Steel Sector — House of Lords, 2016-01-18
Topic: Mixed Topics
Lucy Neville-Rolfe (Conservative, Centre-right): My Lords, with the leave of the House I shall now repeat a Statement made in the other place by my right honourable friend the Minister of State for Small Business, Industry and Enterprise. The Statement is as follows "It is with regret that I find myself having to update the House on further job losses in the steel sector. This morning, Tata Steel announced plans to make over 1,000 redundancies across its UK strip business as part of its continuing restructuring plans. The proposals involve 750 job losses at Port Talbot and Llanwern. There will be 200 redundancies in support functions, and Tata has also announced 100 redundancies at steel mills in Trostre, Corby and Hartlepool. This will be a difficult time for all workers and their families. Our immediate focus will be on helping any workers who lose their jobs back into employment as quickly as possible. We will also continue to support the steel industry Given the UK’s devolution settlement, much of the support that can be offered both to workers and to Tata in south Wales will come from the Welsh Government. But the UK Government want to ensure that Port Talbot has a commercial and sustainable future, and it is encouraging that the Welsh Government are to launch a task force this week to support those affected by today’s announcement I have previously offered our support to the task force chair, Edwina Hart, and will continue to work with the Welsh Government going forward. I therefore welcome the commitment that the First Minister made today to working closely with the UK Government. I can also assure Members that I am working closely with the Secretary of State for Wales, who I know has been in the area today and hence is not here in the House It is important to remember that the fundamental problem facing our steel industry is the fall in world prices, caused by the overproduction and underconsumption of steel. No Government can change the price of steel. But we can and are achieving a level playing field for British producers. I can inform the House that the Government have been working closely with Tata to do all we can to ensure a sustainable future for Tata Steel in the UK, both at Port Talbot and Scunthorpe. The Government have offered their assistance to Tata as it seeks to find a buyer for its long products division. It is encouraging that Tata has announced Greybull Capital as its preferred bidder and we remain in close contact with Tata as its commercial negotiations continue. The Government stand ready to play our part to help secure Scunthorpe’s long-term future Returning to today’s announcement, the same offer is there for Port Talbot. Tata is currently working with consultants to develop a plan to address the near-term competitiveness of its business at Port Talbot. We and the Welsh Government are in regular dialogue with Tata. This dialogue includes my right honourable friend the Secretary of State for BIS, as well as my officials and me. While the future of Port Talbot must be commercially led, we will help where we can within the parameters of state aid rules Last October, the Government held a steel summit at which the UK steel sector set out its five asks of Government. I can report that we have made quick and substantial progress against these asks to ensure a level playing field for our steel industry. The industry asked for lower energy costs. In December, we secured state aid approval to pay further compensation to energy-intensive industries, including steel, to include renewable policy costs. We have already paid nearly £60 million to the steel industry to help mitigate the costs of its existing renewable policies. The latest state aid approval will now enable us to extend the scope of compensation, saving steel makers hundreds of millions of pounds. But we will go even further and exempt energy-intensive industries from most of these costs The sector asked for flexibility over EU emissions regulations, and that is exactly what we have secured. Derogations for Port Talbot have already been agreed by Natural Resources Wales. The Environment Agency has accepted Tata Steel’s proposals for derogations for improving emissions from Scunthorpe, subject to a current public consultation. Once approved, this will give Tata a further six years to improve emissions levels from the coke ovens, and both Tata Steel’s major power plants have been included in the UK transitional national plan which the UK has submitted to the European Union. This gives the company until June 2020, a further four years, to meet emissions requirements. These actions will save the industry millions of pounds We have also published and further updated procurement guidance for government departments to allow aspects such as social impacts, job impacts and staff safety to be taken into account when procuring steel for major projects. We are the first country in the EU to take advantage of and implement these new flexibilities. In short, there is no excuse not to and every reason to buy British steel I have heard it said that the Government have blocked the reform of trade defence investigations; we have not. I can assure you that the Government have been acting decisively to safeguard the UK’s steel interests in Europe. In July and again in November last year we voted in favour of anti-dumping measures on certain steel imports. It was the UK that lobbied successfully in support of industry calls for an investigation into imports of reinforcing steel bar. The European Commission has taken this forward swiftly, including an extraordinary meeting of the EU’s Competitiveness Council, and has agreed faster action. I will be returning to a follow-up stakeholder conference next month where I will push for further progress. The review on business rates in England will conclude this year. Of course, the Welsh Government have responsibility for business rates in Wales and therefore in Port Talbot UK steel has today added to its original five asks with two further requests concerning China securing market economy status and funding assistance for environmental improvements, research and development. We will explore both of these with the sector while continuing to drive forward the original five As we have seen today, the steel industry remains subject to unprecedented global pressures. While the immediate causes of these are beyond the Government’s control, I can assure the House that we continue to do all we can to help the industry and will stand by all those workers who face redundancy in south Wales and other parts of the United Kingdom" My Lords, that concludes the Statement.