UK Steel: Government should swallow pride over an industrial strategy

Steel Industry - Westminster Hall at 2:30 pm on 11th May 2016.

Kevin Brennan Shadow Minister (Business, Innovation and Skills): It is a pleasure to serve under your chairpersonship for the first time, Mrs Moon.

I too congratulate my hon. Friend Tom Blenkinsop, both on securing this debate and on the promotion of Middlesbrough Football Club. I am just sorry that it is not Cardiff City being promoted this year. One of the proudest moments I ever had was being awarded the man of steel award by his union, Community, when I was first a Member of this House and campaigned on the Allied Steel and Wire pension scheme, but he is absolutely a man of steel. What he does not know about the steel industry is simply not worth knowing.

I also congratulate my other hon. Friends and other hon. Members for their contributions, including my hon. Friend Angela Smith, who mentioned Bessemer Road in Sheffield. As an example of the links between different steel communities, there is also a Bessemer Road in the constituency of my hon. Friend Stephen Doughty, bordering on my constituency. That just emphasises the links and the sense of community and solidarity between different steel communities.

I also congratulate my hon. Friends the Members for Aberavon (Stephen Kinnock) and for Redcar (Anna Turley) on their contributions. She has defended her constituents with incredible passion and energy, and I just want to express our solidarity with her and her constituents over what has happened in Redcar. My hon. Friend Mr Bailey reminded us of the wider economic impact of steel making, particularly in his region, the midlands.

Although I welcome the expressions of solidarity from Margaret Ferrier, I must say that I thought what she said about the Aberdeen bypass, after an intervention by my hon. Friend the Member for Cardiff South and Penarth, was staggeringly complacent. It was a breath-taking answer that did not practically express the solidarity with steelworkers in Wales, England and other parts of the United Kingdom in the way that we had expected. There needs to be some more reflection on the importance of that solidarity being expressed right across the United Kingdom.

I also congratulate my hon. Friend Mr Wright, the Chairman of the Business, Innovation and Skills Committee, who is doing incredible work on this subject in that role. My hon. Friend Christina Rees again spoke with passion about the importance of the steel industry in her community.

My hon. Friend the Member for Cardiff South and Penarth told us the incredible news that the Conservative party, Plaid Cymru and the UK Independence party have just formed an alliance in the Welsh Assembly to block the appointment of the Labour First Minister. They have no mandate to do that, and to do it at a time when we are in crisis over the steel industry—that kind of game-playing politics will not be forgotten in our steel communities in the future.

I also congratulate Tom Pursglove, who represents a very important steel-making community in this House, and Neil Gray, who spoke for the Scottish National party at the end of the debate, on their contributions.

I will not speak for too long because I want the Minister to have a chance to respond to the debate and I also want my hon. Friend the Member for Middlesbrough South and East Cleveland to have at least a brief opportunity to respond to her remarks. However, we are in a situation now where we can see the impact on our economy of what is happening in the steel industry. Manufacturing crawled ahead with 0.1% growth in March, barely reversing the 0.9% decline we saw in February, and output in the sector is 1.9% below what it was a year ago. Those are the worst figures for the last three years. The recovery is not happening in manufacturing.

“The march of the makers”—[Official Report, 23 March 2011;
Vol. 525, c. 966.] is not occurring in manufacturing. We know that the plight of UK steel, drowning under the flood of Chinese steel, has contributed to that, as well—obviously—as the uncertainty over the Brexit referendum and so on and the impact that is having on our industries.

We are seeing the impact in things such as the closure—the unnecessary closure—of the Redcar steel plant. Basic iron and steel manufacturing is down 37.3% a year on from the figures in March 2015. That is the sort of impact that this situation is having. I will quote Lee Hopley, the chief economist of EEF, the manufacturers organisation. I think the Minister criticised me for quoting the EEF in a previous debate, but Lee Hopley said:

“There isn’t too much in the data to lift economic spirits as a small increase in manufacturing output in March doesn’t change the picture of an overall weak start to the year.”

That is the economic background to today’s debate. We cannot afford to let the steel industry in this country die, because if it does the impact will go far beyond the steel-making communities that we have heard so much about today.

I will just reiterate the key points that the Minister needs to address, following this annus horribilis that we have had in the steel industry under this Government’s leadership. It is not all the fault of the Government, but it is their responsibility to respond, and to respond quickly and effectively.

As my hon. Friend the Member for Middlesbrough South and East Cleveland said, the insufficient action on trade defence mechanisms is the first charge against the Government—their slow response. More important is the lesser duty rule, which my hon. Friend also mentioned. Why are the Government still resisting getting rid of or reforming the lesser duty rule, but instead leading the opposition in Europe? Why are the Government not moving ahead with the reform of business rates that has been mentioned by so many speakers today?

There has been a failure to provide the bridge to the future in Redcar. We know what the implications of that failure are. We also know that the steel industry is not a dying industry. As my hon. Friend said, seven potential buyers have come forward to show interest in purchasing the remaining Tata/SSI assets. However, my hon. Friend also said there is a possibility that Tata itself might still be interested in this situation. What is the Minister’s response to that? Is that a serious possibility? Can she tell us anything about that?

Also, can the Minister tell us whether the Government will now swallow their pride and admit that they need to have an industrial strategy and to call it an industrial strategy, and to set it out clearly for us? Can she also answer the points that my hon. Friend made about the Catapult and the importance to the UK steel sector and to research and development for the future, if we are going to have a future for our steel industry?

Clive Betts Chair, Communities and Local Government Committee: Will my hon. Friend give way?

Kevin Brennan Shadow Minister (Business, Innovation and Skills): I will not give way, because it would be unfair of me not to leave enough time for the Minister and my hon. Friend the Member for Middlesbrough South and East Cleveland to respond to the debate. However, I note the presence of yet another Sheffield MP here in debate.

As I said, the Business Secretary should swallow his pride over an industrial strategy. What assurances can the Government give us that there will be sufficient time for the sale? None of us is convinced that the current timetable is necessarily achievable. What more will the Minister do on procurement, on making sure that the customer base is preserved, on making sure the highly skilled workforce are not lost and on taking action on tariffs? Finally, will she recognise the danger for our industries of market economy status being granted to China?

On that point, and to allow the Minister and my hon. Friend the Member for Middlesbrough South and East Cleveland sufficient time to respond to the debate, I conclude my remarks.