Economy 21 October 2015 On the road in Redcar: an act of sabotage Robin Brown meets the people and the politicians caught up in the collapse of Redcar's steel industry. Photo: Getty Images/Ian Forsyth Sign UpGet the New Statesman's Morning Call email. Sign-up Tom Blenkinsop’s phone vibrates as he pulls away from his tiny constituency office in Guisborough, a pretty town in his Middlesbrough South constituency that is a mere five miles from SSI’s Teesside’s steelworks but feels a world away. It’s Redcar MP Anna Turley phoning to check in and swap notes. Their conversation - and sometimes industrial-strength language - betrays a deep frustration with the lack of communication from official receivers and Teesside site’s owners. Blenkinsop was working as the trade union liaison the last time the steelworks were under threat, mothballed by the previous owners Tata; Turley is one of Labour's 2015 intake with a strong background as a SPAD and in local government. The two young MPs are the vanguard of the region’s desperate effort to save the Redcar works - the second biggest blast furnace in Europe, capable of producing 9m tonnes of steel slab every year. But they are operating in a political vacuum that seems determined to consign the Teesside plant to history, even while its coke ovens still burn. Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland It’s an impression that the Conservative government has done little to assuage, with repeated refusals of state intervention, lamentations of a tough market and protestations that EU regulations forbid any interference. Blenkinsop rolls his eyes at the suggestion. “As soon as SSI went into liquidation the government was legally able to intervene as EU law only covers companies that are trading. That site isn’t trading. What’s more European law is interpretative: the government could intervene on the basis of health and safety and environmental grounds. In the case of Redcar there is a clear health and safety issue on two counts. If you walk out on coke ovens you have a bomb on site and SSI had not been paying liability insurance, so employees were working without coverage. “If a government has to rescue an asset - an asset that can be protected and used in the future - that’s not intervention or nationalisation. It’s simply regulation, in the same way that we regulate railways to keep them running if the private sector fails.” The awarding of HS2 contracts to Chinese companies on top of a cheap £45m loan to a company owned by Roman Abramovich that will be used to fund steelworks in Canada raises more questions about the government’s thinking on industry and infrastructure. Blenkinsop has little doubts as to where priorities lie. “It all points to a strategy of managing decline and there doesn’t seem to be any understanding that there is a market to take advantage of there - particularly in recyclable steel. The technology is there to form steel on-site, reducing overall costs and able to compete against emerging markets. It means you can recycle scrap and take on Turkey and China without bringing in iron ore, so there’s an environmental consideration too.” Business ministers Sajid Javid and Anna Soubry have stuck to the party line about difficult trading conditions on the open market - a tonne of iron ore was at point selling for less than $45, cheaper than a tonne of cabbages. Yet Blenkinsop argues there is a clear strategic imperative in ensuring a domestic supply when prices do recover, lest the UK be at the mercy of a Chinese monopoly. Blenkinsop has little faith in Sajid Javid - “an ex-Deutsche Bank bean-counter” - and laments the departure of Vince Cable from the Commons, and Michael Fallon to Defence. “Before the election we had Cable at BIS, who did understand the situation but had no power and lacked the will to challenge Tory ministers. Fallon also got it but was more interested in the foreign affairs and defence. We’re now lumbered with Javid, who doesn’t understand the economic benefits of an industrial base.” Born in Middlesbrough, the grandson of a steelworker, Blenkinsop’s background in the union movement has afforded him a knowledge of the industry’s history, geography and processes unlikely to be matched in any future parliaments. “Steel is cyclical but it has been cyclical and declining since the 70s as new players have entered the market. The steel market has been moving eastward but there’s a problem with Chinese steel - it tends to be contaminated with boron, which has welding implications. As a result companies across Europe are refusing to use Chinese steel. It’s questionable whether Chinese steel will be at all usable in construction and lots of trading houses in Europe are refusing to use it because they