5. Urgent Debate: Job losses at Tata Steel and the future of the steel industry in Wales

– in the Senedd at 3:44 pm on 24 January 2024.

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Photo of Elin Jones Elin Jones Plaid Cymru 3:44, 24 January 2024


The urgent debate is next this afternoon on job losses at Tata Steel and the future of the steel industry. And I call on Luke Fletcher to open the debate. 

Photo of Luke Fletcher Luke Fletcher Plaid Cymru

Diolch, Llywydd, and thank you to Members for agreeing to make time for this debate. As I mentioned yesterday, in proposing this debate, we did so because of the strategic importance of the steel industry, an industry whose products we all rely on every day. To illustrate, did you drive to work or take public transport? Well, your car, your bus, your train is steel. Did you turn your radiator on, or use your fridge to grab milk for your cereal? Well, your fridge, your radiator—steel. The capacity to produce steel is fundamental to any plans any of us might have in our own homes, but also to develop our infrastructure, protect our national security or grow and green our economy.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 3:45, 24 January 2024

To put it as plainly as I can, there is no path to net zero that doesn't involve domestic steel production. That's why it's important for us to think about the future of this sector. And I say this with all due respect, but that's why the lack of urgency, vision and ambition over the last decade or so from central Government has been disappointing. We're not talking about a nice to have; we're talking about one of the most important resources and production capabilities a country can have. 

Now, I fully recognise that the UK Government have stepped in with £500 million and £100 million transition fund as well. We heard from the economy Minister and First Minister yesterday about the £3 billion on the table for the UK-wide sector from UK Labour, if they win the general election, but these sums come nowhere close to meeting the scale of the challenge. And I'm not saying this to make a political point; I'm saying this because it's fact. We're either serious about green steel or we aren't.

We only need to look at what's going on elsewhere to see the scale of investment needed. Take Germany, where we have a range of state-aided projects to protect domestic steel production, approved in 2023 and 2024, that we can compare our situation with. And I'll apologise in advance for my pronunciation of some of these places. The first one was a package of €2.6 billion to Stahl-Holding-Saar in one region alone, approved this year. The second was a €550 million direct grant, with an additional conditional payment mechanism of up to €1.45 billion, to support the ThyssenKrupp Steel Europe in 2023, and a third, in 2023, of €1 billion to Salzgitter Flachstahl, all of this for decarbonisation. We also heard yesterday about the €50 billion fund to support decarbonisation in high-energy sectors, also in Germany. We have a long way to go to match that ambition. 

Of course, another concern we have around the proposal at Port Talbot is the focus on the electric arc furnace. It's not a concern directly with the furnace itself, because electric arc furnaces have an important role to play in the steel industry. The concern is with the loss, as a result of an electric arc furnace, of capacity to produce primary steel. Diversification of steel production is important. If we lose the capacity to produce primary steel, we will be the only G20 country unable to do so. And this isn't merely a symbolic point; it's an important point to consider, especially in an increasingly hostile world.

Electric arc furnaces rely on a supply of scrap steel to recycle it into new steel. We've heard much about the quality and the grade of that steel. Now, according to Tata, the technology has come a long way over the years, to a point where they believe the grade won't be as big of an issue as initially thought. While that is welcome news on the quality of steel that may be produced under current proposals, though we do wait to see the reality, there also remain questions that need to be addressed: firstly, do we have enough scrap steel available to us in the UK currently to meet demand? Some would argue that we don't. Secondly, what happens if demand for scrap steel increases globally, which it will, because we aren't the only ones investing in electric arc furnaces?

Putting all our eggs into the electric arc furnace basket is a costly gamble. Investment needs to be diversified. We know that other options are available. DRI has been discussed—direct reduced iron—hydrogen, another. And of course, on hydrogen, yes, it's true it's a way off from being ready, but it's precisely at this moment that investment in it is needed to make it viable. If investment isn't forthcoming, we'll fall even further behind the rest of Europe and future generations won't thank us. We come back to this point of investment. The reality is that the state will need to step in. That's recognised across the world. I've briefly touched on how the world is becoming increasingly hostile. Given these factors, given the strategic importance of steel as a resource, it makes sense that the state increases its stake in the industry.

Now, of course, Plaid Cymru has talked about how all options, including nationalisation and co-operatisation, must be on the table. And these are not new ideas, by the way. For those of us in post-industrial communities, nationalisation is not a foreign concept. Look at Tower colliery in the 1950s, which, subsequently, in 1994, was bought out by the workers, the only deep mine to survive the wave of closures. And, if you want a steel-specific example, look at the Basque Country, where co-operative steel thrives and underpins a successful industry. For much of their history, communities like Port Talbot have had decisions made for them. As we move into the future, that needs to change.

Llywydd, as I said at the beginning of this contribution and during my pitch for this debate yesterday, the need for a serious debate on the future direction of the steel industry in Wales is desperately needed. I've spoken with many Members here over the course of the last few months and, on this subject, there isn't actually much that divides us. We all agree on the importance of the steel industry, but, if we are serious about its future, now is the time to take a new path. I look forward to Members' contributions today and to continuing much of this work beyond today's session. Diolch.

