9. Statement by the Minister for Economy: Tata Steel

– in the Senedd at 4:27 pm on 7 November 2023.

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Photo of Elin Jones Elin Jones Plaid Cymru 4:27, 7 November 2023

(Translated)

So, the next item will be item 9, a statement once again by the Minister for Economy on Tata Steel. Vaughan Gething.

Photo of Vaughan Gething Vaughan Gething Labour

Diolch yn fawr, Llywydd. On 15 September, Tata Steel and the UK Government announced a joint agreement on a proposal to invest in electric arc furnace steel making at the Port Talbot site, with a capital investment of £1.25 billion, including a grant from the UK Government of up to £500 million.

In my statement to Members at that time, I highlighted the Welsh Government’s concerns, while welcoming the signalled investment in the future of the steel industry in Wales. In particular, I highlighted the potential impact of such a deal not only on the workforce and the industry, but on the local economy, the wider supply chain and those communities who rely upon steel. Llywydd, we have stressed the anxiety that this would cause for workers and families in many parts of Wales and made clear that it was essential that Tata conducts a meaningful consultation with its employees through their recognised trade union representatives about their proposals.

Members will be aware that last week, on 1 November, there was widely reported speculation that Tata planned to announce its intention to close entirely the heavy end of operations at Port Talbot, including the closure of both blast furnaces by the end of March 2024. This would lead to thousands of job losses. Subsequently, Tata Steel did not make a formal announcement following their board meeting in Mumbai. This has left thousands of workers and their families, in Tata Steel and across the wider supply chain, facing an uncertain future in the run-up to Christmas. The communities in which these steel plants are located, in some of the least well-off parts of the UK, will also be anxious and concerned.

On 1 November, I spoke, at their request, with the local Members for Port Talbot and the steel trade unions, who all voiced their huge concern over this potential announcement. I also spoke with senior representatives from Tata Steel UK. During these meetings, I stressed the importance of proper consultation with the recognised trade unions and full consideration of the report into alternative options that the trade unions are preparing with Syndex, who are a specialist consultancy with expertise in the steel sector.

The Welsh Government is committed to supporting a just transition to net zero in a way that aligns with our Well-being of Future Generations (Wales) Act 2015. We're concerned not only about the impact on employees and communities, but also to avoid offshoring our emissions from Wales to other parts of the world. Emissions from production and transport need to be considered as part of any assessment. Both the First Minister and I have had further dialogue with the company and steel unions this week. I will, of course, continue to keep lines of communication open. We stand ready to do everything within our power to support those affected at this time, and I reiterate my calls for the UK Government to work with us more closely. I have, of course, written again to the Secretary of State for Business and Trade, seeking an urgent meeting to discuss the matter and how our two Governments might be able to work together.

Llywydd, our focus is on the interests of the many thousands of Tata employees, their families, the wider communities and all those involved in working with and supporting the five Tata facilities in Wales. Their contribution to our economy is totemic, bringing with it a truly global reach. From electric vehicles and wind turbines to tins of beans and new homes, steel is the thread that will run through the economy of today and tomorrow. It matters to growth, security, net zero and the UK’s place in the world. Our long-standing commitment to the sector is based upon these realities. We will go on making the case for a stronger, greener sector, capable of capturing the enormous opportunities that could be won here in Wales. Thank you, Llywydd.

Photo of Paul Davies Paul Davies Conservative 4:32, 7 November 2023

Can I thank the Minister for his statement? I share the Minister's disappointment that a statement has not been forthcoming from Tata on its restructuring plans in the last week, and therefore, I urge the Minister to work as constructively as possible with the business until we know more about its current position and its specific plans for the future.

The Minister is right to say that workers and their families in Port Talbot are understandably anxious and concerned about what the future holds for them, and I agree that there needs to be far greater engagement between Tata and its workers. The Minister has said that he has spoken directly to senior representatives about his concerns, and perhaps he could tell us what sort of response he received from them. There is a critical need for Tata to communicate more openly with its workforce and the Welsh Government needs to objectively understand why the company has chosen to engage in the way that it has so that it can help ensure that any consultation process going forward is meaningful and there is a genuine interaction between the business and its workforce.

According to some reports, Tata executives have warned that its UK operations are losing more than £1 million a day, and I'm sure the Minister will acknowledge that this is not sustainable in the long term. I'd be grateful if the Minister could tell us what the Welsh Government's own economic assessment of the business and its operations in Wales actually is and what does the future of Tata Steel in Wales look like for the Welsh Government.

It goes without saying that Tata is a hugely significant employer, and I'm sure we all agree that the business model will undoubtedly have to change going forward in order to decarbonise its operations. I know the Minister has previously said that he's working with the finance Minister to see what can be done to further strengthen Welsh procurement, which will hopefully give our steel industry more opportunities. So, I'd be grateful for any update he has on that work to strengthen procurement opportunities, as well as outlining what opportunities have been found or are at least in the pipeline for UK-produced steel.

