House of Commons
Tuesday 12 April 2016
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Foreign and Commonwealth Office
The Secretary of State was asked—
1. What assessment he has made of the effect of the EU referendum on the UK’s diplomatic relations (a) within the EU and (b) globally. 
Other Governments respect the fact that this is a decision for the British people. Our EU partners agree that many of the reforms that we have secured in the renegotiation will benefit Europe as a whole, and more and more of our friends and allies around the world are telling us that they value this country’s membership of the European Union.
Order. It would be a courtesy to the House to tell Members what I think Front Benchers know—namely, that the Foreign Secretary is away on ministerial business.
I apologise for not doing so at the start. My right hon. Friend is in the far east on the final leg of a tour covering several countries.
We are grateful, and we look forward to the right hon. Gentleman’s imminent return.
Does my right hon. Friend agree that whatever the outcome of the referendum in June, the threats we face mean that our bilateral intelligence-sharing relationships with other European countries will remain vital, and that, working with those outside the EU, European relationships will continue unimpaired to ensure we remain as safe as we can be from external threats?
I agree with my hon. Friend that it is important to maintain strong bilateral relationships in intelligence sharing between the relevant agencies here, in Europe and around the world, while strengthening the intelligence sharing and sharing of information between our police forces. The recent renegotiation confirmed that responsibility for national security rests solely with national Governments, but EU membership enhances our ability to co-operate with other European countries to combat crime and terrorism and keep the British people safe.
What contingency planning is under way with our European and NATO allies for a new provocation from President Putin after our referendum? Putin is of course hoping and praying that Britain votes to leave the European Union and, as the Minister will know, there is a widespread view in security and foreign policy circles that Putin is planning just such a fresh provocation after the referendum, whatever the result.
Given the recent history of the Kremlin’s activities, not only in Ukraine and Georgia but the pressure brought to bear on the Baltic states and the use of the energy weapon against central European countries, we are right to be on our guard. This will be a matter of prime concern at the forthcoming Warsaw NATO summit, and it is important that NATO is prepared for hybrid aggression from the Kremlin that might involve information, the use of energy and the use of soft power, as much as conventional hard power.
Our EU partners will see the EU referendum as a question of our solidarity with them. What lesson will our Italian partners draw from our lack of absolute solidarity with the Italians over the case of Giulio Regeni?
My hon. Friend will want to know that the Minister for the Middle East recently saw the Egyptian ambassador about this case and emphasised that the British Government want to see a full and thorough investigation. Given Mr Regeni’s nationality, the Italian Government and authorities are in the lead, but we remain in very close contact with them and are giving every possible assistance to try to secure an outcome that will give some answers to Mr Regeni’s family.
When the Prime Minister described European discussions as “abrasive” and “difficult”, he was not talking about other European countries; he was not talking about debate across the Floor of the House; he was not even talking about debate within the Conservative party. Rather, he was talking about discussions within his own Cabinet. What does that fractious disunity do to the credibility of this Government’s foreign policy in Europe and beyond?
Our counterparts around Europe are robust democracies and they recognise that this country’s membership of the European Union has divided politicians of all parties for very many years, and that it is possible for people on the right and the left to come to opposite points of view. What the Prime Minister has secured—a firm Government position to support our continued membership of the European Union but with licence given to Ministers to express their dissent in a private capacity—is a fair outcome.
Does the Minister not feel that the robust democracies in Europe and beyond—not to mention the people of this country—are crying out for a debate on our future in Europe that rises above the internal divisions in the Conservative party?
That is precisely what the Government are leading at the moment. I think that at the end of this week, when the Electoral Commission designates the two campaign organisations for remain and leave, we will indeed see that debate continue, and I hope that the right hon. Gentleman and his party will wish to play a constructive part in it.
There has just been a referendum in the Netherlands, where the people overwhelmingly rejected the extension of privileges to Ukraine and its membership of the European Union. How will our Government recalibrate our policy on that?
The Dutch vote was a consultative referendum on a Dutch parliamentary decision to ratify the European Union-Ukraine association agreement. It is a matter entirely for the Dutch Government and the Dutch Parliament. The United Kingdom remains a strong supporter of the efforts being made by Ukraine to defend its national sovereignty and integrity in the face of Russian aggression, and to implement much-needed, far-reaching political and economic reforms that will benefit everyone in Ukraine.
Does the Minister agree that the only thing that Nigel Farage, George Galloway and Vladimir Putin have in common is that they want Britain to leave the European Union? Does that not say a lot about the consequences of our possible departure from the EU?
There are indeed some strange bedfellows in that particular camp, and none of those three gentlemen is one from whom I would want to take advice about where the best interests of the British people lie.
Migration (Western Balkans)
2. What assessment he has made of the effectiveness of recent steps to reduce migration to Europe through the western Balkans. 
The Government believe that the EU-Turkey agreement will make a genuine difference to the migration flows into Europe and through the western Balkans. The plan disrupts the smugglers’ business model, and breaks the link between getting into a boat and settling in Europe. We continue to monitor the impact on the ground and help countries in the region to manage the pressures that they currently face.
Will my right hon. Friend confirm that the Government will continue to help Greece to manage the pressures on its borders and avoid the distressing scenes that we have witnessed in the western Balkans?
Yes. To date, we have allocated more than £19 million to Greece for urgent aid such as food, water and medical assistance. We are also supporting organisations that are helping the Greek Government to build their capacity to manage arrivals and monitor borders. So far this year, for example, we have offered 139 months’ worth of screening and debriefing expertise to Frontex to help it to beef up the capacity of the Greeks to manage the very large number of asylum claims that they will need to process.
I understand that the British Government have also contributed eight judges, but I also understand that the shortfall in expertise amounts to 2,500 staff. What more can the Government do to support the Greeks?
We continue to consider whether there are ways in which we can help further. We are not members of the Schengen group, so under the group’s rules we are barred from providing some forms of assistance. However, the Prime Minister talked to Prime Minister Tsipras very recently about what more we could do, and we continue to discuss with Greece and our other European partners how best we can help to manage the pressures on Greece. It is in all our interests that European countries come together to manage the crisis in the Aegean and ensure that migrants are treated humanely but also fairly, and that if they do not have well-founded asylum claims, they can be returned.
If a migrant claims asylum in Greece and then makes his or her way to the United Kingdom, we are unable to send that individual back to Greece because the Greek asylum system is deemed unfit for purpose. What steps is the Minister taking with his EU counterparts to ensure that Greece brings its asylum and detention systems up to the requisite standard?
Anyone in the circumstances that my hon. Friend describes who was not a Greek national would need a visa to enter the United Kingdom from the countries to which asylum seekers are going from Greece. The whole purpose of the EU-Turkey agreement and of the assistance we are giving to Greece is to manage the situation in the region so that we do not face the pressures he describes.
Thousands of Yazidi women who have been kidnapped, tortured and raped by ISIS cannot come through the Balkans and are unable to access the medical and psychological support they need in the region. Will the right hon. Gentleman encourage our EU partners to follow the example of Germany by admitting some of those women so that they can access the medical support they need? Will he also talk to the Home Office about allowing some of those women access to Britain so that we too can assist them?
Each asylum claim in Greece has to be considered according to international law and judged on that basis. The United Kingdom is giving strong financial and political support to Turkey, Lebanon and Jordan, which are bearing the brunt of supporting the very large numbers of refugees coming from Syria, including the Yazidi women about whom the hon. Lady is particularly concerned. She is right to be concerned about those people, but the best way to offer them the help they need is to ensure that the money that was promised at the recent London conference on Syria is provided to give them assistance in the first safe country they get to, rather than encouraging them to make a perilous journey across the Aegean sea in the hands of the people smugglers.
3. What discussions he has had with other members of the international coalition on improving diplomatic co-ordination of steps to tackle Daesh. 
Britain has helped to create the global coalition against Daesh that now includes more than 60 countries. The last meeting of the smaller group of countries, which the Foreign Secretary and I attended, took place in Rome in January this year.
I thank the Minister for his answer. As reports emerged of the genocide being committed by the Nazis, the allied Governments made a co-ordinated joint statement on 17 December 1942 to condemn those crimes and pledge to bring those responsible to justice at the end of hostilities. Does my right hon. Friend the Minister agree that co-ordinating a similar statement today would be appropriate, given the evidence of similar crimes being committed by Daesh against Christians and other religious minorities?
My hon. Friend makes a powerful argument. The regular images on our screens confirm the scale and the barbarity of Daesh’s inhumane treatment of minorities. We are now witnessing systematic and horrific attacks against Christians, Yazidis and others, based on their religious beliefs or their ethnicity. I too believe that acts of genocide have taken place but, as the Prime Minister has said, genocide is a matter of legal rather than political interpretation. We as the Government are not the prosecutor, the judge or the jury. Such matters are determined first in the international courts and in the United Nations Security Council, but we are helping to gather evidence that could be used to hold Daesh to account appropriately.
Daesh poses a particular threat to civilians in Syria, as does the ongoing besieging of communities across that country. With the Syrian regime continuing to block United Nations trucks, less aid is now reaching those communities than before the cessation of hostilities. Does the welcome news on Sunday that the World Food Programme was able to deliver 20 tonnes of aid to Deir ez-Zor in a successful airdrop demonstrate that the Foreign Office, along with the Department for International Development and the Ministry of Defence, should now re-examine the possibility of airdrops to all besieged communities in Syria?
I pay tribute to the work that the hon. Lady does in this particular area, and to her knowledge of these matters. She is right to recognise the extra work that is being done to ensure that aid gets through to those difficult areas. This is one of our focuses as the cessation of hostilities begins to endure. We must ensure that those who have been caught up in this horrendous war are able to receive the aid that they require.
22. Tackling Daesh online is as important as tackling the menace on the battlefield. Together with the international community, what more can the Government do to ensure that social media is closed down when it poisons the minds of young people and opened up to promote tolerance, fairness and opportunity? 
My hon. Friend is absolutely right. The difference between Daesh and al-Qaeda or others before it is that this and future groups will use the internet to recruit, to fund themselves and to encourage people to fight. That is why we formed the coalition’s strategic communications working group. In London, we have formed a cell that shares best practice to ensure that we stop the movement of funds and fighters and that we challenge the poisonous ideology that Daesh puts out online.
Yesterday, the Association of Garda Sergeants and Inspectors met and carried out an assessment of its ability to face terrorism, stating that its capability to deal with the international terror threat was imperfect. Will the Minister indicate whether he will host a conference with Garda officers and draw up a plan to ensure that the threat does not permeate our border?
That is a little bit off my beat, but it is something that my right hon. Friend the Minister for Europe, the Home Office and I should want to move forward. We have been at the forefront of sharing best practice in recognising when extremism starts to embed itself, whether in universities, prisons or elsewhere, but if lessons are to be learned and if co-ordination can be better, we should absolutely look into that.
The international peace agreement is effectively dead as a result of recent Russian action in Aleppo. What further action can the group of countries that my hon. Friend mentioned in answer to an earlier question take to tackle Daesh more effectively?
I understand that my hon. Friend considers these matters closely, but I do not agree with his analysis. Russia is playing an important role in the cessation of hostilities given its influence over the Assad regime. He is right to identify the consequences and challenges facing Aleppo, which is Syria’s largest city by some margin. There has been an awful lot of frustration at the lack of humanitarian aid, which Staffan de Mistura, the UN special envoy, is focusing on to ensure that support can get in.
Daesh is trying hard to radicalise sub-Saharan Africa as well as the Maghreb. What efforts are the Government making to ensure that east African countries, such as Kenya, and the nations of the Sahel—Mali, Mauritania, Niger and Chad—do not fall prey to this malignant cancer?
The hon. Gentleman is right to focus on not only the challenges of Daesh in Iraq and in Syria, and we are also familiar with what is happening in Libya. Further afield, unless we are able to work and encourage local police and forces and local capability to recognise extremism, we will see it permeate other places, such as sub-Saharan Africa. That is exactly what we are doing with our local programmes in each of those countries to ensure that they have the strength and capability to recognise when extremist groups, such as Daesh, al-Shabaab, and Boko Haram, are trying to penetrate their areas.
Several hon. Members rose—
Order. Unfortunately, progress is rather slow today. I am keen to accommodate as many questioners as possible. A short sentence by way of question and a short sentence by way of reply will usually suffice.
4. What assessment he has made of the effect of the EU referendum on UK trade with countries with which the EU has a free trade agreement. 
The Government believe that the UK will be stronger, safer and better off by remaining in a reformed European Union. Were we to leave, we should expect to lose our preferential access to not only the European single market, but the 53 markets outside the EU with which the EU has free trade agreements.
The EU has preferential trade agreements with 53 countries, including high-growth Asian nations such as Vietnam and Korea, where I believe the benefits have boosted British trade by some £2 billion a year, and talks with Indonesia and the Philippines start soon. Will my right hon. Friend explain whether we would easily be able to replicate those 53 agreements in the case of Brexit and how long that would take?
May I congratulate my hon. Friend on the work he does as the Prime Minister’s trade envoy to the ASEAN—Association of Southeast Asian Nations—region? I agree with him that the record shows that alternative trade agreements would take years to negotiate and there would be no guarantee whatsoever that we could obtain terms that were anything like as good as those that we enjoy through the European Union today.
Conservative Members do not like to hear this, but will the Minister confirm that he listened to the wise words of David Miliband on Radio 4’s “Today” programme this morning? Is what he said not absolutely true: our international trading partners are already postponing decisions on investment in this country and ceasing to hire in this country?
I missed that interview this morning, but I do agree with what Mr Miliband says. What I hear direct from businesses in this country is that they are concerned about the uncertainty, that some have indeed postponed decisions and that many more would consider reducing the levels of employment or of investment in this country if there were a decision to quit the European Union.
Does the Minister really believe the guff and propaganda he is spouting?
I would point my hon. Friend to the fact that the Government’s case—that we are better off remaining in the EU—is supported by the overwhelming majority of business leaders and of trade union leaders in this country. I just wish he and others who advocate leaving the EU would, for once, come up with a coherent and consistent description of the alternative.
As we know, the Government are in favour of the European partnership, trade and the benefits of remaining in the EU. The EU referendum provides the opportunity to display exactly that, so when will the Minister be inviting and, we hope, welcoming President Hollande and Chancellor Merkel to the UK, with the strong campaign message, “Shoulder to shoulder. It is better for the UK to remain in the EU”? Will he welcome and invite them?
Both Chancellor Merkel and President Hollande have made it clear that they believe the United Kingdom contributes a huge amount to the political and economic weight of the EU in the world, and they want to see us vote to stay within the EU. They are also clear that this is a decision for the British electorate to take, and they respect that fact.
In answer to the Minister’s question, our vision of the UK outside the EU is very simply that we would be like most other free trading nations around the world: trading as we see fit. I suggest the Government are playing with fire, because the more they wade in in favour of remaining during this referendum debate, the more the referendum will be seen as being unfair, and that could create further uncertainty, particularly if the vote is narrowly for staying.
The Government are not going to be silent or neutral on an issue that we believe is central to the future prosperity and security of the United Kingdom. I am glad that my hon. Friend seems to believe, on leaving, we should continue to be part of the European single market, but he is yet to say how that would involve not having to accept freedom of movement, agreement to all European rules although we would have no say or vote on them, and contributing to the EU budget. That is the situation Norway and Switzerland are in today.
Given the claims some have made about possible free trade deals outside the EU, is the Minister for Europe aware of any major trading partner that wishes the UK to leave the EU?
The key point here is of course that we have a free trade agreement with the European Union, as we have with other nation states. There is a question that has to be answered: why are so many of the states that have said we should stay in the EU the ones that the other side seem to think we can have some sort of agreement with?
The consistent message that we hear from friends, allies and partners, not just in Europe, but in the Commonwealth and around the world, is that they want to see us stay in the EU. I am still waiting for the advocates of quitting to come up with an example of a friendly international leader who supports their case.
There are more cars manufactured in one city in the north of England in one month than that great car-producing country Italy makes in a year, and the vast majority of those cars are exported to Europe—and that is just one city in one region. We see that being replicated right across the country. Early assessment suggests that any post-Brexit deal would place a tariff of up to 10% on every single car manufactured in the UK and sent to Europe, and that, over time, that would damage both manufacturing and jobs in the UK. Will the Minister confirm the possibility of a tariff of at least 10% being placed on every car manufactured in the UK?
That is indeed the case. If we were outside the single market, and World Trade Organisation rules applied, we could expect that 10% tariff on every car exported to the rest of Europe from the United Kingdom, which is why exit would be such a bad deal.
Several hon. Members rose—
Order. I made an appeal for a speed-up a few moments ago, but unfortunately, to put it bluntly, the Member concerned made a mess of it and did not speed up. We must now speed up.
5. What steps the Government are taking to support other countries in tackling honour-based violence. 
Tackling violence against women and girls—including so-called honour killings—and the promotion of women’s rights remain central to UK foreign policy objectives. We work closely with the most affected countries, including with the Governments of Pakistan and Afghanistan.
I support the work that the UK Government have done with the Government of Cameroon in tackling the abhorrent practice of breast ironing. Does the Minister agree that unless we seek to find ways for these so-called honour-based crimes to be prosecuted in their country of origin, we will struggle to pursue prosecutions here in the United Kingdom?
I pay huge tribute to my hon. Friend for the work that he does in this area. He has called debates in Westminster Hall and in other forums to ensure that we recognise the important role that Britain and the international community must play in relation to female genital mutilation and breast ironing. As he says, those are abhorrent crimes, and we are working with other Governments in countries where such practices exist.
Karma Nirvana based in Headingley in my constituency does amazing work highlighting this so-called honour-based violence, which is a scandalous practice. It trains police officers. Will the Minister tell me what he is doing to work with foreign Government to ensure that they are also training their police forces?
We have doubled our commitment to human rights and increased the Magna Carta Fund to promote better understanding of these issues. What we find is that states have the laws in position, but they do not apply them. That is where we need to work closely with Governments to make sure that they follow through the laws that are already in existence.
