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The recent announcement by outgoing Corus Chairman, Sir Brian Moffat, (below) came as a blow to everyone connected to the industry in the North East:

"Steel production from Teesside will not be required for the group's internal demand. Teesside will have to look to sell its products on the international market."

What does this mean for the Teesside steel industry?

This decision places the long term future of the Redcar plant, which employs many of my constituents, in jeopardy. I have gone on record as saying that it constitutes the final vindictive and disgraceful act of Sir Brian Moffat and his incompetent colleagues. There is no doubt in my mind that he and other Corus managers have shown themselves to be utterly inept.

Criticism of Corus management has been widespread. Mick Leahy, general secretary of the Iron and Steel Trades Confederation (ISTC), recently told MPs on the Trade and Industry Select Committee that "Much of what has happened (at Corus) is self inflicted. Yes, there are problems with the exchange rates, but other UK manufacturers have overcome that issue. Quite frankly, in our view it is down to bad management". That view was reiterated by officials in Department for Trade and Industry.

The fact is, you do not have to look hard to see the failings of Corus management. Among the most glaring failures has been the lack of investment the company put into research and development, a point I recently raised with the Economic Secretary in Treasury Questions:

The Economic Secretary to the Treasury (John Healey): The Government are encouraging investment in research and development throughout Britain. Last year, we allocated the largest sustained increase in the science budget for more than a decade and, to boost commercial research and development, we have introduced tax credits for large and small companies.

Ms Dari Taylor (Stockton, South) : I welcome my hon. Friend's response and, for the record, my region has accorded widespread praise for the research and development credits proposals announced in the Budget. However, will the Minister acknowledge that the management of British industry needs an urgent change of culture, given that Corus spends only £64 million [annually] out of an operational budget of £7.2 billion on research and development in the steel industry? Is not that simply managing decline in the steel industry rather than growth in the UK?

John Healey: My hon. Friend is right to point to the importance of private sector investment, because the major variation in research and development spending in each region primarily reflects private sector variations. My right hon. Friend the Chancellor is well aware of the particular challenges faced in my hon. Friend's region. He mentioned in his Budget statement that business R and D in the south-east is worth £450 a head, and that in my hon. Friend's region, the north-east, it is only £50 a head. The £650 million in R and D tax credits will help, as will the work being done in the region by One NorthEast. My hon. Friend might like to know that her regional development agency is now investing more than twice the average amount invested in other regions in support of regional science, engineering and technology.

The Minister's reply indicated that the government is working to encourage greater investment in research and development, and highlighted the change in management culture that is urgently needed, particularly in the North East.

For too long, managers have acted in the short term, or on the basis of making a quick buck. That certainly seems to have been the case at Corus, which neglected investment in research and development in favour of awarding £700 million dividends to shareholders.

Even worse, were the large bonuses and pay offs that managers and directors secured at the recent AGM, after the decision to axe jobs and cut loose the Redcar plant. These financial awards (only secured on the basis of proxy votes of pension fund managers) were both distasteful and disgraceful. Far from being rewarded, the managers and directors ought to have been penalised. They bear a heavy responsibility for the current plight of the company and it is to everyone's benefit that the management has now been restructured.

What next?

The crucial need now is to find a way of keeping Teesside steel in business. To that end, all the local MPs are working hard with the new management, and the unions, to try to secure the future of the plant and hopefully prevent the subsequent loss of jobs which would be devastating for the wider Teesside economy.

We recently met with new Corus (Redcar) boss Andrew Page, who summed up the current situation, saying "we've got a good product, we've got a reasonable market, but we've got a difficult task to become profitable."

These are difficult times, but not impossible times, and I do feel more confident because we are being spoken to by Corus management in a way we never have been before. Indeed, I am more comfortable and confident in the management at Redcar than I have ever been previously. But the situation remains serious; the task to make Redcar profitable is immense but it is one we are fighting to achieve.

"A special Steel Summit organised by the Evening Gazette is taking place at the Redcar Bowl at 10.30am on Sunday 1 June. I will be in attendance, along with other Teesside MPs, trade union chiefs, council leaders, representatives of development agencies and industry experts. The aim of the summit is to discuss the future of Redcar steel and to answer the queries and concerns of workers. The event will be widely reported, with Radio Cleveland intending to provide in-depth coverage and the BBC's Politics Show devoting a 20-minute slot. By keeping this issue in the public eye and high on the agenda, we aim to press the case of Redcar steel."