The Government yesterday published its reaction to a report from a committee of North-East MPs concerning the closure of the Corus Teesside Cast Products plant. Stuart Arnold reports.

FOLLOWING the closure of the Corus Teesside Cast Products (TCP) plant last month, local MPs submitted a report to the Government.

The report contained a number of recommendations about the closure, and how the region could be supported.

These are the key points from the Government’s reponse.

MPs: Corus, the Government, trade unions and the region must find a way to return the plant to operation as soon as possible, and to maintain the jobs of the highly-skilled workforce.

Government response: We continue to engage with Corus and (Corus owner) Tata at the highest levels to ensure that all possible options, including the potential sale of a majority stake that would secure the future of TCP, are pursued. Ultimately the decision to mothball the TCP plant is a commercial matter for Corus.

MPs: The development of the offshore wind industry will need substantial quantities of good quality steel, and it seems short-term to remove a local steel producer from the area just as these industries are developing.

Government response: In giving evidence to the committee, managing director of TCP Jon Bolton said that Corus believed any increased domestic demand as a result of developments in offshore wind and related industries could be met from other existing UK operations that have also been operating below capacity.

MPs: We are disappointed that the Government has concluded a wage subsidy would not help maintain production at Redcar and Lackenby. We urge the Government to keep an open mind on this, should a future operator for the plant emerge.

Government response: We have extensively examined the case for UK wage subsidies and concluded that this is not a feasible, cost-effective or sustainable option. The Government must also take account of the EU State Aid rules that are stricter for the steel industry than for other sectors, and prohibit direct operational aid such as wage subsidies.

If a viable proposition for the future operation of the plant emerges, then the Government will work with any potential operator to try to ensure a successful outcome.

MPs: We recommend that the Government Office North- East and regional development agency One North East find out as a matter of urgency whether European Globalisation Adjustment Funding would be available to assist those made redundant at TCP. If such funding is available, we recommend that they do not give the matter “the fullest consideration”

but apply immediately.

Government response: European Globalisation Adjustment Fund (EGF) funding has to be over and above the provisions that nation states have in place to help redundant workers. It is not available for direct aid to keep plants open or to reopen them. The UK has one of the most developed employment support packages and EGF must complement, not replace, member state actions.

Any decision to proceed must be on the basis that it adds value to the considerable support which is in place already.

This would exclude using it for Jobcentre Plus and Rapid Response Service activity.

In order to fulfil this requirement, and the strict criteria for any EGF application, the Department for Work and Pensions is preparing an economic analysis, a breakdown of the actual number of redundancies, legal assurances, costings for bespoke training and evidence that appropriate financial management systems are in place.