That this House believes the British steel industry, and the livelihoods and communities it supports, should not be undermined by unfair competition from overseas; regrets that the Trade Remedies Authority has not accounted for the interconnectedness of the British steel industry, nor the impact of safeguard tariffs being maintained in the US and EU, when recommending the abolition of nine of the 19 existing safeguards on steel products; accordingly requires the Government to take urgent action by legislating to allow Ministers to reject the Trade Remedies Authority’s recommendation and temporarily extend the current safeguards; and orders that, at the sitting on Monday 28 June, Standing Order No. 14(1) shall not apply, and that precedence at that sitting shall be given instead to any Business of the House motion in the name of the Leader of the Opposition which may be moved at the commencement of public business that day to make provision for urgent legislative action to protect the vital interests of the British steel industry.
The motion before us disagrees with the recommendations of the Trade Remedies Authority to revoke half the current safeguards protecting our nation’s steel industry against potential floods of cheap imports. It requires the Government to bring forward emergency legislation, allowing them to reject those recommendations and extend all the current safeguards before they expire on 30 June. Finally, it makes provision for the Leader of the Opposition to enable the emergency legislation to be considered next Monday if the Government fail to do so themselves.
It is a pleasure to open this debate. It is a testament to the urgency and importance of the issues before us that so many Members have registered to speak. For that reason, I will not be taking many interventions. I believe that there are 24 Labour Back Benchers alone who want to contribute.
We all recognise that the livelihoods and futures of steel communities across our country will be directly affected by the decisions taken in Westminster this week, but it is the motion before us tonight that creates the possibility that those decisions will be the right ones. That is a heavy responsibility on our shoulders and it is therefore incumbent on us all to treat this debate with the seriousness that it deserves. That is why it is a source of regret that the one person whose decisions will matter above all in Westminster this week—the Secretary of State for International Trade—has chosen not to be here this evening.
After all, it is the Secretary of State’s Trade Remedies Authority—appointed, empowered and inspired by her—that has made the misguided recommendations that have led to this crisis. It is her powers in relation to those recommendations and her freedom to take other issues into account which are the subject of the motion before us today. Most fundamentally of all, it is her general approach to trade policy and her specific attitude towards the future of the steel industry in Britain that is crucial in determining the final decision that is taken on the retention of these safeguards.
If it were me standing in the Secretary of State’s position, I would want to be here this evening to listen to what the representatives of Britain’s steel communities have to say, particularly as some of those representatives are sitting on her own Back Benches. In her absence, I am going to use my opening remarks to look through each of the three issues I mentioned in turn—first, the role of the Trade Remedies Authority; secondly, the powers of the Secretary of State; and, thirdly, the decisions she now has to take—and try to develop a consensus in this House not just in support of this vital motion, but on how the Secretary of State should approach the crucial days ahead.
Let me start with the role of the Trade Remedies Authority and the reason for its flawed recommendations. There is nothing worse, in life or politics, than people being wise after the event, but in respect of the Trade Remedies Authority it is very much a case of predictions coming to pass. Four years ago, my hon. Friends the Members for Brent North (Barry Gardiner) and for Sefton Central (Bill Esterson) warned the Government consistently during the first attempted passage of the Trade Bill that their vision for the new TRA was misguided. Exactly 13 months ago, when the Trade Bill returned for a second time, I stood at this Dispatch Box and followed their previous lead, describing the TRA as
“a vital body with a vital task”
but one that was not representative of the business and workers that it was being set up to defend. “No wonder”, I said 13 months ago,
“there are such concerns and suspicions that the Government’s true agenda for the TRA is not to defend Britain against underpriced imports, but somehow to balance the damage they do to domestic producers against the perceived benefits for domestic consumers.”
I said back then:
“That is not the job of the trade remedies authority.”—[Official Report, 20 May 2020; Vol. 676, c. 616.]
I stand by that statement, even more today now that we have seen this new body in action. If we were in any doubt about the misguided sense of mission that is driving the TRA, we had all the confirmation that we needed last week from the new chair and the new chief executive, who were personally selected by the Secretary of State from the senior ranks of the Department for International Trade. In their joint interview with the Financial Times,they explained that, under their leadership, the TRA would always seek to set the lowest safeguards possible, deliberately lower than any EU equivalent, and that this approach would be quite distinct from countries
“which impose swingeing tariffs to protect particular industries.”
They boasted that the TRA had already scrapped more than 50 of the safeguard tariffs carried over from the European Union, and that they intended to consider only around four cases per year where new safeguards might be required, which is a quarter of the amount being pursued each year by Brussels. They concluded that the TRA was
“suited to a buccaneering global Britain”
that would favour free trade over the protection of domestic industries. If anyone were wondering how the TRA can possibly have come to the conclusions that it has when it comes to maintaining Britain’s steel safeguards, the answer is that the men in charge are simply doing what they were appointed to do by the Secretary of State.
I am grateful to the right hon. Lady for taking my intervention and for the point that she is making; I agree fully with what she is saying. Does she agree that it is the complete opposite of taking back control that the Secretary of State cannot even amend the recommendations of this authority and that, basically, it is faceless bureaucrats who are determining Government policy?
I will take one more intervention, especially from the hon. Gentleman whose constituents will want to know what he has to say this evening.
Jacob Young
I thank the right hon. Lady for giving way. Can she be clear in the point that she is making? Is she questioning the independence of the TRA and would she rather have a politically affiliated body determining trade policy?
I would rather that we had a body that looked after the hon. Gentleman’s constituents and defended the steel industry.
Even so, let us not forget a fundamental flaw at the heart of the TRA’s recommendations: the failure to understand that the safeguards put in place by the EU were deliberately intended to provide comprehensive protection across the steel industry as a whole, recognising that if one product line is exposed to cut-price imports, the competitiveness of the whole industry is immediately undermined. The TRA has either not understood that basic concept or has deliberately chosen to ignore it. Either way, I defy anyone in this House tonight to argue that the TRA’s recommendations must be considered sacrosanct either because of its objectivity or because of its expertise. I am afraid that if Members read the Financial Times interview or studied its conclusions on steel safeguards, it is clear that the TRA has been found sorely lacking on both fronts, as many of us predicted that it would
That brings me to the second of the three major issues before us this evening. If the TRA’s recommendations are flawed, what can the Secretary of State do about it? As the House will be aware, as the legislation stands, it does not allow the Secretary of State to reject the TRA’s recommendations in order to retain the existing state safeguards. The motion before us proposes emergency legislation, allowing the Secretary of State to do exactly that. The reason that we would argue that such an unusual move is a necessity is not just because of the urgent need to stop those steel safeguards expiring at the end of the month, but because this review process has exposed three fundamental problems in the remit of the TRA’s investigation that cannot have been intended by Parliament.
First, it makes no sense whatsoever for the TRA to look at the UK’s safeguards on steel in isolation from what the rest of the world is doing with theirs and from what is happening in global steel markets. Let us consider the position that we are at present: eight of the world’s 10 largest steel markets have safeguards currently in place, with the US and the EU recently confirming that they are certainly keeping theirs. At the same time, China is heading towards the 1 billion tonne mark for annual production and still has more than 300 million tonnes in spare capacity. In that context, it would be utter madness to remove half our current safeguards and expose our country to a flood of cheap imports from China and elsewhere at exactly the time that those suppliers are desperately hunting for an unprotected market. Yet the TRA has not given any consideration to the international context, because it is apparently not in its remit to do so.
No, I will not give way at this stage. I am going to finish the speech.
If we do wish to do so in Britain, we can wean ourselves entirely away from the cheap imported steel that causes 50% extra carbon emissions, and instead have a British steel industry that leads the world in the development of hydrogen steel technology and decarbonised steel production, and by doing so leads our country to the achievement of net zero. If we choose to do so in Britain, we can put home-produced steel at the heart of every defence contract and infrastructure project from warships to wind farms, and use British steel to build our way back to full economic recovery. If we choose to do so in Britain, we can make the jobs in our steel industry the foundation for creating thousands more well-paid, good-quality, skilled jobs in other communities that need them, as we apply our skills and strengths in steelmaking to the new opportunities created by the green industrial revolution.
However, to make all those things happen, there is something the Government must contribute. It is just as precious as public funding, but so much easier to provide, and that is a simple injection of certainty and stability. When our steel companies go into the world and seek investment in their future, they must be able to say with total confidence that the British Government have their back, will support them when necessary and will always do whatever it takes to defend them against unfair trade or a surge in cheap imports. That type of certainty and confidence is the minimum that our steel industry has the right to expect from their Government, and if it cannot get that from them, Parliament must seek to provide it instead.
That is the fundamental choice before us all tonight, but especially Conservative Members who may be debating with their conscience which way to vote. Will they side with the communities of Scunthorpe, Cardiff and Sheffield, who see a bright future for their industry, or will they side with the fanatics from the right-wing think tanks who see no future at all? Will they provide our steel industry with the safeguards that it needs to build for the future with confidence, or will they leave it to sink or swim in a flood of cheap imports from China?
New roads, track renewals, flood defences, Hinkley Point—the Government are unleashing the potential of our whole country by backing British industry and boosting Britain’s infrastructure. Steel first came to the fore as Britain led the global industrial revolution, and it is today’s infrastructure revolution, underpinned by 7 million tons of steel in the next 10 years here alone, that will see Britain lead the world into the future. Steel remains one of the pillars of British industry and one of the commanding heights of the economy to this people’s Government, and we are committed to championing free and fair trade to the benefit of jobs in every corner of our country.
The Conservatives are moving our great country on, instead of going backwards with the Labour party. We have secured trade agreements with 68 countries around the world, plus the EU, covering trade worth £744 billion last year, and we are just getting started. We are negotiating an agreement with New Zealand, we are working to join the trans-Pacific partnership and we have announced our intent to begin negotiations with India, too. This will put Britain at the heart of a new, dynamic, global trading network, as a hub for investment and exports, securing prosperity for British families and generations to come. That is important because we know that our job is to serve the British people, whether they drive a white van or a hatchback car, and whatever flag they fly from their home.
We fully agree that our steel producers and the livelihoods that they support in every part of our kingdom should be protected from unfair competition. More than that, we want them to be able to export to friends around the world.
Under the last Labour Government, steel production in this country fell by almost 50% to its lowest level since 1934. Does my hon. Friend agree that the Labour party should look at its own record in office rather than criticising this Government?
I completely agree. Indeed, not only is my hon. Friend right, but the numbers get worse for Labour: in Labour’s last five years in charge, industrial electricity prices rose by two thirds, hitting the steel industry hard. In contrast, we have provided £500 million in relief to the steel industry since 2013 to help it to cope with high electricity costs. We have also fought hard to make sure that the industry does not have to face duties of 25% when we export to the European Union.
We are alert to concerns that China is artificially promoting state-subsidised steel. We can see the impact of such trade-distorting practices today, with the steel market 40% over capacity. The facts show that as we have stepped up to take action, the Labour party has been shuffling its feet. Despite the rhetoric today, in her very first appearance at the Dispatch Box in that role, the shadow Secretary of State for International Trade, the right hon. Member for Islington South and Finsbury (Emily Thornberry), asked my right hon. Friend the Secretary of State to make it clear to the United States that she would not agree a deal with our American friends that would constrain Britain’s ability to negotiate a deal with China. The right hon. Lady was willing to put a deal with China ahead of the deal with the United States.
Whether the Labour party has changed its policy on China or not, this people’s Government have no plans to do a trade deal with China. On the contrary, we have used our presidency of the G7 to rally an alliance of democracies in a battle for the soul of global trade. To win that battle, we want better and more modern rules at the World Trade Organisation, as well as new rules on industrial subsidies. That is why we are working under the G7 trade track, an initiative pioneered by Britain to set the agenda for WTO reform. This will be a tough fight, but it is a fight we must win. People cannot believe in free trade unless it is fair. That is why we need effective rules and tools.
