Created: 10 July 2019
I spoke in the Steel Industry debate in Parliament yesterday to once again support the efforts to save the Scunthorpe steelworks. Alongside other local MPs, Nic Dakin and Martin Vickers, we again presented a united cross-party voice in support of this vital industry.
The Official Receiver, who is the independent person overseeing this process, is presently assessing a short list of bids for the site. The Government cannot mandate his decision on this matter but, separately to this, Government Ministers have met with some of the potential buyers to outline the tens of millions of pounds the Government is prepared to put in to secure the business.
The use of public money to support the industry has to comply with EU and UK competition and state aid rules and must be on a commercial basis. That is why there is no magic wand, but residents can rest assured that everything that can be done is being done to secure the business.
We will know more in the next few weeks, but residents can see below what I had to say in the debate yesterday.
UK Steel Industry Debate
Andrew Percy (Brigg and Goole) (Con)
It pains me to disagree slightly with the hon. Member for Rotherham (Sarah Champion)—for whom I have a high regard and whom I consider a friend—but it is simply not the case that the Government have done nothing. It is also a little rich to take lectures from Labour, under whose last tenure in government the number of people working in the steel industry halved and UK steel production fell.
It is not the case that the Government have done nothing. This Government have acted to defend the steel industry in a number of ways, whether by creating the scheme that enables the company to be reimbursed for its high energy costs, by restructuring business rates, which have a direct beneficial impact on the site in Scunthorpe, through the millions of pounds that they made available shortly before the liquidation of British Steel to cover the EU carbon credits, or through the tens of millions of pounds that the Government were prepared to put in but could not do so because an arrangement on a commercial basis, as required by UK and EU state aid laws, could not be achieved. The Government have a strong record of supporting the sector and supporting steel workers in Scunthorpe.
It was the UK Government in the EU that led demands to change procurement rules within the European Union, just a few years ago, to make it easier for us to procure UK steel. Of course, those procurement rules are still a challenge for us. The Government cannot just turn around, as some people think, and say, “We are going to use UK steel in all Government contracts.” That would be illegal under UK and EU law, and—for those who think that a no-deal Brexit is the answer to all this—it would even be illegal under World Trade Organisation rules.
Having used half my speech to slightly disagree with my friend the hon. Member for Rotherham, I will say why we need the Government to act now and set out some things they need to do.
As the hon. Member for Scunthorpe (Nic Dakin) outlined, our area relies strongly on the steel industry. Scunthorpe is a steel town; north Lincolnshire is, in many ways, a steel district. Most of the workers—the lion’s share, probably—live in my constituency. We cannot underestimate the impact of steel workers on our local economy, because these are some of the best paid and most skilled jobs we have in our area. I am not prone to hyperbole—well I am, but let us pretend I am not—but to lose them would be devastating on our local economy.
Martin Vickers (Cleethorpes) (Con)
Will my hon. Friend give way?
Of course I will give way to my neighbour.
My hon. Friend is, as always, erudite—that is the word I was looking for. His point about the northern Lincolnshire economy is well made, as it was by the hon. Member for Scunthorpe (Nic Dakin). Would he also acknowledge that this issue spreads far and wide? Some 150 people are employed at the port of Immingham, either by Associated British Ports or British Steel directly. Speaking as chairman of the all-party parliamentary group on rail, I can say that there are impacts not just on the supply of steel but on the movement of raw materials.
Absolutely. I do not need to repeat what my hon. Friend said; all that is true and demonstrates how important the industry is not just to our sub-region or region, but to the whole UK economy.
Where are we now? I thank the Minister and the Secretary of State for the positive way in which they have engaged with local stakeholders, unions, the councils and local Members of Parliament. I genuinely believe that this Government are trying to do everything they can to secure a future for the site. This is an independent procedure through the official receiver, but locally we do not want to see a partitioning off or a selling off of different parts of the business. We want to see the business sold in its entirety. For the reasons stated by the hon. Member for Scunthorpe in relation to the strategic importance of the industry, we have to continue producing steel in Scunthorpe.
The Government must stand ready to do all they can financially to support the industry. There are tens of millions of pounds that were available before the liquidation, which we have been assured remain available for any new partner on a commercial basis, as required by law. Can the Minister reconfirm that today? That would be appreciated.
We have to be honest about the situation if a buyer cannot be found. We know that we are down to a short list—it is good that there are number of buyers who are realistic prospects to purchase the business—but as I and other colleagues have repeatedly said, we must not be close-minded about any particular structure moving forward. Nationalisation does not get us over the problems of investment having to be on a commercial basis. That might or might not be an answer in and of itself, but it does not mean we should simply rule that option out, or the option of a public-private partnership. Every option should be considered by Government to ensure that the whole business can continue to operate.
We do not want the crumbs off the plate, as it were, and just a few hundred jobs saved if part of the business were sold separately. We want it to continue in its current form because it is so strategically important to UK plc.