30/09/2015 17:49 BST | Updated 30/09/2016 06:12 BST

Loan To Save SSI Steel Plant 'Would Be Illegal', Says Minister

The Northern Powerhouse minister has explained why banks got a bailout but the mothballed Redcar steel plant could not.

Thai owners SSI announced 1,700 jobs will go at the site amid falling global steel prices, causing a huge blow to the Teesside economy.

Prior to the devastating announcement, there were calls for the Government to step in to help the struggling industry.

James Wharton, Conservative MP for nearby Stockton South and who has responsibility for the Northern Powerhouse, write an article in the Teesside-based Gazette newspaper to explain why that could not happen.

He expressed his sympathy with workers and their families and said the Government has been working with SSI over the summer, before news of the crisis reached the media.

Mr Wharton said that had to remain confidential for commercial reasons, but without help the end could have come sooner.

And writing for the Gazette, he explained options to do more now were limited.

"A loan or grant would be illegal under EU state aid rules," he said. "People sometimes point to the banking bailouts of the past and ask, if this is true, how they received help?

"At that time a special exemption was made by the EU Commission because of the unique role banks have in the economy.

"Whatever the rights or wrongs it was not against the law."

Mr Wharton said the reality was SSI had lost hundreds of millions of pounds since it reopened in 2012.

Any government aid would not solve the plant's underlying problems, he said.

Nationalisation would mean the taxpayer would have to cover those losses, Mr Wharton argued.

Anna Soubry, minister with responsibility for steel, will call a summit for the industry to see what help the Government can offer, he said.

And Mr Wharton felt Teesside still had a bright future, with jobs created in other industries.

Meanwhile the Archbishop of York, Dr John Sentamu, said the Government should help manufacturing.

He said: "It has a critical role in our UK economy and in our regional economies as well.

"It is my hope that the SSI plant executives with the union officials can find a way forward to retain the skills in the area and to maintain the facilities if it is deemed possible to resume production.

"In any case this closure should be a spur to innovation and investments in Teesside, whose skilled and dedicated workforce have enormous potential.

"I will try to do all I can as an advocate for workers and their families – and for the future of their community - at this difficult time."

Steel from Redcar has helped build the Sydney Harbour Bridge, Wembley Stadium and Canary Wharf in London.