Minister delivers five point plan to save 2000 jobs at steelworks

The SSI plant at Redcar
The SSI plant at Redcar
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MPS demand the Government take action to protect the future of a major North Yorkshire employer

A PLAN to save the UK steel industry has been delivered to Government by an MP fighting to save 2000 jobs.

SSI, the Thai-based owners of the Redcar steelworks employing people from across North Yorkshire, has struggled by falling demand for slab steel and plummeting prices.

A missed debt payment announced earlier this week has thrown the future of a key regional employer into doubt.

Delivering a five point plan to Business Minister Anna Soubry, Redcar MP Anna Turley said there were five areas of practical action the Government could take to give the industry a ‘chance to stay alive’ in a fiercly competitve market.

She revealed new statistics which show that the steel industry in the UK is disadvantaged by £431million per year compared with global competitors as a result of the exchange rate, energy policy costs, air pollution targets and business rates.

The Labour MP asked the minister to fully implement the Energy Intensive Industries Compensation Package, well ahead of its April 2016 launch, which could help plants keep costs down.

A reduction in business rates for industries reliant a significant amount of machinery would also help the sector, and should be in line with rates paid by competitors France and Germany, Anna argued.

She also demanded a more realistic timetable for meeting emissions targets and more support for EU anti-dumping measures to protect against low Chinese steel prices.

After reeling off a list of architectural feats using Redcar steel, including the Canary Wharf development and Wembley Stadium, Ms Turley asked for a commitment from the minister that major public projects use only British steel.

Speaking in the chamber, Anna said: “I ask the minister in desperation to consider the request for financial assistance from SSI so that we can continue to see wages being paid. So we can get the 50,000 tonnes of cargo that is sitting on the dock as we speak a mile down the road to the blast furnace. So the gas can keep pumping, so the coal can load the furnace and the workers can pay their mortgages and feed their families. So the proud tradition of steel making on Redcar can remain the beating heart of our community.”

“As I said in my maiden speech there already is a ‘Northern Powerhouse’ – it’s called Teesside. If the Government doesn’t act today we will know their words are hollow.”

Conservative MP Andrew Percy for Brigg and Goole, whose constituency includes Scunthorpe Steelworks, said he shared many of Ms Turley’s concerns about the difficulties facing the industry, and urged the Government to bring forwards its implementation of the compensation scheme.

The Business Minister said discussions were at a critical point and she didn’t want to say anything that might ‘alter of effect’ the work of the Teesside based MPs in trying to find a solution.

She said: “I totally echo the words of the Prime Minister that we will go on to do everything we can to support this vital industry. I fully agree with the Prime Minister, my role is to champion the steel industry and do all that I can to make sure the words of the PM are echoed right across Government.”

However she said pleas for financial intervention were difficult as EU rules on state aid prevent the Government from being able to rescue a steel company in difficulty. They can only contribute to research and training.

“The rules on state are very strict,” she added.

SSI took over the former Corus Teesside Cast Products plant in 2010 after it was mothballed, and is believed to have spent around £1 billion getting it up and running. The takeover deal valued the business at $469m (£291m).

The Teesside plant has the second-largest blast furnace in Europe and slab production capacity of 3.5m tonnes per year, however prices have shrunk from £318 per tonne to £191 per tonne while the Chinese share of the British market has quadrupled.