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Tata Steel

Volume 710: debated on Wednesday 13 May 2009

Question

Asked By

To ask Her Majesty’s Government what discussions they have had with Corus and its parent company Tata Steel about the future of its Teesside Cast Products plant.

My Lords, I spoke to Kirby Adams, chief executive officer of Corus, last week when I first heard the news of the situation at Teesside Cast Products. I am seeing him again tomorrow. Officials in my department are exploring how the Government can help to resolve the dispute with the consortium of partners to the 10-year off-take agreement in a way that avoids job losses. Local agencies have also met Corus to discuss potential help for employees whose jobs may be lost if the dispute cannot be resolved.

My Lords, I thank the Minister for that Answer. Will he join me in paying tribute to the outstanding skills and dedication of the 3,000 workers employed at the Redcar plant, which is under threat of closure, who have made that plant a world-class steel production facility? Does he share with me, and with the many people on Teesside whose jobs are under threat from this announcement, the intense anger that this closure should be the result not of any lack of international competitiveness but of a flagrant breach of contract by the people whom they have supplied? Will he commit this Government to giving every possible support to Corus, to the management, and to the unions and other organisations that are working to ensure that the proud history of steel production at Redcar is retained?

My Lords, I certainly can give that commitment on behalf of the Government. The Prime Minister expressed the same sentiment in the other place only today. The noble Lord and I share a former constituency interest in Teesside, so I am well focused on this matter. It is extremely serious. If the plant is mothballed, there will be a risk that it cannot be restarted cheaply or easily. That will threaten the 3,000 jobs at stake. It is essential that Corus does everything that it can legally to reinstate the off-take agreement. I urge Corus and the consortium to seek to resolve their differences and reach a satisfactory solution that avoids these redundancies.

My Lords, I recognise that the Minister will not disclose to your Lordships the details of current and ensuing commercial negotiations, and I am sure that everyone on all sides of the House agrees with the sentiments that he expressed, but will he confirm that he has no intention of going back to the bad old days of old Labour propping up industries?

My Lords, I am not quite sure what the noble Lord means. This is not some sort of old, discarded plant or industry that has no future. As the noble Lord, Lord Bates, has made absolutely clear, this is a profitable plant with high productivity, as shown by an excellent workforce. I have asked our embassies abroad to make contact with the consortium companies to understand their actions and to explore the options for reopening discussions with Corus to resolve this to everyone’s satisfaction. As I say, I will meet and discuss this again with the Corus chief executive, Kirby Adams, at a steel summit that I will hold with the All-Party Group on Steel tomorrow.

My Lords, bearing in mind that our manufacturing industry is at a very low ebb, will the Minister give the assurance that if some sort of subsidy is needed to keep the plant open, the Government would be prepared to make that subsidy available even if the European Union disagreed to it?

No, my Lords, I do not think there is any need for a subsidy for a plant that is perfectly profitable and efficient, and simply needs a consortium of partners from four different countries to uphold their side of the agreement which they have entered into. That is what we will be seeking to obtain.

My Lords, will the unions be fully involved in any negotiations on this matter? I speak as a member of Unite, which as you will know has been very concerned about support for manufacturing industry.

My Lords, shortly after I spoke to the chief executive, I telephoned Mick Leahy of the Community union on this matter to discuss the potential impact on the workforce and what can be done, and I will continue to talk to him and other representatives of his union as necessary. We are all joined in what we want to happen. We want the terms of this agreement reinstated so that the production and sale of steel slabs can resume as soon as possible.

My Lords, may I join with all those who have celebrated the skill, the commitment and the efficiency of those at the plant? We find what the Minister has to say very reassuring and we all urge him to continue what he is doing until it is brought to a successful conclusion.

My Lords, the matter is now going to arbitration. The notice that the company gave last week is for a 90-day consultation period. I assure my noble friend that I and other members of the Government will be working as hard as we can and pursuing every possible avenue in support of the company to get this matter resolved at the earliest possible moment.