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Steel Industry — [Mrs Madeleine Moon in the Chair]

Part of the debate – in Westminster Hall at 3:23 pm on 11th May 2016.

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Photo of Iain Wright Iain Wright Chair, Business, Innovation and Skills Committee, Chair, Education, Skills and the Economy Sub-Committee 3:23 pm, 11th May 2016

That is crucial. Any such commitment would provide much needed confidence in our steel industry, as well. It is a foundation industry that is strategic in its importance to the economy and vital to our manufacturing base.

That brings me on to my second point: confidence. I have pushed the Minister and the Secretary of State on the matter, because it is of central importance. The Minister heard that for herself from the local management and workforce when she visited the Hartlepool pipe mill a couple of weeks ago. Suppliers and customers have the perception that the Tata steel business will not be there in a couple of months’ time, as it might have been pushed into administration. Suppliers, certainly in our part of the country, have had their fingers burned with the closure of SSI. They do not want to be an unsecured creditor in an administration situation, with the likelihood of receiving no money and being out of pocket, and the possibility that their own business will come under threat.

Customers for Tata’s steel products, especially in sectors such as energy, infrastructure and oil and gas, have very long-term horizons in their requirements. They want to be certain that their orders will be there. If they are not, they will look elsewhere. That is not in the long-term interests of the UK steel industry or the viability of Tata’s successors. Credit lines and insurance are being withdrawn, and I cannot stress how important that is. What else can the Minister do—I know that she has worked hard behind the scenes—to provide extra reassurance, further commitments and definite indicators of confidence? Perhaps that would include the public sector placing orders with Tata Steel.

That brings me to my third point, which is about Government action. Procurement is one of the industry’s requests for Government action, and that theme flows through my other points. The Minister must be aware that she has not delivered in full what could be provided for the steel industry. Everyone is aware of the massive global forces at work, with steel prices and overcapacity, but Mr Jha told the Business, Innovation and Skills Committee that UK steel manufacturers suffer from structural weakness—business rates, energy costs and procurement. What is the Minister going to do about that? We should not be looking to the past. Although we should celebrate our steel past, we should look to a future with steel as a massively important part of a modern manufacturing industry.