Former Steelworks Site in Redcar

Lord Harrington of Watford Excerpts

Wednesday 14th November 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

It is customary in Westminster Hall debates to say what a privilege it is to appear in front of the Chair. In your case, Mrs Moon, that is absolutely true. I am greatly honoured to do so.

[Gill Furniss]

Charmer!

[Richard Harrington]

Just currying favour with the Chair—but it is actually genuinely true. One of the most interesting days I have had in this job was spent visiting Mrs Moon and her constituency.

I thank the hon. Member for Redcar (Anna Turley) for securing the debate. These are very important topical points and I congratulate her on the consistency of her representations on this project. The whole area is very lucky to have the MPs that it does—the hon. Lady, my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) and the other MPs who have spoken today. It is also lucky to have the Mayor, Ben Houchen.

There is a bit of an undertone of “who said what where”. That is not for me to go into, but I make a plea to all parties, including those not in the room, that these matters are much better dealt with on a consensual, cross-party basis. If anybody feels that I and my office can help in that, I am very pleased to offer that help.

[Anna Turley]

I concur with the Minister’s comments and I reassure him that the reason for calling today’s debate is to try to move on to the substantive issues of the site. I welcome the positive, constructive tone that we have struck today, because I think that is the only way forward.

[Richard Harrington]

I thank the hon. Lady for that intervention.

I have visited the site, although not recently—I was 17 at the time. I was brought up in Leeds and went on a school trip to visit the Neddy—the National Economic Development Council—in Newcastle, the steel site and the Wilton ICI chemical works nearby. I have never forgotten the scale of it.

I whizzed past the site in my current job, when speaking at a steel conference just next to it in the constituency of the hon. Member for Redcar. A lot of Members of Parliament have trooped up there, as have a lot of Ministers. There has been talk of hollow words, but it is much better that there is a general awareness throughout the Government. The Mayor and other parties involved with the development corporation are regular visitors to the Treasury and other parts of Government, and so they should be. It is part of our democratic system, and we all co-ordinate together; I hope everyone realises that my office is very much part of that. I have certainly had nothing on my desk to do with this project that has been gratuitously turned down, ignored or not taken seriously.

I have been scrawling furiously during the debate to try to prepare to answer the points that have been made. I will try not to go over the history again, as it has been well covered by other contributors. Perhaps for the sake of Hansard it would be convenient if I did, but I think it has been said very well.

The South Tees Site Company is funded by a grant of £118 million, which was granted in the autumn Budget 2017 and includes £48.9 million for improving the site. The point was made—eloquently—that a lot of that money had to be spent, but it is still taxpayers’ money. It did have to be spent, and I hope that it is the first of very much more to come in the future.

There has been talk of different projects and implications that they have been turned down by the Government. My personal experience of doing this job is that I have spoken expensively—I mean extensively—to Liberty Steel. In its case, both those words might be true! I have spoken to it to get a project, which is still very much in outline. It has not been rejected. There has been nothing put in front of us.

It might have been the hon. Member for Redcar, or another speaker, who said that this project is going to Scotland. That is not the case. I am in regular talks with the company and I have been to its offices. I have met the chairman and other officials, several times, with our own experts, to try to get the project to a state where it can be looked at as a serious proposal. This is not a criticism, but it is not yet at that stage. I hope it will be. We meet regularly, and the company knows that the door is open.

As far as INEOS is concerned, its decision was taken for commercial reasons. As has been mentioned, I think it was more of a question of not wanting a brownfield site and a start from scratch, rather than anything to do with this site, the Government saying no or anything like that.

[Alex Cunningham]

I think the Minister will agree that the major impediment in our way—which, if resolved, could sweep away all that doubt—is the issue of land ownership and the associated legal agreements. When is that going to be resolved?

[Richard Harrington]

All in good time. I cannot give the hon. Gentleman a date now, but I will come to that shortly. I will make progress because I want to leave time for the hon. Member for Redcar to sum up.

