To ask Her Majesty’s Government, in the light of the fall in the value of the pound sterling since the EU referendum, what assessment they have made of the extent to which the closure of the Redcar plant was caused by the value of the pound at that time; and whether, when making decisions concerning other UK steel plants, they will take into consideration possible future fluctuations in the value of the pound.
1 February 2017
The closure of SSI Redcar in October 2015 reflected the difficulties facing the steel industry at the time. The main causes were (a) the price of slab steel produced by SSI Redcar, which had almost halved over the previous year (b) 30% overproduction of steel in the global market, and (c) depressed demand which had not returned to pre-recession levels. Since it re-started steel production at the plant in 2012, SSI UK’s losses amounted to £275 million in 2012, £193.5 million in 2013, £81 million in 2014 and £92.5 million up until the end of June 2015. The huge burden of these accumulated debts forced the parent company to file for bankruptcy in Thailand and on 12th October 2015, having received no viable offers from potential buyers, the Official Receiver announced that the coke ovens and blast furnace at Redcar steel would be closed.
The Government remains in close contact with steel producers about all the factors that have an impact on the sector, including exchange rates.
The Government has launched an Industrial Strategy Green Paper to build an economy which creates the conditions for competitive, world leading businesses right across the UK.