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Post-SSI Support Package: Redcar

Volume 604: debated on Tuesday 19 January 2016

Motion made, and Question proposed, That this House do now adjourn.—(Charlie Elphicke.)

As has been well documented in this House and in the national media, my constituency has been through one of the toughest times in its existence. I could debate all day with the Minister about what more I believe the Government could have done to save the Redcar coke ovens and blast furnace. I also have many outstanding questions on the future of the site and who will be paying for it. But I want to make the people who have borne the brunt of the tragedy the topic of this debate.

Some 2,200 men and women lost their jobs directly when SSI went into liquidation. Twenty-six supply chain businesses were also affected, with a further 954 redundancies. As is the case after such a calamitous economic shock, numbers continue to increase as local businesses, shops, childminders, decorators, hairdressers and many others are affected by the money being taken out of the local economy. Each of these is a tragedy. Each of these is a life that needs to be picked up, a mortgage that needs to be paid, a Christmas that had to be got through. Redcar and Cleveland Mind has had a 91% increase in mental health referrals in the past year, and we know that January and February are hard at the best of times. I therefore thought it important to stop at this point and to take stock of where we are and what is happening.

Does my hon. Friend agree that the collapse of SSI has had massive ramifications right across Teesside, so any response that the Government may give, including Lord Heseltine’s review, has to deliver immediate and targeted support to ensure that all our constituents who are so affected have the employment opportunities that they, and our communities, deserve?

My hon. Friend is absolutely right. The scale of this has been absolutely devastating, not just for those who were directly employed, but, as I said, in the knock-on repercussions for our community.

This debate is about trying to learn lessons from the support package that has been put in place—lessons at local level and, indeed, national level. It aims to look at how the £50 million support package from the Government is being applied, what is working and what is not, and what lessons can be learned, particularly as we see other steelmaking areas in the country now facing the same tragedy as us.

Out of the tragedy has come some positive learning. The steel taskforce has been an important creation to enable multi-agency co-operation from the start. Weekly meetings have allowed local partners from the Department for Work and Pensions, the local authority, BIS, the unions, the local enterprise partnership, the local media, elected politicians and others to clarify communications processes and to get to the root of the issues and concerns. I believe that every region should consider putting together a committee of this kind that could be called on in the event of a catastrophe similar to that which we saw last year. Indeed, areas with similar high levels of unemployment may want to consider organising such partnerships as a standard procedure to tackle the challenges they face in employment and skills.

It has also been encouraging that national and local agencies have worked together in a way that departmental silos and local versus national boundaries all too often prevent. The National Careers Service has provided guidance and advice. The Skills Funding Agency has acted to remove barriers and increase the flexible use of its funding for SSI workers. Jobcentre Plus has worked closely alongside the DWP and BIS, allowing rapid response processes to be put in place and creating an efficient system for passing on referrals. FE Plus, a group of colleges in Teesside, has forged a close working relationship with private training providers, allowing referrals to be passed from public sector providers to private sector education providers with specialist provision.

This experience has highlighted the complex and bureaucratic nature of skills funding and provision, but it has also clearly indicated that after an initial period of shock, enabling agencies to work together at regional level has allowed many of the usual barriers to be overcome, helped particularly by the benefit of a clear decision-making body in the form of the taskforce.

I congratulate my hon. Friend on securing this debate and on the sterling work she is doing for people across Teesside and elsewhere. My surgeries have been full of people who are contracted employees and who are not getting the same level of support as direct employees. Does she agree that barriers need to be broken down so that they can get help similar to that for direct employees?

My hon. Friend makes an extremely important point. I have met a number of contractors, many of whom have service of over 30 years in the steel industry, having worked in catering and on the site itself. They have all provided as much value to the steel industry as others, and they deserve equal treatment. I will go on to talk about one of the successful experiences that we have had. Again, I hope that lessons can be learned to make sure that there is not a two-tier system for contractors and the full-time employed.

We sometimes overlook one important issue. This is not just about jobs; it is about the financial, emotional and physical impact on families as they wonder how they are going to pay their bills and mortgages. Does the hon. Lady think that the Government should provide help for people to get through this hard time and make sure that they can cope at a time of stress?