6. What recent assessment he has made of the likelihood of a two-state solution in the Middle East. 
I visited Israel and the Occupied Palestinian Territories in February and I remain clear that a two-state solution is the only credible way to resolve the conflict. We continue to work closely with international partners to preserve the viability of the two-state solution and to encourage a return to meaningful negotiation.
In 2016, there has been an acceleration of evictions and property destruction on the west bank. By these continuing actions, the Israeli Government are showing complete contempt for the notion of a two-state solution—a fact recognised by President Carter. When will the Government update UK policy to reflect reality on the ground in this area?
During my meetings with the Deputy Foreign Minister and indeed with the Prime Minister, I found that they remained committed to the two-state solution, but my hon. Friend is right to recognise that measures are being taken and events are taking place that seem to take us in another direction. We need to ensure that people are able to come back to the table, and that we are able to make progress. There is no other solution to this. We cannot continue with the status quo.
Hezbollah is constructing a base in Syria to fire Iranian ballistic missiles into Israel. How seriously does the Minister regard that?
Again, the hon. Lady highlights the challenges that the region faces. We need to ensure that we work with the international coalitions to prevent such events from taking place. Iran is starting to take incremental steps towards greater responsibility in the region. Unless it is able to control Hezbollah and have an influence, we will see that this nuclear deal will mean little.
There have recently been two initiatives in the region: the extension of fishing rights for Gazan fisherman with Israeli co-operation, and the naming of a basketball tournament after a terrorist who killed 36 people, including 12 children. Which of those two initiatives does the Minister think is more likely to bring about a two-state solution?
My right hon. Friend highlights the dilemma that we face. We need grassroots initiatives on a low level such as extension of fishing rights, for which I have pressed for some time. Oil and gas reserves can be tapped into off Gaza, which will also help the economy. At the same time, basketball courts and, indeed, schools and streets are being named after terrorists, which does not suggest that the Palestinians are as serious as they should be.
The Minister will know that Israel is demolishing Palestinian homes and other structures at three times the rate at which it did so last year. I was in the region last week, with the hon. Members for Rochester and Strood (Kelly Tolhurst) and for Hazel Grove (William Wragg), and Lord Warner, and we saw that for ourselves. Given that a number of these structures are EU-supported and EU-funded, what are the Government going to do not simply to express concern but to hold Israel to account? What mechanisms are available to do so?
The hon. Gentleman highlights a challenge that we face. Britain has been working closely with Israel to change the approach that Israelis have taken on administrative detention. We have also funded and facilitated independent reports on the challenges that we face, and I raised this matter with the Deputy Foreign Minister, Tzipi Hotovely. I will continue to press Israel to move forward. Again, this takes us back —it is a retrograde step.
Will the Minister tell me if he managed to visit—
Question 7 would be a good start. No more today about the Israelis or Palestinians—the next question is about the Chagossians.
7. What progress his Department has made on allowing Chagossian people to return to the Chagos Islands. 
This is much more familiar territory for me.
Officials met over 500 Chagossians in their communities in the UK, Mauritius and the Seychelles. The public consultation we published in January received over 800 responses. I recognise that Chagossians have urged us to announce a decision soon, and we very much hope to do so.
Does the Minister agree that the £60 million estimate for the resettlement of the Chagos islanders, at 0.002% of the international development budget, is a price that the Government must pay this year so that the Chagos islanders can return home? Every day they are not allowed to do so is a day of shame for this country.
Perhaps I might outline for the House some of the costs. We estimate that the initial costs would range from £55 million for a 50-person pilot on Diego Garcia to £256 million for a 1,500-person resettlement on Diego Garcia and the outer islands. In addition, operating costs would range from £5 million to £18.5 million a year on a potentially open-ended and escalating basis.
Will the Foreign and Commonwealth Office commit that financial resource, which is desperately needed, to recognise the human rights of this group of people who have suffered for so long under many different Governments?
Following the detailed KPMG report and subsequent consultation, Her Majesty’s Government are looking closely at the matter. The hon. Lady will forgive me if I do not come to a conclusion at the Dispatch Box, but go through due process, and I will try to do so as quickly as possible.
Refugees: Middle East
8. What recent discussions he has had with his counterparts in the EU, Africa and the middle east on steps to tackle the refugee crisis in the middle east. 
Ministers have frequent discussions with both EU and non-EU partners about migration and refugees. Our focus is on securing a durable solution to the crisis which tackles the causes of migration as well as the consequences, and we continue to play a leading role in that work.
The Libyan Government recently requested help to prevent illegal migrants from departing from their coast. When does the Minister think we will be in a position to begin returning those intercepted in the Med to the north African coast, rather than allowing them to make landfall in the EU?
We are ready to respond positively to requests for support and assistance from the new Libyan Government to tackle the criminal gangs of people smugglers and prevent tragic deaths at sea. We have not yet had a specific request for assistance on tackling migration as my hon. Friend described, but we are ready to take action if we receive such a request.
21. What is the Minister’s current assessment of political progress in Tunisia, and what are the British Government doing to support the progress there? I do not mind if the Minister with responsibility for the middle east answers.
We continue to support the democratic evolution of Tunisia, and we are working actively to support the Tunisian authorities to ensure that they have control over their borders so that there can be checks against the risks of terrorists moving across borders and in order to disrupt the work of people smugglers.
As we successfully engage Daesh in Syria and northern Iraq, what assessment has the Minister made of the threat of Daesh moving to Libya?
It is a very serious threat indeed. That is why we give such a high priority to international work to establish a proper system of government in Libya and very much welcome the work that has led to the creation of the Government of national accord. We are working actively with European and wider international partners to ensure that that new Government get the support that they need.
Many on the Opposition Benches strongly agree that there should be a strategy in which the UK is involved to strengthen countries in order to stop their people wanting to flee. However, far more should be done by the UK to allow more people in, and one process would strengthen the other. Does the Minister agree?
No. We have given a commitment, on which we are delivering, to resettle 20,000 vulnerable Syrian refugees from camps in the region during the lifetime of this Parliament. Let us not forget that we also pledged £2.3 billion in humanitarian assistance to support Syrian refugees, giving them help in the regions where they are present and trying to deter them from taking the appalling risk of putting themselves in the hands of the people smugglers.
9. What discussions his Department has had with the Department for Work and Pensions on the potential effect of the UK leaving the EU on employment. 
The Government’s view is that the UK will be stronger, safer and better off remaining in a reformed EU. More British people are in work than ever before, and nine out of 10 people in work in this country are UK nationals.
Airbus, which is based near my constituency, employs 15,000 people directly, has 100,000 people in associated businesses and has taken the unprecedented step of writing to all its employees urging them to vote yes to stay in Europe, because it says that
“we…don’t know what ‘out’ looks like.”
Will the Minister endorse that decision and tell the House what “out” looks like?
Airbus is typical of a large number of advanced manufacturing companies that are based across national borders within Europe but benefit from the European market, and which also give business opportunities to a host of small enterprises through their supply chains. That reinforces my view that it would be a severe blow to employment and hopes of growth for this country to withdraw from the EU.
Given the cross-departmental nature of the question, does my right hon. Friend agree that the Prime Minister could very helpfully agree to go before the Liaison Committee to deal with all these cross-departmental questions?
The Prime Minister agreed with the Liaison Committee that he should make three appearances during 2016. The next one is scheduled to take place before the summer recess. My right hon. Friend the Prime Minister has also been at this Dispatch Box on many occasions to answer questions about European policy, and my hon. Friend the Member for Wycombe (Mr Baker) has taken ample advantage of the opportunity provided by those events.
I doubt that that will satisfy the Liaison Committee, but I note what the Minister says.
It is not just those in employment, but pensioners who would suffer the consequences of Brexit. What can the Minister say about any British pensioners living in Europe who may be caught up in the “frozen pensions” scandal if we leave the European Union?
It is the case that British pensioners and other expatriate UK citizens who are resident in other EU member states get certain rights and benefits as a consequence of our EU membership. We cannot guarantee that in the event of a British withdrawal, the negotiations on exit would lead to those rights and benefits being retained.
In the Minister’s publicly funded glossy brochure—I have a copy here—which claims to set out the facts, the Government state:
“Our EU membership magnifies the UK’s ability to get its way on the issues we care about.”
Will my right hon. Friend explain how that squares with the fact that the UK has been outvoted every time it has voted against an EU measure—72 times in total, and 40 of those defeats under this Government?
I suggest that my hon. Friend checks the footnotes to the leaflet, which have been published online so that everybody can see the basis on which those statements are made. We have been successful in roughly 87% of votes in the Council of Ministers, and most outside observers say that we have a better track record than most other member states in getting our own way.
Given that after 40 years the European Union has still not managed to negotiate a trade deal with the United States of America, surely if we left and regained control of settling our own trade deals, we would be able to make trade deals much faster than the EU.
In relation to employment.
And create job opportunities as a result.
I am glad to hear that my hon. Friend speaks for that faction of the Brexit camp that supports the transatlantic free trade agreement, because not everybody on his side of the argument does. The United States, through its chief negotiator and the head of its chamber of commerce, has made it clear that it is interested in a deal with 500 million people, the biggest market in the world, but not terribly interested in giving priority to a deal with a country of just 65 million people.
10. What recent assessment he has made of the security situation in Yemen. 
The level of fighting in Yemen has reduced in recent weeks, and I am pleased to welcome the cessation of hostilities, which began on 10 April.
We finally have a fragile ceasefire in the region, but not before thousands have been killed and millions displaced. There have been wide accusations of serious war crimes. Will the British Government now finally support a full investigation into the allegations?
I join the hon. Lady in welcoming the cessation of hostilities. The peace talks will begin on 18 April in Kuwait. A number of organisations have been created, including the Yemeni national independent commission of inquiry, which is the appropriate body to look into human rights issues in Yemen. The Saudis have themselves organised their own investigative committee in order to analyse and put their hands up when mistakes were made.
I commend the Minister for his tireless work in seeking an end to the horrendous conflict in Yemen. What steps are the Government taking to support the UN-sponsored peace talks in Kuwait in little under a week’s time?
We have participated fully in bringing together what has been a very complex situation. Often people simply try to knuckle it down to one, two or three sides, but al-Qaeda is in Yemen, as is Daesh. There are not only the Houthis and other groupings, but many militias that are looking at which way the winds will blow. I have spoken on a number of occasions to President Hadi, and indeed to Ismail Ahmed, the UN envoy, to encourage the ceasefire. I hope that we will see real progress when the talks commence in Kuwait on 18 April.
I welcome the ceasefire, but since Sunday there has already been an attack on Taiz. Will the Minister confirm that he will be in Kuwait on 18 April and that he will do all he can to ensure that the ceasefire holds?
I cannot confirm at this moment whether I will be attending, but the right hon. Gentleman is right to outline the breaches, which are taking place not only in Taiz, but elsewhere, including east of Aden, where 15 Yemeni soldiers were killed, and not by the Houthis or any other militia, but by al-Qaeda. It is important that we ensure that the talks work and that the international community supports them fully.
May I just push the Minister on the answer he gave to my hon. Friend the Member for Swansea East (Carolyn Harris) about the Saudi investigation into the conduct of the coalition campaign in Yemen? Does he have faith that the investigation will be thorough, independent and transparent? Does he expect the initial findings to be published? What follow-up will the UK take if allegations of war crimes are substantiated? Will he also outline the steps that the Government have taken to ensure that the UK liaison officers supporting the Saudi military campaign have not been unwittingly involved in potential war crimes?
As I have said in the Chamber a number of times, we have one of the most robust systems of arms export control licences in the world, and it is important to make sure that they are robust. We have been working closely with the Yemeni authorities, but also with the Saudis, to make sure they put their hands up when a mistake is made. We have frank conversations with them privately to make sure that the investigation will work as we expect it to.
T1. If he will make a statement on his departmental responsibilities. 
My right hon. Friend the Foreign Secretary is currently in Vietnam holding meetings with Vietnamese Ministers about trade and political relations. This follows visits to China, where among other things he pressed the Chinese authorities for action to bring greater stability to world steel markets, and to Japan, where he represented the United Kingdom at a meeting of G7 Foreign Ministers.
In the wake of the recent visit by Premier Modi to the UK and the current visit by the Duke and Duchess of Cambridge to India, can my right hon. Friend highlight the trade and investment benefits to both countries from these important high-level exchanges?
Indeed I can. My hon. Friend is right to draw attention to the current visit by Their Royal Highnesses, which is going extremely well. We have incredibly good bilateral relations with India, and the visit here by Mr Modi was a great success. My hon. Friend is absolutely right to point to the soft power we have in our diplomatic armoury, from the BBC, to the British Council, the GREAT campaign, the Newton Fund and the Chevening and Marshall scholarship programmes. All those are part of the jigsaw that helps us to do business and to project British values right around the world.
The Prime Minister said yesterday that all of Britain’s overseas territories and Crown dependencies, apart from Anguilla and Guernsey, have now agreed to provide our law enforcement and tax authorities with full access to information on beneficial ownership. Why will there not be public access to the registers, given that the Prime Minister wrote to the overseas territories on 25 April 2014 to say that making such information open would help “to tackle crime”, and given that, from June this year, the British register of beneficial ownership will be open to the public? If openness is good enough for the UK, why should we accept a different position in our overseas territories?
It is disappointing that the shadow Secretary of State does not congratulate the overseas territories on the enormous progress they have made on tax transparency and on opening up for law enforcement agencies. This is really superb progress, but as the Prime Minister outlined yesterday, it is not an international standard, and we need to move towards eliminating all corrupt, terrorist and money laundering practices across the globe. While there are states in the US where people can open companies and not have full public registers, it is only fair to say to the overseas territories, “Congratulations on progress so far.” Longer term, the Prime Minister and the Government are clear that we want greater transparency, and that will be about a move towards public access.
I do welcome progress; I was just asking why the overseas territories will not meet the standard Britain is going to set.
Our membership of the European Union helps us in the fight against money laundering, terrorist financing and tax evasion—an example being the fourth anti-money laundering directive, on which the UK has taken the lead. The directive will, for the first time, oblige all member states to keep registers of beneficial owners and to make those open to tax and law enforcement authorities and to others who have a legitimate interest, including investigative journalists. Does that not show that leaving the EU could hinder the fight against financial criminality in Europe, because the best way to tackle such criminality is to work in partnership with our neighbours?
I agree with the right hon. Gentleman that there are many ways in which we benefit, in taking action against crime, through this kind of European co-operation. What I hear from the police service is that almost all serious crime these days has an international dimension of some kind, and countries need to work together to tackle that. The current system, where we can choose whether to opt in to individual justice and home affairs measures, really does give us the best of both worlds.
T2. What more can be done to prevent vulnerable people from being indoctrinated to become suicide bombers? 
The Koran actually forbids suicide, and if we look at the profile of suicide bombers from Sousse to Bali, we will see that martyrdom is sold by extremists as a fast track to paradise to people who have scant knowledge of the Koran. They are promised a ticket to heaven with little, if any, service to God. If we are genuinely to defeat extremism and stem the tide of vulnerable recruits, greater emphasis needs to be placed on duty to God in this life as well as the next.
T3. The Minister will be aware of reports that Libya paid $1.5 billion into the US compensation fund for relatives of victims of terror blamed on Libya. Why have the UK victims of IRA terrorism that used Libyan Semtex not received similar support? The Minister recently indicated that he would support those victims of IRA terrorists who used Semtex. What is he doing and what support is in place for them? 
It is for a previous Government to explain why that opportunity was missed when the United States advanced discussions in that area. What I have done, in meetings both in Belfast and here in London with those victims of terrorism that involved Semtex or, indeed, that was supported by Gaddafi, is facilitate a visit to Tripoli when the security measures allow it.
T4. Could a Minister update the House on the support we have given to the Government of the Ivory Coast following the terrorist attack in Grand Bassam in March? 
Last week I visited the scene of the attack in Grand Bassam in Côte d’Ivoire, which killed 19 people and injured more than 20, and laid a wreath on behalf of Her Majesty’s Government. Furthermore, I met President Ouattara and discussed how the UK can support efforts to prevent the radicalisation of young people in his country. We all offer our condolences, support and, indeed, solidarity.
T9. Developing countries lose three times as much to tax havens as they gain in international aid. Although yesterday’s announcement was a welcome, partial step in addressing that, registers of beneficial ownership will be ineffective unless they are public. Does the Minister agree that the Prime Minister’s anti-corruption summit next month would be an appropriate deadline to insist that all of the UK’s overseas territories and Crown dependencies adopt public registers of beneficial ownership? 
First, we should congratulate the Prime Minister. This is the first international conference on anti-corruption. We have already made great progress on beneficial ownership, but it is not the only issue of corruption. Having visited Ghana last week, I know that many other issues need to be tackled. Although beneficial ownership is an important issue, it is not the only issue for that corruption conference.
T5. The huge Mosul dam is crumbling and might collapse. If it does, Mosul will be covered with up to 70 feet of water and 1.5 million lives will be threatened in Tikrit, Samarra and Baghdad. What work is under way to maintain the integrity of that structure? 
To use your superlative, Mr Speaker, this is one of the most serious things that Iraqis face, on top of everything else that is going on in Iraq. If a 14-metre tsunami along the Tigris goes through the Mosul dam, it will take out the city of Mosul and put Baghdad under 5 feet of water. The Iraqi authorities need to recognise the sense of urgency with regard to the dam, which is built on gypsum, and put in place emergency measures and alerts. We have already taken precautions at the embassy.
T10. When did the Minister last make representations on the plight of the Baha’is in Iran? 
I raised the issue of the Baha’is and other minorities in meetings with the Foreign Minister when he visited in March. I also have regular meetings with the chargé d’affaires—the ambassador in waiting—in London.
