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Steel Industry

I congratulate my right hon. Friend the Member for Rotherham (Mr. MacShane) on securing this important debate. He referred to the impact of redundancies on steel towns and areas, with specific reference to Rotherham and Stocksbridge. The work force in Stocksbridge of approximately 850 will be reduced by 379. It does not need a mathematician to work out that the impact will be serious. Over the years, Stocksbridge has weathered many storms, most of them from the late 1970s and early 1980s when the Conservative Government did little to intervene in the massive contractions that hit the steel industry. Stocksbridge then employed more than 6,000 people at the steelworks in the valley, but that number was reduced to 600 before increasing to 850. Steelworking in the area goes back to the 1840s, when the works were founded by Samuel Fox. To this day, the valley is known not as the valley of the Little Don, but as the valley of the Fox, such was the impact of steel on the area. Stocksbridge exists for one reason only—steel. Without steel, Stocksbridge would still be a hamlet of a few dozen houses; instead, it has a population of 13,500. As my right hon. Friend said, the structure of the steel industry in places such as Stocksbridge has a similar effect to that of mining in any pit village. The place exists only because of steel, hence the importance of Corus Engineering Steels, even now, to towns such as Stocksbridge. Another point that my right hon. Friend made that is worth repeating relates to the quality of the work in Stocksbridge, Rotherham and other places that provide components for niche markets, including aviation—planes have a little bit of Stocksbridge in them, whether in the landing gear or elsewhere—as well as components for the energy, oil and gas industries, and increasingly for the new green technologies, such as turbines. If Britain is to specialise in high-value steelworking, Stocksbridge is at the niche end and highest value end of that market. Its specialisms are such that previous attempts to move steelworking capacity elsewhere have always led to its return to Stocksbridge. Attempts have been made to close the operation in my constituency, but it has always come back because the skills required to produce steel are so specialised that it has not been possible to maintain production without returning to the area. That is not surprising, because its 160 or 170 years of specialist steelworking and secondary skills in metallurgy and so on are second to none. A long history of steelworking does not give an area an automatic right to survive, but that long history and the skills that have been built up over generations in areas such as mine means that Stocksbridge, Sheffield and so on have a right to be supported by maintaining the steel industry in their areas. What is made in Stocksbridge will be critical to the economy as it goes into an upturn. We hope that green technologies, the energy industry, aviation and the automotive industry will soon move into more positive times. Companies such as Corus will then be critical if British manufacturing is to exploit the new opportunities that will be available in the long term. We all know why we are where we are with Corus. Demand is down and Stocksbridge is working at 25 per cent. capacity. Energy prices have crept up, as my right hon. Friend said, and it was inevitable that redundancies would be announced. We all hoped that those announced at the beginning of the year would be the only ones, so the latest announcements have been soul destroying in places such as Stocksbridge. Many of those who worked at the plant knew that there was a possibility of redundancies, but they still came as a shock when they were announced. The announcement ran like a tremor through the town: everyone was talking about it, and everyone started to worry not just about the job losses and what they would mean for local families, but about the knock-on effect on the local economy. In a small town such as Stocksbridge, many local businesses exist only because of Corus—even the local sandwich shops exist only because of Corus. On top of that, many contractors, such as electricians and so on, who are not on the Corus payroll depend on Corus for their survival and livelihood. What can the Government do to support UK steel, and Corus in particular? First, as my right hon. Friend said, continuation of the Government's economic stimulus is critical. The car scrappage scheme has been helpful to Corus; it should continue and, if possible, be expanded because it has done a great deal to help UK steel, and it could help a great deal in Corus's fight for survival. Secondly, we would like the Department—I hope that the Minister will comment on this—to do more to stabilise energy prices in the industry, which have been a huge and ongoing problem for a number of years. Since I came to the House, both Corus and the community have told me repeatedly that the price of energy, compared with that of our European neighbours, has been a key problem for Corus's competitiveness. The more the Department can do to help to stabilise energy prices, the better it will be for the company in the long term. Thirdly, if our Prime Minister is to engage in discussions with the French on Anglo-French collaboration on infrastructure projects, with nuclear power being a key part of that, I hope that he will do his best to ensure that British industrial interests are well represented in those discussions. British manufacturing could have a key role in building the future infrastructure of the UK and France. We know that the capacity potential for British manufacturing and specifically steel to fulfil the requirements of the new generation of nuclear power plants to be built in this country is around 90 per cent.—it is possible for UK steel manufacturing to provide up to 90 per cent. of the components required for the new generation of nuclear power plants. There are European rules on competition and so on, but it would be good to know that the Government are doing all they can to ensure that UK steel manufacturing is well placed to exploit the opportunities that will be available. Our Prime Minister can play a key role in delivering that. A £5 million training package was announced two weeks ago. My right hon. Friend referred to ProAct, which is a Welsh scheme, and I understand that a similar scheme in England would cost around £44 million. The Department should consider introducing such a scheme. If the Welsh can do it, why cannot the English? I would like to hear from the Minister today how the Department is working with Corus to ensure that that £5 million is well used and delivers what it needs to deliver. It is a small sum. I agree with my right hon. Friend the Member for Rotherham that we need much more such money, but we need to ensure that the money that has been provided is used properly—used to secure the long-term future of the plants in Stocksbridge and Rotherham. What is the status of the Minister's discussions with Corus, and what commitments is she trying to secure from Corus on the proper use of that money? We need guarantees from Corus that the money will be used to secure the long-term survival of the company in South Yorkshire. That is critical—from my point of view, it is the most important aspect of the discussion today. Why is steel so important? It is easy for people who live in Sheffield to forget that others do not necessarily consider steel to be so important. Sheffield was once the largest steel producer in the world and stainless steel was invented in Sheffield, so it is easy for us to forget. We have to ask ourselves the question again and again and to remind people why steel is important, because we in South Yorkshire take it for granted. Steelmaking is a primary economic activity. As my right hon. Friend pointed out, it is a barometer of the health of the economy and of the health of British manufacturing. Given that in recent debates, it has been recognised that we have become over-dependent as a country on financial services and the service economy and that we need to rebalance the economy in favour of manufacturing, now is the right time to think properly and strategically about the future of steel, because steel is a critical part of any manufacturing economy such as ours. In particular, Corus Engineering Steels is a critical part of the steel industry because of its production of components for the niche end of the market and because it represents exactly where the UK needs to be in terms of manufacturing—at the very top of the highly skilled, high-value end of component manufacturing.