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Steel Industry

Volume 496: debated on Thursday 16 July 2009

7. What recent discussions he has had with representatives of the steel industry on its future prospects. (287055)

We have had regular discussions with steel industry representatives in recent weeks. I have spoken on several occasions with Mr. Kirby Adams, the chief executive of Corus, and Mr. Michael Leahy of the trade union Community about the future of the industry in the UK. The Prime Minister will be meeting representatives of Corus later today.

The announcement last week of further job losses at Corus in Llanwern, coming on top of the 500-plus job losses already announced earlier this year, is more bad news for Welsh steelmakers and their families. Can the Minister reassure me and my constituents that progress is being made on the crucial issues of stimulating demand, energy prices and more money for training?

In my discussions with the company, Corus has said that demand is the critical issue. Global demand for steel has fallen sharply, and the United Kingdom is not exempt from that. At the moment, Corus has the capacity to produce around 3 tonnes of steel for every tonne that it sells in the UK market. That is why it is critical that we maintain both the capital expenditure programme, in construction for example, which uses half the steel that Corus produces, and the car scrappage scheme, which has helped to boost automotive sales, and that we resist the pressure for public expenditure cuts, as advanced by the Opposition, which would hit demand and threaten steel jobs even further.

In supporting the hon. Member for Newport, East (Jessica Morden), may I ask the Minister to go a little further? Steel is an essential part of the UK manufacturing sector. He has talked about bringing forward construction projects, but could he be more specific? Major civil engineering projects could take up quite a lot of the product of Corus, so could he give us any indication of the sort of projects that the Government are genuinely bringing forward at this time?

Just last week we announced more social housing, which will help to stimulate demand in the construction sector and increase demand for steel. My advice to the hon. Gentleman would be to speak to his Front-Bench colleagues, because I very much agree with the sentiments of Mr. David Blanchflower of the Monetary Policy Committee, who has said:

“If you want to transform a recession into a depression, go ahead and cut public spending. I would advise against it…Voters want jobs.”

I heartily agree.

In congratulating my hon. Friend the Member for Newport, East (Jessica Morden), let me say that her campaign goes well beyond Wales, vital though that is. In my county of Lanarkshire we have men and women with the skills and potential to do still more, but we would like to know what Corus’s strategy really is.

I believe that Corus values its work force, and that it is doing its best to maintain capacity in a very difficult trading situation. As I have said, it has the capacity to produce roughly 3 tonnes of steel for every 1 tonne that it is able to sell at the moment. In those circumstances, it is also working with the Government on extra training help for the work force, and we have offered £5 million of help for that training effort in order to work with the company to help maintain its work force through this difficult period.