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Steel Industry

I, too, congratulate my right hon. Friend the Member for Rotherham (Mr. MacShane) on securing the debate. It is important for all our communities and I am pleased to see how many hon. Members from the all-party steel and metal group are present, representing their steel communities. We all have a common interest and a common cause. Like Stocksbridge, Scunthorpe was built on steel. Before the discovery of ironstone, Scunthorpe was no more than five small villages. There have been enormous structural changes over the years, but the work force have responded with dedication and skill and have kept production up, even though fewer people have been employed. However, although Scunthorpe has fared better than many plants in recent times, the recent announcement of 500 job losses is a very heavy blow to the town. Of course, it is a blow not just to steel production and the steelworks, but to the whole local economy, because those are good jobs with decent pay. Taking those jobs out of the local economy has a knock-on effect all the way through the economy—on other jobs, other industries, the supply side, services and manufacturing. In addition, we do not know what the future will bring. I endorse what my right hon. Friend said about the pressures on steel and about the pressures being global. This is not a national but an international issue. Other companies all over the world are suffering in the same way as we in the UK are. It is important that we work together to forge partnerships and to seek common cause. There should be common cause between the trade unions, management, local authorities, the regional development agency, Government and ourselves as local Members of Parliament representing our communities and the people who work in the steel industry. The Government can take a wide range of measures to help steel, but I accept, as my right hon. Friend said, that the Tata group is a very profitable group and it has some responsibilities in relation to seeing Corus get through the current period. One advantage of being part of a very large conglomerate is that there is some shielding from downturns, which of course are not unknown in the steel industry. Many of us have been through many downturns. In the past and particularly the 1980s and '90s, the first thing to go was jobs. I take a lot of encouragement from the fact that Corus and the Tata group have had a more thoughtful approach. They have genuinely been trying to minimise job losses and find savings in other areas, which is exactly the right thing to do. With my hon. Friend the Member for Brigg and Goole (Mr. Cawsey), I recently held a meeting with all the trade unions in Scunthorpe to talk about how we as local MPs could work with the unions, the company and the local council, all of which are committed to seeing us through the present difficulties, to help the steel industry, which is so important to our whole economy. Some of the issues that we discussed have been touched on in the debate and they include support for UK manufacturing. Manufacturing is an important part of our economy, but it has not had the support that it deserves. Sometimes, a small intervention can make a huge difference. One example is the car scrappage scheme, which is having a beneficial effect. Car manufacture is not a major component of output in Scunthorpe, but some companies there supply the car industry, and there is a knock-on benefit right through the economy. That is an example of a successful scheme that the Government have put in place. We could bring forward major infrastructure projects, such as Building Schools for the Future and the construction of new health centres, as well as road and rail improvements, which the Government have announced and which I very much welcome. A lot more could also be done on social housing and house building, which help with demand for steel and make a useful contribution to our economy. We could promote major investment in new clean energy. We will have to have an awful lot of new power stations in the very near future. The growth of the green economy has real potential for steel manufacturing, and the Prime Minister very much believes in it, but a great deal more could be done. We need to consider anti-dumping measures. There have been allegations of slab coming in from Ukraine at prices that are below the cost of production. We need to be wary of that and to watch what other countries are doing to ensure that there is no trade distortion. We also need to look at what we can do to promote world demand, as the Prime Minister has been doing through the G8 and the G20. We need to explore ways to support the work force and companies in minimising job losses. We could be put at a serious disadvantage compared with what other European countries are doing to support their work forces through wage subsidies. I know the arguments on that subject and I know that this country opted out of an EU scheme in the '80s, when anything to do with the EU was anathema, but it is at times like this that one can see the benefits of the EU, because European countries such as France and Germany are getting the benefits of the social systems that are in place. The Welsh ProAct scheme has been mentioned, and it seems to be very successful. My right hon. Friend the Minister should look at it carefully to see how we can help through initiatives such as Train to Gain, which has been used quite successfully. How can we use support for skilling and temporary support for the work force to reduce job losses in this difficult period? We also need to ensure that UK manufacturing and UK steel get a fair share of Government contracts. Energy prices are an issue—a complex one, as I know from my work on the Select Committee on Energy and Climate Change. It is fair to say that deregulation in the UK brought advantages for manufacturing and domestic consumers, but there is a bit of a disparity between UK and European prices. The price of gas is competitive in European terms, but the price of electricity is not, and questions need to be asked about why those disparities exist between the UK and the rest of Europe. In some parts of the steel industry, credit insurance is a problem. I would have thought that the Government could do something to support credit insurance and to put in place measures to provide some underpinning. I hope that the Minister will look at that. Finally, there is the question of partnerships. Steel is crucial to our local economies and to our national economy. It is in all our interests to ensure that we have a successful and viable steel industry, because steel production is part of the manufacturing base. It is important that we all work together and that the Government, the company, the trade unions, local authorities, regional organisations and trade organisations look at what we can do to ride out the world storm and ensure that we have a successful and viable steel industry in place to take advantage of the inevitable upturn. In relation to the steps being taken in other parts of Europe, we must not put our industry—steel or manufacturing—at a disadvantage. That is the Government's responsibility, and they have introduced some very helpful and successful measures, but the points that I have raised need to be carefully considered.