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Westminster Hall

Thursday 21 January 2016

[Mr Charles Walker in the Chair]

Backbench Business

UK Steel Industry

1.30 pm

Stephen Kinnock (Aberavon) (Lab): I beg to move,

That this House has considered the future of the UK steel industry.

It is a pleasure to serve under your chairmanship, Mr Walker. I thank the Backbench Business Committee for granting this important debate. I also thank the Minister and all my colleagues for coming to support it—it is a fantastic turnout.

As we all know, this has been a big week for the British steel industry—but, unfortunately, for all the wrong reasons. Yesterday, jobs were lost at Sheffield Forgemasters, and the week began with Tata Steel’s announcement of more than 1,000 job losses across the country. That was bad news for everybody, but it was particularly devastating for my constituency, where the Port Talbot steelworks are located. Some 750 people who woke up with a job at the Tata steelworks in Port Talbot on Monday morning no longer have a job. The steelworks are the beating heart of the economy and the community in Port Talbot, and the job losses will affect not just those being made redundant, or those in connected industries, but their families, their friends and the entire community.

What immediate action will the Government take to support those who have been made redundant? There will need to be training and support so that they can make the transition into other jobs, and the local community will need help to support those affected and their families, as well as those in connected businesses. If the Government do not act, my community will pay the price for generations to come.

However, this is not just about Monday’s announcement. The Government must act to support the steel industry and to prevent further job losses, and they must do so now. There are a number of things that I, my colleagues inside and outside this Chamber and, most notably, the Community union and Tata Steel itself want to know. We want to know why the Government have done nothing. They have talked a big game, but their warm words have been matched by frozen actions.

First, we have called for changes in UK business rates, which are up to 10 times higher than those of many of our European competitors. Will the Minister commit to consulting the Welsh Government and other devolved bodies on cutting business rates for capital-intensive industries such as steel by removing plant and machinery from business rate calculations?

Secondly, the promised Government compensation for energy-intensive industries has still not materialised. In the light of Monday’s announcement, will the Minister commit the Government to the more rapid implementation of measures on energy-intensive industries and to a deadline by which moneys will actually be available? We cannot have more of the cheque being lost in the post.

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Thirdly, on procurement, we asked the Government to introduce guidelines that properly recognise social issues, local value for money and local content in projects with a major steel component. However, all that their November procurement policy note says is that steel requirements should be “openly advertised” to allow UK firms to compete. Will the Minister explain why they will not go further in using Government procurement to support the British steel industry?

Paul Flynn (Newport West) (Lab): Can my hon. Friend begin to understand what got into the Government’s mind when they handed over the nuclear industry in perpetuity to the Chinese? Because of their infatuation with them, they are allowing them to prosper, while our industry crumbles. We have a policy of deindustrialisation, with our industry being colonised by the Chinese.

Stephen Kinnock: I pay tribute to my hon. Friend’s long and illustrious history in the steel industry. He was a steelworker himself, so he speaks with particular experience and expertise. I absolutely agree with his point about the nuclear industry. I would bring everybody’s attention to the outrage of EDF telling a well-known British steel producer that it was not allowed to tender to make turbines that it is absolutely qualified to provide, thus denying it the opportunity of a multimillion-pound contract. The idea that this country’s procurement policies are somehow changing is a myth, and that experience of EDF and that steel maker is a case in point.

Andy McDonald (Middlesbrough) (Lab): While my hon. Friend is on the issue of procurement, will he say whether he is as dismayed as I am that the Ministry of Defence is commissioning steel hardware from Scandinavian plants? Does that not speak to a lack of joined-up thinking and a lack of Government focus on innovation, and on research and development, into new products needed by the MOD?

Stephen Kinnock: My hon. Friend makes an excellent point. What is interesting about the MOD angle is that we are talking about national security. The steel industry plays a critical role as a foundation industry, whether we are talking about the homes we live in, the offices we work in, the knives and forks we use to eat our meals or the incredibly important contribution the industry makes to our armed forces across the world. This is, therefore, not just an issue of the economy or of pounds, shillings and pence. Our national security is at stake.

John Woodcock (Barrow and Furness) (Lab/Co-op): I, too, congratulate my hon. Friend on securing this important debate. Is he aware of the contribution that steel makes to the submarine supply chain? That led the Community union to argue forcefully that the Labour party should continue to support it. Furthermore, Graham Honeyman, the managing director of Sheffield Forgemasters, is clear that the company cannot survive if it loses the order for the Successor submarine programme.

Stephen Kinnock: My hon. Friend makes an excellent point. He will be aware that a debate is taking place in the Labour party, but I can assure him of which side of that debate I fall on. There are a number of reasons why I fall on that side of the debate, but saving our

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manufacturing industry—up to 20,000 jobs rely on the nuclear programme to which he refers—is critical. I will certainly contribute forcefully to the debate in our party from that perspective.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I congratulate the hon. Gentleman on securing the debate. The estimated capital cost of Trident could be up to £165 billion. Is he seriously saying that if the UK Government redirected that amount of capital investment, we would be able to produce only 20,000 jobs?

Mr Charles Walker (in the Chair): Order. I am not allowing Members to get into a debate on Trident. Mr Kinnock, can you continue, please?

Stephen Kinnock: Thank you, Mr Walker. I defer to your better judgment, but I would be more than happy to continue that debate outside the Chamber.

In the light of what we are discussing, will the Minister explain why the Government will not go further in using Government procurement to support the British steel industry? It is one thing to put in place procurement guidelines, but driving the message home across Government, let alone the private sector as well, is another matter. Words are easy, but actions are far more difficult, and those actions require leadership. With Hinkley Point B, the Government have a real chance to show leadership by using procurement to support British industry. However, they seem to be squandering that opportunity, with no British steel due to be used on the project.

I would also like to ask the Government about the Swansea bay tidal lagoon. First, they need to get on and approve the project—each day of delay is costing months or years of progress on it. However, I also ask them to show some leadership and to commit to sourcing all the steel for the turbines, or as much of it as possible, from the United Kingdom steel industry. The tidal lagoon not only provides the entire Swansea bay area with job opportunities, which are desperately needed in the light of Monday’s announcement, but supports local jobs at the Port Talbot Tata Steel plant.

British steel is among the highest-quality steel in the world, and we should make better use of it. British-based certifiers have among the most robust standard regimes, particularly on environmental and social impact, so it is unusual to say the least that the Government appear to favour BES 6001, rather than the far more robust BS 8902, as the standard for reinforcing steel. No Chinese steel meets the stringent quality and sourcing criteria of BS 8902, so its adoption as the Government standard would help to protect against Chinese steel dumping and support high-quality British steel.

The fourth area on which we have repeatedly called on the Government to act is the dumping of Chinese steel on the British market, which is the greatest challenge facing the British steel industry. The Secretary of State for Business, Innovation and Skills is no fan of the European Union, but he seems to be a fan of hiding behind it. The Secretary of State and the Minister know that far more can be done to support the steel industry without the Government’s breaching state aid rules. The Government must work with Europe to deal with

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the issue of Chinese steel dumping. Last year, China produced 441 million tonnes of steel more than it consumed, much of which was dumped in the UK.

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): My hon. Friend is making an extremely strong speech. I congratulate him on securing this debate. Given that a number of us have been raising the issue of Chinese dumping and providing detailed statistics and examples for years, not just months, is he surprised that the Government have taken so long to take action?

Stephen Kinnock: I am surprised. I believe that the Secretary of State had to look up Brussels on a map to work out how to get there last year.

The critical point is that the European Union sets the rules of the game, and it is up to the member states to invoke those rules and deploy defensive trade instruments. I would like to share something with my hon. Friend. I read a very interesting interview from 2012, which was posted on Twitter by Laura Kuenssberg. She interviewed the then managing director of Tata Steel in Port Talbot—[Interruption.] I know my hon. Friend is well acquainted with it. I apologise for that connection; I assure him that it was completely coincidental. Guess what the managing director of Tata Steel asked for? He asked for action on anti-dumping, on high energy costs, on public procurement and on business rates. We have had four years of inaction, and here we are again. It is like a nightmare version of “Groundhog Day”.

Huw Irranca-Davies (Ogmore) (Lab): I commend my hon. Friend on securing this debate and on the way he is outlining the practical things that can be done. May I draw Members’ attention to the House of Commons Library assessment of the state aid interventions by other European countries, which are within the rules? We are allowed to do that. Germany’s bona fide support—it is not giving hand-outs—for its industry is twice the level of the UK’s. Does my hon. Friend agree that we are not doing what we can for the steel industry?

Stephen Kinnock: I agree entirely. I feel that our Government are not acting as they should because they are driven by a dogmatic, laissez-faire ideology that has nothing to do with standing up for British steel, British industry and the British economy. That laissez-faire ideology will never enable us to act as we should.

Kevin Brennan (Cardiff West) (Lab): It is worse than standing still. Over the past few years, the British Government have led a blocking minority on further reform of trade defence mechanisms. They are still doing so, despite Ministers’ denials in the Chamber. The Minister should explain to the House and the country why they are doing that.

Stephen Kinnock: An explanation would be very much in order. My hon. Friend makes a very interesting point about something I will come to shortly: market economy status for China. How is it possible for the Government to justify on the one hand saying, “We are standing up for British steel and British industry”, and on the other being China’s chief cheerleader in Europe and actively agitating for it to have market economy status? I look forward to the Minister’s explanation of that entirely illogical and unjustifiable position.

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Louise Haigh (Sheffield, Heeley) (Lab): I want to reflect on the fact that Ministers are so terrified of the EU state aid rules, but seem to have breached EU public procurement rules by failing to tender for Hinkley Point C. Will my hon. Friend reflect on that discrepancy?

Stephen Kinnock: My understanding is that a very prominent and well-known producer of British steel has been informed by EDF that they are not allowed to tender on the basis of what appear to be spurious health and safety grounds. I encourage the Government immediately to carry out an independent evaluation of why that producer was not allowed to tender. Let us hear it from an independent evaluator, because at the moment it is somebody’s word against somebody else’s. It is the Government’s responsibility to step in once again and stand up for British industry, rather than sell it off to foreign bidders.

The rise in the market share of Chinese rebar, which went from zero four years ago to 45% of the UK market now, can be explained only by Beijing’s distortion of the market. Some 70% of Chinese steel makers are state-owned, and the remaining 30% benefit from tax rebates that amount to a state subsidy. We are asking the Government not for special treatment for British steel, but for a level playing field and action to correct the market distortions. We are seeing not the forces of supply and demand working away, but a marketplace that has been hijacked by subsidised Chinese state steel that has been dumped in a previously perfectly well-functioning marketplace.

The Government should take action and show leadership, but they have been asleep at the wheel. Will the Minister explain what action the Government will take against Chinese dumping? Specifically, can she tell us whether the British Government support China’s being granted market economy status? A yes or no answer will do fine.

Just over a week ago, the Foreign Secretary said on the Floor of the House that

“it is through the prism of steel”—[Official Report, 12 January 2016; Vol. 604, c. 694.]

that Chinese market economy status should be judged. On that basis, we should say a clear and resounding no to market economy status for China. Time and again, the Government have acted as China’s chief cheerleaders in Europe—particularly on market economy status. They know that MES will cost British jobs and limit our ability to impose tariffs on dumped goods, but they are more interested in cosying up to China and making Britain, in the Chancellor’s words, “the western hub” for Chinese trading.

Andy McDonald: I am grateful to my hon. Friend for giving way yet again; he is being very generous. Does he share my concerns about the prospects for HS2? We hear that the Chancellor has had active discussions with the Chinese about the steel that will be used in that project.

Stephen Kinnock: I have heard the Minister and many of her colleagues assure us on the Floor of the House that a large portion of the steel used in the HS2 project will be British. I can only go on the Minister’s words. We shall see, as we have seen before, whether the Government’s words and actions match up.

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Nic Dakin (Scunthorpe) (Lab): Does my hon. Friend agree that, to ensure that UK steel is in a position to gain such contracts in the future, it is important that skills and new technologies are in place? There is a role for Government in that, too.