Trade remedies are an important tool in our tool box, and it is right that Britain stands up for her key industries. It is right to have a robust framework in place, and we do. We said that we would get Brexit done and then move on to people’s priorities. We got Brexit done. We got a trade deal with the EU, and now we have transitioned 19 measures from the EU, plus the steel safeguard. Now that we have full control of our trade policy, we can go further to defend British industry and jobs, and take further action where necessary.
The Minister is painting a very positive picture. Has any consideration been given to ensuring that every Government contract is carried out using only British-based steel? Not only would that secure local jobs for local people, but I believe it would send a message that has been lost in our search for a good deal.
The hon. Gentleman is right to say that we must champion British steel at every turn. Indeed, the Department for Business, Energy and Industrial Strategy has been creating a strong pipeline to ensure that advance notice has been given to industry about the 7 million tonnes of steel that will be required, so that industry can seek the opportunities that lie ahead. The safeguard measures that Labour Members talk about today are only part of the picture with trade remedies. Dare I say that it is not the first time the Labour party has not quite understood international trade?
We must remember that safeguard measures are not intended to address unfair practices, which are the subject of the motion. They are emergency measures intended to tackle unforeseen surges in imports, and they are governed by strict WTO rules. It has been the job of the independent Trade Remedies Authority to investigate whether the steel safeguard measures should be extended, amended or revoked. That independent organisation has followed the evidence, and engaged widely with importers, domestic producers and overseas exporters. Although on Twitter the shadow Business Secretary seemingly does not know the difference between independence and being part of Government, the TRA is independent. This is not the Government’s proposal, and for each commodity covered by the safeguard measures, the TRA has considered whether there is domestic production, whether there is evidence that a surge in imports has caused or threatens to cause serious harm, and whether it is in British economic interests to maintain the measure.
The shadow Secretary of State stated that she was shocked that the TRA had not considered what the impact would be if the restrictions were removed. Under schedule 49(4)(a) of the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019, that is precisely what it must consider in its analysis. Does the Minister agree that the right hon. Lady does not know what she is talking about?
My hon. Friend makes an excellent point about the lack of attention to detail on the Labour Benches. The approach we have taken forward is in line not only with WTO rules but with our domestic legislation.
I will tell you the truth, Madam Deputy Speaker: the TRA has recommended to the Secretary of State that nine product categories of the existing safeguard measure be removed. It judged that seven of them did not meet the requirement to show a significant increase in imports. Another failed to show any risk of serious injury or injury recurring, and the other did not pass the economic interest test, with industry asking for it to be removed, as the shadow Secretary of State discovered this morning, courtesy of the “Today” programme on BBC Radio 4. The Labour party seems intent on throwing the baby out with the bath water. The TRA recommended retaining the safeguard on 10 other product categories, and that would be exposed to legal challenge if we were arbitrarily to take the sort of decision that the Labour party advocates. Does the Labour party want to leave the WTO and adopt an isolationist approach in the world? I don’t, and I won’t.
In truth there is a choice between working hard, getting into the detail and defending British interests, which we are doing and will continue to do, and playing politics, as Labour Members and those on the left of our politics seem intent on doing.
It is worth remembering that the TRA was set up in 2018 under the last Government and places strict limits on the powers of the Secretary of State. Of course, the Labour party knows this, because Labour tried to curtail the Secretary of State’s powers even further. The hon. Member for Bootle (Peter Dowd), as shadow Chief Secretary to the Treasury, spoke against
“the public interest...being used as a mechanism to widen the powers of the Secretary of State.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 25 January 2018; c. 103.]
During the passage of the Taxation (Cross-border Trade) Act 2018, Labour stood against the Secretary of State being able to reject a recommendation of the TRA, but today Labour is asking us to legislate to do just that: to reject the TRA’s recommendation.
Under the legislation from the last Parliament—that dead Parliament—the Secretary of State does not have the power to change the TRA’s recommendation—
The Secretary of State does not have the power under the law to change the TRA’s recommendation on the safeguard measure to retain measures against its advice. She possesses only a downward ratchet, which means either accepting the TRA’s recommendation in its entirety or rejecting it and seeing every part of the safeguard measure expire on 30 June. I can assure the House that the Secretary of State takes these responsibilities very seriously and will reach a decision on the recommendation and publish it before the measure is due to expire.
The right hon. Lady did not answer the earlier question from my hon. Friend the Member for Redcar (Jacob Young) either.
Extending the deadline for a decision is not an option, and extension of the safeguard on product categories would expose Britain to challenge from other member countries of the WTO for non-compliance with the agreement on safeguards, which, as I warned a moment ago, may lead to a WTO decision requiring the United Kingdom to revoke the measure in its entirety.
I thought the Labour party understood these principles. After all, the hon. Member for Brent North (Barry Gardiner), the then shadow Trade Minister, criticised President Trump for imposing
“protectionist tariffs that the rest of the world believes are illegal under WTO rules.”—[Official Report, 4 June 2018; Vol. 642, c. 39.]
Maybe that was Labour’s policy then and this is its policy now. Perhaps the Opposition were against the policies of President Trump then and support the policies of President Trump today. Either way, they do not have the British national interest at heart. The Labour party is showing once again that it is a protest party, lacking in competence and understanding of the issues. Labour may have changed its leader, but it poses a clear risk to our country.
Turning to our friends in Europe and America, we continue to have discussions with the steel sector to understand its concerns about the outcome of the EU’s steel safeguard review. We recognise the harm caused by the unfair and unjustified US tariffs levied on our steel industry under section 232. It is fake news to suggest that our steel industry threatens the viability of American steel producers or that it contributes to global excess capacity in the market. Trade barriers such as these are what bring the rules-based international trading system to its knees, yet that is the sort of approach that the Labour party is advocating tonight. We remain disappointed at the continued imposition of such tariffs and are pressing our American counterparts for an urgent and permanent resolution. After working to date to de-escalate the Boeing-Airbus dispute by agreeing to suspend retaliatory tariffs for five years, we now want to shift their attention to the unjustified section 232 tariffs and work with them to agree a fair, permanent resolution for British industry.
No. We should all greatly value Britain’s reputation as a champion of global free and fair trade. We should not want to take actions that risk being found to be non-compliant at the WTO. The Secretary of State takes her responsibilities very seriously in considering the recommendation from the TRA, but the truth is that the best way forward, the right way forward, for our steel producers lies in free and fair trade. Together, we can make sure that this vital British industry enjoys a sustainable long-term future. The British people should be in no doubt: this people’s Government are backing our steel manufacturers; this people’s Government are backing the tens of thousands of jobs in the industry; and this people’s Government will continue to do so.
Before I call the Scottish National party spokesperson, I remind colleagues that there is a three-minute limit on Back-Bench speeches. If colleagues take less than three minutes, more people will get in—at the moment, not everyone will get in. I should also say that if colleagues choose to take interventions, I would be grateful if they still stuck to three minutes. Thank you. I call Marion Fellows, for the SNP.
I was eager to take part in this debate, as steel is a subject close to my heart. I have a steel plant in my constituency: Dalzell Steelworks in Motherwell, which was saved by the Scottish Government in 2016 when it was sold on by Tata Steel. At that time, I was a member of two steel taskforces, one organised and led by the UK Conservative Government, and the second by the SNP Scottish Government. The UK steel taskforce talked a lot about the importance of steel and what it would like to do to help the industry. Despite that, Redcar steelworks and other locations closed, and approximately 20,000 steel jobs have been lost over the years.
We were told it was the fault of the EU, and there was nothing we could do about the high cost of energy or to stop the imports of cheap steel that were so dangerous to our industry in the UK. Well, here we are in 2021, and what has happened? A recent report from UK Steel shows the significant electricity price disparity the UK steel sector still faces compared with its European counterparts, paying an extra £54 million in energy costs compared with German steelmakers. Over the past five years, the price disparity has cost the sector £254 million, or 130% of annual capital investment.
The report, “Closing the Gap”, shows the huge structural barrier facing the UK steel sector as it faces the core challenges of adapting to a trading environment outside the EU and trying to recover in the aftermath of the pandemic, and embarks on the major challenge of decarbonisation. The report makes a powerful argument for the UK Government to put forward a bold programme of support for the sector, to level the playing field. Consistently higher UK electricity prices increase production costs, reduce available capital and deter inward investment, severely reducing the sector’s ability to invest. Gareth Stace, UK Steel’s director, said:
“Our new report plainly demonstrates UK steelmakers face systemic disadvantages in higher electricity prices than our competitors… Electricity is one of the biggest costs for the steel industry, it undermines our competitiveness and it damages our ability to invest… And the issue is becoming even more urgent with the growing need to rapidly decarbonise”.
Once again, the hon. Lady is making a fantastic speech in defence of the steel industry. The key point seems to be that the US and the EU are maintaining their safeguards. We know that there is a massive oversupply of steel being produced around the world; I think the figure in 2019 was 514 million tonnes. If the British state removes our safeguards, it does not take a brain surgeon to work out where some of that steel is going to be arriving.
I thank the hon. Gentleman for his intervention. He actually did the next part of my speech, so I can move on and let more Back Benchers in.
It is quite hard to talk about global Britain when a UK foundation industry, such as steel, is being put to the wall by a Government who seem not only not to understand manufacturing but to think that it is okay to allow a foundation industry to try to compete with both hands tied behind its back. The UK Government said that they wanted to “take back control” from bureaucrats, but they are allowing the TRA, an unelected body, to make shattering decisions on the steel sector. This is a Government just like Thatcher’s Government, who closed Ravenscraig in my constituency. The UK Government have the power to protect steel jobs, but they are actively undermining steelworkers and the steel sector and risking jobs. Boris Johnson is finishing off Thatcher’s mission to destroy Scotland and the rest—
I am sorry—the Prime Minister is finishing off Thatcher’s mission to destroy Scotland and the rest of the UK’s industrial base.
Contrast that with what the Scottish National party Scottish Government have done for steel in Scotland. The Scottish steel taskforce was set up at the same time as the UK taskforce, or a few months later, to save the Dalzell works and the Clydebridge plant. From day one, the focus was on making these plants productive again. The Lanarkshire steelworks had closed in 2015 and the Fort William smelter was poised to close before the Scottish Government interventions in 2016. The Scottish Government helped Liberty Steel to reopen Dalzell, and direct job numbers have recovered. In Lochaber, 165 direct jobs have been saved—not many, but in Lochaber, that is a huge number of jobs—and 44 new jobs were created by the GFG Alliance.
The Scottish Government and Scottish Enterprise supported Liberty’s acquisition of Dalzell and Clydebridge steelworks. Scottish Enterprise provided support through a £7 million commercial loan to Liberty Steel and the business has successfully re-entered the heavy steel plate market. Scottish Enterprise recognises the challenging environment for businesses in Scotland right now and the significant economic benefit that Liberty Steel brings in terms of jobs, the supply chain and the future safeguarding of Scotland’s steel industry. Scottish Enterprise is in discussion with Liberty Steel on repayment of the loan funding, and, of course, debt forbearance is not uncommon in the current market.
The GFG Alliance has said that its Scottish businesses are performing strongly and have access to sufficient resources for their current needs. There has been no call on the Government guarantee and the Government receive a fee from the business for providing the guarantee, and the guarantee is backed by security over its assets. In Scotland, there is political will to support the steel industry. Where is that will in the UK Government? It appears that this UK Government are happy to give a hand to their cronies, but are willing to allow steel, a foundation industry, to founder under unfair competition and high energy prices. There is a reluctance to help an industry that provides decent, well-paid jobs and that could supply steel for the green energy industry and infrastructure for recovery after this coronavirus pandemic.
I will take the few short minutes available to me to highlight the need to promote the production of clean steel, which can play a key role in the covid recovery, levelling up and decarbonisation. With COP26 rapidly coming into view on the horizon, there is an opportunity for the UK to be a global leader in this sector.
In the next few years, there will be an enormous increase in the demand for steel, and that is already manifesting itself in significant price increases. In East Anglia and off our coast, steel will be required for the largest array of offshore wind farms in the world, for the building of the Sizewell C nuclear power station and the cabling required for renewing and extending our grid.
