Steel Industry

Debate between Angela Smith and Tom Blenkinsop

Thursday 3rd November 2016 Westminster Hall

[Tom Blenkinsop]

I thank my hon. Friend for raising that point. There have been warm and welcome words from the Government about an industrial strategy. The Opposition have been talking about that for the past six years, but be that as it may, the Government are there and we want to work with them over the next few months to form that industrial strategy. There are immediate issues that need to be resolved, hopefully in the autumn statement, and there are further long-term issues in relation to an industrial strategy, how we form that strategy by sector and how the steel sector needs specific treatment in order to go forward.

The other aspect of the steel industry’s significance is the jobs it provides, the communities it forms and has formed, and the culture of which I am proudly a part. More than 30,000 people work in the steel industry, from watermen to control panel engineers and from craft workers to lab technicians. What is important is not only the numbers but where in the country those jobs are, because as well as adjusting the mix of our economy to include more manufacturing, a long-term aspiration of successive Governments has been to rebalance the economy away from London. The UK steel industry supplies more than 10,000 jobs in Yorkshire and the Humber, 8,500 in Wales, 4,000 in the west midlands, 2,000 in my own region, the north-east, and at least 1,000 in Scotland. Those regions are desperate for jobs and investment, and they have been the worst hit by the decline in manufacturing and domestic industry.

Simply put, if the Prime Minister is serious about spreading opportunity around our nation, she cannot abandon the steel industry. Steelworkers across the UK are not asking for charity, merely for access to a level playing field on which to compete with steelmakers from across the world, but in a number of ways, UK steel is fighting an uphill battle. The trade tariffs that protect American steel producers from Chinese steel are many times those in place to protect British producers. Despite limited Government assistance, energy for British steel producers remains more expensive than for our European competitors, and Government-led infrastructure projects, most recently Trident, continue to use foreign-made steel instead of British alternatives.

Where our industry can compete and has been leading the world is in our people and our skills. It is difficult to estimate the value of the institutional knowledge and experience in Port Talbot, Stocksbridge, Skinningrove or Sheerness, but it has helped those communities to stay afloat and their steelworks to function. The Materials Processing Institute in Teesside is producing world-leading research, and has received visits from German, Slovak and Swedish Government representatives who wish to draw on our expertise in this country.

It is testament to the combination of those institutional skills, the experience of steel communities around the country and the cutting-edge research of institutes such as the MPI that the productivity of the steel industry has consistently improved over the last decades. It is for those reasons that the UK steel industry should be seen as an opportunity—a reservoir of potential—rather than, as it is sometimes called, a burden on a modern economy.

We should be wary of how quickly that reservoir can evaporate. A steel or metals industry cannot be created from scratch overnight. The average age of a steelworker is growing, and the current crisis means fewer young people are coming into the industry. Without a secure future, the skills developed over decades could be lost. Those skills are not important only for the steel industry. I recently met representatives from Metalysis—a company that uses an innovative process developed at Cambridge University to produce metal powders and alloys that will be vital for 3D printing—who emphasised to me the importance of those skills grown in the steel industry for their business. To allow that experience and research reservoir to dry up with the decline of the steel industry would not merely affect the future of steel in the UK, but would cut off our competitive advantage for the metals sector.

Rather than let that advantage disappear, we should build on that potential by creating a steel sector catapult and a metal materials strategy, through which knowledge can be shared, built upon and turned into results for British industry. I hope the Government will work with MPI and members of the all-party parliamentary group on steel and metal related industries to fashion a new bid for that catapult. That is something the Government could commit to today that would show that they are serious about the future of the industry. I hope the Minister will remark on that later.

Steel in the UK is not an odd nostalgia but a viable industry with a future. It does not need charity but access to a level playing field on which to compete. If given that access, it is reasonable to believe the industry could be the world leader it already is. There are immediate challenges, though. The five asks on energy costs, business rates, Chinese dumping and procurement have still not been fully delivered on by the Government, and they demand the Government’s immediate attention. They can be acted on now and the solutions announced in the autumn statement.

The drop in sterling and the change in global steel price is not a solid foundation on which to build the steel industry’s future. The Government must not believe that their short-term work is done. They must take action, with long-term milestones and with a long-term view, so that not only people in the House know where they stand, but investors in the industry know exactly what the 20 or 30-year view is, and associated industries that rely on steel know exactly what to expect.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Members across the House could be forgiven for thinking that the Government have assumed that, because the sense of immediate crisis appears to have passed, their foot can be taken off the brake and that we can rely on the industrial strategy emerging next spring to address the problems. Does my hon. Friend agree that that is definitely not the case, and that the Government need to keep at this, on top of it, and give it the priority it deserves now?

