Nia Griffith MP, Shadow Secretary of State for Wales, will be meeting Sajid Javid on Monday over the future of the steel industry. Together with other MPs from the All-Party Parliamentary Steel Group, she will be quizzing Sajid Javid on his progress to date. Nia explained
“Following up on our previous dialogue with Sajid Javid, we will be reiterating to him just how vital it is that he should do all it takes to secure the future of our steel industry. Firstly, we will be asking him what guarantees he has obtained from TATA about an orderly and responsible sale procedure. Secondly we will be quizzing him on what help the Government will be putting in immediately to attract a suitable buyer and what progress he has made on finding a buyer. Thirdly we will seeking serious commitment from the UK Government, not only to interim support, but to policy changes on energy costs and putting a stop to Chinese dumping, together with a forward-looking industrial strategy to secure the long-term future of the UK steel industry.”
Call to action to Save Our Steel
In an article for the Morning Star earlier this week, Nia wrote:
Last Monday members of the National Assembly for Wales will be returning to Cardiff, recalled by Labour First Minister Carwyn Jones AM to discuss the crisis in the steel industry, and define collective action to support its future. But this is by no means a crisis confined to Wales. Far from it. It is about whether we keep steel making in the UK at all, a foundation industry, a building block for our manufacturing industry and of strategic importance to our defence industry. So whilst Welsh Government has already pledged a substantial package of support for a turnaround plan, key policy levers like energy costs and import duties affecting the industry and the scale of finance needed for interim support or temporary nationalisation are UK Government responsibilities. Yet, in spite of this and a petition which reached 100,000 signatures in a matter of hours, Tory Prime Minister David Cameron has refused to recall Parliament.
So if Welsh Government can bring back AMs as it makes a significant pledge from its budget, why can’t Cameron get MPs back from holidays? Do 40,000 immediate job losses, costs of £2.5m a day and the imminent end of steel making in the UK, with unquantifiable knock-on effects for downstream businesses and a drop in our export capacity mean nothing to the Prime Minister? Clearly not.
In fact, without the petition, it is doubtful whether we would even have seen him cut short his holiday, and return for a meeting of ministers, a meeting from which the key player Business Secretary Sajid Javid was absent, inexplicably visiting Australia just when he knew that TATA Steel’s crux meeting would be taking place in Mumbai. Whether that was incompetence or indifference, he now needs to get a grip.
We urgently need the UK Government to wake up and adopt a pro-active industrial strategy to secure the future of our steel industry. No matter how skilled and dedicated the workforce, who have shown that they can secure new markets and make the industry more competitive, nor how much TATA has invested in the recent refurbishment at Port Talbot, it will be nigh impossible to attract in a buyer, without serious commitment from the UK Government, not only to interim support, but to policy changes and a pro-active, forward-looking industrial strategy to secure the long-term future of UK steel.
It is not as if the Government has not been told time and time again, as, industry bosses, Union reps and steel MPs have been stressing the policy changes needed to support the industry: bring down energy prices, use UK steel in government projects and stop Chinese dumping.
Deliberate intervention by the Conservative Government has in fact exacerbated the steel industry’s difficulties. The Chancellor dealt a hammer blow to the industry back in 2010 by introducing a very high carbon tax, a tax unique to the UK which is not levied elsewhere in the EU. The whole point of working with the EU on carbon reduction measures is to create a level playing field for all countries across the EU, whereas this tax damages the competitiveness of UK industry and deters investment in the UK. In response to our immediate requests for help for energy intensive industries, the Chancellor promised a mitigation package in 2011. Now whilst they could have reduced or scrapped their carbon tax as unilaterally as they introduced it, we saw the pantomime of the Government restricting eligibility for the package and therefore using the requirement for EU clearance for this “State Aid,” as an excuse to delay it, until December 2015, whilst other EU countries like Italy put the financial support in immediately, and worry about dotting the i’s and crossing the t’s with the EU afterwards.
We’ve seen the same hypocrisy on Chinese “dumping” – in its technical meaning of selling under cost-price – the Government is quick to boast that it has, thankfully, signed up to renewing a couple of specific anti-dumping measures on Chinese re-bar steel, but, at the same time, it has led the blocking of wider EU reforms to impose speedier and tougher all-round tariffs on Chinese steel.
A proper joined –up industrial strategy also means close co-ordination and planning, from blast furnace through the supply chain, so that we keep and develop the specialist capacity we need to supply infrastructure projects, be they privately –led power generation turbines or publicly –led transport or strategic defence contracts, so we do not end up importing steel because we no longer have the capacity to produce it. It also means securing future UK markets for our steel by investing in the development of competitive, advanced manufacturing in those sectors which use steel.
This is not some so-called statist ideology: it is an essential tool for the success of any modern industrial economy. And, if the government chooses to ignore calls from MPs, or even from Parliament’s BIS committee, you would have thought that they would have done more in response to TATA Steel’s report on the foundation industries, prepared by PwC in January 2014. The then BIS Secretary Vince Cable actually spoke at its high-profile launch at the Shard, a building significantly constructed with 12,500 tonnes of UK steel.
Urgent too is structural reform of our energy market, reforming the wholesale energy market and the energy distribution network- a point reiterated by the IPPR’s report last month on strong foundation industries.
The Government has made much of some belated moves on procurement policy, but this is severely undermined by news coverage of the Chancellor inviting the Chinese to bid for HS2 contracts. Neither has the UK Government signed up to the Charter to use sustainable UK steel, in contrast to Welsh Government and a number of local authorities. It is still a far cry from backers of the Swansea Tidal Lagoon, who have deliberately sought UK suppliers for the construction of the lagoon, in the hope that this will be the first of several in the UK, with a potential export market to follow, a project incidentally delayed by Government deferring agreement on a strike price for the electricity produced.
Gordon Brown stepped in promptly with the banks, now we need decisive action form David Cameron on immediate unequivocal support for our steel industry, plus radical changes in Government policy and a pro-active industrial strategy to save our steel for future generations.