Redcar Steelworks

Tom Blenkinsop Excerpts

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.