UK Steel Industry

Andy McDonald Excerpts

Thursday 21st January 2016 Westminster Hall

[Stephen Kinnock]

I pay tribute to my hon. Friend’s long and illustrious history in the steel industry. He was a steelworker himself, so he speaks with particular experience and expertise. I absolutely agree with his point about the nuclear industry. I would bring everybody’s attention to the outrage of EDF telling a well-known British steel producer that it was not allowed to tender to make turbines that it is absolutely qualified to provide, thus denying it the opportunity of a multimillion-pound contract. The idea that this country’s procurement policies are somehow changing is a myth, and that experience of EDF and that steelmaker is a case in point.

[Andy McDonald (Middlesbrough) (Lab)]

While my hon. Friend is on the issue of procurement, will he say whether he is as dismayed as I am that the Ministry of Defence is commissioning steel hardware from Scandinavian plants? Does that not speak to a lack of joined-up thinking and a lack of Government focus on innovation, and on research and development, into new products needed by the MOD?

[Stephen Kinnock]

My hon. Friend makes an excellent point. What is interesting about the MOD angle is that we are talking about national security. The steel industry plays a critical role as a foundation industry, whether we are talking about the homes we live in, the offices we work in, the knives and forks we use to eat our meals or the incredibly important contribution the industry makes to our armed forces across the world. This is, therefore, not just an issue of the economy or of pounds, shillings and pence. Our national security is at stake.

--- Later in debate ---

[Stephen Kinnock]

My understanding is that a very prominent and well-known producer of British steel has been informed by EDF that they are not allowed to tender on the basis of what appear to be spurious health and safety grounds. I encourage the Government immediately to carry out an independent evaluation of why that producer was not allowed to tender. Let us hear it from an independent evaluator, because at the moment it is somebody’s word against somebody else’s. It is the Government’s responsibility to step in once again and stand up for British industry, rather than sell it off to foreign bidders.

The rise in the market share of Chinese rebar, which went from zero four years ago to 45% of the UK market now, can be explained only by Beijing’s distortion of the market. Some 70% of Chinese steelmakers are state-owned, and the remaining 30% benefit from tax rebates that amount to a state subsidy. We are asking the Government not for special treatment for British steel, but for a level playing field and action to correct the market distortions. We are seeing not the forces of supply and demand working away, but a marketplace that has been hijacked by subsidised Chinese state steel that has been dumped in a previously perfectly well-functioning marketplace.

The Government should take action and show leadership, but they have been asleep at the wheel. Will the Minister explain what action the Government will take against Chinese dumping? Specifically, can she tell us whether the British Government support China’s being granted market economy status? A yes or no answer will do fine.

Just over a week ago, the Foreign Secretary said on the Floor of the House that

“it is through the prism of steel”—[Official Report, 12 January 2016; Vol. 604, c. 694.]

that Chinese market economy status should be judged. On that basis, we should say a clear and resounding no to market economy status for China. Time and again, the Government have acted as China’s chief cheerleaders in Europe—particularly on market economy status. They know that MES will cost British jobs and limit our ability to impose tariffs on dumped goods, but they are more interested in cosying up to China and making Britain, in the Chancellor’s words, “the western hub” for Chinese trading.

[Andy McDonald]

I am grateful to my hon. Friend for giving way yet again; he is being very generous. Does he share my concerns about the prospects for HS2? We hear that the Chancellor has had active discussions with the Chinese about the steel that will be used in that project.

[Stephen Kinnock]

I have heard the Minister and many of her colleagues assure us on the Floor of the House that a large portion of the steel used in the HS2 project will be British. I can only go on the Minister’s words. We shall see, as we have seen before, whether the Government’s words and actions match up.