T6. Could we have an update on the Havana process, which is working to bring an end to the conflict between the FARC rebels and the Colombian military, and which should offer the best opportunity to focus much more on tackling the drugs trade? 
I do not think we need to get too hung up on the actual date; what is important is the result, which is the big prize towards which all have been working for a considerable amount of time. We again congratulate the negotiating team under President Santos, as well as the Cuban Government in Havana on the part they have played. I am also pleased to say that the United Kingdom has helped the process with advice and financially, with an EU trust fund and a UN fund.
Last week, the Secretary-General of the UN, Ban Ki-moon, said that there is a greenhouse effect in terms of the extremist groups that are bringing their influence to bear in the wake of the Syrian conflict. Can the Minister confirm what the Government’s strategy is for defeating Daesh, as opposed to simply displacing it?
The hon. Lady is right. Not only is that the case at the moment, but when the Bali bombing took place, there were 21 registered terrorist groups from a British perspective, and today that number is more than 50. It is important that we focus on eradicating Daesh in all its forms not only in Iraq and Syria, but where it is starting to spread, and its franchises, such as the Khorasan group, the Taliban, al-Shabaab and Boko Haram. Those other groups are trying to get support from Daesh. Internationally, we must wake up and focus on the scale of the problem.
T7. Given that so many are now using the proper name for the terrorist organisation Daesh to defeat its ideology, propaganda and appeal, is it not unfortunate that the BBC still refuses to do so? 
I congratulate my hon. Friend, who, I think, got an award in your presence, Mr Speaker, for his campaign on that very issue. I am puzzled about why the BBC, from John Humphrys to John Craven, continues to use the term Islamic State. There is nothing Islamic and nothing state-like about it. I do not know what more we need to do. Perhaps we need to write to “Points of View”.
I am sure the whole House will join my condemnation of the human rights abuses, documented by the United Nations and Amnesty International, that have been committed by the South Sudanese Government forces, which included deliberately suffocating men and boys in a container and allowing government soldiers to rape women in lieu of wages. Following his recent visit to South Sudan, can the Minister tell the House what representations he has made to the Government of South Sudan and what process is in place for peace?
I made a number of representations to President Salva Kiir and to Riek Machar during the African Union meeting. The UK Government secured agreement at the UN for a new commission on human rights, and the Government of South Sudan must now fulfil its commitment to co-operate with the commission, which is charged with investigating gang rapes, the destruction of villages and attacks on civilians that may even constitute war crimes.
T8. Many of my constituents have expressed concern about the possible admission of Turkey to the EU. Is it still the Government’s policy to support Turkish admission? Bearing in mind public hostility, are they prepared to reconsider their position? 
As the Prime Minister said the other day in the House, Turkish membership of the EU is not on the cards for many years indeed. That is not least because there would have to be a Cyprus settlement before Cyprus lifted its block on a whole number of the negotiating chapters. That is not something that we are likely to face in the lifetime of this Parliament or the next, and possibly not in the one after that.
The recently elected MPs of the new Hluttaw in Myanmar are acutely aware of the scale of the task that they face in building democracy in their country. On my recent visit, I was really quite touched by the extent to which they appreciate the support of the UK Parliament for the work they have to do. On that note, may I ask what dialogue the Government are engaged in to promote freedom of expression and political rights in Burma?
I am glad that the hon. Lady called the country Burma towards the end of her question, unlike the BBC, which continues to call it Myanmar. We are hugely supportive, as she knows, of the new Government of Daw Aung San Suu Kyi, who has just appointed herself State Counsellor and Foreign Minister, among other titles. She is basically running the Government. It is very early days.
We continue to support Burma across the whole range of issues, from human rights, to the issue in Rakhine, to the peace process and the ceasefires. I congratulate hon. Members from across the House who have taken the trouble to go to Nay Pyi Taw to try to teach some of the new politicians there the basic elements of how to run a democratic Government. There is a long way to go, but I believe that we are moving in the right direction.
This Government and the previous Labour Government have deliberately undermined authoritarian regimes such as those of Saddam Hussein, Gaddafi and Assad, and they have unleashed totalitarian regimes as a result. Will the Government accept that Assad, however unpleasant, is not going to go? Will they accept realpolitik, pick up the phone and try to broker a deal between Russia, Assad and the other anti-Daesh movements in order to try to get some chance of peace in the benighted Syrian countryside?
It is for the people of Syria to decide who should lead their country. The majority of people in Syria do not accept that Assad should be part of its long-term future. He has used barrel bombs, he has used chemical weapons and he should have no part at all in the long-term future of the country.
Will the Minister give us an assessment of how far away Libya is from having a stable Government? What is the strength of Daesh there, and are real steps being taken to bring in ground forces to push them out of the country?
I am pleased that Prime Minister Siraj and the Presidency Council are now meeting in Tripoli. It has taken a long time to get the General National Congress and the House of Representatives to agree to support the Prime Minister. These are important initial steps, but the hon. Gentleman is right to recognise that Daesh has a foothold in Derna and Sirte. That is why the sooner the Prime Minister is able to make the important decisions, the sooner the international community can come in and provide support to make sure that Daesh does not gain a long-term foothold.
British exports to China have more than doubled since 2010, led by firms such as Havant-based manufacturer Colt. Will the Minister join me in congratulating Colt, and encourage other firms to follow its lead?
Indeed, I congratulate all the companies in my hon. Friend’s constituency. Trade with China, despite the recent setback, is still doing extremely well. Our bilateral relations have been reset, following the successful state visit to this country of President Xi. The Foreign Secretary has just been in Beijing. We both encourage British companies to trade more in China—it is a huge market—and all of us, as local Members of Parliament, to do everything we can to encourage our small and medium-sized enterprises to trade with China. Equally, the United Kingdom still continues to attract huge Chinese investment in our infrastructure, which of course provides employment and jobs.
Several hon. Members rose—
Order. I am sorry, but, as usual, demand has hugely exceeded supply and we must now move on.
Points of Order
On a point of order, Mr Speaker. I have made the Minister for Community and Social Care aware of my intention to make this point of order. In an answer to my written parliamentary question asking for the number of deaths that have occurred in child and adolescent mental health units since 2010, the Minister said that only one such death had been recorded by the Care Quality Commission. However, freedom of information requests conducted by Inquest have found that at least nine young people have tragically died in England while receiving in-patient psychiatric care since 2010. In response to this research, the Minister stated in an interview on last night’s BBC “Panorama” programme that he did not know how many children and adolescents have died in psychiatric units in recent years. This discrepancy between the Government’s account of the number of child deaths and the data collected from FOI requests raises serious questions about how the deaths in psychiatric care of some of our most vulnerable people are treated, recorded, investigated and learned from.
Can you advise me, Mr Speaker, whether you have received any indication from Ministers that they intend to clarify for the parliamentary record what the accurate figure is for the number of children who have tragically died in all NHS-funded psychiatric in-patient settings since 2010?
Extremely important questions are raised by this matter and by the broadcast, although not for me. We cannot have Question Time on the basis of points of order, but as the Minister of State is in the Chamber and apparently willing to say some words, we are happy—exceptionally—to hear him.
Further to that point of order, Mr Speaker. I am very grateful to you for allowing me to respond. I appreciate the fact that the hon. Member for Liverpool, Wavertree (Luciana Berger) gave me notice of her point of order. Some very serious questions were raised by the “Panorama” programme last night. I have agreed to meet Inquest’s Deborah Coles, the lady who put in the FOI request. There is a discrepancy in the numbers. There are difficulties in definition in relation to this matter, but the present situation is not acceptable. I will look as quickly as possible at finding a way of correcting the record as soon as we know exactly what the figures are, and at making sure we have sorted out this data problem effectively for the future.
I am extremely grateful to the Minister for his courtesy. On a personal note, may I wish the Minister very well in that important meeting with Deborah Coles? She is a very formidable character, as I know myself, because we knew each other at university. She is very formidable indeed, and I wish him well.
On a point of order, Mr Speaker. We have just had questions to the Secretary of State for Foreign and Commonwealth Affairs. We had an excellent team of Ministers here, but we did not have the Secretary of State. The Minister for Europe made the point that the Secretary of State was on the last leg of an overseas visit. I thought it was a convention of this House that Parliament came first and that Secretaries of State should be here for questions unless an emergency took them away from the House—clearly this trip was planned. Will you give guidance to the House on whether Secretaries of State should be on overseas trips when questions to their Department are scheduled?
Further to that point of order, Mr Speaker. Things may have changed since I was paying attention to this—it is 25 years since I was a Minister—but in my day, a Minister for the Government spoke with the same authority no matter what rank of Minister they were.
Certainly the team communicate with the House as a team. That is undeniable. This is not within the power of the Chair. The Secretary of State did courteously write to me to notify me that he would be absent. My sense is that he is not likely to be absent on anything like a regular basis. If that were to happen, it would be strongly deprecated not just by the Chair but by Members across the House. Let us hope it does not happen again. If there are no further points of order, perhaps we can move on to the ten-minute rule motion.
Events and Festivals (Control of Flares, Fireworks and Smoke Bombs Etc)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to make it an offence to be found in possession of, or to use, certain articles or substances capable of causing injury or behaviour likely to lead to injury at, or in transit towards, certain events, concerts or festivals or other public gatherings; and for connected purposes.
In plain English, this Bill proposes to prevent audience members at concerts and festivals from using dangerous pyrotechnics such as flares, fireworks and smoke bombs. There are places where items like these can safely be used, but not in the close confines of a live music audience.
Flares can burn at up to 1,600 °C; fireworks can be even hotter, at up to 2,000 °C. There is also the added danger of an unexpected projectile. Smoke bombs are also hot and pose particular risks at indoor venues and also for fellow audience members with asthma or other such breathing difficulties. The surprise throwing of pyrotechnics from within a crowd can also create dangerous and distressing crowd disturbance.
In 2014 there were 255 incidents involving flares at live music events, both indoor and outdoor, ranging from festivals such as Electric Daisy Carnival and T in the Park to popular city venues such as Brixton Academy. Like many right hon. and hon. Members and our constituents I enjoy live music, but no one should be seriously burned as part of a fun afternoon or evening. No one wants to see panic at the disco or any other music event. We want to get the number of these incidents down to an all-time low.
Gigs and festivals are particularly popular with young people. They and their parents have a right to feel safe both in attending and in sending their children. Unfortunately that was not the experience of an 18-year-old girl who attended an Arctic Monkeys concert and required three dressings to burns on her arms from a flare that had been thrown, or of the 17-year-old girl at the Reading festival who suffered a panic attack after being burned across her abdomen and thighs by a smoke bomb.
When I mentioned the subject of the Bill to other people, many outside the music industry were surprised that audience use of pyrotechnics was not already banned. Their surprise is understandable given that such protection has long been afforded to football fans by the Sporting Events (Control of Alcohol etc.) Act 1985, which made it an offence to enter or attempt to enter a football ground while in possession of a flare, smoke bomb or firework. Courts have taken such public endangerment very seriously, and even those without previous criminal records have been given custodial sentences of one or two months and banned from football grounds for up to six years.
The numbers bear out the fact that that is an effective approach, both legislatively and judicially. By contrast with the 255 incidents at music events in 2014, there were just three incidents at football grounds.
In my capacity as chairman of the all-party group on music, I have found broad support for the Bill throughout the music industry. Live Nation, one of the largest concert organisers and ticket providers in the UK, has been campaigning on this subject for a considerable time, as yet without success. I would like to see that change sooner rather than later, because, with the right support, these injuries and incidents are absolutely avoidable. The Association of Independent Festivals, which represents many popular events including the Secret Garden Party and the Isle of Wight festival, has asked for the law’s support:
“It is the responsibility of organisers to provide a safe and enjoyable environment for fans and the Government should support this objective by creating a level playing field between music and sports fans.”
Concert organisers have every reason to want to protect concert goers. Unfortunately, with their powers basically limited to expelling someone from a venue, they feel rather toothless when it comes to deterring this kind of dangerous behaviour, despite their desire to do exactly that.
Unlike at football grounds, the current legal situation at festivals and music venues is as follows. Under-18s are banned from carrying fireworks, a classification that also includes smoke bombs, in public places. However, an overwhelming majority of concerts and festivals occur on private property. There is no such regulation for flares, which are not controlled under the Fireworks (Safety) Regulations 1997 because they are not intended for entertainment use. There is no offence for adults carrying fireworks or smoke bombs, unless it can be proven that it is done with intent to cause injury. Concert injuries from these articles are usually a case of—I will be frank—bone-headed disregard for others and stupidity, rather than malice. Essentially, it all amounts to no rules or protection when it comes to audience possession of pyrotechnics at music events. When an industry wholeheartedly welcomes a proposed law not as a burdensome regulation but as an essential tool to protect safety surely this is one of the most clear-cut cases where Parliament should act. We would not be doing our duty if we ignored it.
The Minister for Policing, Fire, Criminal Justice and Victims confirmed in a letter to Live Nation in March 2015 that in his view the matter required
“proper examination of how best to deter the misuse of these devices”.
That is a view I share and welcome, but little progress has been made. I believe that proper examination of the effective results achieved by the ban on the misuse of these devices at football grounds leads to the conclusion that a ban covering music events would be the best next step. Thus, in proposing the Bill, I believe the time has come to take that forward.
Right hon. and hon. Members will know that I am not, by instinct, someone who likes to ban things. By and large, I believe people should have the right to choose to take risks and make informed decisions for themselves, even if they are not decisions we would make ourselves. However, audience members have not chosen to be exposed to the danger of flares and fireworks deployed in improper conditions, possibly by those who do not know how, or are in no fit state of mind, to use them. They have come to enjoy live music, and these incidents both endanger them and ruin their events.
To be entirely clear, my Bill would apply only to audience members and spectators at these events. There has been a little misreporting today online on the “billboard” website. Venues and artists would still be able to use pyrotechnics in their act and in their stage set-ups as they currently do. I certainly do not want to curtail the ability of trained professionals to put on a vibrant and exciting show. Having enjoyed many a gig myself, I know that “the fire has always been burning since the world’s been turning”, and that when tested properly and used safely it can be part of a great spectacle. I am not sure whether you are a fan of the Kings of Leon, Mr Speaker, but I am sure you would agree that we should ensure that nothing untoward is ever on fire.
There is support from the industry, venues, artists, fans and colleagues from across the House—I am grateful to my co-sponsors for showing there is cross-party agreement. This is a problem on which there is a consensus of concern among music fans and the music industry, and I am grateful for the opportunity to bring it before the House.
Question put and agreed to.
That Mr Nigel Adams, David Warburton, Steve Rotheram, James Heappey, Mark Pritchard, Pete Wishart, Valerie Vaz, Byron Davies, Craig Williams, Kevin Foster and Nigel Huddleston present the Bill.
Nigel Adams accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 22 April, and to be printed (Bill 157).
UK Steel Industry
Emergency debate (Standing Order No. 24)
I beg to move,
That this House has considered Tata Steel’s decision to sell its UK steel operations; and action the Government is taking to secure the future of the UK steel industry.
Mr Speaker, may I place on the record my thanks to you for granting this debate under Standing Order No. 24? Such debates are rare, but the situation facing the steel industry cannot be categorised as anything other than an emergency. Today’s debate provides an opportunity for the Secretary of State to come to the House with a comprehensive plan to secure the future of our vital steel industry which is hanging by the thinnest of threads. Anything less from him will be an abdication of his duty.
Yesterday, the Secretary of State said he was looking at the possibility of “co- investing” on commercial terms. I hope he will take the opportunity to explain to us in more detail exactly what this means. Call it what you like—“co-investing”, “part-nationalisation”, “temporary public stewardship” or “sheltering the assets”—it is clear that circumstances might require the Government to do this. They should spare their ideological blushes and just get on with it.
It is also important that today the Business Secretary hears directly from Members of Parliament who represent steelmaking communities. Between them, they have great expertise and knowledge that I hope will inform his response to the crisis from now on. Up until now, the Government and the Secretary of State have been found wanting. They have been behind rather than ahead of events. Their response to the biggest crisis in steelmaking for a generation has been warm words but little effective action. There has been what can only be described as an ideologically driven reluctance to get involved as the crisis has deepened. It has been a mixture of indifference and incompetence.
Will the hon. Lady give way?
I will give way, but I must say that I will not give way as generously as I normally do, because this is a three-hour debate and it is really important that Members from steelmaking communities have their say.
The First Minister of Wales has called on all parties to come together to work towards a future, rather than—for want of a better phrase—political point scoring. The hon. Lady is very passionate on this issue, as we are on the Government Benches—it is vital that we have a British steelmaking sector—but will she assure the House that she and her colleagues are taking that combined political approach between the parties to secure that future, rather than trying to drive a wedge between the parties?
We will judge the Government by their actions and their achievements rather than their words.
The complete absence of either a manufacturing strategy or an industrial strategy has hampered the Government’s ability to think strategically about what is needed, and never has it been more urgent that the Business Secretary does so. This is urgent because on 29 March Tata announced it would sell its entire steelmaking operations in the UK, leaving the future of the UK steel industry hanging by a thread and putting 40,000 jobs in communities up and down our country at imminent risk.
As someone with a Tata presence in my constituency, I wonder whether the shadow Secretary of State shares my concern that although we knew about this on 29 March—people going to Mumbai knew it was going to happen—we have not discussed it formally until today, and yet three years ago, the Prime Minister reconvened the Chamber within two days, during an Easter recess, to talk about the death of Margaret Thatcher. What does that say about the Government’s priorities?
It is regrettable that there was not a recall of Parliament, but we are where we are, and we have this debate now, thanks to you, Mr Speaker.
It is imperative to underline the fundamental importance of this industry for our economy and our country. Steel is a foundation industry. While it might make up just 1% of total manufacturing output, that output is crucial. I believe that our world-leading automotive, aerospace and defence industries and our rail and construction sector all depend on a strong and sustainable domestic steel industry.
