Hywel in Parliament - Debates

Debate on British Steel Industry

20th Feb 2007

Dr. Hywel Francis (Aberavon) (Lab): This is an opportune debate on the future of the British steel industry, which I welcome as a member of the steel union community, a former chair of the all-party group on steel and as the Member of Parliament for the steel constituency of Aberavon. I say that it is opportune for obvious reasons. We are moving into a new period with the imminent takeover by Tata of Corus. In listening to the speech by the hon. Member for Blaenau Gwent (Mr. Davies), I am reminded of the words of the Italian socialist Antonio Gramsci:

"Pessimism of the intellect, optimism of the will."

While the hon. Gentleman's speech had that sense of pessimism or, I should be generous, realism, I would like to strike a more optimistic note—optimism of the will. Potentially, we are in a situation where there isa great opportunity. That is certainly the view of management and unions in the Port Talbot steel plant in my constituency. I commend in particular the work of Mr. Phil Dryden of the management of Corus and Mr. David Ferris, the chair of the joint unions, who personify the joint working in the way in which they are building a new future for that plant. That joint-working is known as the journey.

I should also point to the words of the Secretary of State for Wales, my right hon. Friend the Member for Neath (Mr. Hain). He recognises, as I do, that the takeover has enormous potential, and he emphasises, as I do, that the steel industry has been, and still is, strategically important to both the Welsh economy and the British economy.

Dr. Kumar: My hon. Friend thanks many people for the contribution that they have made to the steel industry in his area. We should also congratulate Philippe Varin on doing a marvellous job in turning around Corus from the situation it was in three or four years ago. It is because of his leadership of Corus that Tata Steel from India is in a position to buy the Corus steel industry. Credit is due to Philippe Varin's leadership, and to the entire board.

Dr. Francis: My hon. Friend anticipates what I am about to say. I acknowledge the contribution of Philippe Varin, and that of the chair of the company, Jim Leng.

The key is investment. The signs are relatively positive—in contrast to some of the comments of the hon. Member for Blaenau Gwent. I welcome the good work done in the run-up to the takeover by the Corus management in securing a good deal for its employees for the immediate future, including resolving the employee pension fund issue and trade union representation and consultation arrangements, and—equally importantly—in securing the confirmation of previously agreed capital expenditure projects. That shows that, importantly, there is recognition of the position of the steel industry in Britain. Tata appears to have a strong commitment to the UK steel industry; otherwise, why make those commitments?

That leads us to believe that the other key factor is the positive role of our Government in the changeover period. The industry is rightly praised for the success in terms of productivity improvements year on year— they are much better than for any other part of the British economy. Both the management and the unions should be proud of that, and I am sure that the Government recognise that.

I was very pleased by the constructive statement made to the Welsh Affairs Committee by the Minister for Trade, my right hon. Friend the Member for Makerfield (Mr. McCartney) on 6 February. During one of the sittings of our major inquiry into globalisation he said:

"The DTI are very keen indeed to work with this new inward investor...we have to ensure that Tata...are looking to expand into markets with the materials and products that are developed by Corus."

He went on:

"I was pleased to see that Tata have confirmed their commitment in terms of their previous issue of capital investments and I am pleased to see that they have come to a deal with the trustees of the pension fund to sustain and invest in the pension fund. That seems to give me an impression that they are here for the long haul."

That last phrase is worth emphasising. He ended by saying:

"Tata has given a commitment in terms of the location of the business here in the UK and so we will be looking to work with the company very proactively, and if there are issues that come up where we can assist we will do so."

That is a welcome commitment on the part of the Government. I take from that ministerial statement that this Labour Government recognise that steel is of strategic importance to the British economy and that they are prepared to enhance that. I look forward to hearing the Minister's response to that point.

Finally, may I be a little parochial? Will the Minister urge the Government to encourage discussions with Tata to ensure that there is long-term steel investment in Port Talbot in my constituency, and also in all other plants right across the United Kingdom? My plant needs a modest investment of £240 million in the finishing end to ensure that the necessary efficiency and the maximum output of 5 million tonnes can be achieved. Incidentally, that £240 million is roughly the same amount as the banking costs of achieving the recent takeover.

I am sure that the response of the skilled, professional and dedicated steel industry work force throughout the UK will be worthy of that great industry. We are very proud of them, and we believe that the industry has a great future.

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