Stephen Kinnock: I agree entirely. There are two elements to this crisis. One is the short-term perfect storm that we are facing. The lack of Government support for building the industry’s resilience is a major contributing factor to that. The other element is equally worrying in many ways: the complete absence of a long-term strategy—nothing on research and development and innovation, nothing on investment, nothing on building our skills base and nothing on the long-term sustainability of such a foundation industry. As long as that long-term strategy is missing, short-term action will simply be treading water and running to stand still. We are in desperate need of a Secretary of State for Business, Innovation and Skills who is prepared to use the words “industrial strategy” and then to do something about it. The issue of market economy status for China is a chance for the Government to stand up for British jobs, for British industry and for Britain.

Finally, all those failures clearly come together into a single issue, to which my hon. Friend referred: the absence of a long-term industrial strategy for the steel industry, with a commitment to strategic investment in skills, infrastructure, energy, and R and D. Why have the Minister and her Department still not produced such a strategy—a strategy to save British steel, to save British jobs and to save communities such as mine? In the first half of 2015, the Minister almost never appeared in public without talking about her Government’s “long-term economic plan”. She now has the chance to show that that was not all hot air. Now is the time for the Government to produce a long-term plan for steel.

Back in October I said it was 10 to midnight for the British steel industry. I finish by asking the Minister what time she thinks it is now.

Several hon. Members rose

Mr Charles Walker (in the Chair): Order. Many Members are standing to catch my eye. If all Members limit themselves to 10 minutes, everyone will get in.

1.51 pm

Nic Dakin (Scunthorpe) (Lab): Thank you, Mr Walker. It is a privilege to speak in this debate—yet another one on steel in this House. I apologise that I will have to leave part way through the debate for a meeting elsewhere about steel in Scunthorpe. The hon. Member for Brigg and Goole (Andrew Percy) is coming as well, so we give our apologies.

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing the debate and on his good opening speech. As he said, the campaign for the steel industry has been going on for a long while—the challenges facing the industry are not new at all. We have known about since I was elected in 2010. Even since the steel summit in October—to give credit to the Minister, she was largely responsible for taking the energy from both Government and Opposition Members and moving the summit forward—the situation has become much worse. At the end of the summit we

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learned about the loss of jobs at Long Products, including in Scunthorpe. Since then we have had job losses in Rotherham and at Caparo Merchant Bar, and this week in south Wales and at Forgemasters in Sheffield. Things are getting significantly worse, not better, so the Government need to step up even more to the plate than they have done so far.

Anna Turley (Redcar) (Lab/Co-op): I, too, congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important and timely debate. My hon. Friend the Member for Scunthorpe (Nic Dakin) referred to the steel summit in October. Does he agree that there were five very specific asks on that day that the Government could have implemented on the next Monday morning? Instead, they set up working groups, which appear to be little more than talking shops. Concrete action has been extremely limited.

Nic Dakin: My hon. Friend is absolutely right. One of the pressures for the steel summit was the awful news of what happened in Redcar, which really focused minds.

To be fair to the Government, in many ways we have a good Minister. She puts her shoulder to the wheel and tries to move things forward. I am sure that the situation is as tough for her inside Government as it is for us outside, but one of the Opposition’s jobs is to push even harder from outside—that is our responsibility.

Let us look at the five asks. Things have been delivered on energy costs, although the Government promised delivery of the mitigations three years ago, so it took them three years. That is not a track record of fast delivery; on the other hand, it is welcome that that delivery has taken place. There is still more to do. The funding from the energy mitigation is still not immediately getting to the people it needs to reach, so that one has still not been forced through completely, although it is welcome and the Government’s movement on that should be recognised.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Beyond the five industrial asks, which my hon. Friend is going into, another issue is the timeline for Long Products. Before Christmas, in autumn last year, the chief executive of Tata Europe, Karl-Ulrich Köhler, put a specific timeline on when Tata would say whether it would own, or not, every single Long Products site—that includes Dalzell, Clydebridge, TBM, Skinningrove, and Scunthorpe and all the sections within—and that was April this year. What does my hon. Friend think that the Minister feels about the pressing timeline, as well as the five industrial asks?

Nic Dakin: That timeline is pressing and the Government will be as alert to it as everyone else is in the Chamber or, most importantly, among our constituents. It is good to remind us of the timeline, because it is there and the clock is ticking.

The second industrial ask is about supporting local content in major construction projects. Again, the Government are to be congratulated on making progress. Much stronger guidance is now in place, which has the potential to make real changes. I stress “has the potential” —we need to see the guidance driven through, so there

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is a job for Government to do: to force it through. As my hon. Friend the Member for Aberavon said, this needs to be driven through Government and other contractor organisations, otherwise it will remain a nice bit of guidance sat on a shelf somewhere, which will be no good to anyone. Although we recognise that the Government have moved forward on that, they need to move further—the job is started, but not done. The energy costs job was started, but it took us three years to get it done, so we need to keep up the pressure and keep our shoulders to the wheel.

The next industrial ask is about business rates and finding a way of not penalising capital investment in energy-intensive—or any other—industries. The Government admit that they have kicked any review of business rates into the long grass, but the issue needs to be addressed urgently. Business rates in the UK are up to 10 times higher than in France or Germany, which is significantly anti-competitive.

Let me turn to the industrial ask about taking anti-dumping measures. As my hon. Friends have said, the Government have been slow to get behind the wheel and get good trade defence instruments in place. At the moment the concern in Europe is about the issue of a profit margin of 1.5%, because that is a dangerous line to pursue and would not be beneficial to steel producers in the UK or elsewhere in the EU. I hope the Minister will encourage the Secretary of State to phone Commissioner Malmström to make the UK’s position clear about the need to support anti-dumping. Perhaps he has already called her, in which case it would be positive to hear what the Minister can report.

My hon. Friend the Member for Aberavon has already said much about the threat to the UK if market economy status for China is not handled properly. The UK needs to put itself in a leadership role in Europe. The Minister often shows leadership in the House of Commons on many issues, and she and her colleagues need to show that sort of leadership in Europe to ensure that the UK steel industry has a decent future.

Finally, support for research and development and environmental improvements is a big area of need. We need the Government to look at ways in which investment can be made so that the UK steel industry produces the right quality and type of steel to win the contracts of the future. That needs investment in R and D and in future skills, and that needs to happen now. We cannot wait until those opportunities are there; we need to be in a position to take advantage of them.

I hope the Government are looking at ways to make grants available or at using contra-cyclical loans or other imaginative ways to allow such investment to take place. Unless that happens, there will not be a UK steel industry in the future. As my hon. Friend the Member for Aberavon said in his summing up, we need a steel strategy that takes those industrial asks into account. We have ticks in boxes that show that that has started, but we now need to move that forward and get it finished. That needs more time and effort from all of us in the Chamber, including the Minister.

2 pm

Andrew Percy (Brigg and Goole) (Con): It is a pleasure to serve under your chairmanship, Mr Walker. I was not planning to speak, for the reason given by my neighbour,

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the hon. Member for Scunthorpe (Nic Dakin), but I could not deny the Chamber the opportunity to have some wise words put on the record—that may be a subjective statement, but I agree with it. Like him, I will have to pop out of the debate at 2.30 pm to go to a meeting organised by Baroness Redfern with Greybull Capital, which will hopefully take over the site at Scunthorpe. We may be back with some asks from them for the Minister before the end of the debate—who knows?

I agree with a lot of what the hon. Gentleman had to say in what was a sensible contribution, as is usual for his comments on this subject. I do not need to go into the history and value of the Scunthorpe steelworks to our area and the thousands of people who work in it, but it is vital to the economy of not only north Lincolnshire but the whole of the Humber.

I want to thank and pay tribute to the Minister, who has bitten the bullet and given us, the workers and others in the industry a lot of confidence that she is on our side in the fight to try to retain the steelworks at Scunthorpe. I thank her for what she has done on that. A lot of work has already been done. As the hon. Gentleman knows, we have done a lot with the Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for West Dorset (Mr Letwin), in his role in the Cabinet Office and he in turn has done a lot of work with Shareholder Executive and all the rest of it to try, with the necessary support from the Government, to facilitate the sale, which we hope will happen for Scunthorpe.

I agreed with some of the content of what the hon. Member for Aberavon (Stephen Kinnock), who opened the debate, had to say, but not necessarily with some of the political points made. It is frustrating that the energy-intensive industries compensation scheme took so long to implement and get approval for through the European channels—the Minister and I will be on different sides of a debate on Europe in a few months’ time, so I will not labour that point—but that cannot be laid at the Government’s door. We welcome that support and the approval for it. I echo the comments that we want to see that paid as quickly as possible—we are all on the same page.

As for business rates, this is not as simple as some Opposition Members have tried to make out. As lawyers have told us repeatedly at the taskforce, a bespoke package for the steel industry will not be allowable under EU rules, and a review of a more general change to industry across the UK is complex and expensive, as we all know. It is therefore not as simple—as has sometimes been presented locally—as the local council writing off business rates. It cannot do that, because that is not legal under EU rules, so we should be honest about that. It is not the panacea that some have presented it as—“If only we had action on business rates, everything would be fine.” That is not the case.

I welcome the change in the procurement rules. I remind the House that this Government renewed the Network Rail contract, which was really important for Scunthorpe. I think we will all be in agreement in wanting to see as much of the High Speed 2 work as possible, along with other infrastructure projects, delivered out of Scunthorpe. To have the knowledge that that is in the pipeline will be really important in the decision that Greybull Capital makes with regard to Scunthorpe. I therefore agree with the comments made about that.

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We also need to pay tribute to North Lincolnshire Council and Baroness Redfern, who have really engaged with the Government on every level. In particular, they have made some innovative proposals on how we can make better use of what is a very large site at Scunthorpe. I always remind the hon. Member for Scunthorpe that the site is so big that it is split across our constituencies. He has all the plant, but an awful lot of the site that is not utilised lies in my constituency and it could help secure its future, whether that is through looking at a use for renewable energy or at a business and enterprise zone. The council has been open to that and it has been impressive to hear how much other parties have welcomed its approach. The Minister and everyone involved in the ongoing discussions can be assured that whatever the council can do, it will do, to realise the asset in that site, which we hope will give some comfort to Greybull, the preferred bidder at the moment.

As for Chinese dumping, we have to remember—this is sometimes lost in some of the stuff that comes from the Labour party—that this is the first Government to have taken action on Chinese dumping. That is a change in approach and it has come under this Government, which is important.

Stephen Kinnock: Will the hon. Gentleman give way?

Andrew Percy: I will not, because I have only got a few minutes and other people want to speak.

Yesterday, at the Canadian high commission I sat down with a group to discuss the Comprehensive Economic and Trade Agreement and the Transatlantic Trade and Investment Partnership. The Canadians—one of their chief negotiators was there—see such agreements as a potential mechanism for creating a defensive block against the practices that have been going on, particularly in the economies of that region. That is a message for the Labour party. I do not know what its official policy is, because I know technically it does not have one any more—the shadow Cabinet certainly does not have one—but on TTIP and CETA it needs to get into the right place, because they are a way to build a defensive block. I urge Labour to embrace agreements such as CETA and TTIP.

Tom Blenkinsop rose

Andrew Percy: I will give way to the hon. Gentleman because he has not given a speech.

Tom Blenkinsop: I thank the hon. Gentleman for giving way. The Government’s policy is to support China’s market economy status, whether inside the European Union or outside. Of course, that comes after the recent negotiations in Paris, at which China promised to meet its own internal emissions trading scheme. The Government’s position is to support market economy status before China implements any reduction in production or emissions, but I think we should use MES as a leverage tool before any agreement.

Andrew Percy: As I think the Minister said in the statement on Monday, the Government have not determined what our policy will be, and it is a matter that will have to be decided at a European level, anyway.

I agree with the comments that the hon. Member for Scunthorpe made about R and D. I do not need to repeat them, but I would have said something similar.

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There has already been some political knockabout and, as the Minister reminded us on Monday, Labour’s record on steel is not necessarily great either. The steel workforce was halved and, during Labour’s period in government, we lost workforce and plant in Scunthorpe and thousands of steelworkers were sacked.