The hon. Gentleman is absolutely right. We pushed for the Government funding to go towards crisis loans and crisis management, and the taskforce has been excellent at putting in place support for mortgage payments and transport issues and for ensuring that people can pay their bills. I want to make sure that that is replicated when addressing the problems in Port Talbot and elsewhere and that they learn from our experience in Redcar. That is not to diminish, however, the devastating consequences of what has happened. There were huge challenges over Christmas. Many people got through Christmas and provided for their families, but, looking ahead, we have to press on and give them the long-term help and support they need to get back into work. The hon. Gentleman makes an extremely important point.

One of the most important factors in the response has been the flexibility of the funding available through the support package. It ensured that people were not limited in the courses to which they had access, as would usually be the case, and that specialist and professional training ordinarily paid for by employers was now funded by Government for these priority workers. That flexibility was coupled with the relaxation of certain rules, such as the Jobcentre Plus 16-hour limit for training or education, and the fact that applicants were not restricted to just one course or to those that were relevant only to previous employment or experience, which was an issue at the beginning of the process. Such barriers would have got in the way of accessing opportunities. The DWP and BIS should look at that at a national level in order to widen access and opportunity to all.

Jobcentre Plus organised rapid response sessions just three days after liquidation, and it saw more than 2,000 people in the course of just a few weeks. It then worked with the National Careers Service to organise the subsequent individual one-to-one skills sessions, which have helped to inform training needs.

There has also been an unprecedented level of contact between colleges in my area and employers, with further education providers in my constituency contacting more than 2,500 separate companies directly. That has ensured that employers were made aware of the funding and training that local colleges had available to fill vacancies that the businesses were advertising. There have been three jobs fairs, one which took place just two weeks after the announcement, and we understand that they have filled about 200 vacancies, although the Minister may have some more up-to-date statistics.

There are also plans to engage more large-scale companies locally, particularly those that may be six months to a year away from starting up, to ensure that we shift the focus from immediate recruitment to creating bespoke training packages so that people can get the skills they need down the line, when those companies come on board and invest in our area. I want to take this opportunity to thank the countless local businesses that have got on board quickly and been extremely helpful and forthcoming in the support they have provided to those workers and apprentices affected.

Despite positive collaboration and partnership at local level, however, the success of a venture such as this can only truly be measured by the experience of those who are on the receiving end of the support. I want to set out some of the challenges we have faced so that the lessons can be taken up by Government. At an early taskforce meeting, it transpired that no agency or individual had a full and comprehensive list of all those who had been affected by the closure of SSI. The taskforce had to re-collect information on names, addresses, skill sets and qualifications. We need to ensure that data sharing is seen as an early priority in the unfortunate event of another area being affected. We also need accurate and longitudinal information on who has accessed help and support, who is in work and where that work is located geographically.

There were also well-documented problems with accessing the central Government money announced by Ministers. It took hard work from the chair of the local taskforce to convince risk-averse Whitehall mandarins that support for apprentices and the use of the funding to incentivise recruitment did not constitute state aid. I hope that BIS has learned to be more ambitious in the way it supports enterprise than this episode has demonstrated.

Unfortunately, there have also been widespread delays in accessing training, as some of the agencies involved struggled to deal with the massively increased demand. Further education funding has been reduced by 14% in the past five years. Although the £3 million available to local Teesside colleges for courses is excellent, the challenges in upscaling rapidly to cope with the levels of demand have led to delays for those accessing courses.

For example, a constituent of mine with 31 years’ experience in the steelworks applied for training no less than three months ago. Since then, he has been passed from agency to agency and is now on the verge of missing the deadline for the next wave of training courses in February. I have received many similar concerns about delays to accessing training. I have even had cases where ex-SSI workers have been forced to attend existing college courses with 16 to 18-year-old students, which is disruptive for all parties involved. Others are on courses between the hours of 9 am and 5pm, but have been told that they must attend the jobcentre during those hours. Of course, the organisation and administrative challenges that come with dealing with thousands of requests after years of cutbacks is huge, but the human impact of such delays is tragic.

