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Port Talbot Steelworks
30 April 2024
Lead MP
David Davies
Debate Type
Ministerial Statement
Tags
EconomyTaxationEmploymentBusiness & Trade
Other Contributors: 19
At a Glance
David Davies raised concerns about port talbot steelworks in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
On 25 April, Tata announced its strategic direction to proceed with its Port Talbot transformation, following the launch of a statutory consultation in February. Despite ongoing consultations, the minister holds regular discussions with unions and management to support interventions for a brighter future. The UK Government has committed £500 million as part of a £1.25 billion investment by Tata Steel to build a new electric arc furnace, which will save 5,000 jobs out of more than 8,000 employed at Port Talbot. Additionally, the minister announced £100 million for the transition board to support affected employees and businesses in the supply chain. The government is also progressing with plans for a floating offshore wind industry and establishing the Celtic freeport.
Jo Stevens
Lab
Cardiff East
Question
Last Thursday’s news was devastating for workers at Port Talbot, threatening nearly 3,000 jobs. Labour Members have been advocating for their constituents but criticises the government's £500 million investment for job losses instead of job preservation. She urges a delay in Tata’s irreversible decisions until after the general election and requests publication of the local economic plan.
Minister reply
The minister clarifies that the £500 million will save 3,000 jobs through an electric arc furnace project using imported materials, which increases sovereign steelmaking ability. He explains there is no impact on floating offshore wind creation as it uses different types of steel than produced at Port Talbot. The number of jobs affected by the blast furnaces closure is estimated around 2,800, to be confirmed post consultation. Tata will continue negotiations with unions to avoid compulsory redundancies.
Question
When will the government address high energy prices that impact steelmaking competitiveness and job security?
Minister reply
The minister acknowledges the challenges of high energy costs due to outdated infrastructure. Tata has benefited from various schemes introduced by the UK Government, including British industry supercharger scheme and carbon border adjustment mechanism, which aim to support industries facing such challenges.
Richard Thomson
SNP
Dunfermline and West Fife
Question
Despite the Secretary of State's claims, the Government are investing in support that will result in approximately 2,800 job cuts and an irreversible reduction in capacity to produce virgin steel. Tata has announced a voluntary redundancy scheme starting on May 15th. Can the Secretary of State update the House on what he expects redundancy packages to include, and does he condemn threats from the company to withdraw enhanced redundancy packages if industrial action occurs?
Minister reply
The value of redundancy packages will be agreed between Tata and trade unions, but it is clear that they aim to offer more than statutory requirements. The Government's plan involves saving 5,000 jobs with a half-billion-pound investment from the UK Government and £750 million from Tata. This is better than losing 8,000 jobs as initially proposed by Tata. Steel production in the UK relies on imported materials, and scrap steel for electric arc furnaces will be used to support this plan.
Scunthorpe
Question
What work has been done to determine the quality of 8 million tonnes of scrap that could go into electric arc furnaces? Regarding sovereign capability, what about domestic iron ore, coke, and limestone supplies?
Minister reply
Officials from the Department for Business and Trade and EY have reviewed Tata's business plan. The UK Government is investing half a billion pounds while Tata invests £750 million. While it might be possible to find domestic supplies of raw materials, there is currently no enthusiasm to open up mines or quarries.
Stephen Kinnock
Lab
Aberavon
Question
The Port Talbot steelworkers have given their life to the industry. The deal between the UK Government and Tata is a significant blow, with possible losses in supply chains beyond the 2,800 figure mentioned. Does the Secretary of State agree that adopting the multi-union plan could be better than this 'reckless' deal?
Minister reply
There will clearly be an impact on those in the supply chain; however, it would be irresponsible to estimate numbers. The Syndex plan is not commercially viable according to Tata's management and would face technical difficulties.
Robert Buckland
Con
South Swindon
Question
What discussions are ongoing regarding whether Tata will keep one of the blast furnaces open longer than planned?
Minister reply
Tata has faced losses exceeding £1 million a day due to keeping two blast furnaces operational. Building an electric arc furnace on the site with one blast furnace still in operation faces significant technical and financial hurdles. If Tata wishes to propose such changes, the UK Government would be open to discussions.
Dwyfor Meirionnydd
Question
Why is the UK so uniquely incapable of effective investment in its strategic steel future compared to countries like the Netherlands and Germany?
Minister reply
Building a Direct Reduced Iron plant would not resolve job loss issues, with only an additional 200 jobs potentially saved. Such plants require regular and affordable natural gas supplies which are currently unattainable in the UK context.
Jessica Morden
Lab
Newport East
Question
The Government's lack of ambition for steel industry investment is disappointing, impacting Newport’s Llanwern plant. Why will the Secretary of State not show more ambition and try to avoid compulsory redundancies?
Minister reply
Port Talbot plans to close down the pickle line at Llanwern once the electric arc furnace is built. The Government cannot force Tata to continue accepting losses over £1 million a day, unlike some Labour Members suggesting.
Christine Jardine
Lib Dem
Edinburgh West
Question
I come from an area of the country that suffered from industrial decline two generations ago, and the human impact of what we see happening to Port Talbot will blight the current generation. We talk a lot about a transition to a green economy. When will the Government invest in the national skills strategy that we need to provide? People in Port Talbot are about to lose their jobs, and redundancy payments do not last forever. A generation will be blighted. They need skills for the 21st century, so will the Government commit to a national skills strategy?