Llywydd, we need to remember that the Port Talbot site is the biggest single emitter of carbon dioxide in the UK, and so it is understandably under pressure, as I said earlier, to move to greener, less carbon-intensive forms of steel making. Indeed, the Welsh Government has always asserted that its focus is to explore all avenues to secure a successful low-carbon future for Welsh steel, and today's statement reaffirms that.

It's a fact that our lives rely on good-quality steel: steel to make bridges, pipelines and cars. Even some renewable energy generation relies on steel. Therefore, perhaps the Minister could outline what offers of support, if any, the Welsh Government has made to help the business on its decarbonisation journey.

The Minister has said that there are institutions in Wales that could take part in the research and development of the electric arc steel making, as well as using hydrogen more in the process. We need the Welsh Government to tell us more about exactly what work they want to see take place here and how that research and development work should be funded. Is this an area where the Welsh Government is planning to make some substantial investment, and if so, how much is that? Of course, at the heart of this is a need for partnership and parties to come together—Tata as a business, both the UK and Welsh Governments, and the workforce too.

In closing, Llywydd, can I thank the Minister for his statement today? Again, I reiterate my support to help Tata decarbonise and produce steel in a much greener way in the future. I would also like to reiterate how crucial it is for Tata to now properly and appropriately communicate with its workers as soon as possible, in order to minimise the anxiety and concerns felt by the employees and, indeed, by the whole community. Diolch.

Photo of Vaughan Gething Vaughan Gething Labour 4:35, 7 November 2023

Thank you for the comments and questions. I'll start with the Member's question about conversations with senior Tata representatives. The First Minister and I met with senior representatives from Tata today. We discussed again not so much wanting a blow-by-blow account of what happened last week, but to understand the impact of what happened last week, to recognise that is still very much there. It has not gone away. People are not unconcerned now. The nature of the briefing that was delivered was detailed, and people are still anxious about their jobs and their future at probably the worst time in the year.

Tata have made clear that they wish to see the Syndex report, with its recommendations, to understand if there are alternative proposals to deliver a decarbonisation journey for steel production at Port Talbot. That is an ask that the trade union side have been making. It's positive that they say they're going to wait for that report to be provided—I understand it is imminent—and we would then want to see genuinely meaningful consultation take place. There would need to be time for that report to be discussed, so that does not mean the triggering of the legal process, because that would require Tata to have firm proposals for job changes. We think that there would be a need to discuss the viability of any alternative proposals that may come from that Syndex report, and it's important that the time is available to do so.

That may also deal with one of his other questions about the financial assessment of the company. The Welsh Government hasn't undertaken a forensic analysis of the financial assessment of the company. We're not in a position to do that. But we are interested, of course, in the future of the sector, the future for workers, and the future of communities, and the understanding that we will need lots more steel in our future.

You talked about emissions—the emissions of steel produced in Port Talbot today compared to how steel might be produced in the future. If we see steel that is imported into the UK, we would also want to understand the emissions cost of that steel, wherever it is produced, as well as the transport cost of that steel from other parts of the world to the UK. So, it's important not to get carried away and think there is a single sum to be undertaken here about the journey to decarbonisation, which the steel trade unions and steel employers recognise has been necessary. That was a conversation that I had on becoming the economy Minister. I know that's a conversation that's taken place during my predecessor Ken Skates's tenure as well. So, we want to see a genuinely just transition that does not offshore jobs and emissions to other parts of the world.

I think it's also worth pointing this out in finishing. In all of the challenges we have, the investment proposal that was made for electric arc involved Tata and the UK Government investing in a different future. We have always said that we understand that greater electric arc steel making is part of the answer, but want to see all other technology answers looked at—so, direct reduced iron as an alternative as well, when that might be possible. In all of these futures, though, the willingness of the UK Government to continue to act as a stakeholder, to continue to act as someone who is prepared to invest in the future, particularly if that delivers a path where you can see a net reduction in emissions, including how emissions might be offshored, to continue to see a future for large numbers of workers who might otherwise lose their jobs, is part of the discussion we need to have, with an openness from the UK Government to do so.