[Tom Blenkinsop]

I thank my hon. Friend for raising that. There are a number of issues within that general question that still hang over the industry. I am at pains to talk about the broader industry and the new, smaller companies that are emerging. The debate tends to be dominated by issues around Tata, for obvious reasons, but we need to look at how we develop smaller companies, hence our desire for the steel sector catapult to be established. Although those smaller companies have come to the fore, they have told me directly that if a steel sector catapult existed, they would have been able to get where they are now a lot quicker and with a lot less capital, which would release more capital to do other things or to develop other research and development potential. One of the most profound issues, which I will go into later on, is the British Steel pension scheme.

Producing steel is a massively energy-intensive process. Despite the Government’s policy, which compensates energy-intensive industries for the disproportionate impact of carbon reduction measures on them, British energy prices are still far higher than those in Germany and elsewhere in Europe. The steel industry is aware of the need to transition to low-carbon energy sources, but only in a way that makes business sense.

Everyone I have spoken to in the steel industry welcomes the inclusion of the energy portfolio in the same Department as the business and industry strategy portfolio. That makes sense, and it is about time it happened. However, the Department has yet to respond to the EEF’s five recommendations aimed at addressing the competitiveness of UK energy costs. Since the initial meeting with the Department for Business, Innovation and Skills on this issue in June, EEF estimates that the disparity between UK and European energy costs means the UK steel industry has paid £20 million more in energy bills than their continental competitors. What is being done on energy costs? What benefit has the sector felt since the creation of the Department for Business, Energy and Industrial Strategy?

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[Angela Smith (Penistone and Stocksbridge) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friends the Members for Redcar (Anna Turley) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate. It is always timely to have a debate on steel, such is its importance to the economy, but at this particular moment, given the wide range of issues we face, including Brexit, it seems particularly timely.

I want briefly to go back to October 2015, when the SSI crisis hit TV screens. As we know, the company went into liquidation and 6,000 people lost their jobs. That is 6,000 men and women lost to the industry, potentially forever, and 6,000 families who face an uncertain future. Yet since the collapse of SSI and the problems that Tata faced earlier this year, although there have been some improvements in the conditions faced by steel producers—not least because of the 16% devaluation of the pound—there are still major problems facing the steel industry.

The Chinese dumping of steel continues, and the UK is still blocking attempts to put meaningful tariffs on that steel as it comes into Europe. It has never been about protectionism—this is a really important point. Rather, it is about effectively countering the hidden subsidies that the Chinese state has embedded in its own production of steel. I have listened to the Chinese and have heard them say they will roll out figures on their production and about how they are reducing the volumes of production, but they never, ever refer to the fact that they are effectively undercutting the global steel market by embedding subsidies in their pricing structures.

Let us not forget that we still have all the other issues that my hon. Friend the Member for Middlesbrough South and East Cleveland mentioned in his opening remarks: the five key asks that were developed some time ago by UK Steel, supported by the union Community and supported by parliamentarians across the House. My hon. Friend did an excellent job setting out the key strategic issues facing the industry at this point. I will not go through them all again, because he did that brilliantly and the case is made.

As would be expected of me, and because of the situation I face in my constituency, I want to focus briefly on the situation with the Tata holdings in the UK. Although the sale of Port Talbot has been suspended while Tata and ThyssenKrupp talk about a joint venture, Speciality Steels, which has plants in Sheffield—in Stocksbridge, in my constituency—and Rotherham, is still up for sale.

I do not apologise for rehearsing the point about the importance of the Stocksbridge plant. Members have heard me say before that the steel produced at Stocksbridge is in the top 7% of the value chain for global steelmaking. Two thirds of the aviation steel made globally is made in Stocksbridge: it makes steel for landing gear, for the Rolls-Royce engine and for the sliding doors on the aircraft body. It is an incredibly important and valued part of our steel industry. I have even heard it said—by people who frankly do not know a great deal about what goes on there—that there is effectively old-fashioned steelmaking going on in that facility, in something that looks like a shed. I know that the Minister has visited Stocksbridge and so entirely understands my point. What goes on inside that building—that very old facility—represents some of the best and most advanced steelmaking technology in the world.

I am incredibly proud of what Stocksbridge does, and I know that the community is too. We are confident that the plant will have a future and we know that the right investment plan can secure that future. It has got the vacuum induction melting facility, but it needs further capital investment if it wants not only to maintain its place in the value chain, but to move up it. That is the ambition: to move into the era of 3D printing mentioned by my hon. Friend. Stocksbridge wants to be able to produce—if hon. Members will forgive the layperson’s way of saying it—the powdered steel, which we know will enormously increase the value of what we make there. That is something like £30,000 to £40,000 a tonne initially. It is critically important that we get the right buyer for Tata Speciality Steels: a buyer who is in it for the long term and prepared to make the investment.