think it’s dangerous. “I find it bizarre that the Chancellor is going to use Chinese steel for HS2 when you could get it from Scunthorpe, which supplies rail, in HS2. But then we’re actually less competitive than our EU competitors because the government unilaterally imposed the CPF tax.” The rigorous and unilateral imposition of a Climate Change levy - prompting SSI UK COO Cornelius Louwrens to wryly observe that the coalition government was ‘very good at being good’ - and the lack of promised assistance to the energy-hungry sector has begged questions as to whether the government fully understands the plight of its domestic heavy industry. Redcar's steelworks, seen from the beach. But the last straw has been the amounts of state-owned Chinese steel being dumped on the market well below cost value - amid dark mutterings from Australian iron ore mines of thousands of tonnes stored under water by a Chinese government waiting to unleash it on the market. While Germany’s protectionist instincts are masked by a raft of licensing and regulation and various blue-chip French companies are partly owned by the state, Italy has temporarily nationalised the large Ilva steel plant, rather than submit to the market, on the grounds of health and safety. The lack of protection for foundation industries afforded by the Conservative government has north-eastern eyes looking across the English Channel in envy. In the days preceding the company’s collapse Anna Soubry’s visit to the region to protest her anger at the lack of communication from SSI - from production to pause to liquidation within two weeks - was met with scepticism. However few on Teesside would dispute that the Thai company had not been without difficulties. Stories abound of vital equipment not replaced, over-indebtedness and logistical errors - blamed on a callow parent company and relative lack of managerial experience on site. Even so, Redcar was edging towards the black during 2014 and the site enjoyed extremely high productivity - a tribute to the efforts of its dedicated workforce. Without the Chinese economic shock of 2015 it’s likely the site would have made money again. Still, the site’s problems were hardly a secret, prompting Blenkinsop to question how much the government really knew - and when. “For the last eight months there was a lot of of money owed to local companies, plus issues with pension payments. SSI couldn’t pay their business rates - there were a lot of distress signals the company was sending out. Anna Soubry let it slip just after the liquidation announcement that the Insolvency Service had been monitoring the situation for months. It’s inconceivable that the civil service wasn’t briefing ministers so they must have known.” The perilous position of SSI has been an open secret among workers, local politicians and press since the blast furnace was relit and production recommenced in April 2011. A BBC reporter directly described the company as a "basket case" on the regional Look North programme. Local MPs have repeatedly persuaded pre-eminent regional newspaper the Northern Echo to spike stories reporting SSI’s difficulties, lest it create a run on the company or panic among creditors. It’s a surprising move from a newspaper, yet also an indication of the solidarity that the region displays in relation to the steelworks. For two weeks mining company Hargreaves Services supplied coal to the coke ovens - vital for the site’s ongoing viability in producing steel - out of its own pocket. It’s here where the region’s desperation to maintain the site - and the government’s indifference - has been pivotal. Sajid Javid has been criticised for his response to the crisis. Without more coal the coke ovens collapse in on themselves and without the mothballing work that Tata Steel put into the site in 2010, when steelmaking was last halted, the blast furnace also becomes unviable. Even as the last coke was pushed through the ovens on October 15th, both assets were described as ‘not going concerns’ on the Insolvency Service’s website. At the same time Turley was in Parliament virtually begging the government for a stay of execution as new interested parties came forward with offers for the plant. The ‘hard’ closure that the government receiver has insisted on has essentially scuttled a site that has received around £1bn of investment over the last 10 years and was thought to have an operational life of another 20 years. Turley has described the lack of intervention as “industrial sabotage”. Confusion reigns over exactly what the government knew about SSI’s difficulties over the course of 2015 - and what their real position is. Blenkinsop has been told that the Insolvency Service knew of the works’ mounting debt