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New PM must act to safeguard steel industry, says MP

Published 13/07/2016

Workers at Port Talbot face an uncertain future as talks to save the Tata plant continue
Workers at Port Talbot face an uncertain future as talks to save the Tata plant continue

The decision to leave the EU is a body blow for the British steel industry and the new prime minister must do more to protect it, an MP has warned.

The steel industry has been thrown into crisis in recent years, squeezed between rising energy costs and cheap steel from the Chinese.

Last year the Redcar works in Teesside closed, while thousands of workers at Port Talbot face an uncertain future as talks to save the Tata plant continue.

The EU is Britain's most important steel market and some have raised fears that pulling out could further damage the industry .

Speaking in the Westminster Hall debate, Labour MP Stephen Doughty (Cardiff South and Penarth) demanded that ministers spell out what they are doing to help the industry in the wake of the Brexit vote.

He said: "The steel industry faces immense challenges. There is a future for this industry, there is a bright future for this industry, its workforce, its products and its role in our economy - b ut only if Government takes decisive action to respond to the challenges that it faces.

"And that is even more important in the aftermath of the decision on the EU referendum."

He added: "I argued a few weeks before the referendum vote that I felt that a vote to leave the EU would be a body blow to the industry.

"And I'm sorry to say that, in terms of the information that I've had from producers, from UK steel, from Community union, from many others involved in the industry, that all the referendum has resulted in is yet more uncertainty, yet more challenges for an industry that was already facing significant difficulties."

As Theresa May takes over as prime minister, Mr Doughty urged the Government to take immediate action.

He said: "What the industry, what the workers in this industry, what all of us want to hear today is categorical assurances and actions.

"We don't want to hear more platitudes, we don't want to hear more warm words."

He said the steel industry cannot afford to wait and warned its future is a matter of national significance that the new PM must act immediately to safeguard.

Mr Doughty called for action to be taken on energy costs, steel dumping and to help the industry as it faces the uncertainty of Brexit.

He added: "Crucially, this is a question for the new prime minister.

"Is she going to take the kind of laissez-faire approach we have seen from the minister's current boss in the Cabinet, this idea that there is no industrial strategy, that we shouldn't be intervening and so on and a quite late series of interventions in the industry?"

He went on: "Or is she going to be a prime minister and set in place a Cabinet that is going to take decisive action in the national interest?

"That's the fundamental test, that's the fundamental expectation people in this industry have.

"We need to see a proper industrial strategy and we need to see tough action, particularly in relation to the Chinese."

Labour MP Stephen Kinnock, whose Aberavon constituency includes Port Talbot, said the steel industry has been plunged into uncertainty.

He said: "The past few weeks, particularly after the referendum, have been characterised by uncertainty.

"Economic uncertainty, the pound falling, investment put on hold, jobs at risk. Party political uncertainty, governmental uncertainty and paralysis.

"This uncertainty has been particularly acute for the steel industry."

Tata Steel has put the sale of part of its business on the back-burner as it explores the possibility of setting up a joint venture with German rival ThyssenKrupp, but it has refused to guarantee the future of Port Talbot as part of the proposed deal.

Mr Kinnock said: "The workforce and their families were clearly reacting with a degree of scepticism and concern.

"That announcement compounded existing uncertainties.

"ThyssenKrupp has long expressed interest in Tata's Dutch plant, but until last week there has been no convincing evidence of any interest in Tata Steel's UK operations.

"The central concern around this joint venture proposal therefore is, particularly with Britain outside of the EU, that the UK operations including Port Talbot in my Aberavon constituency might not receive the support and investment that we require.

"Therefore clear assurances are required from the Government, Tata and ThyssenKrupp that the mooted joint venture will in no way diminish Port Talbot."

He said the Government must "urgently clarify" its trading relationship with the EU and said the "top priority" must be to bring down energy costs for the industry.

He said: "Energy costs in this country are quite simply astronomical and the Government should and must act."

Business Minister Anna Soubry, whose brief includes steel, said the Government is committed to protecting the British steel industry.

She said it is crucial for the industry for Britain to negotiate to tariff-free access to the single market, and urged big manufacturers such as car companies to continue to buy British steel.

She said: "The UK steel sector exported 6.3 million tonnes of steel last year, 3.3 million tonnes of which went to the European Union member states. That is how import the EU is when it comes to the exporting of steel.

"So access to that single market, I would suggest, is absolutely critical, not just for steel but indeed for the whole of our economy."

And she added: "Buying British-made steel - made in Port Talbot, made in Scunthorpe - that is so critical, not made in Turkey.

"It is important we secure tariff-free access to the European market, not just for the steel sector but for those parts of our economy that buy British steel like the automotive sector."

She pointed out that, while Brexit is not what the steel industry wanted, many big steel-producing areas in Wakes and England did vote for it.

And responding to concerns about the future of Port Talbot, she said the Government has made it clear it wants to see blast furnaces continue to burn in South Wales.

Speaking about the possibility of Tata striking up a partnership, she said: "There are a number of issues that arise out of that - notably the issue of pensions. I know you will rightly have concerns about that."

She added: "The Government has always said we will do everything we can to support the production of steel in South Wales; that means making sure that at least one of those blast furnaces remain open."

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