Photo of David Rees David Rees Labour 3:50, 24 January 2024


Thank you, Luke, for calling for this debate this afternoon.

Photo of David Rees David Rees Labour

For the first five minutes, I agreed with everything you said, wholly. Llywydd, since last week's announcement from Tata, communities across my constituency of Aberafan wake up every day with anxiety and uncertainty for their futures. For my entire life, I have lived in a community where the steelworks has always been in sight. I pass it every day when I come here. I see those two steel dragons breathing fire from their bellies and producing the liquid iron that is used to make the steel that goes all over the globe—actually, including this building. The works has given a livelihood to family members, neighbours, friends and people I see every day. I have met constituents who are third and fourth generation steelworkers, children who've aspired to work in the works, and brothers and sisters have been there, their mothers and fathers have been there. There are local companies whose order books are almost entirely based upon their work in the steelworks, and the retail and hospitality businesses surrounding the plant, which count on steelworkers coming in and spending their money. 

Now, Port Talbot is known as a steel town, but it's not just a term to us; it's a proud badge of honour that we wear. It's a way of life for many thousands of people, spanning over generations. And as Alan Coombs, Community union officer has said, steel is in our DNA; it has shaped the community of Port Talbot the same as it has shaped many others across Wales—Llanwern, Trostre, Shotton. But following the announcement, people ask, 'What now for steel?', 'What now for our town?' And for the UK economy, not just for Wales's, it's a foundation industry and the consideration of the UK not having the ability to make virgin steel is one that we should all regret and challenge. 

Llywydd, this is not the first time I've stood in this Parliament to speak about the future of this plant and its workforce; Members will remember 2016, when we were recalled before the election, and that was because there was a threat from Tata to sell the site or close it. The prospect then put at risk 6,000 jobs in Wales and up to 40,000 jobs throughout the UK. There were many questions that I put to the Government then and they're still applicable now. However, we overcame that threat and we will overcome this threat. Today, we do need to look at the future. I welcome the £500 million deal between the UK Government and Tata that was announced last September and an investment that was for the installation of a single electric arc furnace and formed part of a £1.25 billion deal. Investment is always welcomed. But steelworkers felt, naturally, uneasy about what the proposals were, because we didn't know the details—no matter what I've heard from Ministers in the UK Government, there were no details at that point—but they accepted that steel needed a green future. However, there were different options available on how we get to that future, what will a transition look like. And here we are, January, and Tata have now announced their plan to shut down both blast furnaces this year, with 2,500 jobs to go from Port Talbot alone. That is totally unacceptable. What we will now see in Port Talbot is a plant that will, until the EAF is built, import virgin steel from Tata's thriving plants elsewhere, in Holland and India, and that's to be rolled into coil here. That's not a fair and just transition. How can 2,500 job losses in less than nine months be a fair and just transition?

What a sorry position we have found ourselves in. We will have gone from one of the leading countries in the world for the production of quality steel to mere importers of it. There is another way, and I'm grateful to my trade union colleagues in Community, GMB and Unite, for working hard over the last several months to produce that credible alternative plan for steel in the UK, which could save jobs and keep us as a country that produces its own steel. They commissioned leading experts in steel production—it's not them, it's experts in steel production, Syndex, who produced the report that came up with that alternative to this drastic, cliff-edge decision. Now, I encourage everyone to follow and support that. I'm also encouraged by UK Labour's £3 billion green steel pledge. I know Luke said it was not enough, but it's more than enough from what is being put by the UK Government at the moment. I understand what he said about the €4.5 billion in Germany, at which part, if we were still in the EU maybe we could get some more money from them as well, but there we are. Now, that directly invests in proper technology, in new technology, and it won't be just for EAF, it'll be for the reduced iron as well, and that is important; it's just like Holland is actually doing with Tata.

My community, Aberafan, deserves to know what future they face and what the Tories have in store for them, because, at present, all they can see is the UK Government essentially giving Tata money to export jobs abroad, import carbon emissions, and saying to them, 'Here's the money, cut the emissions,' and that's it. It shouldn't be that way. Unfortunately, or fortunately for me, the only prospect is a general election where Labour get into power and actually have a plan and put that plan into action. It's a credible plan, working with the trade unions. In the meantime, I will continue to fight for everybody in Port Talbot, for every single job, every single business, every family affected. I urge Tata to carefully think about their plans. Don't make irreversible decisions now that will ruin so many lives and ruin so many businesses. There is a credible plan: take advantage of it. 

Photo of Tom Giffard Tom Giffard Conservative 3:56, 24 January 2024

Port Talbot is a town built on steel, and a town shaped by steel. Having visited the Port Talbot plant on a number of occasions since I was elected to this Senedd nearly three years ago, the stupidest question I ever asked was, 'How long have we been making steel in Port Talbot?' Because the answer is basically forever. Before the mass industrialised plants we see across the world today, our Celtic ancestors used a primitive method of steel making, using the raw materials they found in the hills overlooking the site of the current steelworks to make a very early form of steel.

