UK Steel Industry

Debate between Tom Blenkinsop and Anna Soubry

Tuesday 12th April 2016 Commons Chamber

[Tom Blenkinsop]

The Secretary of State said that the Government would do everything possible for the communities and people affected. As he knows, on the day of the liquidation at Redcar, he announced an £80 million total package—

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

It is £90 million.

[Tom Blenkinsop]

Oh, is it £90 million now? We have heard previously, from that Dispatch Box—[Interruption.]

UK Steel Industry

Debate between Tom Blenkinsop and Anna Soubry

Thursday 21st January 2016 Westminster Hall

[Anna Soubry]

No, because I want to make some progress and to address all the points that have been made.

I do get agitated because I know the five asks regarding the steel industry. We have delivered on four and as for the fifth, which is business rates, the review continues. I hope that the Chancellor will agree with my view, for what it is worth, that rates should not rise after investments in plant and machinery which, as I have said many times, is bonkers. I hope that the representations that the Secretary of State, BIS and I make on behalf of all businesses affected by that peculiarity will advance that argument and that the Chancellor will agree with us.

Let us be honest, however, and recognise the problem: the price of steel has been tumbling. The price of slab has almost halved in 12 months. Production across the world—this is not just China—has increased, but consumption has fallen and is yet to return to pre-2008 crisis levels, so what is the Government’s priority? I will not put a figure on it, but the priority is to secure the production of steel at Scunthorpe and Port Talbot. I want to pay tribute to everybody who works in the steel sector, especially to all those workers who have so far found themselves being made redundant. We will not forget the more than 2,000 workers at SSI in Redcar and the many more in the supply chain. I and all my Conservative colleagues do not need to be patronised by being told about the huge impact that redundancies have on communities and right across the workforce, because we understand that. I pay tribute to all those who work at Scunthorpe and Port Talbot, and to those who have lost their jobs, while also remembering what is happening at Forgemasters.

Forgemasters makes steel particularly well. It effectively has a contract with the Ministry of Defence, but it is not with the MOD, in that it supplies the steel for Trident. If Opposition Members want to secure Forgemasters’ future, they need to ensure that they support Trident—that is an absolute fact.

[Tom Blenkinsop]

Will the Minister give way?

--- Later in debate ---

[Anna Soubry]

With great respect to the hon. Lady, one of the things that she will find here is that when a member of a political party stands up and makes assertions about the Government when their political party is in government elsewhere, they hold responsibility and have to provide answers. Someone cannot just stand up and make bland statements saying, “We have had a look at this, and we have had a look at this. Oh, and by the way, the UK Government are absolutely hopeless and useless, but we are absolutely brilliant,” and then not have an answer when they are asked, specifically, “So, have you delivered on this? Have you delivered on that?”

[Tom Blenkinsop]

Forgemasters creates the vessels for the reactors within the four replacement submarines, and plate for their hulls is made by Dalzell and Clydebridge. The future of those steelworks is uncertain, so any commitment to four submarines is dependent on those sites unless the Government find alternative solutions, because it is sonar-specific plate.

[Anna Soubry]

I apologise to the hon. Gentleman; I specifically asked my officials for an answer to that very important point. At the moment I have not got that information, but I will of course write to him if I am able to obtain it.

Let me move on to the five asks of the steel industry made at the steel summit. On energy-intensive industries and electricity prices—absolutely delivered. Opposition Members say, “Well, they go back, and they say you didn’t do this and that,” but a lot of the delay was not the fault of any tardiness on behalf of the British Government; it was unfortunately due to the slow cogs and wheels of the European Union.

I am not going to engage in all this silly, patronising nonsense about the Secretary of State not knowing where Brussels is. Hon. Members do not do themselves much credit by taking such cheap shots. The Secretary of State went to Brussels and called an emergency meeting. He has been advancing the cause of ensuring we get the compensation signed off under the state aid rules, and I am hugely and deeply proud of that. It is because of his efforts and instructions to officials to expedite it without any further messing about that it is absolutely being delivered. Ask one—delivered.

