GORDON BROWN and Peter Mandelson last night insisted there is a “realistic” chance of resurrecting 1,600 North-East steel jobs.
After the Cabinet had met for the first time in the region, Gordon Brown said: “We have had to stimulate interest in a buyer or investor who has a market for that steel and that is the key issue, so there is some interest and we have got to follow it through. I think the interest that we are talking about is realistic interest.”
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The Corus Teesside Cast Products plant at Redcar will be mothballed from today, but Mr Brown believes that is not necessarily the end for steel after 150 years as a mass industry on Teesside.
“We cannot create a steel market but we can try to find the investors that will develop the potential of Redcar. That’s why it has been mothballed. It has not been closed for ever and we are still on the search for new investors,” said the Prime Minister.
“I do understand the frustration.
There are wonderful workers at Corus. This is a good company, it is not a company that should be going under.”
A spokesman for union Unite branded the mothballing process a “disgraceful charade” and said it will meet other unions next week to discuss what action to take. It will also call on members at other Corus sites to take “strategic action” to force the company to take heed of offers already tabled to save the Redcar plant.
Meanwhile, Lord Mandelson called on Corus to “negotiate in good faith” with potential buyers.
He said the Government was “walking a tightrope” as it sought to bring interested parties together.
He added: “This is a very finely-balanced and complicated situation. There are certain overseas companies interested in the plant, but only on the right terms and at the right price – and at the right time.
“We have to take this one step at a time. I don’t want to create false hopes, but nor is there a reason to despair.
“I think there is a real chance of (the plant) reopening – but not a certainty.
“It depends, both on those who want to come in as partners, and the owners engaging them in doing so.”
The Business Secretary urged all parties to enter into serious negotiations, adding: “It takes two to have a negotiation – and both have to be willing partners; willing parties to the negotiation. For any change of ownership it takes both parties to negotiate in good faith.
“I am encouraging Corus to do that.”
Workers are due to start the job of cooling the furnace at the Redcar plant this morning – a delicate operation that will take about six months.
Hopes that the Prime Minister would announce an 11thhour rescue during yesterday’s historic Cabinet meeting in Durham City came to nothing.
Behind the scenes, the Government is working on a plan to hold the core workforce together for as long as possible – something that will be crucial if production is to restart.
The Northern Echo understands that Corus apprentices will be given the opportunity to stay together in the hope their skills can be transferred to a new employer.
The Northern Echo revealed earlier this month that a Far East steel company is interested in buying a stake in TCP.
But it is not prepared to buy the plant outright and ministers have been scouring the world looking for a partner.
Venture capitalist Jon Moulton, who once tried to buy MG Rover, is also believed to be putting together a bid.
Former Hartlepool MP Mr Mandelson said he understood the sense of frustration and anger at what was happening to the Teesside steel industry.
“Certainly I do because there is a view that (the mothballing operation) could have been avoided.
“I’m not in a position to judge, but there’s no point in dwelling on the past – we just have to do everything we can for the future.”
But he warned that the Government could not make the impossible happen. “Some people say look, the Government should put in place a (bridging loan) to facilitate a change of ownership.
“That possibility has to exist in order for that bridge to take place.
“The Government cannot negotiate because we are not the owners. We cannot subsidise the plant directly because we do not have the legal ability to do so. We can encourage, facilitate and where possible oil the wheels.”
The Government has faced strong criticism on Teesside for not doing more to save the plant.
Lord Mandelson expressed his frustration, saying: “Both myself and Nick Brown (Minister for the North-East) and the local MP Vera Baird have been extremely active on this for months.
“I haven’t been sitting on my hands and nor have my colleagues.”
Ministers have gone to great lengths to emphasise that today’s operation is not a plant closure.
Instead, the furnace will be mothballed in a phased operation that will allow it to be restarted should a buyer emerge or the market for slab steel continue to improve.
“When something is mothballed it can also return,” said Lord Mandelson. “You don’t necessarily lose the workforce.
It’s true that the longer you leave it the weaker the potential, but mothballing in itself does not mean closure.”
Asked if he knew the devastation the closure of the main industry would cause a place as geographically distant as Redcar, the Prime Minister replied: “I understand that because my constituency has been a group of mining communities that feel very strongly about their own identity and also feel it very hard when the one industry, which has been absolutely crucial, has been at risk, but we are doing everything we can.”
Nick Brown said before yesterday afternoon’s Cabinet meeting that he had been in negotiations with interested parties only hours earlier.
He said: “I don’t want people to think we have given up and walked away, but I don’t want to raise false hopes because it might not work. It is, frankly, a long shot.”