Westminster Hall – Wednesday 13th July 2016
Implications for the UK Steel industry of the outcome of the EU Referendum
It is widely accepted that steel and the steel industry are essential to Wales and its economy, which is particularly the case for my constituency and the people of Neath. The TATA steel works in Port Talbot and Trostre, in the constituencies of Aberavon and Llanelli respectively, are places where hundreds, if not thousands of my constituents go to work every day.
As a product of the industrial revolution, both coal and steel have been the beating heart of Neath for well over a century, defining its communities and those who have had their lives touched by those industries. The Mackworth Family, George Tennant, Joseph Trelleges Price, David Thomas, and Evan Evans-Bevan are all names that would be familiar to anyone who has lived or worked in the Neath or South Wales Valleys.
However, I do not need to regale you with its history in order to make you aware of the present situation, and the realities of an industry in decline.
Between 1997, a highpoint, and 2014, iron production in Wales fell by 3,210 kilo-tonnes or over 50%. Steel production has fallen by 25% during the past 40 years.
There 465 businesses which make up the steel industry, employing 34,500 people. Over 50% of these jobs are based in Yorkshire and Humberside, or Wales.
Of the 1,050 jobs lost in the UK steel industry since the year began, 750 of them have been lost from Port Talbot. This was on top of the 400 jobs that were lost in 2014.
But again, these are things that you already know. What you perhaps don’t know, is that the extent of this decline could have been slowed, shrunk or even prevented, should we have remained as a member of the EU, and should this Tory Government have taken up the offers of support that have been coming from Europe.
Let me take this opportunity to remind people of the fore-runner of the European Union – the European Coal and Steel Community – which was set up to not only cement peace but also help economic growth by pooling resources and preventing unnecessary competition.
Such planning and collaboration has seen the UK steel industry become world leading, not only in terms of size but also quality.
Nevertheless, the process of industrialization travels across the globe as it seeks out fertile land and a willing workforce. The latest industrial revolution taking place in China may well be the biggest of the all and in 2013 they produced 779 million tonnes of steel, or 48% of the total worldwide output. The UK produced 12 million tonnes.
Size isn’t everything, though, and as members of a strong European Union we were in a position to engender the very reason for the EU in the first place – strength in numbers, collective planning, a common purpose.
Had the UK Government allowed, we could have installed anti-dumping tariffs on Chinese steel, lifted the Lesser Duty Rate, and applied for crucial EU funds which would’ve shored up the industry during these difficult times.
In addition, more than half of the UK steel exports are to the European Single Market – what will happen to these exports as a result of the recent referendum? I fear the impact of tariffs or an elongated trade agreement may signal the death knell of an industry already fighting to compete on a level global playing field.
The UK steel industry has declined by 42% from 1990 to 2014 in real terms – economic output in 1990 was £2.7 billion compared to £1.7 billion in 2014. How can we halt this decline without the support of our European partners, automatic access to a ready-made single market, or the potential of additional funding to tackle rising energy costs and environmental commitments?
In 2014 the UK exported 7.6 million tonnes of steel (worth £6.0 billion).
Beyond the heavy end, we also have organisations who innovate and produce hi-tech products that are changing the way we view steel. Indeed, Neath Port Talbot is home to a company called SPECIFIC, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. SPECIFIC are hugely concerned about the prospect of leaving Europe, not least because of the essential funding they’ve received, without which they probably would’nt exist, but also because of the potential loss of a market where they could promote and sell their products.
Let us not forget the steel that we import from the EU, which make up 69% of our imports, steel which isn’t made in the UK but is vital to many key industries producing specialised products, infrastructure and new construction projects.
It is not a matter of IF there will be implications on the UK steel industry as a result of Brexit, but what will be the extent of these implications. Exports will be hit hard, output will be slashed, jobs will be lost and communities will be forsaken. I fear for the future of the UK steel industry in a UK outside of the European Union and call on our Government to do all it can to protect it.