--- Later in debate ---

[Anna Soubry]

I am so sorry; the hon. Gentleman should read his brief better. There were—[Interruption.] No, no. There were five asks. I have dealt with four; the fifth is business rates, and I think I have dealt with that. The status of China is a new ask, not one of the original five. Let us deal with the market economy status for China. The Prime Minister has made it clear, and I think he makes a good case, that there is a good case for China to be given market economy status. This is where I get agitated with Opposition Members. I do not have a problem with people when we disagree on politics or argue about policies; I have a problem when they tell their constituents that if China gets market economy status, we will not be able to vote in favour of tariffs to stop it from dumping steel or anything else. That is not true. Russia has market economy status, but the EU is able to, and does, vote in favour of tariffs to stop Russia dumping.

For example, in the meeting I was talking about earlier, even though the task groups had come to the end of their time, we specifically looked at Russia and Iran. We are gravely concerned about the amount of steel that they are producing and about the threat of it flooding into the UK economy. So, again, we are looking at the issue of tariffs, but let me make it very clear. The Government do not make the complaint to the European Union; the complaint comes from the steel industry itself—it must raise the complaint. It is wrong for hon. Members to say to their constituents that if China gets market economy status, we are precluded from introducing tariffs. We are not, so Members should please not mislead their constituents.

[Tom Blenkinsop]

rose—

Post-SSI Support Package: Redcar

Debate between Tom Blenkinsop and Anna Soubry

Tuesday 19th January 2016 Commons Chamber

[Anna Soubry]

I am not aware of anything in particular in respect of the redundancies in Hartlepool, but if the hon. Gentleman and those in the neighbouring community want to put forward a case, I am always willing to listen.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

First, this situation is unlike the mothballing scenario in 2010, when I was a union officer on site, because there was not a single hard redundancy in the 22-month period. Now, there is a liquidation scenario and we have seen many hard redundancies. Secondly, I have written to the Minister about extending the remit of the taskforce to encompass the whole Tees conurbation and to help other workers who lose their jobs, such as those at Caparo, Tata and Boulby in my constituency. Thirdly, this will happen again and again. We have seen it in Port Talbot, Trostre, Llanwern, Dalzell and Clydebridge. We need a national network of taskforces to see how steelworkers and other workers are being treated in different areas of the country. This cannot be dealt with in a devolved, fragmented way. It is a sectoral issue that encompasses the whole of the UK.

[Anna Soubry]

I do not have time to deal with all those points because I want to respond to the specific points that were made by the hon. Member for Redcar, but there are lessons to be learned. It behoves any community, in the event of serious job losses, to act quickly and pull it all together. Many communities do so and that was critical in Redcar.

I pay tribute to the hon. Members for Redcar and for Middlesbrough South and East Cleveland (Tom Blenkinsop), and other hon. Members, for the way in which they have worked with the taskforce. I have paid tribute to Amanda Skelton and Paul Booth for the way in which they formed the taskforce almost before the dreadful news came on that Friday. As the hon. Gentleman said, at least 2,000 people were immediately put into redundancy, with all the consequences that that has for the supply chain, and many hundreds of them had not been paid for a considerable period. One reason why the taskforce was successful was that there were already good relationships between business, the council, Members of Parliament and all the other people one would expect to be there.

As a Government, we quickly put forward a financial package. In effect, there was £60 million. There was a headline figure of £80 million, but just under £30 million of that was used for redundancies, so the money that could be put into helping people get back into work was in the region of £50 million. I want to put it on the record that there was a £2.4 million safety net fund and that £1.7 million was eventually made available for apprentices. It took a bit of a fight, but we got there. There was £3 million for retraining courses, £2.6 million for a flexible support fund, £750,000 for business start-ups, a jobs and skills fund of £16.5 million, and £16 million of support for firms in the supply chain and the wider Tees valley area. There were also redundancy payments.

