Steel Industry — House of Commons, 2015-10-20
Topic: Labor
Sajid Javid (Conservative, Centre-right): The steel industry across Europe and around the world is facing challenges on a scale unprecedented in recent history, and today we have had further devastating news of redundancies, this time at Tata. So let me begin by saying something to the people of Scunthorpe and Redcar and anyone else living in a community where the local economy is built on steel. I know that the current situation is unbearably difficult and that you are deeply worried about your future and the future of your families, but I assure you that the Government are doing and will continue to do everything within their power to support you in the weeks, months and years ahead. For decades, the United Kingdom has prospered on the back of your industry. We will not abandon you now, in your time of greatest need There is no straightforward solution to any of the complex issues involved, but the Government have no intention of simply standing by. We have already announced a package worth up to £80 million to support people who have lost their jobs as a result of SSI’s liquidation and to mitigate the impacts on the local economy; we have asked Amanda Skelton, chief executive of Redcar and Cleveland Council, to chair a local taskforce; we have ensured that money reaches workers’ pockets quickly via the redundancy payments service; we have brought workers and opportunities together at a jobs fair at which more than 1,000 vacancies were showcased by more than 50 local employers; we have provided additional flexibilities to local further education colleges to allow people to take up training to enhance their job prospects; and we have set aside money to fund those proposals from the taskforce that will make an immediate and lasting impact on the local economy We will do what we can to soften the blow of any further redundancies among steelworkers—including, of course, those in Scunthorpe. Jobcentre Plus and rapid response support will naturally be available, and we are setting up a taskforce that Liz Redfern of North Lincolnshire council has agreed to chair. I will carefully consider what the taskforce proposes by way of additional support that may be necessary Alongside our immediate help for individuals who are laid off, we are taking steps to ensure a future for Britain’s steel industry in an exceptionally difficult market. Excess capacity in global steel is enormous—more than 570 million tonnes last year, almost 50 times the UK’s annual production. The price of steel slab has halved in the past year alone. In the three years since SSI restarted production at Redcar, the plant has lost more than £600 million There are limits to what the Government can do in response. No Government can change the price of steel in the global market; no Government can dictate foreign exchange rates; and no Government can simply disregard international regulations on free trade and state aid—regulations that are regularly used to protect British workers and British industry To identify where progress can be made, I hosted on Friday a top-level summit with key players from the UK steel industry. Bringing together industry leaders, trade unions, Members of Parliament and senior figures from government, the summit created a framework for action that will help us to support steelworkers now and in the future First, we will drive up the number of public procurement contracts won by UK steel manufacturers and their partners through fair and open competition. This Government are committed to a major programme of infrastructure spending. I am determined that the UK steel industry should play a central role in its delivery. The new public contracts regulations give us more scope to offer greater flexibility around how we include social and environmental considerations in our procurement activities. We intend to help other departments and business to take full advantage of these flexibilities, building on what we learned from projects such as Crossrail Secondly, we will consider what lessons can be learned from other countries in the EU and beyond. This will include the resilience of the steel sector in competitor countries and market share of national manufacturers Thirdly, we will look at what government can do to boost productivity and cut production costs. This includes addressing energy and environmental costs, regulation, skills and training. An extensive review of business rates is already under way, and the Government will look very closely at all proposals These steps will come on top of the action we have already taken. For example, we have paid out more than £50 million in compensation to energy-intensive industries in the steel sector. We also plan to offer further compensation in respect of feed-in tariffs and the renewables obligation. This constitutes state aid, which must be approved by the European Commission. The approval process is under way, but it is taking longer than anticipated, and longer than I would like. My Department is working closely with the Commission to answer its concerns and impress upon it the importance of prompt approval. I also plan to meet European Commissioners next week to reinforce our concerns about unfair trade issues and gain their support for urgent action. We have already voted to support extensions of duties on wire rod. We will demand action wherever there is evidence of unfair trade Since Victorian times, British steel has helped to make Britain great. In 2015, it is vital that all of Britain comes together to forge a stronger future for the men and women to whom this country owes so much.