UK Steel Industry

Debate between Anna Turley and Andy McDonald

Tuesday 12th April 2016 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

Yesterday, the Secretary of State pledged his commitment to the steel industry, which I welcome, but I would like him to spell out exactly why his Government are now willing to consider co-investment with a potential buyer for Port Talbot, when they ruled out anything like that for Redcar—at the time because they said that state-aid rules prevented their supporting SSI, and after SSI was liquidated because they refused to put any British taxpayer money into the Thai banks that owned the site. Why were the Thai banks not suitable for co-investment? It could have bought us time for a sale or enabled the mothballing of the blast furnace. I would like the Government to give us a full explanation of that decision.

In the weeks prior to closure, SSI asked the Government for a loan to enable it to restructure and keep the plant going. It was refused. I sat down with Ministers and potential investors—a company willing to run the coke ovens and run, or at least mothball, the blast furnace while a buyer was found—who did not want a single penny of Government money, but the Minister said it could not be done. What has changed? Does she now regret not listening to the people of Teesside, the unions and the companies we presented to them in order to keep steelmaking alive on Teesside? The cost of hard closure has been far greater than that of intervention would have been. I want to say something about that cost in the time available.

First, on the local economic cost, 2,200 direct jobs were lost overnight at SSI and over 900 further jobs were lost in the immediate supply chain, from those who provided the parts and maintenance to the companies that provided the gas or loaded the slab at the ports to those who cleaned the overalls and fed the workforce. Plus, there is no way of measuring the knock-on impact on local shops, hairdressers, builders, nurses—as my hon. Friend the Member for Middlesbrough (Andy McDonald) mentioned—and childminders. We know they are all feeling the pain. Unemployment in my constituency has jumped by 16.2%. We now have the tenth-highest unemployment rate in the country. The steelworks were the foundation industry for many businesses large and small across Teesside. For 175 years, that industry powered the local economy, providing jobs and security for local people and a source of immense pride, as our steel built the cities of the world.

Secondly, I want to talk about the cost to the Exchequer and the state. It is currently understood that the Government are paying over £200,000 a week to maintain the site in its unrecoverable coma status. Recovery of the land for future use is expected to cost the state well over £1 billion. As for the British steel industry itself, we have lost Europe’s second-largest blast furnace and coke ovens, in which millions of pounds had been invested and which were in very good shape.

[Andy McDonald]

Does my hon. Friend agree that trying to land a bill of £1.1 billion on the Teesside communities for the remediation of the site is totally unacceptable? I know that the Minister is ignoring it, but it will be a huge issue for Teesside if it is landed with that bill.

[Anna Turley]

My hon. Friend is absolutely right. I want a further commitment from the Government that they will maintain their support for the site as it stands, meet that cost and enable local people, businesses and representatives to decide the future of the site and how it can contribute to our local economy.

We have lost our blast furnace and coke ovens, in which millions of pounds had been invested—expensive national assets belonging to the British steel industry now laid to waste. We can add to that a loss to the Exchequer of the tax intake from those 3,000 workers; the £50 million—and it is £50 million, not £80 million—paid for retraining; and the further £30 million for redundancies and other costs. We must bear it in mind that the majority of workers are still awaiting payment of their protective award, on which I would be grateful for an update from the Minister. Finally, there is the loss to Redcar and Cleveland Council, which has already suffered a £90 million loss after six years of Tory austerity, of £10 million a year in business rates from SSI alone.

Thirdly and most importantly, I want to speak about the human cost. Six hundred workers are back in work or full-time training, according to Department for Work and Pensions figures. I pay tribute to them, my taskforce colleagues and all those in the jobcentres and colleges who have worked hard to achieve that, but 600 of over 3,000 workers six months after closure still leaves us with a lot of work to do. What about the thousands of others? They are signing on, many for the first time in their lives, and many are approaching the six-month cut-off point for contribution-based jobseeker’s allowance. Those with a partner with an income of more than £114 a week will soon lose their JSA entirely.