Recent reports about the apparent boardroom manoeuvrings at Tata are a little worrying, to say the least. Given the current instability at the global board-level at Tata, I ask the Minister what the Government are doing to ensure that the sale of Tata Speciality Steels in South Yorkshire is not compromised by the uncertainties apparent at boardroom level at Tata HQ. What communication is he having with Tata at the highest level? I do not expect the detail, or for commercial sensitivity to be compromised, but can he tell us what discussions are taking place to make sure that the sale of Speciality Steels is given the priority by Tata that it deserves?

Yesterday, during Prime Minister’s Question Time, I raised the Prime Minister’s visit to India next week. I did not really get the clear answer I was looking for, but can I now ask the Minister to commit to ensuring that the delegation led by the Prime Minister that is going out to India next week takes the opportunity to raise with Tata the business of ensuring a sustainable future for Speciality Steels and, indeed, the other Tata holdings at Port Talbot and elsewhere? In other words, what are the Government doing to support Speciality Steels, Port Talbot and the other Tata holdings in the forthcoming period?

If we are to have a successful steel industry, we need demand for steel produced both for home markets and abroad. Recently we have heard some pretty bad news about the demand for UK content even in British infrastructure projects. We all know about the recent decision to award the contract to supply the steel for the pressure hulls of the new successor Trident submarines to a French company, despite the fact that we have the capacity here in the UK and two UK firms submitted a joint bid for the work. There are other upcoming projects that could, with a bit of support and leverage from the Government, absolutely maximise the use of UK steel.

[Tom Blenkinsop]

On the Ministry of Defence contract, which occurred two years ago, when two British firms—or two UK sites—came forward with ideas for the plate steel for the hulls on the successor programme, they were actively told to go away by the MOD, as it had already procured the contract from a French site. The two British sites involved, which wanted to come together and provide a solution, just wanted a bit of time—given the time that has subsequently passed, those two sites could have provided the steel. That was another missed opportunity in a period when we were still members of the EU, and defence contracts are exempted from competition regulations.

[Angela Smith]

I completely agree with my hon. Friend. His point relates entirely to the situation with shale gas. My hon. Friend made an impassioned case for the shale gas industry earlier this afternoon, and I entirely support him in that. I support the signing of the memorandum of understanding by Community and by the GMB. We all know that the domestic supply of shale gas will help not only the steel industry, but a range of industries in the UK, because it will provide valuable feedstock for the chemicals industry, for example.

Are the Government continuing to support the development of the relevant steelmaking capacity to ensure, for instance, that UK steel will be used in developing the new industry? There have been difficulties in ensuring that the UK steel market can provide that capacity, but we know that work is ongoing, in partnership with the oil and gas industry, to get over those obstacles and make it possible for the UK steelmaking capacity to deliver the steel that the shale gas industry needs. That relates entirely to the point my hon. Friend made: will we ensure this time that we do not miss an opportunity to expand the UK steel industry and exploit new opportunities that become available, such as shale gas?

The same can be said of the Swansea bay tidal lagoon. Is the Minister providing input on the process to the so-called Hendry review? That is critically important. There are huge advantages for the UK steel industry from that project, if it goes ahead.

Onshore Oil and Gas

Debate between Angela Smith and Tom Blenkinsop

Tuesday 26th January 2016 Westminster Hall

[Angela Smith (Penistone and Stocksbridge) (Lab)]

As always, it is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing this important debate on the role that manufacturing can play in the unconventional gas extraction industry.

This is not really a debate about whether the UK should develop a shale gas capability. The House has rightly focused on the need for a robust regulatory framework for such an industry, and it will no doubt continue to debate such important issues, but this morning’s debate is much more pragmatic. The question before us is clear: if the shale gas industry is going to develop within the clear regulatory framework agreed by the House, how do we best ensure that UK manufacturing can exploit to the maximum the supply-chain opportunities made available by that nascent industry? That pragmatic point is what is important to people up and down the country who have traditionally depended on manufacturing jobs to maintain their prosperity, living standards and family life. At its heart, this is about a debate that understands the importance of manufacturing to the UK economy.

In the US, which has had a shale gas industry for some time, one of the biggest winners has been the chemicals industry. Shale gas production in the US has seen feedstock costs reduce significantly, giving the chemicals sector a major competitive advantage over manufacturers in the EU and Asia. Shale gas ethane from the US is much cheaper than that from the EU, which is produced from naphtha, a refined form of crude oil. Cheaper energy, combined with cheaper feedstock, has kick-started investment in the US chemicals industry, attracting $138 billion of investment so far and funding 225 new projects.