And it's fair to say that it's not just a conversation that I have been seeking to have with different UK Ministers. Again, I recognise the Finance and Local Government Minister, who's on the screen—with each of the different Chief Secretaries to the Treasury that she's had to deal with, she has been a consistent advocate for the UK Government to act to support and invest in the future of steel making. You may not hear that reported very often, but I know that is part of the conversation we have. And indeed the climate change Minister has similar conversations with her counterparts as well. So, the view of the Welsh Government is very clear and unambiguous, and we hope that the UK Government will continue to be an active partner who are willing to look again at what they're prepared to do to invest in the future, because I think there's real reason to think that there are good days ahead for steel making and its use here in Wales and beyond.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 4:40, 7 November 2023

Just over a month ago, we learnt, as had been suspected for some time, that the UK Government's deal with the owners of Tata Steel is likely to come at the steep price of 3,000 jobs lost, with the vast majority affecting the plant in Port Talbot. Members across this Chamber will be well aware of the devastating implications of this scenario to the local community, which, despite having supplied generations of workers to the plant, has long had to contend with the state of existential uncertainty that has surrounded the Welsh steel industry for many years. What's been going on will no doubt increase feelings of anxiety for many.

What has been particularly distressing, though not surprising given the contempt of this UK Government towards workers, is the fact that trade unions and their representatives were shut out from the negotiations from the start. This is the same shoddy treatment of workers that we've seen continue over the past two months while Tata have been ironing out the finer points of detail for implementing this deal, and that was on show just last week. There's widespread agreement amongst the unions for the need to decarbonise the industry and to harness Wales's potential as a hub for the green industrial evolution, but as I've stressed many times, the transition to this outcome that we all want to see must be just, and I reject the underlying premise to this deal that installing the necessary technology has to involve some kind of trade-off, with Welsh workers invariably having to shoulder the costs.

As the Community union has rightly pointed out, there is a degree of hypocrisy to Tata's position on the green transition, given that it's threatening to close its operations in Wales without this package of support for the installation of the new electric arc furnaces, while continuing to export blast-furnace-manufactured steel from non-green sites in India and the Netherlands. Ultimately, if we continue down this route, we'll have dirtier steel, thereby offshoring carbon emissions in the process.

Electric arc furnaces have a role to play, but as a technology, it's just one cog in a complex machine. Hydrogen is a long-term solution, direct reduced iron a quicker stepping stone. The Secretary of State for Wales appeared before ETRA—the Economy, Trade and Rural Affairs Committee—which was also joined by a member of the climate change committee, and he did not believe that hydrogen was worth investing in, as it wasn't commercially viable. What would be the view of the Minister on this? I found it to be quite a shocking attitude, particularly because the implication is that it is not the role of state to develop strategic resources unless it's commercially viable for private business. Perhaps this is why we need to think of alternative models of industrial ownership in Wales, because here's the reality: it's been put to me several times that Tata is a private company, and if it's not making profit in Port Talbot, then people can't expect it to continue to operate there. I'd accept that premise if we were talking about a company that was producing luxury goods, but that's not what we're talking about here, is it? What we're talking about here is a strategic resource.

It speaks volumes about the lack of agency that we have in Wales over our economy that decisions on the future of one of the most important manufacturing operations in the country were made behind closed doors by the UK Government and a multinational firm. Instead of accepting the status quo, whereby the status of so many Welsh jobs are inherently beholden to the commercial interests of parties that aren't even based in Wales, we must strive for better alternatives, such as supporting the proliferation of co-operatisation, ensuring that when critical industries are put at risk by corporate restructuring or reprioritisation there is a robust framework in place for workers to take over the management of operations, and thus maintain their presence in Wales. And this isn't, of course, theoretical thinking: it's exactly what's been done in the Basque Country. So, I would be interested in the Minister's thoughts on this beyond, and with respect, saying, 'We simply can't afford it', because if we don't take steps to safeguard the steel sector here in Wales, then the costs in the future will be far higher. And I'm not expecting him to say, to be fair, 'We'll do something tomorrow', but surely we need to start thinking. This isn't sustainable and we need to seriously think about the future.

I'll end, Llywydd, by saying that, in this instance, credit where it's due. The Welsh Government, and in particular the Minister, I know have been proactive in trying to secure the future of the site. I know that through the work of the cross-party group on steel, and that's why I'm genuinely reaching out here for us to work together, to develop a new future for the sector together. What I fear we are seeing here, actually, is a UK Government with zero ambition for the steel sector, not just in Wales but across the UK as well, and that will be to the detriment of our communities and future generations, if we don't show the ambition now and that we don't get this right now.

Photo of Vaughan Gething Vaughan Gething Labour 4:46, 7 November 2023

Thank you for the comments. I think there were many areas where there was consistency in my statement and, indeed, my response to questions from Paul Davies—the points around a generally just transition; the need to have meaningful consultation with trade unions; to take seriously the Syndex report that we understand is imminent; to understand the reality of emissions footprints. If you propose to, long term, create steel in other parts of the world, through a blast-furnace process, and to import it here, we need to understand what that looks like. We also need to understand the opportunities for alternative technologies as well, and how close they are to being mature.

