UK Steel Industry

Tom Pursglove Excerpts

Thursday 17th September 2015 Commons Chamber

[Tom Pursglove (Corby) (Con)]

It is a great pleasure to speak in this debate, which I am grateful to the Backbench Business Committee for securing. It is also a great pleasure to follow the various remarks made this afternoon, first from the hon. Member for Redcar (Anna Turley), who made a strong case for her constituency and gave us a positive, constructive and helpful overview of the problems facing the industry. As I often do, I ended up agreeing with my hon. Friend the Member for Brigg and Goole (Andrew Percy) about the EU dimension. The hon. Member for Hartlepool (Mr Wright) made some interesting comments, and I hope that the Business, Innovation and Skills Committee, which he chairs, will play a leading role in bringing forward these arguments, informing the debate and playing a constructive part in it. He redeemed himself later in his remarks, having earlier left me slightly disappointed by the tone of his remarks about the work of Ministers. I pay tribute to the Minister—

[Mr Iain Wright]

She’s good.

[Tom Pursglove]

I am glad that that is on the record, because the Minister has done an awful lot, particularly on anti-dumping. As Members know, Ministers take these concerns seriously and have been providing what support they can.

Corby has a proud history of steel production that began in Roman times, when the area was worked for iron ore. During the industrial revolution, the ironstone industry thrived in the area, with the discovery of extensive ironstone beds, and by 1934, the steel firm Stewart & Lloyds had moved into Corby to build a large ironstone and steel works, which took the population of Corby from just 1,500 in 1931 to 12,000 in 1939, well and truly putting the town on the map. Many people moved into the area to work in the steel industry, most notably from Scotland, and Corby is regularly known locally as “Little Scotland” owing to the large number of skilled Scottish workers who moved there for the steelworks. This has had a direct impact on the make-up of the area, and today we still have a proud Scottish community in the town and its surroundings. As Corby’s voice in Westminster, I am here to speak in favour of this motion and to urge Ministers to hold a summit on this key industry, which is a large employer not only in Corby but across the country. I know that all Members advocate on behalf of their local workforce, but the Corby workforce are incredibly hard-working, dedicated and committed. I hear such comments week in, week out in my constituency, and I am incredibly proud of that.

Today’s motion has unified Members from both sides of the House who are working constructively together, through the all-party group on steel and metal related industries, to get a better deal for the UK steel industry. I thank my right hon. Friend the Secretary of State for Business, Innovation and Skills for agreeing to meet the APPG in the coming weeks and the Minister for standing up against Chinese dumping. She has taken action in the European sphere, and I trust that she will continue to fight for steel in upcoming anti-dumping cases at EU level. I appreciate their willingness to listen, and I hope that by working together we can find solutions to the problems facing the industry. I also welcome the answer given by the Secretary of State for Energy and Climate Change to my question this morning. She advocated on behalf of buying British products, which is something I am sure we all agree with strongly. I hope that that will come across in future discussions with Ministers and that they will continue to advocate that position publicly.

Mr Speaker, did you know that the steel tubing used in sprinkler systems and managed motorway gantries is made in Corby? Furthermore, as I alluded to in my maiden speech, one can also see Corby steel products at the London Eye, the Wembley arch and the Olympic stadium. These are just some of the products manufactured in Corby, and we should all feel proud that it is British products we can see at these iconic locations in our country. I strongly believe we should shout from the rooftops for British business and support UK supply chains.

I know the industry faces challenges in that regard. Foreign competitors are winning UK contracts over British businesses because of the combination of the current exchange rates and cheap imports, which can provide a more competitive end price. However, the value of steel to the UK is not just in the end product but in the value throughout production. By buying British, we can support our own industries and those working in these sectors, boost our own economy and in turn benefit from this growth. If foreign companies win contracts, this does nothing to further those aims. Furthermore, all the evidence suggests that the quality and standard of British steel is far superior to that imported from elsewhere. That is why I am such a strong supporter of the charter for sustainable British steel, an initiative I would like to see adopted across Government, local authorities and broader public sector procurement.

On the wider context, the benefits of buying British massively outweigh the benefits of importing from foreign countries. First, the transportation costs are lower, and, as we heard in Question Time earlier, it is also better for the environment. Secondly, it creates skilled jobs and the ability to offer young people apprenticeships and graduate jobs. Tata Steel, in my constituency, has led on this, nationally employing 500 apprentices and graduates this year alone, and in Corby it has taken on six new apprentices, investing an estimated £10,000 per year in each. As the local MP, I appreciate Tata’s commitment to local young people. From speaking to local apprentices, I know how important these opportunities are in terms of learning a trade, having a job and, perhaps most importantly, getting the opportunity to forge a career.

Fundamentally, the procurement process must be looked at, and I believe that the Government, local authorities and the wider public sector can do more to promote procurement strategies to support domestic manufacturers. This would obviously require a shift in culture in some areas, but a steel summit would begin that dialogue. Speaking of sustainability, it is vital that the steel industry and the Government identify a constructive way forward on energy costs and green taxation—an onerous burden that Members on both sides of the House have alluded to in departmental questions this very week. The huge costs associated with energy supply for energy-intensive manufacturing immediately puts British business in a difficult position and at a competitive disadvantage over foreign rivals. Indeed, data on EU industrial electricity prices for extra large users between July 2008 and December 2013 show that Britain was the most expensive even before tax. I am aware from my conversations in Corby and east Northamptonshire and from visits to local firms that this does not just affect the steel industry but plagues other sectors, such as the plastics industry.

The current system, whereby energy-intensive industries pay huge energy bills up front and then receive compensation afterwards, is unhelpful. I would be intrigued to know how much the bureaucracy is costing both individual businesses and the Government to administer. By opening a dialogue, as the motion states, we can seek meaningful and urgent solutions to this problem. I am increasingly coming round to the point of view that it would be better to exempt energy-intensive industry from these burdensome levies and charges, but in the shorter term I agree with implementing the compensation package in full and in a very timely manner.

The UK prides itself on innovation in business, as MPs see week in, week out in their constituencies. British businesses are at the cutting edge of international innovation. I struggle to understand, therefore, why industries such as steel are penalised through the business rates system, which disincentivises investment and pushes up costs. How can it be right that these businesses pay rates not only on the size of the site but whenever they invest in new machinery and equipment? An example of this was the Tata Steel site in the constituency of the hon. Member for Aberavon (Stephen Kinnock). Tata Steel invested £185 million for a new blast furnace for its Port Talbot site, which then led to an increase in business rates of £400,000 a year, despite the fact the site did not change in size or scope. Penalising investment like this is detrimental to British industry, and I believe that the Government, who have made clear their commitment to business-led growth, should be working with industries to stop this tax on innovation.

During my remarks, I have outlined just a few of the complex and wide-ranging issues affecting the steel industry. I very much look forward to visiting the Tata site in Corby in the coming weeks, but it is apparent in the short term that we need high-level discussion between all those involved in this important strategic industry. That is why I wholeheartedly support today’s motion.

Going forward, I hope that the cross-party spirit that has characterised the debate—today, but also in the months since I became a Member—endures. I hope that Ministers will continue to engage, listen and work with colleagues of all parties who are concerned about the future of this vital British industry. While I appreciate that at this point some issues are out of the hands of the UK Government, as they have shown, they can do things to hold back the tide and give steel companies an opportunity to adapt and move forward. It is vital for the survival of the industry that we come together to make progress before it is simply too late.