Protecting Britain’s Steel Industry

Richard Fuller Excerpts

Monday 21st June 2021 Commons Chamber

[Mr Jayawardena]

The hon. Gentleman is right to say that we must champion British steel at every turn. Indeed, the Department for Business, Energy and Industrial Strategy has been creating a strong pipeline to ensure that advance notice has been given to industry about the 7 million tonnes of steel that will be required, so that industry can seek the opportunities that lie ahead. The safeguard measures that Labour Members talk about today are only part of the picture with trade remedies. Dare I say that it is not the first time the Labour party has not quite understood international trade?

We must remember that safeguard measures are not intended to address unfair practices, which are the subject of the motion. They are emergency measures intended to tackle unforeseen surges in imports, and they are governed by strict WTO rules. It has been the job of the independent Trade Remedies Authority to investigate whether the steel safeguard measures should be extended, amended or revoked. That independent organisation has followed the evidence, and engaged widely with importers, domestic producers and overseas exporters. Although on Twitter the shadow Business Secretary seemingly does not know the difference between independence and being part of Government, the TRA is independent. This is not the Government’s proposal, and for each commodity covered by the safeguard measures, the TRA has considered whether there is domestic production, whether there is evidence that a surge in imports has caused or threatens to cause serious harm, and whether it is in British economic interests to maintain the measure.

[Richard Fuller (North East Bedfordshire) (Con)]

The shadow Secretary of State stated that she was shocked that the TRA had not considered what the impact would be if the restrictions were removed. Under schedule 49(4)(a) of the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019, that is precisely what it must consider in its analysis. Does the Minister agree that the right hon. Lady does not know what she is talking about?

[Mr Jayawardena]

My hon. Friend makes an excellent point about the lack of attention to detail on the Labour Benches. The approach we have taken forward is in line not only with WTO rules but with our domestic legislation.

I will tell you the truth, Madam Deputy Speaker: the TRA has recommended to the Secretary of State that nine product categories of the existing safeguard measure be removed. It judged that seven of them did not meet the requirement to show a significant increase in imports. Another failed to show any risk of serious injury or injury recurring, and the other did not pass the economic interest test, with industry asking for it to be removed, as the shadow Secretary of State discovered this morning, courtesy of the “Today” programme on BBC Radio 4. The Labour party seems intent on throwing the baby out with the bath water. The TRA recommended retaining the safeguard on 10 other product categories, and that would be exposed to legal challenge if we were arbitrarily to take the sort of decision that the Labour party advocates. Does the Labour party want to leave the WTO and adopt an isolationist approach in the world? I don’t, and I won’t.

--- Later in debate ---

[Richard Fuller (North East Bedfordshire) (Con)]

Changes by politicians to the recommendations of the Trade Remedies Authority is the sort of meddling that the regulations were designed to discourage, because political involvement is too often influenced by lobbying pressure and special interests rather than by the wider benefits to society. The TRA is clear that trade protections should continue where there is evidence of an import surge over the period of investigation and injury to producers. Protection will continue on 82% by volume of currently protected products. Protection is recommended to end only where there has been no import surge at all or where any increase in imports has resulted in no injury to producers. We should not continue protection when no injury has been incurred.

The motion says that, on Monday 28 June, Labour will be prepared to take all the steps necessary for

“urgent legislative action to protect the vital interests of the British steel industry.”

However, that is false for two reasons. First, as analysis by the authority demonstrates, the changes are designed not to affect steel industry participants. The UK steel industry is at risk from dumping arising from chronic global over-supply, but it also suffers from relatively high labour costs, burdensome energy costs, a large green footprint for accessing raw materials and an expensive, unproven and unfunded pathway to a green steel future, none of which is addressed in the motion but all of which is vital for the industry’s future.

Secondly, the Labour motion seeks to align completely the largely private interests of the owners of businesses in the steel industry—some of them are good; some of them are a bit more dodgy—with the interests of UK taxpayers as a whole. Those interests may overlap, but they are not identical. The motion is an incoherent gesture, not a viable strategy for the UK steel industry, demonstrating the superficiality of Labour’s approach to the steel industry, just as Labour’s call to put taxpayers’ money into a firm that is now under investigation by the Serious Fraud Office was a few weeks ago.

If the UK wishes to have a vibrant steel industry, it needs the sort of thorough review that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is undertaking. Should the industry require additional investment by the UK taxpayer, the case for that will have to stand up well to Treasury scrutiny. The context for the Treasury includes: that the UK economy is already being taxed at its highest rate since the 1960s; that Government debt is already at nearly 100% of GDP; that last year the UK ran its largest ever peacetime deficit of £303 billion; that, worryingly, £303 billion means that we are borrowing one third of all public expenditure; and that, in 2020, the Bank of England bought approximately 80% of that borrowing. Quantitative easing to finance Government expenditure rather than to meet an inflation target is an emergency tactic, not a regular tool of fiscal policy, and the benign period of its availability is coming to an end.

This Parliament needs to start making tough decisions if we are to make space to support our UK steel industry’s green transition. If we can address bigger issues along the lines of infrastructure projects, we can support the green change in the steel industry.