Energy-intensive Industries

Jessica Morden Excerpts

Wednesday 24th November 2021 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I congratulate the hon. Member for Stoke-on-Trent South (Jack Brereton) on securing this debate and on a very good opening speech, in which he has talked about the ceramics industry. I hope that his speech demonstrates the call for greater Government support for energy-intensive industries, including steel, which I will be talking about today, representing Llanwern steelworks and Liberty Steel in Newport East. I hope that shows that this is a truly non-partisan, cross-party campaign that we can all agree with.

I declare an interest today as a proud member of the Community and GMB trade unions, which—along with Unite—so ably represent steelworkers in my constituency and across the UK. Those campaigning unions, along with the industry trade body UK Steel and hon. Members of different parties, have long banged the drum about the need to reduce eye-watering energy prices, which hold back our steel sector. I make no apologies for doing so again today, as this is an issue that has not gone away; in fact, it has got much worse over the last year.

Even before the pandemic hit, industrial energy prices were hitting our steel producers to the tune of £50 million a year. In the five years that UK Steel has been monitoring the costs, they have cost the UK sector £0.25 billion more than what is paid by French and German producers. UK steel producers—we always quote this fact, but it is worth doing so again—still pay 86% more than German competitors and 62% more than those in France. As the hon. Member for Stoke-on-Trent South said earlier, wholesale prices are now at record highs, with electricity costs peaking in October. To put that into context on the ground, energy costs for medium-sized steel rolling mills in south Wales and across the UK have almost quadrupled over the past year. One manufacturer said to me that it was paying £130,000 a week, which has now gone up to over £500,000 a week in some cases.

There is nothing inevitable about this, as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) said in Wales questions last week. Other countries have acted swiftly to ensure that energy costs are less of a burden on steel producers. The hon. Member for Stoke-on-Trent South mentioned the Portuguese Government. The Spanish and Portuguese Governments have taken decisive steps, including reducing the extraordinary profits made by energy companies, cutting special electricity tax rates for steel, and introducing a minimum 30% reduction in network charges for industrial users. Although every economy and every country is different, such steps represent Governments making a tangible show of support for their steel sectors—an example that the UK Government should follow.

The reasons why we support our steel sector fall into even sharper focus following COP26. Indeed, there was welcome acknowledgement at the summit that the world cannot decarbonise without steel—whether it is for use in wind turbines, electric cars, energy-efficient buildings, infrastructure and much more. That is why it was all the more disappointing that nothing of note for steel was in the Budget, which UK Steel rightly called a “missed opportunity” and a “triumph of complacency”, particularly on support to help the industry to decarbonise. For example, there was nothing on industrial energy costs, even though we know that the move towards decarbonisation will require even more energy-intensive methods of steel production.

I asked the Prime Minister about this last week but did not get much of an answer, so I will put the question to the Minister: what is happening with the clean steel fund that the industry was promised? It was absent from recent announcements and last month’s net zero strategy paper, and when my hon. Friend the Member for Blaenau Gwent (Nick Smith) raised the issue in the main Chamber recently, he was referred to the industrial energy transformation fund, which is two years older than the proposed clean steel fund. It really feels like the Government do not know what is happening to it, and its absence risks adding to the growing gap between what is needed to decarbonise the sector and what is available in support.

We have also heard little from the Government on improving the procurement of UK steel—a move that would support jobs and livelihoods, benefit our economy, provide value to the taxpayer, and lower our carbon footprint. The latest Government data on how much steel is sourced for the UK includes only 160 tonnes of British steel, which is somewhat lower than the estimated 800,000 to 900,000 tonnes that the forward-looking pipeline indicated. It is not good enough, and it is about time the Government took steps to ensure the maximum economic value of public money to be spent on steel in the coming years.

It is worth saying again that the Government talk the talk on net zero and industrial strategy, but it is really not worth anything if steel is not at its core, as my hon. Friend the Member for Aberavon (Stephen Kinnock) will agree. When the Community union launched the “We Need Our Steel” campaign, the “We” it referred to was not just our world-class, highly skilled steelworkers, or communities such as mine, with industry at their heart, and all those in the supply chain. It also referred to government at all levels harnessing the potential of steel and using it to build back the economy after the pandemic, and to power a green industrial revolution.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is giving an excellent speech. It appears that some Members on the Government Benches seem to see steel as a sunset industry. In fact, nothing could be further from the truth. It is at the cutting edge of innovation. New alloys are being developed all the time. We need to emphasise the fact that this is a future-facing industry.

[Jessica Morden]

I thank my hon. Friend. It is absolutely true to say that steel is a future-facing industry, which will help us build back the economy after the pandemic and help us power a green industrial revolution. That is as true now as ever.

Income Tax (Charge)

Jessica Morden Excerpts

Thursday 28th October 2021 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

It is right that we view this week’s Budget in two contexts: that of the pandemic, which is still very much with us, given the high case rates across the UK; and that of the political decisions that have been made by this Government over the past 19 months.

Time and again, the political choices that have been made by the Conservative party have been economically and morally adrift. As my hon. Friend the Member for Leeds West (Rachel Reeves) rightly said yesterday,

“we have a Government who are a byword for waste, cronyism and vanity projects.”—[Official Report, 27 October 2021; Vol. 702, c. 290.]