Trident is really important for the industry. That is a message to the Labour party—its more sensible Members will understand its importance. An important issue raised by the hon. Member for Penistone and Stocksbridge (Angela Smith) at the steel summit was our position on the future of fracking and whether it provides a market for the steel industry, as it has in the United States. I am somewhat in two minds about fracking, not least because there are eight potential sites in my constituency at the moment. We need to get a grip on that industry and make a decision on where we are policy-wise.

I will end by thanking the Minister. When she has come to Scunthorpe and met us, it has always been on a cross-party basis. I was disappointed to see the Leader of the Opposition appear at a meeting that we were not invited to. When the Minister has visited, the hon. Member for Scunthorpe has always been invited. Clearly, a political game is going on there. That is not what steelworkers need. We do not need people coming up and giving simple platitudes, saying, “The Government can just do more.” Things are not that simple. The Government have committed to us to do everything they can. I am pleased to hear the Prime Minister talk about Scunthorpe being of strategic importance to the United Kingdom.

There will always be politics in this place, but visits such as the one made by the Leader of the Opposition, who turned up to the constituency and gave steelworkers a false impression of the simplicity of the issue, are not fair to anybody—especially not steelworkers. We have to remain on the same page on this issue. I welcome the work that the Government have done. There is more to be done, as I think the Minister understands, and we hope that everything will be done to support the sale to Greybull Capital.

2.11 pm

Huw Irranca-Davies (Ogmore) (Lab): May I commend my hon. Friend the Member for Aberavon (Stephen Kinnock) and other hon. Members for their contributions? The speech made by the hon. Member for Brigg and Goole (Andrew Percy) in defence of the Government was very bold; it was also very wrong. I do not say that politically, however. Every word I say today is based on the importance of the steel industry for not only the United Kingdom and south Wales, but the constituents of my hon. Friend the Member for Aberavon and those in Neath, Bridgend and Ogmore. The industry is important for not simply those directly employed by it but, as my hon. Friend knows from his area, those who are indirectly employed by it in the supply chain, which is around 1,200 people in our area. It is also important for every café owner, pub owner, plumber, electrician and tradesman who relies on the steel pound.

Do not accuse me today of making political points for the sake of it. I will speak from the heart, and I will speak on behalf of constituents who are very worried at this moment in time. I want to put that on record.

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The hon. Member for Brigg and Goole said that politics was being played, but I am not playing politics. I believe in the future of a viable, vibrant steel industry and the importance of that for the United Kingdom. I know he does as well, and while we may argue, we will do so on the basis that we firmly believe in the future of a steel industry.

The Minister has been credited in this debate and others as being doughty, feisty and a fighter with real capability. I agree, but I say to her quite directly that her important role in battling for the steel industry looks at the moment like an impotent one. I am sorry to say that, because there have been many good words spoken, and taskforces have been set up, belatedly.

The Government recognised late in the day that when they imposed carbon taxes three or four years ago—I say this as a strong environmentalist—they did not put in place the mitigation measures needed for energy-intensive industries. That should have been done at the same time for not only the steel industry, but ceramics, the paper industry and others. A thinking Chancellor would have worked that out and not waited three years. The approach has damaged the steel industry, and we need to put it right.

Stephen Doughty: My hon. Friend made an incredibly important point about environmental matters and carbon efficiency. Would it not be absolutely absurd for the UK’s highly carbon-efficient steel industry—whether in my own constituency, Port Talbot or elsewhere—to see its jobs offshored to the less carbon-efficient China?

Huw Irranca-Davies: Indeed; my hon. Friend makes a wise point. I commend the Government for their high-level negotiations at COP21 in Paris—tremendous. The UK led the high-level coalition of ambition. The EU led as well, and yet we could end up in a situation in which we are not only offshoring jobs, but offshoring them to countries that do not have the same standards of energy efficiency that we have at Tata Steel in Port Talbot and throughout the UK. It is in the interests of the climate to keep those jobs here in this country.

Tom Blenkinsop: There is another interesting factor here because if we look at Tata’s profits right up until the financial year 2007-08, nearly every slab coming off each site that Tata owned was being absorbed by the world market. China was consuming so much steel during the 12% to 13% growth period that the argument that China has been eroding British jobs over the past 20 or 30 years is false. This is a very recent phenomenon—it is in the past four years—and measures need to be taken now.

Huw Irranca-Davies: Indeed. I believe that if any Government Minister could batter down doors and argue for a fully engaged, fully proactive and serious strategy that looks at the steel industry five, 10 and 20 years hence, this Minister could do it. I sense she is trying to do her best, but I suspect she is having some arguments thrown back in her face by others.

The Minister for Small Business, Industry and Enterprise (Anna Soubry) indicated dissent.

Huw Irranca-Davies: The Minister will shake her head and say, “No, of course we’re all lined up on this, ” but the Government need to lay out the industrial

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strategy for steel, and lay it out with urgency, setting the timescale in which a range of measures will be delivered. The hon. Member for Brigg and Goole was absolutely right that no one measure will do this. There should be a package of measures on the table right now, and that includes at a European Union level. I know, as a former Minister who used to go to Europe, how difficult it is to negotiate out there.

My hon. Friend the Member for Aberavon and others outlined the issue of market economy status for China. In an open letter to the Minister, the general secretary of the steelworkers’ union Community, Roy Rickhuss, wrote:

“senior industry figures…have told me that if China does achieve Market Economy Status it will be a catastrophe for our industry and most likely the final nail in the coffin for UK steelmaking.”

The Minister does not want to see that, and I do not want to see that. In that case, we need to get this absolutely right. I need to hear—all of our constituents need to hear—from the Minister the approach of the UK Government to that matter.

The reality of granting China MES status was outlined in a study by the Washington-based Economic Policy Institute that was published last September. It stated:

“an EU decision to unilaterally grant MES to China would put between 1.7 million and 3.5 million EU jobs at risk”

by curbing the ability to impose any interventions on those dumped goods. That is the scale of risk, so we have the situation that we are already dealing with, and then we have that.

I know that the Government have been accused of being a cheerleader for China. Let me put it in a different way. Unless we hear something different from the Minister today, it will seem to many people that the Government either are proactively encouraging the opening up of markets at all costs, without any regard for not only steel but other industries, or are simply failing to realise—for whatever reason, whether ideological or otherwise—the importance of the steel industry to this country and our communities.

Let me close on this point. The steel industry has to be more competitive, as we know. When I was a little toddler in shorts, my grandfather would take me to the Baldwins steelworks in Gowerton. It was the most outdated steelworks—crikey! I remember the smell and the smoke, and the danger and the excitement of it. Those works are long gone, but Tata Steel Port Talbot and the other plants throughout the UK should have a future. They need an actively engaged Government who say, “Not only do we believe in the industry, and not only do we have the words, but here are the five or six measures that the industry, unions and the steel group of MPs are calling for.” Just do it, and we will throw our weight behind you.

2.19 pm

Jessica Morden (Newport East) (Lab): May I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing the debate? The support and turnout from Opposition Members speaks volumes about its importance. My hon. Friend articulately and ably made the case for more Government intervention on steel. I welcome the opportunity to talk about the impact of this week’s job losses, primarily on Llanwern steelworks, although I am mindful of the contribution made in my constituency by Tata’s Orb works and Liberty Steel.

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The Prime Minister made great play of the employment figures at yesterday’s Prime Minister’s questions. I know that Opposition Members and people outside the Chamber who were watching him and hearing his words would very much have been thinking of the steelworkers, their families and those directly affected by the announcements this week. They are waiting anxiously as they watch the industry in crisis.

There was a statement in the Welsh Assembly yesterday. Edwina Hart, the Welsh Government Minister with responsibility for business, said:

“Behind each of the job losses announced is an individual, and in many cases a family, whose life has been changed”

by this week’s announcement. These jobs are predominantly outside London and the south-east, and they come with above-average salaries in areas of below-average income.

As my hon. Friends have said, steel is very much part of our heritage in Wales. Steelworkers, as we all know, take huge pride in the work that they do and what they produce. My hon. Friends in the Chamber know that all too well, not only because we represent steelworkers, but because many, like me, have family connections with the steel industry. I believe that the father of my hon. Friend the Member for Cardiff West (Kevin Brennan) worked at Llanwern steelworks.

The job losses at Port Talbot that were announced this week affect Llanwern, too. The overall figures for job losses at Llanwern were not announced by Tata in this week’s press release, but that forms part of Port Talbot strip products. The people affected include those who were seconded to Port Talbot from Llanwern last year when the hot strip mill was mothballed. Any solutions should recognise that the future of Llanwern is very much tied up with the future of Port Talbot. In addition to the 750 jobs that are being lost across the sites—the majority are in Port Talbot, but Llanwern is also affected—there are job losses to come in support services and management. Any action to support steelworkers, technical staff and support staff should be mindful of the impact on the Llanwern site.

I welcome yesterday’s statement by the Welsh Government about what they can do to help. There is the taskforce, in which I hope the UK Government will play their part, action to help affected employees now, and a recognition that businesses in the supply chain will be hit, as my hon. Friend the Member for Ogmore mentioned, along with local suppliers. The Welsh Government are looking at what can be done immediately and then at what they can do in the future on research and development, skills and training, business rates, for which they are responsible, and procurement, as was clearly set out in yesterday’s statement. The Welsh Government can and will do what they can to help, but they can only do so much. As my hon. Friends have ably articulated, we need UK Ministers to make good on the actions that were laid out extremely clearly by the industry and the unions at the steel summit, and to do so quickly.

Energy costs were discussed earlier today. The recent action involving compensation has been acknowledged, but UK Steel says that nobody is going to receive significant benefit until April. That is too slow, given the years that have been spent waiting for delivery, during which costs have increased again and again.

I wholeheartedly back the call for the Government to support anti-dumping action at an EU level. The UK

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should play a strong role in EU decisions over China and market economy status, and I fully support the comments that have been made so far on that.

Although there are new procurement guidelines, the Government must ensure that they are met, or we will let the benefit slip away to other nations. It is worth pointing out that Roy Rickhuss, the general secretary of the Community union, has said that the Welsh Government have a better track record on procurement than other Administrations in terms of prioritising community benefits. Perhaps UK Ministers could look at that and learn lessons from Wales.

From talking to Llanwern steelworkers this week, it is clear that their overall impression is that the Government have acted far too slowly. They have played their part with the unions in weathering the storm during difficult times to help to increase productivity in the business. My hon. Friend the Member for Aberavon put it well: we are used to the Government parroting the line about a long-term economic plan, but we need to see action from the Government, not just words, and steel must be at the heart of that.

2.25 pm

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): It is a huge pleasure to serve under your chairmanship, Mr Walker, and to follow some of the excellent speeches we have had this afternoon, not least the very passionate speech we heard from the hon. Member for Ogmore (Huw Irranca-Davies). If he succeeds in his ambition of gaining the seat in the Assembly for his constituency, he will be a great loss to this place, although I understand his aspirations to return home to the motherland once and for all.

We face two distinct choices as policy makers: first, do we just accept that the days of the domestic steel industry are over, that production in the UK cannot compete with cheaper production elsewhere, and that, in a global market, only the fittest will survive? Or secondly, do we stand firm in the belief that steel production is a vital strategic industry in Wales and in the UK and that all options must be explored and taken to save the industry, much in the same way that the Treasury responded to the banking crisis in 2008?

Plaid Cymru and I are firmly of the second view, because it is difficult to comprehend the impact on the Welsh economy if steel production was to cease in our communities. Tata and its supply chain supports nearly 20,000 jobs in south Wales and, according to the Welsh economy research unit at Cardiff University, its operations are worth £3.2 billion annually to the Welsh economy.

The industry is undoubtedly facing a perfect storm of a glut of cheap imports from China, Turkey and Russia, as well as falling prices and rising energy costs. Reuters recently reported that Chinese imports of reinforcement bar steel has increased from zero to 250,000 tonnes a year since 2012—a quarter of the market, directly undermining Celsa in Cardiff which specialises in that product. I think the hon. Member for Aberavon (Stephen Kinnock) mentioned the figure of 45%, which is 20% more than the figure that I mentioned. That just shows the impact of dumping by Chinese steel producers.

