Redcar Coke Ovens

Anna Turley Excerpts

Tuesday 13th October 2015 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

(Urgent Question:) To ask the Secretary of State for a statement on the closure announced yesterday of Redcar coke ovens, leading to the direct loss of 2,200 jobs and many thousands more in the supply chain in the local community.

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

Let me begin by saying that the significance of yesterday’s announcement is not lost on me or any member of this Government, because we know and understand the profound implications it will have for Teesside. The hon. Member for Redcar (Anna Turley) and I will not agree on this matter, but I pay tribute to her for fighting for her constituents, as every good MP should do. I also pay tribute to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who I suspect will also fall out with me today, for the work that he has done on behalf of his constituents.

I say that the significance was not lost on me because it was an honour to go up to Redcar the other week to meet a number of people. We knew that SSI was in huge difficulty. To put the situation in context, it never made a profit, notwithstanding the undoubtedly outstanding workforce and a lot of good will, and the coke ovens were losing, on average, £2 million a month.

The official receiver was accordingly brought in that Friday, and in his capacity as liquidator of SSI he announced, following discussions with potential buyers, that he had received no viable offers for the coke ovens or the blast furnace and that he would therefore begin closing those facilities. The terminology is that this is a “hard closure”—it is a tough closure as well. This is not mothballing, so we have to be realistic about the implications.

This is hugely regrettable news for SSI workers, their families and the local economy more broadly. Only this morning I spoke to the chief executive of the local council, Amanda Skelton, who informed me that at least 50% of the people employed at the ovens and blast furnace live in Redcar, so we are under no illusions as to the significance of the situation for the town.

The Government remain absolutely focused on supporting those people who find themselves out of work as a result of SSI’s liquidation. Through a package of up to £80 million, we will continue to invest in them and the future of the Tees valley economy.

Safety, as Members might imagine, is a top priority. We will continue to ensure that the official receiver has all the funding and support necessary to deliver a safe and orderly closure of these assets, working with the Health and Safety Executive and Environment Agency. I thank the official receiver for what he has done. He was able, with Government assistance, to keep the coke ovens going until yesterday’s announcement, which is no mean achievement.

By way of example of the seriousness of the situation, when I was last in Redcar we discussed the possible sale of coke that might just have raised £800,000 that Friday morning and that might just have bought some sulphuric acid to keep the power plant going. That was the reality of the hand-to-mouth existence of SSI. That is a reflection not of the local management, which struggled under the most difficult of conditions, but, unfortunately, of the Thai owners, notwithstanding the welcome they properly received when they bought the plant and the great hope invested in them by the local community.

I place on record my thanks to everybody—including the Community trade union, which I had the great pleasure to meet, representatives from the local authorities, local Members of Parliament and other stakeholders—who has helped to operate SSI’s facilities safely during this particularly difficult period. They have done so much to try to ensure that there is a future for steel making in Redcar, but unfortunately all that good work has come to nothing.

[Anna Turley]

This Government have overseen a tragedy for the people of my constituency and the region. This is an act of industrial vandalism for British manufacturing. We are talking about potentially as many as 6,000 jobs in the local area, but this is about more than jobs and livelihoods: this is about people’s identity, their pride, their dignity and their respect in work, and it is about the heritage and the history of our local community, where people have been involved in steel making for generations. That has been torn away.

This is about more than our past: it is about our future. Fifty apprentices were due to start with SSI on the day it paused production. Steel underpins the entirety of the Teesside economy. The Government have turned their back on my constituents and on steel making in Teesside, and they have dealt a hammer blow to the UK industry.

Why did the Government refuse to intervene on environmental grounds to secure the site? Why have they hidden behind state aid rules when other countries in Europe have stepped in to protect national assets? Why are they claiming that money would go to the Thai banks when the official receiver works on behalf of the Crown and has a responsibility to maximise the value of an asset, not to close it down? How can the Government say, in just a few days, that there were no viable options or buyers, when I understand that there were at least 11 interested parties? Why did they pull the plug before they had properly explored the options for developing foundry coke for emerging markets in western Europe? Why have they included—this is absolutely disgraceful—statutory redundancy payments in the £80 million support package? The payments could be as much as £20 million to £30 million of that sum. They are misleading people and cheating them of the support promised to them. Finally, why have they allowed 170 years of great British steel making, which built the world from Sydney harbour bridge to Canary Wharf, just to fade away without so much as a whimper from this Government?

[Anna Soubry]

As I said, the hon. Lady and I are bound to fall out on these things. Let me just make this absolutely clear: this is not a decision that the Government have taken; this is a decision that the official receiver has taken. The official receiver is independent. It is his decision and, as I said, he has made it after more than a week of trying to forge an agreement with potential buyers, notably of the coke ovens. I do not believe that anybody has come forward to buy the blast furnace.

We know the reality. The reality is that there is an over-production of steel across the world and an under-consumption. We have not even got back to pre-crisis levels; in fact, we are 25% short. The price of slab made in Redcar has almost halved in 12 months. That is why the site has never turned a profit. That is why, unfortunately, it has made losses year on year. As I said, the coke ovens were making a loss of some £2 million a month. We have done everything we can.

In relation to the environment, we disagree. We are working with the Health and Safety Executive and the Environment Agency. The truth is that those discussions had been happening for some considerable time before the company went into liquidation, because such an outcome was always the fear, faced with the harsh reality of where we are with our steel industry not only in this country but across the whole world.

Nobody is hiding behind the state aid rules. Many stories are told about what other countries do, but when we dig deep into such stories, we find that they are actually the stuff of myth. Italy is a particular example of that. [Interruption.] I think somebody is shouting, “Outrageous!” I am more than happy to share with—