People are moving out of homes, cars are being given up and many are reliant on hardship funds to pay the bills. One worker can no longer afford to keep his rented house to have his children stay overnight because of the bedroom tax. He is having to be rehoused in a one-bedroom place and cannot have his children to stay. The effect on family relationships has been huge. There has been a widespread loss of identity, comradeship and pride in a skilled trade. Redcar and Cleveland Mind has seen a 91% increase in mental health referrals in the last year, and is doing a fantastic job, but many of my constituents are under the radar. One has not even left the house since he lost his job last September. Families have been destroyed and lives shattered. Our town has been through a tragedy. The financial and human cost of inaction is far higher than that of intervention would have been. I say to the Government: you let us down last year, but please do not let down any other steel town in the UK.

Post-SSI Support Package: Redcar

Debate between Anna Turley and Andy McDonald

Tuesday 19th January 2016 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

As has been well documented in this House and in the national media, my constituency has been through one of the toughest times in its existence. I could debate all day with the Minister about what more I believe the Government could have done to save the Redcar coke ovens and blast furnace. I also have many outstanding questions on the future of the site and who will be paying for it. But I want to make the people who have borne the brunt of the tragedy the topic of this debate.

Some 2,200 men and women lost their jobs directly when SSI went into liquidation. Twenty-six supply chain businesses were also affected, with a further 954 redundancies. As is the case after such a calamitous economic shock, numbers continue to increase as local businesses, shops, childminders, decorators, hairdressers and many others are affected by the money being taken out of the local economy. Each of these is a tragedy. Each of these is a life that needs to be picked up, a mortgage that needs to be paid, a Christmas that had to be got through. Redcar and Cleveland Mind has had a 91% increase in mental health referrals in the past year, and we know that January and February are hard at the best of times. I therefore thought it important to stop at this point and to take stock of where we are and what is happening.

[Andy McDonald (Middlesbrough) (Lab)]

Does my hon. Friend agree that the collapse of SSI has had massive ramifications right across Teesside, so any response that the Government may give, including Lord Heseltine’s review, has to deliver immediate and targeted support to ensure that all our constituents who are so affected have the employment opportunities that they, and our communities, deserve?

[Anna Turley]

My hon. Friend is absolutely right. The scale of this has been absolutely devastating, not just for those who were directly employed, but, as I said, in the knock-on repercussions for our community.

This debate is about trying to learn lessons from the support package that has been put in place—lessons at local level and, indeed, national level. It aims to look at how the £50 million support package from the Government is being applied, what is working and what is not, and what lessons can be learned, particularly as we see other steelmaking areas in the country now facing the same tragedy as us.

Out of the tragedy has come some positive learning. The steel taskforce has been an important creation to enable multi-agency co-operation from the start. Weekly meetings have allowed local partners from the Department for Work and Pensions, the local authority, BIS, the unions, the local enterprise partnership, the local media, elected politicians and others to clarify communications processes and to get to the root of the issues and concerns. I believe that every region should consider putting together a committee of this kind that could be called on in the event of a catastrophe similar to that which we saw last year. Indeed, areas with similar high levels of unemployment may want to consider organising such partnerships as a standard procedure to tackle the challenges they face in employment and skills.

It has also been encouraging that national and local agencies have worked together in a way that departmental silos and local versus national boundaries all too often prevent. The National Careers Service has provided guidance and advice. The Skills Funding Agency has acted to remove barriers and increase the flexible use of its funding for SSI workers. Jobcentre Plus has worked closely alongside the DWP and BIS, allowing rapid response processes to be put in place and creating an efficient system for passing on referrals. FE Plus, a group of colleges in Teesside, has forged a close working relationship with private training providers, allowing referrals to be passed from public sector providers to private sector education providers with specialist provision.