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We need action, as the hon. Member for Newport East (Jessica Morden) said, at all tiers of Government—at Welsh, UK and European levels—if we are serious about saving the industry. The Welsh Government are probably in the best place to move swiftly, and I welcome the establishment of the taskforce, although I hope it will be more about coming up with ideas as opposed to being seen to do something.

Employment costs are obviously one major cost for steel producers. Tata contributes £30 million in business rates across its three Welsh sites, with 40% being measured on plant and machinery. Business rates are devolved and a Welsh Government-funded business rate relief scheme based on plant and machinery is one obvious possibility, saving around £12 million. The choice is quite simply a 40% hit on business rates from Tata on a temporary basis or a 100% hit if its Welsh plants go.

Secondly, the Welsh Government should be considering a Welsh public stake in Tata’s Welsh steel operations. I notice that a similar policy is Labour’s UK answer to the difficulties of the industry, yet at a Welsh level, the First Minister has ruled that option out. I do not particularly want to make partisan political points today, but if Labour is not prepared to pursue that policy in Wales where it has the power to do so, why should anyone take their UK policy position seriously? Our position, which we have put forward this week in the Welsh media, has been supported by Gerry Holtham, a member of the Labour party and perhaps the closest to a rock-star economist that we have in Wales.

A public-private partnership to develop the planned power plant at Tata’s Port Talbot site would be a huge vote of confidence in the plant, making it more sustainable. The planning process would need to be streamlined—perhaps the hon. Member for Aberavon will want to talk about that when he winds up, given the discussion we had privately a few days ago.

I notice that the UK Government are willing to loan £400 million to Greybull Capital, a private equity firm, to help it purchase Tata’s Scunthorpe site. The UK Government should be looking at similar support for Tata in Port Talbot—or to the Welsh Government, or on a combined basis. That sort of intervention would constitute an environmental improvement and therefore, in my understanding, would be legal under state aid rules. If the UK Government do not pursue that idea, many in Wales will be left wondering why they are willing to support steel plants in England and not in Wales.

The Welsh Government must radically change their procurement policy to promote domestic steel—I disagree somewhat on that with the hon. Member for Newport East. They have by far the worst record of the Governments of the UK. Again, state aid rules should not be used as an excuse. Domestic producers are competing against heavily subsidised and state-owned Chinese steel. In other words, it is not a fair and open competitive market in the first place.

At UK Government level, we need a clear indication that Ministers are on the side of the industry. I note that only one Conservative Back-Bencher is present, none from the Liberal Democrats, some from the Scottish National party and Plaid Cymru, and many from the Labour party. If there were a groundswell of support for the industry from Government Back Benchers in a debate such as this, I can imagine what effect it would have on the Government’s mindset.

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Stephen Kinnock: The hon. Gentleman mentioned the important issue of the power plant at Port Talbot, which has a green light for its planning. I understand that construction of the plant and its operation would save between £25 million and £30 million a year on energy bills for the Port Talbot plant, so it would be a huge saving and a great boost to the plant. Does he agree that it would be welcome if the UK Government and the Welsh Government came together in a dialogue, pooled resources and gave some support to Tata Steel, both financial and in kind, to facilitate construction of that plant?

Jonathan Edwards: I fully agree with the hon. Gentleman. That was the point I was endeavouring to make. A one-off capital cash injection could have tangible benefits and would be a huge vote of confidence in Tata at Port Talbot and the communities of south Wales.

I challenged the Prime Minister yesterday about the huge contradiction in cheerleading the case for China to have World Trade Organisation market economy status, which would make it impossible to impose tariffs on steel, while at the same time belatedly calling for unfair price tariffs against China. Many hon. Members have spoken about that so I will move on to my next point.

The UK Government have a defining choice. Do they put the interests of the City first and deliver their wish that London becomes a centre for trading in the Chinese currency, or do they protect manufacturing workers? I hope that, for once, they will put the communities I serve before the City of London.

Port Talbot, Trostre and most of the supply chain are in a tier 1 European Union assisted area. As I told the Minister during the debate on a statement last week, the UK Government should be looking at innovative operating aids to reduce employment costs, such as a national insurance contributions holiday. State aid is permissible under EU law if there is unfair competition or market failure, as is the case in this instance. We should be taking action now and pressuring the European Commission for a derogation. We cannot afford to wait years for a decision.

Similar to what the Welsh Government are doing, the UK Government should be looking at its procurement policies to ensure that domestic steel is used in large infrastructure projects. The hon. Member for Aberavon made a valid point about EDF.

The difficulties facing the industry are not, of course, confined to Wales. The UK Government should introduce a temporary reduction in business rates for steel in England. That would trigger consequential funding for Wales, Scotland and Northern Ireland to help their industries within the devolved Government areas.

At European level, the Commission must wake up and smell the coffee. China is producing steel, selling it at below production cost and dumping it on the European market. It is a purely aggressive strategy aimed at decimating steel production in the EU. The Commission’s job is to act. We can contrast that with the response of the US Government who, according to Bloomberg, are taking steps to impose a 265% tariff on Chinese steel. As I have said, it is the UK Government’s job to press the Commission. If they refuse, my party’s call for the Welsh

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Government to have a direct role in EU decision-making processes to protect Welsh interests will become a battering ram.

The Commission’s investigations into Chinese steel dumping are taking far too long and its recommendations have been pitiful. For reinforced bar steel products, it recommended a measly tariff of only 9%. It is estimated that an investigation into coiled steel, which is made at Port Talbot, will take a year. The US—I am not usually a cheerleader for the US Government—takes only 45 days to conclude such investigations.

While European bureaucrats dither, Welsh workers are losing their jobs and the pace of action is simply not good enough. To those who argue that a Brexit is the solution to my complaint, I respond by telling them to look at what happened to the coal industry—we would be leaving the steel industry in the hands of a Westminster Government.

In reality, the steel industry in Wales faces massive challenges. I am informed that Tata in Port Talbot does not produce specialised products and therefore faces the brunt of the exports from China and other economies. The transition to a more modernised production system creating specialised steel will not be easy. It will require significant capital investment, but if we are serious about securing a future for steel production in Wales and across the UK, we need a range of temporary interventions to create breathing space for the necessary investment to be delivered.

In conclusion, this has been a deeply troubling week for Wales and our economy. The ongoing problems have been highlighted for a long time, yet the Labour-run Administration in Cardiff seem to stand passively by and do precious little, apart from blaming the UK Government. The Tory Westminster Government seem more interested in helping their friends in the City than in helping the working communities that I represent.

2.35 pm

Mr Iain Wright (Hartlepool) (Lab): It is a pleasure to serve under your chairmanship, Mr Walker, for what seems the umpteenth time. My mother sends her regards again—private joke.

I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important debate. The situation in his constituency at Port Talbot is grave, with devastating consequences for the community he represents, the prosperity of his local economy and the entire Welsh economy. It is also another body blow for the UK steel industry, which has suffered punch after punch in recent months. Since August last year, the industry has seen 5,000 job losses. One in six of all jobs in British steel have been lost in less than six months and there have been major site closures. We have seen redundancies and reductions in capacity in Redcar, Scunthorpe and Lanarkshire, as well as further job losses this week at Port Talbot, Corby, Sheffield Forgemasters, and in my constituency at the Tata Steel pipe mill.

In response to the acute crisis facing the steel industry, in the autumn 2015, the Select Committee on Business, Innovation and Skills conducted an inquiry into the Government’s response. We published our report just before Christmas, saying that at the time of publication, and as a result of site closures and job losses, the steel industry was on the verge of terminal decline.

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The announcements this week make a serious matter even worse and run the risk of pushing British steel over the edge and facing a truly existential threat in a matter of weeks or months.

The Committee found that although the Government identified the steel industry as being of vital importance—a point that the Minister established and reiterated during her evidence—they were not alert to the many warning systems being raised by the industry and issues that had been raised for years. We found a lack of action at EU level and a failure by UK Governments to push for a co-ordinated EU approach. Other countries have safeguarded their steel industries against the onslaught of cheap Chinese imports in recognition of the strategic importance of their domestic steel-making capability. The UK has not done that, leaving this country and its steel industry particularly exposed.

Anna Turley: My hon. Friend is making some extremely important points about the role of the EU in this crisis. As the situation was unfolding in Redcar, the Government made great play of saying they could do nothing to intervene because of state aid rules. My hon. Friend will share my concern that we have had agreement from the European Commission that research and development, developing innovation, supporting training and, crucially, employment, and protecting and enhancing the environment are all grounds on which our Government could have intervened. The Government have done too little, too late for Redcar, but I hope that for other areas they will step up and use those opportunities to get through the state aid rules they hid behind in Redcar.

Mr Wright: My hon. Friend has been a fantastic champion of the steel industry generally, and particularly in fighting for SSI and for it to be retained. She will know that EU state aid rules are often a smokescreen for lack of political will. An excellent programme on BBC 1 this week, “Inside Out North East and Cumbria”, looked at the plant closures here and compared them with how the Italian Government could keep steel plants open. There is a lack of political will, because that could have been done. SSI could have been at least mothballed.

Anna Soubry: Will the hon. Gentleman give way?

Mr Wright: I certainly will, because I was interviewed for the programme and I know the Minister was too.

Anna Soubry: Yes, I was. Does the hon. Gentleman agree that the Italian steel plant was not a blast furnace? The blast furnace had been mothballed.

Mr Wright: I will come to mothballing of blast furnaces, because that is another key finding by the BIS Committee. We found that job losses, plant closures and factors that have worsened since we published our report just before Christmas mean that the prospect of any future growth in the steel sector had been irrevocably damaged. We regretted that Ministers were unable to prioritise preserving existing capability and retaining skills in the steel sector in particular.

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The Minister talks about a blast furnace. The blast furnace at Redcar was one of the most efficient in Europe. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talks about it as having been second only to Dunkirk, and he knows more about steel than anyone else I know. However, it has now been lost forever to the British manufacturing base. Why was it not considered for mothballing rather than cold closure? The cost of cleaning up the site is destined to be in the region of half a billion pounds, and that is likely to fall to the taxpayer. It is an absolute disgrace, and our manufacturing base has been forever undermined as a result.

Huw Irranca-Davies: What are my hon. Friend’s thoughts about the fact that there was a vote in the European Parliament last Tuesday, when a Labour motion was passed, thank goodness, to look at reviewing the effect on steel of European state aid rules, whereas last December when there was a similar motion—looking at the European state aid rules, but also at the dumping of Chinese steel—Conservative Members of the European Parliament voted it down? What is going on? Why are we catching up? What does it say about the Government that they say one thing here and another in Europe?

Mr Wright: That is an absolute disgrace. We should all, regardless of where we sit and to which party we belong, be identifying steel as a major and important foundation industry for the British manufacturing base and having a co-ordinated approach to ensure that we can safeguard and retain those assets and, crucially, those skills as much as possible. If we are moving towards the high-value-steel end, where we are producing steel, metals, and materials that are stronger, more flexible and lighter, we need the skills to be able to do that. The 2,000 people in Redcar are not coming back to the steel industry. The 750 people in Port Talbot will in all likelihood not come back to the steel industry. And the hundreds of jobs in the steel industry that have been lost in my constituency will not come back. That is to the detriment of the British manufacturing base and the future competitiveness of the UK steel industry.

Tom Blenkinsop: My hon. Friend the Member for Aberavon (Stephen Kinnock) has said that if I was ever on “Mastermind”, my specialist subject would of course be blast furnaces, given that I dealt with the mothballing of the Redcar blast furnace back in 2010. That was mainly down to the expertise of the area and people such as Dave Cox, who is a constituent of my hon. Friend the Member for Redcar (Anna Turley). The real issue now—this sticks in the throat of most people—is the costs of having to maintain that site, which are about a quarter of a million pounds a week. Over the period of a year, that would have been approximately the same amount of money as it would have taken to pay for the three grades of coke that were sitting on a vessel just outside Teesport and which could have been brought in to save the Redcar coke ovens.