However, we must not ignore the environmental impact of steel production, as the industry contributes up to 7% of the world’s CO2 emissions. The rapid emergence of hydrogen, which has quickly evolved from the new kid on the block to the energy sector’s Swiss army penknife, provides the UK with the USP for promoting clean steel, whether from carbon capture, offshore wind or nuclear power. The volume of hydrogen needed for steel production is of reasonable proportions to match either blue hydrogen or green hydrogen.
East Anglia, as you are well aware, Madam Deputy Speaker, is not an established centre for the steel industry, but we are uniquely placed to play a major role in the changing face of domestic steel production due to ready access to low-carbon energy sources, whether offshore wind through carbon capture for the existing gas infrastructure focused on Bacton, or Sizewell C. It is also important that in the supply chain we promote and develop fabrication hubs in places such as Lowestoft, where skills and expertise have been built up in shipbuilding and the oil and gas industry for well over a century.
The Government are laying the foundations for a world-leading clean steel industry with the 10-point plan, the industrial decarbonisation strategy and the industrial fuel switching competition. It is vital that they now build on that work, announce the findings of the call for evidence for the clean steel fund and bring forward the following policy initiatives: first, a border carbon adjustment on imported goods based on their carbon content; secondly, the setting of clear targets for the use of clean steel by specific dates in infrastructure projects; and, finally, the promotion of a clean steel demonstrator project. It is also important that the forthcoming hydrogen strategy provides the framework for the industry to develop in East Anglia.
The heart of the issue that we are debating today is the Government’s power, or willingness, to intervene in the national interest. The Conservative party told the public that voting for Brexit would mean that we took back control. Instead, since Brexit, the Conservatives have scrapped the industrial strategy, failed to secure a slot in the Queen’s Speech to reform state aid, failed to improve public procurement rules and boxed themselves into a corner by failing to reform the rules of the Trade Remedies Authority, as we have heard this evening. These issues are now putting jobs in the steel industry at risk, as the steel industry tells us, at a time when the sector is once again in peril as it swings from steel crisis to steel crisis.
The long-running pressures on UK steel are well known—high energy prices, high business rates and global competition from countries that undercut the price of British steel—but the importance of the steel sector to the UK is also well known, from protecting highly-skilled, well-paid jobs in communities that rely on the industry, to being able to buy domestic sources of steel, which need to be low-carbon.
The Government, however, have failed to do anything helpful on these issues. In fact, they have made things worse by publishing an industrial decarbonisation strategy that once again does not have sufficient buy-in from the Chancellor to help businesses to make the changes they need. Now, to make things even worse, the Minister tells us that the Government cannot do anything to stop the Trade Remedies Authority scrapping tariff safeguards, at a time when we all know that huge gluts of cheap steel are waiting to be exported from countries such as China.
I am going to be unusually generous to the Government, because I believe the Minister knows he is in trouble, which is why he barely touched on this motion in his speech. I think the Business Secretary knows all of this and he wants to do something about it, but, much like when Downing Street mounted a coup and took industrial policy from the Department for Business, Energy and Industrial Strategy, the Business Secretary and the Ministers here seem not to have the authority or power to act. That is why repeatedly the Business Secretary has said that it is the International Trade Secretary’s responsibility to sort this out. I note that neither of them is here this evening.
Nicola Richards (West Bromwich East) (Con)
It is a pleasure to have the opportunity to speak up for our fantastic steel industry in West Bromwich East and the wider country. Steel has always been very important to the Black Country. The industrial revolution brought with it huge technological changes that the Black Country capitalised on, allowing cast-iron and steel to be produced at a cheaper price than wrought iron. Steel is part of our identity, and the communities that grew around West Bromwich, Walsall, Wolverhampton and Dudley were home to the families that drove the furnaces day and night—“Black by day, red by night”, as the saying goes. We are proud of our industrial heritage in my part of the Black Country. Indeed, steel, iron and industry are what our regional flag is all about, and I know that the people of the Black Country are incredibly proud of that.
As we know, this debate is about not just the economic benefits of producing steel, but the future of the industry and the many thousands of people whose livelihoods depend on its success. That is why I was in many ways surprised to see this as a subject of an Opposition day debate, given the strong commitments this Government have made to the steel industry. Interestingly, employment in the UK steel industry was cut by more than a half under Labour. The Office for National Statistics says that jobs in the steel industry fell by more than half between 1997 and 2010. By stark contrast, the proportion of steel procured within the UK nearly doubled in 2020 compared with the year before, with 77% of steel used in public projects now being procured from the UK. I would be interested to hear from the Minister about the plans to ensure that our domestic steel industry is at the heart of the Government’s plans to build back better after the pandemic.
I am also impressed by the launching of the steel procurement taskforce, helping the industry to compete for public contracts. Meeting regularly over the coming year, the taskforce aims to explore what the Government and industry can do to address challenges that the sector is facing in competing for and securing public contracts. That is a common-sense approach. It would however, be remiss of me not to mention the situation with Liberty Steel, which has been an incredibly worrying episode for many of my constituents and their families.
I have already spoken about this situation, but I really hope for a positive resolution to it soon and call again for the protection of jobs in West Bromwich. I have spoken to the Business Secretary about this directly on many occasions and want once again to place on record my personal thanks to him for his regular engagement and his commitment to the industry. Re-establishing the UK Steel Council and creating the £250 million clean steel fund to help the sector adapt to new challenges, such as decarbonisation, is absolutely the right way forward. Later this year, the Prime Minister will be looking to secure firmer climate target agreements when he hosts the COP26 summit in Glasgow, so I implore the Government to engage with industry leaders and stakeholders ahead of the summit to bring the entire steel industry with us on this decarbonisation drive.
I support the motion to bring forward emergency legislation to give Ministers powers to reject the TRA’s recommendations and temporarily extend all 19 steel safeguards so that they do not expire at the end of June, and allow time to find a long-term solution to protect the British steel industry.
The steel industry is vital to our economy and the idea that it does not have a future is unthinkable. Our steelworkers are as robust as the steel they produce. They have bounced back from every adversity they have encountered, but the situation is about to get much worse as the industry faces a potentially catastrophic existential threat. Under current legislation, the Secretary of State can accept the TRA recommendations and we lose nine safeguards, or reject them and we lose all 19. That is so wrong. Dropping nine safeguards will open up our market to thousands of tonnes of cheap steel imports with no defences to stop it. That will have dire consequences for every steelworks because of the interconnectedness of the industry.
Steel is at the centre of everything we build. Railways, schools and hospitals all need high-quality British steel, as do the aerospace, agriculture, automotive, defence and construction supply chains, too. The British steel industry produces 7 million tonnes of crude steel every year, 70% of the UK’s annual requirement of which 96% is recycled again and again, and it makes a £2.1 billion direct contribution to UK GDP. Some 33,700 people are directly employed, with an average annual salary of £34,299, and 42,000 people work in the supply chain. Steel is vital for building green technologies of the future, such as wind turbines, and steel is helping the UK to achieve net zero by going through its own decarbonisation process.
The global oversupply of steel, plus unfair trading practices from China, have added to problems facing UK steel producers. The UK Government have not supported the industry during the pandemic, despite demand for steel dropping by 16% in 2020: no emergency support, no support in the last Budget, not mentioned in the plan for growth, not procuring British steel, and holding back funds from the clean steel fund until 2023. It is astounding that the UK Government would provide open access to our steel market. The UK Government need to stop pretending that there is nothing they can do, and support our motion to legislate to keep all 19 safeguards and stand up for steel.
Dr Jamie Wallis (Bridgend) (Con) [V]
This debate is very important to my constituents. It is also a pleasure to follow the hon. Member for Neath (Christina Rees), as both her constituency and mine border Aberavon, where the Port Talbot steelworks are located. There is a huge amount of employment in Bridgend dependent on those steelworks, either directly or indirectly.
I agree with those who say that the Government should do all they can to support the steel industry. It is also true that the industry has faced a multitude of challenges that predate covid. In fact, some are more historical than that. I encourage Opposition Members to look at what happened to the industry between 1997 and 2010, when the production of steel in this country halved and we went from approximately 70,000 people working in the industry in 1997 to just over 30,000 in 2010, a fall of 56%.
The Opposition are correct that overseas steel has had a negative impact on the British steel industry and that our British industries should not be undermined by unfair competition from overseas, especially by the dumping of steel often reported to have come from China, but their proposals to simply reject the TRA’s recommendations would result in all the current safeguards being revoked. It would breach World Trade Organisation rules and open the UK up to legal retaliation from other members. Not only is that counterintuitive, but it is quite the opposite of championing our British industries and reviving the UK steel industry.
There is a need to revolutionise the steel industry in the UK towards the economy of the future. Decarbonisation is clearly key to that. Through the clean steel fund, provided by the UK Government, the industry will adapt to the challenges of decarbonisation while continuing to manufacture world-renowned steel. However, adapting to the future green economy brings with it new challenges as well. For example, electric arc furnaces reduce carbon emissions, but there is a huge concern locally in my constituency about the impact on local jobs of moving to that technology. Although we must work to forge a greener industry, we must also continue to support the steelworkers.
The ways to support the British steel industry are multifarious and there is clearly no one solution to restoring the industry to its former glory, but I strongly feel that one important way of building back better is to champion our industries, especially British steel, when it comes to procurement. The £640 billion levelling-up infrastructure campaign will require millions of tonnes of top-quality steel. We simply must procure that right here in the UK, so that investment in British infrastructure also means investment in British jobs.
One of the reasons that I spent so many hours in Committee opposing the Trade Bill in the previous Parliament was to avoid precisely the sort of nonsense that we are discussing today. The recommendation by the TRA to remove safeguards on nine out of 19 product categories takes us back five years to the crisis that we experienced in 2016. It will leave half of steel products exposed to a flood of imports. We know this because prior to the introduction of the current steel safeguards, UK imports of steel increased by 25% between 2013 and 2017, severely undermining our own industry.
The Government failed to ensure that the TRA would protect and defend British producers. They engineered the membership of the body such that not only does the Secretary of State maintain full control of who is appointed and what its remit will be, but no voice can even be raised to temper the Government’s dogmatic fixation on what their own warped vision of free trade happens to be.
Labour tabled a series of amendments to ensure a level playing field for British industry. The Government voted down every single one of those amendments—and now where are we? We are left with a whole industry that is rightly angry and confused: confused as to why trade unions and employers were not consulted at any stage in respect of the TRA recommendations; confused as to why the TRA has shown such a lack of understanding about the interconnectedness of the industry, as assessment of product categories separately cannot provide an accurate picture of the threat of an increase in imports, nor the damage that it would cause; confused as to why out-of-date data was used that does not include volumes of smaller imports, where there was an increase in 17 of the 19 product categories that the TRA has simply not accounted for; and confused as to why, at a time when the EU and US are maintaining their safeguards, we are stripping ours away.
This decision will leave our market open to import surges just as the sector recovers from covid-19, and at a time when our exports to the EU and US will still be subject to tariffs and quotas. It is reported that the EU and the US are in bilateral negotiations to end tariffs on steel products with a deadline of the end of the year. So, well done to the Secretary of State—it looks as if she has engineered a situation where our steel exporters will not only be undermined in their own domestic market by cheap subsidised steel from China and the far east; they will also face a 25% tariff to enter the US, just as their EU competitors will face no barriers at all. The incompetence is staggering.
Order. I thank the hon. Gentleman for his speech. We must move on because I need to get as many people in as possible.
Holly Mumby-Croft (Scunthorpe) (Con) [V]
I am aware that many learned colleagues wish to speak this evening, so I will get straight to the point and will keep my remarks specific to the TRA safeguards issue.
As colleagues will know, my right hon. Friend the International Trade Secretary will decide whether to accept the Trade Remedies Authority’s recommendations on steel safeguards. Its recommendations are to remove safeguard protections for almost half of UK steel product categories. As it stands, if she does not accept that recommendation, all safeguard protections will expire by the end of this month, and I accept that her hands are somewhat tied in that regard.