Unfortunately, despite the good work done by many jobcentre staff, numerous constituents have contacted me to raise the dehumanising treatment they have received in jobcentres. Many of these workers have never been out of work, and for many of them, as for so many in my constituency, the experience of being on the dole is horrendous. For example, we were assured originally that ex-SSI employees who claimed jobseeker’s allowance would be afforded a 13-week period of grace, which is a mechanism available to all job coaches to allow individuals with extensive experience in a particular field to have some time to focus on applying for jobs in that sector. However, my constituents—I stress, not exclusively those affected by SSI—have been threatened with sanctions if they do not apply for work in bars or retail as early as two weeks into their claim. Many right hon. and hon. Members have spoken about widespread problems in Jobcentre Plus. The issues about sanctions must be addressed. Sanctions should not be used as a mechanism to force claimants to apply for jobs that are not relevant in this instance; such jobs should be a last resort.

Another challenge we face is the confusions on pensions. Ex-SSI employees were left shellshocked to find that the money leaving their monthly pay packets had not in fact ended up in a pension fund. I am now pleased to say that the continued dialogue between the official receiver and the Community trade union has resulted in all the contributions—both employee and employer contributions—being received by Scottish Widows, and they are now being applied to employees’ pension accounts on a month-by-month basis. The continued weekly dialogue between the official receiver and the Community trade union has ensured that there is continued communication and that problems on the site are worked through. I want to commend the Community union for all it has done to support its members at this difficult time.

One of the other challenges we face is dealing with the fact that a number of other companies on Teesside have made workers redundant, including Boulby Potash and Air Products, since the SSI announcement. As a result, an initiative to help people find work following the closure of SSI is being rolled out across the Tees valley. This resource hub brings together a number of agencies to provide advice and support to anyone who has been made redundant or who is out of work. Advice will be available on a wide range of topics, including CV writing, new career opportunities, interview techniques, trade union representation and money management. That is exactly the kind of learning that I want tonight’s debate to share more widely.

Another achievement has been the Insolvency Service’s decision to grant employee status to agency workers, as my hon. Friend the Member for Stockton North (Alex Cunningham) mentioned. We fought to ensure that the 29 workers from Jo Hand Recruitment were in full receipt of their statutory redundancy pay, holiday pay and notice pay. I just wonder how many more of these injustices are happening around the country outside the SSI spotlight.

In conclusion, we are only three months in and we still have a mountain to climb. Many people have not had the help and support they require. Our challenge is to find them and to ensure that they get the support they need to rebuild their lives. Ultimately, the challenge of bringing jobs and economic regeneration to our area is a long-term one, but given the kind of resilience and determination that has been shown in Teesside during the past few months, the challenges are not insurmountable. With the right help and flexibility from Departments and with the devolution of power and funding to local stakeholders, I see no reason why we cannot overcome this tragedy and build a bright future for our town. We know our challenges, and we are showing we can find solutions. I sincerely hope the Government will support us.

I congratulate the hon. Member for Redcar (Anna Turley) on securing this debate, and on placing on public record—this does not have anything to do with party politics—that undoubtedly, throughout this wholly unfortunate and sorry episode, she has always fought hard for her constituents, which she will of course continue to do. Obviously, we do not agree politically at all, but we do agree on the huge resilience and the remarkable achievements we can already see, notwithstanding the terrible closure of SSI. We are agreed about the remarkable people she represents and all that has been achieved, although there is of course an awful lot more to do.

The hon. Lady makes a very good point. In such difficult times, with the closure of a very important industry that employs a lot of people in an area where not many people live—in other words, the industry has a huge impact on the local community—or with a large number of redundancies, as we saw yesterday with the Tata decision about Port Talbot, we must learn the lessons from our being there to support them financially and by setting up bodies to administer the money. She has quite properly highlighted several problems and difficulties. She makes the good point, although it sounds perverse, that we should always be aware that the worst could happen and that it is good to make contingency plans for the worst-case scenario.

When I went to Redcar just before it closed, a good structure was already in place. There was a good local enterprise partnership, and there were good relationships between the local council, under the outstanding leadership of its chief executive, Amanda Skelton, and local businesses, with the involvement of Paul Booth, the excellent chair of the LEP. Sadly, the community had been through it all before and this was not new territory. Because the community had experienced the mothballing by Tata, it had been through a similar experience and was prepared for the worst. There was a lot of realism and reasonableness, notably from the union leaders. I pay tribute to them, as did the hon. Lady. When the dreadful moment came, they could put things together very quickly. I remember the first meeting of the taskforce, when the spirit of togetherness was obvious. They knew what they were doing; they just needed to get on with dealing with the money.

