Steel Industry

Debate between Tom Blenkinsop and Mark Tami

Wednesday 11th May 2016 Westminster Hall

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I beg to move,

That this House has considered the future of the UK steel industry.

Before I begin, I would like to congratulate the steel football club of Middlesbrough on re-entering the premier league this weekend. I congratulate the chairman, Steve Gibson, who yet again has shown what a great model can be provided by a fantastic chair over many years. It is high time he was given a knighthood for his services to football.

Today is about the British steel industry. I want to reiterate that the British steel industry has a future. It is not a sunset industry; it is not a basket case. We, as steel MPs, have hammered home the well-versed arguments of industry and Community, the steelworkers’ trade union, that the Government have not provided the will to back trade defence mechanisms, especially in the case of the lesser duty tariff; that Chinese and Russian dumping is causing chaos in the world, European and British steel markets; that an imposition of the carbon floor price on energy-intensives has had significant repercussions; and that compensation for the carbon price floor and the EU emissions trading system has been slow to non-existent, despite continuous British ministerial promises. Business rates also need fundamental reform.

Despite all that, only this week we saw seven potential buyers come forward with the intention of purchasing the remaining Tata assets. Those assets across the UK—from Port Talbot to Shotton, Trostre, Llanwern and Hartlepool—are manufacturing different products at different levels of the stream of steel production. Prior to that, Dalzell and Clydebridge were purchased by Liberty House. Various Caparo sites previously in administration were also purchased by Liberty. Long product sites such as the Teesside beam mill, Skinningrove and the integrated works at Scunthorpe were all purchased by Greybull Capital, with the intention of significant investment. That is not evidence of a sunset industry. Those are serious players with real desires to invest and make money.

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

While those boons are obviously welcome, I am worried that we see it in the press that somehow everything is okay now. It is not. There is still a great deal of worry out there. I am particularly concerned about people who are leaving the industry to get jobs elsewhere because they do not see security for them and their families.

[Tom Blenkinsop]

I thank my hon. Friend for bringing up that issue, because skills retention is key. There are historical precedents that the Government could look to—not very old ones, but from the previous Labour Government in 2010—for how to use facilities and Government finance in order to retain skills. I will get on to that a little later.

What could have been for the Teesside Cast Products site in Redcar, the second most efficient plant in Europe, if it had been given time and the Government had committed to step in and co-invest, instead of the miserable inaction of a Government paralysed by dogma? It was saved once, but the lessons of how that was achieved were ignored.

Our British steel industry is a world beater. Investors desire to own it. International market conditions are changing right now. Indeed, indicators regarding strip in the UK are far more positive. As world demand increases and Chinese steel sites are closed due to international pressure, we are well placed to capitalise on that, but only if we now rally hard behind our British steel industry.

UK Steel Industry

Debate between Tom Blenkinsop and Mark Tami

Wednesday 15th July 2015 Westminster Hall

[Tom Blenkinsop]

My hon. Friend makes an excellent point, which both the APPG and EEF, the manufacturers’ organisation, have been making for some time. I hope the Minister will respond on that.

Compared with the same period last year, some products are registering truly staggering increases in imports of between 1,000% and 3,000%. The primary cause of those increases is the slowdown in Chinese construction activity, which has prompted certain Chinese producers to seek new markets in which to dump excess production. Those producers have come to the UK because they are already accredited under the British accreditation scheme to sell in far eastern markets such as Hong Kong and Singapore, which use the same accreditation scheme.

The APPG is committed to free trade, but what we are currently experiencing with some steel products cannot be considered free trade. The Government need to take a more proactive approach in such cases—some would say that they need to adopt industrial activism—and I welcome the news that, in last week’s European Commission anti-dumping committee, the Government voted in favour of maintaining anti-dumping duties on wire rod. The Minister heard my colleagues on that issue and took action. In a short period of time, she has been an infinitely better Minister than her predecessor. I will keep praising her in the hope that we get even better answers as the debate continues.

Loss of sales of the magnitude we are seeing now is unsustainable in the longer term for the one remaining British producer of rebar, Celsa, which is based in the constituency of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). The argument is not about creating barriers but about ensuring a level playing field not only in this case but in future anti-dumping cases, such as those on reinforcing steel bar, grain-oriented electrical steels and cold-rolled steels, which are all at various stages of investigation by the European Commission anti-dumping committee.

The steel industry is not all doom and gloom. An industry that remains innovative in which people continue to invest will create direct jobs, skills and broader regional economic growth. The steel industry has the potential to enjoy a long, sustainable, innovative and productive future. Earlier this month, for example, BOC, the biggest industrial gas company in the UK, signed a 15-year agreement to supply industrial gases to Sahaviriya Steel Industries UK, a major integrated iron and steel manufacturing facility based on Teesside in the constituency of my hon. Friend the Member for Redcar (Anna Turley) at the Teesside Cast Products site. The agreement is one of the largest gas contracts ever awarded in the UK. There has since been a turnaround, and the agreement represents a huge vote of confidence in the long-term sustainability of steelmaking on Teesside and the wider UK.

Another example, again from Teesside, is the cluster of energy-intensive industries in the Tees valley that recently set out a bold plan for the UK to lead the world in combining a growing industrial base with substantial reductions in carbon emissions. What is planned will be Europe’s first industrial carbon capture and storage network. CCS is a group of proven technologies that can capture, transport and permanently store up to 90% of carbon dioxide emissions produced by burning fossil fuels, thereby preventing them from entering the atmosphere. To date, the focus in the UK has been on commercialising CCS for electricity generation. Teesside Collective is an important departure; its premise is that a range of industries will be able to capture their emissions, plug them into a shared pipeline network and send them for permanent storage under the North sea. CCS is significant for the steel industry, as an energy-intensive industry, because the EU emissions trading system is likely to remain the primary driver of reducing industrial emissions up to 2030. Following the agreement of a new EU climate change package in 2014, sectors within the EU ETS will collectively need to reduce emissions by 43% between 2005 and 2030. Such reductions may be hard to achieve for sectors such a steel, but that type of programme offers a high-tech solution.

Projects such as the Teesside Collective may be crucial for the long-term future of the steel industry, and I welcome the support that the project has received from the Department of Energy and Climate Change. It is vital that the Government are proactive in supporting the steel industry. Such support does not have to consist of intervention similar to that in Italy, where the largest steelworks is in the process of being nationalised—incidentally, it is one of the worst-polluting steelworks in the EU. Government support could take the form of policies such as competitive energy prices and business rates. Following the review that ended in June, a swift, positive response is now required.

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

My hon. Friend has talked a lot about energy prices, which are a problem. If energy costs move against a plant, it does not matter how efficient the plant is; it will be difficult for it to compete against foreign competition.

[Tom Blenkinsop]

My hon. Friend is correct.