I have put on record my opposition to the TRA’s preliminary recommendations in pretty frank terms, and many colleagues have spoken about the issue in Parliament, fed their views back to the TRA and raised the issue with the Department for International Trade. Despite this extensive feedback, a week later the TRA’s final recommendations still overlooked many of the arguments that were made on both sides of the House—namely, that it did not make a sufficiently industry-led assessment, that it did not use International Steel Statistics Bureau data but used data from Her Majesty’s Revenue and Customs instead, and that it did not sufficiently consider the impact of recent events on the UK steel industry. Reading the final recommendations, it is clear that the TRA is to some degree a hostage of the rigid terms set out in the trade remedies regulations. It is not forward-looking in its assessments and, regrettably, some decisions were made despite the data being insufficient.
I am sure that many across the House will agree that decisions that affect the lives and livelihoods of our constituents cannot be made in that way, and that we now need further proactive solutions to support the steel industry. We must look at whether reform of the Trade Secretary’s powers is required to allow safeguard assessments to be conducted in part by Ministers, who have an understanding of the bigger picture, who are in a position to make decisions about the trade-offs and who are accountable for their decision making. I thank my right hon. Friend the Prime Minister for his commitment to this issue and for agreeing to meet me. That will be a welcome discussion, and I urge the Government to explore how we can make World Trade Organisation-compliant changes in legislation to allow the Trade Secretary the option to take back control and consider whether it is legally possible to extend our existing safeguards. Speaking plainly, it is clear to me that when the EU is set to keep all 19 of its steel safeguards and we are set to keep only 10, that risks putting us at a disadvantage.
It is refreshing to follow the speech by the hon. Member for Scunthorpe (Holly Mumby-Croft). She has a choice tonight. She can vote for this motion, which would provide the ability to take action to introduce emergency legislation, and stand up for her constituents in Scunthorpe. It has been sad to hear some other Members who seemed to be falling in line with their Whips.
The House will be aware of the Celsa steelworks in my constituency, and I pay tribute to the management and all the workers there and to the trade union Community across south Wales. GMB and Unite do so much to stand up for steelworkers, and I declare my interest in relation to the GMB. I also pay tribute to UK Steel. I must also acknowledge the sensible co-operation between the UK Government and the Welsh Government in support of the steelworks in my constituency during this past difficult year, and that is why it was so disappointing to hear such a weak, vacuous and petty speech from the Minister, whom I like personally. His speech will have disappointed steelworkers and steel communities up and down the country, because it simply failed to engage with the issues that they and their industry are facing, or with the challenges to the thousands of jobs not only in those plants but downstream in critical manufacturing and infrastructure projects that depend on British steel.
The steel that is produced in my constituency’s plant is crucial to British national infrastructure, to defence projects, to infrastructure projects such as Crossrail and Hinkley, and to our rail infrastructure. If it is put at risk, as it has been so many times in the past, by cheap imports flooding in from places such as China, Iran and Turkey, that will be an absolute absurdity, not least because our steel is produced in an electric arc furnace from recycled steel in one of the most clean and efficient processes. Why on earth would we want that to be substituted, to see our carbon emissions offshored to China, to see our high-quality steel replaced at the heart of British national infrastructure projects by lower-quality steel from China? What an absurdity that would be, both for jobs in this country and for our national security.
Now then, surely even the Labour party will realise that as we embark on our £640 billion infrastructure campaign we are going to need lots of British steel. We are going to need about 7.6 million tonnes over the next 10 years to build new wind farms, power stations, schools, hospitals, railways and flood defences. We have a record to be proud of: we have provided more than £500 million in relief to the steel industry since 2013, to help it to cope with high electricity costs; we are launching a £350 million industrial energy transformation fund to help businesses with high energy use, including in the steel industry; and we have doubled the proportion of steel procured from within the UK over the past year.
Under Labour, steel production fell by almost 50% and employment in the UK steel industry was cut in half. Industrial electricity prices rose by 66% in the last five years under the Labour Government, crippling the steel industry. Labour MPs complained when we announced new freeports, but they will use a massive amount of British steel and be a welcome boost to large engineering companies such as Abacus Lighting and Caunton Engineering in Ashfield and Eastwood. And they were whingeing about the new royal yacht, which will be made from British steel by British shipbuilders, and will then sail around the world promoting our great country.
Perhaps the Minister will support my idea of building a brand-new yacht for the Labour party. We could call it the HMS Clueless and the skipper would be Labour’s Captain Hindsight, who would lead a motley crew of out-of-touch Labour MPs on a cruise around the world, stopping off at countries that subscribe to their brand of socialism. The first stop would be Cuba, and it would then be off to Venezuela and then North Korea. But there is mutiny in the air and I feel that Captain Hindsight will have to walk the plank, because below deck the Mayor of Greater Manchester is plotting to take back control of the Labour party and, as usual, poor old Captain Hindsight will not even see it coming.
What a ridiculous speech we just heard; let us get back to reality.
On 19 May, only 19 days after the passing of the Trade Act 2021, which updated the Taxation (Cross-border Trade) Act 2018, the Secretary of State, who failed to amend the Trade Bill, said:
“The rules of the TRA were set in legislation in 2018, and I think we are in very different times now. We have had a global pandemic. We are much clearer about the issues of supply chains. I have briefed the Committee”—
the International Trade Committee, on which I serve—
“on…the way we are analysing critical goods.”
She went on to say that she would review the case of the TRA and see whether additional safeguards were needed. That was in May. A month and more later, what has the Secretary of State done? Did she review the safeguards that she acknowledged were weak? Did she change the system that she acknowledged was flawed, under which she can only ratchet down? No, she did not.
Last year, the Under-Secretary of State for International Trade, the hon. Member for North East Hampshire (Mr Jayawardena), who opened the debate on behalf of the Government, said blatantly that the
“system works…It is already delivering in a number of sectors, including steel”.
He must be on a different planet if he thinks it is working! He said that we have the ability “to act very quickly”. If we have the ability to act quickly, Ministers should do something rather than sitting on their hands!
Let us be clear what is happening: the US, the EU and our other major allies are taking action to stop their domestic markets being undermined; we are doing nothing. Just like when the EU took action and we were the ones dragging our heels when we were in the club, now that we are out of the club we are failing to stand up for our own businesses all over again.
I come to a fundamental point of the TRA. This is what the chairman of the TRA said: he has “sympathy” with the points raised around the environment, workers’ rights and extra protections, but he does not believe that the TRA should take any action on those things. He said that the TRA’s guidelines do not allow him to do so. That is the fundamental problem. The Government have dropped the ball—or maybe they are so wedded to the ideology of “free market against protection” that they are willing to sell our steel and other industries down the river. We will not stand for it. We will vote against it.
Changes by politicians to the recommendations of the Trade Remedies Authority is the sort of meddling that the regulations were designed to discourage, because political involvement is too often influenced by lobbying pressure and special interests rather than by the wider benefits to society. The TRA is clear that trade protections should continue where there is evidence of an import surge over the period of investigation and injury to producers. Protection will continue on 82% by volume of currently protected products. Protection is recommended to end only where there has been no import surge at all or where any increase in imports has resulted in no injury to producers. We should not continue protection when no injury has been incurred.
The motion says that, on Monday 28 June, Labour will be prepared to take all the steps necessary for
“urgent legislative action to protect the vital interests of the British steel industry.”
However, that is false for two reasons. First, as analysis by the authority demonstrates, the changes are designed not to affect steel industry participants. The UK steel industry is at risk from dumping arising from chronic global over-supply, but it also suffers from relatively high labour costs, burdensome energy costs, a large green footprint for accessing raw materials and an expensive, unproven and unfunded pathway to a green steel future, none of which is addressed in the motion but all of which is vital for the industry’s future.
Secondly, the Labour motion seeks to align completely the largely private interests of the owners of businesses in the steel industry—some of them are good; some of them are a bit more dodgy—with the interests of UK taxpayers as a whole. Those interests may overlap, but they are not identical. The motion is an incoherent gesture, not a viable strategy for the UK steel industry, demonstrating the superficiality of Labour’s approach to the steel industry, just as Labour’s call to put taxpayers’ money into a firm that is now under investigation by the Serious Fraud Office was a few weeks ago.
In recent years, the UK steel industry has lurched from one crisis to another, with a Government who have used every excuse in the book not to step in. For years, we were told that European rules and regulation prevented us from supporting our domestic industry and procuring UK steel. Despite the fact that that was not true—we saw our European partners use their steel in infrastructure projects time and again—in the UK, we had project after project using imported steel, despite alternatives being available.
UK steel makes up only about 10% of UK public sector demand. That is pathetic, but it will not change unless the Government work with UK steel well in advance of major procurements to maximise UK input. Too often, it is an afterthought, or left to the companies delivering the projects, with Government turning a blind eye. The Government are right that the industry needs to modernise and invest in new technologies to meet the challenges of the future, but that is not simply going to happen by some sort of magic. It is no good just saying to an industry that relies on coal and high-energy usage that it needs to change and decarbonise overnight. This industry pays 86% more for its electricity than in Germany and 62% more than in France, and that imbalance is set to get worse rather than better. It is no good saying that hydrogen is the solution to every problem going when we do not have a single facility in the UK, unlike in other countries. The industry will need help and support to meet these challenges and not just warm words and no action, which is what we have seen up until now.
As with energy prices, where the Government refuse to help and just say that it is an issue for Ofgem rather than for them, we now face the major challenge of the TRA judgment making it open season to dump products on the UK. We have seen the results of that dumping for many years. How is our domestic industry expected to survive, let alone compete, in these circumstances? Again we hear from the Minister tonight, “There’s nothing we can do.” Well, that is not good enough. We need to legislate now if we are going to make sure that we can maintain these safeguards and save our industry. Time is not with us and failure to act would be disastrous. Shotton steelworks celebrates 125 years of production this year. Let us hope and trust that there are many more years to come.
I am very much in favour of free trade, which contributes to prosperity, innovation and fairness across the world. However, free trade requires a level playing field, and right now the pitch on which our UK steel industry is trying to compete is uphill and full of holes. Our British steelmakers cannot compete on price with foreign manufacturers many of whom have far cheaper energy prices and receive massive state subsidies. Other countries also employ market-distorting practices such as steel dumping, with the deliberate intention of putting British steel manufacturers out of business. That is why we, and the US and the EU, have rightly implemented steel safeguards over recent years to protect domestic industries from unfair and malicious practices that are the very antithesis of free trade. It is therefore incomprehensible that the Trade Remedies Authority is recommending that we allow over half our safeguards on steel products to lapse, at a time when the EU and the US will be maintaining their safeguards in response to the continuing threats to steel producers around the world.
Steel is a critical national industry producing essential materials for our infrastructure and our nuclear and defence capabilities. Steel is therefore crucial to our security. It is also an industry that is vital to our economy. Steel supports over 33,000 jobs, including many hundreds in the Stocksbridge steelworks in my constituency. I know that the Government fully understand this. I am grateful for the frequent engagement of my right hon. Friend the Business Secretary with me on this issue and the welcome commitment of the Minister today to use anti-dumping measures where necessary. I also look forward to meeting my right hon. Friend the Prime Minister later this week to discuss this issue further. The recommendations of the TRA could be devastating for UK steel and I am concerned that they are based on the wrong data and fail to take into account the international situation.
We need to take action to retain our steel safeguards. I accept that my right hon. Friend the Secretary of State for International Trade does not currently have the power that she needs to ensure that that happens. However, the necessary changes are legally complex, and the Opposition’s proposal will breach World Trade Organisation rules and could result in retaliatory tariffs from other nations. Although we must act quickly, we must also be certain to act legally, and a quick Bill thrown together on the back of an Opposition debate is not the proper way to give our steel industry the protection it needs. We cannot afford to get this wrong. Although I cannot support the motion, I do urge the Government to take rapid action to reform the TRA and give new powers to the Secretary of State. In 2016, people in my constituency voted to take back control. That means our democratically elected Government having the final say over our trade policy. The Government must act to back UK steel.