Port Talbot is a town where steel is wrapped into the history and into the culture of the place. The blast furnaces dominate the skyline, towering over the streets where people go about their daily business. Even if you don't work in the steelworks yourself, they're such an ingrained part of the town of Port Talbot that being without them would be unimaginable. For many of us that grew up in south-west Wales, seeing the steelworks out of your window on the M4 after a long trip away was the sign you knew you were home. Imagine San Francisco without the golden gate bridge or Paris without the Eiffel Tower. Port Talbot isn't Port Talbot without the steelworks in its skyline.

So, the loss of jobs we've seen announced by Tata Steel will not only be devastating to the workers directly affected by them, it will challenge the very notion of what Port Talbot is. A loss of 2,800 jobs in a town the size of Port Talbot is a loss that will be heavily felt, there's no doubt about it. But it particularly looms large when you consider how integral those jobs are to the town itself. In these difficult times, I think it's really easy to be a pessimist about the future of a town like Port Talbot, but, despite everything, I continue to be optimistic about the town and what its future could look like. The UK Government has unveiled an almost unprecedented £100 million support transition fund to support workers to help train them to find new employment. That's nearly £36,000 for every one of the 2,800 jobs that look set to be lost. The general job market in the UK at the moment is one where there are more job opportunities than those that can fill them, so training workers up to be able to fill those roles will be vital.

But, for the town itself, I genuinely believe the proposed free port has the opportunity to change the game for the town of Port Talbot and for the region as a whole—the Celtic free port project, which will see an investment corridor built across the ports of Port Talbot and Milford Haven, with green energy projects at their core. The free port could see 16,000 new jobs delivered and £5.5 billion-worth of investment, making a transformational difference in a pair of communities that sorely need it.

Photo of David Rees David Rees Labour 3:59, 24 January 2024

Thank you for taking the intervention, Tom. I appreciate what you're saying, and I'm looking forward to the free port; I've supported it from day one. But do you agree with me that that is years down the road, and it's not going to happen next year or the year after or the year after that? It's still a long way off. It's the future, but it's a long way off, and this cliff edge is now, and there's a huge gap between the two.

Photo of Tom Giffard Tom Giffard Conservative

Yes, thank you for your intervention. The very next line of my speech addressed that.

I appreciate the ambition here is longer term, which is why the short-term measures, like the UK Government transition fund, are so essential. I called it a UK Government fund, but, of course, it has Welsh Government representatives as part of it. But I call it a UK Government fund because it's the UK Government that has put forward the money—£100 million of it, to be exact. But not one single penny has been put in by the Welsh Government—not one penny. We heard yesterday, and I'm sure we'll hear it again from the economy Minister today, that the Welsh Government stands ready to support workers in Port Talbot, but, unless those words are matched with their cheque book, they're nothing but empty platitudes. Workers in Port Talbot deserve the Welsh Government to literally put their money where their mouth is, step up and financially support the steelworkers by contributing to that transition fund. Otherwise, workers and the town of Port Talbot will ask the same question that the BBC put to the economy Minister last week: where has the Government been?

Photo of Sioned Williams Sioned Williams Plaid Cymru 4:00, 24 January 2024


It has been a tortuous few weeks for thousands of people I represent since we heard that announcement that the heavy end of the steelworks would close entirely. So much uncertainty then, so much worry, but also a desperate hope that the plan that was presented by the unions would persuade Tata to change their decision, to make a more gradual change, thus avoiding such sudden and significant redundancies, and avoiding the catastrophic situation we are now facing. There was also hope that the Governments at both ends of the M4 would be able to deliver that just transition to the green future that they are fully aware is needed by their industry and our planet to ensure fairness.

But what we had was contempt: Westminster’s contempt towards Wales, with Rishi Sunak refusing to take a call from the First Minister of Wales. It’s appalling. Contempt also towards the workers who have been thrown aside in the same way as our miners and their communities were thrown aside. And they are angry; they feel that a major injustice has been done here because there are other options available. Losing these jobs, and losing them in this way, was not inevitable. They remember that the Westminster Government bailed out the banks in 2008, so why not rescue their industry, why not save our steel, steel that is vital for creating that green future that is now seen as the altar on which their livelihoods, their skills, their identity and their communities are now being sacrificed?

We cannot afford to lose the skills or the jobs, nor can we afford to lose faith either in a net-zero future, but this will be the inevitable outcome if we don’t see a proposal on the table that will enable us to pause, take stock and overturn this decision. As well as the proposals put forward by the unions, it is clear that additional investment is needed to make this a reality. There are also alternative models that could be adopted to ensure that we retain jobs and retain our ability to produce primary steel here in Wales and in the United Kingdom. This could happen via nationalisation, and by doing so, creating a co-operative Welsh steel company. We need to think creatively and consider all options. Wales and its workers are being betrayed once again by the Westminster Government, and our communities are, once again, powerless to prevent the economic and social devastation that will follow as a result.