The challenge in all of this is, and, with respect, I think the Secretary of State for Wales—it's not his specialist area, but I don't think it is fair to say that there is no future for hydrogen. Actually, the alternative investments are being undertaken, and if you don't invest in what those will look like, then you'll never know yourself. It's part of the reason why—it wasn't me that did it; I think it was, again, my predecessor Ken Skates, who invested money in a metals institute in Swansea University, to look at the ways in which you can produce metals, how you can produce the grades and the quality of them as well. And that does actually matter, and that's involved partnership, with Tata investing in doing so.

I would say, though, that within all this, we still come back to the challenge of UK Government investment. How much are they prepared to invest in the future and what is their expectation for what that investment will deliver? Because within this, we need to recognise that steel is a strategic asset not just for Wales but for the whole of the UK. And you can't undertake a strategic UK asset without considering the volume and the quality of steel making here in Wales. The news from Scunthorpe yesterday really matters, and it should matter to all of us, because the same broad proposal to move from blast-furnace production to electric arc doesn't just mean that thousands of other workers are worried for their jobs—and I think all of us should be concerned about that too—but, from a UK point of view, it potentially means that primary steel making would not exist. That then means we'd be reliant on other parts of the world for all of that primary steel making, and that's part of the challenge. There is a big strategic choice for the UK Government. It's why the choices they make really do matter above and beyond the workforce in Port Talbot; they'll matter to what we are able to do here in Wales and across the UK.

If you think about future opportunities, we need to think—. You'll need plate steel to deliver some of the renewable opportunities. We don't currently make that anywhere in the UK. Actually, that would require a UK Government to be prepared to talk with the sector and to understand how it can strategically invest, to deliver that capability. And then there's an opportunity not just for the UK but for beyond as well, and that's the conversation I want to be able to have with the UK Government. I would like to have that conversation with the current UK Government. I think I would have that conversation if there were a Labour Government in place. The difficulty is, can we wait until a general election, or will those choices already have been made? I think it's my duty to try to work with the current UK Government to get the best possible deal for Wales. And that's what I'm prepared to do, regardless of our difference, because that is what I think workers deserve, and I think it's what the people of Wales deserve.

Photo of David Rees David Rees Labour 4:49, 7 November 2023

Minister, can I thank you for your statement, but more importantly thank you for your speedy response last week, when we heard the reports and the discussions we had on Wednesday afternoon? The bombshell that we heard from that report was devastating for the workforce, their families and the communities in and around Port Talbot, who rely upon the income from the jobs there. And it's not just the 3,000 that we talked about, because they're talking about mothballing the hot mill and the continuous casting plant. That's jobs being lost for four years, if steel making comes back. That's the contractors and all the suppliers going as well, and all the businesses that rely upon those men and women working there. It's a huge impact and let's be blunt: we've talked about a just transition, and I agree with you—we need a just transition—but this is not a just transition, it's a closure. It's a closure of those plants and, if we're lucky, they might decide to actually build an arc furnace, because that's not guaranteed at this point in time. They're just simply talking about closing the plants in March 2024, and four years probably before anything happens. Those men have gone. Those women have gone. There are no skills there. It really is a threat of closure for the town. 

So, I'm conscious of my time and I'm conscious of what I say often to Members, but it's important I think that yesterday's announcement, which highlights the loss of steel making in the UK, basically—primary steel—is also included here. It's important we get the message to Tata and the UK Government, and I want you to send this strong message that we want a just transition, unions want a just transition. They accept the move to green steel, they accept the changes, but what they are offering at the moment is not that, and we've got to keep pressing the message that that is what we want. You mentioned alternatives. We want the alternatives, we want direct reduced iron furnaces, we'll take the electric arc furnaces, but it has to be focused on consultation with the unions, not simply communication. It's got to be consultation and meaningful consultation with the unions. Will you make sure that that message gets through to them, please? 

Photo of Vaughan Gething Vaughan Gething Labour 4:51, 7 November 2023

Thank you, David. And I thank him for his early morning message to me last week requesting a meeting. Look, David Rees has been a consistent supporter for steel. You'd expect him to be with his constituency and being the chair of the cross-party group. And the points he makes are points that have come up in conversation with steel trade unions, and, indeed, with Tata—the need for a just transition, to consider the reality of emissions and whether we're simply offshoring our emissions or not; the need to consider what a just transition looks like in terms of workers and their jobs, and that can only come from meaningful consultation with the recognised steel trade unions, and the reality that, actually, it's a transition to the future where we will continue to need steel. And the strategic choice that not just Tata need to make about their business, but the UK needs to make is: are we prepared for a future where primary steel making is not something the UK undertakes? Are we prepared to buy into a future where we constantly have to import from other parts of the world? Importing that steel to be rolled here may happen for the medium term, but the challenge is, for the longer term, does that allow us to do what a modern economy should be able to do to undertake all those opportunities, or will we give away the opportunity to make our own strategic choices? I think it would be the wrong choice to do that. That's a message that we have constantly had with the UK Government when we've been able to talk to them, and we've made clear that we think the loss of primary steel making would be a mistake from the UK point of view.  