I am a great believer in trade. I am currently holding a series of DIT-sponsored trade roundtables in my constituency, and as chair of the all-party group for Africa championing the positive power of fair trade. Trade can help lift countries out of poverty, drive innovation and promote sustainable economic development. There is no such thing as free trade in the sense of trade free from political and regulatory choices. What this Government mean by free trade is choosing to pursue the lowest common denominator—low wages, bad processes, environmental destruction, and human rights abuses. There are two important consequences of that. First, our national interest demands a sovereign steel capability, as do other countries’ interests. That is why there is a current glut of steel production, as our competitors, in particular China, ensure that their steel capabilities survive the pandemic and technological change. That is why ideologically puritanical free trade does not work for a sector such as steel, and is at the heart of the Government’s betrayal of the steel industry.
Secondly, because there are always political and policy decisions to be made, it is essential to have workers’ representatives in the room when these decisions are taken, which this Government refuse to do. Without workers’ involvement, global Britain will not be politically sustainable. Last month, I chaired an international TUC-Labour discussion on building a workers’ trade agenda. Trade unions in other countries have considerably more access to trade negotiations. Katherine Tai, President Biden’s new trade commissioner, is an example to follow. She says:
“We know that trade is essential to a functioning global economy. It is clear, however, that the past promises made to workers on trade were not met…The consequences for families when factories closed and jobs were sent overseas were real…It is the result of a long pursuit of tax, trade, labour and other policies that encouraged a race to the bottom.”
The Biden Administration intend to improve workers’ representation in trade policy in the US and in the World Trade Organisation. Furthermore, the recently signed United States, Mexico, Canada agreements include the strongest labour and environmental standards in any agreement. If workers in the US are worried that workers in Mexico are being denied the right to organise, a rapid response on traded goods can follow.
Steel has played an important role in Darlington’s past and is set, thanks to this Conservative Government, to play an important role in our clean, green future. Indeed, Darlington is home to a British steel site, and on its outskirts is the world renowned Cleveland Bridge, which my hon. Friend the Member for Sedgefield (Paul Howell) will say more about.
We all know that steel has heavily influenced our national story whether that be in our railways, our bridges or our ships. Sadly, the industry has been in decline for too long with lost jobs for thousands. Indeed, many of these jobs were lost under the last Labour Government.
I am proud that the Tees Valley has been at the forefront of British steel manufacturing for 170 years and while the old Redcar Steelworks closed in 2015, we have a bright future as the home of the innovation and design sector, on which I am quite sure that my hon. Friend the Member for Redcar (Jacob Young) will expand.
This Conservative Government are delivering where the last Labour Government failed. We are supporting this key industry by directly investing in our national infrastructure, using British steel to help revolutionise our transport and energy sectors. This Government are doubling the amount of steel procured within the UK and using British steel in the £640 billion infrastructure spending. Steel made in Britain will help us to build back Britain as we look beyond the pandemic. HS2, Dogger Bank, Hinkley Point C as well as new schools, hospitals and flood defences across the UK are being built with British steel. I am delighted that Cleveland Bridge, staffed by many of my constituents, will be providing its expertise for many of these projects.
In addition, this Government are helping to decarbonise the sector. That has been achieved by creating a new £250 million clean steel fund, and launching a £315 million industrial energy transformation fund to help businesses with high energy use, helping the industry to cut its bills and emissions. While the Labour party does nothing but talk down the steel sector, failing to support production and jobs, this Conservative Government are supporting the industry, so that British steel is best placed to benefit from the opportunities presented by our new trade deals around the world, and our massive infrastructure investment.
My Aberavon constituency is home to the UK’s largest steelworks, employing around 4,000 men and women, and sustaining thousands more jobs through its supply chains. The steelworks are the beating heart of our local economy and community, yet for 10 years, successive Conservative Governments have failed to recognise that the steel industry not only delivers prosperity, but also makes a vital contribution to our country’s security and resilience.
Every military vehicle, major infrastructure project and power station requires steel. Steel enables us to stand on our own two feet as a nation. Homegrown steel is the only route to tackling climate change, and it will play a critical role in greening our economy, from electric cars to solar, wind and tidal power. British production processes have half the carbon footprint of China’s far less decarbonised steel industry, and shipping steel from the other side of the world is obviously more carbon intensive.
That is why Labour Members are clear about our determination to keep all 19 UK steel safeguards. This is not in any way an argument against free and fair trade; it is an argument for free and fair trade, because the “free” without the “fair” is meaningless, and we cannot have one without the other. Global overcapacity in 2019 was estimated to be 514 million tonnes, dwarfing the 10 million tonne UK market. That was largely driven by China, whose steel industry is 80% state owned, and deliberately over-produces and illegally dumps steel to damage western economies. Indeed, only two out of the top 10 steel markets in the world currently have no tariffs or quotas in place. When a tidal wave is about to hit, it makes no sense to remove our flood defences.
This entire process has been a shambles from start to finish. First, too many powers were handed to the Trade Remedies Authority. Secondly, the TRA failed to undertake a responsible process. It failed to use accurate industry figures, to engage properly with industry and trade unions, or to consider the interconnectedness of the industry, and the impact that the removal of those nine safeguards will have on wider business models. That points to a wider fear that the Conservatives’ independent trade policy has nothing to do with supporting UK business to flourish, and is in fact all about removing safeguards and lowering standards, so that the UK can more easily negotiate minor trade deals.
I welcome the opportunity to contribute to this important debate. In post-Brexit Britain it is important not to underestimate the importance of the British steel industry to the UK economy. In Sedgefield alone, an array of companies form part of the steel industry’s supply chain, from large international manufacturers such as Cleveland Bridge and Gestamp, to vital local small and medium-sized businesses such as Ebac and Finley Structures.
The steel industry’s supply chain plays a huge role in the local Sedgefield economy and it is therefore essential that the industry is resilient, increasing job security and creating high skilled apprenticeships and jobs for young people. I note the hypocrisy of the Opposition, who wish to debate and comment on what this Government should be doing to support the steel industry, while sitting on a track record of 13 years of Government with no proactive policies to help the steel sector move forward.
The Labour party has historically failed to offer support to such an essential industry. Indeed, when the right hon. Member for Doncaster North (Edward Miliband) was Labour leader, not once did he mention such a pivotal sector to our economy in this place. Industry experts even accused a predecessor of mine, the then Prime Minister, of a deliberate slight against the UK steel industry when in 2002 he put party donors before UK steel manufacturers. The purpose of Government is to act. When Labour was in government it chose not to, but now, when Labour Members do not have to take responsibility for delivery, they are full of instructions.
The Conservative party is different, and I know that this Government are committed to ensuring that UK steel prospers into the future. There is, however, always more that we can do to listen to the needs of the industry and engage with sector leaders to ensure that the Government know exactly what they need to do not only to survive but to build resilience and prosper. I recently held discussions with international steel products manufacturer Gestamp, which employs more 1,000 people at its Newton Aycliffe plant. It has some innovative and progressive ideas about how the Government can help to build industry resilience. I encourage Ministers to visit companies such as Gestamp, which can be really valuable contributors to future policy discussions.
Steel, as we have heard from so many speakers, is absolutely vital to the UK, and it is good to see that British steel provides 70% of the UK’s annual requirements and is particularly important in a whole range of things. Like other hon. Members, I have manufacturers in my constituency that rely on steel and on the supply of steel, but today I want to touch on the issue of the Trade Remedies Authority.
As we have heard, back in 2017 Labour pointed out the need for a body to regulate trade. However, the current body is not the most suitable one for our steel industry. We warned against the Government creating a Trade Remedies Authority that was unfit for purpose. They did not listen to those warnings, and we are now sadly seeing the consequences of that failure to listen unfold. A Trade Remedies Authority made up of economists and backed by incomplete HMRC data will never be enough to reflect the true complexities and nuances of the steel industry. A Trade Remedies Authority devoid of union input will never be able to truly reflect workers’ voices, with their practical experience of the sector and understanding of British steel. A Trade Remedies Authority without actual industry representatives, such as those working with steel in the UK, will never truly understand the consequences of its decisions or the impact on local communities such as mine.
The TRA as it stands lacks the ideas and experience necessary to tackle the issues that the steel industry faces. That means that it is making skewed recommendations that will drive a race to the bottom, with dangerous consequences for our industry. Its powers of investigation are too narrowly focused. Recommendations on sectors such as steel need to consider the impact on employment, communities, critical national infrastructure and defence procurement. Crucially, they need to understand that what we do in one part of the industry affects the whole. Instead, we have a narrow and blinkered assessment of pricing, supply and demand in individual product categories, with no sense of the wider picture.
Jacob Young (Redcar) (Con)
I will confine my remarks to the three obstacles that the UK steel industry faces. The first, the subject at the heart of today’s debate, is global competition and the impact of tariffs. I wholeheartedly agree with my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates): we support free global trade, but when it comes to steel making, there is currently no free market. Almost every nation that makes steel does so with some form of subsidy or trade barrier, so we need to consider a sensible response.
This is a complex issue, and the conclusions of the independent TRA do not seem to reflect the reality of the interdependence of our industry. The current situation is to the detriment of the UK, so we need to consider how we combat that unfairness. I wholeheartedly welcome the Minister’s comments about reviewing the powers of the Secretary of State.
The second obstacle is UK procurement. It was said in our previous debate that we must build back better, but why not build back British? More than 2 million tonnes of steel are estimated to be used in HS2—let us use UK-sourced steel and make HS2 a project that benefits every corner of the UK, not just London to Birmingham. The Prime Minister’s 10-point plan requires steel for increasing our offshore wind capacity and for building electric cars, carbon capture, utilisation and storage plants and nuclear power plants—let us build them with British steel.
The third obstacle is energy pricing. I am really pleased to see the Minister for Business, Energy and Clean Growth in her place, because we have spoken about the matter many times before. In the steel and chemical industries, energy costs remain uncompetitive in comparison with the continent. These are energy-intensive industries: whether they are producing steel through blast or electric arc technology, or breaking chemical bonds to drive chemical reactions, they need a lot of energy. The problem will only increase as we switch to lower-carbon fuels, so I urge the Government to come forward with a strategy to level the playing field in this area, too.
I commend the Government for their commitment to UK steel so far. The Labour party pretends that the Government do not care about our industry, but if it were not for this Prime Minister—and this Chancellor, when he was Chief Secretary to the Treasury—we would have barely any steel left in Redcar and Cleveland. It was their commitment to seeing through the sale of British Steel in Lackenby, Skinningrove and Scunthorpe that protected the thousands of jobs that depended on it.
On his visit to Redcar and Cleveland, the Prime Minister said:
I thank my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) for initiating this crucial debate in Opposition time, which shows that she is giving it the importance that it deserves, and for making such a strong case for the need for emergency legislation to allow Ministers to reject the TRA’s recommendations and temporarily extend the steel safeguards so that they do not expire at the end of the month and we can allow for a longer-term solution. It was a pity that we had such a woeful response from the Minister tonight.
Let us remember that UK Steel called the TRA’s recommendations
“a hammer blow to the UK steel sector”
and to steel communities. I echo what other hon. Members have said about the TRA recommendations. The safeguards are vital if we are to provide a stable environment for the sector and protect against unprecedented import surges from better-protected markets. Slashing those safeguards after Brexit would see the UK become one of the least protected of the major steel markets, undermining our own industry. The EU is maintaining its old steel safeguards, as is the USA. Why, at a time when the global steel market is dealing with overcapacity and looking to recover from the economic shock of the pandemic, are our Government even considering allowing the withdrawal of vital protections for our steel sector?
Steel should be at the heart of our economic recovery. It employs 33,000 people directly and is a strategic industry that is vital to our regional economies. Removing key steel safeguards would simply compound the prevailing challenges that the industry already faces. Our steelworkers, including those at Tata Llanwern, Liberty and Celsa in my constituency, are some of the most experienced and best-skilled in the world, but they already have to compete with one hand behind their back in so many ways, with sky-high industrial energy costs and frankly inadequate UK Government procurement policies. Then there is the whole issue of bonded warehouses, which effectively undercut producers by waiving duties on cheap foreign imports. We need action on that for the Liberty plant in my constituency, currently being undercut by the storage of massive imports of Turkish steel products in bonded warehouses.