The hon. Lady is right to say that there is often a big problem in Whitehall. We said to those people, “We trust you to work out where the money needs to go.” However, the situation was, frankly, maddening and infuriating, and I only found out about it after she sent me a text. I do things differently, Mr Deputy Speaker. I give people my mobile phone number and say, “You contact me. You text me”, and they do! In a way it should not be like that, but it is good—we can exchange numbers later in private, Mr Deputy Speaker. The reason I do that is because of the situation that we found at Redcar. We had a group of people in the taskforce whom we trusted, and I pay tribute to all of them. They are not paid to do that, and they have worked incredibly hard. Amanda Skelton is paid to be the chief executive of the council, but she has worked like an absolute trooper and well beyond the hours for which she is paid—astonishing!

We trusted those people to put together a package and to have the funds, but we then had to go through the most bizarre set of hoops and all the rest of it, because they had to show that the package was value for money. As I put it to my otherwise excellent civil servants, this is a chief executive of a unitary authority who, on a daily basis, deals with large amounts of money and a huge budget. She is more than capable of looking at value for money, because unfortunately she has had to make lots of cuts, to reorganise and so on. In other words, I cannot think of many people who are more qualified to decide where the money should go, and who also have the responsibility to safeguard what is taxpayers’ money, but instead a system had to be followed—and Governments, of whichever colour, are blighted by too many systems and processes. We say that we will trust people, but too often we do not. However, we cut through that system—the instruction I always give is, “Get on with it. Trust these people and give them the money so that they can get on with it.”

There is no better example of the determination of those people involved in the taskforce—and beyond in the community—to do the right thing by all those who were made redundant at Redcar than what happened with the apprentices. There were 51 apprentices at SSI, and those jobs finished on that Friday. Some of those youngsters were on three-year apprenticeships, and it had all gone. This is a lot of money to ordinary folk, but we were talking about £1.7 million. It was astonishing. People such as Paul Booth went out there and found a place for every single one of those 51 apprentices within a week. That speaks volumes about their abilities, and about the reaction from the community and businesses. We then had to get the money—bit of a nightmare—but we got it, and all 51 apprentices can continue their apprenticeships.

Steel Sector

Debate between Tom Blenkinsop and Anna Soubry

Monday 18th January 2016 Commons Chamber

[Anna Soubry]

As I said earlier, the Prime Minister has said that this is a vital industry, and we are absolutely determined to have a sustainable steel industry, producing steel in blast furnaces in Scunthorpe and south Wales.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Before Christmas, the OECD held a meeting about steel that the Chinese delegation refused to attend. Obviously, every other country’s representatives wanted to talk specifically about Chinese dumping.

What is the Government’s position on Chinese market economy status? Are they in favour of it, whether inside or outside the European Union, and whether or not China signs up to the emissions trading system agreement that was signed in Paris? Will the Minister please tell us how on earth we will have a manufacturing sector at all by the autumn—when the European Union will make a decision on MES—if China is allowed to dump with such abandon in the absence of any proper control, whether in this place or in the European Union?

[Anna Soubry]

As I have said, MES is a matter for the European Union, and as I have also said, we are broadly in favour of it, but we have made very clear that China will only get it if it proves that it can play by the rules.

Redcar Steelworks

Debate between Tom Blenkinsop and Anna Soubry

Thursday 15th October 2015 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the Government’s £80 million released to help former employees of the SSI steelworks in Redcar.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

I may break your rule, Mr Speaker, because I actually have quite a lot to say over and above what was said on Tuesday.

We know and accept, and everybody understands, that this is a deeply dreadful time for all concerned in Redcar. That is why, on 2 October, the Secretary of State and I went to Redcar—I had been there since the previous Wednesday—and announced a package worth up to £80 million to help both the workers directly affected and the supply chain and the local economy more broadly. We briefed the local taskforce, including the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), that day on the contents of the package.

As Members will know, some elements of that package have already been rolled out and are delivering support. In terms of helping individuals, only yesterday the Jobcentre Plus service co-ordinated a very large and very successful jobs fair to help people affected to move into jobs as quickly as possible. Initial reports are that about 1,500 people attended the event, along with 50 employers offering 1,000 vacancies. That is on top of the individual support sessions that Jobcentre Plus has already been offering locally.