Minister reply
The hon. Lady asks about the money to support the town of Port Talbot. There is £500 million to build an arc furnace that will save thousands of jobs. There is also £80 million from the UK Government primarily to retrain people, and another £20 million coming in from Tata.
Kevin Brennan
Lab
Cardiff West
Question
Is this not just the tail end of a Government who abandoned the words “industrial strategy” a decade ago when I asked questions on this matter? Why have the Government not had the ambition and the vision to realise the potential? For example, if there were a plate mill on the site, it could produce the steel for the substructures and wind turbines that are planned to be built in the Celtic sea around the Milford Haven and Port Talbot freeport?
Minister reply
There are discussions going on about the possibility of building a plate mill on the site when the electric arc furnace is completed. However, even if such mills were built it would not solve the problem that 2,800 people are facing losing their jobs.
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
Question
We talked earlier about the supply chain. The repercussions of this decision will be felt across south Wales, so can I ask the Secretary of State directly whether he has secured any commitment whatsoever from Tata about the future of the workers at those downstream facilities across south Wales?
Minister reply
Tata has been clear that it was originally going to close those sites but now expects all those sites to remain open. During the building phase of the arc furnace, while the blast furnaces are shut down, Tata will bring steel in from elsewhere to make sure product is going into those other plants.
Nia Griffith
Lab
Llanelli
Question
With the closure of the coke ovens making the viable lifespan of the blast furnaces all the more precarious, and the electric arc furnace still being a long way off, we will rapidly reach a situation where Port Talbot can no longer supply the Trostre works in Llanelli. What talks has the Secretary of State had with Tata bosses about securing high-quality interim supplies for Trostre?
Minister reply
I have spoken to Tata on that very issue. It is clear that it would have to import steel to feed Trostre, and it is willing to do that. The timeline for the electric arc furnace is ambitious but work is ongoing: groundworks will start very shortly.
Chris Bryant
Lab
Rhondda and Ogmore
Question
The Secretary of State casually discards 2,800 jobs and is so uninterested in the ongoing effect on the rest of the economy in south Wales that he has not even made an assessment of what the economic impact will be. Can he clear up for us precisely how many other people’s jobs are likely to be affected?
Minister reply
Nothing whatsoever in the Wales Office at the moment is more important than securing the future of Port Talbot. The Government are putting up £500 million to ensure the future of steelmaking in south Wales.
Question
My constituents who work in Port Talbot inform me that there has been no progress on enhanced redundancy negotiations between the unions and Tata. Given the scale of public investment, will the British Government use their leverage to ensure Tata treats its workforce with dignity?
Minister reply
The hon. Gentleman is right; Tata now needs to come forward with more information about who exactly we can expect to see being made redundant and what their current skillsets are.
Justin Madders
Lab
Ellesmere Port and Bromborough
Question
My constituents at the Shotton plant are very worried about the news they are hearing and concerned about their colleagues’ futures. What assessment has the Secretary of State made of the short, medium and long-term impact of these decisions on other plants?
Minister reply
We were clear that while the arc furnace is being built, we wanted to make sure all those other plants around Wales receive product. Tata has been clear it will happen.
Mike Kane
Lab
Wythenshawe and Sale East
Question
It is an increasingly dangerous world; will the Secretary of State release an impact assessment on Britain losing its sovereign capability to produce virgin steel?
Minister reply
The iron ore, limestone, and coke are coming in from abroad. However, we are already producing high-quality steel in arc furnaces used for nuclear submarines.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
Question
We have great hopes and plans to build offshore floating wind structures in the Cromarty firth; do the Government recognise that continued production of steel will be crucial to this plan becoming a reality?
Minister reply
Yes, I agree with the hon. Gentleman that it is important we have means of producing steel for building floating offshore wind turbines.
Jim Shannon
DUP
Strangford
Question
I thank the Minister for his answers. It is clear that he is keen to find solutions, but obviously many on this side of the Chamber—indeed, on both sides—are a bit concerned. Bearing in mind that steel produced in Port Talbot is the backbone of much construction in Northern Ireland—which prompted the hon. Member for Aberavon (Stephen Kinnock) to highlight protocol problems with the Prime Minister in the past—I too want to express my deep concern and ask the Minister to explain where the steel for our construction sector in Northern Ireland will come from if the Government are unable to step in and save jobs in Port Talbot.
Minister reply
In the short term, I assume that the steel going into the industry in Northern Ireland does not come directly from Port Talbot. It probably comes from some of the other finishing plants. I do not know the full detail of the exact grades of steel that go into the Northern Ireland construction industry, but I am happy to discuss that with the hon. Gentleman. Tata has made it absolutely clear that it does not expect any disruption in supply while the arc furnace is being built. Everyone I have spoken to—not just those at Tata, but independent experts—has said that 90% of the grades currently produced using blast furnaces can be produced using an electric arc furnace, and that the technology of electric arc furnace steel production is rapidly improving, so I would not expect there to be any disruption to supplies in the medium or long term.
Shadow Comment
Jo Stevens
Shadow Comment
The news from Tata has significant economic implications, threatening nearly 3,000 jobs at Port Talbot. Labour Members are concerned about the loss of sovereign steelmaking, which impacts national economy and security. The shadow criticises the government's £500 million investment for job losses instead of job preservation. She urges a delay in Tata’s irreversible decisions until after the general election and requests publication of the local economic plan.
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