We cannot allow cheap carbon-intensive steel from China to destroy our steel industry and our planet. Over half the steel in the world is now produced by China—the amount has doubled in the last 20 years—and we face a climate catastrophe. British steel uses 50% less carbon, and we have a situation in which, since Kyoto, global emissions have gone up 60% since 1990. The Paris limit of 1.5° C will be breached by 2025, and 8,500 tonnes of ice is melting every second of this debate in Greenland. China is emitting 28% of global emissions, which is more than the US and the EU combined: 7 tonnes of carbon per person, compared with 5.8 tonnes in Britain. On a consumption basis we do 8 tonnes, because we have subcontracted our coal-fired power stations and manufacturing to China. China now has over half the capacity for coal-fired power stations—1,037 coal-fired power stations—and it plans another 300. Its emissions will not peak until 2030, and we do not know what that peak will be. It will only be carbon neutral by 2060, and that is not even net zero.
We must act. We need to have the same tariff safeguards as the EU and the US against the dirty steel the Chinese are dumping. We need to switch to the border adjustment carbon tax being considered by the EU, which factors the carbon price into those taxes, for COP26. We have talked a lot today about the balance between strategic industrial interests and consumer prices, but those consumer prices need to factor in the environmental cost of carbon. It must be in the guidelines for the TRA to make these recommendations, which it is not. Buying more carbon-intensive products—whether steel, manufacturing or agriculture—is destroying our planet. Let us build back greener, reward lower carbon, tax higher carbon in COP26 and remember that, as the US says, we want to make trade a force for good that encourages a race to the top—not just for workers’ rights, but for our environment. Let us build back British steel, let us have a safer planet and let us protect jobs in Wales, in England and beyond.
The TRA’s sole function is to look at data and decide whether to impose trade restrictions to protect the UK steel market from unforeseen surges of imports to ensure fair trade. It is not there to put up protectionist barriers to international trade. Its recommendations are based on detailed research into the UK steel market. So it is not so much the data that Labour challenges—as was made clear earlier this evening, it is the terms of reference given to the TRA. Let us be clear: Labour wants to move to outright protectionism.
Extending tariffs that are not justified by the data shifts the debate from ensuring fair competition, which drives long-term economic growth and prosperity, to outright protectionism, which corrodes markets and makes us all poorer. That is particularly the case with a foundation product such as steel. Labour wants to put up the price of steel for all the manufacturers of the United Kingdom, making their products more expensive and then less competitive. What does Labour suggest when they struggle against cheaper imports—more protectionism? Even its current proposal is so extreme that it would require us to leave the World Trade Organisation. What next? These are the economics of the Soviet Union.
The Government are right to focus on defending fair competition while supporting our steel industry to adopt low-carbon energy sources as we move toward renewable supplies, supporting our producers to the tune of £500 million since 2013 so that our cleaner energy does not disadvantage them. In the long run though, we need to move away from clumsy and expensive state support. Rather than costing our Treasury money to compensate industry, a carbon border adjustment mechanism would raise income from high-carbon imports, providing funds to invest in our own decarbonisation plans. Those are supports that can work within WTO rules, not in flagrant breach of them, as Labour wants.
No longer will our exports be penalised by relatively high energy costs or be undercut in our domestic market by dirty imports. Such a mechanism will allow us to price carbon realistically, unleashing the power of the free market to nose out lower-carbon alternatives as part of the unending price war that real competition brings. That is the kind of policy framework that a serious Opposition would be proposing. If the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) wants to modernise the Labour party, he should start with the Soviet dinosaurs in his BEIS team.
The decision whether to extend safeguards in steel production is the first real test of the UK’s independent trade policy. As of today, it is a test that the Government have woefully failed. The recommendation of TRID, now confirmed by the TRA, is a crushing blow to the UK steel industry, coming at a time when it faces myriad challenges, both long and short term. The recommendation will leave almost half of all UK-produced steel production categories and a third of UK-produced steel by volume at the mercy of import surges, with devastating consequences. The interconnected nature of the industry means that those consequences will be felt across the sector.
Both the US and the EU are almost certain to extend their own safeguards. In contrast, Britain stands ready to open up our own markets, leaving import challenges inevitable; at the same time, our exports will face substantial tariff barriers, placing UK-produced steel at a huge disadvantage in the global markets. For years, the Government have blamed EU rules for their own failure to provide the UK steel industry with the backing it deserves. Now, free from those rules, rather than fighting to protect our industries, the Government are using steel as the canary in the coalmine.
This decision could not come at a worse time for the industry. In Rotherham, my constituents face profound uncertainty. The crisis that has engulfed Liberty Steel has placed steel production in the town in jeopardy. Steel is central to our local economy. With more than 900 Liberty staff based in Rotherham and many more workers in the steel supply chains, its loss would be a colossal blow, but more is at stake than the economic impact. Steel is integral to our town’s identity, its pride, its heritage. Although there has been some good news recently, with Liberty reiterating its commitment to the Aldwarke plant, the decision to seek a buyer for its specialist steels arms, which include the Brinsworth narrow strip mill, is a cause of real concern.
To date, the Government have done little more than keep a watching brief. We cannot allow this to continue. The Government must play an active role to make sure that our industry is secure.
Steel is a vital industry—vital to our economy, our national security, and the prosperity of communities outside London and the south-east. If the Government implement the Trade Remedies Authority’s recommendations to scrap nine of the 19 safeguard tariffs on steel, it will pave the way for cheap imports that will undermine our domestic steel industry at the worst possible time.
Current trade policy is failing the UK’s regions. Despite the protestations of Government Members, time and again the Conservatives have failed to back British steel, opting instead to rely on imported steel in Government procurement contracts. Ministers and the TRA are undermining an industry that, as we have heard, directly employs nearly 34,000 people in relatively well paid and highly skilled jobs and supports a further 42,000 jobs in the supply chain. Labour has pledged to build in Britain to create UK manufacturing jobs in the low-carbon infrastructure of the future. We cannot allow the Government to offshore this vital industry. British steel should be at the heart of every major UK defence and infrastructure project. We need to see investment in decarbonisation and in hydrogen technology that will enable our steel industry to lead the way towards achieving the UK’s net zero target and safeguard good, well-paid green jobs in the process.
We need a trade policy that empowers workers. Labour warned that the lack of representation for both industry and unions on the Trade Remedies Authority would be detrimental and lead to the kind of recommendations that this motion seeks to reject today. My union, Unite, which represents thousands of members in all areas of the steel industry, is urging the Government to take immediate action to stabilise the industry. I share the concerns of Unite assistant general secretary, Steve Turner, who said that
“there is a real danger that a combination of ideology and the wrong political choices will open the gates to cheap imports, which will costs thousands of skilled jobs and devastate local communities.”
We have heard impassioned speeches on both side of the House from Members who represent steelmaking constituencies. I am really pleased that the motion from my hon. Friends also recognises the importance of those in the supply chain, because in Chesterfield, with our close proximity to Sheffield, we have a long-standing history of supply to the steel industry, and that is incredibly important.
What is slightly missing from this debate is how crucial the steel industry is not just to those people employed directly in it or those supplying it, but to manufacturing in the UK more broadly. In terms of the role of global Britain and supporting global manufacturing, having a competitive steel industry here in the UK is absolutely crucial and we must give that support. I feel that the Government do not think through the consequences of us being entirely dependent on China, in terms of our global independence. When I heard the contribution from the Minister at the start of the debate, it made me wonder if that was really the party that, just a few months ago, was claiming that they would enable us to “take back control”, because he simply stood at the Dispatch Box, threw his arms in the air and said that there is nothing that we can do. I am glad that there are some Government Members—in Stocksbridge, in Scunthorpe—who do recognise how dangerous this will be. Let us see how they vote later today and whether they do so based on the sentiments that they laid out.
Manufacturers in Chesterfield have been coming to me saying that the steel prices that have rocketed up recently and a Government who are washing their hands of any responsibility are making UK manufacturers outside the steel industry desperately concerned that they will no longer be competitive in future.
I come from a family of Welsh industrial workers. My father and grandfather were coalminers and my other grandfather worked for the steel industry. The steel industry is a vital part of the Welsh economy. Along with the coal industry, it is part of our industrial heritage, and I want steel to be part of our future, too. I have seen at first hand the devastation caused to communities by the closure of the mining industry and I do not want the same to happen to the steel industry. It employs thousands in jobs in Wales, and many through the supply chain, and the median salary in the steel sector is around £34,000 a year. While this may seem humble to the average Tory, it is 45% above the median salary in Wales. It provides stable, well-paid jobs—gold dust in parts of the country such as mine that have been neglected by successive Tory Governments.
The Government talk of levelling up, but we judge them by their actions, not their words. Their failure to protect and modernise the industry adequately belies the levelling-up rhetoric. Levelling up for the steel industry in Wales will be sacrificed on the altar of the Government’s uncaring pursuit of free trade agreements. If Wales is to meet its carbon emissions target, the steel industry needs considerable investment, and the UK will not achieve its target for emissions unless the steel industry in Wales is adequately financed to enable this to happen.
There are measures that this Government can take to protect the British steel industry, particularly in this post-Brexit world. Not to take those steps would be an abrogation of the Government’s responsibility to the British people. Not to invest in the necessary infrastructure for the future green industry would be a denial of their obligations to future generations. That is why I fully support this motion.
We have had an excellent debate with noteworthy contributions from all parts of the House. I congratulate the shadow Secretary of State for International Trade, my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), on securing this debate, and I particularly thank my hon. Friends the Members for Bristol North West (Darren Jones), for Neath (Christina Rees), for Brent North (Barry Gardiner), for Cardiff South and Penarth (Stephen Doughty) and for Brighton, Kemptown (Lloyd Russell-Moyle), my right hon. Friend the Member for Alyn and Deeside (Mark Tami), and my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell), for Aberavon (Stephen Kinnock), for Blaydon (Liz Twist), for Newport East (Jessica Morden), for Swansea West (Geraint Davies), for Rotherham (Sarah Champion), for Easington (Grahame Morris), for Chesterfield (Mr Perkins) and for Cynon Valley (Beth Winter). As I said, there were great speeches from all parts of the House.
At the heart of the debate is a question. We can all talk the rhetoric of building back better, but the question facing us is: when hard decisions have to be made, is rhetoric matched by reality? There is no greater test than how we treat the steel industry, because steel supports tens of thousands of high-skilled, high-wage jobs that are the pride of communities across our country, because a strong domestic steel industry is essential to our national manufacturing success and because steel is vital for our national security. We should be using every tool at our disposal to support the industry. That means Government putting their money where their mouth is in enabling steel to navigate the green transition, it means doing whatever it takes to support employment and it means making the right decisions on trade.
Let me come to the heart of our motion. The Under-Secretary of State for International Trade, the hon. Member for North East Hampshire (Mr Jayawardena), drew the short straw at the International Trade team meeting by being sent out to bat when the Government have no position, or at least no position that I could comprehend from his speech, but this is an incredibly serious situation. We are nine days away from these protections lapsing.
I thank everyone who has spoken on this important topic this evening. We have heard some passionate speeches, not least just now from the right hon. Member for Doncaster North (Edward Miliband), and I recognise the significant concern being expressed by all colleagues on behalf of UK steel producers.
Hon. Members heard the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena), clearly set out the role of the Trade Remedies Authority, which is sponsored by the Department for International Trade, and how its recommendation process works. The world has changed since 2018 when these powers were put in place, so my Department is very supportive of the Trade Secretary’s desire to review the domestic toolkit, given the challenges of global trade. At the same time, my ministerial colleagues in BEIS and I will continue to devote our focus to the future of this important sector. Although the global economic context is challenging, hon. Members will recall that the Secretary of State said when giving oral evidence to the BEIS Committee’s inquiry into the future of steel that the UK industry will continue to need high-quality steel and British steel is among the best in the world. Making sure our steel industry has the right conditions to thrive is a key part of our efforts to reach net zero and level up across our country.