Our manufacturing sector is already facing tough times. The Secretary of State said yesterday in the House that manufacturing was up since 2010, but Office for National Statistics figures show a different picture. Manufacturing output in the last quarter of 2015 remained frozen at the level of five years ago, while output in January was actually lower than the year before and is still 6.4% down on the same period before the global crash.
In his 2011 Budget speech, the Chancellor espoused his vision of a Britain
“carried aloft by the march of the makers.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]
But he has failed to match his rhetoric with reality, because since then the manufacturing sector has actually shrunk. His much promised rebalancing of our economy has in reality failed to materialise. In this context, the challenges facing the steel industry represent an existential crisis for the UK’s manufacturing sector as a whole. I do not believe we can safely allow it to shrink further. And I for one am glad that the Government appear finally to have realised this.
Now we need action. Beyond the impact on manufacturing, the crisis in the steel industry matters for the wider economy too. Much has been said about the cost of supporting our steel industry, but far too little has been said about the costs of letting it be destroyed. Recent estimates show that its collapse would lead to additional costs to the Government of £4.6 billion through reduced tax receipts and increased benefit bills. It would also suck demand out of the economy, reducing household spending by £3 billion in the next decade. There would be secondary shocks, too, especially in the steelmaking communities up and down the country. For example, Tata is the biggest business rates payer in Rotherham, with an annual bill of £3.2 million. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) pointed out today, the loss of this revenue stream to the local authority is equivalent to a 1.8% increase in council tax there.
Does my hon. Friend agree that the way forward was shown by the Labour Government before the 2010 general election, when they introduced the car scrappage scheme to support our automotive sector? It was supported by all parties in the House at a time of dire threat to the sector. As a result of intervention and an intelligent industrial strategy, the automotive sector was preserved and now prospers. Is not that the model we have to follow?
My hon. Friend is absolutely right. I hope that the Secretary of State is taking note.
The loss of our steel industry would worsen our already record-breaking trade deficit, which is now the worst since 1948. The value of the goods and services we import now exceeds the value of those that we export by £32.7 billion. The loss of steel and our current exports of steel combined with the need to import far more steel would make this barely sustainable record deficit even worse.
Beyond the economic cost, there would also be an intolerable social cost. There are 15,000 jobs directly at stake in the industry and a further 25,000 jobs at stake in the wider supply chain. These are the kind of high-skill, high-paid jobs of which we need to see more. The end of steelmaking in the UK would be devastating for 40,000 workers and their communities. Some people have highlighted the potential costs of intervening to save the steel industry, but I believe the costs of letting steel fail are far greater.
I do not want to pre-empt what the hon. Lady may say, but will she confirm that it is the policy of Her Majesty’s Opposition that the steel industry should be nationalised, and should remain in public hands until it can successfully go back into private hands?
What needs to be done is what is necessary to preserve, restructure and ensure the survival of our steel industry for the future. That is the Government’s job. We will be as supportive as we can—I shall set out some parameters later in my speech—but this is about the Government getting their act in order. The Opposition are holding the Government to account for their actions, rather than just their words. That is what this debate is about.
On that point, we heard nothing yesterday from the Secretary of State, either at the meeting of the all-party group on steel and metal-related industries or in the Chamber, about what action the Government will take on energy costs and business rates—costs that are burdening the steel industry, and on which the Government could act, yet we have seen no sign at all that they will change their policies in these vital areas.
I hope that we will have the chance to hear about concrete action from the Government in this debate.
I was talking about the costs to the community of letting steel fail. The costs to manufacturing and the economy are high, but the costs to the workers and their communities would be much higher. We very much welcome the recent commitment from the Business Secretary to do everything he can to protect steel-making and processing in the UK, but this Business Secretary has form. Warm words are all very well, but they are worthless, as the community in Redcar know to their cost, unless they are followed up with meaningful action.
Opposition Members are in no doubt that there are huge challenges facing the UK steel industry, but we believe that it can have a strong and sustainable future, and we know that decisions made by this Government now will ultimately determine whether it does. That is why I welcome the commitment the Business Secretary appeared to make in yesterday’s statement to what he called co-investment. Perhaps he will tell us whether he is considering co-investment to save the blast furnaces at Port Talbot, because we did not get an answer to that question in yesterday’s statement.
Will the Business Secretary confirm here and now that he will avoid a fire sale of these assets, and ensure that irreversible mistakes are not made in the way that they are sold? If Tata is to act as a responsible seller, it must consider only those offers that seek to maintain both upstream and downstream assets—that is, both the strip business at Port Talbot, and the specialist business based in and around Rotherham, Stocksbridge and the rest of south Yorkshire. The Government must also make sure that enough time is made available to ensure that an appropriate consideration of responsible offers can take place. It took nine months for the Scunthorpe deal to be developed, yet Tata has indicated that it wishes to exit the UK in four months. What is the Business Secretary doing to reassure the existing customer base that their current and future contracts will be fulfilled during this period of uncertainty? The plants cannot be saved if their order books disappear.
Let me turn to a number of areas where I believe the Government can make a positive difference. The most significant cause of the crisis facing the steel industry is the dumping of huge amounts of cheap Chinese steel on the market. It is priced below the cost of production; Chinese state-owned steel companies are making billions of pounds in losses, yet they continue to pour out more and more product. UK steel producers simply cannot compete with this state-subsidised unfair trade, which is threatening to destroy the European industry as well as ours. We are not calling for protectionism, but we are standing up for fair trade, and calling for quick and effective tariffs that will help to level the playing field. The Business Secretary must abandon his opposition to the abolition of the lesser duty rule and block unfair Chinese imports.
Granting market economy status to China must not be automatic. China meets only one of the five criteria that must be met if this status is to be granted, yet the UK Government support granting market economy status to China as early as the end of this year. Action to level the playing field using trade defence instruments, and on market economy status for China, would give potential buyers of Tata’s UK steel operations the surest sign that the Government stand ready to act.
On procurement, the Government should take concrete action to ensure that UK steel producers are able to benefit from large public sector contracts. The Ministry of Defence will spend £178 billion on defence equipment over the next 10 years, yet the Conservative-led coalition Government scrapped Labour’s defence industrial strategy, which made British jobs and industries the first priority in all decisions on MOD contracts. We are now in the deeply regrettable situation of an aircraft carrier, British surface ships and armoured vehicles all being manufactured in the UK with mainly imported steel, when, with more planning, our domestic industry could have supplied those needs.
The Government must also take action on infrastructure investment. Despite all the Government public relations about this, public sector net investment in the UK will in reality be lower as a percentage of gross domestic product at the end of this Parliament than at the start, and half what it was under the last Labour Government. Of the projects announced in the Government’s infrastructure pipeline, just one in five is actually under way. For the sake of our steel industry and the wider economy, Labour calls on the Government to bring forward shovel-ready projects that require a significant amount of steel, and to ensure that the changes to the procurement rules, which the Government keep boasting about, actually begin to make a difference.
I would like to share with my hon. Friend the fact that I received a letter from the Prime Minister yesterday praying in aid and praising an infrastructure project investment in the railway between Wrexham and Chester. However, this is being funded by the Labour Welsh Government and, unfortunately for the Prime Minister, it appears to be the only example that he could put forward of investment in rail in north Wales.
My hon. Friend makes a telling point, and I hope that the Government will connect those two things in their procurement efforts, so that we can make a real difference to the potential customer base for UK steel at this very difficult time.
Does my hon. Friend share my concern that certain major procurement projects, such as High Speed 2 and nuclear, are being given to the Chinese? My fear is that they will naturally want to use Chinese steel. Also, if these were British companies, they would be paying British corporation tax, national insurance and income tax, and would be developing supply chains and export capacity. Does my hon. Friend share my fear that there is no proper joined-up industrial strategy to protect our jobs and our future?
I agree with my hon. Friend, and when we see the Chancellor travelling around China and asking the Chinese to bid for all these contracts, it is hard to avoid realising what is happening.
Business rates represent a far higher cost for UK steel producers. There had been reports that the Government were planning to exempt plant and machinery from business rates, which EEF has described as a “tax on investment”. The Chancellor reportedly even costed this change with a view to including it in his now infamous Budget last month before dropping it at the last minute. It seems that the measure, which would have significantly improved the future prospects of the industry, was sacrificed in pursuit of his economically illiterate and increasingly unachievable surplus target.
I said earlier that part of the problem is ideology. Labour has been calling for a modern and intelligent industrial strategy, and I am pleased to say that in yesterday’s statement the Business Secretary actually uttered the words “industrial strategy” for the first time. Now that that Rubicon has been crossed, all we need is action to match the words. Today, let us spare a thought for the thousands of steelworkers whose futures hang in the balance. The Government ignored the warning signs for far too long, and now they must act to find a suitable buyer, and to work with the steel producers, the workforce, and the clients and customers to ensure that the industry is placed on an even keel. The cost of failure, both economically and socially, is unthinkable. We need urgent action to save our steel.
The whole House will have been deeply concerned by the crisis that has affected the global steel industry over the past year. The facts are familiar, but they bear repetition. Around the world, steelmaking capacity is about 35% higher than demand. In China alone, excess steel capacity is 25 times the United Kingdom’s entire annual production. Demand has slumped in China as its economy grows, and demand here in Europe has yet to return to pre-crash levels.
That surge in supply, coupled with a fall in demand, has inevitably led to a large fall in prices, and the knock-on effect for steelworkers around the world has been, quite simply, devastating. Here in the UK, we have sadly seen the closure of the SSI plant in Redcar after its Thai parent company ran up unsustainable losses. Across Europe, some 70,000 steelworkers have been laid off since 2008. Last week we heard that the United States Steel Corporation, the biggest steelmaker in the United States, was laying off a quarter of its non-union workforce, and earlier this month, the owner of one of the two heavy steel mills left in Australia went into voluntary administration.
This is, of course, about more than just numbers. It is a human tragedy. When we talk about job losses in the abstract, it is easy to forget that each of them represents a person: a hard-working, highly skilled man or woman. Many of those men and women will have husbands, wives, children and other dependants to support, or there will be local businesses that rely on their custom, and the same pattern will be repeated throughout the supply chain. That is why, when job losses have happened in Britain, we have done everything we can to support the communities affected.
The Secretary of State said that we must not forget. I assure him that there are people in this House who do not forget. I am one of the people whom his Government did this to some 30 years ago, when they closed the coal mines. They looked at the economics, and they did not care about the social cost, which destroyed areas like mine. The Secretary of State needs to bear that in mind during this debate.
I am sure the hon. Gentleman agrees with me that when there are job losses and the Government can help, of course they must do so.
Will the Secretary of State give way?
I will plough on, but I will give way in a moment. I am about to speak about Redcar, and I know that the hon. Gentleman is interested in that as well. We have committed up to £80 million to helping people affected by SSI’s closure. That includes more than £16 million to help local firms to employ former SSI workers, and a further £16 million to support firms in the SSI supply chain and the wider Tees valley. Millions more are paying for retraining at local colleges. For example, there was a £1.7 million package to help former SSI apprentices to remain in employment, education or training.
The Secretary of State said that the Government would do everything possible for the communities and people affected. As he knows, on the day of the liquidation at Redcar, he announced an £80 million total package—
It is £90 million.
Oh, is it £90 million now? We have heard previously, from that Dispatch Box—[Interruption.]
Order. Shush, junior Minister. We do not need you to burble from a sedentary position. Be quiet! Your burbling is not required. Learn it. I have told you so many times; try to get the message.
Not so long ago, at that Dispatch Box, the Secretary of State changed the figure to £50 million. Moneys on top of that have only been acquired because the Community trade union claimed a protective award from the tribunal to ensure that the workforce got what they were entitled to. The Government could have fast-tracked that some seven months ago.
I thought I heard the hon. Gentleman say “up to £90 million”. What we have always said is “up to £80 million”, and that has not changed. I agree that there is a long way to go, but so far, in respect of Redcar, nearly 700 jobs have been created, safeguarded or supported, and only a quarter of the more than 2,000 workers at SSI were claiming jobseeker’s allowance at the end of February.
I do not want to take up too much time, because I shall be speaking later, but the figure of 600 jobs relates to those who are in work or full-time training, not just those who are in work. That is important, because it is work that will be vital at the end of the training.
The hon. Lady has made a very important point: at the end of the day, it is about work. Training can lead to work, as can retraining, so it is important to invest in it. I know that, to the people of Redcar, this seems like a drop in the ocean. When a community is built around a single industry, the death of that industry takes away more than just the jobs. I do not want to see any other steelmaking community suffer the same fate, and that is why the Government have been taking real action to support the industry.
Does the Secretary of State begin to appreciate how this flows into the community? A medical centre on Teesside that I visited recently lost two nurses, who had to give up their bursary-funded training programmes because their husbands lost their jobs at SSI. The consequences and the ripples spread right out. It is not 2,200 people who have lost their jobs; it is up to 9,000 people, and the Secretary of State should understand that.
The hon. Gentleman is absolutely right: there can be a devastating effect on the community that goes way beyond the actual job losses at SSI. That is why we must do everything, together, to prevent the same thing from happening to any other community, and we must support the supply chain, because, as he says, there is a ripple effect throughout the community on many, many businesses.
Will the Secretary of State give way?
I will give way once more, but then I must plough on.
The Secretary of State may know that I worked very hard with Members on both sides of the House to secure a proper pension for the Visteon pensioners from Ford when it had short-changed them. Given that Tata has almost fully paid up its pension fund, will the Government socialise that fund, so that the pensioners can be secure in the knowledge that they will have a pension in future, and so that prospective buyers need not be concerned about that?
I will move on to the subject of Tata in a moment, but the hon. Gentleman is right to identify pensions as an issue, and we are considering all possible solutions.
Let me say a little about the action that we have already taken. We have taken action on power: £76 million has already been paid to steelmakers to compensate for high energy bills, and we expect to pay more than £100 million in the current financial year alone. In the autumn statement, just five months ago, we announced that we would go further. Energy-intensive industries will be exempted from renewable policy costs—a move that will save the steel industry more than £400 million by the end of this Parliament.
Surely my right hon. Friend agrees that, rather than compensating businesses for a tax that we levied, it would be far more sensible and logical to scrap the tax.
Given what my hon. Friend has said, I presume that our move towards exemption rather than compensation is exactly what he wants to see.
Does the Secretary of State accept that the support that the Government are giving our steel industry in respect of energy costs is only a fraction of the support that Germany and other countries are giving their steel industries? It will still leave our industry with much higher energy costs than those of other European Union countries. Is the Secretary of State not prepared to consider going further to help our industry when it is in such a difficult position?
By calling it a fraction, the hon. Gentleman underplays the help that this support is providing to the industry. The manufacturers in the industry see this as a big game-changer in how they account for the cost of power. I can agree with the hon. Gentleman, however, in that I think there is still more to look at in this area, particularly with regard to Tata and securing a buyer.
In a meeting with the Industrial Communities Alliance, which represents traditional industrial areas in the UK, the EU Commission reiterated its commitment to change the trade defence instruments, which would tackle the cheap steel issue. We are in line and the Commission is in line. Will the Secretary of State get in line to ensure that we can make these changes?
I will come on to trade defence instruments in just a moment.
I want to talk about the delivery of a new flexibility on emissions regulations. This was asked for by the industry and we have delivered, potentially saving the industry hundreds of millions of pounds. We have also taken action on procurement, and we have become the first country anywhere in Europe to take advantage of EU rules to make it easier for the public sector to buy British. That is on top of our proud record of procuring British steel.
The Secretary of State makes much of the changes he is making on procurement. The Minister for Defence Procurement, the hon. Member for Ludlow (Mr Dunne), who is sitting next to him, told me in answer to a recent question that the Ministry of Defence did not even have full records of where it was getting its steel from for UK defence projects. How can we be sure that the Secretary of State will follow through on his commitment on procurement when Government Departments are not even keeping records and when so many UK defence projects are being made in Korea, China and elsewhere?
The hon. Gentleman might hear more from the Minister for Defence Procurement in the coming days, but I can tell him that the two new Queen Elizabeth class aircraft carriers are being built with almost 100,000 tonnes of British steel, that Crossrail, the biggest construction project in Europe, is using almost exclusively British steel for its 26 miles of tunnels, and that 96% of Network Rail’s spending on steel rail goes directly to British firms. It buys 1,500 miles of steel rail every year from Tata in Scunthorpe. That is enough to build a two-track line from London to Edinburgh.
I certainly agree that Network Rail provides a case study in how to do procurement, and it is to be commended. However, we need to ensure that the DONG energy contract for developing the North sea wind farm, which will be the second biggest in the world, will use UK steel. What progress is the Secretary of State making with his colleagues to ensure that that happens?
We have had meetings with that particular company and many others in a similar situation. The hon. Gentleman will know that many of them are private companies and therefore not subject to all the rules around procurement, but there are ways of trying to encourage them to invest more in British steel, and that is exactly what is happening.
The question of trade defence instruments was raised earlier, and the hon. Member for Wallasey (Ms Eagle) mentioned the point as well. We have been working hard on this issue at EU level, and that work began long before this crisis broke. I hear a lot in this House about ideology, but I am just interested in one thing: what actually works. When evidence shows that tariffs against unfair trade will make a difference without harming British businesses or British consumers, I will always support them. That is why last July the UK voted to impose a 16% tariff on wire rod; since those duties were imposed, imports from China have fallen by as much as 90%.
In November, we voted to impose a 28% tariff on seamless pipes; since those duties were imposed, imports from China have gone down 80%. In January, we voted to impose an 11% tariff on rebar, and since then, imports of that particular steel product have fallen by a massive 99%. In February, we voted for a 15% tariff on cold rolled flat products, and that move has already reduced imports from China to almost nothing. This is real action with real tariffs and they are making a difference for British steelworkers.
The European Steel Association’s spokesperson, talking about the change to the lesser duty rule, has said that
“the fact that the UK continues to block it means that when the government says it’s doing everything it can to save the steel industry in the UK and also in Europe, it’s not.”