I recognise the concerns that if blast furnaces are closed, how much guarantees can people have that steel will continue to come into Wales to undertake other operations that require that import of steel. And it's not just Port Talbot; there are other sites around Wales that are looking anxiously about their future. That was made very clear to me when I went to Llanwern with John Griffiths and members of the community and Unite. So, there are many, many aspects to this that we need to understand, and I can assure the Member that we are making those points constructively but clearly in all of our conversations, and it is why I really do want to have that conversation with the UK Government as well, to understand whether we are really are on the same side, because, to be fair, I think Paul Davies was constructive. If that was the response of the UK Government, I think we would be able to do something to deliver a stronger future for the steel sector. 

Photo of Altaf Hussain Altaf Hussain Conservative 4:54, 7 November 2023

Thank you for your statement, Minister. Following your discussions with Tata and the steel unions, do you have any concerns that the pursuit of electric arc furnaces could undermine the agreed deal? Since your previous statement following the news of the deal between Tata and the UK Government, what steps has the Welsh Government taken to support the workers at risk of redundancy? And finally, Minister, with today's announcement that Wales will need four times as many wind farms in order to meet your Government's energy targets. What steps are you taking to ensure that Port Talbot becomes the hub for the production of needed turbines? Thank you very much.

Photo of Vaughan Gething Vaughan Gething Labour 4:55, 7 November 2023

On the final point, it's what we want to see delivered—investment in port infrastructure. That has to come alongside clarity, and a pipeline for the offshore industry itself. The current indication of 4 to 4.5 GW of power doesn’t provide enough for businesses to invest in the longer term. The potential for four to five times as much is really important to unlock, and then I think we will see those sorts of investment choices being made. It’s also why the port infrastructure choices, the floating offshore wind manufacturing industry scheme choices, which have yet to be made for Wales—it’s really important that that investment is made. And it underpins the Celtic free-port bid. Port Talbot and the port of Milford Haven need to see those investment choices being made, and to be fair, again, I know that there are Members in Altaf Hussain’s own party who are making that case. It’s really important that the decisions now come, and I hope that the autumn statement will not be a missed opportunity, because if the UK Government do announce that investment will come to Welsh ports, then I for one would welcome it. It would allow us to do more and to see jobs being created.

The challenge, though, still comes that, if the current proposals for only electric arc steel making come in, then that is part of the risk we see for the change in jobs, but also the scale over which that would happen. We’re not able yet to have specific conversations with people at risk of redundancy, because the consultation hasn’t finished, and what it’s really important that I do is not get lost in trying to give specific figures on job losses that are or might take place. I think it’s really important that I have the clarity in saying we need to have a meaningful consultation for the Syndex proposals that are coming, and which the company are aware of, to be looked at, treated meaningfully and seriously, before any formal consultation takes place. That will require—. If we are required to do things around it, we will do, but it will definitely require the company and the unions to look again at what might be possible. So, I look forward to receiving a copy of that report when it’s provided, and I look forward to, I hope, then at least having a conversation with the union on what the future could be, and a better future than the one that was possible last week. 

Photo of John Griffiths John Griffiths Labour 4:57, 7 November 2023

Minister, thank you for the mention of all the Tata plants in Wales, and particularly your visit to the Llanwern plant to speak with the unions and hear from them first-hand. As you will know, Llanwern is still a significant part of the local economy, and in fact the age profile at Llanwern now is younger than it has been for quite some time, which is also significant in terms of any restructuring that takes place. Obviously, uppermost in the concerns of the trade unions at Llanwern, Minister, is the future of Llanwern and how it fits into the overall picture, and the cold mill, for example, and fears that any steel produced by electric arc furnaces might not be of the quality that would support the continued operation of the Zodiac plant, for example. So, there are many particular issues and specific issues that Llanwern has, and the workforce there has, as part of that general situation that we face in terms of steel in Wales. So, it’s just my usual plea, really, Minister, that Llanwern isn’t overlooked in any way in terms of the wider picture as matters proceed. 

Photo of Vaughan Gething Vaughan Gething Labour 4:58, 7 November 2023

I'm grateful to the Member for pointing out the interconnected nature of choices that are made around Port Talbot and their direct impact on significant numbers of jobs in other parts of Wales, including Llanwern. And it was a really instructive visit, not just meeting trade union representatives from Community and Unite, but also, then, seeing some of the operation as well. The quality of the steel that comes in is really important for the product they’re able to make at the end, and the viability of the plant and the jobs that go alongside it.

