Shotton Steelworks: 125th Anniversary

Stephen Kinnock Excerpts

Wednesday 1st December 2021 Commons Chamber

[Mark Tami]

Really.

After John Summers’ death in 1876, the business began to expand under the leadership of his son Harry, who joined forces with three of his brothers, grew the business and opened the Hawarden iron works on the banks of the River Dee in 1896. With a 250-strong workforce and the installation of eight steam-driven rolling mills, galvanising pots, annealing furnaces and corrugating equipment, that was the beginning of the Shotton Steel plant that we know today.

Workers travelled from all over the country, such was the production demand, and by 1902 Harry Summers had turned the plant’s attention to steel production, with the site in Shotton being recognised as a leading steel manufacturer by 1909. John Summers and Sons was now the largest manufacturer of galvanised steel in the country, with a site covering 60 acres and employing 3,000 workers.

One of only two strikes in the works’ history caused major disruption to production between 1909 and 1910. The dispute concerned the contract system, whereby at each mill one person—the contractor—employed ten others on a piecework system. It was common for workers to be paid according to favouritism, rather than the hours they actually worked or their productivity.

[Stephen Kinnock (Aberavon) (Lab)]

Sounds like the Tory party.

[Mark Tami]

I can only agree with my hon. Friend.

Believe it or not, there was even the idea that some received payment in the local pub by way of a pint or two of beer. As a result, many joined the Steel Smelters Union in protest, and to avoid industrial action the Summers family drew up a deal with the disgruntled workers. However, the deal failed to avoid industrial action, as the contractors protested against it, with daily picketing at the factory gates. The dispute came to end in December 1910, following a mass address to the workforce by Harry, who agreed to replace the ad hoc contract system with the direct payment of wages—progress, indeed.

Following this period of uncertainty, Shotton focused its efforts on the first world war, producing thousands of steel sheets for the trenches, Nissen huts and shell making. Despite jobs in production remaining strictly for men, many women entered the site for the first time to carry out clerical work. In the immediate post-war years, Shotton Steel maintained its success, with the workforce rising to some 5,800. The period between the two world wars saw considerable change in both production techniques and global demand, with a general decline in demand for black and galvanised sheets, which at one time accounted for 98% of Shotton’s production. Disruption continued during the great depression following the Wall Street crash and Black Friday, when two thirds of Shotton’s workers lost their jobs and the plant closed its doors, not to open again until 1933.

During the second world war, Shotton Works operated at full capacity, producing 2.2 million tons of black and galvanised sheets for various uses. Most notably, as I am sure people will remember—I do not know whether they will remember at first hand—there were the Anderson air raid shelters, which saved many lives during the blitz. Unlike in the first world war, women were now employed in the labs, packing departments and cranes, making up about 1,000 of the workforce. Harry Summers died shortly before the end of the war, but he has always been remembered fondly:

“A more fearless, a more honest and more straightforward man it would be hard to name”,

as Richard Summers wrote in his obituary of Harry.

His Royal Highness Prince Philip, the Duke of Edinburgh, officially opened the first phase of the plant’s post-war development scheme in 1953, giving the plant additional space. At that time, steel consumption by the UK car industry had increased by 88%, creating a dramatic rise in demand. Under Harold Wilson’s Labour Government, Shotton moved to public ownership under the British Steel Corporation, employing 12,000 people out of the 270,000 British Steel Corporation employees nationwide. That figure, if we think of the workforce today, shows the dramatic change.

While this marked the end of the Summers’ ownership, for generations after the family name remained synonymous with Shotton. The Summers family had guided the company to become a world leader in steelmaking, putting Deeside on the global stage. I know that many people, even now, still refer to it as Summers’s—the name has lived on.

The 1970s were dominated by disputes over plans to phase out iron and steelmaking at Shotton, as part of the Government’s deep-seated review of the British Steel Corporation. Following several protests and backroom negotiations, led by the workers action committee, in May 1977 the British Steel Corporation removed proposals for the termination of iron and steelmaking at Shotton. With trading prospects looking brighter, the review was put on hold until 1982.

