with us; when the industry provides us with evidence, we act on its behalf. We will continue to do that by pressing the European Commission for firmer, faster action against unfair trade practices, and that is exactly what my right hon. Friend the Secretary of State for Business, Innovation and Skills is doing at this moment in Brussels.
David Mowat
A few moments ago, my right hon. Friend referred to the pre-arrangements in Germany, by which its steel industry pays 4p for a unit of electricity and its consumers pay between 10p and 15p a unit. That was pre-arranged, but it cannot be right that the state-aid rules do not apply to those circumstances, while everything we try to do falls foul of those rules. That simply cannot be right; it may well be an EU rule, but it is not adequate.
Stephen Crabb
I agree with my hon. Friend about the price differential. We recognise that very significant differential, and we are determined to take action, but I do not agree that we fall foul of state-aid rules all the time. We are committed to doing what we can within the rules, to which not just the British Government but the UK steel industry have signed up.
Sammy Wilson (East Antrim) (DUP)
If we go down the road of looking for EU approval for changes to state-aid rules, does the right hon. Gentleman accept that the situation will not be resolved quickly? When it came to corporation tax in Northern Ireland, it took four years, and when it comes to the aggregates levy, we are still fighting on the issue after eight years. Does he accept that by the time the EU gets round to making a decision, the steel industry is likely to be well gone?
Stephen Crabb
I do not accept that the European or the British steel industry will be “well gone”, to use the hon. Gentleman’s phrase, but I think he is right when he talks about the length of time it takes to get state-aid clearance on these issues. This is one aspect of the overall issue that we are pushing for. My right hon. Friend the Minister for Small Business, Industry and Enterprise has had some discussions about this herself. This is a matter on which we are determined to take action—and not with respect only to the issue of state-aid approval that we are seeking at the moment, because we are concerned about the overall process for speeding up state-aid applications generally.
My right hon. Friend the Prime Minister discussed this issue with President Xi of China during the important state visit last week. President Xi recognised the UK’s concerns and will be taking action to address Chinese overcapacity. The working group on international comparisons in the steel industry, chaired by the Minister for Small Business, Industry and Enterprise, met last week and is looking at how we can speed up cases within the EU by working with other member states facing similar issues and working with the industry to speed up its provision of evidence on dumping, which would mean that we could then take action.
Stephen Crabb
Secondly, we are addressing the impact on intensive energy users such as the steel industry of policies to reduce the negative impacts of climate change.
As I said a moment ago, we have already given more than £50 million of support to the steel industry. We were the first EU country to pay compensation for indirect costs of the EU emissions trading system to energy intensives in 2013, we started to pay compensation for the costs of the carbon price support mechanism as soon as the European Commission gave state clearance in 2014, and we exempted the metallurgical industry from the climate change levy in the same year. As my right hon. Friend the Prime Minister has announced, we will provide further compensation for climate change policies, with payments starting as soon as state aid is approved and continuing throughout the current Parliament.
Andrew Gwynne
We must remember that behind all this are communities, and individuals living in those communities, who are facing a very uncertain future. Will the Secretary of State take this opportunity to dissociate himself and the Government from the views of his noble Friend Lord Heseltine, who has said that now is as good a time as any to lose a job? Is it not time that he found himself a different job too?
Stephen Crabb
I have no idea what comments the hon. Gentleman is referring to, but I do know that the noble Lord whom he mentioned has a track record of regeneration, winning support for UK industries, selling UK plc around the world and driving up growth in some of the most deprived parts of the UK to which not a single Labour Member could aspire.
All energy-intensive industries will benefit from the compensation at the earliest opportunity, and we are working with the Commission to gain approval quickly for proposals to provide additional relief for the impact of indirect low-carbon energy policy costs. The Business Secretary spoke to the Commissioner last week, and, as I said, he is in Brussels again today to make the need for urgency clear to our colleagues there. Once they are in place, these measures will save energy-intensive industries such as the steel industry hundreds of millions of pounds over the next five years.
Thirdly, we are determined to drive up the number of public contracts won by UK steel manufacturers and their partners through fair and open competition. In the last Parliament, we successfully renegotiated EU procurement rules to allow wider social and economic considerations to be taken into account, and we were the first country to put those new rules into action in February 2015.
We have identified more than 500 infrastructure projects and programmes, valued at over £400 billion and listed in National Infrastructure Pipeline, to help the industry to plan for and win contracts. Those contracts include Crossrail, which we are building with more than 50,000 tonnes of British steel, and HMS Queen Elizabeth, for which Tata provided 40,000 tonnes. We are currently embarking on the biggest programme of investment in our railways since Victorian times. Network Rail’s £38 billion, five-year investment and replacement programme includes demand for British steel worth billions of pounds, and Network Rail sources 95% of its steel from the UK.
Stephen Crabb
I will give way one last time, because I know that the hon. Gentleman likes talking about these issues.
Mr Jones
I thank the Secretary of State for finally giving way. The Department for Business, Innovation and Skills is sponsoring a £200 million contract for a new polar research vessel. I know that his Department is not involved, but can he guarantee that the ship, which is to be built in Birkenhead, will be produced with British steel?
Stephen Crabb
As I think the hon. Gentleman knows, I have had no sight of the details of that issue, but I shall try to find an answer for him by the end of the debate.
The steel procurement working group chaired by my right hon. Friend the Minister for the Cabinet Office met representatives of UK Steel last week to work out what steps need to be taken to ensure that Government projects use as much British steel as possible, and that includes considering the feasibility of more central procurement.
On 16 October, we hosted a summit with the key players from the UK steel industry to discuss where more progress could be made. The summit, which brought together industry leaders, trade unions, Members of Parliament and senior figures from the Government, created a framework for action that will help us to support steelworkers now and in the future. Progress needs to be made quickly, but we also need to find the right solutions rather than just rushing into action.
Several hon. Members rose—
Stephen Crabb
We have working groups from the summit who will now supply evidence and recommendations to the Department for Business, Innovation and Skills. The subjects will include driving up the number of public procurement contracts won by UK steel manufacturers, the lessons that can be learnt from other countries in the EU and beyond—
Several hon. Members rose—
Stephen Crabb
—and what more the Government can do to boost productivity and help steel manufacturers to cut production costs.
Stephen Crabb
The UK’s steel industry is part of the foundation of many of the nation’s great, world-beating supply chains—
Madam Deputy Speaker (Natascha Engel)
Order. The Secretary of State has indicated that he is not giving way. Shouting “Minister!” from a sedentary position is not going to help anyone.
Let me also say that Members who are included in a very long list of speakers and who make constant interventions will not be called. We shall not be able to fit everyone in as it is, but if the interventions are kept to a minimum, we may have a chance of getting a little way down the list.
Stephen Crabb
This is a very important debate, and loads of Members want to speak in it. I think that I have been quite generous with interventions, and I shall now bring my remarks to a close.
As I was saying, the UK’s steel industry is part of the foundation of many of the nation’s great, world-beating supply chains: automotive, aerospace, construction and energy, to name just four. The Government therefore remain committed to a healthy and growing steel industry in the UK. That is essential if we are to increase productivity and thereby raise standards of living for everyone in the country. However, during what is an extremely difficult time for the UK steel industry, we must do as much as we can to support the families of those affected by these changes, as well as supporting the UK steel industry, here and abroad, so that it can compete on a level playing field.
Madam Deputy Speaker
Before I call the hon. Member for Livingston (Hannah Bardell)—on whose speech a time limit will not be imposed—I must inform Members that there will be a time limit of four minutes for Back-Bench speeches. I hope that that will enable us to get everyone in.
Hannah Bardell (Livingston) (SNP)
I am pleased that, following last month’s Backbench Business debate, we have a further opportunity today to discuss the challenges facing the steel industry in the United Kingdom. Let me say at the outset that SNP Members will support the motion.
Since last month’s debate, more challenges have arisen than solutions have been implemented. The global pressures that triggered a series of recent announcements on job losses at UK steel plants have been apparent for a number of months and have been emerging for considerably longer, but the Government have been slow to act with our European partners. In the light of these announcements, the steel industry has been clear and united in its requests for Government assistance, but the Government have been flat-footed for too long. I welcome some of their very recent progress, but the timely delivery of what they have promised is key. I hope that today’s debate will offer them another opportunity to set out, in detail, the measures that they will take immediately to protect threatened jobs and support the continuing industrial production of steel in the UK, and also to provide a timeline for the delivery of that support.
Last week, Tata Steel announced its intention to consult on the mothballing of its Dalzell—Members should note the pronunciation of that; I was glad to note that Conservative Members managed to pronounce it correctly—and Clydebridge facilities, with the potential loss of 270 Scottish jobs. Each one of those jobs supports a further three in the wider economy, which serves as a reminder that closure of the two facilities will be felt not just locally, but much further afield. I intend to allow my hon. Friends who represent the communities involved to speak at greater length about the impact of last week’s announcement, but let me just say this: if there is to be a future for the industrial production of steel in Scotland, the lights at those plants must not go out.
The commitment from the SNP and the Scottish Government is clear. We will work relentlessly, and resolve to do everything in our power, to keep Dalzell and Clydebridge open. I am pleased, therefore, that the Scottish Government have assembled a cross-party, multi-agency Scottish steel taskforce, and that our First Minister has visited both sites affected. All members of the taskforce will work to explore a future for the facilities—and, unlike the Conservative party, I can say that that includes the trade unions.
I also welcome the commitment from Tata Steel to work with the Scottish Government to find an alternative operator. The plants at Dalzell and Clydebridge are powerful assets, with a labour force who are highly experienced in the processing of steel for use in military products as well as in the offshore oil and gas industry. The economic climate may be challenging, but I am confident that my colleagues in the Scottish Government and their agencies will do everything in their power to protect jobs and see production continue.
Hannah Bardell
I would like to make some progress.
Wherever the endeavour to save these plants may lead and whatever the outcome, our first consideration will always be the affected communities. Every job lost and every single redundancy tells its own personal story. For the communities of Motherwell and Cambuslang, which have been home to the facilities for generations, the news could not have been more devastating, and the workers and families face a very anxious and uncertain time ahead. Modern apprentices starting their careers face losing the opportunity to learn a trade in an industrial setting. Workers who have dedicated 30 years and more to these plants face losing their livelihoods and a nation faces losing a key part of its industrial heritage. I am conscious that these emotions are being felt not just in Scotland, but across the communities of south Yorkshire, the west midlands and Scunthorpe, all of whom have been subject to similar announcements and job losses at steelworks. On behalf of my hon. Friends on the SNP Benches, I express our solidarity with those workers across the UK who have an uncertain future ahead of them.