We must remember that the Tata steelworks are located in a county that has employment levels below the Welsh average and that levels of economic inactivity have increased there. Neath Port Talbot is overrepresented in every category under the Wales index of multiple deprivation, and this is also true in terms of local income deprivation, salary deprivation and health deprivation. So, what is the Welsh Government here doing to urge the UK Government to step in to consider all options, including public control, stepping in to do more to avoid the devastating impact on the local community, on Wales’s economy, on the UK’s ability to produce steel and on our journey towards net zero?

Photo of Sioned Williams Sioned Williams Plaid Cymru 4:04, 24 January 2024

As Rhun ap Iorwerth put to the First Minister yesterday, it's not just about the money—it's also about a plan. And it's now even more crucial that we see support for initiatives that retain and increase the skills base needed for the future in the Port Talbot area.

Last Thursday, on the day the news started to reach us from London, I was in Port Talbot, meeting with a local fabricating and welding company, JES Group. They've launched a skills academy, a centre of excellence, for the development of fabrication and welding skills, of which there is a shortage across south-west Wales—an industry that is one of the very few offering commensurate salary opportunities higher than the mean average quoted for workers in the region. The academy they're developing can run a full range of specialist training courses for anyone, from local school pupils and apprentices, right through to existing welders requiring continuing professional development, and all those looking for pathways into the industry. The objective is to deliver a programme that can upskill and reskill workers, who could then take advantage of the opportunities presented by the renewable energy industry. 

Will these kinds of initiatives be supported in any future Welsh Government strategy? Would the Minister support the use of funding available, from Government, Tata or the transition board, for this type of local development? We can't hope to benefit from the opportunities provided by the renewable energy industry and the drive to a net-zero economy without a highly skilled labour force, which is now being put at risk by the Tata announcement. Because people have left already. They are leaving, and may be forced to leave to support their families, to find a future for themselves. So, what solutions do you have, Minister, for them if the will and needs of Wales are once more ignored?

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour 4:06, 24 January 2024

Primary steel making in Wales, and in the UK, indeed, will be destroyed once and forever by the decision of the UK Government to enable Tata to shut down the blast furnaces in Port Talbot. With the end of primary steel making on these islands, we will be the first developed country in the world to stop producing its own raw steel. The implications are seismic for Wales and for the UK. In respect of national security, our defence sector will be exposed to the geopolitical perils of imported steel, as will our car industry and other sectors. The hoped-for manufacturing using UK steel for our latent offshore wind industry in Wales will be undermined before it even begins.

The thousands of direct jobs in Port Talbot, hundreds of which are in the Bridgend area, plus the supply chain across the region, and, indeed, the UK, will be calamitous, and the ripple effect through the local and regional economy will be felt for generations, again. Under former Prime Minister Thatcher and MacGregor, there was at least a rationale—it was a hard, neoliberal rationale, but a rationale nonetheless—of causing deep pain through harsh cuts to the steel industry to make it competitive in the global economy. Whilst the steel industry was decimated and steel communities were devastated, it was done by the Conservatives of the time under the pretext of creating a more productive but much reduced steel capacity. 

But this time, under Prime Minister Sunak, there is not even the flimsiest attempt to save primary steel making. The Conservatives of the UK Government have given up entirely on steel and on these communities. Whereas Prime Minister Thatcher believed there was some sort of future for steel, slimmed to within an inch of its life and with a workforce having to accept massive cumulative changes over the years to their terms and conditions, the current Conservative Government and Prime Minister are condemning primary steel making on these islands to the history books. 

The former Chancellor, now Prime Minister Sunak, does not believe our steel is worth the cost of saving. This is unadulterated, unrestrained capitalism at its most brutal: 'Let the market decide. Governments are impotent. Communities will suffer, families will suffer, but hey, that's just the way of this globalised, free-market world.' But there is an antidote to this unfettered global capitalism, and there always has been, if we—we—choose to use it, because it's us—our democratic voice and the actions and inaction of our Governments, too. We can choose to shape what happens here. But, at the moment, inaction is the order of the day for the UK Government.

The failure to invest in primary steel making is a political choice made by the current Conservative Prime Minister and his Cabinet. The current Secretary of State for Wales is today going around the tv studios as a cheerleader for the demise of the industry, asking us to applaud as the curtain comes down for the final time on primary steel making, because the UK Government has provided £500 million for another show across the street, because that's what we're now being offered. Electric arc and recycled steel is a vitally important part of a decarbonised steel future, of course it is, and we should be investing in this, but to turn out the lights on primary steel making at the same time when other countries are maintaining their investments, and the best are indeed seeking to decarbonise primary steel making—well, this is unforgivable. We are being presented with a false choice by the Conservative Government: it's electric arc or nothing. [Interruption.] I won't, because I need to—. Go ahead. Yes, I will. Go on, please.

