Boulby Potash and Teesside Unemployment

Alex Cunningham Excerpts

Wednesday 2nd December 2015 Westminster Hall

[Tom Blenkinsop]

Thank you, Mr Davies.

The first reason for the different effect is that my constituency, in the borough of Redcar and Cleveland, has the largest population of miners in the UK. It is more than fair to say that the announcement came as a complete surprise to almost everyone—except some members of the management, perhaps. Only two years ago ICL repeated announcements that the mine had 40 years of potash that could be accessed. That has suddenly fallen to two years’ supply. There had been no sign that the business was struggling, whereas, by comparison, debt and coal shortages were routinely reported for SSI. It was undoubtedly weathering the storm that commodity prices have suffered since the beginning of this year. However, there were none of the early indications that one might have expected, given that the potential job losses run to three quarters of current employee levels. The proposals set out that 700 jobs of a workforce just shy of 1,000 are to go by 2018, with half of that happening by the end of this financial year. If anything, the mining industry in my constituency and neighbouring constituencies appeared to be on the rise, with the proposed York potash project.

I cannot proclaim strongly enough how much of a staple Boulby Potash is in the east Cleveland community. Generations of families have forged livelihoods on the back of the mine since the early ’70s, and now for hundreds of them there is the potential for that livelihood to be stolen away from them. In the early days of the mine, relatives of such people lost their lives to create a working mine and provide good, well-paid jobs for the community. The workers have been given this news in the run-up to one of the most stressful periods of the year. Despite what former Ministers may say, there is never a good time for someone to lose their job, but there is something particularly cold about losing it—or at least being informed about losing it—at this point, in the run-up to Christmas.

The latest job figures that I have do not even cover the impact of the collapse of SSI. However, for the record, the sad fact is that in the two boroughs that my constituency covers, Middlesbrough and Redcar and Cleveland, there are now 6,887 jobless adults and 1,610 young people signing on. There is also an impact in County Durham, where Thrislington quarry in Ferryhill is now under threat because of the effect on the requirement for limestone, which is a prerequisite for the production of iron in a blast furnace. The Government decided to announce, on the very same day as the Boulby job losses, that three local tax offices that provide employment for hundreds of people will be relocated to a centralised hub, which is at best an hour’s commute away if traffic is good.

[Alex Cunningham (Stockton North) (Lab)]

It is sad that the Government are contributing to the loss of jobs in our area. In my constituency hundreds of people—probably well over 1,000, and up to 2,000—have lost their contracting jobs related to all the industries that my hon. Friend has been speaking about. I know that it is not in the power of the Minister as an individual, but we need a whole-Government approach and an extension of the help package for the Teesside area, where unemployment is going up in contrast to what is happening in the rest of the country.

[Tom Blenkinsop]

My hon. Friend must have read my speech earlier, because that is one of the things I shall be asking for. The sheer volume of unemployment at private industrial sites in the past two or three months is such that a profound response at Government level is required. I suspect that many people in my constituency do not know whether to laugh or cry at how far removed the Government seem to be, given the position they have taken about the plight of an area that could actually be a part of the northern powerhouse agenda.

To return to the specific matter of Boulby, I seldom sign early-day motions and propose them even more rarely, but in 2010 I proposed early-day motion 1179:

“That this House believes that it makes economic and environmental sense to purchase salt, grit and potash from domestic sources, particularly during periods of increased demand; supports local suppliers such as Boulby Potash mine in Middlesbrough South and East Cleveland constituency; notes the boost this would give to these suppliers; further notes that this would avoid the unnecessary environmental cost of transporting goods from overseas; and therefore calls on the Highways Agency and the Department for Transport to wherever possible purchase from British suppliers.”

I still believe that it would not be unreasonable for any Government to take such action.

I care passionately about the issue, as I do about the steelworks and the UK steel industry, and I have raised it in a range of forums during my time in Parliament. I will give two examples. In June I asked the Secretary of State for Environment, Food and Rural Affairs

“what assessment she has made of the need for security of supply of potash minerals”.

and I received the following response:

“Defra has not made an assessment of the security of supply of potash minerals. The UK currently has one domestic mine for supply and therefore depends on some imports. Import statistics provided to Defra by the Agriculture Industries Confederation show that 135,000 tonnes of straight potash fertilisers and 389,000 tonnes of potash-containing compound fertilisers were imported into the UK from a wide range of EU and non-EU countries in the 12 months to March 2015 making up approximately 40% of UK consumption.”