The primary challenge to Scottish, English, Welsh and, indeed, European steel is a common one. As the OECD has identified, excess global capacity is expected to widen to 645 million tonnes above demand this year. Much of that has been driven by rapidly expanding Chinese steel production. Although that production predominantly met domestic demand at the outset, since 2010 China has been a net exporter of steel. Since 2013 a near-collapse in domestic demand for steel in China has led to a dramatic increase in Chinese steel exports. Indeed, Chinese steel exports are likely to exceed 100 million tonnes this year. If we are to see a correction of global supply, it will be largely incumbent upon China to reduce capacity. In China’s case, that might need to be by as much as 30%, some way above its current target of a reduction of 80 million tonnes of overcapacity by 2017.
Hannah Bardell
No, as many Members wish to speak in the debate.
European-produced steel is unable to compete with such alternatives. As an illustration, according to recent data from the Steel Index, European-produced domestic hot-rolled coil at €415 a tonne is at a €53 premium compared with export prices from China. The presence of excess Chinese steel in European markets requires urgent redress, and I welcome the attention paid by the European Commission to the issue over the past year. There is some evidence that the anti-dumping duties are having some success, and there may well be a case for further action. I urge the Government to participate fully with our European partners in co-ordinating what that further action might be. However, in this endeavour I would also encourage the Government to consider carefully the impact of further anti-dumping duties on the global price competitiveness of European-produced steel.
I was pleased to note that the Secretary of State for Business, Innovation and Skills has belatedly recognised the importance of working with European partners to address the issues of dumping and overcapacity. Today’s press release from his Department triumphantly announces:
“Business Secretary to put steel top of Brussels agenda.”
While I would not wish to rain on the Secretary of State’s parade, I am sure that when he arrives in Brussels he will find the EU Commissioners quite well-versed, given that they have been taking action on these issues for over nine months. I had also hoped, given the impact on the Scottish steel industry, that the Secretary of State might accede to the request from the Scottish Government to be represented at the discussions in Europe today, and I am disappointed that the Scottish Government have once again been frozen out of fighting Scotland’s corner.
Mr Kevan Jones
On a point of order, Madam Deputy Speaker. I note that the Secretary of State has now left the Chamber. I might be an old-fashioned fuddy-duddy, but I thought there was a convention that a speaker should stay for at least the next two contributions before leaving the Chamber.
Madam Deputy Speaker (Natascha Engel)
The hon. Gentleman is absolutely right, but the Secretary of State has just told me that he has popped out to do some media and is coming straight back again. [Interruption.] As I said, the hon. Gentleman is correct, but the Secretary of State approached the Chair on this, and I said it was fine, and there is a Minister listening. At the end of the day, it is the Secretary of State’s choice.
Madam Deputy Speaker
Order. I think we have dealt with this. I call Hannah Bardell.
Hannah Bardell
Thank you, Madam Deputy Speaker. Not only is there disrespect in Europe; there is disrespect in this Chamber. Members on the SNP Benches and people across Scotland may well ask what of the much-lauded respect agenda.
On Government support for the industry, we welcome the positive developments over the last week and welcome the Government’s commitment to the implementation of an energy compensation package to bring down the cost of energy to that enjoyed by rivals, the reduction of business rates in line with those of competitor countries, and more time to meet directives on emissions. I would, however, echo the note of caution from Gareth Stace, director of UK Steel, who told the Business, Innovation and Skills Committee yesterday that
“time is not on our side”.
The issues facing the industry in the UK are pressing and I would encourage the Government to outline today when they will bring forward promised measures to pre-empt any further damage to the UK industry or to jobs. These measures will, of course, be short-term support for the industry to weather what is a tumultuous period, but continuing industrial steel production in the UK in the long-term will not be ensured by a business rate cut here, a delayed emission deadline there or prolonged protectionism from the European Commission.
The Clydebridge steelworks that has been designated for mothballing first opened in 1887 as a giant of industrial Scotland. The steel plates it made were used in many of the most famous ships ever built—the Lusitania, the Mauretania, the Queen Mary and the Queen Elizabeth. The Dalzell works can trace its history to the 1870s. Scotland once had a proud and distinguished industrial heart, but I fear that for much of the latter half of the 20th century Scotland’s industrial story became one of decline.
This idea is encapsulated in a seminal hit—[Interruption.] Hon. Members should listen because I am making an interesting point. This idea is encapsulated in a seminal hit by one of Scotland’s favourite bands, The Proclaimers —if any Members do not know them, they should listen. “Bathgate no more”, goes the lyric, as the Leyland plant closed in 1986; “Linwood no more” as Hillman cars factory closed; “Methil no more” as the fabrication yards that assembled the North sea’s greatest rigs closed. My own grandfather spent a good part of his career at Leyland in Bathgate and I do not want a new generation of Scots to pen songs describing further decline in Scottish industry.
For the time being, the economic powers that Scotland needs to reindustrialise for the 21st century remain with Westminster, but successive Westminster Governments of all colours do not boast a proud record on stewardship of Scotland’s industry. I implore the Government to work with the Scottish Government to enable the development of a coherent, visionary industrial strategy for Scotland. What a refreshing change it would be to be able to help our industry thrive and not just survive, to innovate, to compete and to succeed, rather than stepping in and picking up the pieces when the jobs are lost and the damage is done.
I will conclude my comments the way I started them: by paying tribute to the workers, their families and the communities affected. We salute their resoluteness in this period of adversity. We stand with them in solidarity as they face uncertain and anxious times, and we on these Benches want to reassure them that the SNP Scottish Government will leave no stone unturned in seeking to keep Scotland’s steelworks open and Scottish steelworkers in jobs.
James Morris (Halesowen and Rowley Regis) (Con)
Metal runs through the heart of the black country and the west midlands. On a personal note, my grandfather worked as a forger in the Halesowen steelworks after the second world war. He had an industrial accident there in 1947 and was not able to work again after that, so I know in the blood of my family the difficulties often faced by people in steel communities.
Last Friday I took part in a midlands steel taskforce group, which had been set up by Beverley Neilsen, director of the Institute for Design and Economic Acceleration at Birmingham City university, following the collapse of Caparo into administration across the west midlands, and I was pleased to see that there was cross-party representation at that meeting, as well as representatives of business and local chambers of commerce.
Caparo went into administration for complex reasons. Over a long period of time there have been financial difficulties in the Caparo group. It has been heavily debt-laden since a refinancing deal it did in 2008-09, so not all the Caparo problems are related to the issues of the global steel market. However, jobs are at risk in Cradley heath in my constituency and other areas of Sandwell and across the west midlands, and we need to do whatever we can to help these companies and those people whose jobs are at risk.
At the midlands steel summit that I attended on Friday, we discussed a number of the immediate, short-term steps that we should consider in relation to Caparo. There was a strong argument for setting up a Caparo in administration task group to work with the administrators of the Caparo group. After speaking to the administrators on Friday, it became clear that there were a number of profitable, high-quality businesses in the Caparo group, in the high-tech, high-end engineering sector, that would be able to find buyers. I understand that the administrators have had about 45 representations about acquiring certain parts of the group.
We also need to take action in relation to the impact of Caparo’s collapse into administration on the supply chain across the west midlands. I understand that some small and medium-sized companies were not expecting the group to go into administration and have been suffering cash-flow difficulties. We also need to identify as early as possible those companies that will be at risk, so that we can determine how their skilled workers might be able to find other work quickly. Manufacturing in the black country has been doing very well over the past two and a half years, and there is demand in the area for high-skilled workers, but we need to have a strategy in place around that. Steel plays an important part in the west midlands manufacturing supply chain, and there could be an impact on companies such as Somers Forge in my constituency.
There is no easy solution to the present problems. We need to take short-term action in relation to Caparo, but we also need to take action on energy costs and Chinese dumping. There may be no easy solutions, but there are things that the Government are doing—and should continue to do—to mitigate the problems of the Caparo administration in the short term and to re-establish the steel industry and protect the supply chain in the west midlands in the long term.
Mr Iain Wright (Hartlepool) (Lab)
Like the hon. Member for Halesowen and Rowley Regis (James Morris), I have a Caparo steel factory in my constituency. The 200 workers there are obviously facing troubled times, and it is vital that, as part of the wider steel strategy, we look into the issues affecting them.
Yesterday, we on the Business, Innovation and Skills Select Committee held an evidence session on the state of the steel industry. I am grateful to all the expert witnesses who came along and gave their fantastic evidence. Let me start with the positives. It was welcome to hear the Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry) tell the Committee that she considered the UK steel industry to be of strategic importance and enormous value to British manufacturing. Her predecessors in that post would not have said that. I fear, however, that others in Government, including the Prime Minister, the Chancellor and the Business Secretary, do not necessarily feel the same way. Therein lies the problem. We need that strategic priority in the light of the challenges facing the industry.
The UK steel industry is in grave crisis. All the expert witnesses yesterday said that they could not recall a more serious time for the survival of their industry. Since the summer, a fifth of the workforce in the UK steel industry have either lost their jobs or are at risk of doing so. The tragedy of job losses for the individual steelworkers, their families and their communities is immense, but the loss of the skills, the capability and the competitiveness in such a strategic industry will affect British manufacturing for decades. Gareth Stace, director of UK Steel, gave us a vivid description of the situation yesterday. He told us that the industry was like
“a patient on the operating table. We are bleeding very quickly and unless it’s stopped very soon we are likely to die”.
Richard Fuller (Bedford) (Con)
On that point, has the hon. Gentleman been struck by the relative slowness of the European Union’s response to Chinese dumping, compared with the speed of the response of the United States?
Mr Wright
I thank the hon. Gentleman for his comment, and I will come to that in a moment. He is a fantastic member of the BIS Select Committee, and he was incredibly supportive yesterday.
This is not necessarily a question of the Government waving a magic wand. Global forces are affecting the steel industry. I am not suggesting that the UK Government have a disproportionate influence over what is happening in the global steel industry, but there are things that they can do. The Minister rightly said that she saw steel as a strategic industry because it acts as a foundation for many other parts of the manufacturing value chain. I agree with her on that. A modern steel industry is at the heart of a dynamic and innovative economy.
I would suggest that the role of the Government is to level the playing field for British-based steel makers and ensure that they do not face costs and pressures that our competitors do not face. The role of the Government is also to go out and bat for the British steel industry on the European and world stage. Alas, it emerged clearly from our Select Committee inquiry yesterday that, despite their warm words, the Government have been slow and reactive and that, despite their protestations, they have not prioritised the steel industry in a way that its strategic importance requires.
