EU Referendum: UK Steel Industry

Debate between Stephen Doughty and Bill Esterson

Wednesday 13th July 2016 Westminster Hall

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Gillan, in this debate on an incredibly important subject. I congratulate my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) and all my hon. Friends who have spoken in the debate. They have represented their constituents superbly over the last weeks, months and—in some cases—years to try to protect the vitally important strategic industry of steel.

I also congratulate the trade unions on their work representing their members and the communities that they live in, in these incredibly difficult times. We have seen examples of the benefits of partnership working between local politicians, the devolved Governments, local Government and the representatives of working people in those communities.

[Stephen Doughty]

My hon. Friend is absolutely right to pay tribute to the trade unions and all those who have worked in partnership. Will he join me in paying tribute to the work of the Daily Mirror and its “Save our Steel” campaign? It has kept a focus on the issue, even today in the midst of everything else that is going on, to make sure that we all pay attention to what is happening in the steel industry.

[Bill Esterson]

My hon. Friend is quite right to draw attention to the fine work of the Daily Mirror. Its campaign has raised awareness among the wider public of just how important steel is to the whole country.

We express regret that the Government did not act in a stronger way to try to save Redcar and that there was not greater engagement earlier on Redcar and elsewhere, but we have to focus on where the steel industry is and what can be done now, not least given the challenges following the vote to leave the European Union.

Steel has faced a profound crisis for quite some time. Plants that had been in profitable production for decades have closed. In Redcar, that brought to an end a century or more of steelmaking on the site. For other plants, the potential changes of ownership have been the source of considerable uncertainty and, of course, Brexit has piled uncertainty on top of what was already a very worrying situation.

Britain’s relationship to the EU and the rest of the world is now more unsettled than it has been for many generations. We have seen the immediate impact of the vote not just in the steel industry, but in this industry we have seen the planned sale of the Port Talbot steelworks put on hold. An estimated 15,000 jobs are directly at stake, with another 40,000 immediately affected through the supply chain. Then there are the risks, which my hon. Friends have raised, from the impact on the British Steel pension fund—that threatens the prosperity of more than 130,000 workers, and of course there is the threatened loss of a vital strategic industry. The time is now for decisive Government action to secure as much stability and certainty as possible.

Before the leave vote, the Government had started to act and to recognise, quite rightly, the strategic importance of the steel industry in this country. That recognition had included the potential for the Government to take a stake in the Port Talbot works—the Business Secretary had dropped his previous opposition to responsible ownership and had, at last, understood the importance of Government intervention in industry. As part of any deal, however, he was proposing to switch the indexing of British Steel pensions from the retail prices index measure of inflation to the far lower consumer prices index measure. Over time that would have amounted to a 15% cut in pensions being paid, and, as well as affecting the prosperity of British Steel pensioners, it suggested opening the door to similar pension raids in other sectors.

The proposal has quite rightly been resisted by the unions and also, notably, by other Government Departments. Addressing the crisis in steel at the expense of pensioners is simply not acceptable. Supporting our steel industry will require the Government to follow best practice from north America and Europe, and to develop an effective industrial strategy to support the industry. It will require willingness from the Government to support the pension fund.