There should be no doubt that this Government are committed to UK steel making, as the Secretary of State has affirmed, both at that session and on a number of recent occasions. We are already working to protect jobs and we are straining every sinew to ensure that the industry succeeds at securing a sustainable future. Our unprecedented package of covid-19 support over the past year is still available to the sector, to protect jobs and to ensure that producers have the right support during what has been and continues to be a challenging time.
My hon. Friends the Members for Scunthorpe (Holly Mumby-Croft), for Penistone and Stocksbridge (Miriam Cates) and for Redcar (Jacob Young), whom I know have all met the Business Secretary today to discuss the best way forward for the industry, will, I hope, be reassured about our commitment to our UK steel sector. As many hon. Members with close links to steel will know, the Government are working closely with industry and trade unions to understand how we can, together, create a sustainable future for the steel sector in the UK. We recognise absolutely that industrial users in the UK pay higher electricity costs than European competitors, which is why since 2013 we have provided more than £500 million in relief to help steel producers with electricity costs, and we are currently consulting steel companies on the future of such schemes.
The Minister is saying that this Government have the industry’s back, but the letter by UK Steel read out by my right hon. Friend the Member for Doncaster North (Edward Miliband) made it absolutely clear that it believes that if the Government vote against the motion and do not put in place alternatives, it will be catastrophic for our industry. Why should we believe that the Minister knows better than the very people running the UK steel industry?
I thank the hon. Gentleman, but I refer back to the comments made by the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire. The tools available to us relating to anti-dumping measures continue to be ones that remain at the forefront of the Secretary of State’s toolkit, as I mentioned. I know she will be focusing on that very closely in the days and weeks ahead. There should be no doubt that we absolutely have the future of our steel industry at the centre. It is a strategic industry and remains so, as so many colleagues have mentioned this evening. Speaking as the Minister challenged with delivering net zero, I can say that the offshore wind industry and the nuclear industry, and so many other critical parts of our infrastructure within the net zero part of this Government’s and this country’s commitment over the next 30 years, will require high quality and hopefully very much British-made steel. We are fully cognisant of the international situation that the industry and all its communities face, so we continue to work to protect jobs and to ensure that the industry succeeds in securing its sustainable future. I firmly believe that we will and know that the Secretary of State will continue to update the House in the days ahead.
Question put.
31|21:58|271|355|The House divided:|Question accordingly negatived.||0|0
The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
Secondly, it makes no sense whatsoever for the TRA to conduct an economic test on the need for these safeguards that does not take into account the impact of removing them on the 34,000 well-paid, good-quality skilled jobs for steelmakers in Wales, Yorkshire and Humberside, the midlands, the north-east and elsewhere, and the 42,000 more in supply chain roles. These are exactly the kinds of jobs in exactly the kind of communities that the Government keep telling us are essential to level up our country, and yet the direct threat to those jobs and communities that dropping our safeguards would create is not one of the factors considered by the TRA, because it is apparently not in its remit to do so.
Thirdly, it makes no sense whatsoever for the TRA to make recommendations affecting the British steel industry without considering the knock-on implications for our defence procurement programmes, for the construction of critical national infrastructure, and for the delivery of our net zero emission targets. All those major considerations for the Government will be dramatically altered depending on whether we are producing the majority of our steel we need here in Britain or importing it from abroad. Yet the potential impacts of its recommendations on those different areas were not among the factors considered by the TRA, because apparently it was not in its remit to do so.
That leaves us with a fundamental dilemma: either the TRA’s remit needs to change so that it can consider the global context for its recommendations and take into account their impact on our jobs, communities and regions, our national defence, our civil infrastructure and our climate change objectives, or, alternatively, the Secretary of State’s powers need to change to allow her to weigh up all those factors against the TRA’s analysis and make a decision, with Parliament’s approval, based on our overall national interest, on what is best for Britain. Which of those two options would be better is a discussion for another day, but one thing that we should be certain of now is that the Government cannot proceed with a decision on steel safeguards on the basis of recommendations by the TRA that have not even taken into account some of the most crucial factors at the heart of that decision. On that basis alone, I hope that Members in all parts of this House will agree on the need for emergency legislation to allow the Secretary of State to reject the TRA’s recommendations, extend the current safeguards beyond 30 June, and allow time for discussion about the right course of action for the future.
I said at the outset that the third and most fundamental issue affecting our debate today is the approach of the Secretary of State herself to the future of the British steel industry and whether she will accept our invitation to move emergency legislation, if that is how we vote tonight. If you had asked me that question seven years ago, Madam Deputy Speaker, I would have said yes. Back then, you may remember, the Secretary of State burst on to the political scene with an impassioned cry for us to buy more pears, apples and cheese grown and made here in Britain, and scathing criticism of those who thought that our food production could be outsourced overseas instead. But now she reserves her fury for the British farming industry and all of us in this House who oppose the deal that she has signed to flood our market and undercut our farmers with cheap and cruelly produced Australian meat.
In the past seven years, the Secretary of State has seemingly been fully captured by the free trade dogma that insists on the right of the consumer to choose the cheapest product available from anywhere in the world and rails against any interference with that right, whether it is the maintenance of tariff safeguards to protect domestic producers, concerns about slave labour and human rights abuses, or the cruelty to animals and carbon admissions that are so often the hidden cost of cheap imports. Because the Secretary of State will have no truck with such concerns, she has become the hero of the right-wing free trade think-tanks—the ones that hanker after the supposed improvements in productivity and efficiency if only our NHS was forced to compete, the ones that openly talk about the benefits of destroying the British farming industry so as to end subsidies for wildlife conservation and free up more land for developers, and the ones that inevitably are equally scathing about Government support for the British steel industry or the retention of our safeguard tariffs.
Listen to Mark Littlewood, director general of the Institute of Economic Affairs, who said:
“It’s unsustainable for the government to prop up a steel industry which is no longer competitive internationally.”
Listen to Matthew Kilcoyne, deputy director of the Adam Smith Institute, who described Government funding for the steel industry as
“throwing…cash into a burning furnace”.
These are not some obscure figures on the fringes of public life or some right-wing rent-a-quotes trying to get their names into The Telegraph. These are hand-picked members of the Secretary of State’s own strategic trade advisory group—her personal body of external advisers, whose sole representative from manufacturing industry is not from British Steel or Make UK, but is the director of JCB construction, and guess what? He is the biggest Tory party donor.
These are the voices the Secretary of State is listening to when it comes to safeguarding tariffs, when it comes to protecting British farming and when it comes to protecting British Steel. So no wonder the two acolytes she appointed to run the Trade Remedies Authority think their job is to promote free trade rather than to defend domestic producers, and have recommended this wrong-headed decision on steel as a result, and no wonder the Secretary of State, who said last month that she would do “whatever is necessary” to protect the UK steel industry, will not even attend this debate to discuss how she might go about doing that. If she refuses to act to protect our safeguard tariffs, it will be an unconscionable betrayal of Britain’s steel communities—one that they will never forget and one they will never forgive. What will make it all the worse is that she, her think-tank allies and the Trade Remedies Authority are just plain wrong when it comes to the British steel industry. Opposition Members see a bright future for our steel communities, a green future and a future that creates wealth for our country and well-paid, good-quality jobs in our regions if we have the will to make that future happen.
I have no idea where the Secretary of State stands on that choice, because she has chosen not even to be here this evening, and has so far refused to take the emergency action that the Opposition have instead been forced to propose on her behalf. But if this House decides overwhelmingly to back the Opposition motion tonight and require the Secretary of State to maintain the safeguards, I believe that by sheer weight of pressure we can force her hand to do so, inject confidence back into our steel industry and forge a path for our steel communities to the brighter future that awaits them.
We will continue to deliver for the British people, and that is why we are reviewing the Secretary of State’s powers already, exploring and consulting on how we might legitimately be able to strengthen them. That is why we are working closely with the Department for Business, Energy and Industrial Strategy to ensure that trade remedies measures are up to date in the current context, not least following the pandemic. In the event of there being increased imports of unfairly subsidised products into the United Kingdom, we will not hesitate to take action to defend the industry using anti-dumping and anti-subsidy tariffs. That shows our resolve to improve our domestic toolkit and to use the tools at our disposal to tackle market-distorting practices, but rushing through changes to legislation, posing a risk to industry in the process, as Labour would have us do, is not the answer.
UK Steel says the UK Government need to be “bold and decisive”. It would be hard to describe this Government as such in relation to steel.
Scotland did not vote for Brexit, yet the Tories are using it to remove vital protections from our steel industry. At the end of last year, the UK transitioned the EU’s steel safeguards, retaining vital protection against trade diversion and import surges for 19 steel products produced in the UK. Over the course of the past six months, as we have heard, the Trade Remedies Investigations Directorate has been reviewing the measures to see whether they should be extended. Now, the preliminary decision by the Department for International Trade is to remove a large number of products from so-called import safeguards designed to protect domestic producers from a flood of cheap imports. According to UK steel, this needs to be urgently rethought. Under Tory plans, the Trade Remedies Investigations Directorate —an arm’s length body of the Department for International Trade—recommended extending the measures on 10 categories of imports for three years from next month and suggested that measures on nine categories be revoked. The British steel industry has hit out at these plans—these are the folk who make steel, Minister—describing them as a “hammer blow” that risks damaging the sector long term. It said:
“The UK will become a magnet for huge volumes of steel imports, it is beyond worrying to consider the damage this could do to the UK steel sector and its long-term viability”.
Alasdair McDiarmid, operations director of the steelworkers’ union Community said:
“This is the first test of the government’s commitment to our steel industry post-Brexit and they’re failing it”.
UK Steel said that the removal of protections will have an adverse impact on the manufacture of steel sections across the country. It added that the measures were designed to protect the
“viability of an entire industry, not individual production lines”.
Finally, will the Minister be added to the list of his predecessors who talked a good game, but refused to actually help the steel sector? Minister, we are waiting.
In a letter to me, the International Trade Secretary said, “We will not hesitate to defend UK industry and we will be working across government to ensure the UK can defend its vital interests.” It is the Government’s lucky day, because our motion gives them that opportunity to bring forward the emergency legislation they need to reject the TRA’s recommendations and to temporarily extend the tariff safeguards until fuller reforms can be brought before the House. So this is a real test for the Government, given everything the Conservative party has told us about Brexit, levelling up and protecting British industry. The Government have the power to intervene—the question is whether the Conservative party will do so.
The sector employs 33,000 people. It is a sector that communities and towns are built around. It is a sector that is highly innovative and has continually bounced back from crisis after crisis—
I was born in Scunthorpe, and I was there in 2018 and 2019 when the steelworks were at huge risk. I saw at first hand how much effort and funding the Conservative Government put in place to support jobs, and my words tonight are not a comment on the Government’s previous support for steel; they are a comment on the TRA’s recommendations and on how we react to them. They are a plain ask of the Government to help the steel industry again, because I believe that their instinct is to support the steel industry. No one in this country can go a single day without steel. It is a special case: it is a foundation industry and it affects my constituents, and I will work with right hon. and hon. Members from across the House to fight for the interests of steelworkers in Scunthorpe.
The TRA’s decisions simply do not make sense. Let me give one brief example. Rebar, which is produced in the plant on my patch, is produced in straight lengths and in coils. Straight lengths would be covered by the proposed safeguards, but coils would not be, and would be substituted, yet they are both produced in exactly the same way. All that would happen is that the quota would be used up on the straight lengths and then loads of coil would flood in. That is an absolute absurdity. It is dangerous for our national infrastructure, for our sovereignty and for our national defence, and I cannot understand why the Government are not willing to take action on that. They are letting down workers up and down the country: in Ashfield, in Scunthorpe, in Corby, in West Brom and in south Wales in places such as Bridgend, instead of taking action at this critical time. We do not want to go back to that crisis of the past when there is an opportunity for steel to be at the heart of our future.