I think it is worth picking up, Llywydd, on the point made about the average age of the workforce. The average age of the workforce is younger than I think people would assume. These are people, men and women, who have responsibilities that won’t disappear in a year or two’s time. They will have outgoings for families and homes that will increase the anxiety they face, and it’s really important to understand that. And that certainly informs the way the Welsh Government is going about our engagement with other stakeholders, and it really does reinforce our expectations for consultation to be meaningful and we want as much investment as possible, and the best possible future for the steel sector and their workers. 

Photo of Sioned Williams Sioned Williams Plaid Cymru 5:00, 7 November 2023

(Translated)

I want to refer back to the uncertainty and the anxiety that you mentioned, because uncertainty and anxiety are felt throughout the communities I represent. Businesses and families beyond the workers who work directly in the Port Talbot steelworks are being impacted by these rumours, these whispers about the future, and it creates a great deal of anger and pain. So, I want to know how the Government are ensuring that they are communicating what is happening behind closed doors and around boardrooms with the wider community that is also concerned about the prosperity of their area. And how is the work of the transition board, particularly, building in the participation of the wider community?

Photo of Vaughan Gething Vaughan Gething Labour 5:01, 7 November 2023

(Translated)

Thank you for the question. 

Photo of Vaughan Gething Vaughan Gething Labour

I think I should point out that today is an exercise in communicating with the wider workforce and the wider community who are concerned. Part of what we need to do in the Welsh Government is to remain honest brokers and honest interlocutors with everyone that we talk to, to be clear about when we have discussions that are confidential, to be clear about the consistency we have in discussions with different partners, and what we then can and can't say in a wider audience. 

The difficulty, of course, is that not knowing what the end proposals are, so having had the detailed briefing that's then been reported on and then that not going ahead—. Well, actually, the proposals were really concerning. If they'd gone ahead that would have been a major concern, but people are now living with the uncertainty of not knowing. Having the Syndex report, understanding what that will look like, wanting to hold Tata to their commitment to engage in a meaningful consultation around that, will be really important for us. 

The worst position is the one we're in in many ways. When people say, 'What is really going to happen?', to have to honestly tell someone, 'I don't know' is really difficult. And that's actually really difficult for trade union representatives as well. So, GMB, Community and Unite representatives who are being asked by their members in plants across the steel sector, are having to tell their members they don't know what is really happening. And that can be hard, because sometimes your members assume that you really do know what's going on and you just don't want to tell them, whereas, actually, they haven't been aware.

I think, though, having a united position from steel trade unions around a report from Syndex—if there's a viable alternative we need to make sure that is properly considered. That's why I repeat again the call for the company to take seriously any alternative proposals and for the UK Government to be prepared to move on from their current position of the amount of support they're prepared to provide, and understand the value that could be lost if we're not able to secure the largest amount of jobs possible and the wider economic opportunities that still continue to exist for steel making here in Wales and the wider UK.

Photo of Vikki Howells Vikki Howells Labour 5:03, 7 November 2023

Thank you, Minister, for your statement on what is, of course, a crucial industry for us, both as a key component of the Welsh economy and in terms of our national security also.

I'm pleased to hear you reaffirm your commitment to hydrogen as an alternative to the heavy end. I think it's really important that, in the absence of a clear and progressive long-term strategy from UK Government, the Welsh Government articulates an alternative that might be achieved with either a change in direction from the current UK Tory Government or, and more likely in my opinion, a more progressive future Labour Government

My question for you this afternoon: the Industrial Communities Alliance has highlighted a number of concerns about the UK Government's proposals, including in terms of the steel industry's workforce, the environmental impact and the effect on the local and national economy. What is your response to these concerns as set out in the ICA's 'Wrong Deal for Steel' paper?

Photo of Vaughan Gething Vaughan Gething Labour 5:04, 7 November 2023

I think the broad point is that we share a number of the concerns about what could happen. If you have the loss of all primary steel making you're then reliant on imports from other countries and the prices that you then have to pay. That is a challenge in itself. Will everyone then be prepared in the longer term to carry on importing that steel to run through mills in Wales, or will, actually, you see a move to the potential for that work shifting? Because if it shifts, the risk is the shift is permanent. Now that's a real risk that is discussed openly; it's part of the anxiety that steel-making families understand between themselves. 

I think the other point is—. The point I'm trying to make about the UK Government is that whatever the shade of the UK Government they need to make a choice about what is in the strategic interests of the United Kingdom when it comes to steel making and having that ability here, and the fact that the future economy will rely on steel. We can either make it ourselves, or we can import it, with all the risks that go with it. Then, if you are prepared to co-invest with the sector in a  different future, how much are you prepared to invest and what is your expectation on the return on that, in terms of jobs secured and having different technology choices as well?

