Steel Industry

Part of the debate – in Westminster Hall at 1:00 pm on 24th March 2009.

Alert me about debates like this

Photo of Ian Cawsey Ian Cawsey Labour, Brigg and Goole 1:00 pm, 24th March 2009

I agree. Clearly, new technologies are potentially exciting for the steel industry. As one drives out of Scunthorpe one can see, on the border between my constituency and that of my right hon. Friend Mr. Morley, wind turbines sprouting like daffodils in spring. Every week when we go back, there is another one. They are enormous structures, and we want British steel to be part of the manufacturing base for them and for other forms of renewable energy. The challenges are there for us.

In terms of what a support package could be, many other countries are already putting such ideas into practice. My hon. Friend Dr. Francis mentioned the Welsh Assembly's ProAct scheme a few minutes ago. As I understand it, the scheme was originally intended for the automotive industry and provided both £2,000 worth of training and £2,000 in wage subsidy to each eligible individual. Next month, the scheme will apply to other industries in Wales, including steel.

Last month, the Prime Minister said of the scheme:

"Through the Assembly, Wales has developed a new programme called ProAct to help people to stay in jobs rather than be made unemployed, and a great deal of work is being done by us to look at that scheme and at how it could apply to other parts of the United Kingdom."—[Hansard, 4 February 2009; Vol. 123, c. 487.]

Perhaps the Minister can update us on the progress of that work when he replies to the debate.

Corus has made use of a Dutch scheme for its Netherlands plant. Under that scheme, the work force has access to state aid for employees and companies in cases of national crisis, and the Dutch Government have decided to relax the criteria to cover the current global events. The scheme is now being put into place. Germany has a similar scheme to support income for those in a period of short-time working, as does Austria. In France, Mittal Steel, car manufacturers Renault and PSA, and tyre manufacturer Michelin have called on the French short-time compensation programme. President Sarkozy has proposed to extend the scheme to give significantly more assistance to keep people in work until the worldwide situation improves.

There are plenty of schemes to consider. Increasingly, Governments are coming to the conclusion that in these unprecedented times, it is a better use of taxpayers' money to ride out the downturn, keep capacity in core industries and keep people in work rather than on benefits. My hon. Friend the Minister may have seen the joint proposal from the TUC and the Federation of Small Businesses for constructing a short-term working subsidy. If not, I have a copy that I can pass to him. In their submission, they say of their scheme:

"Such support would enable employers to avoid immediate redundancies and retain essential staff and skills, making business success more likely in both the short and longer terms. It would also reduce the personal and social costs incurred by long-term unemployment...and increase economic demand by limiting the income reductions faced by workers on short-term hours or temporary lay-offs. If linked to training, it would enable longer-term workforce investment."

I cannot disagree with any of that. Surely all those outcomes would be desirable for the Government to achieve.

There is, of course, a cost to the scheme—it is costed at £1.2 billion—but it would keep 600,000 people in work. I have never subscribed to the view that unemployment is a price well worth paying. One of the things that separates the governing party from Her Majesty's official Opposition is our view on that. If we can spend £1.2 billion to protect 600,000 jobs, that would be a price well worth paying. It strikes me that although we all face the same problems around the world, how we respond is crucial to how soon and how extensively our recovery will be. Those who use this period imaginatively to keep people in work, to retrain and to protect incomes and economic activity will win the battle and come out of the downturn with their core industries in place. We in the UK must show that we have the ideas and imagination to do so for our key industries, such as steel. Our workers and our country deserve no less.