Redcar Steel

Lord Tebbit Excerpts

Thursday 15th October 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness for her comments. The local task force that we have set up, which of course did very good work in 2010, will be looking innovatively at options. It is able to come forward with proposals. As she says, we have 170 years of great steel heritage and we need to look forward and find good options for Redcar. Like her, I welcome the summit, because it will look more broadly, obviously well beyond Redcar, at the problems and opportunities for the steel industry.

The noble Baroness asked about mothballing. The company made a last-minute, and I am afraid unrealistic, request for the taxpayer to make an open-ended funding commitment to maintain the coke ovens in Redcar. We were not able to accept that request. On the basis of a limited case, the Government had no confidence that there was a realistic proposal for viability and therefore could not give taxpayer support, even if they wanted to breach state aid rules. The awful truth is that there is a world oversupply of this type of steel. The company had already lost £500 million in its operation over the past three or four years, so despite all the endeavour and optimism of 2012, things did not work out. We have to look forward.

On the northern powerhouse, Teesside is actually making an impressive contribution. The Tees Valley LEP is one that I have visited and is very impressive. The latest investment, while not actually on Teesside but in Darlington, was in the National Biologics Manufacturing Centre. We share common ground that that sort of northern investment is very important for the future of the country.

[Lord Tebbit (Con)]

My Lords, we should all be grateful to the Government for their efforts to do something to help the workforce at Redcar, but it is common ground among us that the fault leading to the closure was not that of management or of the workforce. To what extent was it caused by high energy prices in this country? On the continent, there are steelmakers far less efficient than Redcar, with a far less able workforce and far worse management, which are continuing to be in business. How can that be, in a common market? Furthermore, how can it be that the Chinese are dumping steel into Scotland at the behest of the Scottish Administration? How do these things happen? Why can our steel workers not have a level playing field?

[Baroness Neville-Rolfe]

My noble friend asks a very good question, which is the question I first asked when I heard about this great challenge. But we have in fact provided more than £50 million in compensation to steelmakers for energy costs under the emissions compensation scheme. We voted—in fact I voted—for anti-dumping measures on certain Chinese steel products and we have identified a pipeline of more than 500 infrastructure projects to help the industry to win contracts. The trouble is that we have a worldwide problem in the steel industry. I know from talking to the French, the Germans and the Luxembourgers that they share that problem.