Mr Wright: Despite the fact that my hon. Friend says that his specialist subject would be blast furnaces, he is still a great colleague to go for a pint with. He makes a very important point, and I do worry about this. It is not just this Government but successive Governments who have placed short-term cost considerations over

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long-term value for our economy and society. That is incredibly important. For an industry that has been deemed to be strategic by the Minister, who has been a champion of this sector, the process seems to be one of chaotic yet managed decline. Can the Minister outline how much further she thinks the British steel industry will slide and what, for a strategic industrial sector such as steel, the right level of employment, capability and production is, both now and in the future?

We on the Select Committee acknowledged that the Government had recently woken up to the crisis and begun to take action, but today, exactly a month after the publication of our report and over three months after the closure of SSI and the steel summit on 16 October, no concrete steps have been taken. I am not suggesting that a silver bullet—or a steel bullet—could be fired to withstand the massive global forces affecting world steel demand and production, but swift action on the five asks from the steel industry could have provided a buffer for British-based steel-making plants. I therefore have specific questions for the Minister with regard to some of the five asks. Can she outline how much extra cash has been provided to steel firms since the steel summit, in the light of the decision made on energy-intensive industries compensation? If steel is a strategic industry, why can a special exemption not be given for steel manufacturers in relation to business rates to retain some capacity?

Anna Soubry: It’s state aid rules. You know that.

Mr Wright: If the Minister will allow me to continue, why can investment in plant and machinery not be exempt for an uplift in valuation? On the issue of procurement, the Minister issued new guidelines in the immediate aftermath of the steel summit. Three months on, can she outline the value of the contracts that have been awarded to British-based steel firms as a result of those changes? Has work actually been put into steel plants as a result? What has the Minister done to talk to sectoral groups, such as the Aerospace Growth Partnership and the Automotive Council, to maximise the proportion of British steel used in successful industrial sectors such as aerospace and automotives? I am very pleased to see a Sunderland MP, my hon. Friend the Member for Sunderland Central (Julie Elliott), with us today. We on the Select Committee were told during our inquiry that Nissan in Sunderland—a great example of cost-efficient car production anywhere in Europe, if not the world—uses 75% British-sourced steel in the production of its Juke model. If Nissan can do that, why cannot others? What is the Minister doing to cajole others within supply chains?

Anna Soubry: Force them?

Mr Wright: No, talk to them in a strategic manner rather than force them.

When it comes to moving research and development into new technologies, renewables are a great way to secure a real, viable UK steel industry for the future, yet the Government seem hell-bent on ensuring that we cannot do anything. One example is carbon capture and storage. Real help could have been provided, certainly for steel on Teesside, yet that has not been provided. That is a shame. What can the Minister do to ensure real co-ordination for what is meant to be a strategic industry?

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I want to finish on constituency matters. This week in Hartlepool, 62 job losses were confirmed at Tata’s steel plant. That is on top of the 80 jobs lost at the end of October, when Caparo Industries’ Hartlepool forging plant went into administration. Although Caparo, the national group, has been sold, the factory in my constituency remains closed. Unemployment in Hartlepool rose in December, and the jobless rate is two and a half times the national average. In Hartlepool, we simply cannot afford to lose these jobs and these skills from our strong manufacturing base.

I understand that the redundancies affecting Hartlepool are not on the same scale as those affecting Redcar and Port Talbot, but as I have just outlined to the House, the employment situation in Hartlepool is precarious. Given the real problem with the global price of oil going down to something like $28 a barrel and given that the Tata Steel plant in Hartlepool is a provider, in the supply chain, to the oil and gas industry, we are going to see even more problems, so what is the Minister doing to be alert to these warning signs in order to retain capacity? I have previously written to her, asking whether the same level of support could be provided to Hartlepool workers affected by Caparo’s closure as was the case with SSI. The Minister replied that that could not be granted, but I ask now, in the light of this week’s redundancies affecting Hartlepool, whether that decision by the Minister can be looked at again.

Jonathan Edwards: I congratulate the hon. Gentleman on his speech. He has come up with some very interesting ideas and spoken with great passion. What would be his advice to his colleagues in the Welsh Government, who are deliberating on these issues now? If he was a Member of the Welsh Government—of course, a Labour Government—what things would he be directly calling for now?

Mr Wright: One thing that strikes me about these issues is this. As I said, these are global forces. The price of steel has halved. However, there seems to be a remarkable consensus from industry, unions, MPs and devolved Administrations about what could be provided as a buffer to help to safeguard the steel industry. The five asks from the industry are achievable and realistic and could be provided, but they have not been provided. It is a case of finding out from the Minister in her winding-up speech whether that will be the case.

The British steel industry is incredibly important as a foundation sector for much added value throughout our manufacturing base. If we lose the steel sector, we lose a large part of manufacturing. We cannot allow it to slide any further. We need to be acting. We needed to act years ago; we needed to act in the aftermath of SSI; and we certainly need to act now, in the light of further real trauma in the steel industry this week.

2.49 pm

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): I do not intend to take up too much time, because there are hon. Friends wishing to speak who have had job losses in their constituencies in the last week or so in the ongoing steel crisis. However, I do want to pay tribute to my hon. Friend the Member for Aberavon (Stephen Kinnock) and to the Backbench Business Committee for allowing us to have the debate.

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I also praise my hon. Friend the Member for Hartlepool (Mr Wright) on his excellent speech, and the fantastic BIS Committee report on steel. That excellent piece of work illuminated many points that we needed to look at and raise. It is because the all-party parliamentary group for the steel and metal related industry is one of the most effective APPGs in Parliament, especially for using Parliament’s time to raise issues in the steel industry over the past four or five years, that so many Members have spoken today on this important issue.

In the past week there have been redundancies in Port Talbot, Llanwern, Hartlepool, Trostre, Corby, Sheffield and South Yorkshire. As a former union officer for the trade union, Community, I know some of those sites well and some of the people individually. The redundancies come off the back of a situation relating to Tata long products and, of course, the well documented and tragic events in Redcar at SSI.

I pay tribute to my hon. Friend the Member for Newport East (Jessica Morden), who raised a lot of issues about strip products. I will go into a few issues that my colleagues have gone into, but I want to check what industry is doing. I will be making critical comments about what the Government have and have not done but, as a trade unionist, I still wear my trade union hat and I still want to question what industry is doing. Employees trust employers to hang in there. I know that is very difficult for the industry at the moment. The five industrial asks are acute and critical, but I often ask myself what Tata—just one example—is doing regarding its relationship with this country.

I ask myself about Tata’s integrated industrial strategy in relation to Port Talbot, Llanwern and its own automotive sector. Jaguar Land Rover, as well as the rest of the automotive sector, is growing, developing and doing well but, irrespective of the fact that both companies are owned by the same parent company, one does not necessarily procure from the other. The Government have to step in and, not necessarily force, but certainly induce and use clever mechanisms to try to encourage ways and means by which that relationship could be bettered for workers in the steel industry. I find it hard—I am sure that colleagues do too—to make the argument that a parent company is not procuring from its own site. It is for not just the Government, but the very industries that sit in our nation to justify their industrial actions and procurement policies.

I have spoken at the Sheffield rally, as have my colleagues. A year ago, I managed to get our Front-Bench team to lead the debate on the UK steel industry. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) spoke from the Front Bench in that landmark debate. I believe that the issue of steel had not been brought forward as an Opposition day debate for some time, so it was a significant indicator of how bad the situation was getting.

Stephen Kinnock: On chronology, we hear very often from the Government that all the problems have existed for a long time and that many were building up on Labour’s watch from 1997 to 2010. I accept that point, but there was no Chinese rebar in the British market in 2011. Today, 45% of rebar is Chinese. In the past four years we have seen a total absence of action. The Government

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have been asleep at the wheel and the crisis has come to a head. It is important, for the record, that we recognise that the situation has come to a head over the past three to four years.

Tom Blenkinsop: Until 2008, which was a big year for the steel industry, profits were massive. Everything coming out of any plant was getting bought up. The demand in the world was so high because it was driven by Chinese growth. Any bit of steel—slab or whatever—was being absorbed by the Chinese market. Steel producers made very good profits, as did their workforce, who made very good bonuses. I remember negotiating terms and conditions, and pay and pensions for those workers at the time and they did very well.

The anticipation after that was that the lull in the market would pick up at some time but, if anything, it has remained the same. It has flatlined—never picked up. It is usually an indicator of world economic performance, and nothing has happened. In many ways, the best laid plans always go awry. The real issue is the ability of Governments to react. For some time now, there has not been a proper reaction. There has just been an expectancy or a desire—a hope and a prayer—that the market would pick up again. If anything, it has been quite clear that the domestic policy in China has been to prop up its own industry while that market stays at such a low, with ever increasing production and increasing emissions.

We must talk about the backdrop. The big factor, as my hon. Friend the Member for Hartlepool mentioned, is the “sheikhs versus shale” argument. There is a global, geopolitical war going on between oil and shale gas, as well as the onstream effects of renewables. They have forced down the price of oil, which has been a key factor for steel, whether that is in procuring contracts or gaining work, particularly at Hartlepool or Corby, where tubes are made.

There is a mismatch, in that the new markets developing for potential steel contracts and the R and D that could be invested in them differ very much from the steel sites that already exist. If we are looking at the new future for a tube site, it is more than likely going to be non-conventional onshore or offshore gas. The industry —we will be talking about this next week in a separate debate—requires a different type of tube, which is non-welded. There are no non-welded tube sites in Britain. At some governmental level, there has to be liaison with industry to find out what new industries are coming and to ask whether we are investing and helping those industries or potential suppliers to put in the new factories that will supply the product they require to develop that market.

This is the issue: steel or a steel strategy is one thing; what we really require is a real, integrated industrial strategy. That strategy should look across the piece and across regions to work out who needs to liaise with who to make whatever happen in the future. It should identify which industrial partners to bring on board and what they want to see, and ensure that investment is solid and sound and that we bring investors along with us to make those decisions work in our nation’s favour. There just does not seem to be any of that.

In the Chancellor’s autumn statement we heard that an announcement to the stock exchange had been made about the withdrawal of the last £1 billion to support

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carbon capture and storage. That is integral to any future of shale or non-conventional gas. In a world in which oil has fallen below $30 a barrel and the world market will retrench and retain fossil fuels for the current period, CCS should, in many ways—mainly because of the emissions targets that we are all now signed up to—precede renewables as the step for any nation to take to develop its power generation if, indeed, that country is going to buy in cheap fossil fuels while shale, oil and conventional gas all fight one another for customers. That is a massive opportunity for the steel sector to take hold of.

I have spoken so much about the steel sector, in relation to my local area and the whole UK. There is a positive story to be made for British steel, if we have an integrated industrial strategy. The Government could roll up their sleeves and actively engage with bodies, partners, business and finance to invest in the country. The right and adequate policy could be put down, with long-term futures secured, so that people know that their investments are sound and can deliver. However, in every single situation—for example, after the Paris climate change talks, when the world is looking at CCS as the future, and it is going to develop, the Government removed funding for it—we run away and concede the ground to competitors, which gives completely the wrong message to the industry we are talking about today.

Stephen Doughty: Signals.

Tom Blenkinsop: Exactly. We need to send market signals to potential investors to demonstrate that we have industries that link up with each other.

That brings me to defence. The future of sites such as Dalzell and Clydebridge in Scotland, which are linked to long products, is not certain. They produce the sonar-specific coated plate for the renewal of the four nuclear submarines, but they also produce the plate used for offshore renewable technology. That is where we have to shoot some sacred cows. There is no dichotomy between renewables—the green argument—and, say, the four nuclear submarines. Often the technologies are shared and cross over different markets.

We have to reassure steelworkers at those sites that we will be making the case for their industries and the products they make. However, their future is uncertain. Although the Government make a strong argument for the nuclear deterrent, I am not entirely sure where they are going to procure the plate from. What is the future for Dalzell and Clydebridge? Where is the sonar-specific plate going to come from if those sites are not bought and kept running? At the moment, Tata’s plan is to mothball them both. The certainty that the Prime Minister gives at the Dispatch Box about national security certainly is not there, and he has big questions to answer on national defence because those two sites do not have a certain future.