This experience has highlighted the complex and bureaucratic nature of skills funding and provision, but it has also clearly indicated that after an initial period of shock, enabling agencies to work together at regional level has allowed many of the usual barriers to be overcome, helped particularly by the benefit of a clear decision-making body in the form of the taskforce.

Steel Industry

Debate between Anna Turley and Andy McDonald

Wednesday 28th October 2015 Commons Chamber

[Andy McDonald]

My hon. Friend and neighbour makes a very good point. We have heard throughout that the coal in situ was not suitable for purposes other than the blast furnace. Other coal could have been brought in. Hargreaves was able and available for that and was not embraced. Any sensible Government would have grabbed that opportunity with both hands, but they did not do so.

[Anna Turley]

A lot of the conversation has been about the price of steel as the reason why SSI went under. We are talking about coke and, as my hon. Friend said, there were companies in Germany willing to buy all the foundry coke that we could make in those coke ovens. It was selling at over £500 a tonne, compared with the £100 a tonne cost for making it. That was a profitable business which could have kept the coke ovens going, it could have funded a proper mothballing of the blast furnace, and we could still have steelmaking on Teesside.

[Andy McDonald]

My hon. Friend is absolutely right. That would have been the basis for keeping that coke oven going and mothballing that blast furnace. It is no good the Minister coming to me after the event and telling me in hushed tones that she wishes she had mothballed the site. That will not do at all.

We hear about bringing forward compensation packages. When the Prime Minister was at the Dispatch Box today, it seemed to be a revelation to him that suddenly we were talking about bringing forward a compensation package. We have been talking about it in the Chamber for months. It is as if the scales have been removed from his eyes. The hon. Member for Bedford (Richard Fuller), who is no longer in his place, hit the point exactly when he spoke about the role of Chinese steel and the fact that it is produced at less than cost. We have now heard from the Prime Minister that he discussed it with the President of China. We want to know what action is going to flow from that discussion. There is no point just bringing it up. We want to know what is going to happen. If 94% of the steel coming to Europe is dumped on these shores, it is up to this Government to take action about it and not sit on their hands.

I went to Italy last Friday to speak to the representatives of FIOM from the Ilva plant in Taranto in southern Italy. What a difference from a Government who not only identify the strategic importance of the industry, but are prepared and have the political will to do something about it. They recognise the social impact of thousands of people losing their jobs and they will do anything to stop that happening. That is what we want to see in this country. In Italy there are solidarity laws so that people are not laid off. The bankruptcy laws were changed. In Teesside we saw creditors go to the wall—Hargreaves was struggling, as were personnel agencies, engineers, hairdressers and so on. In Italy, bankruptcy laws were changed so that such firms got tax relief on future businesses. That is what I call an active policy.

For the Minister to say that the Government could not embrace state aid is utter nonsense, and she knows it. Regional aid and environmental aid could have been embraced with no difficulty; that was done for carbon capture and storage at the Florange plant in France. We on Teesside are sitting on a wonderful opportunity that this Government are letting slip through their hands. We need an active industrial strategy. We need a Government who will access the European globalisation adjustment fund—they have not even made an application to it. We need a BIS Department that is scouring the world in advance, not saying, “We were caught out at the last minute”. The Minister responsible for the northern powerhouse openly admits that he had known for ages about the problems. The Department should have been getting on with it, scouring the world, making sure it had the capacity in financial and engineering terms to respond properly.

--- Later in debate ---

[Anna Turley (Redcar) (Lab/Co-op)]

It feels tragic to speak in this debate on the future of the steel industry because, as my hon. Friend the Member for Wallasey (Ms Eagle) said in her introductory comments, our steel industry has gone—175 years of proud history and heritage that built the world, from bridges to stadiums to buildings of great note, has gone. That future is no more. That is the tragedy of which all hon. Members are aware.