In the UK, the chemicals industry is already a major exporter, with about £25 billion of exports. Yearly, it adds almost £9 billion to the UK’s GDP, as well as underpinning much of the manufacturing sector, including steel. In terms of competition, the chemicals sector could benefit greatly from a new source of domestic feedstock. It would benefit from lowers costs and, importantly, from shorter, more secure supply lines.

There should also be opportunities for many UK-based manufacturers in other sectors to supply an emerging shale gas industry. A report by Ernst and Young estimates that more than 39,000 indirect jobs could be created by UK shale gas extraction. It also suggests that the total spend involved in bringing UK shale wells into production would be £33 billion by 2032, which would include £17 billion on specialised equipment, such as high-pressure pumps and mixers. I note with interest that EEF has said that, although the majority of pumps are currently manufactured outside the UK, with some assembly done here, there is significant potential to increase UK production. However, if UK manufacturing is to benefit, it will be necessary to build the case for investment in those things, and that is my first ask to the Minister.

This is, however, not just about pumps; it is also about the sand that will be required for the fracking process. That will come from existing quarries and could generate a £2 billion spend in the UK from 2016 to 2032. This is also about the cement, for which there could be a nearly £1 billion market, and that cement could come from the UK’s four cement manufacturers. We cannot afford to dismiss that potential.

For me, as a south Yorkshire MP, however, the most exciting prospect lies in the opportunities the shale gas industry could create for steel manufacturing. Steel is in crisis. A global slump in demand, contractions in the oil and gas industry and the dumping of cheap, subsidised steel on global markets by the Chinese have combined with high energy costs and unsustainable business rates to create a debilitating sense of volatility in the industry. I acknowledge entirely that the industry must respond positively to the challenges it faces, but if UK steel is to develop a positive way out of its difficulties, it needs Government support.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend is making a good case in relation to the UK steel industry, but the shale industry could help other integrated industrial sectors in the wider economy to develop, and one of those is carbon capture and storage. In a world where fossil fuels are getting cheaper, we should be using pots of funds originally used for renewables for CCS, and the Government should review their decision to get rid of it. In addition, non-conventional gas such as syngas, which comes from coal gasification—there are still tons of coal in the Durham coalfield under the North sea—could be less than 50% of the price of conventional gas. Those two pillars could lead to an industrial renaissance in some areas.

[Angela Smith]

I completely agree with my hon. Friend on both those points. On CCS, it is difficult for the Government to make progress on gaining public acceptance for the shale gas industry, and part of the argument against the industry has always been the emissions and the problem of using fossil fuels into the foreseeable future. CCS is one of the key ways we can deal with that issue and that argument. If there is to be a long-term future for any fossil fuel, the Government must think again about their abandonment of CCS technology.

We need to understand that the nascent shale gas industry offers one of those rare opportunities to create new demand for steel—something we badly need at the moment—and a new sense of hope that there is a positive future for one of our foundation industries. As United Kingdom Onshore Oil and Gas points out, the crisis that the industry faces will not be solved just by dealing with issues relating to energy and business rates, important though those issues are. It needs to be addressed by supporting UK steel to play a bigger role in manufacturing supply chains domestically and globally. This is about the Government supporting the development of a wider range of steel capabilities, by building the business case for the development of a UK shale gas supply chain.

What we do not need, as the hon. Member for Thirsk and Malton said, is a repeat of what has happened with the UK’s offshore wind industry, where we have missed opportunities to build a robust supply chain, despite our strength in the wind energy market. This time, the Government can get things right by working with industry and by supporting the building of a business case for developing shale gas. They can encourage confidence among investors and supply-chain companies and prevent the industry from meeting the fate that has befallen the green energy sector.

Steel’s opportunities as part of the shale gas supply chain focus on two main capabilities. First, as was pointed out earlier, the shale gas industry could need more than 12,000 km of high-quality steel casing, costing £2.3 billion. It could also need 50 drilling rigs, which would cost £1.6 billion to manufacture. So how do we make sure that we make the best of British, in meeting that potential demand? I suggest that we need first to identify the best means of making the UK contribution to the rigging requirements of the shale gas industry. That may or may not mean the domestic manufacturing of the rig components; but at the very least there is great potential for exploiting domestically the need to upgrade rig components to UK standards and to provide ancillary equipment. According to EEF, that market could be worth £1.2 billion. That is a good, practical, pragmatic way forward, which the Government could help to deliver.

As to the steel casing, the problem is, of course, that the UK manufactures welded tubing—not the seamless tubing required by the industry. UKOOG points out, however, that a significant amount of work is required on seamless pipes before they are ready to be used by the shale gas industry and that that could and should be done in the UK. That position is supported by EEF. I would prefer it if the necessary investment could be made to give a UK home to such a manufacturing capability once again; but, however we look at the issue, the Government have a role to play in supporting the steel industry to exploit the opportunities available and thereby to secure a better future for itself.