I finish by saying this: the Minister proudly has the Union Jack on his mask, but I want to see the Union Jack stamped on the steel being used at the heart of our national infrastructure, made by British workers for British infrastructure. That is the choice that the Government have tonight.
If the UK wishes to have a vibrant steel industry, it needs the sort of thorough review that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is undertaking. Should the industry require additional investment by the UK taxpayer, the case for that will have to stand up well to Treasury scrutiny. The context for the Treasury includes: that the UK economy is already being taxed at its highest rate since the 1960s; that Government debt is already at nearly 100% of GDP; that last year the UK ran its largest ever peacetime deficit of £303 billion; that, worryingly, £303 billion means that we are borrowing one third of all public expenditure; and that, in 2020, the Bank of England bought approximately 80% of that borrowing. Quantitative easing to finance Government expenditure rather than to meet an inflation target is an emergency tactic, not a regular tool of fiscal policy, and the benign period of its availability is coming to an end.
This Parliament needs to start making tough decisions if we are to make space to support our UK steel industry’s green transition. If we can address bigger issues along the lines of infrastructure projects, we can support the green change in the steel industry.
Let me finish by quoting President Biden:
“As we emerge from this pandemic that has exacerbated inequity and put an even greater strain on workers’ families, we have to prove that democracy can deliver. We do that by empowering workers, raising wages, standing up for union rights and holding bad actors accountable when they subject their citizens to forced labour and child labour.”
Why is it that our Government want to sell our steelworkers out to China and preside over a race to the bottom?
Last week the Government sold out our farmers in desperation to get the UK-Australia deal across the line. Now they are looking to sell out our steelworkers, with the removal of steel import safeguards. Tonight’s vote is a big moment for the Government. Indeed, it is a litmus test of their much-heralded independent trade policy.
The recommendations of the Trade Remedies Authority are on the desk of our excellent Secretary of State for International Trade, who has been to Sedgefield several times to see at first hand the excellent work of all our local manufacturers. I would encourage her to return and visit those in the steel industry supply chain. I am sure she will give the recommendations the full consideration they deserve, and I look forward to her update to the House.
Building resilient UK supply chains will be vital to our economy in the coming years and decades. The steel industry is one of the most critical and currently contributes £2 billion to the economy. I am sure the Government will take the necessary actions by building upon progressive procurement policies and supporting all of our fantastic steel supply chain, up and down the country.
This kind of outcome was entirely predictable and avoidable, but fortunately it is not too late. The motion before us allows for emergency action to reject these flawed, narrow recommendations and save our steel industry from the consequences. But even more than that, I hope it will allow the Government to reflect on their approach to the TRA. They must listen to British steel makers and work with Labour to establish a revised trade remedies process, accepting that its remit needs to change.
“I think British steel is a very important national asset. I think the fact that we make steel in this country is of strategic long-term importance”.
I wholeheartedly agree. I want us to be stronger. We have to be strategic. We need to continue to back our steel industry.
When Britain left the EU, this Tory Government made a promise that we would be able to support British industry more than we had done previously and that foundation sectors such as steel would be at the forefront of the Government’s thinking. Unfortunately, here is one of the major tests of our new trading priorities, and the Government are sitting on their hands and pretending there is nothing they can do. How can our steel sites supposedly make a business case to investors for long-term projects such as decarbonising when the Government speak positively about the industry one day, only to strip away protections the next? It is a nonsense. I urge the Government to get their act together and secure a long-term solution on safeguards, which are so important to the industry. There is a motion here today that they could choose to adopt, and in doing so they could help the industry. It is a massive test for the Government, and one our industry cannot afford for them to fail.
The Government may be willing to abandon steelworkers and their communities, but my party—the Labour party—will do whatever it takes to defend and protect them and build a stronger, greener, more prosperous British steel industry for the future.
Let us just be clear for the Minister and the House about what UK Steel is saying would be the impact of the measures lapsing:
“a hammer blow to the UK steel sector…utter madness…the UK’s new system has failed our domestic steel sector.”
The decision reflects a fundamental misunderstanding of the realities of steel production. That is the reality.
What UK Steel is saying is not based on ideology, but on a practical assessment of the international steel market. Indeed, it has been well described by a former steel analyst, who said that
“something like 2 billion tonnes are produced every year, and there is a global glut. Lots of steel is being produced, and the real danger is that, somehow, we are exposed to dumping and to people overproducing and, essentially, undercutting our own producers.”
That former steel analyst is none other than the Business Secretary, appearing at the Business, Energy and Industrial Strategy Committee less than a month ago on 25 May.
The Business Secretary went on to say:
“This is a problem that is faced by all steel producers. The US has Section 232 tariffs. The EU, of which we were a member…had its own safeguards and tariff protections…We have to try to work out how we navigate this global glut of steel.”
Here we have a Government Minister who correctly identifies the problem—the risks of global oversupply—yet his own Government are deciding actively to remove the very safeguards against it, to ignore the warnings of the steel industry and steelworkers, to undermine the promises that the Government are making to the sector and to weaken our domestic steel manufacturers. We should be very clear about that because Members, particularly on the Government Benches, were concerned about it.
This is an insurance policy. These tariffs kick in once imports get above a certain quota, set at 111% of historic imports. It is a balanced insurance policy to prevent the oversupply that the Secretary of State identifies. The TRA is proposing to remove the insurance policy in half the product categories. I have read the TRA document and I have listened to the debate, and the case is simply not made out for that. We cannot argue that these are nine areas where we do not have domestic production, because we do, and we cannot say that there is no risk of serious injury to domestic producers, because the industry itself says there is. It simply leaves us with this argument: that we should have the cheap imports at the expense of our domestic industry. In other words, we are failing to learn all the lessons of the past, and here we are. What is the EU doing? Well, the EU is retaining its existing protections. I have to say that it does seem extraordinary that here we are, six months after the end of the transition period—when we were told that Brexit would provide stronger domestic protections for our industry—having to argue with the Government to keep the domestic protections that were in place when we were in the European Union. It makes no sense. No wonder our steel manufacturers are reacting with anger and disbelief, uncomprehending, and asking, “How are we even in this position?”
It is easy in these circumstances to blame the TRA, and, indeed, I think it has made the wrong decision. But this is also about the remit that it has been given. As you know, Madam Deputy Speaker, I am a bit of a nerd—much of a nerd. Paragraph 30 of the TRA’s document says that it has had representations about the interconnectedness of the industry—that we cannot simply separate out products—but it says pretty clearly that that is not really the way it can think about these issues. It cannot look at the interconnectedness of the industry, nor, indeed, a whole set of issues raised by my right hon. Friend the Member for Islington South and Finsbury. It cannot be right that the Government implement these flawed recommendations.
There is also a wider issue, which is that the legislation around the TRA is clearly not fit for purpose. That is why we have tabled this motion. It is hardly as though we are jumping the gun. We are nine days from the end of this protection. I mean, come on! What is the answer here? Our steelworkers and steel manufacturers want to know what the answer is from a Government who say they are standing up for steel. We have made our suggestion about how to deal with this, through emergency legislation. If there is a better suggestion, I look forward to hearing it from the Minister. The Government know in their heart of hearts that they are there in a ridiculous position, but it is time that they did something about it; they owe it to the steel industry to do something about it.
There is a wider context that I want briefly to mention, because it is symptomatic of a failure to have the kind of industrial policy for steel that we need. Steel faces a huge green transition—the hon. Member for Waveney (Peter Aldous) talked about it—but let us be clear about the scale of the task that we all face in this House. The industry says that we need billions for the green steel transition. A £250 million clean steel fund in 2023 is not going to cut the mustard. It is not going to give us the steel industry that we need in the future. There is a big choice for us as a country: do we invest to retain steelmaking capacity, with all the jobs and security it brings; or do we have some kind of neglect of the industry, with devastating consequences?
It is true of hydrogen as well. A £240 million hydrogen fund is better than nothing, but the Germans are offering €9 billion to invest in hydrogen. We face uniquely high energy prices, the whole issue of public procurement, whereby we still spend 25% on foreign steel, and an industry that is too often lurching from crisis to crisis, stuck in a long cycle of foreign acquisitions, insolvencies and bail-outs. To secure a long-term future, we must break this cycle. That is why we need a comprehensive industrial strategy for our UK steel sector, but we still do not see it from this Government.
For the first time in nearly 50 years, the UK has sole autonomy and responsibility for our external trade policy. We have to use this opportunity to develop a trade policy that supports an active industrial strategy that will help grow our foundational industries. I actually think that that view is mostly shared on both sides of the House, but that is why the position we have reached is so incomprehensible. We are not debating how we strengthen the protections for our domestic industry; we are desperately trying to cling on to the protections that we used to have.
Good rhetoric is not enough to help our steel industry; we need action. We need action in the next nine days. The Government must act to keep these protections in place. As we have heard on both sides of the Chamber, they must also give this House the ability to put our national economic interests first in trade decisions. We also need a comprehensive plan to support our steel industry, and deliver the manufacturing and industrial future that we need. We owe it to the communities of our country and to their future to deliver it.
As my hon. Friend the Member for Darlington (Peter Gibson) highlighted, the Government’s £350 million industrial energy transformation fund will support businesses with high energy use to cut their bills and reduce carbon emissions. It is a fact that to reach our ambitious net zero target the UK steel sector does need to decarbonise, as my hon. Friend the Member for Waveney (Peter Aldous) set out so eloquently. Our new industrial decarbonisation strategy, which is the first net zero-aligned strategy from a major economy, sets out, for the first time, the Government’s comprehensive assessment of how industry, including the steel sector, can decarbonise in line with net zero in a way that supports competitiveness and clean growth. As my hon. Friend the Member for West Bromwich East (Nicola Richards) highlighted, this is an important journey for the industry.
The strategy includes a commitment to work with the UK Steel Council, which the Business Secretary re-formed on 5 March and provides a forum to work in partnership with industry and the unions to develop a plan to support the sector’s transition to a competitive, sustainable and low-carbon future. In particular, we are working with the UK Steel Council to examine the implications of the recommendations of the Committee on Climate Change to set targets for steelmaking to reach net zero emissions by 2035. In 2019, we announced the £250 million clean steel fund to support the sector to transition to low-carbon iron and steel production through new technologies and processes, so I can reassure the right hon. Member for Islington South and Finsbury (Emily Thornberry) that we have indeed got the steel industry’s back. This fund is currently in development and we need to take the time to design this policy. Complex decarbonisation projects have long lead-in times and the steel sector has indicated that its preference is for the fund to be launched in 2023.
All that strong steel action is aligned with our prioritisation of science and innovation. We recognise the equally strong economic benefits of public investment in science and innovation, and in its capacity to leverage private investment. Because of that, we will increase public research and development investment to £22 billion per year from 2024-25. We also plan to establish a net zero hydrogen fund, with £240 million of capital co-investment out to 2024-25. This will support at-scale hydrogen production projects, allowing steel producers the potential to access supplies of low-cost hydrogen.
Decarbonisation is one top priority. Another one is resolving procurement challenges that the industry faces, as my hon. Friend the Member for Bridgend (Dr Wallis) highlighted. We are working hard to ensure that UK steel producers have the best possible chance of competing for and winning contracts for all Government projects, including those like ships identified by my hon. Friend the Member for Ashfield (Lee Anderson), with his now famous colour. We have established a BEIS industry-led steel procurement taskforce co-chaired by the Minister for investment to explore what Government and industry can do to address the challenges the sector has reported when competing for public contracts.
More broadly, we recently consulted on an ambitious package of procurement reform with the aim of creating a simpler and more flexible regime that works much better for British businesses. The Cabinet Office has now published both the national procurement policy statement and a new procurement policy note on taking account of carbon reduction plans in major projects. BEIS continues to publish our annual steel pipeline, along with data from the previous financial year on levels of steel procured by Departments, origin where known, and compliance with the guidance on procuring steel.
This House should be in no doubt that the Government are working closely with the steel industry and have put our optimism for the future of our steel industry into action.