The Government have been exposed as having been left baffled and battered by the forces affecting global steel. That is perhaps inevitable, given the scale and gravity of the challenge, but it is a challenge that the industry has been raising with Ministers for some time. Plant closures and the loss of jobs, steelmaking skills and capacity could have been lessened had the Government been more on the front foot and responded more swiftly.
I have enormous respect for the Minister, but she sounded like Elvis Presley in the Committee yesterday when she told us that she wanted a little less conversation and a little more action, please. Her words were welcome, but it became abundantly clear that, in the main, words are all we have. Words are not going to save the British steel industry.
At the steel summit on 16 October, we were provided with an excellent analysis of the state of the industry from its representatives. We were provided with a clear and achievable five-point plan on factors such as energy costs, business rates and local content in procurement projects. However, that analysis was nothing new. It has been known about for weeks and months, if not years. The Government were familiar with the asks from industry long before 16 October, so why was urgent action not taken sooner in such a strategic industry?
The Minister’s insistence on a change in policy on voting in Europe on dumping is welcome, but why did industry tell us yesterday that we in the UK were out on a limb in Europe in not acting in a co-ordinated way on cheap Chinese imports? In response to the hon. Member for Bedford (Richard Fuller), he will recall that the Select Committee was told yesterday that an astonishing 94% of all the cheap Chinese steel coming to Europe comes to Britain, at a time when our domestic industry is dying. We have put up the white flag for our steel industry in response to the Chinese red flag. That is not appropriate.
We have been left in no doubt about the gravity of the situation. We may not even have reached the bottom of the job losses and plant closures. It is not too melodramatic to measure the survival of the British steel industry in weeks rather than decades. We do not have time to reflect or reassess; the Government have to move from warm words to action, and they have to do it now.
Andrew Percy (Brigg and Goole) (Con)
It is a pleasure to follow the hon. Member for Hartlepool (Mr Wright). I do not agree with the last 30 seconds of his speech, but otherwise I could not put a cigarette paper between him and me. I voted for him to be Chairman of the Business, Innovation and Skills Select Committee because he knows how to do this. I apologise if I told anyone else that I was going to vote for them—I tend to tell everyone that—but I actually voted for him. I cannot disagree with the way in which he has just put the case for the UK steel industry. As I said in an earlier intervention, taking the politics out of this is the way to do it. There are things that the Government can do, and things that they cannot. In fairness to the hon. Member for Livingston (Hannah Bardell), she said the same thing. Not everything is in the hands of the UK Government, and the less shouting and screaming we hear from the sides and the more working together we can achieve, the better.
That is not to say that people do not have a right to be angry; they do have that right. I represent a steel area, as do many hon. Members, and I understand the passion. A lot of people have contacted me in the past few days saying, “We’ve bailed out the banks. Why not the steel industry?” Do you know what? I cannot disagree with that. It is a strategic industry and it should be viewed by the Government in the same way as the banking industry is. I pay tribute to the Minister for Small Business, Industry and Enterprise, my right hon. Friend the Member for Broxtowe (Anna Soubry), who has said, time and again, that the steel industry is vital to this country and should be supported appropriately.
I pay tribute to the workers at Scunthorpe, who do an amazing job producing the best steel in the world. I also pay tribute to the unions there, which have responded to this crisis in a sensible and measured way and worked with everyone involved. They deserve credit for that. But where are we at with Scunthorpe? We local Members of Parliament all know that we are in a pretty bad place, and we are all committed to doing everything we can.
We have two prongs to our attack. The first involves supporting those who are affected by the announced and proposed job losses. I met the Minister the other night to put a couple of requests to her, and I shall put them on the record today. We welcome the £9 million that has been announced to support those who are affected. We wish we did not need it, but we welcome it. Our request in relation to that is that we want the support to be spent locally. We do not want outside providers coming in and giving training. We have excellent local colleges, and we have a local council which has a record of delivering through the regional growth fund. It delivered 800 jobs through a £10 million grant when we lost 1,000 jobs four years ago. We want a guarantee that funding can be used to support local small and medium-sized enterprises.
The taskforce, which has been referenced by the Secretary of State, has also put a couple of important asks to the Minister. We know that an offshore wind revolution is approaching the Humber. Some of the skills that have been lost from the site can be used in the jobs that are coming. However, there is a gap between the number of those who will lose their jobs and the number of jobs that are expected in places such as the South Humber Gateway in the constituency of my hon. Friend the Member for Cleethorpes (Martin Vickers). We need support to ensure that the workers can make that transition, and support from the Government to encourage DONG Energy to move beyond its memorandum of understanding with Able.
We need an acceleration in infrastructure projects locally. The North Killingholme flood project would be one that would help, as would bringing forward some of the offshore wind projects.
Andrew Stephenson (Pendle) (Con)
British steel is a quality product. My hon. Friend talks about bringing forward projects, but when I speak to companies in Pendle they say that they use British steel because they have concerns about the quality of imported steel. Does he share those concerns?
Andrew Percy
Absolutely. I am sorry that we do not have more time, because there is an awful lot more that I would like to say in this debate.
My hon. Friend brings me to the second part of our asks, which is how we try to secure the long-term future of the site, because we in Scunthorpe cannot afford to lose it. Scunthorpe is a steel town, and, like all local MPs, I want it to remain a steel town. There are things on which we need to take action. Chinese dumping and the quality of Chinese steel are mentioned repeatedly in that regard. It is true that, before this crisis and following pressure from all parts of the House, the Government had taken action in Europe, and we welcomed that. The carbon price floor was a mistake; my hon. Friend the Member for Cleethorpes and I voted against it. I agree with those who say that we need to bring forward the compensation scheme. I also have sympathy with those who say let us pay it and damn EU approval.
It is worth noting that it is this Government who secured new EU procurement rules that make it easier to get local content. We want the HS2 contracts to go to Scunthorpe, new projects being brought forward and a clear message from this Government that they will do everything they can—in fairness, we have had that message—and that, under these new rules, UK content will be used as much as possible. We have been having useful meetings with the Cabinet Office Minister on this, and we will keep on meeting, as there are other things that need to be done around business rates. We need an enterprise zone for part of the site at Scunthorpe. It is a huge site and it is underutilised, and other things can be done there to secure more business. I wish that I could say more, but, unfortunately, I am out of time.
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.
Martin Vickers (Cleethorpes) (Con)
Many of the points relating to Scunthorpe have already been concisely covered by my hon. Friend the Member for Brigg and Goole (Andrew Percy). May I slightly widen the debate to include the effect on the northern Lincolnshire economy as a whole? I represent a neighbouring constituency, and many of my constituents work in Scunthorpe. Many also work in ports and logistics, which is an area that is heavily influenced by what happens in Scunthorpe. Indeed Tata Steel has a site on Immingham docks, which is the largest port in the country.
I welcome the £9 million that has been announced by the Government. I say to the Minister that some of my constituents, whom I met at the weekend, were reassured by the interviews that she gave last Friday on the BBC in which she made a clear and welcome commitment to the continuation of the steel industry in Scunthorpe.
I have spent all of my life living in the Grimsby-Cleethorpes area. I witnessed the decline of the deep-sea fishing industry, and saw what the loss of a staple industry can do to a local community. It took a whole generation for the area to go anywhere near to recovery. We need to learn from the mistakes that were made not just in the Grimsby area but in other parts of the country, and provide the necessary support. I know that Ministers are determined to do that. We have had talk of strategies, and strategies are fine, but world conditions can change rather dramatically. We can have as many strategies as we like, but what we need is hard and fast commitment from Government.
A taskforce set up under the able leadership of Councillor Redfern, leader of North Lincolnshire Council, has made some clear asks that were outlined by my hon. Friend the Member for Brigg and Goole relating to enterprise zones and skills training in the burgeoning offshore industry. I echo his words about the Able UK site at Killingholme, where DONG Energy has a memorandum of understanding signed with Able. The Government did a great deal to support the establishment and give permission for the Able development, and a little help and support, or perhaps just negotiations, might help to seal the deal and give a great boost to the area.
There has to be a balance with environment taxes. It is nice and cuddly to be able to say that we are in favour of being green and that all sounds fine, but heavy industries such as the steel industry and the oil refineries in my constituency rely heavily on economically priced energy. We need to achieve a balance.
The Chancellor has repeatedly mentioned the importance of the northern Lincolnshire economy as part of the northern powerhouse, but many in the area are still sceptical about that. Now is a real opportunity to show that the northern powerhouse, and the part that northern Lincolnshire can play in it, means something. We want real, tangible benefits. The community will struggle for some time to recover, so positive action, linked to the northern powerhouse initiative, can play a major part in the regeneration of the area and in supplying the jobs that are so urgently needed.
Sarah Champion (Rotherham) (Lab)
I have been an MP for only three years, but it is depressingly familiar to stand in this Chamber following the announcement of another steel plant closure, with thousands more families facing an uncertain future and the heart of yet another steel-producing community being ripped out.
Rotherham steel shows the best of British industry. It is world leading, innovative and dynamic. Steel is vital to my constituency and we are facing 720 imminent job losses. Our local economy is hugely reliant on steel. If this Government allow the industry to continue to decline, not only those who are employed in steel will feel the impact: local businesses, large and small, will be hit hard. Apprentices will lose their careers and young people will lose their hope of a future in steel. Ministers need to know that Rotherham is still feeling the effects of the loss of coal mining in the 1980s. The town was built on coal and steel and the loss of coal hurt us severely and deeply. The impact of the loss of steel would be incalculable.
It is deeply ironic that the advanced manufacturing park where the steel summit was held is built on the site of the battle of Orgreave, which vividly demonstrates our ability, hard work, durability and will to succeed despite what the Government throw at us. To succeed, we must be given the tools. Many commentators, including the hon. Member for Brigg and Goole (Andrew Percy), have compared the lack of support for steel to the decision to bail out the banks in the wake of the global financial crisis. Although I accept the intention, the comparison is flawed. Steel does not need bailing out. It simply needs to be allowed to compete on a level playing field.
Our steel industry is world leading, but it is hamstrung by a Government who appear unconcerned by its present and unwilling to support its future. Parliamentary colleagues and I have repeatedly called for the Government to act to address the high energy costs that leave British steel unable to compete with European neighbours, but what we receive, time and again, are warm words.
Andrew Percy
May I clarify that I am not suggesting that steel requires a bail out? My key point is that the steel industry should be seen as strategically as important as the banking sector to the future of this country.