months ago and also claims that Soubry admitted to Middlesbrough MP Andy McDonald that the government should have mothballed the plant. The speed of the site’s closure enraged the region’s MPs, but it has been shattering to local workers. Job centres, colleges and local GPs know the rhythms of this regional catastrophe - of men with skills few others can boast but helpless when faced with a computer; of fear, anxiety and depression. Against the backdrop of political intrigue are thousands of stories of lives upturned by the news of impending unemployment: holidays cancelled, cars sold and mortgage payments nervously awaited. They are stories that have been detailed by the blog of Anna Maven, wife of Paul and the woman behind the popular Steelworker’s Wife blog. As Paul is coming to terms with the loss of a job he had coveted and treasured at SSI, Anna has been pouring her thoughts into a humble WordPress blog that has been deluged with hundreds of hits every day. Recent events have driven local and national media to the Maven household. It’s made for a surreal few weeks “It’s been a bit of fun,” admits Anna.. “But it’s not a good time for us. It hasn’t really sunk in. I think it will when Paul doesn’t get paid. I don’t want to get down about it and that’s why I’ve written about it. It’s been therapeutic. I keep saying to Paul that we just have to remain positive.” “You go through a lot of phases,” adds Paul. It’s 8 October, the day before he would have been due back at work. “Numbness, disbelief, shock - ‘this can’t happen, I’ll wake up tomorrow and I’ll have been dreaming’. On Friday Anna Soubry was coming up to Redcar and we thought we could ride it out. Come lunchtime on Monday there it was - the letter telling you your job is now over. But you still don’t believe it." “You go through it all - why me? After a week I’m coming to terms with it. There might be a chance in five or six years’ time that we might go back. You never know what might happen.” Anna is less certain - a self-confessed pessimist to Paul’s half-full outlook. “Paul always thinks the best is going to happen. He said if he could go back he would - but I don’t want to go through it again. When you have a family and mortgage you need some security.” A view along one of Redcar's backstreets. The pair live in Anna’s mother’s house with their two young children and have a mortgage on a one-bedroom house that is rented out by tenants. Anna works full-time as a teaching assistant. “It could be a lot worse for us. We’ve got no savings and we can’t afford to sell our house - which would currently be at a loss. But we’ve got this house over heads, so we’re aware of how much worse things could be. Paul would leave the house at 5.15am and do a 12-hour shift so we had a little dream that we could move closer to Redcar. But that’s not going to happen now.” Despite the safety net of the house, they’ve felt the necessity to cut back immediately. The daughter’s swimming lessons have been cancelled and trips out to the theatre and restaurants are on hold. One of the two cars may be sold. But it’s the emotional impact that is felt most keenly. Anna describes the father of her children walking around the house in tears, grieving at the loss of a job that not only afforded them the chance a larger house but was also a source of enormous pride, camaraderie and honour. “It has improved our lifestyle a lot,” adds Anna. “But now that is going to stop. When you’ve got kids you want to make sure they have what they want and for them to experience things.” When Paul applied for a job at Redcar at his wife’s urging, and upon becoming a member of the fledgling SSI UK family, he found a pride he had not previously known through work. “When I signed Monica’s birth certificate I was so proud to sign it “steelworker”. I will still call myself a steelworker even if I never work there again.” “It was the dream job,” nods Anna. SSI UK was run by the heir to the Sahaviriya Steel empire, Win Viriyaprapaikit, initially with long-time site boss Phil Dryden and latterly Cornelius Louwrens. Dryden left in 2014 to work at nearby Hargreaves, responsible for supplying the last of the coal pushed through ovens. His departure worried some steel watchers, but Louwrens was seen as a safe pair of hands and a straight talker on the company’s difficulties. “Mr Win and Mr Dryden were the heroes initially,” says Paul of the day the blast furnace was relit - a true phoenix from the ashes moment. “But we haven’t seen nor heard of Mr Win for weeks. Cornelius was left to take all the flack. He couldn’t get anything from Thailand - they would put the phone down on him. He was kept out of the loop completely. “We were struggling but we were told to hold tight. We