I still think that there is room for the UK Government to do the right thing, and to want to deliver a better deal for steelworkers here in Wales, and I think that that would be of benefit right across the UK. We will carry on making that case. I do believe that we would have a better prospect of seeing that case realised if there were a different Government. Nevertheless, it's our responsibility to carry on making that case to the current Government, recognising that their choices could determine the future of the sector.

Photo of Jane Dodds Jane Dodds Liberal Democrat 5:05, 7 November 2023

Many of you may be wondering why a Member of Mid and West Wales is standing here commenting on this particular issue. Unless you hadn't noticed, as the sole Liberal Democrat, I am the spokesperson on everything. In my role here, I am the spokesperson for the economy and, if there was such a person, the spokesperson on workers' rights. As a former shop steward, it seems absolutely abominable to me, the way that Tata have treated their workers. The additional stress that comes for those workers at this time—you've commented on that, and many here have as well.

It feels that you are doing everything that you can, but I just wondered—. One of the issues that I do raise is the issue of transition basic income. That is an opportunity to move people who are working in carbon-heavy industries, giving them that guarantee of a regular income, to a green industry, with the skills as well, on top of everything else that they are entitled to through any employment packages. So, I just wondered: could you please comment on how the Welsh Government is working at the moment to think about transition basic income in relation to this scenario? Diolch yn fawr iawn.  

Photo of Vaughan Gething Vaughan Gething Labour 5:07, 7 November 2023

Thank you. I should recognise that I am a former shop steward myself. I should also recognise that there is at least one other former trade union lawyer in the room, and at least one other full-time—no, two other full-time trade union representatives in their past lives as well.

Look, I think that the challenge is—[Interruption.] What? I think that the challenge is: how can we best support the workforce in the current uncertainty, and wanting to make it clear that we don't want to simply accept that there will be significant job losses in the near future? We want to see the report that is coming taken seriously. That's why we call for the UK Government to be partners in a conversation about the future.

If there are to be job losses, we need to look at the levers that we currently have available. You'll be aware of the current basic income pilot, which I am proud that this Government is undertaking. It is specifically looking at people leaving care. I don't think that we could transfer that into the current issues that may crystallise over the coming months. What we do have, though, within my department, is the support that we provide through our ReAct+ programme and Communities for Work Plus, where we do seek to try to help people in the transition to undertake a move from one employment to another. We've seen that deployed with Tillery Valley Foods. We've seen it deployed around 2 Sisters as well, to try to make use of the levers that we have.

That's why the budget matters as well. This is a demand-led budget. So, the scale and size of what happens, and the speed of it, will make a difference to the sort of support that we can provide and how effectively we can provide that. So, whether it's called a basic income or otherwise, the starting point is: what support can we provide, how effective can it be, how do we understand the job opportunities that exist, and then how do we help people to practically undertake them?

Photo of Sarah Murphy Sarah Murphy Labour 5:09, 7 November 2023

My grandfather, Patrick Murphy, from New Ross, Wexford, helped to build the Port Talbot steelworks in the 1950s and worked there until he retired, as did my Dad in his summer holidays, and my uncles and my cousins, who were all raised in Bridgend as a result of this. So, this is a really common origin story in my community of Bridgend. We still have many of the workforce who live in my constituency, so there is huge anxiety, as well as huge solidarity with all of the workforce across south Wales.

I want to really echo everything that my colleague David Rees has said today. I want to thank all of the trade unions for standing up for the workforce—Community, Unite, GMBStephen Kinnock, the MP for Port Talbot, and also yourself, Minister. Because, as you have emphasised today, it is about prioritising those people and those families who are at the heart of this.

It is my understanding that UK Labour has committed a £3 billion green steel pledge to help level up UK plants and retain jobs in a fair transition, a meaningful transition, and also have a nearly emission-free steel industry by 2035. So, I'm sorry, but the elephant in the room here is I'm standing here today hearing how UK Government and Tata Steel have absolutely failed to find a deal that is in the best interests of the workforce and our environment and our economy, and then we have this commitment from UK Labour that is ambitious and I just want to ask: does the Minister agree with me that the only way to save British steel is to elect a UK Labour Government in the next general election as soon as possible? Diolch.

Photo of Vaughan Gething Vaughan Gething Labour 5:10, 7 November 2023

Well, I want to thank your grandfather, Patrick Murphy, for making the journey here and helping to be part of, not just the story of Ireland, but the future of Wales, and that's a common story that we should always be prepared to celebrate.

