In the limelight: July/August 2019

July 20, 2019

As uncertainty continues to surround hundreds of North East British Steel jobs, Steven Hugill looks at the potential economic impact on a community still recovering from SSI UK’s shattering loss

The scars run deep on Teesside.

Where once SSI UK’s sprawling steelworks bustled with activity, today the site’s scale is overtaken by the cavernous economic void left behind by the company’s demise.

Existing in a state of managed decay, the works are a rusting reminder of the Thai firm’s painfully fleeting renaissance of the Redcar blast furnace.

Teesside is forged in steelmaking heritage, but SSI UK’s failure changed the landscape forever.

Robbing thousands of time-served workers of their jobs, its collapse ripped through the supply chain and wounded the economies of Teesside and neighbouring east Cleveland.

British Steel’s descent into liquidation risks re-opening those scars again.

Around 700 staff are employed across its Lackenby-based Teesside Beam Mill and special profiles site in Skinningrove, east Cleveland, and clouds hang over their futures as a Government- appointed official receiver seeks a new buyer for the UK’s second-largest steelmaker.

So, just how important is it that a resolution is found, given the economic impact of SSI UK’s demise?

“We still haven’t recovered as a community,” reveals Redcar MP Anna Turley, who fought in vain to keep SSI UK’s fires burning.

“Losing 3000 jobs anywhere in the country would be a disaster; but how do you replace them in a seaside town in Teesside?

“You can see the knock-on effects of SSI UK and how money has been taken out of pockets,” adds Anna, who is Secretary of the All-Party Parliamentary Group on Steel and Metal Related Industries.

“I know of workers who, when they lost their jobs at SSI UK, went to work at British Steel in Scunthorpe and they’re now facing uncertainty again,” the MP continues, revealing she knows of one person who has had 13 different roles since losing their job with the former Redcar company.

When British Steel’s former owner Greybull Capital paid £1 to buy Tata Steel’s Long Products division and reprise a name synonymous with UK industry of yesteryear, bosses were quick to hail its potential to be an industry world-beater.

Theirs was supposed to represent a new epoch for British steelmaking, backed by a £400 million investment pledge, and the initial signs were good, with the business turning a profit and winning new contracts.

But, just like SSI UK, its dream of burning bright lasted a mere flicker.

When it fell into liquidation in May, officials said its progress had been stymied by factors including weak demand, high material prices, sterling’s poor performance and Brexit uncertainty.

As North East Times went to print, the Government’s official receiver David Chapman was assessing a number of bids from interested parties, with some understood to be keen to take elements of the company, rather than its entirety.

In a further twist, Greybull Capital was believed to be eyeing the Beam Mill – previously earmarked to process steel for the 100 Bishopsgate London skyscraper – and Skinningrove, which is known for working with Caterpillar to make earthmover track shoes.

Perhaps understandably, such advances to turn British Steel into a pick ‘n’ mix buyer buffet have met opposition, with the Community Union calling for the prioritisation of bids for the whole business.

Tees Valley Mayor Ben Houchen has said similar, and it’s a standpoint Anna agrees with, revealing she will push Middlesbrough-born Business Secretary Greg Clark to ensure British Steel is sold as an entity.

“The priority is to safeguard jobs and stop the business being cherrypicked. It’s all about keeping the pressure on and trying to reinforce the socio- economic factors about the importance of the jobs,” she says.

“British Steel is a national asset for the country’s economy, every major country should have its own steel industry.

“Redcar was an asset of national value which we lost; we cannot allow the same thing to happen again.”

Anna’s warning is borne out further when  assessing the legacy of SSI UK’s collapse. Many former workers have found new employment, with figures from the SSI Taskforce showing it has helped create more than 1700 new jobs, supported in excess of 300 start-up companies and funded thousands of training courses.

The South Tees Development Corporation is also pushing ahead with its vision to clean up and transform former SSI UK and Tata Steel land into a thriving business hub to attract new companies and jobs to the region.

But go behind the headline figures and a different picture begins to emerge.

A good number of former steelworkers are indeed back in employment, but many are on lower earnings, with some understood to be receiving salaries as much as £10,000 less than their steel pay packets.

Furthermore, the South Tees Development Corporation’s plans, while exciting, will come too late for many.

Workers’ ages, and the here and now necessity of paid employment, means things will never be the same for them, which only emphasises further the importance of safeguarding British Steel’s jobs.

“We have done really well in terms of re- training and re-skilling here, and some of the start-ups that have come out of SSI UK are doing well too,” adds Anna.

“But having the jobs here is the big issue.”

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