Sarah Champion
I completely agree, and I understood the hon. Gentleman’s intention fully.
What is needed now is abundantly clear. The Government might be unable to control the pressures of the global economy, but there are steps that they could and should take to assist the industry in weathering the current crisis. The Government must take action on business rates, which penalise investment in plants and in the technology the industry needs to survive. They must immediately introduce a compensation scheme for high-energy users to ensure that Britain can compete with the world. They must reform energy tariffs. They must commit to favouring British steel in procurement. It is obscene that the Government can decry the impact of cheap foreign steel while turning to foreign suppliers for infrastructure projects. Projects such as HS2 should be using British steel and the skills and expertise our industry can provide.
The Government must also work productively with our European neighbours to enact anti-dumping measures to protect British steel from cheap subsidised imports. The recent steel summit was an opportunity to move from words to action and the message to the Government from MPs, the industry and the unions was clear: we need action and we need it now. That is what colleagues are repeatedly saying in this Chamber. What did we receive? Yet again, warm empty words.
The Government must have an industrial strategy that places steel at its heart, but they seemingly have no industrial strategy at all. The only conclusion it is possible to draw is that the Government do not care about steel, do not care about industry and do not care about the north. I am sad to say that it feels like we are back in the 1980s with a Tory Government who are wilfully ignorant and insensitive to the needs of industry. Once again, it is my constituents who will be left alone to pick up the pieces.
David Mowat (Warrington South) (Con)
Unlike the hon. Member for Rotherham (Sarah Champion), I do not have a direct constituency interest in the steel industry, but 25 years ago I visited the blast furnace at Port Talbot, where I was working. It is one of those memories that stays with you, seeing a blast furnace in full flight. It is clearly a tragedy that the blast furnace at Redcar will no longer operate.
I wish to focus on energy prices. We have heard about Chinese dumping, business rates and so on and, of course, Chinese dumping is a major issue. However, as far as I am aware countries such as Germany and France are not closing blast furnaces or announcing major job losses. One reason is that the steel industry in Germany and France pays 4p per unit for electricity and the steel industry in this country pays 9p per unit for electricity. What matters is how big a proportion of the costs that difference makes up. No matter how efficient the guys watching us from the Gallery are, overcoming such an impediment is impossible. Energy makes up 15% to 20% of steel input costs, so we can work out that the cost in the end is something like 5% of the differential on the product. That is the margin that places such as SSI make on their product, and that is enough to make a difference.
We have an example of what happens when we do not pay attention to these things. Ten years ago, the aluminium industry in our country had three major primary smelters. That is now decreased by 90% and there is only one left, which is in Scotland. It is only left because it has its own hydropower and therefore has no need to deal with the electricity issues. Not only have we seen the demise of aluminium and steel, but this is true also across what we call the foundation industries, including ceramics and chemicals. Chemicals are a big industry and, unless we act on energy prices, we will be in the Chamber discussing chemical plant closures. The industries employ about 900,000 people and I make the point to those on both Front Benches that in this place we have Ministers responsible for banking, for digital, for farming and for sport, but we do not have a Minister responsible for the foundation industries. Perhaps we should.
I shall return to climate change. When I intervened on the shadow Secretary of State, she immediately closed the point down by saying that we have to be aware of climate change issues. That is true, but we cannot be aware unilaterally. No other country in the world has signed up for an 80% reduction by 2050—nobody has done it. It may be that we are right—that we are the only country in the world that will fix our 1.5% of global emissions—but the cost is the stock stuff that we are talking about now, and we all need to be aware of that. As I said in an intervention, when this issue is discussed in Parliament the Labour party and the Scottish National party always take the side of going further and faster on green stuff. Even in the Chamber this week, there were two examples of what I would describe as virtue signalling on this issue by Opposition Members, saying how green they are compared with the guys over here on the Government Benches. That is because we understand the impact of such measures, and we know that unless we act to close that energy price differential, we will be here discussing more industries in future.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I was elected to the House in a by-election in November 2000. Within a week, I became vice-chair of the all-party cast metals group, and subsequently the cast metals and steel group. Since then, I have campaigned with Members from all parties in the House and Governments of different political persuasions on the issues surrounding the steel industry. I resent some of the Secretary of State’s opening remarks, which implied that there was political partisanship. I know that across all the parties of this House there has been a unified approach on issues surrounding the steel industry, and never before has that been more necessary.
I have Caparo headquartered in my constituency together with several of the constituent companies. It employs 1,700 people in the black country—800 in the immediate locality of my constituency—and manufactures a range of products from girders, barriers, portal frames and forged components to heavy rolled bar, sheet and profiles. When Caparo went into administration on Monday 19 October it did not just affect the jobs at that company; a comprehensive network of small businesses that were dependent on Caparo looked with great trepidation to their future. It is part of a complex supply chain in the midlands and many companies and employees within those companies are affected by it. With a huge range of products—computers, white goods, transport, cars, aeronautics, iPads and so on—the chances are that at least one of their components has been made by the highly specialised small producers in the black country. What is worrying is that those companies could not have anticipated the closure of Caparo, and the threat to them is even greater because they have not had the chance to diversify, as happened when MG Rover collapsed 15 or so years ago.
I commend the work of the West Midlands Economic Forum and of the Midlands Steel Taskforce, which the hon. Member for Halesowen and Rowley Regis (James Morris) referred to. It is making recommendations to deal with this problem and I shall highlight some of those which I feel are absolutely vital. The first action needed is to set up a transition fund, as was set up under the Labour Government when Rover went, to deal with the immediate impact on the small businesses that are tied in with Caparo. I understand that one issue is that PricewaterhouseCoopers is demanding payment within 15 days; 60 days is the norm in the industry. That could potentially cause enormous cash-flow problems to a whole range of small businesses, which they need help to resolve.
The second action needed is on skills. We have almost a unique blend of manufacturing skills in the area. We will lose not only the contribution to the economy, but the contribution that those skills could make in the future. We need help to ensure that people, particularly young people, have comparable jobs to sustain their skills. We need help with specialised imports; many products cannot be imported from China. The quality of goods locally must be sustained, and there will need to be some sort of financial support in order to keep that capacity there for the future.
Madam Deputy Speaker (Natascha Engel)
Before I call the next speaker, I am going to drop the time limit down to three minutes. That way, we will be sure to get everybody in.
Tom Pursglove (Corby) (Con)
It is a great pleasure to follow the hon. Member for West Bromwich West (Mr Bailey). I am pleased that the shadow Secretary of State for Business, Innovation and Skills is in her place this afternoon, but I was incredibly disappointed that not once did she talk about working together on this issue, which is so important to our constituents. I will say why it is important. Corby has a rich steel history and 600 people are still employed there, working in the steel sector at the Tata plant. I know that they are all concerned by the events of recent weeks.
Tom Pursglove
My hon. Friend makes a very good point. I know that his Wellingborough constituents are also very concerned about what they are seeing day in, day out on the television.
Historically, since my election to the House, there has been a lot of cross-party support on this issue, but no one would know that based on today’s debate. Watching this from afar, one would not know that there is that cross-party support. That is very disappointing, because both sides of the House acknowledge how necessary it is to provide assistance to the steel industry at this incredibly difficult time.
It is important to thank both my right hon. Friend the Secretary of State for Business, Innovation and Skills and the Minister for Small Business, Industry and Enterprise, my right hon. Friend the Member for Broxtowe (Anna Soubry), who is in her place this afternoon, for their hard work and their interest. They should be given much credit for making themselves available to talk to Members on both sides of the House about their concerns and the issues facing their constituencies, and for not shying away from this. They have done so much more than many Ministers who have gone before them and that has made a positive and significant difference to the debate. My right hon. Friend the Business Secretary is in Brussels today, to discuss the state of the steel industry and the unfair practices that we are seeing, particularly through Chinese dumping. At those discussions, I urge him to stress the need for the protections enshrined in international rules to be deployed to the fullest possible extent.
Tom Pursglove
My hon. Friend knows that I am sympathetic to that point of view. I know that Ministers are concerned about that. For me personally, one of the easiest solutions is to get out the European Union; that would be a solution for that particular point. [Interruption.] Opposition Members may shout me down; they quite often moan about the European Union but do not say very much about how we should put things right.
Some key issues must be tackled before it is simply too late. One is the way that business rates are calculated. Rates are calculated not only on the basis of the size of the site but on new investment in machinery and equipment on the site. As I stated in the Backbench Business debate in September, the UK prides itself on innovation in business and Ministers maintain that they want Britain to be the best place in the world to start and grow a business. As local MPs, we see cutting-edge innovation week in, week out, with British business at the forefront of international innovation. I therefore find it impossible to understand why industries such as steel are penalised through the business rate system, thereby disincentivising investment and pushing up costs. It makes no sense to me, but I know that it makes even less sense to the Tata executives sat around the boardroom table in India.
On energy costs, we need to be mindful of the impact that green taxes and levies have on businesses. There is quite often a clamour to do more on the climate change agenda. I understand that people are passionate about that, but we need to be mindful of the impact that has on the costs attached to doing business.
At Prime Minister’s questions, the Prime Minister alluded to the energy compensation package. Will the Minister say a little bit more about that? That compensation is very important. I entirely support efforts to implement the full package as quickly as possible. At the steel summit she stated that there were delays at the European level. Will she identify exactly where we are at on that point as of today?
I want to mention buying British. I have asked Ministers a lot of questions about that in the past few weeks, across Government. We have a unique opportunity to try and use British steel in key infrastructure projects that are coming forward—on HS2, on fracking, on Crossrail. We should seize those opportunities—make the most of them, use British products where we can. It is incredibly important. That is another reason why I support the charter for sustainable British steel. We should see that adopted across Government, across local government and across public sector procurement more generally.
My constituents tell me week in, week out that they are sick to death of politicians bickering rather than sitting down and finding solutions to the challenges facing our great country. The debate around the future of the steel industry, as I said earlier, in large part has been carried out with good—
Jessica Morden (Newport East) (Lab)
Like other hon. Members, this morning I met steelworkers from my constituency and officials from Community union. No Member who meets any constituent affected by this situation can be in any doubt about its gravity or the scale of the crisis. As speaker after speaker will say here today, this is a critical time for steel; we feel that our industry is on the edge.
