Steel Industry

Stephen Doughty Excerpts

Wednesday 28th October 2015 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

I beg to move,

That this House believes that the UK steel industry is of national strategic importance and should be supported by the UK Government; notes that the UK steel industry is in crisis and that the recent closure of SSI in Redcar has resulted in 2,000 direct job losses, with a further 1,000 contractor jobs lost and 6,000 jobs to be lost in the local supply chain, the announcement by Tata Steel that they will no longer produce steel plate at Dalzell, Clydebridge and Scunthorpe has resulted in 1,170 job losses, and that 1,700 jobs are at risk as Caparo Industries has gone into administration; recognises that for every direct steel job lost a further three indirect job losses will follow; further notes the vital importance of the steel industry to those local communities it serves, the proud industrial heritage of Britain’s steel towns and the very real threat to these parts of the country should the steel industry disappear; and calls upon the Government to take immediate action to protect the steel industry, including immediately implementing the Energy Intensive Industry Compensation Package, taking action with the EU Commission on antidumping measures, looking at temporary action on business rates, reviewing how regulatory frameworks impact the industry, and promoting local content and sustainability in procurement contacts, and for the Government to publish a full industrial strategy including what level of capacity the Government envisages is needed in the steel industry, so as to safeguard this vital strategic asset.

Labour has secured this debate because the British steel industry is in full-scale crisis, and before they were pushed the Government seemed unwilling to do anything practical about it. In the last three weeks, 2,220 employees in Redcar have lost their jobs, 3,000 on-site contractors have been laid off, and 6,000 further jobs will be lost in the local community. The hard closure of the site means the effective destruction of its steelmaking assets, including what was the second largest blast furnace in Europe. The Government’s refusal to help has effectively ended 170 years of steelmaking in Redcar, destroying specialist local skills and condemning the community to a bleak future. Tata Steel’s announcement about the closure of its long products business in Scunthorpe, Dalzell and Clydebridge has cost 1,170 jobs, and effectively ended steelmaking in Scotland. The news that Caparo Industries has filed for administration means that 1,700 more jobs are at risk across the country.

Alongside the tragedy of each job loss, and the ramifications for supply chains and local economies, there is a real worry that the UK’s steelmaking capacity is being sacrificed on the altar of laissez-faire economics by a Government who simply will not act to preserve our country’s strategic assets. Labour contends that steelmaking in the UK is an industry of national strategic importance and should therefore be supported by the Government.

Steel is important for UK manufacturing as it helps our balance of payments, and it is vital for our defence and security. If we are about to embark on the huge infrastructure investments that the Chancellor is so fond of boasting about, surely we should ensure that UK steel has every chance to compete and win those contracts. To do that, we must ensure that the UK steel industry still exists when those contracts come up for competition. As the industry has lurched deeper into this wholly foreseeable crisis, the Government have been quick to come up with expressions of sympathy, but noticeably reluctant to take any decisive action.

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

My hon. Friend will be aware that concerns about the challenges facing the steel industry have been raised repeatedly in this House—I think there have been 10 debates—and there have been repeated questions, meetings, exchanges with officials from the Departments for Business, Innovation and Skills and of Energy and Climate Change, and others, for more than two years. Is she surprised, as I am, that it has taken until today for the Business Secretary to get on a train to Brussels and try to sort out this mess?

[Ms Eagle]

I certainly am surprised. If the Business Secretary needs an Opposition day debate to encourage him to do his job by going to Brussels and talking to the Commission after years of not doing that, we will secure more such debates and persuade him to do his duty, which he should have been doing in the first place.

--- Later in debate ---

[Stephen Crabb]

We are pushing for a quick decision on the state-aid decision. Labour Members have referred to the German example. I have looked at it: Germany had a pre-existing scheme set up. When the new state-aid rules kicked in, that prevented other European countries from implementing a scheme on their own prior to seeking state-aid rules. That is why we have gone to get state-aid approval prior to bringing forward the compensation package.

[Stephen Doughty]

rose—

[Stephen Crabb]

The hon. Gentleman represents a steel constituency, so I give way to him.

[Stephen Doughty]

The Secretary of State is well aware of these issues, as I raised the issue of state-aid clearance with him and Celsa on 11 November last year. Will he confirm whether the state-aid clearance for the steel industry, which the Government say has been a top priority, has actually been at the top of the UK Government’s state-aid clearance priorities at any point in the last 12 to 24 months—and is it now? It is all very well talking about what the Secretary of State is doing today, but has that been at the top of the priority list for the last 12 months?

[Stephen Crabb]

We have absolutely been pushing for state-aid clearance on this. It is really important. As my right hon. Friend the Prime Minister made clear today, as soon as that state-aid clearance is given, we will start paying the compensation to steel companies. It is worth pointing out that we have already paid out £50 million to a number of steel companies to compensate them for additional energy costs arising from environmental and climate change policies, a lot of which were imposed by a previous Labour Government.

--- Later in debate ---

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

Thank you, Mr Deputy Speaker, for fitting me in to speak for a very brief time.

I want to pay tribute to the Celsa Steel workforce in my constituency, to many members of the community, and to all the steelworkers who have come up here today to meet us to emphasise what a crisis this is and what needs to be done. I have never before seen an issue on which there has been such unanimity about what the Government need to do among MPs in all parts of the House, among the unions and the management of the steel industry across the UK, and across the supply chain and all those involved in the industry.

I am not going to rehearse the arguments because I do not have time, but we have been making them for a very long time. I want to get from the Minister a real understanding of why it has taken so long to get to this point. I do not want to cast any aspersions on the work that she and the Secretary of State for Wales, who is also here, have done. They have both listened carefully and acknowledged the concerns expressed, and I hope they are really serious about wanting to take action.

However, I and many others have been meeting on these issues for well over two years. I met the Secretary of State for Wales and the former steel Minister, the right hon. Member for West Suffolk (Matthew Hancock), on 11 November last year, and I was meeting BIS and DECC officials two years before that. We, and the industry, have consistently raised the concerns about dumping, energy costs, the impact of taxation, and the slowness in bringing forth the energy-intensive industries compensation package, yet only in very recent days have we seen substantive action. That reflects two basic things about this Government: first, the lack of an industrial strategy, and of political leadership, across Government; and, secondly and more fundamentally, their attitude towards Europe, on which I disagree with the hon. Member for Corby (Tom Pursglove). We cannot deal with dumping by countries such as China unless we are working together across the European Union.

I want to understand why this has taken so long. The Minister took action, but why was that? Why is this such a revelation at this stage? This should have been going on for years. That is the fundamental point that I want to make.