We should not forget that it was this Government who awarded hundreds of millions of pounds in personal protective equipment contracts to a pest control firm and to a Florida jewellery firm that had no experience of public contracts, as well as £150 million to a company that produced 50 million face masks that the NHS could not use over safety fears.

All too often, the decisions were made before financial and company due diligence was applied. Seventy-one contracts, with a total value of £1.5 billion, were awarded to suppliers before the financial and company due diligence processes were completed. Some £2 billion of contracts were awarded to businesses with direct links to friends or donors of the Tory party. The Public Accounts Committee highlighted this yesterday in its report on Test and Trace, which showed that £37 billion was spent. It said that “eye watering…sums” of taxpayers’ money were spent that failed to achieve the ambition of the project. That is the context of this Budget. That taxpayers’ money could have been spend much more wisely elsewhere. The Government would have done well to have looked at the Welsh Government’s actions in the pandemic for a good demonstration of political choices, under the sensible, steady and evidence-based leadership of Mark Drakeford.

My constituents have not been shielded from the Tory Government’s cut to universal credit this month; 8,630 households in Newport East have lost out as a result of the Government’s decision to remove the £20 uplift, which has made such a difference during the pandemic. The cut, coupled with the rise in national insurance, which will disproportionately impact those on the lowest incomes, falls in the middle of a cost of living crisis that this Budget does so little to address. The reduction in the taper rate is modest, and the Resolution Foundation highlights that about 75% of the 4.4 million households on universal credit will still be worse off as a result of decisions to take away the £20 a week uplift. This is made worse by the fact that the prices of so many everyday essentials, from food and fuel to gas and electric bills, have skyrocketed. No support was announced in the Budget for soaring household energy bills—and 3p off a pint in two years’ time may be welcome, but it is no help for families today.

I very much praise the work of Newport and Monmouthshire citizens advice, which has highlighted that the country faces a perfect storm of household debt, with an estimated 2 million households across the country already behind on paying their energy bills. This Budget presented the Government with an opportunity to take action on the issue. Indeed, the Opposition called on Ministers over recent months to remove VAT from domestic gas and electricity bills—a policy that I know some Government Members would have supported—but that was rejected.

On the theme of missed opportunities, with COP26 beginning on Sunday, there was little in the Budget to suggest that the Government are willing to invest in tackling the climate crisis. Climate action must start at home, and Britain’s credibility as holders of the COP presidency rests on the example that we set. There was little in the Chancellor’s speech to suggest that the Government will invest in delivering the benefits of the green transition to households and to industry, and certainly nothing to match Labour’s ambitions and the achievable demand for an investment of £28 billion every year until 2030 to tackle the climate crisis.

Crucially, as other hon. Members have said, there was nothing in the Budget this week for steel, an industry that would be a beneficiary of and contributor to the creation of a net zero economy. My right hon. Friend the Member for Doncaster North (Edward Miliband) set out that case brilliantly. Steel should be at the heart of the green recovery from the pandemic, and I say that as the Member representing Tata’s Llanwern site and Liberty Steel in Newport. UK Steel has rightly said that this Budget is a “triumph of complacency” and “a missed opportunity” ahead of COP26. Indeed, in the Chancellor’s statement, there was no hint of action on the sky-high industrial energy costs.

We heard a hugely weak response from the Secretary of State earlier in the debate that will deeply disappoint the industry, when he said that he is “in active conversations” and “watch this space”. We have been talking about this for many years. It is a really big burden on our industry that holds back British steel manufacturers against continental competitors. There was also no allocation of funding to the clean steel fund or wider decarbonisation support for the sector. The steel industry has highlighted that, of the 10 points in the Prime Minister’s plan for the green industrial revolution, eight relate to industries or goods that depend on steel or support the decarbonisation of steel. Either the Chancellor has forgotten that or the Government’s industrial strategy was not worth the paper that it was written on in the first place.

The Prime Minister has said:

“It would be crazy if we were not to use this post-Brexit moment to use the flexibility we have to buy British steel.”

It is one of the very few times that I can kind of agree with him. But this Budget was not the vote of confidence in our industry that it needs and deserves. That will need to come, especially if the Government are serious about converting their rhetoric around levelling up into action for an industry that is so well placed to be at the heart of that agenda. The fact that the UK currently imports 60% of the steel that it requires remains an environmental and economic own goal. We have a highly skilled and passionate steel workforce here in the UK, including in Newport East, who are ready to play their part in a green industrial revolution if the Government will just let them.

Yesterday, the Government boasted of recruiting new or extra police officers, but, as the chair of the Police Federation has highlighted, the new recruits, while welcome—I very much welcome those joining Gwent police—are only a partial replacement for the 21,000 officers and thousands of police staff lost over the last decade. Forces such as Gwent, which faced a 40% cut to its budget from 2010 to 2020, deserve a fairer funding settlement from the Government to deal with the many challenges they face, from rising antisocial behaviour in our communities to new and emerging forms of organised, violent and cyber-crime. From speaking to constituents, councillors and local community groups in Newport East, I know that tackling crime is a pressing priority for them. They want our police to be properly resourced to protect us. Sadly, there was nothing in the Chancellor’s statement to suggest that the Government are serious about giving the police the support that they need and deserve.