Quite rightly, in the numerous debates and urgent questions we have had over the past few weeks, the focus has been on the devastating impact on Redcar, Dalzell, Clydebridge and Scunthorpe. In my constituency, we want to convey our solidarity with the steelworkers and their families, communities and trade unions in what is an unbearably difficult time. Steelworkers in my constituency are feeling it too. Nine weeks ago, Tata announced that it was mothballing the hot strip mill in Llanwern, the cold mill and one of the pickle lines, and on the remaining pickle line the tonnage would be reduced. The effect of the mothballing is that 175 contractor roles will end this week, and 100 Tata Steel employees will be redeployed to Port Talbot and other south-east Wales sites.
This is the third time that the hot strip mill has been mothballed in six years, but the crucial difference this time is that we do not know when it will open again. Llanwern is now Tata’s flex plant, with the mills coming on and off line depending on market conditions, leaving local workers, especially contractors, feeling the pain. The dynamics of the market are plain to see.
The Secretary of State for Wales talked about the global challenges, but we need the Government to act where they can. The shadow Secretary of State referred to the tsunami of Chinese steel imports. For Llanwern, action on energy costs is crucial; it is particularly affected by those costs because it takes energy straight from the grid. Llanwern has also been affected by action taken in the United States in defence of its steel market. We have talked also about the action in Italy. We need to talk too about what we can do to protect our own industry in our constituencies.
Nearly two weeks on from the steel summit, what action have we had on energy costs and on major construction projects? Electrification will run through my constituency, and we hope that UK steel will be involved. I say to the Government: please act now; please do not wait. In debates like these, we always talk about the sacrifices that steelworkers have had to make over their terms and conditions during difficult times for their companies. They need the Government to act now, to be pro-active and to have an industrial strategy to help steel in the future.
David T. C. Davies (Monmouth) (Con)
It is a pleasure to follow the hon. Member for Newport East (Jessica Morden), not least because when I left school I started work at British Steel in her constituency. I have to declare an interest as a British Steel pension-holder. I would like to leave everyone with the impression that I was manfully firing a blast furnace, but I was actually a junior filing clerk.
I feel very strongly about this issue and about this industry, which employs so many people in Monmouthshire. We all now accept that there is a problem throughout the world—a huge glut in steel caused by falling demand and an increase in production from China. There are things that the Government can do, and I believe that they are taking the right steps. I am delighted with the idea of the Government’s using British steel as far as possible—not bending or breaking the rules, but changing them so that we can buy our own steel, in projects such as High Speed 2 and in industries such as fracking. That will be very important.
I was glad to hear words in support of the industry from across the Floor because we all have a responsibility in this matter. It is no good blaming the Government for everything; Opposition Members have to be able to challenge themselves and some of their colleagues, who are opposed to fracking on rather spurious green grounds. They should challenge those who say that we should always support everything that the European Union does, even when it makes it difficult for us to get around some of the state-aid rules.
Most importantly—this point has been made by Back Benchers in all parts of the House—we need to do something about the energy crisis. It is no good blaming the Government for that because the whole drive to push up energy prices started with Labour Members, who became persuaded, like so many others, by this idea of global warning. I wish that I had 10 or 15 minutes to outline some of the obvious falsehoods that are propagated around that issue. Suffice it to say that manmade carbon emissions are about 30 gigatons a year out of a total of 700 gigatons that arise naturally. Carbon dioxide is in natural gas, and only about 5% of it comes from man. Of that 5%, only 2% comes from the UK—a tiny fraction of the total amount of CO2 in the atmosphere.
There has been no warming—no increase in the temperature—of this planet for the last 16 years, despite all the CO2 that has been pushed into the atmosphere. None of the scientists can explain that; they say that the pause is caused by volcanoes, they blame other kinds of gases or they say that there is a natural pause, as Jim Skea did. The reality is that there is no global warming at the moment. The Intergovernmental Panel on Climate Change accepts that.
Why on earth, then, are we levying all these taxes on our industries? I support the Government’s coming up with a compensation scheme and freezing the carbon price floor, but I have a much better idea, which I ask Members in all parties to think about: scrap the carbon taxes. There is no point in having them if the Chinese do not have them and when we are generating only a tiny amount of CO2. Scrap the whole lot and we will not need a compensation scheme. Allow our steel industry to compete on an equal basis with everyone else. It is not the global climate that we need to worry about; it is the economic climate.
Angela Smith (Penistone and Stocksbridge) (Lab)
I begin my contribution by way of reference to the three HMS Sheffields, two of which served in conflict. The first saw service in world war two, and the second was a guided missile destroyer which was badly hit in the Falklands war. What all three Sheffields had in common, apart from their name, was the use in their construction of stainless steel fixtures and fittings made in Sheffield. It is easy to see why those ships all carried the nickname “the Shiny Sheff”.
The point of mentioning the Sheffields today is not to indulge in a nostalgic eulogy to naval ships long gone. Rather, it is to draw attention to what I think is the most powerful case for maintaining a steel capability in the UK—namely, that the integrity of our defence demands it. Sheffield steel engineering continues to play a key role in maintaining our defences. Forgemasters provides high-strength steel grades for the Royal Navy and has provided critical components for defence applications, including valves for the Astute class of nuclear submarines. It is not only Sheffield that plays a key role. We know of the potential contribution to the construction of the Trident submarines by the two steel plants under threat in Scotland. We also know that a high proportion of the steel required by BAE Systems is sourced from Tata at Scunthorpe.
We could do more. BAE Systems considers that UK steel plays an important part in its supply chain but has made it clear that UK steel providers do not manufacture the range of steels needed by the company, due to the complex demands of its manufacturing specifications. That tells us a great deal about how far the steel capability in this country has been hollowed out.
Sarah Champion
My hon. Friend makes superb points about specialism, but does she think that the Government recognise that this is a modern, forward-looking industry?
Angela Smith
It is a very modern, efficient industry, and no, I do not think that the Government recognise that at all.
On its own, the hollowing out of our steel capability utterly justifies the demand for a proper industrial strategy. The alternative is to stand idly by while one of our oldest industries withers away and dies. That would be negligent and reckless—negligent because steel making in the UK has one of the most dedicated and skilled work forces in the world, and reckless because we need a strong UK steel capability for the sake of our defence and security.
Mr Iain Wright
My hon. Friend talks about the defence supply chain. Could she talk about the supply chain in other manufacturing sectors, particularly aerospace, automotives and offshore wind? We discussed all that in the Business, Innovation and Skills Committee, and I am concerned that the third working group on public procurement is not looking at the alignment of supply chains. What does my hon. Friend think about that?
Angela Smith
Indeed. Tata speciality steel is headquartered in my constituency and plays a major part in providing components for the aerospace industry. It would not exist today if it were not for the work done by the Labour Government in 2009-10, and I pay tribute to Lord Mandelson for that.
It is important to have the capability not just for the sake of our defence and security and not just because it is good for our GDP, but because we surely would not want to see our defence industry dependent for a range of its key components on steel sourced from foreign shores. That is the important point. I support the five demands laid out by UK Steel and by Community, but the Government’s response has generally been warm words and frequent reference to the law of the free market. That is not good enough.
We need to place those five demands in the context of the two strategic arguments that underpin the case for Government intervention to secure the future of the industry. First, our steel industry is one of the foundations of manufacturing. It has a critical part to play in the job of rebalancing our economy. If we want the march of the makers, we need a steel capability—it is as simple as that. Secondly, we need to maintain and develop our UK steel capability in the best interests of UK defence and security. BAE Systems wants to use UK steel—make it possible for it to use more UK steel.
I hope I have managed to convey a clear sense of the second strategic argument, and I hope the Minister will be persuaded that the Government need to act sooner rather than later to deliver the stability needed for one of our oldest and most important manufacturing resources.
Andy McDonald (Middlesbrough) (Lab)
I speak as somebody from Middlesbrough, and at the last time of counting, 33% of the workforce at Redcar hailed from my constituency. I have no reason to believe that the figures are much different today.
We need an inquiry into the collapse of SSI. I echo the demand from my neighbour, my hon. Friend the Member for Redcar (Anna Turley), who has done a sterling job in her fight for her constituents. We also need an inquiry into whether the Department for Business, Innovation and Skills is fit for purpose. I think it has been sadly lacking in many respects. The bottom line is that this Government could have acted in Redcar and they did not. The coke business was viable and it is an outrage that PWC was not directed to ensure that that business was sustained. That coke could have been made. There was a ready-made market for it. That would have put electricity into the national grid. It was a viable business, and people on Teesside cannot understand why the Government sat back and allowed it to fail. It is a very Conservative failure, and death by neglect—they sat back and did nothing at all. We have heard a lot of blether today about what the Government cannot do. What we want to hear is what the Government can do and what they will get on with.
Tom Blenkinsop
My hon. Friend will be aware that for the sake of £17 million, the third grade required in the three grades for sellable foundry coke could have made that business viable. The often-quoted £2 million cost was actually about South Bank coke ovens, which was already designated for mothballing in April 2016. Redcar coke ovens was profitable and viable, which is why SSI tried to re-form itself as a new company, and Kirby Adams, a former CEO of Tata Europe, tried himself to set it up as a business.
Andy McDonald
My hon. Friend and neighbour makes a very good point. We have heard throughout that the coal in situ was not suitable for purposes other than the blast furnace. Other coal could have been brought in. Hargreaves was able and available for that and was not embraced. Any sensible Government would have grabbed that opportunity with both hands, but they did not do so.
Anna Turley
A lot of the conversation has been about the price of steel as the reason why SSI went under. We are talking about coke and, as my hon. Friend said, there were companies in Germany willing to buy all the foundry coke that we could make in those coke ovens. It was selling at over £500 a tonne, compared with the £100 a tonne cost for making it. That was a profitable business which could have kept the coke ovens going, it could have funded a proper mothballing of the blast furnace, and we could still have steelmaking on Teesside.
Andy McDonald
My hon. Friend is absolutely right. That would have been the basis for keeping that coke oven going and mothballing that blast furnace. It is no good the Minister coming to me after the event and telling me in hushed tones that she wishes she had mothballed the site. That will not do at all.
We hear about bringing forward compensation packages. When the Prime Minister was at the Dispatch Box today, it seemed to be a revelation to him that suddenly we were talking about bringing forward a compensation package. We have been talking about it in the Chamber for months. It is as if the scales have been removed from his eyes. The hon. Member for Bedford (Richard Fuller), who is no longer in his place, hit the point exactly when he spoke about the role of Chinese steel and the fact that it is produced at less than cost. We have now heard from the Prime Minister that he discussed it with the President of China. We want to know what action is going to flow from that discussion. There is no point just bringing it up. We want to know what is going to happen. If 94% of the steel coming to Europe is dumped on these shores, it is up to this Government to take action about it and not sit on their hands.