The human tragedy remains. We have 3,000 people out of work and expect another 3,000 in the supply chain to go. I want to bring attention to that so that, first, it can be prevented from happening in any other constituency. I want to talk about the scale of what we are trying to deal with, the implications and the outstanding issues, and about the despair, anger and chaos that reigns in Redcar and Teesside.

As I have said, the coke ovens and the blast furnace are gone. John, who works there at the moment—he is one of the skeleton staff who are there to try to wind it down—tells me that the coke ovens are cooling rapidly, and that the brickwork is warping beyond good use ever again. He tells me that steel and coke making are at an end for ever.

[Andy McDonald]

Does my hon. Friend agree that it is an absolutely criminal act of industrial vandalism to let those coke ovens collapse when that was entirely and utterly avoidable?

[Anna Turley]

I could not agree more with my hon. Friend. The blast furnace and the coke ovens are national assets. They are part of British industry and manufacturing, and they are strategically important to our economy. They could and should have been preserved.

I want to talk briefly about two outstanding issues that are causing a great deal of concern in my constituency. The first is the training that has not arrived. We were promised £80 million, but it turns out to be £50 million when we take out redundancy and the statutory entitlement that the workforce should have had. That training is not coming through. We were told that a local taskforce would have control—I was pleased to be invited to sit on it—but the reality is that decisions are being made by officials. I understand that we are waiting for a decision from the Secretary of State to clear that money and send it.

UK Steel Industry

Debate between Anna Turley and Andy McDonald

Thursday 17th September 2015 Commons Chamber

[Anna Turley]

I commend my hon. Friend for his passion and commitment. He is absolutely right. There are things coming on stream on Teesside, such as the carbon capture and storage facility, that will struggle if we do not have the steelworks in Redcar. We stand by our climate change commitments, and the steel sector is doing its best to make a difference.

Secondly, the Government must bring business rates for capital-intensive firms in line with those for their competitors in France and Germany. UK companies currently pay between five and 10 times more than their EU competitors. UK manufacturers collectively account for 17% of UK business rates payments. That is estimated to be £4.7 billion in 2015, which would be an increase of £0.3 billion on 2014.

UK Steel wants plant and machinery to be removed from the valuation process. Plant and machinery can make up a significant proportion of a steel site’s rateable value. Under the current system, manufacturers that invest in new plant and machinery to make innovative products, improve efficiencies or meet regulatory standards are punished by the business rates regime. UK business rates therefore act as a disincentive to upgrading facilities, increasing productivity or improving environmental performance.

Thirdly, I ask the Government to consider the derogation requests from the sector on a realistic timetable to meet its increased commitments under the industrial emissions directive. Under current proposals, it is estimated that the cost of meeting the revised permits for the sector will be up to £500 million by 2019. I am sure Members will agree that that is a heavy burden.

Fourthly, the dumping of steel by China is leading to the suppression of global prices. The proportion of Chinese steel entering the UK market has quadrupled since 2011. The Minister showed her support for the steel sector by voting in favour of extending anti-dumping measures for a further five years on imports of wire rod from China into the EU. That is welcomed enormously by UK producers of wire rod.

The UK steel sector is keen for that approach to be extended to other anti-dumping proposals that come out of the European Commission, when it is shown that they can support the UK steel sector against the rapid rise in global imports. That includes the forthcoming decision by the European Commission on rebar—reinforcing bar for the construction sector—which is expected towards the end of the year. In that instance, Chinese imports into the UK market have gone from 0% of the UK market only three or four years ago to 40% of it today.

[Andy McDonald (Middlesbrough) (Lab)]

Does my hon. Friend agree that the attitudes of countries such as Spain, which take a much more rigorous and robust attitude to the import of Chinese rebar, make it more likely that if the Chinese cannot access those markets, the UK will be the next port of call? That exacerbates the problem in the UK steel industry.

[Anna Turley]

My hon. Friend is right, and we are always diligent in undertaking our European obligations. All we ask for today is a level playing field with our European competitors.