On public sector pay, as Unison has pointed out, there is no guarantee that it will rise above inflation. Wage rises below the cost of living, when taxes are going up and universal credit is cut, are, in effect, a pay cut.

Finally, of the 10 Welsh projects earmarked to benefit from the first tranche of levelling-up funding, half fall within marginal Conservative-held seats, although I congratulate my hon. Friend the Member for Pontypridd (Alex Davies-Jones) on her allocation. There are just three beneficiaries in south Wales and none in the entire Gwent region, which means that the excellent cross-party bid for the regeneration of the leisure centre and town centre in Caldicot in my constituency apparently fell on deaf ears, which is disappointing. The Chancellor talked about beer barrel politics yesterday but this actually seems to be a classic case of pork barrel politics from the Treasury.

On that theme, yesterday the Government announced Restoring Your Railway funding for a bidder from north Wales. I ask that the Government now make progress on other bids in the Restoring Your Railway funding pipeline, including the excellent application for a walkway station for Magor in my constituency, which has enormous local support in the community and would bring economic and environmental benefits to the area. I look forward to pursuing this yet again with Ministers in the light of yesterday’s announcement for north Wales.

Finally, my hon. Friend the Member for Stockton North (Alex Cunningham) was quite right to say that this Budget was underwhelming and uninspired.

Supporting Small Business

Jessica Morden Excerpts

Tuesday 19th October 2021 Commons Chamber

[Rachel Reeves]

My hon. Friend is absolutely right. She speaks about businesses in Brent, but that could go for so many other constituencies, high streets and town streets across our country. We want businesses to thrive and power our recovery and for every village, town and city across the UK to feel the benefits of a stronger and more resilient economy. Diluting ambition or postponing new thinking comes at a high price for businesses and jobs.

[Jessica Morden (Newport East) (Lab)]

In Wales, the Welsh Labour Government have helped 70,000 businesses, which will not have to pay any rates until next year, whereas in England over the summer, the support was scaled back. Does my hon. Friend agree that there is a stark contrast between Labour in power supporting business and the Conservative party?

[Rachel Reeves]

My hon. Friend is absolutely right. The Labour Government in Wales ensured that there would be no business rates at all for the retail and hospitality sectors in Wales for this financial year. That is in stark contrast to the Conservative Government in Westminster, who pushed ahead with restarting business rate bills in June this year.

What is decided in this place has huge implications for businesses, from the kitchen-table start-up to our high streets, industrial parks and commercial giants known across the world. That is one of the reasons it is so worrying that, at this crucial time, the Prime Minister and the Chancellor concocted a new jobs tax to arrive in the spring. Despite all their election promises to cut national insurance contributions, they are actually raising them against the strong advice of businesses and trade unions.

The Conservative Government’s actions will make each new recruit more expensive and increase the costs to business. The decision to saddle employers and workers with the jobs tax takes money out of people’s pockets when our economic recovery is not yet established or secure and only adds to the pressure on businesses after a testing year and a half. When all other costs are going up—the costs of energy and of supplies—these tax rises are only hitting them harder.

UK Steel Sector: Supply Chains

Jessica Morden Excerpts

Wednesday 9th June 2021 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

Well done to my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing this important debate. He is both the Member for Port Talbot and our chair of the all-party parliamentary group for steel and metal related industries. He gave an excellent analysis, setting out the issues yet again.

My hon. Friend mentioned that we have had 19 debates on steel in this House over recent years. I feel I have been there with him in many of those, making the same points over and over again. I do so because steel has always been at the very heart of the community that I represent, with many workers in both the steel industry in Newport East and down the road in Port Talbot, and in supply chains, making world-class automotive steel for BMW, Jaguar Land Rover and other projects at Tata Llanwern. We also have the Celsa site in the constituency of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), which is one of the largest producers of rebar; and Liberty, which produces hot rolled coil for domestic and export markets for use in construction and is at the cutting edge of modern steel technology. On that note, I know that we all want the future of all Liberty Steel businesses secured, including Newport, and I know that hon. Members for steel constituencies will hold Liberty and the Government to account and make sure that we uphold that commitment to the workforce and our industry going forward.

On behalf of that industry, those businesses, those workers and the unions in my constituency, I say again what steel MPs have been saying here for many years: steel should be a cornerstone of a comprehensive, forward-looking industrial strategy in this country. It has an absolutely pivotal role to play in our recovery from the pandemic. The economic value of the steel sector cannot be overstated. The industry makes a £2.8 billion direct contribution to GDP and supports a further £3.6 billion through its supply chains, while the average salary is around 36% higher than the regional average in steel heartlands such as south Wales and Yorkshire. If the Government are really serious about levelling up across the UK, they should look to steel as a foundation to build on.

In his response to me at Business, Energy and Industrial Strategy questions last month, the Secretary of State said that the Government were

“committed to a strategic presence of steel in the UK.”—[Official Report, 25 May 2021; Vol. 696, c. 233.]

Although I welcome that assurance, it is now time that the Government backed it up with meaningful action to support the industry.