The Government need to support the establishment of the business case for all aspects of the shale gas supply chain, with particular urgency in relation to the steel aspects of that supply chain. As UKOOG points out,

“We are at the start of the shale journey and the steel industry needs help now.”

UKOOG has pledged to work with the Department for Business, Innovation and Skills to see whether any support can be given. That is incredibly helpful. What we want from the Minister today is a commitment to ensuring that that offer of collaboration from an industry that in a sense is new to the UK—shale gas extraction is new—is taken up enthusiastically by the Government; we want it to be translated into a supply chain strategy that guarantees that the best of British will lie at the heart of a successful, safe and environmentally sustainable British shale gas industry.

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[Tom Blenkinsop]

rose—

[Angela Smith]

rose—

Thamesteel

Debate between Angela Smith and Tom Blenkinsop

Wednesday 21st March 2012 Westminster Hall

[Tom Blenkinsop]

I agree with the hon. Gentleman, who makes a valid point. The steel industry and other energy-intensive industries are worried about their future. The Government, I think, are willing to listen. We hope that the Budget will take more steps to help and assist industry. We need to consider other measures, but I will come on to them later in my speech.

Across Europe, steelmakers have been restructuring their operations in the light of weaker steel demand. Aside from Tata Steel and Thamesteel, ArcelorMittal—Europe’s largest steelmaker—began mothballing furnaces in recent months as part of an optimisation plan aimed at shifting more of its production to low-cost facilities. Recently, it also announced plans to shut indefinitely an electric arc furnace in Madrid due to weak demand. The move will affect around 270 jobs. It is also considering cutting 630 jobs at its Czech plant, to boost competitiveness.

Everyone here, whether MPs or people in the Gallery, is seriously concerned about what the UK Government are doing about UK manufacturing generally, and UK metal process industries in particular. What are the Government doing in Corby, Scunthorpe and Rio Tinto Alcan, to name but a few? There has been a lot of noise from the Government about the manufacturing sector, but little actual help. With 300 companies involved in the local manufacturing supply chain in north Kent, this issue is crucial. The sequence of events that led to the need for this debate on Thamesteel and the wider UK steel industry illustrate that clearly. I have taken some notes from my former Community union officer colleague, Ryan Slaughter, who has been dealing with the Thamesteel situation alongside local reps at Sheerness.

In late 2002, Saudi Arabia-based Al-Tuwairqi Group bought the Sheerness steel mill and formed Thamesteel Ltd. Al-Tuwairqi aimed to invest in the works and produce grade steel bar and billet for the middle east market. Much of the steel bar and billet produced by Thamesteel workers was used in large-scale construction projects across the middle east.

In April 2009, Thamesteel and Van Merksteijn acquired an equal controlling interest in Kierbeck Ltd—a reinforcing steel fabrication business—of 51%, which was held through the holding company TVM Ltd. In May 2010, Mazars administrators were appointed as joint liquidators of Kierbeck Ltd and the business and assets were sold to Kierbeck Thames Ltd, a sister company to Thamesteel, on 2 June 2010.

In the summer of 2010, a working capital agreement was reached with Stemcor UK Ltd, taking out a charge on various companies within the Thamesteel Holdings Group. In September 2011, Thamesteel stock holding was reduced to clear the balance with Stemcor until the full balance was cleared. Production at the rolling mill was also stopped temporarily, owing to a lack of working capital.

In November 2011, the melt shop stopped production. On 15 December, senior management sent an e-mail to management staff indicating that payment of salaries would be delayed—that was on the day when staff were supposed to be paid. On 17 December, HAT Holdings BSC—an Al-Tuwairqi Group company—agreed to invest £170,000 in Thamesteel after installing a debenture to secure future investment.

On 23 December 2011, employees received their last pay to date. On 24 January 2012, HSBC placed a freeze on all company bank accounts. On 25 January, Rod Weston and Guy Hollander from Mazars were appointed as administrators. Union officials were the first production employees to be informed that the company was in administration.

At 11 am on 26 January, Rod Weston addressed all employees at a mass general meeting, announcing 394 potential redundancies. Mazars told employees that, if they did not receive a call by the end of the day, they were redundant. Community union officials addressed employees and began the Save Our Steel campaign. On 28 and 29 January, 341 redundant employees received notices and RPl forms.

On 30 January, my hon. Friend the Member for Harrow West (Mr Thomas) submitted early-day motion 2663 on the Thamesteel redundancies. On 31 January, Community union jointly organised with Mazars a workers’ support day. The majority of workers received help filling in RPl forms and advice from local colleges, Citizens Advice, Jobcentre Plus, Communitas, the Community trade union information advice and guidance training arm and Her Majesty’s Revenue and Customs.

