No wage subsidy for Teesside Cast Products workers

Dec 16 2009 by Sue Scott, Evening Gazette

THE Government has said it would not tap into a 500m euro fund that arguably could buy the Teesside Cast Products plant at Redcar more time as it battles to save 1,700 jobs.

A Department of Work and Pensions spokesperson said it had looked at the possibility of accessing the recently extended European Globalisation Adjustment Fund as recently as last week - but decided there was “no reason to make use of it”.

At the same time it emerged that TCP parent Corus had turned down an offer by Redcar MP Vera Baird to press for a separate short-term working subsidy to reduce costs while the plant pursued a buyer.

The DWP was responding to comments made by junior business minister Rosie Winterton who visited TCP last week to discuss local and national reaction to the fallout created by Corus’ decision to mothball the works.

Labour MEP Stephen Hughes, who attended the same meeting and was closely involved in rescoping the fund in light of the global crisis, said many of the excuses used in the past to justify the Government’s lack of interest in the fund, no longer applied. “It was said that it was too time consuming and bureaucratic, but we now deal with applications within days. We turned one around for in Spain in less than a week. The UK is part of a dwindling few who have not applied to the fund. Finland, Sweden, France, Germany, Spain and Portugal have.”

He said it was also a myth that the fund could not be used to support short time working, as opposed to the fund’s original objective of retraining those already earmarked for inevitable redundancy.

“Staff can be put on short working if the firm is in difficulty as a result of the crisis - workers can, in effect, receive a wage subsidy,” he said.

Mr Hughes was critical of the Government for apparently blocking attempts by regional development agencies to access the funds and for failing to match support given by other European countries to core manufacturing industries.

But Corus, which was arguing vehemently earlier this year for Government intervention in the form of wage subsidies - something the devolved Welsh Assembly has been successful in putting in place for its steel workers - now appears not to be in favour of extra support for Teesside.

At a recent press conference, Corus chief executive Kirby Adams said talk of wage subsidies was “academic” - despite the fact that the company’s parent Tata of India had indicated in its half year results days earlier that TCP had at least until the end of the first quarter of next year to find a buyer.

Redcar MP Vera Baird said Corus was not interested in Government support.

“I did raise it with Peter Mandelson even though Corus had turned [the offer of a wage subsidy] down. You can’t force a subsidy on Corus. They are determined to mothball it.”

Meanwhile, she said it was imperative that the area did all it could to encourage investment in industrial expansion to offset job losses at TCP.