I went to Italy last Friday to speak to the representatives of FIOM from the Ilva plant in Taranto in southern Italy. What a difference from a Government who not only identify the strategic importance of the industry, but are prepared and have the political will to do something about it. They recognise the social impact of thousands of people losing their jobs and they will do anything to stop that happening. That is what we want to see in this country. In Italy there are solidarity laws so that people are not laid off. The bankruptcy laws were changed. In Teesside we saw creditors go to the wall—Hargreaves was struggling, as were personnel agencies, engineers, hairdressers and so on. In Italy, bankruptcy laws were changed so that such firms got tax relief on future businesses. That is what I call an active policy.
For the Minister to say that the Government could not embrace state aid is utter nonsense, and she knows it. Regional aid and environmental aid could have been embraced with no difficulty; that was done for carbon capture and storage at the Florange plant in France. We on Teesside are sitting on a wonderful opportunity that this Government are letting slip through their hands. We need an active industrial strategy. We need a Government who will access the European globalisation adjustment fund—they have not even made an application to it. We need a BIS Department that is scouring the world in advance, not saying, “We were caught out at the last minute”. The Minister responsible for the northern powerhouse openly admits that he had known for ages about the problems. The Department should have been getting on with it, scouring the world, making sure it had the capacity in financial and engineering terms to respond properly.
Marion Fellows (Motherwell and Wishaw) (SNP)
I ask the Government to remember that there are still two steel plants in Scotland, one of which, Dalzell, is in my constituency, near my constituency office. It predates Ravenscraig and has been involved in steelmaking since 1872. Steel has been at the heart of my constituency since then.
I reiterate those facts because my constituency seems not to have figured in the minds of the Secretary of State for Business, Innovation and Skills or the Prime Minister. On Tuesday 20 October, I had occasion to remind the Secretary of State that Tata Steel’s announcement affected plants at Dalzell works and Clydebridge. On the following day at Prime Minister’s questions, in a reply to the hon. Member for Scunthorpe (Nic Dakin), the Prime Minister of the United Kingdom stated:
“I am always happy to meet him and neighbouring MPs again.”—[Official Report, 21 October 2015; Vol. 600, c. 956.]
On the strength of that reply, I wrote to the Prime Minister requesting a meeting. I received a reply from No. 10 yesterday declining such a meeting. My constituents deserve better from the Government.
In the past, the Prime Minister has said repeatedly that my constituents would be better together with the rest of the United Kingdom. They did not believe him on 18 September last year, when a majority of them voted yes—that Scotland should be an independent country. They certainly do not believe that we are better together now, because we clearly have an England-first and a Scotland-nowhere Parliament on non-devolved issues. The Prime Minister did not even raise the question of steel at the European Council and the Secretary of State for Business, Innovation and Skills does not remember where Scottish plants are. He refused to give leave to Fergus Ewing, the Minister for Business, Energy and Tourism in the Scottish Government, to take part in the talks on steel making that are taking place today.
The Secretary of State for Scotland has personally assured me that he will press his ministerial colleagues to ensure that the energy costs rebate will be expedited as soon as they are agreed by Europe. I wish him well in his endeavours, although he might first have to explain to them where Scotland is. I am a member of the Scottish taskforce set up by the First Minister immediately after the Tata announcement. She has said that she will leave no stone unturned to secure a future for Scottish steel—oh for the same commitment from the Tory Government in respect of the UK. They seem to see roadblocks to action everywhere.
Since the Tata announcement on the sale of the long products division, the Scottish Government and Scottish Enterprise have been in constant contact with the company—
Anna Turley (Redcar) (Lab/Co-op)
It feels tragic to speak in this debate on the future of the steel industry because, as my hon. Friend the Member for Wallasey (Ms Eagle) said in her introductory comments, our steel industry has gone—175 years of proud history and heritage that built the world, from bridges to stadiums to buildings of great note, has gone. That future is no more. That is the tragedy of which all hon. Members are aware.
The human tragedy remains. We have 3,000 people out of work and expect another 3,000 in the supply chain to go. I want to bring attention to that so that, first, it can be prevented from happening in any other constituency. I want to talk about the scale of what we are trying to deal with, the implications and the outstanding issues, and about the despair, anger and chaos that reigns in Redcar and Teesside.
As I have said, the coke ovens and the blast furnace are gone. John, who works there at the moment—he is one of the skeleton staff who are there to try to wind it down—tells me that the coke ovens are cooling rapidly, and that the brickwork is warping beyond good use ever again. He tells me that steel and coke making are at an end for ever.
Andy McDonald
Does my hon. Friend agree that it is an absolutely criminal act of industrial vandalism to let those coke ovens collapse when that was entirely and utterly avoidable?
Anna Turley
I could not agree more with my hon. Friend. The blast furnace and the coke ovens are national assets. They are part of British industry and manufacturing, and they are strategically important to our economy. They could and should have been preserved.
I want to talk briefly about two outstanding issues that are causing a great deal of concern in my constituency. The first is the training that has not arrived. We were promised £80 million, but it turns out to be £50 million when we take out redundancy and the statutory entitlement that the workforce should have had. That training is not coming through. We were told that a local taskforce would have control—I was pleased to be invited to sit on it—but the reality is that decisions are being made by officials. I understand that we are waiting for a decision from the Secretary of State to clear that money and send it.
Sir William Cash
The hon. Lady will know that the German Government provided subsidies for the training of employees, including steelworkers, to the value of €5.7 billion in 2013.
Anna Turley
The hon. Gentleman makes an important point. We should look at how the Germans support and respect industry and manufacturing.
Anna Turley
Absolutely. If they do it, why can’t we? I totally agree with the hon. Gentleman. We should also look at how the Germans support industry throughout their education system. He makes an important point.
The training is not coming through and plenty of people are coming to me—I have a huge postbag from people who are not accessing the training and support that they need. For example, Tom, an apprentice who came to my surgery at the weekend, has been an apprentice at SSI for three years and four months. He wants to continue and finish his apprenticeship and has worked very hard on it. He was told by a Department for Work and Pensions official that he should get a job in a bar or in retail.
Sue Hayman (Workington) (Lab)
I am being contacted by young people in my constituency who are finishing their apprenticeships, and who are concerned about accepting job offers from Tata Steel. Other young people are asking me for reassurance about starting apprenticeships in engineering and manufacturing, because they see no commitment from the Government to industry in this country. Does my hon. Friend agree that that is deeply concerning at a time when we have a national shortage of engineering and manufacturing skills?
Anna Turley
My hon. Friend is absolutely right. One of the great tragedies of this situation is the fact that 50 apprentices were due to start on the day that SSI paused production. Steel is a viable industry with a bright future, so engineering is exactly the sort of field we should be encouraging our young people into. The Government should be giving them confidence that they have an industrial manufacturing policy that will support their future.
An hon. Friend drew attention earlier to Lord Heseltine’s recent comment that now is a good time to lose one’s job. That was a grave insult to my constituents and all those who have lost their jobs in steelmaking, but I think that another comment he made was more profound. He said that we should not be supporting yesterday’s industries. That drove to my heart exactly how people on the Conservative Benches view the steel industry: yesterday’s industry. I totally disagree. It is an industry with a bright future. It should be a foundation industry for so many of the highly skilled manufacturing jobs that we want to create. Frankly, I wish we could give more reassurance to the constituents of my hon. Friend the Member for Workington (Sue Hayman).
I want to mention a couple of people who have contacted me about the trouble they have had with their training. Karl told me that he could not access heavy goods vehicle training because he was told that it is not currently a barrier to him getting work. I do not understand that. Dane, who is an electrical engineer, told me that he could have a course funded only if he had a job offer to go with it. There are a raft of problems that I am deeply concerned about. I was ever more concerned to hear that Subway was represented at the jobs fair that was organised a couple of weeks ago. I think that it is deeply inappropriate for highly trained, highly skilled steelworkers to be offered jobs making sandwiches at Subway. I hope the Minister agrees that is not the future we want for the industry.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The steel industry is a vital component in the Welsh economy, not only providing thousands of people with employment, but contributing heavily to Wales’s GDP and export base. The activities of Tata Steel alone reportedly support 18,000 jobs in Wales, and its operations are worth £3.2 billion annually to the Welsh economy.
However, the steel industry in Wales is under significant pressure. In the second quarter of this year alone, the value of Wales’s exports of iron and steel was down by almost £120 million. Thousands of tonnes of cheap steel is being imported every week from Turkey, Russia and China, flooding the UK market and undercutting Welsh-produced steel.
Protecting the steel industry from the volatility of the markets should be a priority for the UK Government, and it should be pursued with the same vigour as we saw when the banks were bailed out in 2008. It is vital that both the UK and Welsh Governments strengthen internal supply chains and procurement practices to ensure that demand for domestic steel is maintained, and Plaid Cymru’s policy of increasing infrastructure expenditure by 1% of GDP is one obvious way to increase demand.
Tata Steel has previously cited the high cost of business rates and high energy costs as causes of recent redundancies. Why do the UK Government not establish an emergency business rates relief scheme targeted specifically at the steel industry? Given that business rates in Wales are the responsibility of the Welsh Government, such a scheme at UK level would trigger consequential funding for Wales, which could be used by the Welsh Government to create their own scheme to protect this key sector in our country. Creating such a scheme would be more affordable than the reduction in tax receipts and the increase in out-of-work benefits to which the decline of the industry will ultimately lead. Also, as Aditya Chakrabortty writes in The Guardian today, why not access the European Commission’s globalisation adjustment fund?
Another key difficulty that British steelmakers face is the extraordinarily high cost of energy across the UK. The UK is one of the most expensive places in Europe for energy. Despite Wales being a net exporter of electricity, energy is even more expensive there than in other parts of the UK. Is it not time that the UK Government broke the monopoly of the big six and followed the example of Sweden and France by creating state-owned energy companies? Many of my constituents will be receiving energy bills from EDF, an energy company almost entirely owned by the French state. The money they pay to EDF effectively subsidises energy bills for French consumers. Similarly, profits made by Vattenfall in its UK operations effectively assist the Swedish Treasury in funding upgrades to Sweden’s energy infrastructure, and the same can be said for Statkraft and Norway.
Cutting the cost of energy would have a significant bearing on the future of the steel industry, but we need to do so sustainably, without threatening the future energy security by killing off the renewables industry. Is it not time to take profits out of the equation? Is it not time for the UK Government to adopt Plaid Cymru’s policy and establish an arm’s length, state-owned and not-for-dividend-profit energy company to serve the needs of industry and citizens?
