Redcar Steel

Baroness Hayter of Kentish Town Excerpts

Thursday 15th October 2015 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for repeating the Answer, but it is really only about how to help redundant workers. While it is welcome, it is not all new money and it does not help other businesses, from shops and services to suppliers and transport, which will also be affected.

More than this, we should not be in this place. Redcar was to be a major player in the zero-carbon industrial zone based around carbon capture and storage in Teesside. Its loss is a major blow to the project, which had received BIS funding. The Government are overseeing the death of 170 years of steelmaking in Teesside despite the site being viable.

We welcome the steel summit, but why not mothball the site to save the asset? There are companies which are willing to supply the coke ovens or do the mothballing, but the Government have not given the time. Could three months not be found? How can we have a northern powerhouse without this fundamental manufacturing capability? How can the Prime Minister say that steel is vital and do nothing to save it?

[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness for her comments. The local task force that we have set up, which of course did very good work in 2010, will be looking innovatively at options. It is able to come forward with proposals. As she says, we have 170 years of great steel heritage and we need to look forward and find good options for Redcar. Like her, I welcome the summit, because it will look more broadly, obviously well beyond Redcar, at the problems and opportunities for the steel industry.

The noble Baroness asked about mothballing. The company made a last-minute, and I am afraid unrealistic, request for the taxpayer to make an open-ended funding commitment to maintain the coke ovens in Redcar. We were not able to accept that request. On the basis of a limited case, the Government had no confidence that there was a realistic proposal for viability and therefore could not give taxpayer support, even if they wanted to breach state aid rules. The awful truth is that there is a world oversupply of this type of steel. The company had already lost £500 million in its operation over the past three or four years, so despite all the endeavour and optimism of 2012, things did not work out. We have to look forward.

On the northern powerhouse, Teesside is actually making an impressive contribution. The Tees Valley LEP is one that I have visited and is very impressive. The latest investment, while not actually on Teesside but in Darlington, was in the National Biologics Manufacturing Centre. We share common ground that that sort of northern investment is very important for the future of the country.