Well, that domestic mine has indicated that it will no longer produce potash by 2018, and I cannot comprehend why the Government had not made that assessment previously. I asked the same question a few days after the announcement by Cleveland Potash, and I was referred to the Government’s previous response. To me, that sends the signal that the Government are happy to live off imports from foreign companies while our own industry collapses. I appreciate that the response did not come from the Department of the Minister who is present for the debate, but perhaps she will enlighten me and fellow Members as to why there has been no such assessment.

I called for this debate not only to address the devastating news at Boulby Potash but to set out the scale of the unemployment that has befallen Teesside in the past two to three months.

[Alex Cunningham]

Of course, a chance to develop opportunities for people in Teesside has been lost in the past few days with the Government’s ditching of £1 billion of support for carbon capture and storage. A major industry could be developed from that, with major benefits for Teesside. The first industrial CCS project was on the stocks, but now we find out that the Government have withdrawn all funding from it. I hope the Minister will address what the Government’s hopes are for that industry, although that may not be her particular responsibility.

[Tom Blenkinsop]

I thank my hon. Friend for going into that point—I was not going to raise it. Stan Higgins, who works for the North East of England Process Industry Cluster, has said that that project is still on track and private investors are still interested, but when the number of programmes was cut from four to one the Chancellor never gave any budget detail about the capital requirement. There was always £100 million floating around, rather than the £1 billion that was promised. Now we know, because of a statement given to the stock exchange at 3 o’clock during the comprehensive spending review speech last week, that all public funding for CCS has been withdrawn.

I think we are missing a huge opportunity. I do not think that Teesside should have the project—I think we should have more than one. CCS is a clear solution for fossil fuel-intensive energy production, and it is acutely needed for manufacturing. If we are going to compete with our European competitors, as well as at least trying to make a fist of it against Chinese imports in any processing industry, we need to be able to provide cheap energy and remove the problems that green taxes and green costs are applying. Ultimately, the biggest point is that CCS provides the manufacturing industry with a solution to carbon dioxide emissions. The UK as a whole—never mind Teesside—is missing a huge opportunity to take hold of that technology and become a world leader in it.

[Alex Cunningham]

We have the Minister with responsibility for coal here today. There was a meeting on Friday in my constituency about offshore underground coal gasification. I wonder if that could also create high-powered, high-value jobs in our constituencies on Teesside. I would be obliged if the Minister could tell us what her Department’s attitude would be to that sort of project coming forward.

[Tom Blenkinsop]

My hon. Friend must have the password to my laptop, because he is quoting my speech verbatim.

To go back to the issue of unemployment, Teesside has endured a tsunami of job losses recently—I genuinely feel that that statement is proportionate. I mentioned the closure of SSI, which has had an impact on its supply chain and on other related businesses with a link to the steel industry. That does not include the contractors affected, nor the loss of the Caparo steel site in Hartlepool. In Stockton, 700 contractors were left shattered at Air Products as it halted the construction of a second gasification plant. Admittedly that is because of technical issues, not economic ones, but no timeline has been given for when construction will be brought back, so those men and women will have to find alternative employment. Jobs will also inevitably go following the relocation of offices by HMRC, as my hon. Friend highlighted. On top of that, local councils and public services continue to feel an unprecedented squeeze on finances due to reductions in central Government funding, and job losses will inevitably follow.

I have spoken at length about the 700 job losses at Boulby. Hopefully I have made it clear that the labour market across Teesside and east Cleveland is beyond crisis point. Governments are meant to make the lives of their citizens easier and provide support in tough times. I cannot call what the Government are doing inaction, because they made the HMRC decision, but they have somehow made—or endeavoured to make—the situation worse in a difficult period.

[Tom Blenkinsop]

My hon. Friend accurately portrays the difficulty of not only the lack of jobs but the geography of the area.