Photo of Tom Giffard Tom Giffard Conservative 4:10, 24 January 2024

That's a highly politicised attack on the record of the UK Conservative Government when it comes to steel making, but shall we have a look at Labour's record when it was last in government? I know you were a part of it, Huw. Under Labour, steel production between 1997 and 2010 fell by almost 50 per cent; half the number of people worked in it in 2010 compared to 1997. And Ed Miliband—you might remember him—the whole time he was leader of the Labour Party, never mentioned steel at the despatch box once. Labour have an abysmal record when it comes to steel in the UK and it's time your comments reflected that.

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour

The Conservative Government is now shutting the doors entirely on primary steel making, and that's the hard reality. There are no romantic words about the steel industry that will make up for that. There is a political choice being made by the Conservative UK Government—his UK Conservative Government—at this very moment.

We have been given £500 million in exchange for losing thousands of jobs. 'Be grateful for small mercies', we are told. 'Accept the pain' once again. But there is a different and a better way forward should this UK Government, or a different UK Government, choose it; there's a different political choice. The choice is to invest also in green primary steel making. It's put forward in the alternative multi-union plans supported by the steel unions, Community, Unite and the GMB. This would secure the future of Port Talbot steel making, protect production capacity and the future of all the downstream plants, which have to be mentioned as well, and avoid any compulsory redundancies. The company has acknowledged it proposes a credible alternative strategy for steel decarbonisation, but it needs a UK Government to step up with the backing for this plan—a UK Government that believes in the necessity of primary steel making as a matter of sovereign security, as well as economic importance. A Government that believes in and invests in active industrial strategy. And, by the way, the German, the French and the Spanish Governments are all committing billions to secure the future of this strategically important steel industry.

The Labour Party have committed £3 billion in the green steel fund, and to using it to support a just transition at Tata Steel. Tata, to their credit, have stayed, despite difficulties, with steel making and with Port Talbot, until now, but they are now talking to the only government at a UK level, the Conservative Government, which is looking for the cheapest option, not the best. So, I say to Tata, as David, my colleague, said, 'Pause; because there is another plan on the table. The steelworkers will not surrender so easily our sovereign steel and there is another Government around the corner. Wait; sit down with the unions, sit down with the Labour Party, plan for a better future and a just transition for Port Talbot and for Welsh and British steel. Let's not export our jobs or our carbon emissions overseas.'

Photo of Elin Jones Elin Jones Plaid Cymru 4:12, 24 January 2024


Chair of the economy committee, Paul Davies.

Photo of Paul Davies Paul Davies Conservative

Diolch, Llywydd. I’m grateful to take part in this extremely important debate as Chair of the Economy, Trade and Rural Affairs Committee.

There can be no underestimating the impact that Tata's announcement will have on the workers and community in Port Talbot, but also at Tata's downstream sites at Llanwern and Trostre and the wider supply chain. As has already been said, producing steel has been the lifeblood of the community in Port Talbot for decades and decades; however, the impact of the steelworks stretches far outside the town. Tata is an economic titan in Wales, currently making up 3 per cent of Wales's economic output. The jobs in their plants are highly skilled and well paid, and the knock-on effect of the production of steel is that it supports thousands of people and many, many local businesses.

Yesterday, the Minister referred to Professor David Worsley from Swansea University, who has said that there are at least three additional jobs reliant on every one direct job in the steelworks, and, on some counts, potentially up to five. And so there are enormous ramifications from Tata’s announcement for the whole steel industry, the wider Welsh economy and for UK steel making. So, firstly, I want to reiterate that the Economy, Trade and Rural Affairs Committee is united in our support for the workers affected by this announcement and our thoughts remain with them at this very difficult time.

Last year, the committee heard from the Secretary of State for Wales when the UK Government announced its £500 million support package for Tata Steel to decarbonise and move to electric arc furnace production. The committee also heard from the unions about the potential impacts the job losses announced last week would have, and about their proposed alternatives. And in response to the announcements last week, the committee has now called on Ministers here in Wales and Westminster to meet with us again as a matter of urgency to look at what more can be done to seek a more just transition—a transition that saves Welsh jobs and protects our national interest. [Interruption.] I give way to the Member for Aberavon.

Photo of David Rees David Rees Labour 4:14, 24 January 2024

I thank you for taking the intervention. Can I ask you whether, in committee, you asked the Secretary of State for Wales were there any conditions placed upon the agreement? And if you didn't ask that, will you ask it next time he comes?

Photo of Paul Davies Paul Davies Conservative 4:15, 24 January 2024

Well, I just want to reassure you as a committee that we will be scrutinising this issue as much as we can, and we will certainly ask those questions. Of course, the committee will continue to engage with Tata Steel, and senior executives have confirmed that they will engage with the committee and answer questions as well on their plans, and I'm grateful that the Minister for Economy has agreed to come before the committee again on this critical issue, and it's positive to hear that he has been able to secure a meeting with Minister Ghani to discuss the future of Welsh steel.