The redundancy payments service has established a dedicated team to process the redundancy pay, holiday pay, arrears of wages and other elements that are due to SSI employees. That is of course subject to statutory limits, but will be done as quickly as possible. I also note that the Government’s business support helpline is prioritising calls from businesses directly affected by the SSI closure, businesses in the local area with the potential to grow and take on former SSI employees, and former SSI employees who are looking for advice on starting a business. That is up and running, and it is working well. Callers will be fast-tracked to an expert adviser, who will provide advice on the issues they are facing, provide information on the local support package and refer them on to any other forms of support they need. That is a good start, but we know we need to do more.

As Members will be aware, we established a local taskforce to help to shape the support to be provided. Right from the start, our intention was not to impose solutions from Whitehall, but to ask the local taskforce for solutions on how best to target money and support. It is meeting right now, but I can understand why both Members who are part of the taskforce—the hon. Gentleman and the hon. Member for Redcar (Anna Turley)—are in the Chamber and not at that meeting. We have now received some initial proposals from the taskforce about supporting workers impacted by the closure of SSI, mitigating the impact on other companies directly affected by the proposal and supporting the growth of the wider economy. As hon. Members might imagine, we are assessing those projects urgently.

I know that the hon. Member for Middlesbrough South and East Cleveland has asked about further education colleges. The full cost of retraining former SSI workers and others made redundant in the supply chain will be met. Local colleges will therefore be able to claim full funding for education and training provided to any learner who was employed at the SSI Redcar plant at any time during 2015, or to a learner made redundant in the supply chain as a result of the plant closure, to support them to gain employment or start their own business. Eligibility will be confirmed by a referral from a Department for Work and Pensions work coach or a National Careers Service adviser who is working with affected individuals. That will enable local colleges to provide wide-ranging support to learners for short programmes of training that enable immediate entry into the labour market or for study that leads to full qualifications such as A-levels or their equivalents. Colleges that meet the quality criteria will receive additional funding to cover the costs incurred because of the additional flexibilities.

I will continue to work closely with the local taskforce, as I hope will the hon. Members for Middlesbrough South and East Cleveland and for Redcar, on how we can best support the workers of SSI, the affected supply chain and the local economy. I pledge that no worker will be left behind.

[Tom Blenkinsop]

The official receiver has indicated that the Government have released no further funds to buy coke. The last shift at Redcar coke ovens pushed the final bed this morning. One hundred and seventy years of steelmaking have come to a terrible, shuddering halt in only four weeks.

Since the liquidation announcement, we have learned that the original figure of £80 million was a public relations gimmick. There is no new money. Why has the Secretary of State continued to ignore calls to provide at least £30 million of new money, when it has been demonstrated that that money is guaranteed under statute for any worker who undergoes redundancy? Why have no colleges or training providers dealing with SSI workers, contractors and downstream workers received any additional funding on top of their existing budgets? What are the estimated clean-up costs of the Teesside Cast Products site in Redcar? How will security and funding be guaranteed for the Redcar bulk terminal and beam mill, which are still in operation? Why are arguably the best coke ovens and the largest blast furnace in Britain, which are on one of the handful of sites in the EU where production costs are lower than 90% of other EU sites, being allowed to close, while less efficient sites continue during this global steel price downturn?

[Anna Soubry]

That was a large number of questions and time precludes me from answering them all. I undertake to ensure that any questions that are not answered in what I say receive a written response.

It is not true that there is no new money. There is an £80-million package, £30 million of which is an estimated figure. We discussed all that during the urgent question on Tuesday. Indeed, the hon. Member for Redcar said that the estimate was between £20 million and £30 million. In any event, there is at least £50 million of new money. I have answered the question on FE colleges. That £50 million of new money is there to support the workers and the supply chain, so that there is reskilling, retraining and—[Interruption.] I am sorry, but I cannot hear what the hon. Member for North Durham (Mr Jones) is saying. If he wants to ask a question, he is more than capable of doing so, and I will answer it.

The reason why we are in this situation in Redcar is that, unfortunately, month on month, year after year, SSI lost money. It never made money at the Redcar steelworks. The coke ovens, as I said on Tuesday, were losing £2 million month on month. That is the harsh reality. The hon. Member for Middlesbrough South and East Cleveland knows the situation. Of course he feels huge passion about it because he has put a long-seated investment of his own life and skills into the plant. He knows the devastating effect that its closure will have on the local community, but the Government have done all they can and now we have to look to the future.