thought they’d have something up their sleeves. Then we found out the last four months of our pension contributions have gone missing - they’ve kept it and they haven’t put their money into the pension fund for four months. Some people were paying up to a maximum of 35 per cent into the pension pots. It turned out that we hadn’t been insured to work on the site for the last six months too.” The unspoken reality of men working uninsured in as dangerous an environment as a steelworks is as astonishing as it is appalling. It has clearly come as a shock to a workforce who thought, despite the rumours, they were all in it together. “Mr Win brought the steelmaking back, but he’s let himself down,” says Paul ruefully. The SSI steelworks, shrouded in mist. There are some jobs around - Nissan is on the doorstep and Paul passed the first stage of the application process. But he seems less sure than Anna that the door is closed on Redcar. “We’re not asking the government to take over the site - just to mothball it so people could go back to their jobs. It would be a tragedy, after 170 years, for it to be closed in two weeks and pulled down for scrap.” Many in Sunderland recognise the downturn in fortunes the loss of local heavy industry heralds. The Mavens’ house was once surrounded by the kind of works that are synonymous with the region - a pit and a shipyard on either side. Now in their place there’s an enormous Tesco and the unfortunately-named Stadium of Light, where Sunderland play. It’s handy for Paul but there’s an irony here too. A huge Black Cats fan, he had just arranged his next year’s work rota around the team’s fixtures. As well as confusion over the reality of the government's much-vaunted £80m rescue package for the region - quickly whittled down to £40-50m once statutory redundancy payments were subtracted, another sleight of hand that has angered Teessiders - both are frustrated by the government’s limp response. Neither would claim to be political, but they show a keen awareness of the social impact of industrial decline on their hometown. “We’re in the North East - we’ve had it done to us with the mines and shipyards,” says Anna. “I know from living in Sunderland all my life how detrimental it’s been here - it will be the same for Redcar. I’ve always worked with young people and it’s no surprise that they’re disadvantaged - they have no aspirations and they have nothing to look up to. “Now it’s all gone. I think it’s why drugs and alcohol have become such a big thing in the city and the pit villages. We used to breed kids who would grow up to be hard workers. Now without the industry and the unemployment there are four or five generations of children who haven’t worked and the kids get sent to work in a call-centre. When a city has an industry it breeds a strong work ethic but it’s just not like that now.” Seeing the government’s spokespersons repeat claims they believe to be hollow every night on the television has been angering and wearying for the pair - much of which has found an outlet in Anna’s blog. “It’s not 1700 men - it’s 1700 men’s wives; 1700 men’s children. It’s thousands of people - all the contractors and local businesses. When they quote that figure of 1700... well it’s not 1700. But when people feel like they’ve lost everything they’ll come together.” Paul agrees but he’s keen not to romanticise the lot of a steelworker and his wife too much. “It is really hard work - we got very well paid for it but they worked us really hard. You can be a second away from death. But it was the best four years I’ll ever have though.It’s a way of life. It’s a brotherhood…” “I’m sick of all these cliches,” laughs Anna. “You all sign off their text messages to each other with ‘love you’ and kisses, don’t you?”. “We are a brotherhood! So it’s very tight knit. One of the lads’ wives was giving birth while all this was going on. And I had to tell him not to bother coming back into work. Another couple met at the works and have both lost their jobs - another lad is away on his honeymoon.” Anna Turley, MP for Redcar A softly-spoken, easy-going man Paul is not a man who appears quick to anger. But there’s an edge in his voice as he laments the government's lack of vision. “It’s just been a privilege working there and it shouldn’t be happening. It should have been looked after by the government. In six or eight month’s time China will have a monopoly on steel and it will go up to $800 per tonne - they’ll claw our eyes out for a tonne of steel. We’ll realise we should have kept our steelworks open.” Paul shrugs. “That’s life really though isn’t it - not much you can do about it. “ Anna agrees. “It’s been a funny old week hasn’t it?” The story of the stricken steelworks has been