[Andrew Rosindell in the Chair]

On long products and the future of Skinningrove and Lackenby beam mill—TBM—in Redcar, we know that Greybull Capital is interested. We want those sites to have a successful future, and there is now a better prospect than under Klesch. However, I have not heard any certain clarification about long products per se. Most of what I read second hand is about the Scunthorpe site. The APPG has already pre-empted that in wanting

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to talk to Greybull to hear its intentions for Longs, but I want clarity for the men and women who work across all the Longs sites.

3.3 pm

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Rosindell. I pay tribute to the previous Chairman, Mr Walker, for his handling of today’s proceedings. I also pay tribute to my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing this high-quality debate, during which important and passionate points have been made. I look forward to hearing the Minister’s response.

The industry, as we have heard repeatedly, has gone through the most difficult and catastrophic times in recent years, but it is important to stop and reflect for a moment. Obviously, the ultimate tragedy for anyone in the steel industry is the loss or injury of a loved one, so I start by paying tribute to Peter O’Brien and Mark Sim, the two workers who were tragically killed at the Celsa plant in my constituency—it was a terrible day when I was informed of that. The plant is close to where I live in Splott. I have visited it many times, and it really is at the heart of the Cardiff South community. To hear of those deaths and the other injuries was a deep shock to everybody involved, and I pay tribute to those workers, their families and the entire Celsa workforce.

I will now reflect on the workforce in the steel industry as a whole. We have heard from many hon. Members about workers’ sacrifices and effort. Whether by accepting wage restraint or changes to shift patterns, they have done their bit to ensure that the industry has a viable future while it is buffeted by global market forces. My hon. Friend the Member for Newport East (Jessica Morden) spoke passionately about the role that steel plays not only across the UK, but particularly in south Wales. There is a backbone of steel running through south Wales from Llanelli and Carmarthenshire through Swansea and Port Talbot, through Bridgend and Ogmore, through Cardiff bay and into Newport. That is reflected on the Opposition Benches today.

Christina Rees (Neath) (Lab) rose

Stephen Doughty: It runs into Neath, too.

Christina Rees: Approximately 1,000 of my constituents work either at Tata in Port Talbot or at Trostre, and they are waiting to find out whether they will be affected, which would be devastating for them. Neath constituency is still reeling after what happened with coal.

Stephen Doughty: My hon. Friend sets out clearly how the situation affects her constituents. The impact on not only the directly employed workforce in all the plants and operations across south Wales and the UK, but all those working in the associated industries, cannot be overemphasised.

While we have the steel backbone that I described, we also have steel veins and arteries running out into many other industries—related manufacturing, training and expertise, and engineering. The loss of highly skilled jobs in the plants themselves has a knock-on effect on communities right across south Wales and the UK.

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I pay tribute to the trade unions and especially Community, which plays a constructive role not only in these debates, but in facilitating the relationship between us and workforces in the plants to enable us to understand what is happening on the floor of the melt shop, and in the rod and bar mill, so that we can see with our own eyes the efforts that the workforces are putting in.

I will not reiterate a lot of points that I have made in previous steel debates, whether from the Front or the Back Benches. Instead I shall emphasise several of the points that have been made and ask specific questions of the Minister. I will focus on constructive solutions. I praise the work of the current steel Minister, and the Secretary of State for Wales has been open about and engaged on this matter with me and other south Wales Members but, to be honest, a lot of this is far too little, far too late. When I was elected in November 2012, one of my first meetings was about the steel industry. The Celsa management and I went to the Department for Business, Innovation and Skills to meet senior officials and Ministers. We presented detailed and carefully constructed warnings about what was happening in the market in terms of Chinese dumping and energy costs. We presented thought-through solutions, and we wanted to work together co-operatively and in partnership to find solutions. Unfortunately, a lot of the warnings were ignored.

I think back to a particular meeting I had in November 2014 in the Wales Office with the Secretary of State for Wales and the then steel Minister, who is now the Minister for the Cabinet Office. To be fair, the Secretary of State made an effort—I genuinely think that he cares about the future of the industry in south Wales—but I am sorry to say that that was simply not matched by the former steel Minister, the Chancellor of the Exchequer and officials in the Treasury and elsewhere. There has been a constant battle between those in government who genuinely accept that there is a problem and want to do something, including the current steel Minister, and others who either act with typical Whitehall caution, saying, “Oh, we can’t do this, Minister. We can’t do that, Minister,” or are actively not interested at all and are pursuing a laissez-faire ideology.

Stephen Kinnock: The promises, and the lack of delivery on those promises, specifically on market economy status for China, have been a constant theme. China’s current non-market economy status will be up for review in December 2016. The first step in reaching a decision will the European Commission making a recommendation. Does my hon. Friend agree that it is time for the British Commissioner, Lord Hill, to stand up for British interests in Brussels and to make it absolutely clear that the British Government will not support market economy status for China? Surely it is time for that promise to be made and, for once, not to be broken.

Stephen Doughty: I wholeheartedly agree with my hon. Friend, who is absolutely right. Such promises have been the hallmark of much of the relationship with Europe of this Government and the previous one. There has been a lack of engagement. We can argue about the reasons why, but things have not been followed through until far too late in the day. I know that the

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Minister will talk about the actions she took, which were very welcome—I praised her for them publicly—but that was the first action after many similar requests in terms of our relationship with Europe.

My hon. Friend the Member for Aberavon talked about market economy status, and my biggest concern is China. It is basic economics. The statistics show that Chinese steel exports have increased every year—they rose in 2009, 2010, 2011, 2012, 2013, 2014 and 2015. If we look specifically at statistics for the EU, we see an upward trend of Chinese exports since the start of 2011. In 2014, they increased by 53%. They peaked in quarter 4 of 2014 at 27.1 million tonnes, but in quarter 3 of 2015, a new record was set of 29.4 million tonnes, which was an increase of 17% in one quarter.

Tom Blenkinsop: To return to the point about MES, there is the issue of what our allies are doing and what China demands. China wants MES almost automatically, without debate. On the flip side, there was an OECD steel committee meeting before Christmas at which nations from around the world wanted to talk specifically to the Chinese delegation about the amount of dumped steel in their markets—this is not just a European Union phenomenon; it is a global one—and China did not attend. Those factors need to be raised by the British Government with the European Union. We should be looking seriously at MES, not just taking it for granted.

Stephen Doughty: I agree wholeheartedly. We have already heard about a letter from Roy Rickhuss, the general secretary of the union Community, to the Minister. The letter, which he made public, says clearly:

“As you will know, it is widely understood that the UK Government has taken a decision to support China’s bid to receive market economy status from Europe. This would be a complete disaster for our steel industry, as it would make it even harder for European producers to gain protection from unfairly traded Chinese imports.”

This is not just about what we have seen, as there are also issues involving the Chinese currency. Many experts agree that the recent devaluation suggests that there is an increased chance of further growth in Chinese steel exports and dumping into markets. We have discussed this in many debates, but there is also a problem that if China is exporting all that steel, and certain other countries and Administrations around the world are taking measures to prevent imports of that steel, the impact on the UK market will be even greater.

Jonathan Edwards: I am grateful to the hon. Gentleman for raising the point about currency devaluation. We have been in huge market turmoil since the new year. It is likely that the Chinese Government will devalue the currency further. If that happens, the problem is likely to get even worse.

Stephen Doughty: Absolutely. I would certainly be interested to hear the views of the Minister and experts within the Department for Business, Innovation and Skills about what impact that might have, and whether it is likely to increase the pressure further.

Tom Blenkinsop: To what extent does my hon. Friend think that the deal allowing Chinese currency to be exchanged in the City of London is affecting the Government’s decision to support Chinese MES?

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Stephen Doughty: I would certainly be interested to hear the Minister’s response to that point. My hon. Friend rightly talked about an industrial strategy and having an overall strategic look at these industries and their interaction in the globalised economy that we face. There are tensions in government between the Treasury, BIS and the Department of Energy and Climate Change. The Minister may shake her head and wave her hands, but she knows that those tensions are there, and that there is not one voice on these matters in government. She works for a Secretary of State who, as we know, would not utter the words “industrial strategy”.

Tom Blenkinsop: Does my hon. Friend believe that maybe, just maybe, we need Treasury Ministers to attend these debates? Despite all the confidence that we have in this Minister, we are now in a situation in which, if we are to talk adequately about UK steel, we need to hear Treasury Ministers justifying decisions and views on things such as MES.

Stephen Doughty: That is important, because a whole-Government approach is needed. We saw the disjunction between DECC and BIS about the package for energy-intensive industries and the measures that were taken. The approach needs to be co-ordinated. The Chancellor has been warned repeatedly, and I have letter after letter from Celsa to him and Treasury officials. We ensured that we always kept them informed, but there was very little engagement by the Treasury.

I would be grateful if the Minister would respond to a number of questions. Given the welcome steps that have been taken on compensation, exemptions and so on, after all the changes come through, will companies be paying more tax or less? What will be the net impact of the introduction of the compensations and exemptions? This has been a key concern for the industry when big figures are bandied around. What will be the net impact on their balance sheets?

Secondly, on procurement—other colleagues have asked this, but I would also like to know—since the Government announced their various procurement measures on a UK level, has any work been given to UK steel producers that would not otherwise have taken place or that had not already been contracted? That point is crucial. Celsa played a crucial role in supplying rebar—I think it supplied some 45% of it—to the construction industry for the Crossrail project. Unless the infrastructure pipeline goes through, and without a commitment from the UK Government that major infrastructure projects—whether in defence, construction or major energy—will support UK steel, we will have a serious problem.

Finally, as the Chair of the BIS Committee and others have mentioned, what does the Minister think is the acceptable bottoming out of the steel industry in the UK? Does she have a sense of where it ends, or is this, frankly, just a managed decline? People want to know and understand the situation. If we do not have clarity of vision from the Government, we unfortunately risk continuing to be buffeted. We will lurch from one crisis and set of job losses to another, as has happened over the past few months, which we warned would happen. Can we prevent any further loss of the expertise, skill and national security provided by our steel industry, let alone the productivity?

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I made this point in an intervention, but I cannot emphasise it enough. As somebody who believes in tackling global climate change, operating sustainably and having responsible industry, I find it absurd that we would offshore from this country steel jobs and production involving the most carbon-efficient methods, because that will result in more global carbon production and an increased chance of climate change, less security of steel supply in our own country, and less quality and safety of supply. Those are serious points that we must be aware of, which is why a strategic approach is required across Departments, with people all singing from the same hymn sheet.

I am proud of what the Welsh Government are doing to respond to the immediate crisis in Wales. I am proud of what the Economy Minister said this week and I am proud of what Carwyn Jones has been doing to respond, but a fundamental change in approach on working together is needed from the UK Government, because otherwise I do not know where we are heading.

3.17 pm

Mrs Madeleine Moon (Bridgend) (Lab): We have had an amazing debate. I thank my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing it, and for the leadership he has shown to Members from south Wales who are deeply concerned about what is happening.

The Select Committee on Business, Innovation and Skills has produced one of the best reports on the future of the UK steel industry and the Government’s response to the crisis that we could have asked for. It sets out everything clearly and succinctly. What I do not understand is why the Government are not grabbing it with both hands and running with it, saying, “Here’s the template. We know what to do; let’s get on with it.”

We have also had wonderful support from the UK steel industry in its briefings. Dear God—if any of us needed a clear example of what is happening in the world of steel, the briefings have laid it out succinctly. The charts are brilliant and demonstrate the decline that has been coming over the years, growing and growing and being ignored, and the crisis that is now upon us.

Perhaps one night I too will be able to go for a pint with my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and find out the totally fascinating character that I am told he is—a raconteur on the issue of blast furnaces. I look forward to that drink and conversation.

My constituency of Bridgend is right next door to Aberavon. One of my communities, which used to be a large council estate, in North Cornelly, was built to house workers for the newly established steelworks of Port Talbot, when it was expanding. I live in Porthcawl, and the town is full of people who used to work in the steel industry and who chose to retire there having worked in that industry. I was in a meeting on Friday with the First Minister, talking about how we would be dealing with the crisis—that is what it is. I hope the Minister takes on board what a crisis it is for ordinary families across south Wales.