On your point around the attitude of the current UK Government, as I've said repeatedly, we will carry on looking to work for the best possible alternative and carry on making the case for continued investment in an alternative future. But on this and so many other things the prospects of delivering a genuinely just transition, with the maximum value for current and future workers, would immeasurably be improved if there were a UK Labour Government, and I look forward to that election taking place as soon as possible.

Photo of Rhianon Passmore Rhianon Passmore Labour 5:11, 7 November 2023

Minister, you told the media, during a news conference earlier, that if all blast furnace activities end without an alternative way to make primary steel, then the UK could be the only G7 country not to have primary steel making capability, and this in today's volatile world is neither sensible nor secure. So, it's imperative that Tata now engage with deep and meaningful consultation with trade unions and thoroughly examine the forthcoming publication of the Syndex report, which has been examining alternative options to decarbonise the industry.

Minister, the trade unions Community, GMB and Unite estimate electric arc furnaces at Port Talbot could result in 3,000 job losses at the steelworks and numerous downstream Tata operations in Wales, which includes Llanwern, an important Gwent employer for Islwyn communities, alongside significant secondary supply chain economic impacts. You stated you've had further dialogue with Tata and unions this week alongside the First Minister, so, therefore, will you keep the Senedd updated on your urgent request to meet face to face with the UK Secretary of State for Business and Trade? And will you make a further urgent statement to this place when Syndex is published so that Wales continues to make indigenous steel, ensuring future security and productivity and securing Welsh green steel jobs now and of the future?

Photo of Vaughan Gething Vaughan Gething Labour 5:12, 7 November 2023

I'm more than happy to commit to keep the Senedd Chamber informed as there are significant developments and areas that we can usefully comment on. When the Syndex report is made available, it will, I think, be necessary to ensure that the clarity of the expectation from this Government and others that meaningful consultation takes place around that report before there is any kind of crystallisation on proposals is important, and the time for that to happen is there, and the space for that to happen as well. It may well be the preference of trade unions representing the workforce that there is time given before a further statement is made in this Chamber, but I'm more than happy to commit to update Members on any meaningful progress that is made in conversations with the UK Government or indeed on any proposals, alternative proposals, that we're able to highlight for Members here, and I know that Members across the Chamber are expressing views because of the understanding of the reach of the steel sector as well. So, I hope that's a helpful undertaking to give.

Photo of Elin Jones Elin Jones Plaid Cymru 5:13, 7 November 2023

(Translated)

Finally, Huw Irranca-Davies. 

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour

Diolch, Llywydd, and, Minister, thank you for the statement. Nobody would be opposed to electric arc being part of the future mix of steel making in the UK, but wouldn't it be absolutely abhorrent if, at the moment, where there is a rush, globally, to be first to market in developing green primary steel making, we absented ourselves from that competition? But what that requires is active Government involvement, alongside Tata Steel, alongside the workforce, but it requires a UK Government as well as Welsh Government—I say this quite frankly, because otherwise we will lose it, and future generations will not thank us for it. We will walk away from primary steel making, and we will offshore it, and will not get that first-to-market competitive edge. And, yes, it will cost. We might have to look at energy costs in the way that other European countries do. We might have to look at investment and grant funding to develop the new technologies. Of course we will. So will other people. But we could be not looking at jobs of the past, but jobs of the future in green steel. So, Minister, could I just ask you: in this pause that we have now ended with, will he do his very best to work with Tata Steel, UK Government, the unions, the workforce, looking on the back of the report that we're awaiting eagerly, and actually argue that case for an active industrial strategy that says that we should be leading the world in developing green steel, green primary steel, as well as electric arc? Because it would be a tragedy, and future generations will not thank us, not just for losing jobs, but for saying that these are jobs of the past when, actually, they should be jobs of the future and we should be leading the way.

Photo of Vaughan Gething Vaughan Gething Labour 5:15, 7 November 2023

I thank the Member. I particularly want to highlight that we agree that electric arc steel making is part of the future. The difference is that we don't think it's the only future for steel making in the UK. We'll continue to make that case in all of our engagements. It really is a choice for the UK Government. If they're prepared to say that they want primary steel making to take place and they're prepared to co-invest in that future, it is possible. There is more that they can do and I'm glad that the Member mentioned energy costs. Other European countries typically have had a more supportive environment around energy. That matters for everyone, including—. I should point out that there is at least one steel maker in my constituency that makes electric arc steel. Energy costs are a real issue that would make a really big difference and we should look at what other European countries do. It has been a regular ask, when the UK Steel Council used to meet, from the sector and from trade unions, and the UK Government understood very well that it was a call where you could see a lack of equivalence with competitor European countries.

I completely agree with you that we need an active Government that is prepared to take ownership and to intervene to make sure that we have the ability to own the future as opposed to importing it from other parts of the world. That is part of what is at stake today.