Nic Dakin (Scunthorpe) (Lab)
I am bemused when I compare the Government’s amendment with the main motion, because I cannot see what they have to object to. The amendment leaves out the motion’s reference to the “national strategic importance” of the steel industry. I think it is nationally strategically important. The motion refers to having an industrial strategy. I think we should have an industrial strategy, and many Conservative Members have said so too. It refers to
“looking at temporary action on business rates”.
As my constituency neighbour, the hon. Member for Brigg and Goole (Andrew Percy), pointed out, discussions are ongoing with North Lincolnshire Council, BIS and Tata on that very issue. I really do not understand why the Government feel they need to amend this very effective motion seeking the five industrial asks, and I hope the Minister will explain why.
I want to give a voice to my constituents, to whom I pay the utmost tribute for the way in which they are handling themselves in these difficult circumstances following the announcements last week. Kevin Allen, who voted Conservative at the recent local and national elections, wrote to me to say:
“I’m a 4th generation steel worker and I’m in fear of my livelihood, if I lose my job then I’ve lost everything, I support two house holds in this town two families so not only have I lost everything so has the other party, that will be 5 people seeking government hand outs, I won’t be the only one in this position, for every steel job this town loses there will be a huge knock on effect with others”.
That is the heartfelt reality in my community.
I had an email from a homeowner in Bottesford who says,
“my husband and I have worked on the steelworks for 36 and 31 years respectively and we are passionate about our jobs and the industry that we are proud to be part of. It hasn’t been easy and we have faced many issues but have fought to survive over the years often working long unpaid hours. The severe situation that we now face feels very different to all others”.
She continues:
“From a strategic point of view we cannot afford to lose our steel industry, we will be totally at the mercy of other countries with little bargaining power.”
Alex Cunningham (Stockton North) (Lab)
A couple of weeks ago I met community officials in Stockton who talked about Ravenscraig in central Scotland, saying that the community there has not yet recovered. That fear must be shared in my hon. Friend’s communities, as well as in others across Teesside.
Nic Dakin
My hon. Friend is absolutely right. That is why it is great to see steelworkers here lobbying Parliament today. It is great to see steelworkers and their families in Scunthorpe high street gathering signatures for petitions and people queuing up to sign them. This is crucial to our community.
It is clear what needs to be done. The five industrial asks that were considered at the steel summit are the five industrial asks that the Government now need to deliver on. They need to act before it is too late.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am dropping the time limit to two minutes. I call Stephen Doughty.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Thank you, Mr Deputy Speaker, for fitting me in to speak for a very brief time.
I want to pay tribute to the Celsa Steel workforce in my constituency, to many members of the community, and to all the steelworkers who have come up here today to meet us to emphasise what a crisis this is and what needs to be done. I have never before seen an issue on which there has been such unanimity about what the Government need to do among MPs in all parts of the House, among the unions and the management of the steel industry across the UK, and across the supply chain and all those involved in the industry.
I am not going to rehearse the arguments because I do not have time, but we have been making them for a very long time. I want to get from the Minister a real understanding of why it has taken so long to get to this point. I do not want to cast any aspersions on the work that she and the Secretary of State for Wales, who is also here, have done. They have both listened carefully and acknowledged the concerns expressed, and I hope they are really serious about wanting to take action.
However, I and many others have been meeting on these issues for well over two years. I met the Secretary of State for Wales and the former steel Minister, the right hon. Member for West Suffolk (Matthew Hancock), on 11 November last year, and I was meeting BIS and DECC officials two years before that. We, and the industry, have consistently raised the concerns about dumping, energy costs, the impact of taxation, and the slowness in bringing forth the energy-intensive industries compensation package, yet only in very recent days have we seen substantive action. That reflects two basic things about this Government: first, the lack of an industrial strategy, and of political leadership, across Government; and, secondly and more fundamentally, their attitude towards Europe, on which I disagree with the hon. Member for Corby (Tom Pursglove). We cannot deal with dumping by countries such as China unless we are working together across the European Union.
I want to understand why this has taken so long. The Minister took action, but why was that? Why is this such a revelation at this stage? This should have been going on for years. That is the fundamental point that I want to make.
Neil Gray (Airdrie and Shotts) (SNP)
My heart goes out to steelworkers, and their families, who are at risk of losing their jobs at Tata Steel, both north and south of the border, as well as to those whose associated jobs are also at risk. This is a huge blow to Lanarkshire, and we now learn that as well as the threat to steel jobs in Dalzell and Clydebridge, North Lanarkshire Council is consulting on shedding up to 1,100 jobs thanks to public sector cuts from this UK Government. This is a very worrying time in my area.
Yesterday, Fergus Ewing MSP, Minister for Business, Energy and Tourism, delivered a statement to the Scottish Parliament about the crisis, so let me contrast the approach taken by the two Governments so far. The Scottish Government took the first opportunity after the recess to go to the Chamber and make a statement; the UK Government had to be dragged to the Chamber by an urgent question and now an Opposition day debate.
In his statement Mr Ewing said:
“let me be clear from the outset that we will leave no stone unturned in our efforts to save the steel industry in Scotland. Our top priority is to secure an alternative operator to continue with commercial production. We are aware that that task is not an easy one and that there are significant challenges facing the continued production of steel in Scotland, but we are determined, as a Government, to use all our resources and, as ministers, to devote our individual time and attention, as required, to do absolutely everything that we can do to prevent the loss of steel making in Scotland.”
The Scottish Government had asked to be part of EU talks on the steel crisis, but this Government refused as they continue to abandon their so-called and short-lived respect agenda—an agenda that has been further abandoned by the revelation that the Prime Minister shamefully refused to meet my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). I sincerely hope that a buyer can be found for the Tata sites, and that the steel industry can continue. For that to happen, the Scottish Government must work through the taskforce—
Sammy Wilson (East Antrim) (DUP)
Although Northern Ireland does not have a steel industry, we have seen the impact that the loss of major industries has on communities. Two issues should concern all Members present in the debate. The first is our relationship with the EU. All suggestions that have been put forward—compensation for electricity prices, procurement or preference given to British steel, or even a reduction in business rates—must be cleared by Europe. Time and again our involvement with the European Union has been detrimental to our industry.
Secondly, energy costs have impacted on the steel industry and will impact on all major manufacturing employers across the United Kingdom. We have been warned that as a result of green taxes that we will impose between now and 2020, electricity prices will escalate. That is a deliberate policy. The carbon price floor will take £23 billion from the pockets of electricity consumers, and on top of that we have feed-in tariffs, contracts for difference, and renewables obligations—all that is imposed on our major manufacturing industries.
There is a schizophrenic attitude in the House to energy prices. We complain when we lose jobs, yet we ask for the introduction of more green policies. If we do not have a consistent policy, many more jobs will be lost in future.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I welcome the opportunity to speak up once again on behalf of my constituents at Clydebridge as they are facing an uncertain future. I know how they must be feeling right now. All too often politicians are accused of having no real-life experience, but I know only too well how it feels to be made redundant. The wait that steelworkers at Tata Steel are currently going through to find out whether they will still have a job in a few weeks is agonising. There is never a good time to lose a job, but job losses would be utterly devastating for those workers.
The Scottish steel taskforce meets tomorrow for the first time. I will be there, and I hope that the pragmatic approach taken will help to find a buyer who can continue commercial production at those sites.
Angela Smith
Will the taskforce consider the importance of the construction of Trident submarines to keeping steel jobs in Scotland?
Margaret Ferrier
No.
The force involves multiple stakeholders of various political persuasions, as well as those of none.
Marion Fellows
Does my hon. Friend agree that the trade unions, especially Community, have been fundamental in keeping the two Scottish plants going this far, and that this has been recognised by the Scottish Government, unlike by the Conservative party, which seeks—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. That intervention is far too long. We want short interventions. We should be on to the vote by now. We have been very generous and it has been abused.
Margaret Ferrier
I thank my hon. Friend for intervening.
I welcome yesterday’s announcement from Scottish business Minister, Fergus Ewing, that Transport Scotland is reviewing all its infrastructure projects, looking at how public procurement might be utilised to help to stimulate the industry.
Steel is used to create more than 80% of the components required to build a typical wind turbine, and plate steel from Tata’s Scunthorpe and Dalzell mills is used in the fabrication of these renewables. UK Government policy on the removal of support for renewables will have an adverse impact along the supply chain, particularly on the steel industry. Plans to cut support for renewables need to be dropped now. The UK has the highest carbon tax in the world. More than half the UK power price is made up of this tax. Steel needs to be given the recognition it deserves in helping to grow the renewables sector, thus reducing carbon emissions in the long term.
I welcome today’s announcement that the Government will refund energy intensive industries for the full amount of the policy costs they face as soon as the state aid judgment comes from Brussels. The Chancellor, however, must take lessons from our European neighbours who have taken matters into their own hands to support their industries, and then obtained state aid clearance retrospectively. A bold move like that could almost certainly facilitate the process of finding a buyer for the sites in Scotland.
Chinese overproduction is leading to steel being sold below market price, and this is being achieved only through Government subsidy in China. Approximately 70% of the Chinese steel industry is thought to be unprofitable. If this were the UK, the industry would have collapsed by now. In short, the European steel market is fighting with one hand tied behind its back. We have both hands bound and the playing field urgently needs to be levelled.
We need a real long-term strategy for steel. We owe it to the thousands of steelworkers across the UK and their families to support them and ensure a sustainability and security of employment. I will work with anyone to help to secure a future for the industry and the jobs of steelworkers in my constituency and right across the UK.
Saving British steel will not be easy, but we must now rise to the challenge and explore every possible option, so we can reach what should be a shared aim for all in this place. We must never give up on the steel industry and the highly skilled workers in their hour of need.
Kevin Brennan (Cardiff West) (Lab)
We have had a very good and, understandably under the circumstances, passionate debate. I am sorry that because the wind-ups have been truncated—the Minister and I have, I think, eight minutes each—we will not be able to refer to everybody who spoke in the debate. I think 21 Back Benchers participated in the debate. It is good that they were all able to speak and they did so with great passion. I would like to mention my hon. Friend the Member for Newport East (Jessica Morden), who represents the Llanwern area. That was where my father worked for 20 years and where I was privileged to work in the steel plant and coke ovens for six months before I went up to university. People who come from steelmaking backgrounds understand why everyone feels so passionate about this subject. I am sorry I cannot mention everybody’s contributions, but I commend the knowledge and passion the hon. Members who represent steelmaking constituencies brought to our proceedings, not just today but throughout the current crisis and long before that.
