Steel Industry: 11th May 2016

The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is an absolute joy and pleasure to serve under your chairmanship this afternoon, Mrs Moon. As ever, it has been a very good debate. I nearly said that we have had the full set that we always have in a debate on steel, but we are missing from the Public Gallery the excellent Mr Roy Rickhuss, who leads the outstanding Community union. I am sure he will be following these events and reading about them in Hansard.

As ever, I pay tribute to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) for securing this debate. I also pay tribute to all those who work in our steel industry—management and workers—and to all those, including the unions, who have been playing such an outstanding role in this incredibly difficult past 12 months. I make it very clear that I want to make a complaint about the hon. Gentleman, because I think he had a quick look at my speech. I thought it was brilliant that he opened on that very positive note. I wanted to do that in my speech.

Unusually for me, I will read certain things out, including quite a few facts and figures, because I want to make it absolutely clear that there is no disagreement among us on this: we all believe that steel genuinely has a future in the United Kingdom. There is no debate either about the quality of the steel we make here and the outstanding quality of the workforce.

We know that it is important—“vital”, in the words of the Prime Minister—that we have a strong British steel sector. In economic terms, steel was worth some £1.7 billion in 2014, representing 0.1% of the total UK economy. At that time—sadly, it is not the case now—it employed 34,500 people. As so many Members on both sides of the House know, the steel industry is a critical, integral part of many places and communities. The Government are clear that the steel industry has a viable long-term future in the United Kingdom, and that is why we have taken unprecedented action.

I have to chide Opposition Members. My hon. Friend the Member for Corby (Tom Pursglove) praised his local Labour leader because he does not care what party they represent; they are working together and fighting in the right way in the interests of everyone at Corby. I am sometimes a little saddened that Opposition Members never give some credit for the outstanding work that this Government have done in relation to the future of the steel industry.

Mr Iain Wright
Don’t push it!

Anna Soubry
I will push it now, because I always like a challenge.

Mr Betts
Will the Minister give way?

Anna Soubry
In a moment. I am happy to allow the hon. Gentleman a quick name check, but I want to make this point first: this Government have taken unprecedented action and given unprecedented support for our steel industry. This Conservative Government have said that we are willing for a potential buyer to look at investing hundreds of millions of pounds of taxpayers’ money by way of debt financing. That includes looking at power plants, notably at Port Talbot, so that we can keep those blast furnaces open. We are also looking to take up to a 25% stake or share in that new company. That comes from a Conservative Government. If anyone had said that 12 months ago, they would have been laughed at. That is how seriously the Government take the importance of the steel industry, and that is what we are prepared to do.

We know that there is a bright future for the UK steel industry. Just look at what has happened in the past few months. Not only has Liberty House bought Tata’s Scottish plate mills at Dalzell and Clydebridge—I was delighted to be there when Tata literally handed the keys over to Liberty—but it has also brought most of the Caparo assets out of administration. We think that that might have saved up to 1,000 jobs. The continuing sale to Greybull of Tata’s long products division based in Scunthorpe is further evidence that the industry has a viable future.

The Government are committed to the record infrastructure investment programme. That is only possible because we continue to take the difficult decisions to keep the economy strong. HS2, Crossrail, the new aircraft carriers and the unprecedented procurement rule changes for publicly funded projects that we have made in recent months mean that the United Kingdom’s steel industry can compete and will win major public contracts.

I very much agree with the hon. Member for Cardiff South and Penarth (Stephen Doughty). I was very pleased to visit the outstanding Celsa steel plant based in his constituency just a few months after my appointment last year. He levelled criticism at the SNP in Scotland and the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). It really is not on. If I said, “Go and check out a website,” I would rightly be derided by Opposition Members, and properly so. The Scottish Government have to put their money where their mouth is and change the procurement rules. They have to copy and learn from what the United Kingdom Government have done and ensure that that steel in Aberdeen is going to British plants. There are no excuses now for that not happening. I am very proud of what we do.

Mr Betts
Something else that the Government can do is deal with the problem of energy costs for the UK industry. They are 85% higher than the costs for the German industry. Is the Minister going to act on that?

Anna Soubry
We have acted. Not only have we now got the compensation package up and running—we are paying out tens of millions of pounds—but from 2017 energy intensive industries will find themselves exempt.

Mr Betts
Eighty five per cent higher!

Anna Soubry
The hon. Gentleman can keep on shouting, and I will start to fall out with him. I am happy to say that I will be visiting his constituency and the steelworks there. As he knows, he will get an invitation, just as everyone always does. In Sheffield, we have good examples of outstanding steel makers and ability. Some 50,000 tonnes of Celsa’s UK steel has been used in Crossrail—the biggest construction project in Europe, built almost exclusively using British steel. Some 95,000 tonnes of British steel was used in the construction of the new Elizabeth aircraft carriers, and Network Rail sources 98% of its steel rail from the United Kingdom—as we all know, it comes mainly from Scunthorpe.

On the point about Ajax, a large part of that steel was unfortunately not made in this country. The remainder was certainly going through a UK buyer. There is of course more that we could do, but we are mapping out indicative quantities of steel for key projects in the infrastructure and Government construction pipelines, including HS2, new nuclear and offshore wind. One piece of work that I am determined to carry on doing relates to fracking. There is a huge job that can be done that will have huge benefits for our steel industry. I will speak bluntly: we have to get on with fracking. I met representatives of that industry only recently. We know that fracking could have real benefits for our steel industry. It was a great joy and pleasure to go to the plant in Hartlepool, which also has excellent unions, good management and an outstanding workforce and is hugely important for that community. They make an outstanding product. They do not make the seamless pipes that have to be used for fracking, but I do not see why we cannot look at making their pipes absolutely compliant so that they can be used.

I had another great visit going up to Rotherham to meet Members who represent the steelworks there. It also has an excellent workforce, outstanding unions and good management with a credible plan and a long-term future. I am proud, as we all should be, of the fact that one third of all landing gear apparently has a component made in Stocksbridge. I was also told that every aeroplane in the world has at least one component made from steel from Stocksbridge.

John Healey (Wentworth and Dearne) (Lab)
And Rotherham.

Anna Soubry
Of course. It is important to say that it is Rotherham and Stocksbridge steelworks. Those are just some of the examples of our outstanding and world-leading steel sector. We can talk about Rolls-Royce engines and Formula 1 cars. Tata Steel has supplied more than half a million tonnes of strip steel to leading companies in the UK’s auto sector, including BMW, Mini, Jaguar Land Rover, Vauxhall and many others.

Unfortunately, the clock is against me, and I have not addressed all the points that the hon. Member for Middlesbrough South and East Cleveland made. I know that he wants to talk to me about the Materials Processing Institute, which officials visited yesterday, and I think we are making real movement there. Mrs Moon, forgive me; I have not been able to deal with all the excellent points and speeches that have been made. The hon. Member for Penistone and Stocksbridge (Angela Smith) makes good points about research. She knows that we continue to talk on that. I cannot say much more about the process with Tata, but we take all those points, and we work unstintingly. I pay credit to the Secretary of State and the officials for the work they are doing to secure a viable future for our outstanding steel industry.

Tom Blenkinsop
In winding up, I would like to say that the critical point about Tata being the eighth player remains fundamental. We still want to know what Tory MEPs will do tomorrow in relation to the market economy status vote. We need to see a legislative framework going from paper to actual action in terms of policy and an industrial strategy. The Government do have an industrial strategy, but we have to bear it in mind that in the past 12 months we have only seen action and promises made as a result of the tragedy at Redcar and a Prime Minister faced by Welsh elections and the European referendum.