Until 2008, which was a big year for the steel industry, profits were massive. Everything coming out of any plant was getting bought up. The demand in the world was so high because it was driven by Chinese growth. Any bit of steel—slab or whatever—was being absorbed by the Chinese market. Steel producers made very good profits, as did their workforce, who made very good bonuses. I remember negotiating terms and conditions, and pay and pensions for those workers at the time and they did very well.
The anticipation after that was that the lull in the market would pick up at some time but, if anything, it has remained the same. It has flatlined—never picked up. It is usually an indicator of world economic performance, and nothing has happened. In many ways, the best laid plans always go awry. The real issue is the ability of Governments to react. For some time now, there has not been a proper reaction. There has just been an expectancy or a desire—a hope and a prayer—that the market would pick up again. If anything, it has been quite clear that the domestic policy in China has been to prop up its own industry while that market stays at such a low, with ever increasing production and increasing emissions.
We must talk about the backdrop. The big factor, as my hon. Friend the Member for Hartlepool mentioned, is the “sheikhs versus shale” argument. There is a global, geopolitical war going on between oil and shale gas, as well as the onstream effects of renewables. They have forced down the price of oil, which has been a key factor for steel, whether that is in procuring contracts or gaining work, particularly at Hartlepool or Corby, where tubes are made.
There is a mismatch, in that the new markets developing for potential steel contracts and the R and D that could be invested in them differ very much from the steel sites that already exist. If we are looking at the new future for a tube site, it is more than likely going to be non-conventional onshore or offshore gas. The industry —we will be talking about this next week in a separate debate—requires a different type of tube, which is non-welded. There are no non-welded tube sites in Britain. At some governmental level, there has to be liaison with industry to find out what new industries are coming and to ask whether we are investing and helping those industries or potential suppliers to put in the new factories that will supply the product they require to develop that market.
This is the issue: steel or a steel strategy is one thing; what we really require is a real, integrated industrial strategy. That strategy should look across the piece and across regions to work out who needs to liaise with who to make whatever happen in the future. It should identify which industrial partners to bring on board and what they want to see, and ensure that investment is solid and sound and that we bring investors along with us to make those decisions work in our nation’s favour. There just does not seem to be any of that.
In the Chancellor’s autumn statement we heard that an announcement to the stock exchange had been made about the withdrawal of the last £1 billion to support
carbon capture and storage. That is integral to any future of shale or non-conventional gas. In a world in which oil has fallen below $30 a barrel and the world market will retrench and retain fossil fuels for the current period, CCS should, in many ways—mainly because of the emissions targets that we are all now signed up to—precede renewables as the step for any nation to take to develop its power generation if, indeed, that country is going to buy in cheap fossil fuels while shale, oil and conventional gas all fight one another for customers. That is a massive opportunity for the steel sector to take hold of.
I have spoken so much about the steel sector, in relation to my local area and the whole UK. There is a positive story to be made for British steel, if we have an integrated industrial strategy. The Government could roll up their sleeves and actively engage with bodies, partners, business and finance to invest in the country. The right and adequate policy could be put down, with long-term futures secured, so that people know that their investments are sound and can deliver. However, in every single situation—for example, after the Paris climate change talks, when the world is looking at CCS as the future, and it is going to develop, the Government removed funding for it—we run away and concede the ground to competitors, which gives completely the wrong message to the industry we are talking about today.