Many of the Redcar steelworkers laid off last week had worked at the plant for years, others even for decades – from boy to man. Having fought to reignite the blast furnace when it was last mothballed just five years ago, thousands of these skilled professionals now face being thrown out of work in a town at the very sharp end of the government’s austerity programme.
On Monday the plant was mothballed, with the loss of 1,700 jobs. By Friday its owner was in liquidation, threatening redundancy for the 500 workers who were being kept on to maintain the site in the hope that it might reopen – taking the potential impact to 2,200 posts.
“When we were younger, it was always a thing that we were told – if you get yourself in at British Steel, it’s a job for life,” said one steel worker who faces redundancy. After looking at the local job market, he says workers at the site are resigned to a choice between taking a huge drop in salary – he is on around £30,000 a year – or relocating. This steel worker, who asked not to be named, has even considered moving to Australia.
“I was talking to a lad who is on the same wage as myself now. He’s desperate. Some aren’t in a position where they can get up and move and are tied down to this area for family reasons. He was looking at starting work in Aldi.” Another, Eugene Purvis, 56, said: “B&Q are looking for [workers]. That’s where I’ll get fixed up with work.” To those spearheading the local campaign to save the works, such stories underline the urgency of the situation.
On Friday, SSI UK, the plant’s Thai owners, went into liquidation following a failed appeal for government help with its reported £800m debts. The government said it had turned down a “last-minute and unrealistic request” from SSI “for the taxpayer to make an open-ended funding commitment” to keep Redcar coke ovens burning, as it had no confidence in its business case and it would be in breach of EU state aid rules.
On the same day, after weeks of intense lobbying, the government announced an £80m support package for those who have lost their jobs, including funding for affected workers to retrain at local further education colleges and tailored jobcentre support. Money will also be available if they want to start businesses, and for existing local small firms to grow. Announcing the package on a visit to Redcar, business secretary Sajid Javid said the aid would “provide important support to workers and the local economy”. A local taskforce, headed by the chief executive of Redcar and Cleveland borough council (RCBC), met for the first time on Friday to plan how to support the redundant workers and a long-term economic recovery package.
But speaking on Friday outside the steelworks, Anna Turley, Labour MP for Redcar, said she felt the government had thrown in the towel too soon. “They’ve said today that [they] accept the end of steelmaking on Teesside. We don’t accept that.” She said that the receiver that comes in will want to maximise the value of the asset, which would hopefully mean a “soft” mothballing process, increasing the likelihood the plant could be reopened in future if a buyer emerged.
As one of Teesside’s biggest employers, long-term closure could be devastating. Redcar sits in an already-deprived borough, which has been ravaged by more than £30m of spending cuts since 2010. Another £22m will go between 2017 and 2020. Unemployment remains stubbornly above even the regional average, and it is higher in the north-east than anywhere else in the country. Last week neighbouring Middlesbrough was found to have the highest proportion of deprived neighbourhoods in the country. Food banks have proliferated in the last six months and feed2,000 across the borough. Ruth Fox, manager of the Redcar area food bank, guesses that demand will double as a result of steel job losses.
The mothballing of the blast furnace is already affecting the supply chain. Peterson Engineering, a stone’s throw away from the SSI plant, has laid off a third of its workforce. Its owner, Neil Doyle, said the firm was owed £190,000 by SSI.
Redcar isn’t the first northern area to contemplate a future without its key industry. Many have successfully diversified. In Hull, a city once reliant on fishing and shipping, the Green Port Hull initiative will host a £310m Siemens offshore wind turbine manufacturing facility. The Albert Dock in Liverpool and Newcastle’s Quayside now thrive as cultural and creative hotspots. Can Redcar take heart from those examples?
“It’s certainly possible to get a certain amount of property-based redevelopment in most ex-industrial areas. It obviously helps to have a waterfront, red bricks and cotton mills,” said Professor Karel Williams at Manchester Business School. But he added: “It’s only Banksy who could make a success out of Redcar steelworks as a visitor centre.”
