Conclusions and recommendations
1. The
central priority for Corus and for the Government, the trade unions
and the region must be to find a way to return the plant to operation
as soon as possible and to maintain the jobs of a highly skilled
workforce until what may well be a temporary downturn in world
steel prices has been worked through. In particular, the development
of the offshore wind industry, the infrastructure required to
implement carbon capture and storage and the other opportunities
in developing the low-carbon industries of the future will all
need substantial quantities of good-quality steel. It seems counterproductive,
and classically short term, to remove a local steel producer from
the area just as these industries are developing. (Paragraph 10)
2. The short-sighted
decision by Corus to close its rolling mill at Redcar and Lackenby
eight years ago has left it unable to respond flexibly to changes
in the world steel market in a way that would guarantee continued
production on Teesside. This is not simply a statement that benefits
from 20:20 hindsight. They were told at the time by the local
trade unions and politicians that this would be the result of
their action. The Government would be well advised to note the
fact that local trade unions and politicians have a track record
of forecasting outcomes correctly, and, in reflecting on that
fact, they should give additional weight to their views in relation
to the present situation. (Paragraph 17)
3. We urge the Government
to continue to work with Tata and Corus and the unions on both
sites to explore fully the inherent potential in the Llanwern
proposal and to seek support from the European Union to progress
the initiative. (Paragraph 18)
4. Any agreement on
compensation from the consortium must fully consider the impact
on the public purse of the disgraceful and reckless behaviour
of members of the consortium and, where appropriate, compensation
to the public purse should be paid. (Paragraph 21)
5. The Government
is to be commended on its swift response to the mothballing announcement.
(Paragraph 23)
6. We deeply regret
that the Teesside Cast Products plant at Redcar and Lackenby has
now been mothballed. We believe that it should have remained open
while any hope remained that TCP, Corus and Tata could find alternative
markets for its steel, alternative uses for the site, and potential
alternative buyers for the site. Now that the plant has been mothballed,
we seek an absolute guarantee from Corus that sufficient staff
will be maintained on site to enable a return to production as
soon as market conditions permit, and we urge all parties to utilise
European wage subsidies and other supportive measures to maximise
employment opportunities at the mothballed site to ensure the
quickest possible restart of operations if and when new operators
are in place. (Paragraph 29)
7. We are disappointed
that Corus ruled out any possibility of a wage subsidy scheme
to maintain production at Redcar and Lackenby under any circumstances.
We are disappointed, too, that the Government, having explored
all possibilities, has concluded that a wage subsidy would not
achieve the desired objective. We urge the Government to keep
an open mind on this question should a future operator for the
plant emerge. (Paragraph 34)
8. We believe that
Corus should make clear immediately whether it will release land
for projects that could provide new jobs and investment for Teesside,
and we hope that it will release that land. If Corus fails to
give such a commitment, or if it is seen to be holding back in
any way, both national and local government should act in the
public interest to acquire the land. Corus's responsibility to
the community which has served it well should also make it contribute
substantially and swiftly to the work needed to make those sites
available for new projects. We call on the Government to ensure
that the "polluter pays" principle is rigorously applied
on land made available for uses that may replace some of the jobs
likely to be lost by Corus's decision to reduce its Teesside operations.
(Paragraph 38)
9. We recommend that
GONE and ONE find out as a matter of urgency whether European
Globalisation Adjustment Funding would be available to assist
those who might be made redundant at TCP. If such funding is available,
we recommend that they do not give the matter "the fullest
consideration" but apply immediately. (Paragraph 40)
10. Whether or not
any tranche of European Union funding is available or UK state
aid for TCP possible, the Government also needs to address the
clear perception among witnesses to our inquiry that the UK fares
less well than its EU partners in supporting troubled work forces
through such funding. In particular, we urge the Government to
look closely at the evidence submitted by Mr Lowther for Tees
Valley Unlimited and at background information provided by Mr
Stephen Hughes MEP, which spell out the significant advantages
that other European countries and industries seem to enjoy. (Paragraph
41)
11. Corus will soon
receive new Carbon Emissions Trading Allowances. If any such allowance
relates to Redcar and Lackenby, any profit made from trading the
allowance on plant that is not emitting simply because it is not
working must be put into supporting the work force and the regional
economy. (Paragraph 43)
12. We recommend most
strongly that the Government choose the Tees Valley as one of
the areas to pilot carbon capture and storage projects later this
year. The Tees Valley is home to 18 of the North East region's 21 largest emitters
of carbon and has the infrastructure and expertise to make such
projects work. Such projects also offer a future to a region still
more dependent than most on traditional heavy industry and desperately
in need of good news at a time of grave economic difficulty, including
loss of jobs now Teesside Cast Products has been mothballed by
Corus. (Paragraph 46)
13. The decision taken
by Corus to mothball the Teesside Cast Products plant at Redcar
and Lackenby with the loss of around 1,600 jobs will have a devastating
effect on the local economies of Redcar and Cleveland and Middlesbrough,
on the sub-regional economy of the Tees Valley and on the wider
North East. The central priority for Corus, for the Government,
for the unions, and for the region must be to find a way to reopen
the plant as soon as possible and to maintain the jobs of a highly
skilled work force until market conditions allow the plant to
operate profitably again, as it has in the past. Corus must continue
to seek either a market for the slab made at Redcar and Lackenby
or to find a buyer interested in taking over the operation. Mothballing
must be real and viable, and that has to mean keeping not just
the plant, but the highly skilled work force, ready to restart
production at short notice when market conditions change. (Paragraph
47)
14. The future for
the North East economy relies heavily on carbon capture and storage
and on the development of renewable energy sources, for both of
which substantial quantities of steel will be necessary. That
steel will not, regrettably, be the slab produced at Redcar and
Lackenby since Corus chose to close the plate mill. The irony
that a region crying out for steel is closing a steel works will
be lost on no one. (Paragraph 48)
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