framed in the media as a sad but inevitable consequence of globalisation, the transition to a service economy and the death throes of an industrial base past its time. Yet Teesside MPs point to the strategic value of domestic steelmaking, opportunities for taking on developing markets with hi-tech innovation and the requirement in the UK for large amounts of steel due to infrastructure projects including HS2 and a new programme of nuclear power stations. In light of the Conservative government’s continued narrative on a long-term economic plan, importance of productivity and much-vaunted Northern Powerhouse, the foot-shuffling response to SSI’s collapse has raised eyebrows. Teesside MPs believe between 6-9,000 jobs will go directly and in the supply chain on Teesside, yet the truth is no-one is aware of the likely impact on employment, GDP and externalities across the north-east - already suffering from high unemployment. Anna Turley claims there up to 11 parties interested in taking over the site - and workers believe there is a potential buyer lined up for the coke ovens. Still the government has done nothing - arguing that it will instead assisted with re-skilling those affected, redirecting them to SMEs or encouraging self-employment. “17,000 job losses with pension plans and good wages of £30-40K a year - whatever they find themselves doing there won’t be the same security,” says Tom Blenkinsop. He argues that the government’s numbers simply don’t make any sense in light of the fallout of such a massive economic primer - not to mention the cost of a site covering several square miles and with 100 years of dirty work behind itl being dismantled. “For the same money that’s being thrown around in terms of the rescue packages you could mothball the works so we can start it up again. Our latest estimates suggest that to clean up that site - full of arsenic and heavy metals leaching into the ground - would cost north of £3bn to decontaminate that site. The Middlesbrough MP sees the lack of help from the Conservative government as a fundamental misunderstanding of an economy increasingly unbalanced by a tendency towards financial products and services. “There’s this prevailing assumption that heavy industry will go east. But the white-collar economy is also moving eastwards. You need a blended, diverse economy to compete globally. There’s a real lack of comprehension that legal, clerical and financial services are going east. You need services to circulate around the primers that are generating the value.” “We always wanted to diversify the economy on Teesside and we’ve seen city regeneration but ultimately they are diversifications from the core, which is steel and processing industries. But if the worst comes to the worst nothing will fill that hole in the next 20-30 years. You’re not going to fill that gap.” Jeremy Corbyn meets Xi Jinping, China's President. Britain is becoming increasingly reliant on Chinese steel. Already a net importer of steel despite the domestic capacity, the UK can only become more reliant on foreign steel, of less certain provenance and quality. It highlights another traditional perceived importance of a country owning its foundation industries. “I’m pro-China,” says Blenkinsop. “But you need your own foundation industries and if you find yourself in a situation where you need to arm yourself or put more money into civil defence, you don’t want to be reliant on someone else supplying it. We’re making massive mistakes by allowing our sites that have the ability to make varying grades of metals to die off. What do you make weapons or submarines or Trident out of?” Mention of Trident is a reminder of issues closer to home. Blenkinsop may be a union man from the North East but, with a Masters in Continental Philosophy and politics that would see him described as a moderniser, he’s no typical Labour bruiser. He makes no secret of his frustration with a party leadership he sees as indulging itself over issues his constituents - and many more outside London - simply do not care about. It’s another source of bemusement to the MP that, on the day the SSI redundancies were announced, the steelworkers union was voted off the NEC in favour of the bakers’ union. The timing could not be more perverse, nor the switch more symbolic of a Labour Party undergoing an identity crisis. In steel’s hour of need the Labour Party shut the door in the steelworkers’ face. Blenkinsop gives the impression that the familiar truism about having to be in power to wield it are more clear than ever. To him, the Conservative government is wrecking the industry without knowing or caring how or why. “Ultimately they just don’t have a plan for steel. There is no national strategy for