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Steel Industry

Volume 611: debated on Wednesday 25 May 2016

With your permission, Mr Speaker, may I pay tribute to my predecessor, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), who is now the Secretary of State for Work and Pensions, for the work he did when he was Secretary of State for Wales in all matters supporting Wales, but particularly in relation to the steel industry?

We are doing everything we can to support the sale of Tata Steel UK, including offering support to potential buyers worth hundreds of millions of pounds. Our discussions with buyers, the Welsh Government and the unions continue, and we stand ready to negotiate with the preferred bidder to ensure the future of steelmaking in Wales and across the UK.

As we know, a critical meeting is taking place in Mumbai later today, and the future of the industry is hanging in the balance. What measures have the Secretary of State and his colleagues in the Cabinet taken to ensure that a viable and sustainable pension scheme is developed as a result of the sale of the business? Can he assure the House that it will be sustainable for the 130,000 members of the scheme?

I have spoken to the Secretary of State for Business since his meetings with Tata in Mumbai. Pensions are rightly one of the issues under consideration, and the hon. Gentleman will be aware that my right hon. Friend highlighted them at the outset, when he said that pensions, plant and power were three of the issues that needed to be addressed. Pensions are an extremely complex issue and cross a number of Departments, but we are determined to find a way through in the interests of the members, the trustees and the company.

8. The sale of the steelworks is at a critical stage. It is crucial to the survival of the plant that both Governments act with purpose to support a successful buyer. Has my right hon. Friend agreed a way forward with the First Minister and the Welsh Government in Cardiff Bay to ensure that that is the case? (905020)

I pay tribute to my hon. Friend for the work he is doing in his constituency, where a number of steelworkers reside, and for the responsible way in which he has pressed issues that are fundamental to a successful steel sale. I met the First Minister earlier this week, and we absolutely agreed that this issue is our priority. We are determined to continue in close dialogue and to work closely together to secure the sale.

We on the Opposition Benches are solidly with the steelworkers who will be marching through Westminster today. The European Parliament has voted against giving China market economy status. Will the Secretary of State press his colleagues in the Cabinet to agree to higher tariffs on Chinese steel?

I look forward, like the hon. Gentleman, to meeting the unions that are marching through Westminster later today. Of course, we are determined to work with the unions and with Tata. However, market economy status for China is separate from the capacity of the European Commission to introduce tariffs. Where tariffs have been introduced, they absolutely work. There are 37 trade defence measures in place at the moment. On wire rod, for example, imports are down by 99%, and I could highlight a range of other speciality steels. So let us not confuse market economy status and the capacity to introduce trade defence measures.

Steel was a significant element in Wales’s £5 billion-worth of exports to the EU in 2015—that is in fact a third of the whole Welsh Government budget. Will the Secretary of State now make the positive case for the advantages to Wales’s businesses, jobs and profitability of remaining in the European single market and the European Union?

The hon. Gentleman is absolutely right: 69% of steel produced in the UK is exported to the European Union. Access to that single European market is fundamental to the steel industry, but it is also fundamental to attracting a buyer. That was the very point I was seeking to highlight to business leaders in Swansea last week.

The steel produced at Port Talbot is transported to Corby and used to produce steel tubes. What steps are Ministers taking to make the case that it is vital to keep that supply chain together as one?

I also pay tribute to my hon. Friend for the way in which he represents the interests of his constituents. He recognises the interdependency of all these plants—the site in Corby, the site in Port Talbot and other sites across the UK. We talk to suppliers regularly because we need to maintain confidence that they will be able to continue to buy steel. We are determined to find a buyer that is in the interests of workers and the economy.

Is the right hon. Gentleman inspired by the minor miracle that has taken place in Newport, where Mr Sanjeev Gupta and his enterprising workforce have brought the dead Alphasteel company back to productive life? Is not this spirit of entrepreneurship, co-operation among the workforce, hope and confidence the way to stage a renaissance of the entire British steel industry?

The hon. Gentleman is right that the interest of Sanjeev Gupta in Liberty Steel demonstrates the dynamism in the industry and the great opportunity that is out there. Liberty Steel has reopened a plant that closed some time ago, and it sees that there is a future in British steelmaking. I hope that we will continue to use that momentum to secure steel for the whole of the Tata operations across the UK.

Given the Secretary of State’s previous answer on the effectiveness of tariffs, why do the UK Government keep being at the head of a blocking minority for reform of the lesser duty rule? Is it not the case that they simply have not done enough to save the British steel industry?

The hon. Gentleman is confused about the impact of the lesser duty rule, which relates to the framework. There are currently 37 trade defence measures in place. Where the European Commission has acted within the lesser duty rule, it has had a significant effect, be it in rebar, wire rod, seamless pipes or cold-rolled flat products. I could highlight a whole range of speciality steels where the tariffs are working within the lesser duty rule, because otherwise there would be an impact on other manufacturers and other costs. We need to work within the rule because it currently operates effectively.