Among the people who came to see me was a lady called Jen Smith. She has emailed me and talked to me about the issue, and about her fears. Her son works at the steel company. He has just bought his first house. She is worried about what will happen to his family and home if he loses his job. The family had plans to work

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on the house and develop it. They had a plan for perhaps a new kitchen or bathroom, and for decoration. All the small companies that my hon. Friend the Member for Ogmore (Huw Irranca-Davies) mentioned will lose that work; so it is not just the steel industry—everyone else in the south Wales business community will be devastated by the job losses. There is an impact on people’s sense of security and worth. Their trust that work will be there for them in future has been undermined. That is the huge worry that we are here to talk about: not just the steelworks but the confidence of people in Britain that manufacturing jobs are safe jobs. That is a huge and frightening problem.

The excellent report from the Business, Innovation and Skills Committee, which I cannot commend enough, talks about steel being supplied to

“multiple strategic manufacturing and construction supply chains”.

I spend a lot of my time talking about defence and security issues, and in that context we often talk about the importance of sovereign capability: the things that Britain needs to maintain, to be safe and secure—things that we cannot let go. I have to ask Members whether they can imagine Britain in 1913 and 1914 saying, “We can let the steel industry go. We can allow our capability to manufacture our own defence capability slip.” No, they cannot imagine that.

Stephen Doughty: My hon. Friend makes an incredibly important point about national security capability. Celsa in my constituency produces rebar, which is used in reinforcing steel, and that is often used to reinforce important buildings. I know that Celsa tests it rigidly, and knows exactly what goes into it. There is regular testing—I have seen the steel being tested. How will we have those assurances if we import stuff from China, where there are not the same safeguards, particularly in relation to defence and security projects?

Mrs Moon: I absolutely agree with my hon. Friend, who has done valuable work fighting for his constituents, to make sure our cherished and valued capabilities stay within our national infrastructure. I cannot imagine how we would have fought the second world war if we had not had our steel industry and been able to manufacture the steel that kept our fleets and troops going, and our tanks rolling across the countryside.

We must stop thinking of the issue in terms of China and its need to dump its excess supply of steel on the European market. I understand what China is doing. It faces its own economic crisis and needs to keep its workforce going, because it does not want instability.

Stephen Kinnock: We understand, of course, that the Chinese economy needs to grow, and China has every right to do that, but does my hon. Friend agree that potentially there is an agenda about dumping? That agenda is to dump the steel, drag the price down, kill the British steel industry and, as soon as that has happened, move in and put the prices up: profits go back up and we are nowhere to be found.

Mrs Moon: My hon. Friend has stolen my best line. That is exactly where I was going in my speech. The dumping is helping China in the short term to keep a

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workforce going, but let us be honest: it has a long-term agenda of destabilising not only the British but the European steel industry. We are our own worst enemies, because we are allowing that to happen. It is time we were realistic and said no. There are opportunities that we can take, and there is a simple one: we can say no to the Chinese market economy status. We can say that; we can do that; we can fight for that. I do not understand why we are not doing it.

Huw Irranca-Davies: I referred in my speech to the Washington-based Economic Policy Institute, which looked at the scale on which jobs would be lost if we gave pure unilateral market economy status to the Chinese. The work also showed that the impact could be as much as 1% or 2% of GDP across the European Union. If that is not cause for Ministers to go out and argue and play hardball, what is? It is a question of jobs and economic growth—all of that. There is a time when we must stand up. If we agree that the issue is strategically important, we fight for it tooth and nail.

Mrs Moon: What is inspiring today is the fact that we are all here doing that—fighting tooth and nail. I know the Minister. We have worked together on defence matters and have a history of sparring across the Chamber, but we also have a history of working together constructively. I hope we are able to carry that on, because there is an unfairness of status in this situation. China can ignore climate change in a way we cannot. It is not bound by the high cost of energy, because it subsidises its companies in the use of energy. It has quadrupled its output of steel since 2000, so its plan has been quite a long-term one. We must deal with the market distortion and think about how we protect our own industries.

The wonderful Business, Innovation and Skills Committee report points out that over the past four decades production in the UK has fallen behind production in France, Spain, Italy and Germany, and that, in those countries, support within the European rules has protected their critical steel making skills and industries, helping them to withstand some of the global competition much more efficiently and effectively than we have in the UK. It is important that we look at the five asks. Those are not the Labour party’s five asks. They are the steel industry’s five asks. The issue is not a party political one. The steel industry says, “Give us these, and we have the opportunity to move forward.”

On business rates I want to raise one issue. I was deeply concerned about this at the statement on Monday. My hon. Friend the Member for Blaenau Gwent (Nick Smith) and I both raised the issue of assistance in terms of business rates. The Minister replied, saying, in relation to the Welsh Assembly: “They wanted that”—business rates—

“as part of their devolution settlement, of course. There is a good argument that if one gets what one asks for, one has to take the consequences.”—[Official Report, 18 January 2016; Vol. 604, c. 1144.]

Well, the Welsh Assembly cannot make the changes to business rates that will bring the exemption for plant, equipment and machinery, which is what we are asking for, and therefore we need the Minister to address that issue and take it forward constructively.

Anna Soubry: Can the hon. Lady tell us why the Welsh Assembly cannot do it?

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Mrs Moon: Because the legislation is primary legislation that will come out of the Westminster Government.

I do not want to take up additional time, Mr Rosindell, but if we can meet the five asks, we can save an industry that we all know we need, not only for this country’s economic future and economic stability but for its strategic defence and security.

3.30 pm

Marion Fellows (Motherwell and Wishaw) (SNP): Thank you, Mr Rosindell, for calling me to speak, and I also thank Mr Walker, our previous Chair.

I could stand here and individually thank all the Members who have contributed so much to this debate, but I will refrain from doing that. I will just thank them collectively, and then thank one or two of them especially. First, I thank the hon. Member for Aberavon (Stephen Kinnock) for securing the debate with the backing of fellow colleagues on the all-party group on steel and metal related industries.

Ravenscraig, which is in my constituency of Motherwell and Wishaw, was once the beating heart of the European steel industry and on closure much of the plant was sold to China. The Ravenscraig site is still mostly a barren wasteland, which is an issue we continue to deal with on a daily basis. All that remains of our steelworks is the Dalzell plant, which is only minutes from my office, and the Clydebridge works, which is in the constituency of my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier).

As well as providing jobs to the communities across Lanarkshire directly and indirectly for generations, our steelworks are a source of pride. Some of the finest steel in the world was produced in Motherwell and it was still being produced until recently. For people in Lanarkshire, our steelworks are iconic and represent the decades of industry that are the foundations of our community. Our legacy is now in danger and so, too, is the legacy of towns in both England and Wales that also have a proud industrial past.

The reaction of the UK Government to the crisis that we face will determine whether or not steel will merely be a memory in our towns and villages or an industry that can remain for generations to come. The Scottish Government have some of this responsibility as well. However, I believe that both Governments starkly contrast with one another in their reaction to the steel crisis.

The Scottish Government reacted within four days of the announcement of the closure of Dalzell and Clydebridge. They set up a steel taskforce, which I am a member of, to find a buyer for the plants, emphasising our commitment not only to strengthening and building our steel industry but to the wider manufacturing sector. Working with the community, Unite, GMB, Tata Steel, Skills Development Scotland, Scottish Enterprise, Transport Scotland, the Scottish Environment Protection Agency, the UK Government, North and South Lanarkshire Councils, the Scottish Trades Union Congress and others, the Scottish Government have vowed to leave no stone unturned in finding a new owner for our steelworks. They have invested £195,000 in a support package to retain and upskill key staff, to ensure that plants can reopen quickly as and when production resumes. Working with Skills Development Scotland, those workers will

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also be upskilled. The training will provide them with a mix of skills in varying fields, including management and new processes.

For workers who have unfortunately worked their last shift at Dalzell and Clydebridge, the Scottish Government have created a project to get ex-steelworkers back into work through the Partnership Action for Continuing Employment scheme. The Scottish Government have agreed with the business rates assessor to ensure that the state of the business will be taken into account in the 2017 revaluation. The Lanarkshire Valuation Joint Board is open to agreeing and pre-agreeing the 2017 valuation with any new operator, to save the plants hundreds of thousands of pounds.

The Scottish Government have also looked at the efforts of other steelworks to reduce energy costs by using renewable energy and investing in energy-efficient furnaces. Scottish Enterprise has been invaluable in that process. It has been working with Tata since before the plants’ closure in an effort to bring down energy costs.

Holyrood has almost exhausted the powers available to it to aid our steel industry. Already, two potential buyers have expressed an interest in our Lanarkshire plants, which is surely testament to the hard work of the Scottish Government’s steel taskforce. We recognise that it is essential that our domestic economy is diverse, so that it can provide employment to those with differing skill sets and aspirations, and not just to those with the skills for the service sector.

Steel in particular is an essential, strategic resource required for a range of purposes, and I thank the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) for referring to both Scottish plants and the contribution they make in that regard. However, the importance of steel in realising those interests is continuously ignored by the UK Government. Time and time again, they fail to take the urgent action that is required, putting further steelworks at risk, as per Port Talbot, Redcar and other plants that are extremely vulnerable and that have suffered great losses.

The Scottish Government have made tremendous efforts to find a new owner for the Dalzell and Clydebridge works, but the powers to resolve the underlying problems facing our steel industry do not lie in Edinburgh; they lie here in London. For years, trade unions and the steel sector have warned both this Government and the previous one about the fragility of the steel sector and the challenges affecting it, but those warnings fell on deaf ears. The dumping of inferior Chinese steel on the markets and extortionate energy prices have crippled the steel industry.

Even now, the British Government merely respond with too little, too late, to aid our steelworkers. They have finally gained EU approval for rebates under the energy-intensive industries compensation scheme, but where is the cash? I remind the House that there was no such delay in intervening to save the lavish lifestyles of London bankers. There is no urgency to save the livelihoods of steelworkers in Lanarkshire and across the rest of the UK.

Last year, the Prime Minister welcomed the Chinese President to the UK to seek ever-closer ties and to discuss trade as our steelworks went into meltdown. He gave only the promise that he would raise the issue of Chinese steel being dumped in Europe and gave

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no indication as to how strongly he would defend our steelworks. We should not seek to open our markets further to China or allow China to gain market economy status, as alluded to—

Anna Soubry: Will the hon. Lady give way?

Marion Fellows: No. I would like to continue at the moment.

As I was saying, we should not allow China to gain market economy status, as alluded to by the hon. Member for Aberavon. To do so would make it near-impossible for our workers to compete, pitting worker against worker in an impossible race to the bottom. Have the Government sought to address that imbalance by strangling our trade unions and attempting to repeal the Human Rights Act, all in the hope that we may finally be able to compete with the Chinese, who have an atrocious record on workers’ rights? The Tories have embarked on an ideological crusade to roll back the state and to deregulate our economy, allowing big business and executives to decide what is important to the country and what is not.

Tom Blenkinsop: As part of the future for Dalzell and Clydebridge, does she see the integrated nature of Scunthorpe, Dalzell and Clydebridge being maintained in order that we retain virgin steel creation within the United Kingdom?

Marion Fellows: I think there is an issue about whether Dalzell and Clydebridge will be maintained by one of the buyers as part of the deal to buy the long products. That will be important, but the real issue that the plants face is rising costs, and that is what the Scottish Government have been trying hard to cover.

Tom Blenkinsop: I made that point because the integrated nature of long products sustains each mill. In effect, we have one site spread over a geographical distance, and in many ways that reflects the United Kingdom. That is why I am asking the hon. Lady whether she thinks it important for us to keep that blast furnace link from Scunthorpe to Dalzell and Clydebridge, through which we can help sustain virgin steel making in blast furnaces in the United Kingdom.

Marion Fellows: To answer the hon. Gentleman, I have doubts about and issues with what he says. I want production to continue, but I want Dalzell and Clydebridge to be able to continue in any case. It may be that the best route for them is another road if someone does not want to buy the whole long products division.

