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Steel Industry: Wales
21 February 2024
Lead MP
Nia Griffith
Llanelli
Lab
Responding Minister
Nusrat Ghani
Tags
EmploymentWalesForeign AffairsEnergyBusiness & TradeAgriculture & Rural Affairs
Word Count: 13742
Other Contributors: 10
At a Glance
Nia Griffith raised concerns about steel industry: wales in Westminster Hall. A government minister responded.
Key Requests to Government:
The speaker urges the government to provide assurances regarding Tata's plans to secure short-term steel supplies for Trostre, including details of risk assessments and contingency plans. She also asks about the conditionality attached to the £500 million loan for developing an electric arc furnace in Port Talbot.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The speaker is concerned about the devastating impact of Tata's plans to shed 2,800 jobs across the UK, particularly in Port Talbot and Llanelli. The closure will affect not only direct workers but also contractors and suppliers connected to the plant, leading to a significant loss of spending power in local communities. She highlights the importance of preserving primary steelmaking in the UK to avoid falling behind other countries in the G20. The Trostre tinplate plant's reliance on Port Talbot for steel supplies raises concerns about quality, logistics, and environmental impacts when sourcing imported steel.
Asked the Minister if the Government has considered additional funding to save jobs at Port Talbot and taking a public stake in the steelworks. Emphasised the importance of retaining virgin steel production capacity. Questioned the Minister about whether the consultation process has any real impact or if it is a done deal, highlighting that the unions are pushing for a multi-union agreement and expressing doubt over the UK Government's openness to alternative options.
Christina Rees
Lab
Neath
She congratulated Dame Nia Griffith on securing the debate and discussed the challenges faced by the steel industry, including global competition and environmental concerns. She highlighted that 2,800 jobs will be lost from Tata Steel operations across the UK, primarily in Port Talbot. Christina Rees emphasized the need for innovation, collaboration with government and other stakeholders, sustainability, and prioritizing workforce well-being to ensure a thriving steel industry.
Holly Mumby-Croft
Conservative and Unionist
Gainsborough
Asked if Tata would have removed all UK jobs without the Government's support at Port Talbot. Questions whether all Tata Steel jobs in the UK would have been at risk if a deal was not done; challenges the understanding that 8,000 jobs would have gone otherwise. Asked whether the UK Government has any say in Tata's decision given their investment of half a billion pounds.
Jessica Morden
Lab
Newport East
Commends the unions for their support during protests and expresses concern over the high age of steelworkers in Llanwern, noting that this deal will end virgin steel production in Wales. Questions the Government's decision to close blast furnaces when Tata will rely on imports from India. Asks if the Minister is willing to engage with Tata and unions for an alternative approach and whether assurances have been given about consultation time and funding details. The UK pays 50% more for energy costs than Germany; the German Government are putting around £2.6 billion into helping their industry transition, highlighting the impact of higher energy costs.
Jim Shannon
DUP
Strangford
The hon. Member commended the debate and questioned whether British steel needs greater governmental support to compete with international imports, highlighting its potential for employment throughout the UK.
Carmarthen East and Dinefwr
The hon. Member congratulated the lead MP and suggested a potential role for the Welsh Government in negotiating with Tata Steel until there is a change in government, proposing an alternative investment plan ready by next year. He commended the hon. Member for her excellent contribution, questioning whether the UK Government's £500 million grant was causing a PR disaster by leading to job losses in Wales. Asked whether Labour Front Benchers are negotiating with steel producers for future plans, suggesting they may be a Government in waiting.
Dwyfor Meirionnydd
The hon. Member stressed the importance of a just transition for affected communities in Wales, citing 2,800 jobs at risk and additional job losses due to farming reforms.