Now, as Members know, Port Talbot steelworks is the biggest single carbon emitter in the country, and I think all Members agree that the production of steel needs to be greener in the future, but the important thing is that there is a fair transition that ensures there is still virgin steel-making capacity in Wales and indeed in the UK. Wales simply cannot afford to lose the skills critical to delivering a future green economy or to see irreparable harm to the communities that have been reliant on steel making for so long. This is especially true for apprentices, who are learning skills to support our green future, and the uncertainty they currently face is indeed heartbreaking. Developments must be made to retain and redirect that skill capacity for the jobs of the future. Now, crucial to this is the need for constructive dialogue on all sides, and there must be meaningful engagement between Tata Steel, the UK Government, the Welsh Government, the unions and, more importantly, the workforce. It's so important that all avenues are being fully explored to mitigate the very worst possible outcomes of last week's statement.

Llywydd, the committee is keen to play whatever role it can to ensure that this matter is fully scrutinised and that the committee gets the answers that the steelworkers, their families and the wider community deserve. It's absolutely essential that the UK Government and the Welsh Government work together to support the workforce and the wider community, and I hope that the transition board will have a very important role in developing that relationship so that a fair and just transition can be made.

I understand that the Minister for Economy is one of the vice-chairs of the transition board, which has already started meeting to consider how steelworkers can be supported in the move to decarbonise operations at Port Talbot. As has been rehearsed, £100 million has been allocated to that transition work to date, and perhaps in responding to the debate the Minister could tell us a bit more about exactly what he wants to get out of the transition board's work and how that money will be spent.

Of course, as the Minister said yesterday, there are no guaranteed outcomes, just a series of proposals, and nothing is actually set in stone. So, now is the time for urgent conversations to take place on how Tata can deliver a fair and just transition to greener practice in a way that supports workers and retains those vital skills.

And so in closing, Llywydd, I can assure Members that the Economy, Trade and Rural Affairs Committee will be monitoring the developments very, very closely indeed. We will leave no stone unturned in scrutinising Tata Steel and both Governments and do whatever we can to help secure a longer, fairer transition for the Welsh sector for years to come. Diolch.

Photo of Peredur Owen Griffiths Peredur Owen Griffiths Plaid Cymru 4:18, 24 January 2024

I want to talk briefly about the wider impact of the decision by Tata. Whilst there is no immediate impact reported on the Llanwern site in my region as a result of the decision to close the blast furnace at Port Talbot, the picture does not look good in the long term. Tata Steel said that around 300 jobs at Llanwern could go in three years' time as a result of the cold-rolling assets being consolidated and rationalised once investments are completed at Port Talbot. I'm devastated for the future of Port Talbot and other Tata sites like Llanwern. These are well-paid jobs that cannot be replaced easily, so losing them will be a big blow.

On the day that the news broke out in Port Talbot, I spoke to an ex-worker at the Ebbw Vale steelworks, who described the impact of the steelworks closure on the town two decades ago, and the implications for the vast supply chain. He described how the job losses at the steelworks, whilst being devastating, only told part of the story. Many more jobs were lost in the supply chain, and the knock-on effect on the town centre was catastrophic. That is my worry for Port Talbot. That's my worry for Newport, if job losses at Llanwern come to pass in three years' time. This is why we need to ensure that everything is on the table now when it comes to saving our jobs and saving our communities. Diolch yn fawr.

Photo of Carolyn Thomas Carolyn Thomas Labour 4:20, 24 January 2024

I think we all agree in the Senedd, cross-party, that the UK needs to produce its own steel, as the WLGA states, for so many reasons: security of access to product rather than relying on the market; importing from across the world in boats, which add more carbon, and maybe created in a less environmentally sustainable way.

I was disappointed about the misinformation being shared again that it's down to a green energy strategy and net zero, which it's not. We need virgin steel produced here to make wind turbines. We all support the move to arc furnaces as an additional process to be able to recycle and recreate steel, but it should be transitional. I don't think the electric arc has planning permission yet, and could be four or five years away. Job losses will be in the thousands. Many are high skilled, well paid, and difficult to replace. Their loss will be hard for many years to come, and Wales still bares the scars of the 1980s and Thatcher.

We need to take a reality check. Lives will be devastated, communities will be devastated, and we are talking people, their livelihoods, their way of living—devastated, gone. We need to measure the impact on health, welfare, families, children and anxiety. What measure is being given to that? What impact assessment? Only yesterday we were discussing rising child poverty in Wales. Public services that would normally step in and throw a blanket of security are struggling from austerity and inflationary pressures. Welfare benefits have been under attack for years. It takes five weeks for universal credit to come through.

The UK Conservative Government said they're investing £0.5 billion, which isn't enough. They are investing £20 billion in carbon capture and storage—a technology that is well behind the curve of advancements. It's not been developed yet properly. There's new better technology coming forward all the time, from turning carbon dioxide into pellets to restore soils and increase crop yields, through to using carbon dioxide in precision fermentation to create food. Progressive technology solutions are constantly being developed that threaten to make a large and expensive project such as HyNet obsolete before it's even started. It's raising many issues regarding undergrounding of pipes and offshore storage in north Wales and greenwashing charges.

