Oral statement to Parliament

UK steel industry: update

Statement by Business Secretary Sajid Javid on the steel sector.

The Rt Hon Sajid Javid MP

All of us are by now familiar with the perfect storm of factors that has led to the global price of steel collapsing during 2015.

But for all the economic challenges we face, the real tragedy is a human one.

Over the past 11 months I’ve visited steelmaking communities right across the UK.

They’re very different plants in very different places.

But one thing unites them.

The pride and dedication of the highly-skilled people I meet.

All they want is to be able to carry on doing what they do so well.

And I’m doing everything I can to help them do just that.

I’ll talk first about Port Talbot.

Since becoming Secretary of State for Business I have been in frequent contact with the senior management of Tata.

This includes several meetings with the group’s chairman last year and this.

Several weeks ago Tata told me, in confidence, that they were seriously considering an immediate closure of Port Talbot.

Not a sale, a closure.

That would have meant thousands of hard-working men and women could already be out of a job.

Thousands more would be facing a bleak future.

I was not prepared to let that happen.

In the days that followed, I worked relentlessly to convince Tata that it was in everyone’s interests to keep the plant open and find a new buyer.

I also made it very clear that the government is totally committed to supporting and facilitating that process.

This work paid off.

Last month Tata announced its intention to sell the plant and its wider UK assets rather than close it.

Since then, I have continued to meet with its executives here and in Mumbai.

I’ve been joined in this by my Right Honourable friend the Secretary of State for Wales.

And we’ve secured assurances that Tata will be a responsible seller, and will allow appropriate time to find a buyer.

The formal sale process begins today (11 April 2016).

I’ve been in contact with potential buyers, making clear that the government stands ready to help.

This includes looking at the possibility of co-investing with a buyer on commercial terms.

And we have appointed E&Y to act as financial advisors on behalf of the government.

Commercial confidentiality means I cannot go into detail about ongoing discussions.

However, I will update the House as soon as it is appropriate.

And let me just thank the First Minister of Wales for all his work so far.

His support in these talks has been invaluable.

I’ll turn now to Tata’s Long Products division.

I’m sure all members will join me in welcoming today’s news of a conditional agreement between Tata and Greybull.

It’s an agreement that protects jobs and minimises the cost to taxpayers.

We’ve been closely involved in the sale process from day one, including making a commercial offer on financing if required.

And we’ll continue to work with them to get the deal done.

Moving on to Scotland, on Friday we saw Liberty House receiving the keys to 2 Tata mills in Motherwell and Cambuslang.

It’s a great result for the people of Scotland, and the Scottish government deserves thanks for helping to secure it.

And finally, since January the global price of steel has started to recover, although it is still a long way from its pre-crisis peak.

So there has been some positive news for Britain’s steelmakers.

But our support for the industry and its supply chain continues.

The Steel Council, which met for the first time early last month, is bringing together government and industry to find solutions.

We’ve been working closely with the unions.

And let me take this opportunity to thank Community, in particular, for its positive, constructive approach.

We’ve taken action on power.

£76 million has already been paid to steelmakers to compensate for high energy bills, and we expect to pay over £100 million this year alone.

We’ve taken action on procurement.

New rules make it easier for the public sector to buy British.

And we’re leading calls for EU action against unfair trading practices.

We voted in favour of anti-dumping measures on wire rod and on steel pipes in July and October last year.

And we voted in favour of measures on rebar and cold-rolled products in February this year.

These measures are having a real effect, with rebar imports from China down 99%.

However, we’re still looking at ways of improving the EU tariff mechanism so we can help the steel industry without harming other sectors.

I’m happy to hear any suggestions that Honourable Members have on that front.

And let me make one thing very clear.

We have repeatedly demanded and voted for tariffs on unfairly traded Chinese steel, and we will continue to do so.

Mr Speaker, I would love to stand here today and declare the crisis over.

To say that not one more job will be lost in Britain’s steel industry.

That’s not a promise I, or anyone in this chamber, can make.

But I can promise this.

This government has consistently done all we can to support Britain’s steel industry.

And that will continue.

We know there are no easy answers.

The challenges facing the industry are vast.

Too many jobs have already been lost.

Where that has happened, we have worked to ensure nobody is left behind.

For example, we have committed up to £80 million to help those affected by the closure in Redcar.

And we stand ready to support any steel community facing redundancies.

But that’s something I am doing everything in my power to prevent.

Britain’s steel industry is a vital part of our economy.

I want to secure its long-term future.

I want to see ‘Made in Britain’ stamped on steel used around the world.

And I want to protect the jobs of the skilled men and women who work in the industry.

The people of Port Talbot, of Scunthorpe, and of steelmaking communities across the UK deserve nothing less.

Published 11 April 2016