Redcar Steelworks

Lord Stevenson of Balmacara Excerpts

Tuesday 13th October 2015 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, the closure of this site is a catastrophe for the local economy and for the local community on Teesside: 170 years of steelmaking were snuffed out yesterday. The Government are overseeing the loss of a national industrial asset while showing no willingness, as far as we can see, to step in and try to rescue it.

Steel produced in that area is surely part of an industrial strategy. One would expect any Government concerned about the future of the economy in this country to think more closely about our automotive, aerospace and construction industry needs and the relationship they have with steel.

Did the Government explore options for mothballing this site over a longer period to save the assets? Will the Minister confirm how much it will cost the taxpayer to clean up the site? As she mentioned, there are several concerns there about toxicity. Will she reflect on the fact that we are currently engaged on the Enterprise Bill, and in that Bill there may be an opportunity to look again at the question of Chapter 11 solutions when industries of national strategic importance get into trouble?

It seems to me that the Government are washing their hands of this and standing back when they should be taking a direct interest.

[Baroness Neville-Rolfe]

I am grateful to the noble Lord for his many questions, and for his reference to the Enterprise Bill, on which we had a good debate yesterday. As I explained at the end of proceedings then, it has been difficult. The underlying problem is that the SSI operation has never made a profit. The scale of decline in steel around the world is enormous. The world is oversupplied, with overproduction at 30%. This figure appalled me. There are 200 million tonnes of excess tonnage in China, and EU production is 169 million tonnes. We have an enormous challenge.

The right thing is to look forward. That is why we have established a steel summit on Friday in Rotherham, which obviously goes wider than Redcar. The Secretary of State will be chairing it and Anna Soubry will be there, along with all the key outside players, including, obviously, steelmakers such as Tata and Celsa, the trade unions and experts, including Oxford Economics, who are able to look objectively at the global position and look forward to see what can be done.

Chapter 11 has its advantages in some other climes. I think we have debated this before. We find that the insolvency tends to end up being less efficient, particularly in the sort of circumstance we have here, where you have a big global problem. You have to look forward to different opportunities for an area.