I have mentioned the high number of private sector industrial jobs being lost, but we cannot forget the impact on well-paid, stable, sustainable public sector jobs, or the follow-on impact on small businesses. People are used to walking into their local tax office or simply picking up the phone to talk to someone there. Admittedly the Government have a reasonable agenda in trying to move towards an online system, but small businesses, in some cases, do not have the know-how, the capital or the time to do use such a system. They need to pick up the phone and get help immediately. I will go into that later.

The fact that we have just under 8,500 people officially registered as unemployed—I hasten to add that that figure is from before the job losses I am talking about today were recorded—shows the sheer degree of human waste and squandering of talent that this Government are presiding over. If those people were in productive work, they could be helping to build a better future and a better economy for Teesside. It is a waste of talent and a waste of human potential, and that is what makes the job losses even more devastating.

As a lot of the industries affected are specialised, finding suitable alternative employment is not straightforward, and the level of pay certainly cannot be matched by other local employers. If we take the example of face workers at Boulby, although their core pay is £28,000 to £29,000 a year, after bonuses they are probably getting somewhere in the region of £40,000 a year. The average income in the Tees valley is more around the £20,000 to £21,000 mark, so we are talking about 700 workers who are on double the area’s average wage. That will have a huge economic impact downstream. We do not have any more of the large-scale heavy industry employers to which there would be a good chance of skills being transferred.

Although welcome, the projects in the pipeline, such as the MGT Power plant, are some time away. If the Government are serious about the northern powerhouse, they must act in the meantime. The future of Skinningrove’s special profiles and the Teesside beam mill near Redcar is still uncertain. Leading figures from across Teesside have argued for a number of years for the need to diversify the economy away from large employers that are highly susceptible to the economic market, while keeping them in place. That continues to be the case, and sadly the fears have become a reality.

We must intervene, knowing that the market fluctuates, and help with the diversification. We cannot simply sit here and say, “This is the market,” again, allowing thousands of people to be shed, because I fear that the skills those people carry will inevitably go to other areas. That will have fiscal implications for our local area and its ability to pay for local services, especially in a political culture where our Government are devolving more and more to our local areas, while the ability of areas to retain their own wealth is being eroded and depleted.

This coming Saturday, I suspect we will all be supporting the Small Business Saturday initiative. It is more vital than ever that small businesses in my constituency are supported, because they need to grow and provide more employment opportunities for my constituents. Creating a mixed economy will require risks to be taken. However, to support and develop our existing process industries on Teesside, we need Government commitment to supporting developing projects such as the Teesside Collective so that it becomes the go-to location for future clean industrial development and Europe’s first CCS-equipped industrial zone. We need our area to be seen and developed as a prime location for the use of Durham coalfield gas—a non-conventional gas that is 50% cheaper than conventional gas—via gasification, so that we can address green costs and taxes for industry and ensure a cheap, indigenous energy supply.

[Alex Cunningham]

Syngas from coal gasification is a high-quality gas with many components, and it is feedstock for some of the industries on Teesside. It could attract other companies to that part of the world, if we were able to provide it.

[Tom Blenkinsop]

My hon. Friend makes the case perfectly, as ever. Furthermore, if we had a CCS plant alongside our own supply of cheaper, higher quality gas, that would be an industrial strategy in and of itself, and private investment would flock there. I hope Lord Heseltine will report that back to higher levels of Government.

The two large-scale measures I have just described would be the basis of reigniting a new emphasis on industry upon the Tees, and I dearly that hope Lord Heseltine will seriously consider pushing and developing them under the Government’s inward investment fund for the Tees industrial conurbation.

In the interim, however, what my area needs is far more profound. We await a proper response to the five industrial asks for the steel industry. The SSI steel taskforce that I sit on with my hon. Friend the Member for Redcar (Anna Turley) needs to be immediately extended to cover the entire Tees Valley Unlimited local enterprise partnership area and to involve other MPs in the area. It is hopelessly unacceptable for the Government to leave that taskforce, with much less financial aid than promised, to deal with the unemployment circumstances of one industrial site and to wholly ignore the plight of workers at Air Products, Caparo, Boulby and their downstream contractor workforces. That has left me and my hon. Friends from the Teesside conurbation in the invidious position of being able to feed back help to ex-SSI workers, but absolutely nothing to others workers affected by job losses. Our job is to serve all our constituents, and having a two-tier system with preferential treatment for some steelworkers and nothing for potash face miners completely undermines our position as democratically elected representatives to this place.