As others have said, we need a change of direction on procurement. The Community union, plus Unite, GMB and others—I pay tribute to them for all the work they do on behalf of their members—have campaigned for decades for contracting authorities to effectively deploy social and environmental clauses in tendering processes in order to support domestic jobs in industry, just as they do in France and Germany, but little has changed in practical terms since 2016, when there were a few measures, and home-grown steel companies are continuing to miss out on important contracts, despite rhetoric from the Prime Minister about being at the front of the queue. The most recent Government data on how much steel is sourced in the UK includes only 160,000 tonnes, which is somewhat less than the estimated 800,000 to 900,000 tonnes of steel that their forward-looking pipeline indicates is used by central Government each year. As my hon. Friend the Member for Aberavon said, we need a patriotic procurement policy.

The case for sourcing UK steel is overwhelming. Every 1,000 tonnes of UK steel used in a public project delivers 4.5 jobs in the steel industry, and 10 jobs when the supply chain is included. As others have said, in addition to the economic boost that that provides, there are real environmental benefits from not importing steel from the EU or China respectively.

Energy prices are a prevalent problem. Ministers may have grown tired of steel MPs banging the drum about this over the years, but it remains critical for our industry. The oft-quoted evidence s is stark: UK steel producers pay 86% more for electricity than their competitors in Germany and 62% more than is paid in France. That is a £54-million-a-year cost burden to the UK steel sector and a huge competitive disadvantage. The targeted charging review led by Ofgem is set to make matters worse, as the review’s proposals would leave our producers paying 156% more in energy costs. Obviously, that would be devastating. I urge Ministers to do what they can on that, too.

As others have said, we need Ministers to work urgently to prevent the Trade Remedies Investigations Directorate from slashing our steel safeguards in half. The case was excellently argued by my hon. Friend the Member for Sefton Central (Bill Esterson). The safeguards are vital to providing a stable environment for the sector and protecting against unprecedented import surges, especially at a time when we are seeing significant global overcapacity in steel.

I also specifically ask the Minister to look again at the issue of bonded warehouses, which effectively undercut UK producers by waiving duty on cheap foreign imports. My hon. Friend the Member for Blaenau Gwent (Nick Smith) has led on this issue, and both of us have written to Ministers to convey our concerns and the concerns of unions and management in Newport and in Tredegar at Liberty. Will the Minister here today look into the matter?

As my hon. Friend has said, we saw the cost of doing nothing at the Orb works: we lost the only plant making electrical steels in the UK at a time when we are going to need electrical steels. The Government should have stepped in then. Orb steelworkers knew what was at stake, and I was proud to stand alongside them and their unions in the fight to save steel jobs.

As a country, we just cannot go on making huge strategic mistakes when it comes to our steel and manufacturing sectors. We need to utilise our steel assets and invest in our greatest strength, which is the indomitable, passionate and highly skilled steelworkers we have. We need the industry to have a level playing field. We need to have the right backing to drive this forward. We ask again for the Government to step up, to address the issues raised again today and to come up with a viable long-term plan to protect our industry.

Oral Answers to Questions

Jessica Morden Excerpts

Tuesday 25th May 2021 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

What steps he is taking to support the steel industry.

[Jessica Morden (Newport East) (Lab)]

What steps he is taking to support the UK steel sector.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

The Government are committed to a UK steel industry. I mentioned this repeatedly in my session with the Business, Energy and Industrial Strategy Committee this morning.

[Kwasi Kwarteng]

The hon. Gentleman will remember that Mr Gupta asked me and the Department for £170 million. Many Labour Members—dare I say it?—were hollering and screaming and saying we should nationalise. In fact, I would say that my actions and those of officials have been vindicated. There were serious concerns about corporate governance with this company, and Labour Members would do well to understand how to manage public finances with care. Having said all that, I am monitoring the situation closely and I remain strategically committed to the steel industry and this sector.

[Jessica Morden]

On behalf of workers at Liberty Steel in Newport, I agree with my hon. Friend the Member for Blaenau Gwent (Nick Smith): the Government must do all they can to protect these strategic businesses that are very important to our communities. Because of that, and because of global overcapacity in steel, it is also critical and very urgent that Ministers work with Cabinet colleagues to prevent the Trade Remedies Investigations Directorate from slashing our steel safeguards in half, so please will the Government act on that?

[Kwasi Kwarteng]

With regard to TRID, the hon. Lady will know that the consultation on that closes tomorrow. I would urge all interested parties to feed into that consultation so that we can reach a good decision. She knows that I am on record as having committed to a strategic presence of steel in the UK . I think that is vital and as Secretary of State I will always promote it within Government.

UK Steel Production: Greensill Capital

Jessica Morden Excerpts

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend will remember that I was a Minister in the Department for Exiting the European Union, as I think it was called. I do not want to revisit those debates, but I will say that the future of our industrial strategy, in terms of our green commitments, in terms of the steel commitments and in terms of electric vehicles, is a very bright one indeed.

[Jessica Morden (Newport East) (Lab)]

On behalf of all those working at the successful Liberty plant in Newport, may I reiterate how difficult this uncertainty is for the dedicated workforce who make world-class steel, and for their families? May I urge the Secretary of State to keep talking to and meeting virtually with groups of hon. Members, with Liberty plants and with the steel unions over the coming days? As my hon. Friend the Member for Manchester Central (Lucy Powell) said, the UK steel industry is the cornerstone of our national security and our economic prosperity, and it is absolutely crucial to our building back better.

