Steel Debate - Westminster Hall

 

Watch the full debate here

I want to start by thanking you, Madam Chair for granting today’s debate and congratulate the Hon member for Middlesbrough South and East Cleveland for securing this debate.

There are many familiar faces in here, Madam Chair, and that is no surprise as Labour members in this House have raised the issue of steel well over 220 times since last May.

And the Save Our Steel Campaign has been exerting real pressure for over a year now.

Watch the full debate here

I want to start by thanking you, Madam Chair for granting today’s debate and congratulate the Hon member for Middlesbrough South and East Cleveland for securing this debate.

There are many familiar faces in here, Madam Chair, and that is no surprise as Labour members in this House have raised the issue of steel well over 220 times since last May.

And the Save Our Steel Campaign has been exerting real pressure for over a year now.

The work of Community and other Unions, and, most importantly, the thousands of steelworkers around the country has been remarkable.

But still, when crunch time came the S of State was caught unawares in Australia, the Prime Minister in the Canary Islands. Only when it became a public relations disaster did the government start to wake up.

The announcement that the government would take an equity stake and provide other forms of support was of course welcome.

We know how much this must have hurt the Secretary of State, and we salute him on crossing the Rubicon and coming to realise that there is a role of government in the building of a well-functioning industrial base.

Who knows, having had this damascene conversion he may be willing to now utter the words “Industrial Strategy”. Stranger things have happened.

Unfortunately this realization came too late for the people of Redcar, as the Hon Member for Redcar so movingly described a few weeks ago.

That is a betrayal for which the government shall not be forgiven, a betrayal that deserves no forgiveness.

But the government now has the opportunity to ensure they do not make the same mistake twice.

So today, some simple questions.

First, on energy costs.

The government’s compensation package is of course welcome, but much more can be done.

At Port Talbot, large amounts of gas, particularly from the coke ovens, are recycled and used as energy.

It is a form of renewable energy, by definition.

Why, therefore, can we receive Renewables Obligation Certificates for that?

In addition to the plans for a new generator, Tata have submitted an investment package of £130m, which would upgrade equipment and deliver massive energy efficiencies and cost savings.

BIS, as I understand it, have carried out a technical investigation, but have yet to give the project the green light.

Can the Minister explain why there has been such a delay in giving the green light?

It is possible that state aid is an issue, but I’ve been in contact, myself, with Commissioner Vestager and she, in a letter to me quite clearly stated that she remains “ready to work with the UK authorities on how best to make use of the possibilities offered by EU State aid rules to support energy intensive industries.”

The offer of help is there, why don’t we use it?

Second, on Business rates.

For Port Talbot, yes, this is a devolved issue, so what is needed is a cooperative approach between Westminster and Cardiff.

Tata Strip,Trostre and llanwen Specialty and Bar pay £28m a year in business rates.

Meanwhile the Ijmoduen plant in the Netherlands pays £2.5m a year in business rates.

How can we possibly justify UK business rates that are over 11 times those of the Netherlands?

I understand the governments concerns around the precedent they fear would be set on business rates and the broader implication that could have, however, that is simply a matter sitting down and sorting it out. .

The government could set a tapered ceiling, saying that the only businesses to be exempt would be those with, for example, a capital expenditure of over £30m, or those with over 3,000 employees.

They could specify that only companies fitting that criteria and making a loss would be exempt.

Third, on procurement.

The government have trumpeted their changes to procurement guidelines, and for these changes they should be congratulated.

However, as we learnt on Monday with the news that he latest set of British Ajax battle tanks would be largely built in Spain, with Swedish Steel, these changes are utterly toothless.

This news seriously questions the government commitment not only to British steel but also to British industry more broadly.

The Secretary of State has spoken of his desire to see a “New Industrial Revolution”, well steel is central to that.

Earlier this week Nick Reilly, the former head of GM Europe, the man who oversaw the saving of Ellesmere Port and Luton said that, and I quote: “If we lose the steel industry in this country… There is a high risk that maybe one of the manufacturers — maybe Vauxhall, maybe Toyota, maybe Nissan — will move out of the country if they cannot source steel locally. The real risk then is that that could snowball and the majority of the manufacturers go.”

This is a key consumer of UK steel making it clear that the end of British steel will be the end of much more.

 

And As Mr Reilly concluded, “What we are then talking about is not the 30,000 to 40,000 jobs at risk in the steel industry, but hundreds of thousands of jobs across British industry.”

 

Fourth, and once again this comes down to the absence of an industrial strategy, the government fail to understand the export dimension to our industry.

You cannot have a new industrial revolution if your key export industries are in jeopardy.

And steel is an export industry.

Just take the bearing steel required for High Speed Rail.

China, for example, is unable to produce the high quality bearing steel required for High Speed Rail.

But guess who can produce it? We can, and we do.

Fifth, and I think the Minister deserves some personal credit for this over her Secretary of State, but the government’s letter to customers was incredibly welcome.

However, as is often the case, it seems to be a job only half done. Once they got the headline in the papers they downed tools.

The government must similarly reassure suppliers – I have been contacted by constituents telling me that the Bos plant in Port Talbot almost ran out of aluminium as the nerves of suppliers grew – so will the Minister commit to writing to suppliers as she did to customers?

And will the government contact Credit Insurers, who are similarly nervous about the future of Strip Products UK?

And finally, I want to ask the Minister about the timeframe for the sale.

Tata have placed an incredibly tight timeframe for the sale process. We are told that it is to be completed, come what may, by 28th May. That is an incredibly tight turnaround for due diligence, the likes of which I never encountered in my business career for such a complex deal.

So can the Minister tell us what her government has been doing to put pressure on Tata to ensure a more flexible and reasonable timeframe for the sale?

This is something that I have raised with Tata, [in particular on Monday when I spoke with the new head of Strip Products UK, Bimlendra Jha].

This could not be more urgent, Madam Chair. I implore the minister to answer the questions as specifically as possible. I implore that the answer is not more committees and working groups and warm words with frozen actions.

I implore that we see some real action on these issues of energy, on procurement and on the dumping of Chinese steel so that we can finally give some confidence to the future of the British steel industry.

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