On 1 February, Michael Leahy wrote to the Secretary of State for Business, Innovation and Skills asking him to meet Community union Thamesteel workers. On 7 February 2012, the first meeting of the Kent county council taskforce was attended by Ryan Slaughter, from the Community union; Ken Pugh, a county councillor; Kevin Lynes, the chair of the meeting and another county councillor; John Burke, who is the constituency manager for the hon. Member for Sittingbourne and Sheppey (Gordon Henderson); Jobcentre Plus; MidKent college; a representative of the Department for Business, Innovation and Skills; Peel Ports; and Citizens Advice. The aim of the taskforce was to provide immediate support and to plan a long-term economic strategy for Sheerness.

Also on 7 February 2012, Michael Leahy, the general secretary of the Community union, Roy Rickhuss and two Thamesteel workers, Pat Wiggins and Tom Butler, met the shadow Minister for Business, Innovation and Skills, my hon. Friend the Member for Hartlepool (Mr Wright). On 13 February 2012, the Secretary of State for Business, Innovation and Skills wrote to Michael Leahy and declined to meet Thamesteel workers who are Community union members.

On 10 February 2012, the first Thamesteel RP1 forms were received by the local redundancy payments office and a further nine employees made redundant. On 14 and 15 February 2012, a second tranche of RP1 forms were received by the redundancy payments office.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Does my hon. Friend agree that the contrast between the behaviour of the current Secretary of State for Business, Innovation and Skills and that of the previous Secretary of State for Business, Innovation and Skills, Lord Mandelson, is not to be believed, given that Lord Mandelson worked very hard when the steelworks in my constituency was under pressure and about to go under, and he worked really hard to ensure that it had a future?

[Tom Blenkinsop]

I support my hon. Friend’s comments and will return to them, as she makes an important point. It is all about how we define industrial activism and whether we have an industrially active policy, where Ministers are willing to roll up their sleeves and get their hands dirty.

On 17 February 2012, the Community union Sheerness works branch met and voted to lobby Parliament. On 21 February 2012, the all-party group on the steel and metal-related industry, which I chair, met and heard representations from two Thamesteel workers, Pat Wiggins and Tom Butler. On 22 February 2012, the second meeting of the Kent county council taskforce took place. On 24 February 2012, the redundancy payments office received a third tranche of RP1 forms. From 27 February 2012, 240 RP1 submissions were paid to Thamesteel workers in a week.

On 8 March 2012, Community union Thamesteel workers held a lobby of Parliament. On 13 March 2012, Michael Leahy, the general secretary of the Community union, wrote a further letter to the Secretary of State for Business, Innovation and Skills, asking for assistance and a meeting with workers. On 16 March 2012, the deadline that Mazars had proposed as a cut-off date for bidders was passed. On 21 March 2012—today—a Westminster Hall debate to raise the concerns of the Thamesteel workers is being held. On 28 March 2012, creditors of Thamesteel will meet at Priestfield stadium in Gillingham.

Throughout this time, it is safe to say that the presence of the Government has been fairly non-existent and those of us who are here today, and the workforce, would like to know why. Why has the Department for Business, Innovation and Skills ignored requests to meet the democratically elected representatives of the workplace that is affected? Why have the Government so far waited for an invisible hand, instead of lending their helping hand? Why has the Secretary of State ignored a trade union that he knows can deliver results in saving steelworks, as was seen at Redcar’s Teesside Cast Products?

If the Secretary of State or the Minister agreed to meet the union, they could have heard directly from men such as Ian Crosby, Paul Davies, Michael John Terry, Aby Abraham, Gary Lewis and Barry Coulthard, who are all workers at Thamesteel who have written down accounts of their plight. Unfortunately, I do not have enough time to read out all their accounts, but if you will indulge me, Mr Davies, I will read out two of them.

Ian Crosby writes:

“I am a 29 year old man that has worked for Thamesteel for the last six years. I applied for the job when my then fiancée fell pregnant with our first child. The salary at Thamesteel was quite a jump from the job I had previously been in, as well-paid jobs to enable supporting a family are few and far between on the island. We are now married and have three sons, aged five, three and five months old. My wife is currently on maternity leave from her part-time job, so it is now more crucial than ever that I can support my family.

When the steel mill went into administration in January, it was absolutely devastating for my family. The fact that we were also not paid for our last month of service was awful for us. I literally had £6 left in my bank on the 25th of January. As you can imagine, with three young children and a house to maintain it is very rare to ever have any money left at the end of the paid month, but with it being the month after Christmas we were even more desperate for payday to come. My wife and I were questioning how we were going to afford nappies or milk for our youngest children, which is something that you should never have to question. My wife was very down about the whole situation and after just having a new baby it hit her even harder. It took almost four weeks before any money was made available to our family. As I had been in employment since I was 16, I am only entitled to contributions-based jobseekers allowance for the time being. This means my children are not entitled to school meals or milk tokens and I am not entitled to free prescriptions, dental care, etc. I find this unbelievable as I have never claimed benefits before and paid my taxes for over a decade, yet it appears you get penalised for that.

