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Steel Industry

Volume 605: debated on Tuesday 2 February 2016

We are taking clear action to help the steel industry. We are cutting electricity costs, tackling unfair trade, updating procurement guidance, introducing flexibility in emissions regulations and reviewing business rates. That is what the steel industry has asked for and what we are delivering.

I thank the Secretary of State for that answer. The Foreign Secretary said of China the other week in this Chamber that

“it is through the prism of steel that their claims to be treated as a market economy are likely to be judged in the European Union.”—[Official Report, 12 January 2016; Vol. 604, c. 694.]

Equally, the Ministry of Defence has recognised the strategic importance of the steel industry with the support that it has given to Sheffield Forgemasters. When will the Secretary of State follow suit? In particular, when will he pull his finger out and start battling for British steel with companies such as EDF?

The hon. Lady may be interested to know that it was the Secretary of State who asked for an emergency meeting of the European Council to discuss this issue of unfair trade for the first time and to make sure that when the EU takes action, it does so appropriately and in a speedy fashion. The EU is considering the issue of market economy status. When it puts forward a proposal, we will take a careful look at it. Even if a country does have market economy status, that does not stop the EU taking action, as is shown by the examples of Russia and the US.

As you are aware, Mr Speaker, I have concerns about a written answer that I received last week from the Ministry of Defence. It stated that

“the Ministry of Defence (MOD) does not hold a complete, centralised record of steel procurement for projects and equipment, either in terms of quantity or country of origin, over the past six years.”

Why on earth should we believe the Government’s promises on procurement when they do not even keep records in the Ministry of Defence, and what will the Secretary of State do about it?

We are the first country in the EU to take advantage of new procurement rules. When it comes to defence needs and other infrastructure projects, we should use British steel whenever we can. For example, the Queen Elizabeth-class aircraft carriers are 94% British steel—that is 77,000 tonnes. Last week I visited Crossrail, the biggest infrastructure project in Europe, and almost all of it is British steel.

22. Under current rules, steel companies pay the highest energy taxes in Europe. Those taxes are then used to subsidise wind farms, which are made from cheap imported steel. Does the Minister agree that our policy needs to change? (903392)

I agree about the importance of energy costs, and that is an issue that the steel industry has raised time and again. We had previously announced a system of compensating for part of the cost, but we went further after listening to the industry. We needed to make a change, and we have made a change, which is a full exemption.

In her letter to me about procurement associated with Hinkley Point C, the Minister said that

“there are few companies globally that have the capacity to make the ultra-large forgings required for nuclear power plants. It is widely understood and accepted in the nuclear industries that the UK does not have the capacity.”

Given that Sheffield Forgemasters says that it does have that capacity, and that it has supplied such forgings to nuclear plants elsewhere in the world, has the Secretary of State asked the Minister what evidence was used to make that statement? Does he think it appropriate to scrutinise the rationale behind such a sweeping statement that dismisses world-class British steel manufacturers?

I do not think the hon. Gentleman is up to date on his information, and if he were to speak to Forgemasters—I am sure it would be more than happy to speak to the Chair of the Business, Innovation and Skills Committee—it would admit that it has challenges meeting all orders for different types of steel. The important point that we all agree on is that wherever possible, when steel can be supplied by British companies, that is exactly what we should use.

Last year we became aware of Tata Steel’s intentions to mothball two of its sites in Scotland at Dalzell and Clydebridge, with the loss of hundreds of jobs. Those two sites have a proud history and they are far from being, as the Small Business Minister shamefully described them, “bits and bobs”. Further job losses have recently been announced at Texas Instruments, and at every opportunity I and my SNP colleagues have pressed the Government to produce a coherent strategy for an industrial plan. Once more I ask the Secretary of State to bring that strategy for our manufacturing sector before Parliament.

As the hon. Lady will know, we work with many industries. I attend industry and sector councils, and we have strategies, including the metal strategy, of which I am sure she is aware. She will also be aware of the actions that we have taken, such as cutting energy costs, providing flexibility on EU emissions regulations, changing procurement guidance and looking at business rates, all of which will help the steel industry across the United Kingdom.

If the Small Business Minister is right about Sheffield Forgemasters, why was it so furious about her words? Why did it make clear that it could supply 80% of the components necessary for Hinkley Point C? Should she apologise to the House, or can the Secretary of State do that on her behalf? What explains the answer that she gave to Parliament—ignorance, or lack of faith in UK steel?

The Small Business Minister has absolutely nothing to apologise for, and she was accurate in her statement. As I did the hon. Member for Hartlepool (Mr Wright), I encourage the hon. Gentleman to speak to Forgemasters himself. As I am sure he agrees, whenever we can use British steel for defence purposes, it is important that we do.