The Minister clearly recognises the tremendous job that has been done on Teesside by so many people, including the local authorities. She will also be aware that yesterday’s announcement affects my neighbouring constituency of Hartlepool, where 100 jobs will be lost. Has she given any consideration to what will happen to those workers, particularly in relation to the excellent package that is available for SSI workers?

I am not aware of anything in particular in respect of the redundancies in Hartlepool, but if the hon. Gentleman and those in the neighbouring community want to put forward a case, I am always willing to listen.

First, this situation is unlike the mothballing scenario in 2010, when I was a union officer on site, because there was not a single hard redundancy in the 22-month period. Now, there is a liquidation scenario and we have seen many hard redundancies. Secondly, I have written to the Minister about extending the remit of the taskforce to encompass the whole Tees conurbation and to help other workers who lose their jobs, such as those at Caparo, Tata and Boulby in my constituency. Thirdly, this will happen again and again. We have seen it in Port Talbot, Trostre, Llanwern, Dalzell and Clydebridge. We need a national network of taskforces to see how steelworkers and other workers are being treated in different areas of the country. This cannot be dealt with in a devolved, fragmented way. It is a sectoral issue that encompasses the whole of the UK.

I do not have time to deal with all those points because I want to respond to the specific points that were made by the hon. Member for Redcar, but there are lessons to be learned. It behoves any community, in the event of serious job losses, to act quickly and pull it all together. Many communities do so and that was critical in Redcar.

I pay tribute to the hon. Members for Redcar and for Middlesbrough South and East Cleveland (Tom Blenkinsop), and other hon. Members, for the way in which they have worked with the taskforce. I have paid tribute to Amanda Skelton and Paul Booth for the way in which they formed the taskforce almost before the dreadful news came on that Friday. As the hon. Gentleman said, at least 2,000 people were immediately put into redundancy, with all the consequences that that has for the supply chain, and many hundreds of them had not been paid for a considerable period. One reason why the taskforce was successful was that there were already good relationships between business, the council, Members of Parliament and all the other people one would expect to be there.

As a Government, we quickly put forward a financial package. In effect, there was £60 million. There was a headline figure of £80 million, but just under £30 million of that was used for redundancies, so the money that could be put into helping people get back into work was in the region of £50 million. I want to put it on the record that there was a £2.4 million safety net fund and that £1.7 million was eventually made available for apprentices. It took a bit of a fight, but we got there. There was £3 million for retraining courses, £2.6 million for a flexible support fund, £750,000 for business start-ups, a jobs and skills fund of £16.5 million, and £16 million of support for firms in the supply chain and the wider Tees valley area. There were also redundancy payments.

The hon. Lady is right to say that there is often a big problem in Whitehall. We said to those people, “We trust you to work out where the money needs to go.” However, the situation was, frankly, maddening and infuriating, and I only found out about it after she sent me a text. I do things differently, Mr Deputy Speaker. I give people my mobile phone number and say, “You contact me. You text me”, and they do! In a way it should not be like that, but it is good—we can exchange numbers later in private, Mr Deputy Speaker. The reason I do that is because of the situation that we found at Redcar. We had a group of people in the taskforce whom we trusted, and I pay tribute to all of them. They are not paid to do that, and they have worked incredibly hard. Amanda Skelton is paid to be the chief executive of the council, but she has worked like an absolute trooper and well beyond the hours for which she is paid—astonishing!

We trusted those people to put together a package and to have the funds, but we then had to go through the most bizarre set of hoops and all the rest of it, because they had to show that the package was value for money. As I put it to my otherwise excellent civil servants, this is a chief executive of a unitary authority who, on a daily basis, deals with large amounts of money and a huge budget. She is more than capable of looking at value for money, because unfortunately she has had to make lots of cuts, to reorganise and so on. In other words, I cannot think of many people who are more qualified to decide where the money should go, and who also have the responsibility to safeguard what is taxpayers’ money, but instead a system had to be followed—and Governments, of whichever colour, are blighted by too many systems and processes. We say that we will trust people, but too often we do not. However, we cut through that system—the instruction I always give is, “Get on with it. Trust these people and give them the money so that they can get on with it.”