The laissez-faire approach is endangering our steelworks and our manufacturing base. I hope the Prime Minister, in his future negotiations on the UK’s position within the EU, seeks radical reform to state aid rules and the ability for states to favour domestic products in the tendering process. As the hon. Member for Aberavon said, the Secretary of State needs a map to find Europe while Scottish Ministers are battering on the door to represent UK fishing rights, for example, where they have real expertise and experience. I do not believe the UK Government are constrained from developing and bolstering a strong steel sector. I believe that what

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constrains them from saving our steel is their priorities, which are mainly raising their military profile, cutting public services and cutting tax for the richest while the poor are hammered.

The Prime Minister was willing to grant an audience with the Chinese President and Lincolnshire MPs, but when he was asked to meet Lanarkshire MPs, he gave no such courtesy. I very much enjoyed meeting the Minister in his stead, and thank her for her time. The Government show contempt for steelworkers in Scotland. In an address to the House, the Secretary of State for Business, Innovation and Skills failed even to mention the Scottish plants. More recently, the Minister referred to the UK’s steel industry as consisting basically of Scunthorpe, Port Talbot and “other bits and bobs”. Those “other bits and bobs” are a source of pride and livelihood for communities across the UK, from Motherwell to Redcar to Port Talbot.

I hope for the sake of my constituency that a new owner is found for our steelworks. The Scottish Government have gone to unprecedented lengths to secure a future for Scottish steel. I give my sympathies to people elsewhere facing a similar uncertain future. The UK Government should note that people in Scotland are watching this Parliament. The UK Government saw no issue or hindrance in bailing out bankers, but they see only roadblocks to intervening and saving our steelworks. They are allowing a core industry of my community and this country to crumble. I hold in my hand a copy of the strategic framework for supporting the steel sector in Scotland. The UK Government should have an equivalent. Do they? I don’t think so.

Anna Soubry: Will the hon. Lady give way?

Andrew Rosindell (in the Chair): Order. Has the hon. Member for Motherwell and Wishaw finished?

Marion Fellows: Yes, I have. Thank you.

Andrew Rosindell (in the Chair): The hon. Lady did not give way. I call Kevin Barron.

3.43 pm

Kevin Brennan (Cardiff West) (Lab): Thank you very much, Mr Rosindell. It is not the first time I have been called Kevin Barron, even though that is not my name. On one occasion I was briefly knighted by the Daily Mail online, much to my surprise. I am not Sir Kevin Barron; I am much more shovelry than chivalry.

Andrew Rosindell (in the Chair): Order. I apologise.

Kevin Brennan: We are very grateful, despite that slight slip on your part, Mr Rosindell—it was very uncharacteristic—that you are chairing our proceedings today. You are very welcome in this Welsh-majority debate. I know that you were left off the list of English MPs the other night when we had the first vote under the execrable new English votes for English laws arrangements in the House of Commons. I hope you feel you are receiving a warm welcome from your Welsh colleagues, who would like to be on an equal basis with you as MPs. Perhaps we can change that ridiculous rule in the future.

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Let us get to the debate. I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock), who made an excellent start in kicking off the debate. He speaks from great knowledge, given the location of the Port Talbot steelworks in his constituency. He described the Government’s approach to this issue as “warm words” and “frozen actions”. He made a powerful case, I thought, on the Government’s failure to act on dumping and on market economy status for China. He challenged the Minister to say how close we were to midnight in terms of the future of the steel industry, and we would very much like to hear her response.

We also had a contribution from my hon. Friend the Member for Scunthorpe (Nic Dakin), who pointed out that the situation facing the industry has got much worse since the steel summit on 16 October. He listed all the jobs lost in the steel industry since then. He speaks with tremendous expertise on the industry, and he should be listened to.

We had a contribution from the hon. Member for Brigg and Goole (Andrew Percy). In making a political speech, he seemed to be criticising politics being carried out in the House of Commons. When he expressed shock, or feigned shock, about politics occurring in this place, he reminded me a bit of Captain Renault in “Casablanca” complaining about gambling at Rick’s establishment. The hon. Gentleman, however, has a close constituency interest in the subject and, when we are not jousting across the Chamber, he works closely and across parties with colleagues in the interests of his local steelworks.

The next speech was a passionate one by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). He will be a great loss to this place when, we hope, he becomes the Assembly Member for Ogmore in the near future. He spoke well about why the Government had not introduced the necessary mitigating measures at the same time as the carbon tax. They should have been introduced at the same time, and he outlined the scale of the consequences if market economy status is awarded to China without any attempt to leverage from the Chinese an end to the dumping of steel in European markets.

My hon. Friend the Member for Newport East (Jessica Morden) sent a note to me, as she did to you, Mr Rosindell, saying that she could not stay for the whole debate. She is the Member of Parliament for the Llanwern steelworks and she, too, spoke passionately. She mentioned the work of the Community trade union and Roy Rickhuss, whom I first worked with many years ago on the Allied Steel and Wire pension problems when I first became a constituency MP. She also mentioned the work being undertaken by the Welsh Government.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made an important point about the small 9% tariff that the European Union appears to be planning in relation to rebar. That is too little and too late. I saw the Minister nodding when the hon. Gentleman made that criticism, so I hope she will tell us what the Government are doing to persuade the Commission that it has not done enough on those short-term measures. At the same time it would be nice to hear about what is really going on with the long-term reform of trade defence mechanisms and what the UK Government’s game is in that. The Minister shakes her head from time to time, but the Government have been

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involved in organising a blocking minority in the European Union on the long-term reform of trade defence mechanisms. If we are to have a future for our steel industry, that reform will be vital.

We also heard from the excellent Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for Hartlepool (Mr Wright), whose excellent report is available at £10 from good bookshops and Her Majesty’s Stationery Office. [Interruption.] I am sure he will tell us it is also free online. He spoke with tremendous knowledge, expertise and passion about the failure of the UK Government to push for a co-ordinated European Union approach, and about the failure to retain blast furnace capacity at Redcar, which has been lost, as he pointed out, because of the lack of effort by the Government. [Interruption.] From a sedentary position, the Minister suggests that she is considering nationalising the steel industry to achieve these aims.

Nationalisation is not necessary. The choice is not between inaction and a laissez-faire approach to the steel industry and the full-scale command economy ownership of all of the means of production in the steel industry. It is about an active industrial policy and Ministers using all the levers at their disposal, including their influence and every Government Department, including the Treasury, and using their imaginations in working with industry to bring about the saving of the capacity of this country to produce steel. That is what is at the heart of this debate. There is a question that the Minister will have to answer about the Government’s view on the minimum strategic capacity that they believe they can allow the industry to go no further beyond. However, I will come to that question further into my remarks.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about blast furnaces. If there was a professorship of the blast furnace, he would be the professor. He raised very appropriate questions about what industry is doing. In his remarks, which bear reading and studying, he showed a real vision for the future of the British steel industry that the Minister would do well to listen to.

My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is literally a doughty defender of his constituents, rightly referred to the tragedy at the Celsa plant and the deaths of two of the workers there. He also raised the big question about the strategic level at which the British steel industry should be protected. My hon. Friend the Member for Bridgend (Mrs Moon) spoke well and with clarity and passion, as always, about the human impact of the job losses at Port Talbot, and the hon. Member for Motherwell and Wishaw (Marion Fellows) spoke with sincerity about her constituents and about the impact the changes will have on them. Also, perhaps not purposefully, she showed the importance of the UK for the future of the steel industry, because for us to have a strategic steel industry there has to be a certain level of scale and integration, as my hon. Friend the Member for Middlesbrough South and East Cleveland pointed out.

Now, who have I missed out? [Interruption.] I think only one Conservative spoke and I have referred to him.

Like many people here—anyone from south Wales probably has links to the steel industry—I come from a family whose life chances were pretty much determined by and strongly influenced by the steel industry. My father

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was part of the group of people who helped to build Llanwern steelworks in 1962. On my birth certificate, his occupation is listed as a platelayer. He was involved in bringing the railway line that was necessary for an integrated steel plant into Llanwern steelworks, and then he stayed there and got employment at the new steelworks for the rest of his working life. Indeed, before I went to university, I had an opportunity to work at Llanwern steelworks for six months, where I worked mainly in the steel plant, but also as a platelayer, which was a rather nice rounded end to that period of my life as a platelayer, replacing and maintaining railway lines within the steelworks at Llanwern. That is why we hear—I know the Minister understands this—the passion that comes from my hon. Friends and colleagues. They understand how steel underpinned their life chances and the life chances of their constituents and their communities. The availability of well-paid, stable employment in their areas was the foundation of the creation of the life chances of many of my hon. Friends here today.

Mr Iain Wright: Will my hon. Friend give way?

Christina Rees: Will my hon. Friend give way?

Kevin Brennan: I will give way to my hon. Friend the Member for Neath (Christina Rees) first, who I forgot to mention, but who intervened on behalf of her constituents.

Christina Rees: I totally agree with my hon. Friend about life chances. My father worked at the site of the Steel Company of Wales. The Abbey went into the Steel Company of Wales, which moved on to Tata. When I was a schoolchild I played hockey at the Steel Company of Wales—it was the centre of the community. As for life chances, it put food on our plates at home. The threat of the closure of Trostre and Port Talbot is more than I can contemplate, given the devastating effect on communities.

Kevin Brennan: My hon. Friend is absolutely right. I know that the Minister understands this, but it is important to make it clear why Members feel so passionately about the importance of maintaining the steel industry both as a strategic asset to the country, and as the underpinning foundation of many of the communities we represent.

Mr Iain Wright: My hon. Friend is making an incredibly eloquent and moving point about how steel is in his blood, as it is in the blood of other hon. Members. Both my grandfathers were steelworkers in Hartlepool, so this is important for me personally, as well as for my local community. However, can we not fall into a trap of talking about the British steel industry as somehow in the past? It is vital to ensure that we have a vibrant and competitive steel industry for the future to make sure that we remain competitive in the world markets for manufacturing and much of our supply chain.

Kevin Brennan: My hon. Friend is absolutely right. One of my central points is that the British steel industry is competitive. I freely admit that the British steel industry of the past often was not competitive, often had poor

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industrial relations and weak management, and sometimes had, in the distant past, very low productivity. However, over the years, it has become one of the most efficient industries anywhere, with some of the best working relationships between workers and employers, because of their understanding of the common interests that bind them together, and because of the workforce’s desire to ensure that the British steel industry has a future, with them often prepared to make real sacrifices to enable that to happen. That is why we have such a competitive steel industry. The only sense in which it is not competitive is because of the issue raised by many Members today: Chinese dumping of steel at well below what it costs China to produce.

China’s steel makers, 70% of which are state owned, are not profitable, and, according to our UK Steel briefing, are believed to lose close to $34 per tonne on all crude steel produced in China. In 2015, they produced 441 million tonnes more steel than China itself consumed. China’s 101 biggest steel firms lost $11 billion in the first 10 months of 2015. In 2003, China exported 7.2 million tonnes of steel, which was 5% of the steel trade between the main global regions; by 2015, total export levels from China had exceeded 107 million tonnes.

It is impossible for the highly competitive and efficient British steel industry to compete with a state entity of that size—the country contains one in five of the world’s population—that is determined to use that capacity to kill off its competitors and to destroy the British steel industry. That was what was going on while Ministers were talking to Chinese officials when they were over in the autumn. At the same time as its officials are smiling and talking about future trade deals, China is pursuing a policy of deliberately killing off the British steel industry.

Mrs Moon: Does my hon. Friend agree that if we do not successfully beat this back in relation to steel, other industries will follow? It is not just about steel; it is about Britain and Europe saying no and defending our industries.

Kevin Brennan: I fear that my hon. Friend may well be right. It is clear that the Chinese state is absorbing the losses to kill off the competition, which is why it is essential that we have a UK Government who understand that and are prepared to take the action necessary to protect the strategic asset that is the UK steel industry.

Tom Blenkinsop: It is worth remembering that the Redcar blast furnace was constructed by the Callaghan Government in 1978 and 1979. There was supposed to be a second furnace, but that mysteriously disappeared after the change of Government. The current world market is effectively free for China, and it is interesting that the one nation with a state-owned steel industry is dominating the market. That is not a defence of a nationalised steel industry, but it is certainly something that Ministers should pore over when they consider which policies, regulations, instruments or trade defence they should be implementing in the steel market.