[Kwasi Kwarteng]

The hon. Lady will know from our bilateral conversations that I am very committed, as Secretary of State, to the future of this sector. I am always happy to meet representatives, experts, workers, representatives in a trade union capacity and local management. I am always open to seeing people and trying to work out pragmatic, positive solutions. This is a really important issue and I am pleased to have engaged with the hon. Lady in the past, as I am sure I will in the future.

Oral Answers to Questions

Jessica Morden Excerpts

Tuesday 29th September 2020 Commons Chamber

[Kwasi Kwarteng]

I would be very happy to meet with MPs and representatives in the Mersey region. I know the Mayor, Steven Rotherham; I met him in my previous life as a DExEU Under-Secretary. I am happy to meet him and others again.

[Jessica Morden (Newport East) (Lab)]

What steps his Department is taking to ensure that employers do not use unfair and discriminatory practices when selecting people for redundancy.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Any discrimination when selecting people for redundancy would be not only wrong, but unlawful. Employees with the necessary qualifying service can bring a claim to an employment tribunal where they believe that they have been unfairly selected for redundancy.

[Jessica Morden]

Citizens Advice research shows that one worker in six is facing redundancy and that parents and carers of those who have shielded are twice as likely to be made redundant. Will the Minister now provide additional emergency resources to enforcement bodies to ensure that people are treated fairly, equally and safely during this extremely worrying time?

[Paul Scully]

We work closely with the enforcement body to make sure that it can do its job and we resource it accordingly. We are also looking to the long term to see what more we can do for better enforcement in these matters.

UK Steel Industry

Jessica Morden Excerpts

Monday 14th September 2020 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

I am grateful to have the opportunity tonight to talk about some of the challenges and the opportunities facing our steel sector, both as co-chair of the all-party parliamentary group on steel and metal related industries along with the hon. Member for Scunthorpe (Holly Mumby-Croft) and the secretary, my hon. Friend the Member for Aberavon (Stephen Kinnock), and on behalf of my constituents who work in Tata’s Llanwern site and Liberty Steel in Newport East.

I pay tribute to all those who work in the UK steel industry. They are a dedicated and highly skilled workforce, making world-class products.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I am proud to have spent eight hours in our local steelworks in Scunthorpe in the recess. Choosing to do it on the hottest day of the year was perhaps not my finest move, but I agree with the hon. Member that our steelworkers are incredibly hard-working, dedicated people, and it is hot and difficult work. I hope that she will join me this evening in calling for the Minister to consider setting targets for the amount of UK steel used in public projects; for steel specifications to be published using UK norms; for the long overdue steel public procurement pipeline to be published consistently; to push for other Departments to sign the UK steel charter and for Government-linked projects such as HS2—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I suspect that there might be quite a few interventions in the debate. It is only half an hour, and it is the debate of the hon. Member for Newport East (Jessica Morden). I hope that any interventions will be short.

[Jessica Morden]

I thank the hon. Member for Scunthorpe for her intervention and wholeheartedly agree with what she said. I will go on to say more about that later.

Our steelmakers have a pride in and passion for making steel, despite the sacrifices they have made in difficult times—and there have been some. During the pandemic, some steelworkers have had to be furloughed as demand has dropped.

[Ruth Jones (Newport West) (Lab)]

I commend my hon. Friend and neighbour for bringing this important debate to the Chamber tonight. Does she agree that the UK Government must do all they can to ensure that the jobs of steelworkers across the UK are protected as we come out of the furlough scheme?

[Jessica Morden]

That is important for so many sectors and jobs, including the steel industry in our city.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on bringing the debate to the Chamber. This will be a short intervention. Is she aware that Northern Ireland has a strong steel industry based on many individual contractors and that consideration must also be given to supporting the subsidiary jobs and industry throughout the United Kingdom? It is not just Wales; it is Northern Ireland, Scotland and England.

--- Later in debate ---

[Jessica Morden]

It is the UK steel industry. The hon. Member makes an important point, and I hope the Minister will address it later.

Some steelworkers have had to be furloughed as demand dropped in their parts of the business, but others have continued to make the essential steel we have needed in this crisis for the beds in the Nightingale hospitals, the urgent hospital extensions, the food and drink industry and more. As hon. Members here tonight with an interest in steel know—I am pleased to see so many here tonight at this late hour, including on the Front Bench—steel is everywhere and fundamental to our lives. Steel must play a crucial part in the UK’s post-pandemic recovery. Our plants stand ready to play their part in that with the right Government support, and that is what we ask for tonight.

Like almost every other sector of the economy, the UK steel industry has been hard hit by the pandemic, with steel producers reporting that orders have fallen by around 50% since March. At the start of the pandemic, the Chancellor promised the British public that they would not face the crisis alone and that the Government would undertake unprecedented measures for unprecedented times. However, as of today, only one company has received vital emergency funding. There has been much talk of Project Birch, but little news. I know that the Government have been in ongoing talks with steel companies in the last month about liquidity support.

[Mark Tami (Alyn and Deeside) (Lab)]

The issue is that the steel industry was not in a great place before covid, and the danger is that if we get steel being dumped by China or other countries, then we really are on the brink.

