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Steel Industry

Volume 602: debated on Wednesday 18 November 2015

I would like to start by putting on record the enormous sense of solidarity felt by all people across Wales with the French nation. We stand with them shoulder to shoulder in these difficult and anxious days.

The steel industry in Europe is facing a perfect storm as a result of a glut of cheap imports, falling prices and high energy costs. With nearly half of the UK’s primary steel industry employed in Wales, we fully recognise the impact of these global challenges on Welsh steelworkers and their families. We are working closely with the industry and with the devolved Administrations to do everything possible to support the industry at this time.

We on the Labour Benches associate ourselves with the Secretary of State’s words about the people of Paris.

On 28 October, the Secretary of State for Business, Innovation and Skills attended an extraordinary meeting of the Competitiveness Council on the steel industry. Following that EU meeting, plenty of warm words were issued in a written statement, but can the Secretary of State tell the House what practical measures were agreed to help the steel industry in this extremely difficult time?

I thank the hon. Gentleman for the question. Before I answer it substantively, I should make the House aware that there has been an explosion in the past hour at the Celsa Steel plant in the constituency of the hon. Member for Cardiff South and Penarth (Stephen Doughty). Our thoughts are with the workers at this time and with the emergency services who are at the plant as we speak.

On the practical response to the global challenges facing the steel industry, the hon. Member for Caerphilly (Wayne David) will be aware of the specific practical working groups that we established following the national summit. Those engage the Welsh Government as well as the Scottish Administration, and action has been taken by the Business Secretary at a European level to get our European partners to focus much more seriously and more urgently on tackling dumping and bringing forward state aid clearance so that we can fully compensate our steel industry for the higher energy costs that it faces.

What assurances can my right hon. Friend give me that procurement for large infrastructure projects, such as the electrification of the great western main line, will prioritise the use of British steel?

I am grateful to my hon. Friend for that question, as it gives me the opportunity to talk about one practical measure that we have taken in recent weeks: we have changed the guidelines for Departments on procuring steel for major projects, allowing for Government contracts to take into consideration wider economic and social impacts, which we hope will create more opportunities for UK steel manufacturers to win those bigger contracts. With this Government making a record investment in infrastructure, that creates future growth opportunities for the British steel industry.

Although we clearly need measures such as help with business rates and energy costs, does the Secretary of State agree that if we do not tackle Chinese dumping, all those other measures will count for nothing and that the future of the industry in this country is bleak?

I agree with the sentiment and the direction of the question. That is the backdrop to the global challenge, not just for the British steel industry, but for the steel industry in north America and all across Europe. With a glut of cheap Chinese steel coming on to the market, we are leading efforts at a European level to tackle dumping. We voted for the anti-dumping measures in one specific section of the steel industry and we are continuing with those discussions.

I thank my right hon. Friend for the answers that he has given so far, but what measures is he taking with the Wales Office to lobby other Government Departments to pre-order steel from Wales and other areas of the country for our infrastructure projects to ensure that there is a future for steel in Wales?

My hon. Friend is right. That taps into the point that I made a few moments ago about the changes that we have made in the procurement guidelines. The Crossrail project, for example, which has used 50,000 tonnes of high-quality steel from Celsa Steel, which I mentioned a few moments ago, is a great example of the UK Government investing in infrastructure and using the power of our procurement to create growth opportunities for British steel manufacturers.

The incident this morning at Celsa in my constituency to which the Secretary of State has referred is obviously deeply concerning news. Can he say anything more about the incident and ensure that there is full support from all in responding to and investigating it?

As I understand it, the incident happened in the past hour. Ambulances are at the scene. I am told by officials that there are three injuries at the site. That is all I know at this moment. As the hon. Gentleman says, our thoughts are very much with the workers, their families and the emergency services at the scene.

First, I echo the words of the Secretary of State in respect of the tragic events in Paris and the explosion at Celsa this morning.

The Secretary of State knows just how serious is the crisis facing the steel industry in Wales, and indeed the whole of the UK. Four years ago, the Chancellor promised a compensation package for energy-intensive industries. What reassurance can the Secretary of State now give to the thousands of workers in Wales whose jobs depend on the steel industry that his Government will deliver that package by the end of this month?

The point I would make first up is that we are in the process of delivering that compensation. We have already paid out about £50 million in compensation to British steel companies, not least to companies based in Wales, so the money is already getting to them. What we are talking about at the moment is getting state aid clearance for the final element of the compensation package. That is really important for the steel companies, and we are pressing hard to get it.

After four years, the Secretary of State’s Government have still not finished negotiating one package. That hardly bodes well for the promises the Prime Minister is making about EU reform.

The Government have made much of merely renewing existing anti-dumping measures, but with 94% of the Chinese steel that comes into the EU flooding the UK market, why is the Secretary of State’s ministerial colleague in the EU Council of Ministers blocking the much needed reform of the trade defence instruments?

I am not sure that the hon. Lady is fully sighted on all the actions on steel that we are taking at a European level. My right hon. Friend the Secretary of State for Business, Innovation and Skills and his colleague, the Minister for Small Business, Industry and Enterprise, have been at the forefront in discussions and negotiations at a European level to get change, with real, practical, urgent action on anti-dumping and on state aid clearance for compensation for energy costs. We are leading the way in trying to get change at a European level to support and protect our British steel industry.