Redcar Coke Ovens

Debate between Tom Blenkinsop and Anna Soubry

Tuesday 13th October 2015 Commons Chamber

[Anna Soubry]

My hon. Friend makes a very good point. We have to get the balance right. We all want to live in a cleaner, greener world, but there is a cost associated with that. I just want to say one thing. I had to go to Berlin yesterday, and one of the things I did was to take the opportunity to talk about the actual reality of the situation in Germany. It is right that its energy prices for industry are lower, but those for ordinary consumers are considerably higher. Such is the Commission’s concern that it is now looking at and investigating whether such a balance is a breach of state aid rules. There is a lot of strength in what my hon. Friend says, but we again have some mythology. Sorting it out and getting to the facts is one reason why we are having a steel summit on Friday.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

If someone were to build a steelworks today, they would build it at Redcar because of the port, the quality of the steel, its location in relation to the European market, the skills of the people and the fact that the largest blast furnace in Britain is located there. Coke will still be pushed till Wednesday, and possibly even Saturday. I could ask many questions of the Minister, but the main one that I want answered now is why, when the Insolvency Service is under the jurisdiction of the Secretary of State, allowing him to steer and guide it, did it recommend closure of the entire site yesterday, prior to the steel summit on Friday? We thought that we would be talking about Redcar and Britain’s largest blast furnace. If Britain’s largest blast furnace is not part of a steel summit and a steel strategy for Britain, what is the point of the summit?

[Anna Soubry]

There are many points to discuss at the summit, one of which is the reality of the steel industry across the world. Let me make it absolutely clear that the official receiver is independent and free of interference from Government, and rightly so. That should never change. I would have hoped that the hon. Gentleman understood that. We have to be absolutely clear on this. The coking ovens were losing £2 million a month. It is a tribute to—[Interruption.] Honestly, I would take another question, but heckling will not help the hon. Gentleman.

UK Steel Industry

Debate between Tom Blenkinsop and Anna Soubry

Thursday 17th September 2015 Commons Chamber

[Anna Soubry]

I agree, but as the hon. Gentleman also knows there are very strict state aid rules. We could have a debate about whether this country should impose them at a higher, gold-plated level compared with other countries. My hon. Friend the Member for Wellingborough (Mr Bone) has said, “Everybody else tears up the rules and so should we”, but I do not agree, because we cannot complain about other people breaking state aid rules if we are doing it ourselves. I would much rather go to the European Union with clean hands so that we can say, “We’re abiding by the rules, so now you have to abide by them, too.”

The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) is not in her place, but she made demands of the Government. I hope she will forgive me, but I do not think she is aware of what the state aid rules are: they expressly prohibit the Government from giving any money to rescue and restructure a steel company in difficulty. EU state aid rules for steel permit support only for research and development, environmental protection and training, and only then within specified limits.

The hon. Members for Redcar and for Middlesbrough South and East Cleveland talked about what happened to the SSI plant when it was under the ownership of Tata and mothballed back in 2009-10. I will be corrected if I am wrong, but as I understand it that process was not supported by Government aid. I absolutely pay tribute to the unions, the workforce and everybody involved, including the local Members of Parliament and, no doubt, local councillors, who came together to work out that package, but I understand that the state aid rules forbade the Government from giving aid.

[Tom Blenkinsop]

To provide some context, at that time trade unions—with Community in the lead—alongside other helpful partners in the industry, were looking at potential buyers, such as Dongkuk, Marcegaglia and SSI, so that was not the issue. We had a destination to go to, but we needed a bridging gap. The Government provided £60 million of support funding to make sure that there was a taskforce for the area. The situation is now different, but we can talk about that in private.

[Anna Soubry]

I think we are agreed because this has affected Governments of all colours—or rather, of both colours. In all seriousness, the rules on state aid are very strict. I take the view that we should not blatantly breach those rules, because we cannot hold to account other countries that breach them, blatantly or otherwise, if we are guilty of doing the same.