The Government cannot say that they were not warned about the crisis in the steel industry. MPs have been assiduously vocal over a long period of time. I see that the hon. Member for Stockton South (James Wharton), the so-called Minister for the northern powerhouse, has joined us. If he missed any of today’s proceedings he can read about them in The Northern Echo tomorrow. The efforts of my hon. Friends have been the very opposite of the showboating they were accused of. On the contrary, they have stood up for their communities, the British steel industry and its workers. They have made a substantial contribution towards forcing the Government to acknowledge that action is required, however late and inadequate it might be. It is good that the Business Secretary is finally talking to the European Commission, and it is good that he has gone to Brussels. Only last week, we found out in a parliamentary question from my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that he had not—incredibly—until now spoken to the Commission about this. Clearly, he booked his Eurostar tickets very quickly to get over there today, and we welcome that.
It is perfectly reasonable, however, to ask why it has taken so long. Why has the Business Secretary been chasing rather than leading events? We know that when he became Business Secretary he did not want to have an industrial strategy and preferred to talk about an “industrial approach”. That hardly smacks of someone who will intervene before breakfast, lunch, tea and dinner, let alone supper, on behalf of British industry. There are echoes today of the famous row between Margaret Thatcher and Michael Heseltine over Westland.
Kevin Brennan
I am not going to give way, because of time.
We found out today that the Government are ordering hundreds of military vehicles and three new ships for our armed forces to be built using steel imported from Sweden. And this at the same time as Gareth Stace, of UK Steel, said that the British steel industry was “likely to die” without stronger support from the Government. He said that yesterday to the Business, Innovation and Skills Committee. We should not be surprised that the Business Secretary has until now pursued what Tata called in its briefing for this debate a laissez-faire ideology, because he has made it clear that that is what he believes in. You might not have read it, Mr Deputy Speaker, but his favourite book is “The Fountainhead”, by Ayn Rand, in which the hero blows up a poor housing estate because he does not like the design, such is his individualist approach.
Kevin Brennan
The Minister may say that, but my argument is that the basic cause of the Government’s slowness to respond to the steel crisis is that the Secretary of State fundamentally believes that it is not the business of Government to get involved in markets and industry. So while he is having to be seen to be doing something by going to Brussels today, he is actually in practice—[Interruption.] Government Members can chunter away as usual all they like, but in practice he has been busy planning the dismantling of his Department’s capacity to support steel and other key strategic British industries. He has volunteered to cut his Department’s budget by 40% , and this week we read in the Financial Times how investment grants to key British sectors are being converted to loans. It turns out that the much-vaunted apprenticeship levy will become a displacement tax on business and will not compensate for the cuts to the training budget.
This approach has to stop, and it is has to be replaced with a proper industrial strategy based on the consensus built up under the last Labour Government and, in fact, the last coalition Government, but which the Business Secretary does not believe in. We need a much clearer steer from the Government that they are prepared not only to say that steel is a key strategic industry, but to act to ensure it remains a key strategic industry. I again ask Ministers what they think is the minimum capacity for steelmaking in the UK below which it is not in the country’s strategic interests to go? The Minister told the Select Committee:
“I have an absolute determination to keep steel in this country”.
In her winding-up speech, will she make it absolutely clear what she means by minimum capacity for this strategic industry? What efforts are Ministers making to calculate the cost of cleaning up sites such as Redcar when they close? In a written parliamentary answer to me last week, she could not say. How can the Government decide whether closure is the right choice when they cannot even estimate the cost of cleaning up the site?
At last week’s urgent question, I urged the Business Secretary to implement the five points raised by UK Steel at the steel summit the previous week. At that time, he could not confirm that he would. Will the Minister now confirm, albeit belatedly, that the Government will do that, and will she fully implement the energy intensive industry compensation package now, not later?
Will the Government finally press hard at the EU level on anti-dumping measures? Will the Minister even admit that dumping is going on? Will she let that phrase cross her lips in her response? Will they remove plant and machinery from business rate calculations and stop gold-plating EU regulations? Will they support the use of British steel in major projects, unlike what we hear today with the staggering news about Swedish steel being used by the Ministry of Defence? Will they listen to calls from the trade unions, including Community, for a long-term strategy rather than a hand-to-mouth approach? What are the Government going to do to support skills retention and short-time working during the current crisis, if that is needed?
This has been the first major industrial test for the Business Secretary in particular and for the Conservative Government in general since the general election As I have argued, their initial response was to revert to type and do as little as possible. They were prepared, it seemed, to let a key strategic industry die without a fight. Because of the chorus of voices from local MPs, from us as Her Majesty’s loyal Opposition, from the workforce, from employers and from the public, they have had to move, albeit far too slowly and too late for thousands who have lost their jobs The steel industry is a classic example of a case where the Government need to be prepared to roll up their sleeves immediately and intervene before breakfast, lunch, tea and dinner. This Government have been slow to act. The steelworkers whose jobs have been lost know it, the British public know it and, deep down inside, Ministers know it too—it will not be forgotten.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
May I begin by paying tribute to all those who work in our steel industry, particularly the workforce and indeed the management? I pay particular tribute to all those—it is mainly men, but some women also work there—who have unfortunately lost their jobs, and to their families, be they at Dalzell, Clydebridge, Scunthorpe, Rotherham, Llanwern or Redcar.
Nobody should ever dare to suggest that anybody on the Government Benches has taken any pleasure, happiness or anything else in the unfortunate demise we have seen over recent times of a large part of our steel industry. [Interruption.] The hon. Member for Cardiff West (Kevin Brennan) is sitting there, but he made one of the most disappointing speeches I have ever heard. He does no service whatsoever to his industry and the workers he says he seeks to support, who have come all this way to be here today. In the short time I have been in my position it has been a pleasure to attend a number of debates and even urgent questions to listen to the impassioned speeches of so many Members who speak on behalf of their constituents, and rightly so. That is their job and they do it. But, seriously and genuinely, to try to score cheap political and, in many respects, highly personal points does absolutely nothing at all. [Interruption.] The hon. Member for Middlesbrough (Andy McDonald) shouts at me, but he should know better. He knows how hard I, and others, worked to secure the future of the Redcar plant, but let us get to the facts.
The facts are as follows: the price of steel has in some instances, slab in particular, almost halved. That is the harsh reality. On the Redcar plant, it is a fact that all the time SSI was there—more than three and a half years—it lost hundreds of millions of pounds. You can have my word, Mr Deputy Speaker, that if anybody had come forward to buy the blast furnace to secure it or the coke ovens, the official receiver would have taken those offers exceedingly seriously. But the horrible truth is that no such buyers came forward, and why would they?
Anna Soubry
I am sorry, but I am not taking interventions. They would not, because the plant was losing hundreds of millions of pounds—even the coke ovens, which we fought so hard to secure, were losing £2 million a month. That was the harsh, awful reality.
All the steel industry asks for—and it is right to make these requests—is that we have a level playing field. It feels that its hands are tied behind its back. It makes its case, and I pay tribute to Gareth Stace, one of the first people—
Several hon. Members rose—
Anna Soubry
No, I am not giving way. He was one of the first people that I met after my appointment, because I knew how much he knew about the British steel industry. It wants a level playing field, and it is right to do so. That is what this Government are doing.
Let me make it absolutely clear—
Andy McDonald
On a point of order, Mr Deputy Speaker. We hear from the Minister that no people were coming forward to discuss projects to take over at SSI. She needs to correct that position, because there were consortiums of—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. That is not a point of order, but a point of debate. I understand that emotions are running very high.
Anna Soubry
As I said, nobody came forward with an offer, and the hon. Member for Middlesbrough (Andy McDonald) knows that I held a meeting with someone who had said they were interested, but the harsh awful reality was that nobody came forward with an offer.
Anna Soubry
No, I will not take any more interventions from the hon. Gentleman. I will talk to him as I always do but I do not have time for interventions.
Let me explain the actions that the Government have taken. On energy costs, we have already paid out £50 million in compensation to the steel industry. In relation to the “unfair trade”, as we put it—in simple and sharp terms “dumping”—one of the first things we did when we were elected was to take a decision and cast our vote to protect our steel industry. That had never happened before, and it was done specifically on the direction of myself and the Secretary of State for Business, Innovation and Skills. Then we turn to rebar—the investigation was started on behalf of this Government and on behalf of the steel industry after it came to us and presented us with the evidence.
Now let us look at procurement. Opposition Members, and indeed Government Members—I pay tribute to my hon. Friend the Member for Corby (Tom Pursglove) who fights as hard as he always does for his steel workforce—quite properly talk about a difficulty over procurement. Again, let us look at the evidence. The evidence is absolutely clear. We have already changed the rules for the benefit, not just of the British steel industry but for the whole of British industry, because we put into the score card of the public sector the fact that social and environmental considerations could be taken into account. That was the first time that had happened, so I am not taking any lessons from Labour Members, who had an opportunity to do that for 13 years and failed to do so. That is the sort of direct action that we have taken. We are taking this further. We have three working groups, one of which is looking specifically at how we can extend those rules further—and not just in the public sector.
Several hon. Members rose—
Anna Soubry
The hon. Members for Hartlepool (Mr Wright) and for Scunthorpe (Nic Dakin) can come to see me any time. The hon. Member for Hartlepool made a really good point about the supply chains. Yes, we can chase public procurement, but we have to make sure it goes through the supply chain, which is absolutely the sort of work that the Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for West Dorset (Mr Letwin) is doing—looking at how best to take those new rules all the way through the supply chain.
The Government will take further actions. We have advanced the talks with the Commission for millions more in compensation. That is why the Secretary of State for Business, Innovation and Skills is not here today; he is over in Brussels doing a brilliant job. We have already spoken to the most important Ministers about how to change things and how to secure and work with our allies in Europe to make sure that we look at the state-aid rules and how we can do more on dumping to protect our steel industry.
If we look at the Crossrail contract, we find that 97% of all the materials have been placed with British companies using British materials. We know that 40,000 tonnes of steel for HMS Queen Elizabeth was made by Tata, while 95% of Network Rail’s steel is British steel. It has embarked, under this Government, on the biggest programme of railway investment that has been seen since Victorian times. If only it were as simple as—
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No.36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I now have to announce the result of a deferred Division on the question relating to Joint Committee on Human Rights. The Ayes were 485 and the Noes were 61, so the question was agreed to.
[The Division list is published at the end of today’s debates.]