Is not that the truth about the Secretary of State’s efforts?
I will turn to that in just a moment.
I thank the Business Secretary for taking my intervention. I hope that he will also answer the question that my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) has just asked him. On the question of procurement in relation to energy, the Government are intervening more than ever before in the energy market through contracts for difference. Has the Secretary of State looked into ensuring that when those often very generous contracts are negotiated, they contain a requirement to buy British-made steel?
I can tell the right hon. Lady that no stone remains unturned in our efforts to help sell as much British steel as possible. The hon. Member for Torfaen (Nick Thomas-Symonds) asked about the lesser duty rule, and this point is raised repeatedly by Labour Members, but Labour had no problem whatever with the rule when it was in government. Scrapping the rule altogether would cost British shoppers dear. It would raise prices on everyday items that we rely on. For example, the rule saves British shoppers £130 million on footwear in one year alone. However, I told the House yesterday that I would be more than happy to look at any ways of specifically helping the steel industry, and I hope that Members will come up with ideas during the debate. I will, of course, be listening.
I referred earlier to the Labour Government’s intervention on car scrappage before the 2010 election. They stepped up to the plate to support the industry at that time. May I suggest that the Secretary of State approach the aerospace and automotive sectors and ask the Automotive Council and the Aerospace Growth Partnership to place on their agenda ways in which they could assist the UK steel industry by stepping up to the plate at this time of great difficulty for the industry?
As the hon. Gentleman will know, we have sector councils for both those industries, and we meet regularly and have a regular dialogue. This is exactly the kind of thing that those sector councils are designed to focus on, and it is exactly the kind of work that they are doing. I hope that the hon. Gentleman will welcome that.
I have read some very interesting statistics in the past week. There has been a 43% decline in the foundation industries across the United Kingdom since 2000, but the figure across the other OECD countries is only 21%. Why does the Secretary of State think the decline across the UK since 2000 has been twice that of the other OECD countries?
I do not know where the hon. Gentleman gets his numbers from, but this brings me to a useful point. The hon. Member for Wallasey said earlier that I had stated yesterday that manufacturing output in this country had gone up since 2010; she suggested that that was somehow incorrect. I can tell her that manufacturing output has gone up 2.2% in real terms since 2010 and that it is up 18.7% in current prices. Those are the official numbers, and manufacturing employment is also up. If she wants to hear about when manufacturing output actually fell, I can tell her that it was during the last Labour Government, when it fell from 18% of GVA to about 10%.
Steel companies are seriously concerned that the granting of market economy status to China will severely jeopardise their ability to take Chinese and other companies to court for steel dumping. What assessment has the Secretary of State made of that threat?
First, that will be a decision for the EU. We will, of course, have an input, but it will be a collective decision. Secondly, if any country wants market economy status, it must earn it. Whatever the country, it must show that it is behaving in a responsible way. Thirdly, we must remember that even when countries get market economy status, tariffs can still be imposed. Russia and the United States would be good examples.
Does the Secretary of State accept that many on this side of the House believe that it is for this House and this Government to decide when a country such as China is dumping? We should decide whether to impose tariffs. Indeed, many of us think that if we had been outside the EU months ago, we would have imposed tariffs on Chinese dumping and would have solved the problem.
We have led the way in taking action, which has resulted in the right tariffs, which have helped the steel industry while protecting producers and consumers. My hon. Friend will agree that when action is taken through tariffs, we want to ensure that they are at the necessary level to help the industry without hurting consumers and producers.
Will the Secretary of State give way?
I will give way once more on this.
While we are still on tariffs, the Secretary of State mentioned the tariff on rebar and the drop in production. Increasing the tariff in that industry is obviously crucial, but other facts are at play. Rebar exports shunted up production before the tariffs came in, so we may have seen a drop-off due to that; there are also the exchange rate differentials. Does the Secretary of State still think that the rebar tariffs are high enough or should they be even higher to deal with the changes going on in that industry due to other factors?
We should always be driven by the evidence. The 99% fall in imports year on year, resulting from the tariff, suggests that it is effective, but we should always keep the situation under review and ensure that it remains effective.
My right hon. Friend mentioned the action that the Government have taken on procurement and their response on tariffs and power. Yesterday, he talked about Government co-investment. Will he please take this opportunity to clarify what is meant by that?
My hon. Friend will know that that comment related to Tata’s decision to sell its strip products business. What I said was really to show that when the Government say that we will consider all options to help create a long-term, viable business with a commercial operator, that would be such an option. The key point is that any co-investment would have to be on commercial terms. Investment can take a variety of forms, such as debt, but what I said was a demonstration of all the options that the Government are considering. I will move on to say a little more about Tata strip products in a moment.
Will the Secretary of State give way?
The action taken on tariffs, energy costs and procurement has sent a powerful message to investors around the world that the British Government are standing up for UK steel. That commitment is not new; I have been working with the steel industry from my very first day as Business Secretary, long before the current crisis made it on to the front pages. As I told the House yesterday, Tata contacted me several weeks ago to warn that it planned to sell parts of its strip business and to close its Port Talbot site immediately. Thanks to the groundwork laid by my team and colleagues over the past year, we were able to secure a reprieve while a buyer is found. I am leading the Government’s efforts to help to find a buyer for the strip business, and we will update the House on progress as soon as possible.
When that buyer is found, the Government stand ready, as I have said, to support it in any way we can to help to get the deal done. We have already set out some of the ways in which we can help. It would not be prudent to go into the detail, but the goal is to find a commercial buyer, with the Government helping to secure that transaction and a long-term, viable future for the business.
I understand where the Secretary of State is coming from but, taking a broader view of co-investment, one option is R and D. The steel sector does not have Catapult status. Will the Secretary of State look at that as a potential route for co-investment in the steel sector, particularly in respect of organisations such as the Materials Processing Institute, to get an R and D link with our domestic steel industry?
The hon. Gentleman makes an interesting point. He will know that Catapult centres are a partnership between Government, business and academia. If that can help the steel sector, I am more than happy to look into it if a proposal comes forward.
Hundreds of apprentices at the Port Talbot works receive on-the-job training while attending local colleges and universities. Swansea University has approximately £40 million in active grants to support research and innovation in the steel industry at the Materials Research Centre. If the steel-making facilities are removed and sponsorship is subsequently lost, future generations will be deprived and the UK will miss out on the potential to be at the forefront of materials development.
The hon. Lady makes a key point about the importance of skills and training, and I can assure her that we are already working with the Welsh Government on that. I have already started discussions with both the Minister for Universities and Science and the Minister for Skills to ensure that the issue remains front of mind.
We heard yesterday about the deal between Tata and Greybull Capital, and we will do everything we can to help finalise that transaction for Tata’s long products division. Yesterday’s announcement has also helped safeguard almost 5,000 jobs; alongside Liberty House’s acquisition of steelworks in Scotland and the west midlands, it is a real vote of confidence in Britain’s steel industry.
I would not have been able to do this work alone and I want to praise my right hon. Friend the Minister for Small Business, Industry and Enterprise, who has been absolutely tireless over the past year in her efforts to protect steel, as has my right hon. Friend the Secretary of State for Wales. I have also had the pleasure of working closely with the First Minister of Wales and the leader of the Welsh Conservatives in the Assembly. They have both proved to be positive, constructive allies in the fight to save Port Talbot. The steel unions, particularly Community, have been equally constructive, consistently coming forward with solutions rather than complaints. For that, I thank them once again.
Investors everywhere know that British steel is the best in the world and that British steelworkers are the hardest working in the world. They know that the British Government stand with the steel industry. We will do whatever we can to support it and to help it become more competitive. The challenges we face are great and the crisis facing the steel industry is global, but I am fighting for Britain’s steelworkers every hour of the day. I was fighting for them long before this crisis hit the headlines and will go on fighting for them as long as it takes. Britain’s steelworkers are the best in the world, and they deserve no less.
I congratulate the hon. Member for Wallasey (Ms Eagle) on securing this debate; I appreciate your discretion in permitting it under Standing Order No. 24, Mr Speaker. I will speak briefly from the SNP Front Bench, to allow colleagues from steel communities both in Scotland and in England and Wales to contribute to this short debate.
Yesterday, the Business Secretary tried to dig himself out of the hole he had dug by claiming credit for the news that Tata may have found a buyer for the Scunthorpe plant. He told us that this Government had done everything they could for the steel industry and that workers in England and Wales, with their jobs on the line, should be grateful to the Tories. It is welcome news that Tata appears to have found a buyer for its operations in Scunthorpe, and I hope that buyers can be found for Port Talbot and other sites. If the Government have been involved in the deal, I commend that, but I am concerned at reports of a possible erosion of workers’ terms and conditions as part of the deal. Is the Business Secretary aware of that? If he had discussions with Greybull Capital, did the changes come up? Will he now make representations to it on that matter?
I am also keen to probe a bit further the Business Secretary’s apparent flirtation with direct UK Government investment and the potential co-ownership of steel sites, including Port Talbot. He described it as co-investment in “commercial terms”. Perhaps he could clarify that, because it was as clear as mud yesterday and left more questions than answers. Indeed, it appears that this morning No. 10 was briefing against his flirtation, saying that nationalisation is not the answer. How unco-ordinated and shambolic!
On what the hon. Gentleman said about terms and conditions, that ends up going to ballot, after being negotiated with lay reps on site, including those at Skinningrove in my constituency. The reductions in terms and conditions and the pension contributions are for 12 months only. In collective bargaining that is usually called a short-term working agreement, and I have negotiated those many times in order to save sites. It is also an industrial matter; it is not really a political matter for this place to discuss.
I take the hon. Gentleman’s intervention in the spirit in which it was clearly given.
As I said yesterday, the fact that the Business Secretary was literally on the other side of the world at the height of this crisis two weeks ago when Tata made the announcement is a perfect metaphor for the Tory approach to the steel industry. Yesterday, I believe, was the first time this Government have proactively engaged with the House on the steel issue, and even that was after a shambolic recess, when there were calls for a recall of Parliament. On every other occasion I have been involved in discussions—certainly on the vast majority of occasions when steel has been discussed in this House—it has been because the Government have been dragged here by Opposition parties, as they have been again today. It is clear that the Government have been comfortably behind the curve on the steel crisis.
We had a statement yesterday!
I have already said that yesterday was the first time the Government had proactively done this, and that was after a shambolic recess. They have clearly been comfortably behind the curve on the steel crisis; we have seen poor, defensive reactions, rather than proactive and practical support. That is in stark contrast with the proactive, professional and diligent way the Scottish Government approached the crisis facing the Scottish plants at Clydebridge and Dalzell. Nicola Sturgeon said her Government would leave no stone unturned in saving a crucial industry, and that is exactly what happened.
The Scottish steel taskforce was quickly assembled, and I am delighted to say that my hon. Friends the Members for Motherwell and Wishaw (Marion Fellows) and for Rutherglen and Hamilton West (Margaret Ferrier) contributed to that, and that Liberty House has now bought these sites, to maintain a crucial industry in Scotland.
Yesterday, the Business Secretary was noble enough to commend the Scottish Government for their actions and efforts, and I thank him for that, but the mask slipped later on in the exchanges when my hon. Friend the Member for Rutherglen and Hamilton West asked whether the UK Government had learned anything from the approach taken in Scotland. He said the only reason why Scottish steel has a bright future is the strength of the UK economy. That was utterly complacent, arrogant and ignorant of the facts.
SNP Members now stand in solidarity with the steelworkers of England and Wales as they struggle and fight for their jobs and their industry, alongside their union representatives. We now hope the UK Government can work more co-operatively with EU colleagues on anti-dumping measures, energy costs and the other issues facing this industry, so there can be a long-term future for a crucial part of the manufacturing sector.
There needs to be a credible strategy for manufacturing and heavy industry in the UK, as the shadow Business Secretary said. This Government are facing a massive, record-breaking trade imbalance. The only way of rectifying that is if we start making things and if this Government start supporting those areas of the economy, rather than relying so heavily on other areas. Imagine what could have been achieved had the Prime Minister spent the last year touring European capitals pressing for action on steel, rather than testing the patience of European colleagues on his EU referendum gamble.
Yesterday, I asked the Business Secretary a simple question and he dodged it. He now has the opportunity to hear it again and perhaps he will take the opportunity to answer it. Will he publish details of all the meetings, phone calls and correspondence with the EU and with international and trade counterparts that he, the Prime Minister, the Chancellor and other members of the Cabinet have made in respect of the steel industry, and any such visits they have made? If he has done the work he claims to have done and if he has indeed strained every sinew for the steel industry, he can have nothing to hide. Indeed, publishing would help to show if he really had the grip on this issue he claims to have had.
I suspect that the Secretary of State dodged that issue and question yesterday because the reputation he has gained for himself in steel communities across these isles is ringing true. What we needed to hear, today and yesterday, was the commitment of this Government to save this crucial industry, not just for the workers—saving their jobs, and their skills and livelihoods—but for the wider economy. I wonder whether we will ever hear that commitment from this Government.
Several hon. Members rose—
Order. On account of the level of interest, there has to be a time limit. We will begin with a six-minute time limit on Back-Bench speeches.
It is a great pleasure to follow the hon. Member for Airdrie and Shotts (Neil Gray), who speaks for the Scottish National party. I have to say that I thought some of his remarks were more designed for party political purposes than to deal with what we are facing today. We are dealing with people’s livelihoods and with whether they have jobs, and I hope the tone of the House today will be about a solution and what we can do, rather than about making party political points. I also regret, Sir, that Parliament was not recalled last week, as this was a matter of such urgency that we could have come back to have a proper debate, and Members interested in this vital issue would have attended. It was quite right, Sir, that you allowed this Standing Order No. 24 application and that it was unanimously approved by this House—there was no opposition to it.
I know that many Members wish to speak, so I will keep my remarks brief. I declare an interest, as some of my constituents work in the steelworks in the neighbouring constituency and have contacted me about their concerns. This is about not just the people who work directly in the industry but those who rely on the economic benefit from it. I also spent 13 years in south Wales, so I know how important the industry is there.
The shadow Business Secretary analysed the situation very well. There has to be a steel industry in this country, and I think Members on both sides of the House agree on that. We cannot be left without a steel industry, and there is one reason for that: if there is a war in the future—I hope there will not be—we have to have our own steel industry or we cannot defend ourselves. Everyone accepts that we need a steel industry and everybody wants to work towards a solution. I know that the ministerial team have been working very hard but I do think they are working with one hand tied behind their back.
The shadow Business Secretary’s analysis was absolutely right: the problem our steel industry has is the unfair dumping of Chinese steel, and now perhaps Russian steel, on to the market, backed by state-controlled companies, which can put millions of pounds into their industries with no problem at all. If I was sitting in China and I wanted to keep my industry going, the classic way I would do it would be by selling my product abroad at less than what it costs to produce. What then happens, as we have seen, and as the Secretary of State has made clear, is that businesses across Europe close. When those industries are knocked out, the main supplier—in this case, China—takes a bigger share of the market and can then bump the price of steel up and hold the whole world to ransom. That is just what happens.
Where do I think the one hand tied behind the back is? It is the European Union. We have heard from Members on both sides of the House that the problem has been delays in the European Union dealing with tariffs. If we were in the United States, the President would just impose a tariff of 266% and that would shut off Chinese steel coming into the USA. Whatever we think about the issue and whether we think the Government have been poor in pushing for tariffs or not, I hope the whole House can agree that if this matter was totally in the hands of this Parliament, the Government could make their decision and act, and the Opposition could criticise and vote against it if they did not agree.
This is a vital national industry. Can my hon. Friend imagine any previous UK Government, in war or peace, allowing our steel industry to go down the tube? My constituency abuts Scunthorpe, and many of my constituents cannot understand the situation. If we had control of our own destiny, surely we could just stop this dumping overnight. This is unfair, unreasonable and ridiculous dumping, and we should stop it.
My hon. Friend is correct. That is the problem. I am afraid that the two Front-Bench teams cannot deal with this situation because of their position on the European Union. If the referendum had not been going on at the moment—
I was in agreement with much of what the hon. Gentleman was saying until he got on to his usual track about the EU. Celsa in my constituency is a Catalan company that operates across the whole of the EU. If we were to leave and to lose access to the single market, we would still be bound by World Trade Organisation rules on state aid and other issues. The uncertainty, damage and risk to jobs in south Wales, which he said he cared about, would be immense. It is grossly irresponsible to suggest that leaving the EU would benefit the steel industry in this country.
I completely disagree with the hon. Gentleman. I think that his analysis is absolutely wrong and that his ideology is driving his comments.
I will not give way again
On that point—
No, I cannot give way, because other Members wish to speak.
It is interesting to note that, by the time this debate ends, a cheque for £7 million will have been written by the Chancellor to send to Brussels—that is how much money we send every three hours to the European Union. Just a fraction of that money could be used to protect our steel industry.
On the question of whether we should renationalise the industry or sell it off, I have to say that I have no problem in that regard. A partial ownership of the steel industry for a period makes sense, as this is a strategic industry, but there is no point in doing that if we cannot solve the overall problem of the dumping of steel in this country. Put simply, we must cut out the cancer first. I have not come here today because of the European Union—[Interruption.] No! I have constituents who are concerned and worried about their jobs. Let me tell the hon. Member for Cardiff South and Penarth (Stephen Doughty) that it is because of the European Union that they may lose their jobs. It is no good him smiling and laughing, because that is the truth. He should be ashamed of saying otherwise.
If we really want to solve the problem of the steel industry, we must stop the dumping. I know that some Opposition Members do not like this, but the only way to save the steel industry is to come out of the EU and make our own decisions in this House. If we had left the EU months and months ago, we would have imposed tariffs on China. If Members want to save the steel industry, they will have to vote to come out of the EU.
I wish to start today by thanking both the shadow Secretary of State, my hon. Friend the Member for Wallasey (Ms Eagle), for securing this debate, and you, Mr Speaker, for granting it.