[Jessica Morden]

I absolutely agree and will come on to say more about that later. I know that hon. Members would appreciate an update from the Minister about how that is going and the plan to secure jobs and the future of our plants.

The UK steel sector employs about 32,000 people directly and 41,000 more through supply chains. It is estimated that these jobs pay 28% higher than the average salary. In steel strongholds like south Wales and Yorkshire, this increases to about 46% higher than the average wage. These are better-paid jobs in communities that really need them. The impact of the pandemic on our steel industry has consequences not only on a local level but on a national level. UK steel contributes a combined £5.5 billion to the UK economy and £3.2 billion to mitigating the national trade deficit through exports produced. That is because steel is a foundation industry for many other sectors: engineering, construction, transport and renewable energy, to name just a few. Steel forms the backbone of our manufacturing sector, and the industry stands ready to supply the world-class steel that will help us to build back better. This is the key message of the “Britain, we need our steel” campaign, which has been launched by the Community, Unite and GMB trade unions, to which I pay I tribute for the work they do to stand up for our steel industry in this country. I hope that all hon. Members here tonight will be actively supporting this campaign.

We need the Government to ensure that all Government Departments now sign up to the UK steel charter. I am pleased that the Welsh Government were one of the first signatories. This would commit the Government to prioritise UK steel in procurement for infrastructure projects. Back in June, the Prime Minister said that the Government will

“do absolutely everything we can…to ensure that UK steel manufacturers are at the front of the queue for the great projects that we are going to construct.”—[Official Report, 24 June 2020; Vol. 677, c. 1311.]

We will hold the Prime Minister to that.

Getting procurement right is key. There are concerns, which some of my constituents share, that any benefits from HS2 will not be greatly felt in our communities in south Wales or, indeed, those outside striking distance of the proposed route. The APPG’s “Steel 2020” report argued that Government procurement and other incentives should be used to increase domestic steel content in manufacturing and construction, as there is clearly a market opportunity. A study of future demand by the Department for Business, Energy and Industrial Strategy shows that UK consumption will climb from 9.5 million tonnes of steel to 11 million tonnes by 2030—a £4 billion a year opportunity for UK producers if the right measures are in place. Currently, less than 50% of steel used in Government-funded projects is British-made. This simply must change going forward: there is much, much more to do. Phases 1 and 2 of the HS2 project combined will require 2 million tonnes of steel, including for tracks, train components, bridges, tunnels, gantries, wire and more. UK steel producers could and should provide 90% of the steel needed for HS2. This is steel that should be made here and not imported.

The broader steps for the UK Government are set out in the UK Steel paper, “Covid-19—Restart and Recovery”. Will the Minister tell us what steps the Government are taking to ensure that all major infrastructure projects set minimum targets for UK steel content, and that all Government-funded projects establish a clear preference for sourcing steel from domestic producers? Will he outline the actions that he has undertaken to encourage all Government Departments to sign up to the steel charter? The Government must do what they can to create the right environment for UK steelmakers in the long term, including a UK sector deal to sit alongside the existing deals for manufacturing industries such as aerospace, construction and automotive, all of which are inherently linked to steel.

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend is making some very important points. On the automotive sector in particular, we need to concentrate on the supply of electrical steels from the Orb plant, which is of course mothballed. I understand that with £50 million of investment support from the Government, it could be resurrected in a matter of months.

[Jessica Morden]

My hon. Friend makes an important point about the Orb steelworks, which closed recently. I will expand on that at the end of my speech, if that is okay.

Change is needed to help UK businesses compete internationally, particularly on energy costs, which I and other colleagues on the APGG have been banging the drum on for a number of years now. This significant challenge for UK steel producers has not gone away. British steel producers pay the highest electricity prices in Europe—80% more for energy than their French counterparts and 62% more than German companies. This creates an enormous additional cost burden on the UK steel sector every year and hampers productivity. Will the Minister update the House on what the Department is doing to extend the indirect carbon price compensation scheme for energy-intensive industries, which is currently due to expire at the end of the year?

In response to parliamentary questions, Ministers have said that the ability of industries to compete across Europe and globally is a priority. It is now time to back up those words with action. It is vital to the sector to maintain current trade flows with key markets. A central concern for the steel industry as we get closer to January is trade with Europe.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making a powerful speech. On the issue of safeguards to ensure that we can continue to sell our steel into the EU, does she agree that the UK Government should now be making a unilateral offer to suspend all trade dumping measures against EU steel coming into this country, so that we can unlock the stalemate around the trade defence measures?

[Jessica Morden]

I do indeed. I believe that would be a generous offer to unblock the current stalemate. On the treatment of EU exports and EU safeguards, an estimated 70% of UK steel exports—some 2.6 million tonnes a year—go to EU countries. That is 1,400 trucks and six trains a week, making it the largest export market for steel. As UK Steel has highlighted, it is crucial for our industry that the UK Government demonstrate as early as possible that they are taking steps to positively resolve the issue with UK trading partners. What progress has the Minister made on EU and UK steel safeguards? An update from him on that is urgently needed tonight.