I have been applying for every job I can, and my wife has had to return to her part-time job months before her maternity leave was due to end. This is really affecting her as she is missing out on those crucial months with her new son that she was able to have with the other two. She is questioning herself and her parental qualities, but she really has no choice. There are no available jobs on the island and I have been unsuccessful with every application I have made.

I loved my job, and am finding it very hard to try and imagine what I am going to do now. The island has lost its main employer for men, and this is affecting many other areas of business. My only hope now is that a buyer is found to start producing steel in Sheerness once more. I think if this does not happen, then the situation will hit me a lot harder as I am still clinging on to that hope.”

Similarly, Gary Lewis writes:

“First of all, a thank you to all who are doing what they can to try and salvage what was Thamesteel. My story...

I was lucky enough to secure a position there in the autumn of 2006, lucky in that with a well-paid job, my now wife and I could plan our family together. Jen, my wife, has two children from her previous marriage and we also wanted our own. Jen was able to give up work and over the next few years we had two beautiful children, coincidentally both born on 25th June, in the same delivery room at Medway hospital, but three years apart. As people always do, we lived to our means, and managed to stay credit-free. We were able to meet all our outgoings and not build up any arrears. We were never well off, but we were not broke. The occasional night out was still possible, as was the odd short holiday.

We live in a modest three-bed semi in Queenborough, and feel we are part of the local community. My stepdaughter, who lives with us, was tutored at the Isle of Sheppey academy, our daughter Ruby attends Queenborough First School, as will Peter when he is old enough. My wife and I were married locally in January 2009 at the local Methodist church, where my wife’s uncle is a Methodist minister. He…travelled to conduct our ceremony. In the last six months, it’s been clear to all that something was going very wrong at Thamesteel. Bar mill production ceased in August last year, and melt shop production was sporadic to say the least. The message from the senior management was always positive, right up until 23rd January 2012, when it first became apparent that we might not get our pay in two days’ time. With the best will in the world, nobody could ever plan for that. In the build-up to Christmas, all we got was positive vibes, and spent up for Christmas as you always do. Everyone wants the best for their kids, so let them have it, our ‘jobs are safe’.

For the very first time in my life, I found myself on the phone to claim jobseeker’s allowance on 26th January 2012. I spent three whole days on the phone explaining to all my creditors—mortgage, energy, etc.—what was happening. The world was falling in and I couldn’t think straight. I tried to be strong for my family, and did the best I could, but the pressure was—and still is—immense. It’s made a hell of a difference to my life. I’ve applied for loads of jobs in my field of knowledge, in all parts of Kent. So far, I’ve had two replies, both of which have been negative. My JSA is now being paid, £210 a fortnight to cover all my bills. I’ve applied for help with the mortgage, but that only starts after 13 weeks. I’ve made an arrangement to pay reduced amounts for gas and water, and have applied to the Energy Trust for help with arrears on my electric bill. I still have to insure my property, keep a car on the road, and put food on the table. AND IT’S ALL GETTING HARDER BY THE DAY.

We have been lucky, in that the freezer was full when all this happened. We’ve been lucky enough to collect three food parcels from the Seashells centre in Sheerness, a scheme set up to help the steelworkers. I can’t thank those involved enough, as these have been a godsend. It’s a shame that I can only claim one more, but we’ll have to make do.

So what now with the works? Everyone waits with bated breath to see what offers have been made. Even if the mill starts up again, there’s no guarantee we’ll get our old jobs back. And there’s no other viable employer on the island. Nothing. Not for a skilled man with a family to support. Sheerness needs this steel mill, and why aren’t the government helping? Peacocks retail have been helped. Why not us? If there’s a continuation of no investment, either by the government or by the private sector, then Sheerness will be dead in its tracks. A town needs a large employer to survive. 350 of my mates are in the same boat. Then there’s the supply chain. I dread to think how many of us there are. Just a thought, has anyone been to Corby recently?

I can’t see us staying unless there’s a major change. All joking aside, we’re considering properties in Slovakia, northern Germany and northern Scotland. Please, help us.

Gary & Jen Lewis, Sammie, Ruby, and Peter, three chickens, two hamsters and a rabbit.”

