Protecting Britain’s Steel Industry — House of Commons, 2021-06-21
Topic: Energy
Marion Fellows (Scottish National Party, Centre-left): I was eager to take part in this debate, as steel is a subject close to my heart. I have a steel plant in my constituency: Dalzell Steelworks in Motherwell, which was saved by the Scottish Government in 2016 when it was sold on by Tata Steel. At that time, I was a member of two steel taskforces, one organised and led by the UK Conservative Government, and the second by the SNP Scottish Government. The UK steel taskforce talked a lot about the importance of steel and what it would like to do to help the industry. Despite that, Redcar steelworks and other locations closed, and approximately 20,000 steel jobs have been lost over the years We were told it was the fault of the EU, and there was nothing we could do about the high cost of energy or to stop the imports of cheap steel that were so dangerous to our industry in the UK. Well, here we are in 2021, and what has happened? A recent report from UK Steel shows the significant electricity price disparity the UK steel sector still faces compared with its European counterparts, paying an extra £54 million in energy costs compared with German steelmakers. Over the past five years, the price disparity has cost the sector £254 million, or 130% of annual capital investment. The report, "Closing the Gap", shows the huge structural barrier facing the UK steel sector as it faces the core challenges of adapting to a trading environment outside the EU and trying to recover in the aftermath of the pandemic, and embarks on the major challenge of decarbonisation. The report makes a powerful argument for the UK Government to put forward a bold programme of support for the sector, to level the playing field. Consistently higher UK electricity prices increase production costs, reduce available capital and deter inward investment, severely reducing the sector’s ability to invest. Gareth Stace, UK Steel’s director, said: "Our new report plainly demonstrates UK steelmakers face systemic disadvantages in higher electricity prices than our competitors… Electricity is one of the biggest costs for the steel industry, it undermines our competitiveness and it damages our ability to invest… And the issue is becoming even more urgent with the growing need to rapidly decarbonise" UK Steel says the UK Government need to be "bold and decisive". It would be hard to describe this Government as such in relation to steel Scotland did not vote for Brexit, yet the Tories are using it to remove vital protections from our steel industry. At the end of last year, the UK transitioned the EU’s steel safeguards, retaining vital protection against trade diversion and import surges for 19 steel products produced in the UK. Over the course of the past six months, as we have heard, the Trade Remedies Investigations Directorate has been reviewing the measures to see whether they should be extended. Now, the preliminary decision by the Department for International Trade is to remove a large number of products from so-called import safeguards designed to protect domestic producers from a flood of cheap imports. According to UK steel, this needs to be urgently rethought. Under Tory plans, the Trade Remedies Investigations Directorate —an arm’s length body of the Department for International Trade—recommended extending the measures on 10 categories of imports for three years from next month and suggested that measures on nine categories be revoked. The British steel industry has hit out at these plans—these are the folk who make steel, Minister—describing them as a "hammer blow" that risks damaging the sector long term. It said: "The UK will become a magnet for huge volumes of steel imports, it is beyond worrying to consider the damage this could do to the UK steel sector and its long-term viability" Alasdair McDiarmid, operations director of the steelworkers’ union Community said: "This is the first test of the government’s commitment to our steel industry post-Brexit and they’re failing it" UK Steel said that the removal of protections will have an adverse impact on the manufacture of steel sections across the country. It added that the measures were designed to protect the "viability of an entire industry, not individual production lines".