I also thank the Secretary of State for his statements yesterday and today and for attending the special meeting of the all-party group on steel yesterday afternoon. However, although I am grateful to him, l regret to say that those meetings and statements have done little to address investor and customer confidence, which are of paramount importance at this time. Alongside the efforts the Government need to make to find and support a commercial operator, the priority at the moment should be securing the order book.
Erosion of the customer base is the most pressing issue facing the British steel industry. If the customer base goes, it will not come back. Unless the order book is secured, it does not matter what else happens. No one will buy a business if it has no customers—it is as simple as that. That is why I was so deeply concerned by the Secretary of State’s response to my question at the APPG yesterday, when I asked him to outline the specific actions he was taking in that regard. He said that he would be happy to engage with customers as and when they approached him. That is simply not good enough. The Secretary of State should be on the phone. He should be reaching out to the chief executive officers of Honda, Nissan, Jaguar Land Rover and others, making it clear that production of the world class steel that they have come to expect and to rely on will continue, come hell or high water.
This House and every steelworker in the country now looks to the Secretary of State to take action. He should set out precisely, and in specific detail, the representations that he intends to make in the coming days and weeks to the companies that comprise the customer base, which is the lifeblood of the British steel industry.
The hon. Gentleman makes an important point about the companies in the supply chain and the customers, and he is absolutely right to do so. What I have said to him and to others is that we are engaging with many of those organisations—I know that the Secretary of State for Wales is, too—but what he must understand is that much of this is commercially sensitive. Many of those suppliers would not like us to discuss who we are talking to and what their concerns are. I hope that he understands that it would be quite improper for us to divulge that information.
I fear that the Secretary of State has misunderstood me. I am simply saying that it is very important to be on the telephone to the customer base. [Interruption.] We on the Opposition Benches and the steelworkers of this country would like a little bit more detail. [Interruption.] Ministers must forgive us for being sceptical about what they are doing or for thinking that there may be a lack of action.
The Secretary of State talked about co-investment yesterday. Although I welcome the fact that he has belatedly converted to the fact that the Government and industry can work in partnership, I am not entirely sure what co-investment means in his terms. I agree with him that nationalisation is not a long-term solution, but what customers need to know is that, come what may, they will still be able to purchase strip products from the Tata sites. Such security can be offered only if the Government commit to keep all options on the table. Can the Secretary of State make such an assurance to the House?
The men and women working in steel and connected industries across this country are among the most highly skilled and effective people in Britain. The Port Talbot workers are already turning the business around, with improved productivity leading to tangible improvements in business and financial performance. Their skill and dedication is matched by that of Roy Rickhuss, the general secretary of Community, who was even praised by the Secretary of State yesterday.
The surprise announcement that we really needed yesterday was not that of a Conservative praising a trade union leader, but that of the Government announcing an end to their laissez-faire attitude. What we needed from the Government was a list of all the discussions that they have had with the customer base, but what we got was yet more prevarication and procrastination. What we needed from the Government was the announcement that all options were on the table, but what we got was ambiguity. What we needed from the Government was the announcement that they would put down their pom-poms and give up their role as China’s chief cheerleader in Europe; that they would end their championing of market economy status for China; and that they would end their campaign against trade defence reform, but what we got was more of the same.
Yesterday, the Secretary of State only confirmed something that we already knew—that the Government’s approach has been characterised by a dangerous combination of indifference, incompetence and a rolling out of the red carpet for Beijing.
Was my hon. Friend as surprised as I was to hear that, when the Chancellor went to China, he invited it to take part in the HS2 project and to bid for the steel? That would mean having Chinese steel in one of our major infrastructure projects.
I was not surprised. Let me remind the House that 80% of the Chinese steel sector is state owned. On what planet can that be considered a market economy? I leave that to the House to decide.
The Secretary of State’s claims that he has been working on these things for months simply do not stack up. Yesterday, both in this House and at the APPG meeting, he claimed to have been aware of Tata’s decision to sell before it was publicly announced. If that was the case and if he really knew what was coming, why on earth was he on the other side of the world when the board meeting was taking place? Why was he caught so unaware? If he really was in the know as he claims to have been, why did he have to rush back to the UK in a mad panic?
The Secretary of State also boasted yesterday that it was his actions and his actions alone that prevented Tata from closing rather than selling Port Talbot and the rest of its strip products division. I must admit that my jaw hit the floor when I heard that claim. I was out in Mumbai. I was there for the board meeting with Roy Rickhuss and Community. The Secretary of State was not. Tata has expressed deep disappointment and frustration with the lack of support that it has received from this Government. We have seen delayed action on energy compensation, with many companies still waiting to receive their money, and weasel words on procurement from a Government who got the steel for the latest set of Ministry of Defence frigates from Sweden. Above all, Tata saw a Government who refused to support the steel sector in tackling Chinese dumping by opposing trade defence reforms, while championing market economy status for China. Therefore, this supposedly pro-business Government's influence on Tata is very limited. What really made the difference was Community’s high profile “Save our Steel” campaign, and the fact that Labour MPs have raised the issue of steel on more than 200 separate occasions since the general election.
The clock is ticking. Tata has said that it will give the sale “all due time”. Yesterday’s news about Scunthorpe took almost nine months, and it is still not fully complete. The deal on Port Talbot and the rest of Tata’s strip operations may also take time. Let us therefore hope that today’s debate marks a step change in attitude and action by the Government. Let us hope that they work proactively to protect the entirety of the order book and that they save the future of the heavy end in Port Talbot,
The hon. Gentleman will know that his colleagues in the Welsh Government have spent £80 million on a conference centre in Newport and £58 million on the airport in Cardiff. Does he think that the £60 million allocated to Tata in Port Talbot is sufficient?
There is a stark contrast between the actions of the Welsh Government and the actions of the UK Government. There is £60 million on the table, and the Welsh Assembly was recalled, and that should have happened in Westminster, so the contrast is clear.
Let us hope that the Government develop and execute a proper industrial strategy, so that the Opposition do not have to raise this matter a further 200 times in the weeks and months to come. Let us hope that they will stand up for steel.
It is a pleasure to follow the hon. Member for Aberavon (Stephen Kinnock), but it is unfortunate that his speech veered towards the critical, rather than the constructive. However, he can be forgiven, because he is one of many MPs speaking in this debate with a significant steelmaking presence in his constituency.
My constituency is not one of those constituencies, but in Parliament we talk as one community for all our constituencies, and discuss how different constituencies and communities can reach out to communities that are severely affected when things go wrong in an industry or because of a natural disaster. Let me repeat that the issues in the steel industry are not going to go away. We face many years of brutal competition in the global steel industry. If my right hon. Friend the Secretary of State and his team can, over the coming months, successfully find long-term solutions for steelmaking plants in Motherwell, Scunthorpe and Port Talbot, that will be a significant achievement in these times.
As someone who does not have a steelworks in his constituency, I believe it is important to discuss what the rules ought to be on what is fair for communities across the country. The OECD in its report last year on the steel industry said:
“In competitive economies, it is the responsibility of the steel companies themselves to identify ways to adapt to changing market conditions.”
We have to accept that many steel companies in the UK have failed to do that. The OECD goes on to say:
“The role of governments should be to allow market mechanisms to work properly and avoid measures that artificially support steelmaking capacity.”
The OECD understands the ways in which developed and developing economies can prosper, and it is important that the Government bear those words in mind. It is also important—and I should like to hear from my right hon. Friend the Minister for Small Business, Industry and Enterprise on this in her closing speech—that while we prepare for the best we also prepare for the worst. I should like to know what the Government are doing to prepare support for Port Talbot if all their best efforts to save the steelworks do not come to fruition. May I make one point from my memory of the coal-mining communities in the 1980s? The Government can never give enough support to communities that rely on a single industry.
Mrs Thatcher did not have an industrial strategy.
No, this is a lesson that we all need to learn. [Interruption.] If the right hon. Lady stops chuntering, I can make a point with which she might agree. Lessons have been learned from the 1980s, and in communities with a significant concentration of industries the Government always have to do more than they think they have to do.
Duties have been mentioned a number of times, so let us clear up the lesser duty rule. The point, as my right hon. Friend the Secretary of State said, is whether the duty is effective. We follow the lesser duty rule, and in the three instances that he mentioned, import penetration has all but disappeared. Giving up the lesser duty rule is not about stopping more steel coming in, but about raising prices on those products. If a 14% tariff is increased to 50% when imports are eliminated that will result in inflationary pressure from the steel industry to other markets, and might be regarded as supporting subsidies from one part of the steel industry to another. It is not right to give up the lesser duty rule, which is the underpinning of the World Trade Organisation, and to take the US approach of zeroing in on tariffs.
On the 267% tariff that America imposed on Chinese cold rolled flat, it was part of the same US decision that imposed a 31% tariff on Tata steel. Tit for tat on trade tariffs does not work.
Does my hon. Friend have a view about why Chinese dumping affects the UK industry much more than the German and Dutch industries? Indeed, Tata is trying to consolidate in Holland. Why have we been affected differently?
My hon. Friend speaks very intelligently. Private companies make decisions in different markets across the European Union. I disagree with my hon. Friend the Member for Wellingborough (Mr Bone), although we agree on Brexit, as I am not sure that the EU is pertinent to the decision that will affect the steel industry. The Government have taken effective action on procurement and power. Having served on a Bill Committee on the privatisation of Royal Mail, I think that a case can be made for the Government to take action on the pension requirements for members of the British steel industry, which was a nationalised industry. There is plenty of scope, for people like me who believe in the free market, to argue that the Government can take action on that basis.
The Opposition say that they believe in nationalisation. The hon. Member for Aberavon said that he believes in nationalisation, but that it is “not a long-term solution”. Opposition Members do not know when the crisis in the global steel industry is going to end. The global capacity glut is over 30%. I am afraid that if we nationalised, we could not determine when we could return the industry to the private market. If people nationalise, they do so for as long as it takes, and I believe, although I understand why my right hon. Friend will not do so, that the Government should rule out nationalisation, which is a step too far for the British economy in supporting the steel industry.
Finally, may I put the issue of the steel industry in context? During the time that most of us will spend in the House—I am looking at older Members—we will live though a global over-supply of capacity. That will be true not just of steel but of other sectors of our economy. We need to understand and abide by the rules that have created a free trade system that has been one of the biggest supports in improving living standards around the world. Supporting WTO rules on the lesser duty tariff is important, as is avoiding a tit for tat war on tariffs. Supporting communities with a significant industry that is affected and making sure that the Government do more than they think they need to do to support those communities are part of making sure that our economy supports them. I commend the Government on their actions, and I will continue to support them critically.
It is an absolute pleasure to follow my colleague on the Select Committee on Business, Innovation and Skills. I do not agree with much of what he said, but the rigour of his analysis, both in his speech and in his work on the Committee, makes the Committee much sharper in what it does, so I commend him for that.
I welcome the emergency debate, because steel industry is facing a real emergency. It has faced it for some time. The Committee found, going back 40 years, that successive Governments failed to value manufacturing and domestic steelmaking capability as the foundations of an innovative economy. Other countries—and this is in reference to an intervention from the hon. Member for Warrington South (David Mowat)—value their domestic steel industry more than we do, which makes them more resilient to the perfect storm of over-production and low steel prices affecting global steel markets.
I want to put it on the record that the challenges facing all steel manufacturers around the world are vast. China produces more steel than all other steel manufacturing nations put together. In two years China has produced more steel than we, the inventors of modern steelmaking, have produced since the start of the industrial revolution, so even if the Government were doing all they could, those challenges would remain vast.
The Government could do more, because Britain does not face a level playing field in respect of steel production. One contributing factor is the high pound. I know that the Government will not do anything to affect that, but they can intervene directly on uncompetitive energy costs and business rates, which put British-based steel manufacturers at a disadvantage.
In December we on the Business, Innovation and Skills Committee published our report on the Government response to the steel crisis. That was prompted by big turbulence, particularly the closure of SSI in Redcar in early October. It revealed the shocking absence of an effective early-warning system in Whitehall designed to detect and address mounting problems in the industry. Industry had been crying out for some time, with five asks concerning procurement, business rates and energy costs, but the Government had been deaf to such pleas. Had they been alert, they would not have had to resort to crisis management and preside over the tragic hard closure of an integrated steel facility, the second most efficient blast furnace anywhere in Europe, and the loss forever to the steel industry of jobs and skills.
The Select Committee’s report found that the Government recognised the vital importance of the steel industry, but the increased activity had not yet translated into a measurable impact on those in the industry and the communities that they sustain. Five months on from the closure of SSI, with other losses such as Caparo, and with the decision last month by Tata to sell its UK steel operations, it is difficult to avoid the conclusion that lessons have not been learned and that increased activity has not resulted in positive outcomes.
My hon. Friend talks about the absence of an early-warning system. In his capacity as Chair of the BIS Committee, does he have any concerns that there is insufficient capacity in the Department to respond to challenges as they emerge on world markets?
My hon. Friend makes an important point. The Department for Business, Innovation and Skills should be looking out for the British economy, making sure that it is the Department for future economic growth. It needs the civil service capacity to do that, and the proposal for it to lose 30% to 40% of its headcount will have enormous consequences for those early-warning systems and for the expertise and knowledge of the steel industry and other key sectors that are needed to ensure that Britain can thrive.
Today and yesterday in his statement, the Secretary of State stated that he was aware that Tata was planning to hard close its steel operations in Port Talbot and elsewhere, but that he prevented that from happening. He was fully aware of the enormity of the crisis, yet he still flew to Australia rather than Mumbai. The evidence surely suggests that he was left blindsided by Tata’s decision, which again demonstrates that no effective early-warning systems were in place. The Secretary of State should have gone out with Roy Rickhuss and with my hon. Friend the Member for Aberavon (Stephen Kinnock) to the Tata board meeting to bat for British steelmaking. The fact that he subsequently went to Mumbai, days after that key board meeting, shows that he knew he had made an earlier error.
The contrast must be made with the events of 2012, when Vince Cable as Business Secretary went to New York to persuade General Motors to make a long-term commitment to the UK, despite overcapacity and loss making in car-manufacturing operations in Europe. As a result of close partnership between the Government of the day, trade unions and local management, GM closed a plant in Germany and committed to build the new Vauxhall Astra at its Ellesmere Port facility. Given the great industrial relations in steel, fantastic trade unions, exceptional steelworkers and committed local management, why cannot this model be adopted for the steel industry?
We must look to the future and ensure that we have a sustainable steel industry. I have mentioned the existential threat to British steelmaking, but it is important to recognise that steel should be seen not as an obsolete industry, but as one whose future is essential to much of British manufacturing. We should be honest about the challenges, but we should not talk the industry down, which would further hasten the signing of its death warrant. We all have a responsibility to ensure that customers do not take flight.
The Government can help significantly with that. They have brought forward welcome changes to procurement rules that should favour British-made steel and its products during the awarding of public contracts. Something similar was announced in October following the steel summit, but we have no tangible evidence in the form of new contracts flowing to British plants and mills. Not a single pound of value has been seen. I asked the Secretary of State yesterday after his statement how greater and urgent collaboration was taking place between the Government, the Steel Council and the strategic sector councils such as the Automotive Council, the Aerospace Growth Partnership and the Offshore Wind Industry Council. Will the Minister provide further clarity about that?
Steel plays a major part in the infrastructure of the country. On 23 March, six days before the Mumbai meeting, the Government published the national infrastructure delivery plan. It contains one reference to steel. Will the Government commit to talking to the Cabinet Office to make sure that more can be done? This is incredibly important for my constituency in respect of the steel pipe mills and for the future of British manufacturing. It is important that we move from warm words to tangible action to safeguard British steel.
Several hon. Members rose—
A five-minute limit on Back-Bench speeches will now apply.
It is a great pleasure to follow the hon. Member for Hartlepool (Mr Wright), whose constituency has a downstream Tata production site. We share that similarity, and I share much of the sentiment that he expressed.
The present situation is of great concern to 600 families in Corby. As the local Member of Parliament, I think about them all the time in the work that I am doing on a cross-party basis in our area to try to support them and the steel industry in general. Margot Parker, the UKIP MEP, Tom Beattie, the Labour leader of the council, and I are working closely together to campaign on the issue. That is what local people and those who work at the local plant expect us to do. I was very pleased that the Minister was able to come and join us in those efforts last week.
I am also pleased to be working with Dougie Fairbairn and the Community union representatives at the Corby plant. That relationship is very important. Their feedback helps me to participate in debates such as this, ask questions and put their concerns to Ministers. That needs to be replicated nationally. There is far too much knockabout. I want to see us all getting round the table, working with the unions, Ministers, Back-Bench MPs and employees to make sure that we find solutions to these pressing problems.
The visit last week was useful not just to meet employees, but to get a briefing on where things stand in relation to the Corby plant. A clear message came across that both investment and time are needed. We should bear that in mind as we move forward. That leads me to the challenges that the industry so clearly faces.
The first one is so evidently the overarching challenge of dumping. The unfair, uncompetitive practices that we are seeing are unacceptable. We have heard a lot about Chinese dumping, but the particular concern in Corby is Russian dumping. We have all acknowledged that we have a brilliant steel industry. The product produced in this country is world-leading, but it currently cannot compete because the playing field is not level. That frames the whole of the ensuing debate.
The Chinese objective is clear. It is to dominate the world market and put other suppliers out of business so that the Chinese can raise the price and reel in the profits. For some industries, cheap steel at present might be an attractive prospect, but the longer-term consequences will be much more serious. Industry in this country and around the world needs to recognise that. We need to respond with strong tariffs and emulate some of the actions that President Obama, for example, is taking, although I do not agree with him on very much.