So, I call upon the UK Government to take stock, move that investment now to where it's immediately needed now to save communities, to save people. The alternative is unthinkable. Thank you.

Photo of Altaf Hussain Altaf Hussain Conservative 4:22, 24 January 2024

As I said yesterday, the announcement on Friday was widely trailed as a devastating blow for Port Talbot and my wider region. My thoughts are with those steelworkers and subcontractors who face losing their job in the coming months.

While there has been much criticism of the deal struck with the UK Government, let's be real—it is better than no deal. Without significant investment from the UK Government, we could be debating the closure of the Port Talbot steelworks. This worse-case scenario is a real possibility, and Plaid Cymru's talk of nationalisation and strike brings it ever closer. Do I think the rescue plan is perfect? No, it's not. It's far from it. While I accept the need to transition to cleaner, greener steel making, I don't accept that we have to take this cliff-edge approach. I would like to see a fair transition that maximises jobs at the plant that would see blast furnace 5 remaining operational until it reaches end of life.

I know that Tata have commissioned independent engineering studies of the proposals put forward by the union, which concludes that continuing blast furnace production while constructing the new electric arc furnace was not feasible due to the cost and risk involved. Well, I am sure we can collectively find a way forward that maximises production and minimises job losses. Minister, the most important issue seems to be around the coke ovens and the fact that work on the arc furnace can't be undertaken safely whilst they are in operation. This would mean the plant would have to rely upon imported coke to continue blast furnace operations. What can the Welsh Government do—[Interruption]. Yes.

Photo of David Rees David Rees Labour 4:25, 24 January 2024

I thank you for taking the intervention, and I'm listening to you here very carefully, but I will say this: there is imported coke now. They're actually not using just the coke from the coke ovens; they're importing it now, so they can keep going, as they are, without those coke ovens, for one blast furnace. No. 4 can keep going. It was built in 2014; it's still got a long life to go.

Photo of Altaf Hussain Altaf Hussain Conservative

What can the Welsh Government do to ensure that Port Talbot can import coke as simply as it can be produced on site? We have to accept that keeping blast furnace 5 running is just a stopgap until the arc furnace is operational. BF5 is end-of-life, and will have to shut down in a few short years.

The unions would have us believe that we can carry on making virgin steel at Port Talbot, and even double production by switching to hydrogen-powered direct production of iron. Whilst this technology is promising, we're still many years away from it becoming commercially viable. The closest to production-ready are the Swedish hydrogen breakthrough iron-making technology, or HYBRIT, a corroboration between state producer SSAB, mining company LKAB and Vattenfall. They envisage being comercially viable by the end of the decade. It is clear that Tata are not prepared to take the risk of investing in this unproven technology, and are wedded to the steel recycling route. The UK is the biggest exporter of scrap steel, so from an environmental standpoint, it makes sense to go down this route. Hydrogen-based iron making might not appeal to Tata, but there is nothing stopping the Welsh Government and the universities investing in developing the technology and spinning out their own green-steel production. Whatever route we take, we need a credible plan, and that will require everyone working together to secure the future of Welsh steel, finding solutions rather than apportioning blame. Diolch yn fawr.

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 4:27, 24 January 2024

Yesterday I chaired a net-zero round-table in the Senedd where we discussed the actions needed to achieve Wales's net-zero ambitions, and the point was made, and it was made powerfully, that many of the technologies needed to move us towards net zero require steel. If we end up with a furnace that can only produce recycled steel, the point's been made, we won't be able to use that for the construction of things like wind turbines—all of these different products that are so necessary for the net-zero future that we all agree we have to reach. How could anyone think that we can do this now apart from exporting our pollution elsewhere? Where's our strategy for low-carbon steel for our future low-carbon economy? We cannot get rid of our emissions by shutting down our industry and destroying our communities. Now, I appreciate the frustration of the Welsh Government that they are, in large part here, shut out of decision making on this issue, just like the workers in days gone by, who were locked out by the large steel owners in the industrial revolution, but they must demand action.

Now, isn't it a rich irony that those workers yesterday going to London to demand that action went on train tracks that were probably made here in Wales? And what happens when we cannot provide those tracks? We have to question whether we can afford to lose the ability to produce virgin steel in the UK. We won't be able to move towards net zero without it. This is not a luxury resource. If we lose control over it, all that's going to happen is that we will have to import dirtier steel at extortionate prices from companies like Tata in places with worse working conditions, all the while contributing to importing emissions. It is far cleaner, more efficient and more logical to produce it here.