There is no better example of the determination of those people involved in the taskforce—and beyond in the community—to do the right thing by all those who were made redundant at Redcar than what happened with the apprentices. There were 51 apprentices at SSI, and those jobs finished on that Friday. Some of those youngsters were on three-year apprenticeships, and it had all gone. This is a lot of money to ordinary folk, but we were talking about £1.7 million. It was astonishing. People such as Paul Booth went out there and found a place for every single one of those 51 apprentices within a week. That speaks volumes about their abilities, and about the reaction from the community and businesses. We then had to get the money—bit of a nightmare—but we got it, and all 51 apprentices can continue their apprenticeships.

The right hon. Lady is right about the apprentices, but there were a few weeks between them losing their jobs and being reappointed. One apprentice came to my surgery and told me that he had been to Jobcentre Plus. Despite having done two and a half years of his engineering apprenticeship, he was told that he should get a job in a bar. It comes back to the point I made earlier: there are issues with the DWP’s systems, and that is one of the main points that I wanted to raise.

Again, that is a good point extremely well made. Such things are not acceptable. Of course I pay full credit to Jobcentre Plus. I know that Ministers stand here and say, “The taskforce has gone whizzing in.” From my experience in Nottinghamshire, when Thoresby colliery closed down, the taskforce went in and it all sounded great, marvellous and wonderful. In a way, it was great and marvellous. A lot of people put a lot of effort in. What matters, however, is the advice that somebody then receives.

There was another problem that the hon. Lady will remember: people being told that they could not sign up to HGV courses. The workforce in our steelworks is almost exclusively highly skilled. It is absolutely obvious that somebody who has been working in a place like SSI at Redcar may well want to change, enhance or add to their skills by training to be an HGV driver. What did we discover? That they could not have any money to do that. The stuff of madness! After a text from the hon. Lady, we got that one sorted out.

We then had some problems in making sure that the money was delivered to the colleges. When, unfortunately, 800 jobs were going in Scunthorpe, we put £9 million in because we had learnt from the experience in Redcar. That was replicated when Labour Members came to see me about the situation in Rotherham. They made a very good argument for a package of support. One of the things the Skills Minister and I did—by way of text, if I may say so again, Mr Deputy Speaker; it got the job done—was to release the money literally within 24 hours. No disrespect to our great civil servants, but we cut all the corners and cut out all the nonsense. The Minister gave a direction and said, “Get that skills money sorted out, so they can have it in Rotherham,” and we did the same in Scunthorpe. That was because of the lessons we learned from our experience in Redcar. However, the hon. Lady is right that there is more we can learn.

I think there is some good news. Over 400 former SSI workers have not yet made any benefit claim to date. We do not know why. I am hoping it is because they have got jobs, not because they have dropped out of the system.

The hon. Lady is also right about data. We always have to have people’s permission before we can share data. Nearly 700 former SSI supply chain workers are no longer claiming benefit. We hope that the majority are either in full-time work or in training. Some 166 people were employed as a direct result of the first jobs fair, which was held, as she said, very quickly in October. Nearly 900 people attended the second jobs and skills fair at the end of November at the Riverside Stadium, where more than 700 immediate vacancies were on offer.

I want to pay tribute to the noble Lord Heseltine. I know he can often be a controversial figure, but he is an astonishing person. He has the ability to bring all the people and all the organisations together. He has vision and drive. It was my idea, if there is anybody to blame—although I do not think anybody should be blamed, because he has been absolutely the right person for this. He has gone up there, and he has a vision and is knitting things together. I hope that in a short period of time we will be in a position to announce more about the future of the works at SSI and what we can do there.

I want to put it on record that 2,000 rapid response sessions have now been delivered, 2,969 people have received advice and help from the support hub, and 5,200 calls were made to the Jobcentre Plus helpline.

Tonight has been about the people, but the site is extremely important too. I hope Lord Heseltine will not make any announcements without discussing with local people what they would like to see from that site, which is so important to the local economy and for local jobs.

Absolutely. One of the great joys of Lord Heseltine is that he is able to work with people. He brings people together. As I say, he has the right connections and the right vision.

It is great to have had this debate. There are lessons to be learned. We have already learned some of them. However, the ideal position to be in is never to have to set up a taskforce or to give out these sums of money in the first place. We do not want to see the redundancies that we saw in Redcar.

House adjourned without Question put (Standing Order No. 9(7)).