The hon. Gentleman makes a compelling point on anti-dumping tariffs. Does he agree that the issue is not just how high the anti-dumping duties are set? The Government have got the lesser duty rule completely wrong. It is not fit for purpose to deal with the scale of dumped steel from China. Also important is the speed with which decisions are taken. In vetoing that decision, the Government are blocking a more accelerated timetable for the imposition of anti-dumping duties.
I am grateful to the right hon. Gentleman for that intervention. We ought to take another look at the lesser duty rule. It makes sense to refresh our thinking on these matters all the time. However, speed is important. One of the frustrations that I was going to speak about later is the time it took in the European Commission last year to approve the energy compensation package. Those delays were unacceptable. It took far too long. We need quicker action.
I am grateful to my hon. Friend, who I know was at the Corby steelworks three times last week. Does he agree with the right hon. Member for Sheffield, Hallam (Mr Clegg) who criticised the European Union for being slow and ineffective in dealing with the steel industry?
The former Deputy Prime Minister probably knows better than most how inefficient the European Union is.
I am not going to give way, because I am very conscious of the time.
As well as getting the tariffs right—I think we should have another look at them—we should consider the market economy status argument that is being made, which is very important. I happen to take the view that if the Chinese are not going to play by the rules, they should simply not be allowed to have market economy status, and I hope that the European Union reaches that conclusion as well.
On energy costs, we have heard a lot in recent years about climate change. We need to be thinking constantly about the consequences of the policies we introduce and the agreements we sign up to. The Government must not act with a silo mentality in relation to these matters; they must be looking constantly at the implications of changes in energy policy. We must always bear that in mind. I welcome the energy compensation package to which I alluded a little while ago, but it did take months and months to approve. Yesterday the Secretary of State mentioned the package of measures that the Government are seeking to introduce in relation to exempting, and we heard about potential delays in that. I would be very interested to hear in his final remarks today exactly where we are with the exemption package, because I think it is an important step forward.
I happen to take the view that we ought to get much tougher on procurement. We have seen some really positive steps, but it is simply unacceptable for any public bodies in this country not to be using British steel at this time. We are seeing big procurement projects and fracking is coming on stream, so we ought to be exploring all the possibilities and ensuring that our procurement policy reflects exactly that. The integrity of the order book is very important, but so too is the integrity of supply chains. We need suppliers to keep on supplying, as well as buyers to keep on buying.
On business rates, at a time when we are trying to find somebody to buy the Corby site and the others that Tata owns in this country, it makes little sense that we are asking investors to step up to the mark and consider buying plant or the portfolio but then penalising them the moment that investment is made. It makes no sense whatsoever. I advocated a business rates holiday for the industry before the Budget, and I would like Ministers to have another look at that, because this is about trying to show signs of confidence that the Government are backing the industry and that we are all coming together to do just that. It is a bizarre anomaly.
In relation to trying to find a buyer for the Tata sites, I take the view that all options must be on the table. We should not rule anything out. I know that people will say, “But you are a free market Conservative,” and I am, but the fact is that our steel industry is not competing on a level playing field at the moment, and that requires action that does not necessarily go with the normal grain. We should therefore not rule anything out. If a short period of public ownership is required in order to find a buyer for the sites, I think that is exactly what we should do.
That is absolutely right. I want to hear a little more to be able to ascertain exactly what Ministers are thinking about that. In trying to find a buyer, we must not let state aid rules get in the way. If they get in the way, we should simply ignore them and do what is right by our steel industry. That is the message that my constituents expect me to convey as their local Member of Parliament.
Thank you, Mr Speaker, for granting this very important debate, particularly because I have 900 very good quality jobs on the line at Tata Speciality Steels in Stocksbridge. I support everything that my hon. Friend the Member for Wallasey (Ms Eagle) said earlier. I will not rehearse the usual arguments that have been articulated so ably by so many Members already, such as on energy costs and business rates. I will not talk about co-investment, because many comments have been made about that already, too.
Instead, I want to focus on confidence in the future of the steel industry. We risk seeing the industry undermined by people posing as experts in the field, such as commentators in the print media, and giving the impression that the industry’s day is done. It is not done; it has a great future. One example is the TaxPayers Alliance—let me make it clear that this is not an ideological attack—which stated last week:
“Unlike German plants which produce specialised products used in the car industry, UK plants have tended to produce basic products using out of date technology.”
I just want to put it on the record that every Formula 1 car made in this country, apart from Ferrari, has a bit of Stocksbridge steel in it, as does every aircraft in the sky. It is Stocksbridge steel that lands the planes safely, because it is used in the landing gear. It is Stocksbridge steel that makes up part of the Rolls-Royce engine that keeps the aircraft in the sky. We in Stocksbridge are incredibly proud of what we do, and the workforce are passionate about the industry’s future and they intend to have a long-term future, but they need the Government’s support.
I want to illustrate the other things that the plant in my constituency is doing. We have just secured £50 million of investment so that we can make the steel and remelt it to make even purer steel, at the VIM, or vacuum induction melting, plant, which the Minister knows about, so that we can go even further up the value chain, instead of just aerospace steel.
Just to correct the record, let me say that Stocksbridge is not a downstream operation. Tata Speciality Steels makes its own steel, remelts it and makes some of the best steel in the world. We have four projects at Stocksbridge, one of which involves making powdered steel, which is worth £30,000 to £40,000 per tonne. If we get the investment for that, with the atomizer plant that will go on the side of the VIM plant, our future will be spectacular. We must secure that future.
By the way, I make that point in relation to all the Tata plants at risk. People say, “Let’s go niche. Let’s specialise.” Actually, Stocksbridge is very specialised, but the steel made at Port Talbot is also specialised and very high quality. It is a different type of steel and it is made according to a different process—it uses blast furnaces, rather than electric arc furnaces—but it still makes fantastic, good quality steel. We make some of the best steel in the world.
In conclusion, too many commentators are focusing on steel as an industry of the past, but it is an industry of the future. I will finish by looking at the reports recently published by the Government’s chief scientific advisor, Mark Walport. He made it clear that manufacturing will be transformed over the next 30 years or so. The future of our manufacturing industry is focused on adaptability, in terms of the rapidly changing intellectual and physical infrastructure that we need. The steel industry is very well placed to do that. Tata has been completely focused on doing that; it just needs the support to get there—or rather, the new owner will need that support.
Mark Walport also made it clear that we need shorter and more integrated supply chains, because of issues relating to quality and safety standards. Our steel industry delivers that. Aerospace companies such as Airbus and Boeing know that they need those integrated, short supply chains, and they get nervous if the supply chains are disrupted. That is why we need to maintain confidence in the industry. I call on the Government to play their part by doing whatever they can to save our steel.
I, too, want to thank you, Mr Speaker, for granting this important debate. Steel is a huge part of the economy of my home town of Newport. In fact, my first job was at British Steel. I declare an interest as a British Steel pension holder, although what that pension will be worth after all this, I do not know.
Members on both sides of the House have spoken very well. The hon. Member for Hartlepool (Mr Wright) made the point that the fundamental problem is the vast amount of steel that has been coming into the marketplace from China since about 2008, and the fact that the demand for it is just not there. In reality, as he says, nobody can do anything about that fundamental problem, but there are certainly things the Government could do to help. Tata was losing about £1 million a day—we had the figures a few weeks ago. Frankly, the Government are not doing enough to help; I will not mince my words today.
One problem is that there has been a lack of consistency on both sides of the House. We need to ask ourselves a fundamental question: do we want heavy manufacturing industries in this country? Of course, people say the answer is yes, and I think the answer is yes, but if it is, one has to ask why, over the last few years, Governments of all parties—this Government, the coalition Government and certainly the Labour Government—have enacted policies that have made it much harder for heavy industry to continue.
Those Governments swallowed lock, stock and barrel the idea that carbon dioxide is a pollutant that is causing runaway global warming, and they enacted a series of policies that made things very expensive for any industry that emits CO2, and made it expensive for heavy manufacturers to buy in energy. We have brought in renewables obligations and carbon floor prices, and as a result, we now have the highest energy costs in Europe. That point was made to us on the Welsh Affairs Committee by manufacturers and the unions. Dealing with the issue may not resolve the fundamental question, of course, but it could make the difference between an industry that is profitable in some areas and one that is not. It could also make the difference to companies such as Tata when they are deciding whether to maintain a plant here or in the Netherlands.
It is important that we think about things consistently. To be honest, I do not buy the argument that carbon dioxide is causing runaway global warming. I have spoken about this before, and I cannot deal with the issue in the next two minutes, but there is simply no correlation with the tiny increase we have had in temperature. Therefore, the Government need to rethink their policy.
Instead of deciding to get rid of the carbon taxes and energy taxes that helped to create the problem in the first place—taxes supported by Governments and MPs of all parties—the Government have brought forward a compensation package. The package is all right as far as it goes, although it had to go through a great big bureaucratic steeplechase in the European Union, which Members on both sides also support, and which I certainly do not. However, having got there in the end, and with the first cheques going out as we speak, what have we actually done? We levied a huge tax on an industry, and now we will give some of that money back, because the tax is having exactly the impact we thought it would, which is to punish the industry. I put it to the right hon. Member for Don Valley (Caroline Flint) that it would surely be much more sensible to scrap the carbon taxes in the first place. There is not much point having a tax if one has to compensate people for its effect.
My hon. Friend is making a powerful speech. Will he explain how our industry is supposed to compete with the industries in continental Europe when we pay twice the energy price they do?
My hon. Friend makes an important point. However, if Members on both sides truly believe that carbon dioxide is a pollutant and is causing runaway global warming, they should stand up, take a bow and explain to steelworkers that those workers losing their jobs is a price worth paying to stop the minute increases we have seen in temperatures—although, in fact, we have not seen any increase in about 17 years. The whole thing is absolute nonsense.
We should say that of course we want heavy manufacturing industries in this country. It is not just steel that is threatened; this is also not just about Tata. The Minister for Small Business, Industry and Enterprise will be aware that one other steel manufacturer in south Wales has said that it may face severe economic problems unless something is done about high energy prices. Sanjeev Gupta, a constituent who is head of Liberty House, has said that we need to scrap the carbon floor price. As I said, this is not just about steel; it is about glass, chemicals, cement and all sorts of other heavy manufacturing industries. If hon. Members truly believe that these industries are polluting the atmosphere and causing a great increase in temperature, although we have not actually seen any evidence of that for 17 years, they are doing exactly the right thing. However, I happen to think that all of them, and this Government, are doing the wrong thing.
It is high time we stopped trying to tax our manufacturing industries, stopped taxing companies that could be profitable, and stopped handing the money to expensive wind farms that generate electricity at two or three times market rates, particularly when the wind farm companies involved are not even willing to buy steel from this country, and import it all instead. In the Committee, the Minister described the policy as barmy, and she was right, although she was probably being far too polite.
I have no problem at all with CO2 being emitted. I want a viable heavy manufacturing industry in this country, and I want to see lots of jobs and low taxation. I am perfectly relaxed about CO2 emissions.
This is not just about the obvious news stories about Port Talbot or the strip industry; it involves all Tata sites, including Aldwarke, Thrybergh, Stocksbridge, Shotton, Llanwern, Orb, Corby and Hartlepool; this is a UK steel crisis.
I reiterate that Tata has to behave like a responsible seller, and we need to remind it of its antics in 2010, when Kirby Adams, the then chief executive of Tata in Europe, tried to use skulduggery to shut Redcar. We solved that problem, but it took more than two years—two years in which there was not one hard redundancy. We need to remind Tata of its previous behaviour and not see it happen again.
British steel is not a basket case, a failed industry or a sunset industry; it is a very successful industry. We had evidence of that recently, when Liberty Steel bought Dalzell and Clydebridge—integral parts of any programme for Trident renewal. Teesside Beam Mill, Skinningrove, Scunthorpe, York, Blaydon and, indeed, Hayange in France, which is part of the long products division sold off to Greybull, are another success story of assets that investors want to buy into. They also demonstrate the European aspect of the previous Corus-British Steel envelope, and we still have sites in IJmuiden and Hayange.
British steel has always relied for its totemic name on its quality and its research and development. Places such as the Materials Processing Institute in Teesside at the old labs at Grangetown, as well as the research and development capacity in Rotherham and Sheffield, when linked with blast furnaces and electric arc furnaces, gives us the ability to control the destiny of metallurgy in our nation. That means we can innovate and create new products. That must be remembered.
I am interested in the notion of co-investment, whether that is in cash terms, or whether it is about an equity stake, a loan, R and D or, more importantly, Government policy. If we are to have a real discussion in this place, we have to look at the different options for co-investment. That is not about the individual commercial parties that may be interested in purchasing, but about putting ideas on the table so that we can actually plan an industrial strategy, because we have not done that in the last five years.
Let us take the issue of Chinese dumping. This is a new phenomenon; it has been going on for four and a half years. Before that, it was not happening. The circumstances have changed, and that is why the Government have to change the way they behave on the lesser duty rule and other legislation. There are no precedents, and that is why we cannot stick to rigid dogma, or even analytical argument around World Trade Organisation rules. On co-investment, I have to question whether we are properly looking at issues such as shale gas, and whether parties are being honest about the policy on that, because we are talking about gas-intensive industries.
On carbon capture and storage, the Government have to come clean. They have pulled the rug from under energy-intensive industries on carbon capture and storage. How will they maintain energy-intensive industries—whether it is chemical processing, shale, steel, light manufacturing, glass, cement or bricks—without a proper strategy on carbon? Taxes can be implemented under the EU emissions trading scheme or unilaterally, by bringing in the carbon price floor. They did that in the Budget some years ago, and they promised to give compensation. However, they did not calculate that if they wanted to compensate people for their own unilateral British tax, they could do so only via the European Union. They had not done the requisite work; they looked at the margins that a Treasury civil servant brought forward and just applied a rule, and they are now reaping the consequences of that.
Ultimately, Port Talbot, the strip and every single other site need time. In 2010, Redcar was saved over two years; SSI had six weeks and fell. We have to give British Tata sites time so that they can be saved. We need proper definitions of co-investment for the community to discuss.
The hon. Gentleman is talking a lot of sense. On the issue of time and co-investment, the Government could provide a bridging loan that extends beyond the period for which Tata is prepared to subsidise the steelworks, until a future buyer is found. Is that the sort of co-investment that the hon. Gentleman has in mind?
I thank the hon. Gentleman for his intervention and for giving me some more time. I really appreciate his comment.
Continued production is another pillar. If we are to save these sites, production has to be continuous or skills will be lost. In Redcar in 2010, the then regional development agency, One North East, along with Government agencies in Whitehall, provided a £60 million package. That came from RDA and central Government budgets. It retained people in the area on training courses while we—I was a union officer at the time—negotiated with other parties, such as Marcegaglia, Dongkuk and SSI, to get that site bought. It is vital to look at continuous production, time and other elements of co-investment, not just the cash element.
I am grateful for the opportunity to speak in this extremely important debate. I thank the Secretary of State and his team for keeping the House informed—in particular for keeping in continuous contact with me and other Members. I thank the Government for the extremely constructive and close way in which they have worked thus far with the unions and other parties.
I congratulate the Community union, whose evidence to the Welsh Affairs Committee was very impressive indeed. Representatives were here yesterday. I am pleased that the Government have kept in contact and ensured that everybody has been kept informed at every stage, because this is about livelihoods. As someone who grew up and was schooled with many who went on to the local steel industry, I recognise how important the industry, the supply chain, the steel stockholders and the maintenance companies that look after the Port Talbot steelworks are to families in my constituency of Gower.
The Government’s interesting announcement yesterday about co-investing with a buyer highlights their commitment to the people who work at Port Talbot. That will help to ensure the survival of the steelworks, but it also demonstrates the need to work on a vast number of issues, many of which have been mentioned today and during the past week, to ensure a viable long-term future for the industry.
It is crucial that parties work with each other in this Chamber and go beyond party politics to ensure the survival of steelmaking at Port Talbot. I want briefly to discuss one of the areas that we need to consider as part of our long-term strategy: the use of British steel in infrastructure projects. I know that there are rules and guidelines, but we must think strategically about our use of steel.
The Government’s increased investment in infrastructure means that British steel has had more opportunities to be used, as a result of which our workers, their families and our communities have been supported. For example, 98% of the steel that National Rail has used has been British, while 95% of that used by Crossrail has been. Indeed, HS2 and Crossrail 2 will provide further huge opportunities for our steel industry. As we have heard, something like 94% of the steel used in manufacturing aircraft procured by the Government has been British and, of course, the Great Western Railway electrification to Swansea will provide a further opportunity to use steel.
We need to ensure that our infrastructure strategy and investment tie in very closely with the use of British steel. I was extremely pleased when the Government and my right hon. Friend the Chancellor of the Exchequer set up the National Infrastructure Commission, headed by Lord Adonis, to give this country the infrastructure to support future economic growth. Will the commission examine how projects could make use of British materials such as steel and support vital industries? Infrastructure projects support local families, local businesses and local communities.
From the coffee shop to the hairdresser and the baker, businesses across south Wales, particularly in the Swansea bay region, are deeply concerned about their future. We need to look at a wide-ranging and long-term strategy to make the industry viable for south Wales. A joint strategy that supports economic growth in the region could consider projects such as the Swansea bay tidal lagoon, which is the type of infrastructure project that would not only add jobs, but continue to support those workers and families just over the bay in Port Talbot.
We must work together. Political grandstanding will not save jobs, provide a long-term viable future for steel production in Port Talbot or support businesses in the supply chain across south Wales. The history of steel in our communities runs deeper than political point-scoring, which causes confusion. Only last week, I spoke to a lady constituent who is a Tata employee, as is her husband, and both of them were appalled and disappointed by the political rhetoric from certain quarters.
We have a shared history and experience of steel in south Wales. Our communities, our social fabric and our lives have all been built or touched by the steel industry. Only by working as one can we provide the future we all want for steel in Port Talbot. Politicians who grandstand in an attempt to ingratiate themselves with steelworkers will not help. We need action, and that is what the Government are clearly providing, constructively and conscientiously. I applaud their actions to date and look forward to a positive outcome for the people of Port Talbot and the many employees who reside in my constituency of Gower.