Ruth Jones
Lab
Newport West and Islwyn
She expressed concern over the impact of current policies on the steel industry in Wales, citing issues such as the quota system hampering smaller suppliers like Island Steel. She criticized the Conservative government's trade deal with India for failing to protect workers' rights and environmental standards. Ruth Jones highlighted the importance of protecting jobs in the steel sector and emphasized the need for a Labour government to invest up to £3 billion in green steel.
Sarah Jones
Lab
Croydon West
Ms Jones highlighted the challenges facing the UK steel industry, arguing that it is not aligned with national economic or security needs and lacks private investor interest. She criticised the Government's indecisiveness and lack of a clear plan for the sector, noting the decline in steel production and job losses compared to other countries. She called on the Minister to address previous reviews recommending improvements and asked about plans for new technology, carbon border adjustments, and skills development. Major importers to the UK are western European nations rather than China, indicating a fundamental problem with how our economy is run. The Government's strategy should address issues like supply chain, skills, R&D and transition.
Stephen Kinnock
Lab
Aberafan Maesteg
The hon. Member agreed with his colleague's emphasis on the need for iron ore-based metallics, advocating for the continuation of blast furnace operations to maintain supply levels critical for high-value steel products. The Port Talbot steelworks in his constituency is vital to the local community and economy. He emphasized that steelworkers have adapted to technological changes over 30 years, delivering new grades of steel as demanded by customers. However, he noted frustration among workers due to high energy costs compared to competitors in France and Germany, loss of government contracts to foreign makers, and lack of domestic investment compared to other countries. He criticized the deal between Tata Steel and UK Government for £500 million funding aimed at redundancy of 2,800 people. He intervened to ask if there were any job guarantees attached to the UK Government's £500 million investment and whether the electric arc furnace model can work without access to iron ore-based metallics. Discussed the mismatch between skills of steelworkers and current labour market vacancies in retail and healthcare sectors, expressing concern over their future employment prospects. Questions the Government's negotiation tactics with Tata Steel and highlights that blast furnace No. 4 has a lifespan until 2032, disputing claims both blast furnaces are reaching their end of life. Challenged the Minister's claim that the Tata plan would enable new technologies, arguing instead that it negates possibilities for direct-reduced iron capability and other technological advancements.
Government Response
Nusrat Ghani
Government Response
It is an absolute pleasure, Sir Gary, to serve under your chairmanship. I congratulate the hon. Member for Llanelli (Dame Nia Griffith) on securing this important debate and on speaking so powerfully on behalf of her constituents, many of whom are directly affected by the proposed closure of the blast furnaces at Port Talbot. All hon. Members here in Westminster Hall today have recognised how vital it is that we have a competitive and thriving steel industry for jobs at the Port Talbot and Trostre plants but also because of its importance to the broader Welsh economy and its future.
The Government are making a significant investment of £80 million towards the dedicated transition board; Tata is also contributing £20 million. The board includes representatives from this House, the Welsh Government, the local council and other key areas to ensure that the local community is well represented and supported through this period of change. In addition, Tata Steel has committed a further £130 million towards a comprehensive support package to assist impacted employees.
Tata Steel's announcement was due to complex international dynamics such as China flooding the global market with subsidised products; it has also seen a decade of financial losses with the Port Talbot plant reportedly losing £1.5 million every day. Despite these challenges, we have provided significant support for energy costs and launched initiatives like the British industry supercharger to reduce electricity costs.
The Government recognise the importance of steelmaking in Wales's history and workforce pride. They are working hard to secure a sustainable future for Welsh steelmaking through initiatives such as the SUSTAIN future manufacturing research hub at Swansea University, which aims to decarbonise and improve efficiency in steel production. The support provided by this Government has prevented the plant from being under threat; without it, there would have been a serious risk of losing all 8,000 jobs across the UK.
The consultations continue, with plans for electric arc furnaces moving forward to provide certainty for supply chains and to use scrap steel within our own economy. The transition board is vital in ensuring that Tata can make informed decisions and meet milestones for building new facilities. We will continue to work towards a brighter future for the UK's steel-making industry.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.