There is also a lack of clarity about what is happening in the US-UK free trade agreement negotiations on the removal of section 232 tariffs on steel projects. Since 2018, UK steel exports to the US have fallen by 32%, so can the Minister update us on those talks too?

Finally, do we want to be a country that manufactures goods or one that just imports them? The Government’s strategy must address the present and future needs of the industry. That means providing the UK steel industry with the vital liquidity support that it needs to protect businesses.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

The hon. Lady is absolutely right to say that steel has a future in the UK. I recently visited Stocksbridge steelworks in my constituency, and some of its work is absolutely cutting-edge and high-tech. Steel is not just an industry of the past and our heritage; it is vital for our future, our research and development, and all that makes Britain a great trading nation.

[Jessica Morden]

I thank the hon. Member for that intervention and agree entirely.

There are significant opportunities for UK steel as we begin to build back greener. The Prime Minister spoke earlier this year of a new age of opportunity in making the UK a world leader in, for example, electric vehicles. Steel will also play a vital role in the production of other green technologies, such as wind turbines, rail electrification, renewable projects, solar panels and more. If the Prime Minister wishes for the UK to be a world leader in those things, we must have an industrial strategy that puts steel at its centre.

Before its tragic closure earlier this year, Tata’s Orb steelworks in Newport was the only manufacturer of electrical steel in the UK. With the right strategy and the right investment, Orb could and should have played an instrumental part in a move to electric vehicles. We need vision from the Government to work with the industry to do that. While it may be too late for Orb, it is not too late for the Government to produce a Budget that incentivises automotive demand, so that the plants at Llanwern, with world-class steel for the automotive sector, can get involved. Steel that is manufactured in Britain also enjoys a significantly lower carbon footprint than imported steel. Not only does imported steel take more carbon dioxide than sourcing a tonne of steel domestically, but steel produced in Britain is subject to higher environmental standards than steel produced abroad.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I absolutely agree with that point. Does my hon. Friend agree that offshoring carbon emissions to China, Turkey and Iran is exactly the way we do not want to go, when we can make that steel in this country in green ways?

[Jessica Morden]

My hon. Friend is absolutely right, and I agree entirely.

It is also vital that the Government recognise developments such as Liberty’s Greensteel hub in Newport, which uses renewable and low-carbon energy to recycle scrap steel to meet the challenges of decarbonisation and growing consumption of steel globally.

Steel can play a vital part in rebuilding Britain after the pandemic. Despite the significant challenges posed by coronavirus, the Government have a unique opportunity to create a 21st-century manufacturing sector that has a revitalised steel sector at its core, so that we can build back. However, the Government must act—something that they have been slow to do in the past. I look forward to the Minister’s comments tonight.

Oral Answers to Questions

Jessica Morden Excerpts

Tuesday 21st July 2020 Commons Chamber

[Kwasi Kwarteng]

My right hon. Friend raises an important point. Of course we recognise the valiant contribution that the sector makes to the UK economy. We are working closely with the sector to pilot the reopening of conference centres, with a view to full socially distanced reopening from 1 October, subject of course to continuing to make progress.

[Jessica Morden (Newport East) (Lab)]

  Constituents are still reporting a catalogue of problems with bounce-back loans, including long waits to be approved and being turned down for business bank accounts because of credit ratings. When will Ministers get to grips with that, to ensure that all eligible businesses apply and receive the loans quickly?

[Alok Sharma]

Bounce-back loans have been a big success; more than 1 million have been approved for businesses. If the hon. Lady has specific issues that she wishes to raise about businesses in her constituency, she should write to me.

British Steel Industry

Jessica Morden Excerpts

Tuesday 10th March 2020 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on setting out the challenges facing the UK steel industry so effectively and forensically. Like him, I am a long-term member of the all-party group on steel and metal related industries, which I have the pleasure of co-chairing with the hon. Member for Scunthorpe (Holly Mumby-Croft). In our group, alongside the Community and Unite unions and UK Steel, which represents the industry, we have been clear for a long time about the strategy we want the Government to follow to save our steel industry. That has never been more important than it is now, when we see a number of global and UK-specific factors aligning to create a uniquely challenging set of circumstances for steelmakers in this country.

Just this week, Tata wrote to its staff to say that its financial position was serious. This will be another critical year. The Government must act now to help the environment at home for business and our trading relationships, whether they lie in the EU, the US or elsewhere. We have heard those asks repeated again today, on the eve of the Budget, which offers the Government a major opportunity to do the right thing and provide the sector with the strong foundations it needs to weather the current downturn and be in a position to ride the next upturn when it comes.

That is why, as other hon. Members have said, we need action on electricity prices. It is a fact often quoted, but still unresolved, that the UK’s energy intensive industry pays some of the highest industrial electricity prices in Europe. UK steel plants, as my hon. Friend said, paid 62% more than their German and 80% more than their French counterparts last year. We need a level playing field with our European competitors. As he also said—I do not apologise for giving the same messages, because our group has been relaying them to the Government for some time—plant and machinery need to be removed from business rate calculations to drive that capital investment.

As others have said, we must maximise the opportunities for UK steel in major infrastructure projects. According to the last tranche of data from the Department for Business, Energy and Industrial Strategy, 42% of the steel that was procured was sourced from outside the UK. That is still not good enough. Projects such as HS2 give us an opportunity to do better and finally get properly behind the steel charter. We need to use the money that is returned to us from the EU research fund for coal and steel to boost steel sector innovation.

