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Redcar Coke Ovens

Oral Answers to Questions — Health – in the House of Commons at 12:33 pm on 13th October 2015.

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Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office) 12:33 pm, 13th October 2015

(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.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

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. 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 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.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

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 have they pulled 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?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

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—

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Oh, I don’t have a problem with being brave. I can tell the right hon. Lady that if we look at the action that Italy has taken, even in the peculiar and exceptional circumstances of a group of directors facing allegations that they were poisoning the land and causing cancer, the Commission is now investigating the situation because it is concerned that there has been a breach of the state aid rules. Such is the nature of the rules, which are very onerous.

Finally, on the £80 million package we have put in, the hon. Member for Redcar makes the point that about £20 million—I think it is nearer £30 million—of that is by way of redundancy payments. Let me make it clear that that was always my understanding, and I thought that we had made that clear when we were up in Redcar. In any event, let me also make it very clear that I am not closing the door on the £80 million, because one of the things of which we are very aware is the implications for the many thousands of other people through the supply chain. Many of them have not been paid for some considerable time, such was the contractors’ and subcontractors’ loyalty to SSI, so the effects through the supply chain will be considerable. I certainly want to be in a position to be able to help everybody, not just the 2,100 people who have unfortunately been affected by the announcement.

Photo of David Mowat David Mowat Conservative, Warrington South

Our steel industry pays the most expensive electricity prices in the EU and, indeed, in the world, and it is impossible to compete at the margin with such costs. Does the Minister agree that whenever we discuss the balance between environmental taxes and lower energy costs, the Labour party always wants to go further, faster and more unilaterally, and that has had an effect in Redcar?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

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 equally, 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.

Photo of Tom Blenkinsop Tom Blenkinsop Labour, Middlesbrough South and East Cleveland

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?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

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 would understand 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.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

It is, I know. That was the pot calling the kettle black, but this is a serious matter.

As Tom Blenkinsop knows, the official receiver ensured that there was enough coal to put into the coking ovens. That went over and above what we all thought would happen on that Friday, when there was not even enough money to buy the sulphur to keep the power station going, as the hon. Gentleman knows. Notwithstanding his efforts, those of the hon. Member for Redcar and the meeting that I had with the group of people based locally who had expressed an interest, the harsh reality is that nobody has come forward with an offer to buy the coke ovens. Are Members honestly surprised when they were losing £2 million a month?

Several hon. Members rose

Photo of Philip Davies Philip Davies Conservative, Shipley

My hon. Friend David Mowat is right about the irony of the Labour party complaining about steel plants closing when it imposed the Climate Change Act 2008 on the UK, which unilaterally put huge costs on energy that other countries did not face. Will the Minister confirm that the Government have learned the lesson and will not unilaterally impose huge energy costs and carbon emission targets on British businesses? If the Government do not make that commitment, many other manufacturing jobs will follow. We are merely exporting jobs to other countries around the world.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

My hon. Friend makes a good point. However, even if we had the sort of energy prices that I would like, it would not solve the problem for our steel making industry, which is that the price of steel has almost halved because of over-production and under-consumption.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Business, Innovation and Skills)

I note that the Minister said that she and her colleagues understand the significance of this situation. That statement would have had more resonance with the House had the Secretary of State come along today.

I pay tribute to my hon. Friend Anna Turley and all my hon. Friends from Teesside, who have worked tirelessly on behalf of their constituents. In contrast, we now see the practical consequences of having a Conservative Business Secretary who is so ideologically opposed to the notion of Governments acting to protect our strategic economic assets in difficult times that he will not even use the words “economic strategy”, preferring the phrase “industrial approach”. I am afraid that “industrial indifference” would be a more accurate description of what we are seeing.

This is not just about the 2,100 jobs that will be directly affected at Redcar, although each one represents a tragedy for those families; this is about a long-term strategic vision for Britain’s economic and industrial future. I am afraid that for all the rhetoric about northern powerhouses and the march of the makers, at the first big test of whether this Government have any long-term strategic economic vision, the march of the makers has come to a stuttering halt.

Why have the Government been so passive about working to save the steel industry in this country when it is so strategically important? What options did they explore for mothballing to save the assets? Why do they believe it acceptable that the £80 million support package also contains statutory entitlements to redundancy pay? I was interested to hear that the Minister might not stop at £80 million, so perhaps she will tell the House a little more about how much she has in mind. Will she confirm how much it will cost the taxpayer to clean up the site safely?

What assessment has the Minister made of the economic impact of the closure on the local community and the supply chain? Did she raise the issue of Chinese dumping during her recent visit to China, or does the UK’s relationship with China now simply consist of kowtowing to the Chinese Government in a way that will mean that they have more financial interest in Britain’s strategic assets than our own British Government?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

It does nobody any good—especially those who have been made redundant—when people engage in scoring cheap political points, and I think it is absolutely pathetic. The Secretary of State and I have worked together tirelessly to consider every single option for how we could assist. That consumed the time of both of us, and we did that work together. One example of that is the fact that, apparently, during all the goings on in the past about saving Redcar, no Minister ever went there. We were the first—it got both of us—and that reflected our dedication and was our attempt to ensure that we did everything we could. That is what we have done, but we must be realistic. The price of slab has almost halved due to over-production and under-consumption. Yes, I did talk about Chinese dumping and many other things related to the steel industry when I went to China, and unfortunately the account that one gets back is not good. This is a worldwide problem, and it will not be solved overnight. This is a tough time—possibly the toughest time ever—for steel industries across the world.

Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan Conservative, Berwick-upon-Tweed

Does the Minister agree that if Labour Members want more freedom for the UK Government to determine Government subsidy for important businesses such as the steel industry, they should vote to support the “leave” campaign?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

My view is that we should stay within a reformed Europe, but those are exactly the sorts of conversations we need to have. We must speak to countries such as Germany and get the facts out there. The idea that only the British steel industry is suffering is not true. This problem affects all steel industries, not just in Europe but in Turkey, Brazil, and around the world. This is a real crisis throughout the world.

Photo of Marion Fellows Marion Fellows SNP Whip

I make no apology for repeating in my short contribution some of what has already been said. My constituents know only too well the terrible cost of plant closures. That has happened twice in Redcar, and my heartfelt sympathies go to each and every person involved. I know how hard Anna Turley and other Members from Teesside have worked.

Industrial vandalism does not even begin to describe what has happened, and is happening, to steel plants in this country. Ravenscraig—I have said the name, but it now means very little. They are still cleaning up in Ravenscraig. They have tried to contain all the terrible heavy metals and industrial material. Most of it has gone, but people are finding it hard to redevelop that site simply because of what was there before. Will the Minister please pledge in Rotherham on Friday to give positive help to the UK steel industry? We must have positive help to survive the recession for all the reasons that have already been mentioned, such as high electricity costs, high rates and so on.

We have had many talks—I know the Minister wants to help; she has been commended on her positivity and her help—but we have come to the end of the line. No more talking; we need action and more than £80 million to try, somehow, to replace all those well-paid jobs. My constituents know how that feels. Many people, including a previous Member for my constituency, went to university on the back of a training course that they received at that time. He was lucky because not everyone was able to do that, but that still did not produce the type of well-paid jobs that there used to be in that area. That is what will happen in Redcar—we all know that.

We talk about state aid, and other countries in Europe seem able to provide that. Conservative Members seem to use Europe as a battering ram. It is one thing for one side, and something else for another, and they change their minds all the time. State aid is possible; it has been done by other countries. Please consider it.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I am more than happy to meet the hon. Lady to explain to her the state aid rules and to bust some myths. She must be assured that the problem is one of over-consumption across the world. These are harsh economic realities, and although I wish I had a magic wand, no Government can set the price of steel. The price of slab has almost halved in 12 months. Hardly anybody is making a profit, and no Government can solve that. She can be assured that the Government are doing everything they can to support the steel industry in this country. Where we cannot support it—as we have unfortunately found in Redcar—we support those workers into new jobs.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

The Minister referred several times to the global steel market, and we know that the dumping of certain Chinese steel products has played a part in the situation at Redcar and set a worrying precedent for all other manufacturing industries, including high-tech. Will she confirm that the Government will look to use anti-dumping measures in other situations, just as they have supported their use in this instance?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

It was, I think, a first when a clear ministerial direction was given that we should vote in favour of anti-dumping measures in the European Commission, and we did that. Last week we abstained from another vote, and I am more than happy to explain to my hon. Friend in more detail why we did that—Mr Speaker, quite rightly, wants me to keep my remarks short. There was a good reason for that abstention, because by doing so we were actually voting in favour of supporting the British steel industry.

Photo of Andy McDonald Andy McDonald Labour, Middlesbrough

More than 20% of the people affected by this issue are from Middlesbrough, as they know only too well. Like me, they heard the Secretary of State say that he does not like industrial strategy. They know exactly what those words mean—[Interruption.] It is no good the Minister whingeing, because that is what the Secretary of State said, and this is how it impacts on people. The Minister hides behind state aid rules, but she or the Secretary of State could intervene if they were minded to. There is regional and environmental aid. Italy, France and Germany have stepped up, but this Government have completely lifted the white flag and surrendered. The people of Teesside will never forgive them for that and for having to spend £1.1 billion to clean the place up. It is an absolute utter disaster, and the Government should be ashamed of themselves.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

The hon. Gentleman was at the meeting—he wanted to come to it and I said he was more than welcome to attend—and he knows that nobody put up a white flag. He is not stupid, and he knows the reality—[Interruption.] I am not patronising; I am reminding the hon. Gentleman, because he is intelligent and he knows, that the price of steel has almost halved. We are not hiding behind state aid rules. I challenge him to tell me what we could do that is within the state aid rules, and I will have a look at that. We have explored everything.

Photo of David Rutley David Rutley Conservative, Macclesfield

I recognise that the closure will have a real impact on the community. Redcar is a great part of the world and has a really skilled workforce, and the Government have taken pragmatic steps to try to assist in a difficult situation. Does my right hon. Friend agree that there are benefits to undertaking more proactive reviews of large sites in industries that are going through transformational change—including diversification initiatives, and considering alternative uses for sites—just as the Minister for Life Sciences is initiating in the pharmaceutical sector?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I am very grateful to my hon. Friend for his comments and for his question. I very much agree with him. We have to take an honest and realistic approach to all these matters, looking at conditions and at events we actually have no control over. There are, however, many things we can do. To say that we do not have a strategy is just ludicrous, because we absolutely do have one.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Education)

With regard to the £80 million in support funding, apart from the disgraceful issue of statutory redundancies being paid out of it, when will people actually get some real money in their hands? People have not been paid for up to eight weeks now. Apart from retraining, what they need is money to buy food and pay bills before this tragedy turns into an utter disaster for those families.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Unfortunately, the hon. Lady is right when she talks about the people in the supply chain who have not been paid because of their absolute determination to try to support SSI. One of the things we absolutely looked at was whether there was anything we could do to help them. At the moment, we cannot find any way to help people along the supply chain who have not been, but who should have been, paid. It was known that the redundancies were part of the package of £80 million it, but we will have to agree to disagree on that. [Interruption.] Well, I certainly said it in the media, so perhaps they did not listen to the local television. In any event and most importantly, we are determined to make sure that it is not just the workforce at SSI Redcar who benefit from the package, but that it goes through the supply chain. We know there are many thousands more who suffer because of this liquidation.

Photo of Tom Pursglove Tom Pursglove Conservative, Corby

Like all Members in this House, I feel exceptionally sorry for the people of Redcar. I know the Corby steelworkers send their very best wishes. Has the Minister received representations from any other sites that perhaps find themselves in a similarly perilous position? Will she promise to continue to engage with the industry and do everything she can to help?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

It is not a secret that we have a really serious crisis in the British steel industry. We identified that when we had our very good Back-Bench debate a few weeks ago. We are holding the steel summit precisely for the reasons my hon. Friend has given. We are very keen to talk to everybody, to explore all options and to do everything we can. As the Prime Minister said, steel is a vital industry. We are determined to continue to do everything we can to support it.

Photo of Iain Wright Iain Wright Chair, Business, Innovation and Skills Committee

The SSI closure is a tragedy for Redcar, but yesterday’s announcement has repercussions far beyond the boundaries of that town. The snuffing out of the blast furnace and coke works puts a pillow over and suffocates the entire UK steel industry and a large part of the manufacturing supply chain. It will no doubt contribute to that sector’s death. What is the Minister doing not just to retrain staff but to maintain and preserve this efficient industrial asset, maintaining and preserving that capability and knowledge to ensure that competitiveness throughout our manufacturing and supply chain sector is not lost forever?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I absolutely agree with the hon. Gentleman. I absolutely know and recognise the importance of the manufacturing sector. I have already used the words the Prime Minister used in recognition of the vital part that steel plays in our manufacturing, and indeed in the country’s, whole industrial base. We absolutely want to support it. That is one of the reasons why we are having the summit on Friday. It is absolutely understood and accepted that it would be wrong to lose steel—the manufacturing, rolling, pressing and everything else of steel in this country—but we are where we are. At the moment, we have gross overcapacity. That is the tragedy, as prices continue to fall.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

Clearly, what has happened in Redcar is a terrible blow to its local economy. In northern Lincolnshire, our economy is very dependent on the future of the Scunthorpe works. It is clearly important that we maintain steel manufacturing capacity in the country. Will the Minister give an assurance that the Government will redouble their efforts to ensure that the Scunthorpe works continues?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Let me make it clear: I will continue to do everything we can to keep the steel industry going in this country. I am looking forward to meeting my hon. Friend later and I am going to Rotherham on Monday to meet people there. I will continue to meet, go around and visit. That is part of our determination to do everything we can to support this vital industry.

Photo of Alex Cunningham Alex Cunningham Shadow Minister (Environment, Food and Rural Affairs)

High carbon taxes and energy costs played a major role in SSI failing. Many other industries across our country are facing the self-same issues. Hundreds of my constituents lost their jobs on Teesside last week. How many more jobs have to be lost before the Government change their policy and start to address these issues?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I think we fall out when we say it is “our” policy. We have all been agreed that we want a cleaner, greener world, but it comes at a price. As I said before, electricity prices and the cost of energy were not the reason. They did not help, but this is about the worldwide problem of over-production, under-consumption and a fall in the price of steel by up to a half of what it was 12 months ago.

Photo of Andrew Stephenson Andrew Stephenson Conservative, Pendle

This is deeply regrettable and will have profound implications for the whole economy. I welcome the announcement of a steel summit to discuss the broader impacts on industry. Will the Minister say more about the organisations that will be involved?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Off the top of my head, those attending will be—as you might imagine, Mr Speaker—steel owners, manufacturers, the steel trade industry itself, trade unions, local Members of Parliament and Ministers from relevant Departments. I cannot remember now, but I think we have a couple of other people coming along to provide an independent assessment of the future of the steel industry. I do not want the summit to be too big; otherwise it will just turn into a grand talking shop. That is the one thing we do not want. I hope we will have all the key people there.

Photo of Jenny Chapman Jenny Chapman Shadow Minister (Justice)

My words could never convey to the Minister the sense of abandonment that is felt in communities throughout the Tees Valley. She stands there as if she has had no choices to make. Why can we not mothball this site? It would cost £30 million. Last time Redcar was in this position it took three years to find a solution. This Government are giving it only days. Why?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Because the official receiver has come to the conclusion—[Interruption.] No, we cannot hide behind the fact that the official receiver is in charge. The official receiver has said he cannot find a buyer. The hon. Lady says it is a mere £30 million. I am sorry, but is that for six months, 12 months or 18 months? How would she justify that to her constituents? It is not Government money, but her constituents’ money. Let me make it very clear: if we do it for Redcar, then do we not do it for every other industry or business in our country that, unfortunately, cannot find a buyer for its products?

Photo of Nicholas Dakin Nicholas Dakin Shadow Minister (Education)

May I, on behalf of the Scunthorpe steel community, express solidarity and support for the Teesside steel community at this very difficult time? When Jaguar Land Rover was in significant difficulty and very challenged, the then Labour Government stepped in and intervened. Jaguar Land Rover is now a byword for success. When will the Conservative Government step in and intervene so that steel can be the byword for success in the future that it has been in the past?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

The hon. Gentleman knows we have done everything we can. He also knows that the state aid rules on steel are the toughest. I am more than happy to go through them with the hon. Gentleman to see whether he can find me a way of doing what he says he wants us to do.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

We have to be frank today that the Redcar tragedy casts a dark pall over the steel summit on Friday. Will the Minister say to the stakeholders, and to others in the industry who will be attending and who are struggling with very difficult times, what she will come up with that is new so that it will not be just a talking shop? Does she, crucially, have the backing of the Chancellor, the Prime Minister and her own Secretary of State to take the actions that matter?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Let me deal with the last point first. I repeat what the Prime Minister said: this is a vital industry that we will continue to support. So yes is the short answer to that question. The hon. Gentleman knows that the state aid rules are the state aid rules. This idea or myth that other countries are doing magic things in breach of the state aid rules without any comeback is just that—an absolute myth.

The hon. Gentleman also forgets—I have to repeat it—that the price of slab has almost halved in the last 12 months. We have over-production and under-consumption across the world, and we are 25% short of where we were before 2009. If we had a magic wand, we perhaps would all want to do these things, but in the harsh reality of the world we are in, we cannot give £1 billion of taxpayers’ money a year, which is what we estimated it would cost, to keep the steel industry where it is today. He cannot justify that to his constituents. That is the reality.

Photo of Angela Smith Angela Smith Labour, Penistone and Stocksbridge

May I place on the record the sympathy of the people of south Yorkshire for the people of Redcar? Of course, people in south Yorkshire know what it is like to see thousands of jobs go at a stroke.

The UK steel industry faces volatile times. The Minister has said today she understands that manufacturing as a whole will be damaged if the UK steel industry goes under, and it is under serious threat. At the steel summit on Friday—in Rotherham, by the way, not Sheffield—will she please bring forward firm proposals for UK Government support for the steel industry? Otherwise it will just be a talking shop. She needs to take responsibility and bring forward firm proposals that we can all talk seriously about on Friday.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I am grateful for the hon. Lady’s comments, but I can assure her that I take full responsibility for the importance of this sector and will do everything I can to make sure we support it.

Photo of Dennis Skinner Dennis Skinner Labour, Bolsover

Is the Minister aware that here we are, on 13 October, about three months since the general election, and we are now beginning to witness the true face in Toryism in practice? We heard for several weeks the story about looking after the working man. We heard the story about the living wage. Now that they have been tested, the Government have decided to hand over the Redcar steelworks lock, stock and barrel, just as the previous Tory Government did at Consett, Corby and many other places. We are witnessing today the true face of Toryism. It has only taken them three months to appear as they really are. This was the day when Osborne’s northern powerhouse strategy died its death.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

And the question is? There was no question. Just standing up and making speeches that do not offer a solution—

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

So have I. [Interruption.] You know what, that is so out of order. [Interruption.] Well, I do. I find it offensive and sexist, and the hon. Gentleman should know better. I know he has a bigger majority than me, but in Broxtowe more people voted for me than for him in Bolsover. He needs to understand that there is under-consumption of steel in the world. The price of steel has almost halved. Fine words are not enough. Realism and action are required. We have to live in the real world, not the fantasy world of the ’60s.

Photo of Stephen Kinnock Stephen Kinnock Labour, Aberavon

The Back-Bench debate secured by my hon. Friend Anna Turley was held shortly before the trip to China, which took place amid much fanfare. The Minister pledged to go to China and lobby strongly against the massive dumping of Chinese steel in our market. May we have a detailed response about what was secured as a result of those discussions?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

I had a number of discussions, and I raised with the Chinese the fact that there is now a growing demand for protectionism, especially in the EU, because of these various allegations—not just on steel—of Chinese dumping. I also had discussions about the future of the Chinese economy, including its steel economy, and whether any change in their policy was expected. We were informed that things would not change, which I am sure the hon. Gentleman will agree was unfortunate, and that they would continue to produce steel in this way. That economy, although growing, is not growing as much as it could, so I am afraid that there is not much hope there. However, we continue to make the case.

Photo of Margaret Ferrier Margaret Ferrier Shadow SNP Spokesperson (Scotland Office)

I echo Members across the Chamber in saying that my heart dropped when I heard what had happened in Redcar and Teesside during the recess. Anna Turley has dealt with the matter very well, against all the odds. Having listened to the mealy-mouthed excuses from the Government Front Bench, I would like to remind the Minister that while her Government should have been acting to protect British industry, Mr Chancellor was off wooing the Chinese. What representations did her Government make to Chinese steel over the upcoming HS2 contracts?

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

These things are all in the future. I can assure the hon. Lady that everybody in the Government wants to make sure that, when the day comes and we look to buy the rails, it is British steel that is bought. I also remind her, following our debate on this, that it would be helpful if the Scottish Government made sure that in their projects they bought Scottish steel.

Photo of Greg Mulholland Greg Mulholland Liberal Democrat Parliamentary Campaigns Chair

My father and many others in my family are proud Teessiders, so I know exactly the devastation that this will cause to local jobs, the local economy and the UK steel industry. I also want to pay tribute to the former MP for Redcar, Ian Swales, who did a wonderful job in the last Parliament. The Liberal Democrats fully support the cross-party campaign. Will the Minister listen to the Liberal Democrat leader and immediately commission a cross-departmental ministerial committee to talk about this matter? This must happen straightaway, before these flames die out and the plant is killed forever, which must not happen. Over the next few days, she must do everything she can and look at all the possible options to save this plant.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

Yes, that committee, which has already been formed, will meet this afternoon. Everybody seems to have forgotten, however, that Redcar unfortunately was mothballed under the last Labour Government and that the furnaces were restarted under the coalition Government. [Interruption.]

Photo of Wes Streeting Wes Streeting Labour, Ilford North

The fate of the Redcar steel industry and the effect on communities on Teesside demonstrate the consequences of a hands-off economic policy and the lack of an industrial strategy. May I press the Minister on the consequences for people on Teesside? She has been asked again and again by colleagues about the statutory redundancy payments they will receive. The hand-to-mouth existence of the plant she describes is nothing next to the hands-to-mouth existence that those people now face. Will she give an assurance that she will consider what more the Government can do to make sure that people receive more than the statutory redundancy package?