Thamesteel

Debate between Pat McFadden and Jessica Morden

Wednesday 21st March 2012 Westminster Hall

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I, too, congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate, which coincides with this afternoon’s Budget statement. If press reports are true, the statement’s main concern will be the tax affairs of people earning more than £150,000 a year. Our concern is different: it involves the hundreds of jobs lost as a result of the closure of Thamesteel and, more generally, manufacturing and steelmaking and their importance to our economy.

It is likely that we will hear a lot this afternoon about rebalancing the economy between finance and industry—indeed, the Chancellor ended his first Budget with a call for a “march of the makers”—but at Thamesteel, the makers have lost their jobs and, as my hon. Friend said, we as a nation have lost the product. I have some experience of that in my constituency, where the huge Bilston steelworks closed many years ago. I hope that that does not happen to the constituency of the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), but most of my constituents would say that the area has never fully recovered from the loss of such a major employer.

I do not want to do what often happens in such debates by going over the history of the decline of manufacturing in the UK. Too many of this House’s debates on the subject are characterised by looking in the rear-view mirror. Perhaps we focus too little on globalisation’s impact on our manufacturing industries and on the possibilities for the future, which is what I hope we can concentrate on.

Manufacturing and steelmaking are still very important to the UK, even if we do less than we did many years ago. There are things that Governments can do—they are not powerless—to support those activities. I have referred to the Chancellor’s Budgets, and his autumn statement gave a relatively small rebate on energy and environmental costs to energy-intensive producers. The scale of that rebate was a fraction of those available in Germany, but at least it represented recognition that the Government have a role to play in trying to ensure that energy-intensive industries remain in the UK.

[Jessica Morden (Newport East) (Lab)]

The hot strip mill in Llanwern in my constituency was mothballed last year because of the fall in demand for steel. Does my right hon. Friend agree that what its former workers need is help now? Tata’s £20 million investment in the Port Talbot mill will help Llanwern in the long run, but Government action is needed now, not in 2013, when the measures for energy-intensive industries will be implemented.

[Mr McFadden]

My hon. Friend makes a good point. I mentioned the rebate to give an example of what the Government can do. They are not powerless when companies have a global choice about where to locate and produce.

Before I ask the Minister some specific questions, let me say that I do not believe that any Government, of whatever political colour, can prevent the closure of every factory. That is not my stance. I was a Business, Innovation and Skills Minister before the election and the Department was not always able to prevent every closure. The Government cannot do that, nor can they magic buyers out of the air if they do not exist, but there are things that the Government, the Minister’s Department, and he and his Secretary of State can do, aided by the good officials who have accompanied the Minister to the debate.

What is the situation with potential buyers? How many have declared an interest? What kinds of bid are on the table? There is a world of difference between someone who simply takes the equipment and the plant and ships them abroad, and someone who is willing to continue production in the area.

My hon. Friend the Member for Middlesbrough South and East Cleveland mentioned the experience of Teesside, which is instructive. When the closure of that plant was announced, many people would have given up on it and thought that nothing could be done and that the situation was hopeless, but that was not the case. The plant might not have had the backing and the belief of the management, but the potential buyers believed differently.

The complaint at the time was not that the Government were doing nothing, but that we were interfering too much. I am prepared to accept that complaint, because, as I had to explain to the management, it may have owned the plant, but it did not have ownership of the overall situation. The Government had a legitimate stake in it, given the jobs that were at stake and the impact on the regional economy and on manufacturing in the UK. I am delighted that a new buyer has come in that has faith in the plant, the product and the workers, and that production has begun again. That shows that it is sometimes possible to find new buyers and that Government can play a role, as an honest broker, in bringing people together.

What role is the Department playing to try to act as a broker and to send out signals to potential purchasers that the UK believes in manufacturing? Is there, as my hon. Friend has asked, any potential for purchasers to apply to the regional growth fund for funding? Are there funds available for training? Such funds have been discussed in similar circumstances in the past and they may make the situation more attractive to potential buyers. There are things that the Government can do.

At a more basic and prosaic level, will the Minister clarify the situation in relation to redundancy and notice payments? The Government have a role to play. My hon. Friend read out letters and spoke movingly about the human effect on families with young children who are waiting desperately for redundancy payments and relying on food banks. This is a desperate situation, particularly for those families with young children. Some payments have been made, but will the Minister assure us that he will use his good offices to ensure that any outstanding moneys, which are the responsibility of the Insolvency Service and the redundancy payments offices, are paid as soon as possible? Families are desperately stretched, so I hope he will do that.

The previous Secretary of State, Lord Mandelson, has been mentioned, but if the Minister does not like that reference, I urge him to consider a different inspiration—namely, a previous Conservative Secretary of State who said that he would be happy to intervene before breakfast, lunch and dinner. I am sure that all Opposition Members would be happy if the Minister took that person as his inspiration.

I hope the Minister will assure us that the practice of not meeting the work force will end—I see no sense in not meeting them when they are desperate to meet—and that he and his Secretary of State will do everything they can to attract a buyer. I also hope that potential purchasers will be made aware of any available funding. Although the Minister cannot prevent every factory closure, he can play an active role in trying to secure a future buyer to continue steelmaking on the site under discussion. That is the commitment that every Member from every party wants to hear.