There is another issue for the Government. Apart from Boulby Potash being the UK’s only domestic potash mine, supplying 60% of the British market’s potash, it is also of strategic importance as the UK’s largest domestic supplier of rock salt. A reduction in manpower will severely undermine the mine’s ability to produce, or indeed ramp up, production at critical strategic points in time for required increases of rock salt during heavy winters that the UK may suffer. Will the Minister tell me what assessment the Government have made of rock salt production and what contingency they have in place? Is she willing to meet with me about that strategic civil matter as a matter of urgency, given that the 45-day consultation at the mine began some time ago? The necessity of keeping any skills potentially required for a sudden increase in rock salt production at the mine during a cold winter in the coming months will undoubtedly have an impact on production levels.

Finally, my No. 1 ask, even if there is only one thing we can deliver today, is for those affected by redundancies at Boulby Potash to be included in the support package being provided to those at SSI, with the additional funding required to do so, so that all taxpaying workers in my area get the Government support they deserve.

--- Later in debate ---

[Anna Soubry]

Yes, I urge the hon. Lady to write or email me and I will make sure all those concerns are directly acted upon. If we can help and make a difference, we absolutely will.

I am conscious of the time, so for the record I want to make a few points quickly about Her Majesty’s Revenue and Customs, which a number of hon. Members have mentioned. In terms of that decision, 2018-19 is the time when the changes will be made. It is important to note that they are not happening overnight; there is a period of time.

On the comments by the Secretary of State for Department for Environment, Food and Rural Affairs, I will take that up—I cannot comment now because I genuinely do not know anything about that. I hear what the hon. Member for Middlesbrough South and East Cleveland said about CCS. May I also say that we have changed the procurement rules? This is really important. Our new directive—our new rules on procurement—basically say that there are now no excuses for not buying British. It really is a big shift, not in Government policy but in the whole attitude and approach. We are making sure that people really do not have any excuses when it comes to procurement—they should buy British.

I also mention the appointment of Lord Heseltine of Thenford, which I know was controversial. It was my idea—I put that absolutely clearly on the record—to bring him in, because he is somebody who gets stuff done, who can bring folk together and who can connect various bits of Government to make sure that Tees valley now gets the inward investment, for example through working with Lord Maude, who sits in my Department and is responsible for trade and all that UK Trade & Investment does. I thought, and continue to believe, that it was a very good idea to bring somebody in with the experience and clout, if I can put it that way, to lead in the Tees valley and bring all these different people, ideas and resources together, so that we get exactly the sort of way forward and future for this part of the country that it absolutely needs and deserves.

Let me also put it on record that I am really proud of the huge amount of work that the Government have done, because it is not all bad news for the Tees valley, even though it has been a really bad few months. There is no debate about that—it has been dreadful. I do not disagree about the job losses and the numbers—they speak volumes, of course. However, we must not forget the huge amount of investment in the Tees valley, with the devolution deal and all that that will bring to the area. The area has huge resources in its people, its skills and its colleges. Notwithstanding this unfortunate time, it still has a great story and a huge future.

[Alex Cunningham]

I remain to be convinced about the value of the devolution deal, but I welcome Lord Heseltine’s involvement in the project. I hope that the Minister might arrange for him to have “CCS” and “coal gasification” on his pad when he starts to decide what he can do and uses the clout that she is talking about.

[Anna Soubry]

I absolutely undertake to write to Lord Heseltine specifically on that point. For the record, the hon. Member for Middlesbrough South and East Cleveland does not only make speeches; he comes to me and makes his case to my face. I make no complaint about that, because he is doing his job. It would be great if more MPs took up such issues in the way that he does—apart from when we fall out, of course.

In all seriousness, however, I undertake to ensure that Lord Heseltine gets a copy of the debate. If the hon. Member for Stockton North (Alex Cunningham) or anyone attending or listening to the debate wishes to write something to me for forwarding, I will ensure that Lord Heseltine knows about people’s desires and dreams—what the hon. Gentleman would describe as things that can be realised as a reality and as a way forward, and that is important.