Sue Jeffrey, leader of the council, said Redcar had a vision to regenerate the Tees Valley. “While this all sounds very negative and difficult – which it is, and I don’t want to underplay the impact of it – we do have ambitious plans to grow our economy.” Its regeneration master plan aims to create 14,000 jobs and 800 businesses by 2025. Middlesbrough council is also investing £500m in regeneration schemes. Huge projects in Redcar have already been completed, including transforming sea defences, and the £1.6m Redcar Beacon, a helter skelter-like tower and business space on the regenerated seafront. Another £31m leisure and business centre opened last year, though it is only around two-thirds full after a boom in creative industries failed to materialise.
There is still optimism for manufacturing on Teesside, with thousands still employed in the chemical and process industry. “Although the steel announcement is very bad news for the individuals and companies affected, there are a number of significant projects happening in Tees Valley and the surrounding area which are creating jobs and supply-chain opportunities now and in the near future,” said Paul Booth, chair of the Tees Valley Unlimited local enterprise partnership (LEP).
Two examples are a potash mine in the North York Moors National Park, which is expected to create up to 2,000 jobs, and the new Hitachi plant in Newton Aycliffe constructing superfast trains, which aims to bring in 730 workers. According to the LEP 21,000 new private sector jobs have been created in the Tees Valley since 2011.
There are also plans to build on Teesside also wants to create the jobs of the future. A group of heavy industries in the Tees Valley, including SSI, want to become Europe’s first carbon capture and storage zone, preventing polluting CO2emissions entering the atmosphere, with a significant number of jobs hoped to follow.
But retaining the steel industry is central to all of this. RCBC championed the return of steelmaking to Teesside as part of its masterplan, and Jeffrey admits that another mothballing puts the skids on its ambitions. She said the last time the plant was mothballed a £100m economic recovery package was required.
“There’s a mismatch between the short-term need and the longer-term plans. I think that is an absolutely key issue. That’s why we’re saying to government: ‘Short term you’ve got to inject some cash here either to ensure that we retain steel-making or to support the economy recovery.’”
Referring to the government’s £80m package to retrain redundant workers and help them set up their own businesses, Turley said:“You can give them all the skills you want but if the jobs aren’t here, the jobs aren’t here. You can’t expect people to start up their businesses and do all these amazing small enterprises. We’re not a Manchester or a Leeds. Steel is absolutely fundamental to the future of the economy here.”
Williams said there was no alternative economic model when a big works closed. “For all the hand-wringing of successive governments over the closure of plants like Redcar, the problem is that in peripheral areas – and Redcar is a peripheral area – you tend to close the plant and leave marooned workers. This isn’t simply a skills problem, it’s a problem about the nature of the housing and labour market in London and the south-east, where we’re actually putting on the jobs.”
The taskforce set up to support workers affected by redundancy will assess the local job market, but Jeffrey says there are likely to be few opportunities for the skilled steel workers in the short-term. “Once again, the Tees Valley and Redcar is going backwards before it can start taking those steps forward. As the recession hit we were only just getting the benefit of the growth that had come before. We’re always catching up.”
Speaking before the liquidation announcement of SSI, Turley refused to contemplate Redcar’s future without steel. “I’ve been wrestling with what does Redcar look like in 2020? What is the future? We’ve always known the steel works is vulnerable. We’ve got a lot of opportunities in tourism, in leisure, in developing the town. We should absolutely be putting our efforts into that. But you need a bridge. My feeling was always that we should be able to do the two.”
She cited the construction of the giant Dogger Bank windfarm 80 miles off the Yorkshire coast and the carbon capture plans, as examples of steel’s potential future viability. “It would be an absolute travesty that a windfarm built off the coast of Redcar is built with steel other than from Teesside,” she said.
“That is for me very symbolic of how you can shift from the old to the new and have a viable technological manufacturing industry going forward, with things like CCS, the wind turbines being built; linking up with Hitachi. There are opportunities there …. but if you lose [the steelworks] that’s the foundation really.”
As the storm clouds hang over 160 years of steelmaking on Teesside, those still campaigning to save the steelworks said their fight would go on. “There is no way we’re going to give up. That’s one thing you must know about Redcar. Everybody is extremely resilient. We’ve had shocks like this before. We will see our way through it,” said Jeffrey.
Regeneration Game: new industries from old
The fate of the Redcar’s plant will no doubt evoke memories for many in one-time industrial hotspots who watched their jobs disappear as mines and ports shut. While those closures caused long-lasting damage, some of the blighted communities have seen new industries emerge.
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