foundation industries. This is a national steel crisis and ignoring it won’t make it go away. The day before the last of the coal was pushed through the coke ovens at Redcar, south Teesside’s three MPs could be seen hopping up and down on the backbenches during the new Parliament’s second PMQs. Blenkinsop, Turley and Andy McDonald tried in vain to catch John Bercow’s eye, but to no avail. They wanted to ask the Prime Minister to his face if he truly understood what his government were doing; to plead for a stay of execution - three months for up to 11 interested parties to compete due diligence and raise capital to purchase the site and its assets. None were called. Minutes later a furious Blenkinsop’s voice trembles with rage down the phone, as if the trauma of the previous four weeks has caught up with him. “Anna Soubry admitted last night to Andy McDonald in the tearoom that they should have mothballed it. We’ve got buyers in the wings waiting to buy the plant but they need time and they won’t give us it. When Anna Soubry says she cannot overrule the receiver it is untrue. It is completely untrue. She can instruct the receiver to keep it going, to keep the plant open and give people time.” Mothballing the furnace and keeping the coke ovens burning over three months would cost around £40m, at another £10m per month the ovens would burn hot until the start of the new financial year in April - a sum that would cost the government the same amount as the supposed £80m of money committed to redundancy payments and retraining for the area. But the government will not budge. Two days later on October 16th hundreds more jobs in the Teesside supply chain go - and there’s news that Tata that make 1200 people redundant at its UK plants. Sajid Javid, attending the Rotherham steel summit, looks as if he has only just understood the enormity of the crisis facing the industry when he receives the news. By the end of the week the nightmare scenario that Blenkinsop and plenty more on Teesside have feared most has come to pass - the hard closure of the Redcar blast furnace and abandonment of the coke ovens ensures their destruction. The unspoken reality is that it might do the same for the region and precipitate the last rites for the UK’s steel industry. “Revenue to HMRC will drop, GDP for the region will go through the floor and dole queues will go through the roof,” says Blenkinsop. “It will cost billions of tax-payer’s money to decontaminate the site. There is no logic to it. This is a political decision. It’s as simple as that now - it’s a political decision to kill that plant." “They have fucked us. They have totally fucked us.” Redcar's coke ovens. William Gladstone called Teesside “an infant Hercules”. At the turn of the century over 100 blast furnaces lined the river Tees as iron ore, coal and limestone from the region flooded towards Middlesbrough, Redcar and Darlington. The resulting steel from Redcar was used in the construction of the Sydney Harbour Bridge, Wembley Stadium and Canary Wharf; the list of notable constructions wide and varied, spanning the world and Twentieth Century alike. As the poet Ian Horn says: Every metropolis; Came from Ironopolis. But even at its height years ago there was trouble on the horizon. In 1913 shipping magnate Sir John Ellerman warned that iron and steel trades on Teesside were threatened with foreign competition and undercutting of prices at a speech in Hartlepool. Surplus dumping of steel was resulting in narrower margins and there was a clear risk for associated industries and communities. It’s the perfect summation of an brutal industry whose future has always looked precarious - a bellweather industry intensely sensitive to market fluctuations. 100 years ago the industrial and strategic importance of domestic steelmaking would be brutally thrown into relief by events on the continent - by 1917 the Dorman Long Redcar Steelworks were scraping the sky down the coast from Hartlepool, during the height of The Great War. There is no such imperative now, but many of the economic and strategic considerations remain the same. British steel is being driven to oblivion, like the last of the coke pushed through the cooling ovens at Redcar. For the people raised in the shadow of the blast furnace that has stood as a totem on Teesside for 35 years - a symbol of pride, hard work and defiance - it has been trapped in a pincer movement of dirty tricks on the global markets and the indifference of a government that seems to be realising too late what a colossal error it has made. › Carnival and cocaine: the return of original comedy Brit-crime thriller Lava Subscribe For more great writing from our award-winning journalists subscribe for just £1 per month!