During the mothballing of Teesside Cast Products, amid much criticism from the Tories and Liberal Democrats, the previous Government did get involved. Alongside One North East, Ministers were active in brokering potential deals with many potential buyers in the summer of 2009: Marcegaglia; Dongkuk Steel; and obviously SSI. We knew but we could not publicly say that SSI wanted to buy TCP at that time. The previous Government gave £60 million in aid for retraining, specifically for the Teesside area, including for workers at risk in Dow Chemical. That money has since been cut by a third. However, the overarching point is that the previous Government were involved directly. They rolled up their sleeves and got their hands dirty in lobbying and negotiating. I know that to be the case, as I was there in the area and living through the process every day for more than two years. The departure of Kirby Adams paved the way for a sale. It was not a lack of Government intervention that was to blame; there was a deliberate policy by Mr Adams to undermine a Save Our Steel campaign on Teesside. Thankfully, we won, and I wonder whether the Prime Minister would be bold enough to consider Mr Adams such a close political ally now.

I say this again: this debate is timely. How could TCP’s future be saved and Thamesteel be allowed to founder? Why were unions embraced as an integral part of the former’s success, yet ignored, leading to negative outcomes, in the case of the latter? Saying that European markets are in the doldrums is not good enough, because both TCP and Thamesteel have a history of selling to non-European Union markets—Asia in TCP’s case, and the middle east Gulf states in Thamesteel’s. This debate is timely because of the imminent relighting of the now SSI-owned Teesside Cast Products blast furnace. I was part of the Save Our Steel campaign on Teesside, which was supported by our local community, trade unions, the media and the men and women of Thamesteel.

I have a few suggestions for the Minister. Could we use the regional growth fund to attract any potential buyers that he might be aware of to the site? Could we talk to HMRC about holding off a little longer, to allow other buyers to come forward? Can we please at least have the Secretary of State directly involved, meeting with the work force, who are desperate to talk to him?

I will close with the words of the late Geoff Waterfield, the Community union chair of Teesside’s multi-union committee, who led the campaign locally. Sadly, he died at the age of 43 in August 2011 from undiagnosed leukaemia. He said:

“When I see a blast furnace, I see a thing of beauty... I see something that has given thousands and thousands of people a way of life, a good, honest wage, the ability to pay their mortgages, go on holidays and bring up their families. That to me is fabulous, that is a beautiful thing. When you come to Middlesbrough and see that skyline... That blast furnace is the heart of Teesside. As long as it pumps, there is life in Teesside.”

That is not just a Teessider’s fairy tale; the men and women from Kent have the same view of their steelworks. It is a story for all steelworkers in Britain. There is a way to save the site, and UK steel, if the Government do something to facilitate the process and lend their support. So the question for the Minister is: “What are you going to do?”

Regional Growth Fund

Debate between Angela Smith and Tom Blenkinsop

Tuesday 1st November 2011 Westminster Hall

[Angela Smith]

I would welcome recognition by the Government that we need far more than what is on offer on the table. We need proper decentralisation of the decision-making processes, more transparency, and a more efficient way of delivering funds to companies. The chances of such funds delivering significant economic growth are about as good as the chances of Huddersfield football club getting a promotion to the championship next year.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend is making a valid case. Opposition Members do welcome the regional growth fund, but I will welcome it even more when it actually arrives, as so far only eight businesses have received any funds. Our concerns are reiterated by the EEF, the manufacturers’ association, which is cited in The Northern Echo today. It wants to ensure that

“the funding promised flows through directly to the projects concerned as a matter of urgency.”

Is the current speed at which cash is going to businesses urgent or slow?

[Angela Smith]

My hon. Friend is right. It is not only slow; there is inertia at the heart of the Government’s approach to investment in our economy. That is all down to the Chancellor of the Exchequer, who said this morning, when asked by the BBC, that this is a difficult journey for the UK economy, but that we are determined to complete it, so that we have jobs and growth—only warm words, once again. He will not admit that he has got it wrong, or that he needs a plan B, and that is at the heart of the problem we are facing.

--- Later in debate ---

[Angela Smith]

That is precisely the point. That underlines the fact that the Government are cutting too far and too fast. Their policies risk producing a double-dip recession.

[Tom Blenkinsop]

Another interesting statistic came out today: the purchasing managers index for manufacturing output slumped to 47.4%, below the 50% figure, which is an early indicator of a downturn in manufacturing. That is a scary statistic for us all to take on board.

[Angela Smith]

I completely agree with my hon. Friend. I repeat that we need an economy that looks at the long term, and not just short-term profits. We need to invest in innovation. We need a co-ordinated, well-funded regional growth strategy, not the disparate, unco-ordinated approach that represents too little, too late, from a Government who have fallen asleep at the wheel and lost their way as far as economic growth is concerned.

--- Later in debate ---

[Angela Smith]

rose—

[Tom Blenkinsop]

rose—

[Eric Ollerenshaw]

I shall give way first to the hon. Lady, and then to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop).