Teesside Cast Products

Business, Innovation and Skills written question – answered at on 24 March 2010.

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Photo of Dari Taylor Dari Taylor Labour, Stockton South

To ask the Minister of State, Department for Business, Innovation and Skills what requests for assistance his Department has received from Corus in relation to Teesside Cast Products.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Innovation and Skills), Member, Labour Party National Executive Committee

The Government have created a fiscal stimulus in areas of public spending that will directly increase demand for steel and feed through the supply chain. Along with its partners in local government and the regions, the Government have brought forward billions of pounds worth of infrastructure spending across the UK.

We also committed £400 million to the car scrappage scheme to underpin the vitally important automotive sector, another very large user of steel. However these measures were aimed at boosting domestic markets more generally and therefore were not specifically targeted at assisting Teesside Cast Products, whose output of slab was sold almost entirely for export.

Corus requested the following assistance from the Department of Business, Innovation and Skills in relation to Teesside Cast Products:

Subsidies for short time working-this request was initially made, through the CBI, on 27 November 2008 and was in relation to all Corus UK sites and not just Teesside Cast Products. The Government declined this request on the grounds that we have extensively examined the economic case for UK wage subsidies and concluded that this is not a feasible, cost effective or sustainable option, nor would it guarantee that plants, like Teesside Cast Products would stay open in the long term.

Export subsidies-Coras raised the issue for potential export subsidies in July 2009 to help bridge the gap between cost of producing slab at Teesside Cast Products and the price that could be achieved for the product on the world market. The Government refused this request as export subsidies would be illegal under the EU state aid rules.

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