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Teesside Steel Industry

I congratulate my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) on securing this debate. I know how much the steel industry means to him personally—as he said, he worked for many years in the steel industry at Teesside—and to his constituents. It is in his blood, as it is in theirs. I note the presence here today of other Members from the area, including my hon. Friends the Members for Blaydon (Mr. Anderson), for Stockton, South (Ms Taylor) and for Hartlepool (Mr. Wright), and my hon. and learned Friend the Member for Redcar (Vera Baird)—and you, Mr. Cook. As my hon. Friend the Member for Middlesbrough, South and East Cleveland said, as a constituency MP you too have a great interest in the subject. If anyone doubted the strength of feeling in the local community about what is happening at the Teesside plant, they need only to have seen the demonstration of support at Middlesbrough's Riverside football ground over the weekend. I understand that. I understand the pain caused by the loss of a steelworks in a local community, as steel runs through my constituency too. It is now 30 years since the Bilston steelworks closed, but local people remember it as though it was yesterday. It has taken a long, long time for the area to recover. The current recession has hit the steel industry hard. Three specific factors serve as the backdrop for Corus's decision to mothball the Teesside plant. The first is a fall in demand. This year, steel production at Corus is expected to be some 33 per cent. down on 2008, and only about 60 per cent. of capacity. Teesside Cast Products—TCP—makes steel for export, but if we compare the first nine months of 2008 with the same period in 2009, we see that steel demand throughout Europe has fallen by 40 per cent. The potential for the company to trade its way out of its difficulties in this country is severely limited. The second factor is a fall in price. Between July 2008, when prices peaked at just over $1,000 per tonne, and December 2009 the price per tonne of the kind of steel produced at Teesside has fallen by nearly 60 per cent. That has left Corus struggling to cope with the twin problems of a fall in demand for its product and a fall in price. Not surprisingly, that has put severe pressure on Corus's finances and the economics of its steelmaking operations, hence the announcement of large-scale job losses twice this year, even before the Teesside announcement a couple of weeks ago.