Finally, we must prioritise our steel industry in upcoming trade negotiations. Some 40% of all UK steel is exported, and it is very vulnerable to any deterioration in our trading relationships with Europe and the rest of the world. As my hon. Friend said, we have seen the impact of the Trump tariffs on our exports. Many of us feel as though we have been firefighting for the last five years. The completion of the sales process for British Steel is good news for the company and some of its workforce, given the huge uncertainty and the setbacks that there have been along the way, but we need the Government to be proactive, not reactive. The Government need to decide whether they value making things in this country and whether we want to become an importer of steel, not a maker of steel.

[Stephen Kinnock]

My hon. Friend is giving a powerful speech. Does she agree that following Jingye’s takeover of the plant at Scunthorpe, there is a risk that the Government may say, “Box ticked—that’s sorted. The short-term issue is resolved, and we can walk away and think about something else”? Does she agree that it is vital that that does not happen, and that we still have to address the structural problems that we are discussing?

[Jessica Morden]

My hon. Friend is absolutely right. We cannot be reactive; we have to look holistically at achieving a long-term strategic vision. Help for British Steel is, of course, welcome, but we need help for the whole steel industry in the UK, including the Welsh steel industry.

Just before Christmas, Tata’s Orb steelworks in Newport—the only producer of electrical steels in the UK—was mothballed. It needed investment, but with investment it could have provided the steel for the electric vehicle industry, in which the Prime Minister has repeatedly said that he wants us to be a leader. Last week, we found out that no Government support was forthcoming, that no suitable buyer had been found for the works and that Tata was now considering other uses for the site. No help or good news was forthcoming.

There is a human cost to the closure. As my hon. Friend said, the steelworks provided well-paid, highly-skilled jobs in an area that needs them, but the closure also represents the loss of a strategic industry at a time when we need it. We are going to need electrical steels like those made at Orb, so either we will have to import them or someone will have to go out and build another plant. How did we allow that to happen? We need this steel Minister to take a holistic approach, rather than a piecemeal and reactive one.

I am honoured to represent a constituency that has a proud steel tradition, which includes the Llanwern steelworks. The automotive galvanised steel produced at the Zodiac plant in Llanwern is renowned for its quality across the world and is used by manufacturers in the automotive sector, which is closely linked to the steel sector, to make more fuel-efficient and lightweight cars. I have mentioned Orb, but there is also Liberty Steel, which produces hot rolled steel coils and floorplate coils for the construction sector. Sadly, in January that company announced job losses in Newport, which is a reflection of the clouds of uncertainty that still hover over the sector.

Steelworkers in my constituency take huge pride in what they produce. There is a real passion for the industry, and that is why we fight so hard for it. Reflecting on that, I want to mention Paul Horton, who worked at the Orb steelworks for 37 years. He was the main union rep for Community and did an excellent job, alongside other reps from Unite. He attended a debate on the future of Orb in this Chamber just a few months ago, when he sat in the Gallery. In that debate, I highlighted the contribution of workers past and present at Orb, and that of the trade union representatives from Community and Unite who fought so hard for everyone there.

Paul clocked up 12,849 days of work at the site and, although he was reaching the end of his own time at Orb, he knew it would be a tragedy for Newport and for south-east Wales to lose such a strategically important works. Sadly, on new year’s day—the day after he finished work after 38 years—Paul passed away. He was a wonderful man and a passionate advocate for our steel industry. In mentioning him today, I want to reflect on the passion and dedication of those who work in the steel industry, and to honour his memory by carrying on the fight to save our steel.

[Sir Charles Walker (in the Chair)]

I will call the Minister no later than 5.33 pm.

--- Later in debate ---

[Kwasi Kwarteng]

I am grateful to the hon. Lady for allowing me to continue. I will not get into a debate as to who is better or what the Scottish or British Governments have done. All I will say is that we have policies and have given funds to support the sector. We are completely aware of the strategic importance of the steel industry and remain committed to it. I will say a few words, to emphasise what has been done.

[Jessica Morden]

rose—

[Kwasi Kwarteng]

If the hon. Lady will forgive me, I have already given way, and I would like to make a few points before I give way again.

We have provided more than £300 million to the steel sector since 2013. We have tried to make energy costs more competitive in the sector. We are acutely conscious that steel manufacturers in Europe have slightly lower—in some cases, considerably lower—electricity costs, but then again, the other side of that coin is that consumers in those countries have much higher electricity costs than consumers in this country. There is a debate to be had about how that pricing structure should work.

Looking forward, we have announced the £315 million industrial energy transformation fund, which will give steel manufacturers finance towards using clean energy in their manufacturing processes. We also have a £250 million clean steel fund, which is also supporting the sector’s transition from fossil fuel-burning dirty energy to low-carbon technologies. These initiatives and funds have all been announced and funded in the past few years. We continue to support the steel industry, and we engage with it through the Steel Council set up by my right hon. Friend the Member for Bromsgrove (Sajid Javid) when he was Business Secretary, so it is not true to say that the Government are doing nothing, or that we do not regularly engage with the industry.