Sadly, rising oil prices and declining demand for strip mill products brought the review forward to 1979, resulting in a plan to end iron and steelmaking at the plant by 1981. Around 6,400 jobs were to be phased out following an agreement between the British Steel Corporation and trade unions. No community in living memory had faced the prospects of such a substantial and rapid loss of jobs—I think it was the place where the largest number of jobs were lost on a single day in a single plant anywhere in western Europe. As a result of only the second period of industrial action in its history, some 7,000 workers clocked off in December 1979, never to return other than for counselling. The heavy end closure was eventually complete in 1981.

The workers action committee, which had fought hard for the retention of iron and steelmaking at the works since 1972, formally disbanded its campaign, which was probably the longest in British industrial history. It had been successful to the extent that Government decisions were reversed on two occasions, with the British Steel Corporation withdrawing its closure proposal totally at one time. Despite the eventual loss of jobs, the Shotton campaign is regarded by many in this place, trade unionists and others as a model of collective resistance. By peaceful demonstration, reasoned argument and persuasion, the men and women of Shotton won support and sympathy at the highest level of Government. I put on record my thanks and, I am sure, that of everyone at Shotton, to Lord Jones, now in the other place, who led delegations and campaigns and spoke many times in this place and the other place, and continues to do so, in support of Shotton and how vital it is to the area.

Towards the close of the century, Shotton’s productivity saw strong growth, with modern equipment and processes, an increasing product range, and high-quality performance. Shotton was the centre of Britain’s coated steel production once again. By the time the Corus Group was formed to run the Shotton plant in 1999, productivity had tripled compared with 1986 levels. Corus was acquired by the Tata Steel group in 2007, and despite global financial challenges, the works remained profitable and forward thinking. With a focus on high-value products, the works achieved a record level of profitability within 10 years. Today, Shotton’s primary markets are construction and consumer products, supplying global brands such as Airbus, Jaguar Land Rover, IKEA and Wickes. As I said, it employs around 800 people.

In its 125-year history, Shotton has remained resolute, and it is still one of the largest employers in Alyn and Deeside, fostering hundreds of livelihoods. We can reflect on the history, but we should not dwell on it, because the next 125 years are just as important as the first, if not more important. This Government must step up their support for the UK steel industry, which continues to face critical challenges. A decade of Government indifference and failure to take action has caused the UK steel industry to nosedive by a fifth—a £1 billion hit to our economy. Since 2010, UK steel production has plummeted by 21.5%, which is 20 times the average among other European countries.

We are all experiencing the dramatic rise in gas prices, which hits Shotton hard because it relies mainly on gas for its energy. When we compare our gas and electricity prices with those in other countries—they are 60% cheaper in Germany and 51% cheaper in France—it is a miracle that we have a steel industry at all.

[Stephen Kinnock]

As my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out, there is a family of steelmaking plants in Wales, Port Talbot obviously being the hub, and we send birthday greetings to Shotton. The integrated nature of the steelmaking process means that the energy costs for Port Talbot, which are the highest in Wales, are crucial for the entire steelmaking process in Wales. As my right hon. Friend the Member for Alyn and Deeside (Mark Tami) has rightly pointed out, we are trying to compete with one hand tied behind our back, because the Government’s inaction is leaving us with massively higher energy costs than our European partners and neighbours.

I hope the Minister does not say, “Well, we pay the energy intensive industries compensation fund,” because these energy price disparities exist after that fund has been provided. Let us please not hear that line again from the Government. Does my right hon. Friend agree that this is the No. 1 priority? We are just asking for a level playing field. We have talked about the past, but the present and the future are so much more important. Unless we get this sorted, we are going to be uncompetitive for another year, two years or even 125 years.

[Mark Tami]

My hon. Friend makes a vital point, and I totally agree with him.

