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Steel Industry

I shall speak briefly, Sir Nicholas. I congratulate my right hon. Friend the Member for Rotherham (Mr. MacShane) on securing this very important and timely debate. He made a convincing case for more Government support for the UK steel industry without, as he said, offering false hope. In my constituency as in many others, the dramatic drop in steel demand has had a tragic impact on workers and families. The job cuts announced by Corus in January have led to more than 500 losses at Corus in Llanwern, with the mothballing of the hot-strip mill. That has been a devastating blow for the very loyal and dedicated work force, who have stuck with Corus through thick and thin, not to mention the knock-on effects on contractors and suppliers. During the present recession, steel has been hit more quickly and more severely than expected. We all understand that the industry faces extreme difficulties, but before the recession, companies such as Corus were making extremely healthy profits and I agree with my right hon. Friend that we must avoid, where possible, short-term decisions that affect the long-term future of the steel industry as a whole. In the past, knee-jerk reactions have affected sites such as Llanwern in my constituency and we should do everything that we can to avoid that now. As chair of the all-party group on steel and metal, I thank my right hon. Friend the Minister for Business, Innovation and Skills for agreeing to come to a meeting of the group before the recess. That follows up the steel summit held by the group in May, at which representatives of the industry and the unions had the opportunity to voice their concerns and have a full and frank discussion with the Secretary of State. I look forward to my right hon. Friend the Minister reporting back on progress made on the issues that we discussed, including, as has been mentioned, action to stimulate demand for steel through the construction and automotive sectors and the car scrappage scheme; assistance with trade credit insurance; and security for energy purchases and prices. It is clear that the burden being placed on the industry by energy companies is unreasonable and unfair; I am thinking especially of the demands to pay up front. That problem could worsen as the country emerges from recession. Traditionally, most bankruptcies occur when companies' working capital increases as they start to ramp up production. If energy suppliers continue to demand those payments up front, that will put an even greater strain on resources. Most crucial is the retention of skills in the industry. It would be helpful if the Minister responding to this debate talked about that. It would also be helpful to have her feedback on the commitment made during the steel summit about working groups with industry and the Department to consider the issues in detail. It would be useful to know what progress has been made on those groups and how often they have met. Other European countries are helping their industry through problems such as that relating to trade credit insurance and are offering, for example, generous arrangements for short-time working. We need to ensure that we have a level playing field to allow us to compete. We need progress on the measures now, because the benefits in all the areas that we have discussed today will undoubtedly take time to filter through to the industry. Momentum will certainly gather with measures such as action to stimulate demand, but every day is crucial, and we need help to come as soon as possible for communities such as mine in Newport, East.