Steel Industry

James Morris Excerpts

Wednesday 28th October 2015 Commons Chamber

[James Morris (Halesowen and Rowley Regis) (Con)]

Metal runs through the heart of the black country and the west midlands. On a personal note, my grandfather worked as a forger in the Halesowen steelworks after the second world war. He had an industrial accident there in 1947 and was not able to work again after that, so I know in the blood of my family the difficulties often faced by people in steel communities.

Last Friday I took part in a midlands steel taskforce group, which had been set up by Beverley Neilsen, director of the Institute for Design and Economic Acceleration at Birmingham City university, following the collapse of Caparo into administration across the west midlands, and I was pleased to see that there was cross-party representation at that meeting, as well as representatives of business and local chambers of commerce.

Caparo went into administration for complex reasons. Over a long period of time there have been financial difficulties in the Caparo group. It has been heavily debt-laden since a refinancing deal it did in 2008-09, so not all the Caparo problems are related to the issues of the global steel market. However, jobs are at risk in Cradley heath in my constituency and other areas of Sandwell and across the west midlands, and we need to do whatever we can to help these companies and those people whose jobs are at risk.

At the midlands steel summit that I attended on Friday, we discussed a number of the immediate, short-term steps that we should consider in relation to Caparo. There was a strong argument for setting up a Caparo in administration task group to work with the administrators of the Caparo group. After speaking to the administrators on Friday, it became clear that there were a number of profitable, high-quality businesses in the Caparo group, in the high-tech, high-end engineering sector, that would be able to find buyers. I understand that the administrators have had about 45 representations about acquiring certain parts of the group.

We also need to take action in relation to the impact of Caparo’s collapse into administration on the supply chain across the west midlands. I understand that some small and medium-sized companies were not expecting the group to go into administration and have been suffering cash-flow difficulties. We also need to identify as early as possible those companies that will be at risk, so that we can determine how their skilled workers might be able to find other work quickly. Manufacturing in the black country has been doing very well over the past two and a half years, and there is demand in the area for high-skilled workers, but we need to have a strategy in place around that. Steel plays an important part in the west midlands manufacturing supply chain, and there could be an impact on companies such as Somers Forge in my constituency.

There is no easy solution to the present problems. We need to take short-term action in relation to Caparo, but we also need to take action on energy costs and Chinese dumping. There may be no easy solutions, but there are things that the Government are doing—and should continue to do—to mitigate the problems of the Caparo administration in the short term and to re-establish the steel industry and protect the supply chain in the west midlands in the long term.