The £14 million granted by the autumn Budget and the special economic area status for the site are both important. They came about because all those different Departments—including the Ministry of Housing, Communities and Local Government, and the Treasury—are working with South Tees Site Company, the development corporation and the combined authority. We have worked together on the proposals and will continue to do so. The 1,500 jobs quoted are a first step, but I know they are nothing compared to the number of jobs that were lost when SSI went into liquidation and struggled from crisis to crisis.

It is very easy to blame one Government and not the other or to say that the Government could have intervened by putting in a load of money to keep things going, but I have seen the consequences of that. I have seen places in the valleys in Wales where hundreds of millions—if not billions—of pounds were spent on keeping businesses open, and I saw a failed industrial policy in the north of England, where I was brought up. That does not mean that Government do not take part in industry—we are spending more money on research and development than ever before.

I really believe that the industrial strategy, in partnership with businesses, is the future. The reason why there is not a steel sector deal—as the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) mentioned—is that industry itself has not come up with its side of the proposals. I am working on this, meeting industry regularly, and am still hopeful, but that is work that must be done in partnership.

The Government responded immediately with support for the site when the closure took place, including a sum of £30 million that was ring-fenced for the statutory redundancy payments. The SSI taskforce, under the leadership of Amanda Skelton, took a leading role and deserves a lot of credit. The hon. Member for Redcar was a member of the taskforce and did a great job.

The clichés about people working together are predominantly true in this case; spats and disagreements come and go. I think it is fair to say that we cannot recreate what was there before—time has moved on. My right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) made the point about how steel has changed and certain commodity products cannot compete with much lower costs. Of the factors for the industry growing up there—iron ore, steel and water—only one remains. That does not mean that the site does not have a fantastic future—I really think it does. I am delighted that the hon. Member for Redcar quoted Lord Heseltine and former Chancellor George Osborne in different parts of her speech.

The Scottish National party spokesperson, the hon. Member for Motherwell, made a very—

[Marion Fellows]

For Motherwell and Wishaw.

[Richard Harrington]

I was abbreviating—my apologies to the half of the hon. Lady’s constituency that I did not mention. The hon. Member for Motherwell and Wishaw (Marion Fellows) made some good points about apprenticeships, and I am very pleased about the way that apprenticeships in steel are going. I was pleased that all the apprentices at Redcar were found alternative jobs and positions. The experiences of Ravenscraig and Consett were fed into the creation of the solution, with the development corporation and so on. That does not compensate for what happened, but it shows that lessons have been learned.

The master plan is excellent, and proposals for additional funding will be carefully considered. They have to meet public funding guidelines, which I know all hon. Members will accept. The Government’s current position is therefore to commit resources in a number of areas. I accept the shadow Minister’s view that some of that is just hot air and announcements, but that is the way that public sector financing works; there is a principle and then there has to be a business case. I make no apology for that—that is the way it has to work. Business cases are not there to be stopped; they are there to be taken on board.

I really am running short of time—that is my own fault for giving too many compliments to most of the other speakers, which I should not have done—so I will hurry up. The subject of the airport, which was raised very eloquently, is not one that I have really concentrated on. Maybe I should have, but I have not. May I suggest a meeting with the hon. Members who are interested in the airport issue, rather than just giving a vague answer today?

We very much believe in the concept of a local solution, and the Government are very open to specific suggestions from private companies or from the development corporation. I hope we see through all the smoke about individuals—who should be in this or that job, or who said this or that—and come to the collective solution that we all want.

The debate has given me the chance to canter over matters. We must remember that the site is the UK’s largest regeneration opportunity, and if the UK is to develop in terms of its industrial strategy, which we hope it will and fully intend it to do, that will be there. The site has received much publicity thanks to the efforts of hon. Members present, the Mayor and everybody else involved in the development corporation. We know what the challenges are in the special economic area in the Tees valley. Even people who did not watch the documentary on television—I was very disappointed about the lack of a starring role for the hon. Member for Redcar; had I been in charge of casting I would have altered that—will know that these things take a lot of time. Decontamination has to happen first, before a deal with the banks, which I am sure will come about—these are very complex matters. It is not as if the banks are a single entity; there are three of them, with very different views.

The Government are determined to see the site redeveloped in an exciting way in the end, so that it is a flagship for our future industrial strategy and an example for the next industrial revolution as it was for the first.