British Steel — House of Commons, 2019-05-22
Topic: Macroeconomics
Rebecca Long-Bailey (Labour, Centre-left): I thank the Secretary of State for advance sight of his statement This is indeed very worrying news for the workers, their families and the communities who rely on British Steel directly in Scunthorpe, Skinningrove and Teesside and all the way through the supply chain. At least 25,000 people will be worried sick this morning, wondering whether they will have a job this time next week As the Secretary of State knows, however, the sector is critical to our manufacturing base and is strategically important for Government procurement from rail all the way through to defence. It is therefore imperative, given that the Government now have some control via the official receiver, that this business is stabilised and confidence is given to customers, workers and businesses right across the supply chain. The message from the Government today must be that British Steel is one of the linchpins of our industrial strategy and to that end they will move heaven and earth to ensure business as usual continues It is reported that the owner, Greybull Capital, was asking the Government for a loan of £30 million. The shadow Minister for steel, my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), asked for more information yesterday, but we were given none. Can the Secretary of State confirm today what the asks of British Steel were in the negotiations? Were they just the reported £30 million or was that part of a wider package of measures to support steel production I welcome the publication of the accounting officer’s assessment, but can the Secretary of State confirm Greybull Capital’s reasoning in asking for a loan, while reportedly being unwilling to put money on the table and simultaneously investing over £40 million in a French steelworks last week The Secretary of State has said in his press statement today that he will "pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside", and I welcome that. I also welcome the indemnity he has referred to, but can he outline exactly what other possible steps he will be pursuing in the coming days? Do they include bringing British Steel into public ownership as Unite the union and the Labour party have called for? Do they include discussions with other interested stakeholders to examine options for saving the company, including with Network Rail, which procures 95% of its rails from the Scunthorpe site? It is clear that we simply cannot countenance warm words and no real action as was the case with the SSI steelworks almost four years ago The truth of the matter is that the cost of British Steel collapsing is far greater than any short-term outlay the Government must make now. The Institute for Public Policy Research has estimated that British Steel’s collapse could lead to £2.8 billion in lost wages, £1.1 billion in lost revenue and extra benefit payments and that it could reduce household spending by £1.2 billion over 10 years. This is a significant economic disturbance, if the Secretary of State would like to dust off his state aid handbook We know Network Rail sources 95% of its rails from Scunthorpe. Last year, Network Rail signed a £200 million contract with the company. The loss of this supply could have serious consequences for Network Rail’s cost base and the quality of the steel used to maintain and upgrade the British rail network. Notwithstanding the great commitment by Network Rail to British Steel, however, we also know the Government’s wider public procurement of UK steel has been disappointing, with only 43% of steel used in Government projects traced to firms based in the UK, according to UK Steel analysis. So will the Secretary of State confirm today what steps he is taking to positively procure British steel for more of our key infrastructure projects Finally, there is no doubt that the UK steel industry is in a difficult place. Uncertainty about future trade with the EU and the dangling prospect of no deal are having a severe impact. Domestic issues like uncompetitive electricity prices, business rates and lack of support for steel in the so-called industrial strategy are also undermining the sector’s ability to compete, but UK steel has a proud history in the UK and there is no reason why this cannot continue. The ball is in the Government’s court: they can take action now to save British Steel and support the wider industry, or they can accept that their legacy will, yet again, be industrial decline. We in the Opposition know which side of history we want to be on, and I hope the Secretary of State wants the same thing.