Protecting Britain’s Steel Industry

Edward Miliband Excerpts

Monday 21st June 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

We have had an excellent debate with noteworthy contributions from all parts of the House. I congratulate the shadow Secretary of State for International Trade, my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), on securing this debate, and I particularly thank my hon. Friends the Members for Bristol North West (Darren Jones), for Neath (Christina Rees), for Brent North (Barry Gardiner), for Cardiff South and Penarth (Stephen Doughty) and for Brighton, Kemptown (Lloyd Russell-Moyle), my right hon. Friend the Member for Alyn and Deeside (Mark Tami), and my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell), for Aberavon (Stephen Kinnock), for Blaydon (Liz Twist), for Newport East (Jessica Morden), for Swansea West (Geraint Davies), for Rotherham (Sarah Champion), for Easington (Grahame Morris), for Chesterfield (Mr Perkins) and for Cynon Valley (Beth Winter). As I said, there were great speeches from all parts of the House.

At the heart of the debate is a question. We can all talk the rhetoric of building back better, but the question facing us is: when hard decisions have to be made, is rhetoric matched by reality? There is no greater test than how we treat the steel industry, because steel supports tens of thousands of high-skilled, high-wage jobs that are the pride of communities across our country, because a strong domestic steel industry is essential to our national manufacturing success and because steel is vital for our national security. We should be using every tool at our disposal to support the industry. That means Government putting their money where their mouth is in enabling steel to navigate the green transition, it means doing whatever it takes to support employment and it means making the right decisions on trade.

Let me come to the heart of our motion. The Under-Secretary of State for International Trade, the hon. Member for North East Hampshire (Mr Jayawardena), drew the short straw at the International Trade team meeting by being sent out to bat when the Government have no position, or at least no position that I could comprehend from his speech, but this is an incredibly serious situation. We are nine days away from these protections lapsing.

Let us just be clear for the Minister and the House about what UK Steel is saying would be the impact of the measures lapsing:

“a hammer blow to the UK steel sector…utter madness…the UK’s new system has failed our domestic steel sector.”

The decision reflects a fundamental misunderstanding of the realities of steel production. That is the reality.

What UK Steel is saying is not based on ideology, but on a practical assessment of the international steel market. Indeed, it has been well described by a former steel analyst, who said that

“something like 2 billion tonnes are produced every year, and there is a global glut. Lots of steel is being produced, and the real danger is that, somehow, we are exposed to dumping and to people overproducing and, essentially, undercutting our own producers.”

That former steel analyst is none other than the Business Secretary, appearing at the Business, Energy and Industrial Strategy Committee less than a month ago on 25 May.

The Business Secretary went on to say:

“This is a problem that is faced by all steel producers. The US has Section 232 tariffs. The EU, of which we were a member…had its own safeguards and tariff protections…We have to try to work out how we navigate this global glut of steel.”

Here we have a Government Minister who correctly identifies the problem—the risks of global oversupply—yet his own Government are deciding actively to remove the very safeguards against it, to ignore the warnings of the steel industry and steelworkers, to undermine the promises that the Government are making to the sector and to weaken our domestic steel manufacturers. We should be very clear about that because Members, particularly on the Government Benches, were concerned about it.

This is an insurance policy. These tariffs kick in once imports get above a certain quota, set at 111% of historic imports. It is a balanced insurance policy to prevent the oversupply that the Secretary of State identifies. The TRA is proposing to remove the insurance policy in half the product categories. I have read the TRA document and I have listened to the debate, and the case is simply not made out for that. We cannot argue that these are nine areas where we do not have domestic production, because we do, and we cannot say that there is no risk of serious injury to domestic producers, because the industry itself says there is. It simply leaves us with this argument: that we should have the cheap imports at the expense of our domestic industry. In other words, we are failing to learn all the lessons of the past, and here we are. What is the EU doing? Well, the EU is retaining its existing protections. I have to say that it does seem extraordinary that here we are, six months after the end of the transition period—when we were told that Brexit would provide stronger domestic protections for our industry—having to argue with the Government to keep the domestic protections that were in place when we were in the European Union. It makes no sense. No wonder our steel manufacturers are reacting with anger and disbelief, uncomprehending, and asking, “How are we even in this position?”

It is easy in these circumstances to blame the TRA, and, indeed, I think it has made the wrong decision. But this is also about the remit that it has been given. As you know, Madam Deputy Speaker, I am a bit of a nerd—much of a nerd. Paragraph 30 of the TRA’s document says that it has had representations about the interconnectedness of the industry—that we cannot simply separate out products—but it says pretty clearly that that is not really the way it can think about these issues. It cannot look at the interconnectedness of the industry, nor, indeed, a whole set of issues raised by my right hon. Friend the Member for Islington South and Finsbury. It cannot be right that the Government implement these flawed recommendations.

There is also a wider issue, which is that the legislation around the TRA is clearly not fit for purpose. That is why we have tabled this motion. It is hardly as though we are jumping the gun. We are nine days from the end of this protection. I mean, come on! What is the answer here? Our steelworkers and steel manufacturers want to know what the answer is from a Government who say they are standing up for steel. We have made our suggestion about how to deal with this, through emergency legislation. If there is a better suggestion, I look forward to hearing it from the Minister. The Government know in their heart of hearts that they are there in a ridiculous position, but it is time that they did something about it; they owe it to the steel industry to do something about it.

There is a wider context that I want briefly to mention, because it is symptomatic of a failure to have the kind of industrial policy for steel that we need. Steel faces a huge green transition—the hon. Member for Waveney (Peter Aldous) talked about it—but let us be clear about the scale of the task that we all face in this House. The industry says that we need billions for the green steel transition. A £250 million clean steel fund in 2023 is not going to cut the mustard. It is not going to give us the steel industry that we need in the future. There is a big choice for us as a country: do we invest to retain steelmaking capacity, with all the jobs and security it brings; or do we have some kind of neglect of the industry, with devastating consequences?

It is true of hydrogen as well. A £240 million hydrogen fund is better than nothing, but the Germans are offering €9 billion to invest in hydrogen. We face uniquely high energy prices, the whole issue of public procurement, whereby we still spend 25% on foreign steel, and an industry that is too often lurching from crisis to crisis, stuck in a long cycle of foreign acquisitions, insolvencies and bail-outs. To secure a long-term future, we must break this cycle. That is why we need a comprehensive industrial strategy for our UK steel sector, but we still do not see it from this Government.

For the first time in nearly 50 years, the UK has sole autonomy and responsibility for our external trade policy. We have to use this opportunity to develop a trade policy that supports an active industrial strategy that will help grow our foundational industries. I actually think that that view is mostly shared on both sides of the House, but that is why the position we have reached is so incomprehensible. We are not debating how we strengthen the protections for our domestic industry; we are desperately trying to cling on to the protections that we used to have.

Good rhetoric is not enough to help our steel industry; we need action. We need action in the next nine days. The Government must act to keep these protections in place. As we have heard on both sides of the Chamber, they must also give this House the ability to put our national economic interests first in trade decisions. We also need a comprehensive plan to support our steel industry, and deliver the manufacturing and industrial future that we need. We owe it to the communities of our country and to their future to deliver it.