Tata’s announcement that it would no longer support its operation at Port Talbot came as no surprise to Labour Members. We had been warning the Government for months that that was coming down the line, but they chose to do nothing. The Secretary of State was on the other side of the world when the announcement came, and he now clings to the claim that he somehow saved the plant while he was in Australia. As workers at Redcar found out, this Government do too little, too late, and, as my hon. Friend the Member for Wallasey (Ms Eagle) has said, they offer warm words but no action.
This crisis now affects the whole of the UK steel industry, not only Port Talbot. The media have a habit of describing the whole UK steel industry as loss-making, but that is far from the truth for a lot of those plants that add value. Shotton steelworks galvanises and colour-coats steel. It is a profitable business that employs 800 people—quality jobs that are vital to the economy of Deeside. Profitable it may be, but that does not ensure its long-term survival. Shotton relies on steel from the Port Talbot operation. If Port Talbot closes sooner rather than later, it would not be long before Shotton would have to cease its operation due to lack of supply.
The idea that someone can just pick up the phone and buy in from China or anywhere else lots of cheap steel of the quality and quantity needed for a plant such as Shotton is far from reality. To ensure the future of Shotton—I made this point to the Secretary of State yesterday—we need a lot of time. That is a common theme of what colleagues on both sides of the House are saying.
Time is needed not only to find a buyer for the whole of the UK business that will invest and commit to the future, but to allow the downstream businesses to find an alternative steel supplier should the worst happen. I do not want to see that, but the Government have to plan for all scenarios. As many other colleagues have said, we have to reassure the customer base as well. If we do not do that, there will be no businesses to sell to, because the customers will start to leave and walk away. They need assurances.
Shotton, probably more than anywhere else, knows about the impact of job losses in industry. In 1980, despite the gallant efforts of my predecessor, now Lord Jones, and the trade unions, Shotton saw its steelmaking cease and more than 6,500 people lose their jobs. At the time, it was the largest number of job losses at a single plant on a single day anywhere in the history of western Europe. Although the area has recovered and new employers have moved in and grown, the scars of the events of 1980 remain.
On Deeside, nearly everybody has a family member or a friend who worked in the industry. Some people never worked again. The lesson is that such large-scale job losses affect not only the individuals who once worked the industry, but their families and the whole area. Such job losses destroy whole communities, which take many years to recover. The Government have an opportunity to save the industry and assure its long-term future, but they need to act—and they need to act now.
We have two important debates this afternoon: this one on steel, and the debate later on the contaminated blood scandal. As a steel group member, I am incredibly pleased that my hon. Friend the Member for Wallasey (Ms Eagle) has been able to secure the debate. I gently reassure anyone who has come to lobby on the contaminated blood scandal that hon. Members will be here to speak for them in that debate later. It will be a very long day for those who have travelled from far and wide to get here. Both of the debates remind me of “Groundhog Day”, because we have to come back time and again to rehearse the same arguments and press for action.
Understandably, much of the focus has been on Port Talbot, and I praise my hon. Friend the Member for Aberavon (Stephen Kinnock) for his efforts with the steel unions. As has been said, however, this is a UK steel crisis. Steelmaking may have ceased in 2001 in Llanwern, but slab has been imported by rail from our sister plant in Port Talbot ever since. Our steelworkers are proud to roll UK steel, and they want to continue to do so. They are looking to the Government to ensure that happens.
At Llanwern, we have taken a cumulative hit over the last few years. Hundreds of jobs have been lost, to the point where we have 700 left. It has been painful. Many of the Llanwern steel workers have transferred to Port Talbot, and they now face uncertainty there. As my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) has said eloquently, steel could have a great future. At Llanwern, we have the Zodiac line, which is Tata Steel’s world-class coil galvanising line. The Zodiac line is doing well. Orb Electrical Steels, which produces a type of high-tech electrical steel, is in profit following a period of restructuring a few years ago. As is often said in debates such as this, steel is cyclical, and Orb demonstrates that. The order books are healthy.
We have had much in the way of warm words, with phrases such as “do all we can to help”—that has been said again today—but what do they mean in practical terms? The asks from the unions have been well rehearsed today, and I would like to add to them. The unions want fast action to protect the order books to ensure the businesses are saleable. It is crucial to the future of Llanwern and Orb that they are not undermined by seepage of business elsewhere before any sale or transferring of work. The unions want time for the sale, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) has said. It is important to know the timescale. Long Products took nine months, and Tata appears to be saying four months. As the shadow Business Secretary has said, we need time for an appropriate consideration of offers. What is the news on the Secretary of State working with Tata to ensure that it is a responsible seller?
I have many steelworkers in my constituency but also a large number of steel pensioners. Can the Government give those pensioners and future steel pensioners some reassurance about their pension fund, and can the Secretary of State outline the actions that the Government are taking?
The asks from the steel industry in recent times have been for action on Chinese dumping, on which the Government have failed. They have also failed to act on the lesser duty rule. It is ironic that while our Government have been slow to act on tariffs to protect our industry, the Chinese Government have just imposed 46% tariffs on electrical steel. Although Orb no longer exports to China, companies in other countries do. They will be looking for alternative customers in other countries, and that could mean issues down the line for our electrical steel industry sales.
We have asked for action on energy prices. That took two years to deliver, and is only just coming through now. That is too slow. We need real action on procurement, not simply the souped-up advice note that came out last week. Will the Minister tell us today what specific projects he has in mind? The Welsh Government have done all they can to help with the levers that they have had at their disposal. That has included setting up the steel taskforce to work on practical ways to help. I know from my union reps who came here yesterday how much that relationship is valued.
References were made yesterday to grandstanding, and they have been repeated today. I assure hon. Members on both sides of the House that steel group members have raised issues to do with steel time and time again in the Chamber. It is not grandstanding; it is personal. It is personal because our constituents are loyal, resourceful, highly skilled and incredibly hard-working. We understand what they are going through in tough times. These are valued jobs.
The issue is also personal because I look around the Chamber and see my hon. Friend the Member for Cardiff West (Kevin Brennan), who worked at Llanwern, as did his dad; I see my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), whose dad also worked there. I see my neighbour, my hon. Friend the Member for Newport West (Paul Flynn), who worked as an industrial chemist in Llanwern. My parents met in the steel industry at Ebbw Vale. There are many others. We cannot let our steelworkers down, and I make no apology for speaking up for them.
I thank all those who managed to get your permission to hold this debate, Mr Speaker.
I was a member of the Scottish steel taskforce, along with my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier). The Scottish steel taskforce was a partnership of Tata Steel, local authorities, trade unions, political parties, the UK Government and Scottish Government agencies such as Scottish Enterprise, Skills Development Scotland and Partnership Action for Continuing Employment. The taskforce was put together by the Scottish Government to help to find a buyer for the threatened Scottish plants in Dalzell and Clydebridge. The taskforce did a great job, as some Members and the Minister may well know.
The handover took place on Friday, based on a back-to-back agreement whereby the Scottish Government bought the plants from Tata and sold them on to Liberty House. It was a wonderful day. We were surrounded by all the members of the taskforce, the steelworkers and their families and friends. It was an emotional day. Steel is an iconic industry in my constituency, and it is responsible for some of the specialised steel that is used in the defence industry and in the oil and gas industry. It could not be allowed to go under, and the Scottish Government did not allow that to happen. They took a very proactive approach to the threat. They put forward legislation that introduced a one-year relief on business rates for a prospective buyer. The assessor agreed to look at the state of the steel industry when revaluation takes place next year.
The Scottish Environment Protection Agency worked closely with the taskforce to make sure that any prospective buyer or anyone who was interested got the best possible advice as efficiently and quickly as possible. The Scottish Government have produced a new responsible procurement policy, which echoes and, in some instances, betters that which has been produced by the UK Government. [Interruption.] The Minister chunters; I am sorry, but I have lost my place.
The Scottish Government are working to reduce overall energy consumption and energy cost. The Scottish Government were very pleased that the EU cleared the energy intensive package in December last year, after the UK Government were prodded into action by the UK steel summit. Skills Development Scotland developed an upskilling programme to help to retain key staff and to help them to move back into employment once a buyer was found. Those were the very people who were there on Friday. Sanjeev Gupta of Liberty Steel said that the transfer of ownership could not have happened without the efforts of the Scottish Government. He has also indicated that 150 jobs will be created to get the plants back up and running again, which gets us almost back to where we were.
The UK Government cannot rely on helping workers after the event. It is the Government’s duty to be proactive, and to be seen to be so, in securing buyers for effective plants, following the Scottish Government model. Scottish Government phoned prospective buyers, kept in touch with the customer base and, at the same time, maintained business confidentiality. They can do it, so the UK Government should be able to do it. The Scottish Government also launched a manufacturing strategy only this February, which proposes to boost the Scottish economy by investment and education in order for Scotland’s businesses to compete globally. What are the UK Government doing in that regard?
Finally, may I give the Secretary of State a piece of advice? He should speak to the Scottish Government to see how saving plants can be done using actions, not words. As the First Minister has said:
“The steps we have taken in Lanarkshire should give hope to those in other parts of the UK that with the right support and a strong Government there can be a future for steel.”
There have always been the strongest of links between the constituency of Torfaen and the steelworks at Newport. I speak today for not only the steelworkers in Torfaen, but the many more steel pensioners, including my father, whose time at Llanwern was referred to by my hon. Friend the Member for Newport East (Jessica Morden).
I echo what my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) said: the steel industry can and should have a great future. There are so many great things about our steel industry. It is an industry that has always involved working together—between workers, management, unions and owners. It is an industry that has some of the most skilled and committed workers to be found in any industry anywhere in the world. It is also an industry that I believe is vital to our national security: we cannot have a country that is secure unless a native steel industry is available to us.
We should not forget that, over many years of change, the steelworkers have been a constant. The industry has gone through change—it was nationalised after world war two; most of it was reprivatised in the early 1950s; it was renationlised by the Wilson Government in the 1960s; it was privatised again under the Thatcher Government—but the steelworkers have always shown their central commitment and demonstrated their skills during that time. It is unthinkable that there should be no steelmaking at Port Talbot, just as it is unthinkable that we should not look at this as a UK-wide problem.
It seems to me that the Government have to look strategically at two things. They must look at what they are doing practically to support the sale process at Port Talbot, and at what they can do to support both the aspects we are now coming to: the expressions of interest and the due diligence period that will follow. There are far wider questions, however, in relation to how the Government will be judged on their actions and what they actually do to help the steel industry.
The lesser duty rule has been mentioned a number of times in this debate. Let us be clear: as long as it is in place, the duty imposed will always be lower than the margin of the dumping. The European Commission wants to scrap the lesser duty rule. The World Trade Organisation rules do not even oblige the European Commission to apply the lesser duty rule. It is for the UK Government to make the case within the European Union for it to be scrapped, but of course the fact is that they are not doing that. The European Steel Association spokesman said:
“The fact is that the UK has been blocking this. They are not the only member state, but they are certainly the ringleader in blocking the lifting of the lesser duty rule. The ability to lift this was part of a proposal that the European commission launched in 2013”.
What has the Secretary of State done on this since then? The answer is absolutely nothing. There is also the issue of market economy status for China. I thought that Mario Longhi, the chief executive of the biggest steelmaker in America, put it best when he said, about even thinking of granting market economy status for China,
“where you have all the evidence in place that denies them that right it’s just ridiculous”.
The Secretary of State should bear that in mind.
The Secretary of State does have a choice, particularly when it comes to the lesser duty rule and market economy status for China. Where do his loyalties lie: do they lie with Beijing, or with the steelworkers of this country? Would it not be the most supreme irony if a Secretary of State who is supposedly ideologically wedded to free markets ends up granting market economy status to a country where 80% of the steel industry is owned by the state? Is that seriously what the Secretary of State is going to do? It is time he put aside his obsession with Beijing and acted for our steelworkers.
I am grateful to my hon. Friend the Member for Wallasey (Ms Eagle) for securing this hugely important debate.
We on Teesside are still reeling from the Government standing by and allowing steelmaking to die at the SSI plant at Redcar. People have very long memories, and it is a shame that it has taken another six months to discover the concept of co-investment, because that has come a little bit late. However, I very much welcome the securing of the long products division, and I congratulate the unions on their initiative in progressing the discussions to such a successful conclusion.
This is the most bizarre of circumstances: we are fearing the collapse of steel production in the UK, but we have the most superb industry, with a brilliantly skilled workforce and an excellent industrial relations history. It is therefore essential that we send out the message that we have a steel industry that is very much worth fighting for. We need to instil confidence in steel customers and suppliers alike that our steel operations are very much open for business. Steel has a bright future if we can get through these next few months.
On development, I am grateful to the mightily impressive Chris McDonald of the Materials Processing Institute for pointing this out:
“Two-thirds of the steels in use today were not even invented 15 years ago, and steel remains a vital ‘economic enabler’ for UK economic growth without which our successful high-value manufacturing sector simply could not exist.”
The automotive, aerospace, defence, nuclear and rail sectors all need the development of new steels in the pursuit of ever improving productivity, and our leading companies undoubtedly benefit from research partnerships with domestic steel producers. He went on:
“If the steel industry were to disappear altogether from the UK, reliance on overseas producers would not only mean the loss of thousands of jobs, but also slow the pace of development and risk the offshoring of the whole manufacturing supply chain”.
We should therefore grasp the opportunities presented by Tata Steel’s sale offering of its assets in the UK.
The debate is about more than just Port Talbot, but that is vital. There is an overwhelmingly strong case for the continuation of steelmaking at Port Talbot, with its advanced steelmaking equipment, its experienced workforce and its capability of making world-leading, high-quality steel for the most demanding applications. Labour Members are in no doubt that the plant can not only compete, but have a highly profitable future. In addition, there is a huge opportunity for new mini-mill operations based around electric arc furnaces, utilising 100% recycled raw materials and offering a step change improvement in carbon emissions.
I plead with Ministers to include all aspects of the future of UK steel in their thinking: the exploitation of, and commitment to, innovation and research and development will undoubtedly pay rich dividends. There is a research and development proposal on the table from the MPI, TWI Ltd and the Institute of Materials, Minerals and Mining. The proposal will leverage recent and secured future investments, which have been used to upgrade materials, research and support facilities in Rotherham, Port Talbot and Cambridge, as well as on the two sites in Tees valley. I urge Ministers to look closely at that proposal. The automotive industry has been turned round to become an enormous success, and we can do the same with the steel industry.
The timescale is crucial, but it is ridiculously tight. The kindest thing to say is that the seller is incredibly ambitious to think that such a process can be undertaken in such a short space of time. Crucially, in the final analysis, the state will indeed step in. Call it temporary nationalisation, public sector stewardship or whatever we like, but let the customers, suppliers and workers know that the UK steel industry will endure, and it will not only endure but thrive.
In the middle of 2014, Tata announced that it would dispose of its long products business. It has taken until this week for the conclusion of a process that involved first interest from one buyer, its pulling out and then the work that everyone—trade unions, the management team, Tata itself, Greybull Capital and suppliers, who have also had to contribute to the process—has done locally. The way forward is tough and the process is not yet complete. I welcome the Secretary of State’s statement yesterday that he would do everything possible to ensure that those matters that still need to be resolved are resolved satisfactorily, so that the sale goes ahead and there can be a future—I believe that, although different from the past, that future will be a positive one. That will be positive for all the communities throughout the long products sector, including those in Scunthorpe—the site of the largest steelworks in England, which I am proud to represent.
When the Secretary of State was first appointed I wrote to him to ask for a meeting, because I knew that the steel industry was facing a crisis. Unfortunately there were other pressures on his diary at that time. Back in September I asked the Prime Minister for a steel summit. Eyebrows were raised by Government Members then, but to the credit of the Minister and the Secretary of State, we got a steel summit in Rotherham, which helped to focus on this issue.
Let us look at the issues that we have been arguing about—I have been arguing about them for four or five years now. The Government have moved on energy costs, but that movement has been slow and laborious. They brought in a unilateral carbon floor tax, then found themselves in a mess. It has been more than three years now and the money for mitigation is only just getting into the coffers of steelworkers. Frankly, that does not give the message of confidence needed to take the industry forward. However, I welcome the Secretary of State’s comments today that he is looking at doing that by exemption rather than through the current methods. We are seeing movement, which should be welcomed.
It is deeply disappointing that the Chancellor was unable to bring us good news about business rates. Listening to what Ministers have said in many speeches, I believe that they have been fighting their corner on that. It is deeply disappointing that the Government at the highest level were unable to move on that, as it would have made a real difference. Ijmuiden, a larger plant in the Netherlands, pays less in business rates than the Scunthorpe plant. That is not right. The playing fields need levelling.
I very much welcome the Government’s movements on procurement and the production of better guidelines but, as I have said all along, the proof of the pudding is in the eating, when the guidelines are tested. I point again to DONG Energy’s development of the Hornsea project on the North sea. That is happening because of a very generous contract for difference that the UK Government have given to that private sector company. Public money is invested in that project, and the energy coming from the development will be paid for by UK taxpayers and UK energy bill payers. It will be outrageous if UK steel is not in those monopiles, blades and turbines going up in the North sea. I urge the Secretary of State to work tirelessly with his Cabinet colleagues to ensure that private companies delivering public projects also deliver on procurement for our steel industry.
Finally, much has been said about Chinese dumping. The Secretary of State’s mood music has changed on that issue, which I welcome, but the change has been very slow. We have seen action, which should be approved. We have heard from the whole steel community—from Eurofer, for example, which represents steel communities and employers across Europe—about how important it is to tackle the lesser duty rule. That would give a signal about confidence, which is what the industry needs more than anything else—and confidence not just that we are getting warm words, but that those warm words are supported by actions. Such actions should be prompt, not laggardly. Save our steel.