Boulby Potash and Teesside Unemployment

Andy McDonald Excerpts

Wednesday 2nd December 2015 Westminster Hall

[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.

[Andy McDonald (Middlesbrough) (Lab)]

My hon. Friend makes an excellent point about the HMRC job losses. As far as his own constituency is concerned, if those jobs now have to be consolidated, people will have to travel to Waterview Park or Longbenton. The journey for those people, especially from places such as Guisborough in his constituency, will be some five hours, and that simply is not sustainable. Those jobs, as he and I have experienced in the past, will simply wither on the vine. Is that not an accurate statement of what will happen on Teesside?

[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.

--- Later in debate ---

[Anna Soubry]

I know—I only have 10 minutes.

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate. Obviously, we do not agree politically, but I would be the first to pay tribute to the continuing work that he does on behalf of his constituents. He has come here with a list of demands, and quite properly so—there is nothing wrong with that. As far as I am concerned, the usual rules will apply: if I do not answer any of the questions that he has asked, my officials will of course answer them later, and the same goes for interventions that other hon. Members have made.

The announcement that Cleveland Potash plans to shed 220 direct jobs along with another 140 contractor jobs is extremely bad news. I would be the first to concede that, and as the hon. Gentleman said, it comes at a particularly difficult time for this part of our country in the wake of the closure of the SSI plant at Redcar. The impact is not lost on this Minister, nor on the Government: it is bad news for those workers and their families. The hon. Gentleman is right that there is something about the run-up to Christmas that makes these things all the worse.

[Andy McDonald]

Will the Minister give way?

[Anna Soubry]

As an act of extreme generosity to the hon. Gentleman, I shall give way.

[Andy McDonald]

I am very grateful to the Minister; she is extremely kind. Will she apply her mind to the plight of those workers who were employed through agencies in respect of the SSI crash, and who are now having to go to the redundancy payments service and are not getting a return, notwithstanding the fact that they are producing P45s to show that they were employees? They are being told that they were self-employed and that there is nothing down for them. Will she please use her good offices to extend the rescue package to include those people?

[Anna Soubry]

I will certainly look at that, and I am more than happy to discuss it with the hon. Gentleman afterwards. However, if I may, I will talk about the situation at Boulby, which is, of course, the subject of the debate.

The Government, unfortunately, cannot alter the level of potash reserves. We stand ready to provide support to the Cleveland Potash workers through the Jobcentre Plus rapid response service. Let me say to the hon. Member for Middlesbrough South and East Cleveland that, as the hon. Member for Redcar knows, when it comes to some of the rather peculiar decisions that are often made by jobcentres, saying, “You can’t have funding for this,” or, “You can’t do that,” I urge him to give me the examples—my door is always open to him and to other hon. Members—and I promise I will always do whatever I can to unglue some of the ridiculous rules that seem to exist. We cannot mess about. People are in danger of losing their jobs and we need to make sure that the support available for them is real support that delivers.

Our aim is to help all the workers who are affected, even though a final decision has not been made. However, I think we all know and understand where we are going in this unfortunate situation. I am told that the Department for Work and Pensions has already made contact with Cleveland Potash to see what can be done to limit the impact on staff, and officials in my Department are discussing how the company can provide the most effective support to the workers who will be affected.

I am pleased that the owners of Cleveland Potash have committed to the long-term future of the mine, particularly in developing their polysulphate product line. The commercial exploitation of that product is supported by the Government. In due course, as the product becomes more acceptable in worldwide agriculture, I hope that more jobs will come back to the mine.

This loss comes after significant job losses in the Tees valley, particularly with the liquidation of SSI, but also given what has happened with Caparo’s operation in Hartlepool and the pause—and it is a pause, we are told—in construction announced by Air Products in Cleveland. Let us hope it is just that—a pause—and that all then goes well. I know from my meetings with those directly impacted by the SSI closure how difficult a time it has been for everybody. That is not lost on me.