--- Later in debate ---

[Mark Tami]

Once again, I agree. I am also very concerned that the Government only ever seem interested in the steel industry when we are in crisis. When there is a crisis, suddenly the Government are all over the steel industry, and the moment it drops out of the headlines, so does the Government’s interest in it. That is just not acceptable. As my hon. Friends have said, the danger is that, at some point, the industry—or significant parts of it—will fall over. My hon. Friend the Member for Aberavon (Stephen Kinnock) made the point that without Port Talbot, there is a danger that there would not be a Shotton either. That is a point that the Government really need to grasp.

There is no mention of steel in the Government’s latest Budget or their so-called plan for growth, and their industrial strategy has effectively been scrapped. There has been a total failure to support environmental targets with investment that could boost decarbonisation in the industry. Funding from the clean steel fund has been delayed until 2023 and, as I have said, the issue of high energy prices has been completely ignored. All we ever get is, “Oh, it’s nothing to do with us. Have a look at Ofgem; maybe they can do something.” That is not acceptable.

Labour’s analysis shows that 24p of every pound spent on steel for Government infrastructure projects was spent outside the UK in 2017-18, meaning that Shotton and other plants throughout the UK have been left behind. The Government are making an utter mockery of their pledge to “level up” with such actions, which leave behind steel areas completely. Stronger “buy British” steel targets could create and safeguard around 50,000 jobs, and boost the economy by £4.4 billion. Vitally, it would also lower the environmental damage of steel imports. True levelling up would consist of more than just rhetoric. It is clear that we need decisive action and decisive planning. We heard only a couple of days ago in the other place that steel for our warships and our submarines is being imported, with the argument being, “We don’t have it in this country.” We do not have it in this country because we were not told soon enough that the plants could start producing what was needed. The end result is that we are importing steel to build warships and submarines. That is how stark the position is and how stark the Government’s failure is.

As well as taking action to secure the next 125 years of production at Shotton, we must also reflect on the role Shotton is taking in the fight against the climate and ecological crises we face—a point raised earlier. We need a green plan for steel and we need it to be supported by the Government. I want Shotton steelworks to become the first carbon-neutral plant in the UK. Shotton has been central to much progress in UK steelmaking for more than a century, so it would be fitting for the plant to lead the country’s decarbonisation efforts. Fortunately for us in Wales, the Welsh Labour Government are already taking the first vital steps to support Shotton’s path to becoming carbon neutral. The manufacturing action plan for Wales, a collaborative effort made between Industry Wales, trade unions and representatives from the manufacturing sector, is central to that progress. First Minister Mark Drakeford is stepping in to take action in pursuit of a prosperous, green and equal economy.

The Tata Steel group has been clear that decarbonisation and securing a green approach to steelmaking are top priorities. Shotton is already playing a key role in the fight against climate change through the application of its products in the construction of “active” buildings, which produce more energy through renewables than they consume. There is scope for more progress, and we must support and encourage Tata with that. Many critics argue that decarbonisation and economic growth in the steel industry are mutually exclusive, but with the right financial backing and strategic approach, Shotton can lead the UK steel industry to being carbon neutral and continue to support jobs in north Wales.

We hear a lot from the Government that hydrogen is the future. It may well be the future, but it is not currently the present and it will not be the future unless we invest in it. It is not going to happen by accident that one day we wake up and the steel industry and other industries suddenly have plentiful supplies of hydrogen, it works and everything is fine. We need to be ploughing investment into research now, otherwise we will fall further behind and we are already falling behind our European neighbours.

The steel industry in Alyn and Deeside is the very fabric of our area.

[Stephen Kinnock]

The point on hydrogen relates to the discussion we were having about energy costs. An electric arc furnace approach or a hydrogen-based approach takes even more energy, power and electricity than the current gas-fired approach. If we do not get the energy costs issue sorted, it will completely hamstring our efforts towards decarbonisation.

[Mark Tami]

I absolutely agree with my hon. Friend. We have to look at the whole picture, not just part of it.