Steel Industry

Debate between Kevan Jones and Angela Eagle

Wednesday 28th October 2015 Commons Chamber

[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.