We need Port Talbot to be fully functioning for the future of Wales, and my colleague Liz Saville Roberts said yesterday in the Commons, and my colleague here, Sioned, has made the point as well: if the Conservative Government can take over the banks when the markets fail, why not steel? There is hypocrisy in Tata's position to close operations in Wales on the basis of a green transition while continuing to export blast furnace-manufactured steel from non-green sites in India and the Netherlands. This decision is not about net zero; it is about politics and money, and Rishi Sunak couldn't pick up the phone. He could not find the time to speak to Wales's First Minister about the thousands of jobs that are on the line. He didn't think it was worth his time to speak to him. What an insult to the people of Port Talbot. What an insult to the people of Wales. Entire families will be worried sick about what the next 12 months will mean for them. Local businesses won't know where to turn for certainty. This isn't only a problem for Port Talbot, it doesn't only affect that one town or this one industry. The consequences of Tata's negligence towards their workforce will be profound, and Rishi Sunak couldn't pick up the phone. That tells you all you need to know about what Westminster thinks about us.

We in Plaid Cymru believe this is not as good as it gets. We will continue to fight for the people of Port Talbot, for steel makers across Wales and for our communities not to be thrown on the scrapheap. We've been here before in Wales. The story of workers being abandoned is only too familiar to us, as is a negligent, cruel, cold Government in Westminster. It is a story we cannot allow to be repeated. People's lives should mean more than this.

Photo of John Griffiths John Griffiths Labour 4:31, 24 January 2024

We've heard some very powerful contributions already today, haven't we, in terms of the effects of the announcement by Tata and the approach of the UK Government. I thought my colleague David Rees spoke incredibly powerfully on behalf of those steelworkers in Port Talbot and all those other dependent businesses and the local community. I was very pleased as well that David described the situation right across Wales, including Llanwern in Newport East, because, obviously, Port Talbot is at the eye of the storm, but the ramifications spread right across our country, as Delyth Jewell has also said, and many others.

What strikes me, Llywydd, is, when you talk to people, it's not only the steelworkers and their communities that very readily understand the argument that the UK needs a steel industry, for those reasons that other Members have set out, including Huw Irranca. It's so obvious to so many people that, in this modern age, with all the uncertainties, with all the war and conflict that's going on, a country that's serious about having a strong economy and looking after its people must have a thriving steel industry, including primary steel production. It's so important for defence, for manufacturing, for infrastructure, for construction, for renewable energy. It's not about the past; it's about the present and the future. And we know that that future can be a green steel future, and that's why I'm so grateful to the multi-union Syndex report that sets out not just the importance of getting to the green steel future, but how we get there. They've done some of the heavy lifting, haven't they, in setting out how that can be achieved, that we're not stuck with the current Tata-UK Government approach.

One of the huge frustrations is the timing issue, isn't it, that, as well as having that Syndex report, we have a UK Labour Government committed to providing the sort of investment that will see us through to that future that protects our jobs, our communities, our economic future. But we are where we are. It's up to the UK Tory Government when that next UK general election takes place, and it could be a year away. Trying to bridge that gap is just so frustrating and so incredibly difficult. And when we see our competitor economies, as we've already heard, putting forward that scale of investment that's necessary to protect their economies and their people, and knowing that we could and should do the same, but we're hamstrung by that current Tory UK-Government approach—.

And the other thing that I hear a lot from people that I think is so powerful and important—I hear it in Newport, which is still a town, a city, that very much values its steel heritage and its current steel jobs, several hundred well-paid jobs that we want to protect for the future, and all the dependent spend and suppliers in the local economy—. People in Newport understand all of this, Llywydd, and what they say to me is, 'Can we not learn the lessons from the mining industry, for example?' Communities didn't count for the Tories, did they? Jobs didn't count for the Tories. Timely transition that protected people for the future and found a way through to better times—none of that counted for the Tories then, and it doesn't count for them now. And in Newport, we have the example of the Orb steelworks producing electric steel. The case was made at the time: 'We need that electric steel for the UK for the electric car industry, for the renewable energy sector.' It wasn't accepted, it wasn't understood by the Tories in the UK Government, and now nearly everybody laments the loss of the Orb steelworks not just for Newport and the surrounding area, but for the whole of the UK.  

Llywydd, please let's learn those lessons. The UK Tories must think again. Look again at that Syndex report and take the decisions that Port Talbot, Llanwern, the steel communities all across Wales need for our futures.

Photo of Gareth Davies Gareth Davies Conservative 4:36, 24 January 2024

I'm pleased to take part in this debate this afternoon, and I'd like to put on record my thoughts and sympathies with the workers at Port Talbot affected by the news of the closure of the blast furnaces. As a Member for north Wales, Shotton steelworks isn't too far down the road from my constituency and it still employs over 700 people. So, I'd be pleased if the Minister, in responding to today's debate, could address the north Wales aspect and what that means, and what discussions you will have with the UK Government and Tata Steel to look at the prospects for people in north-east Wales as a result of this news from Port Talbot.

I anticipated the predictable attacks on the UK Government from Labour and Plaid Cymru politicians over the last five days, who have deliberately politicised this issue where there was no reason or benefit to do so. Whereas the Welsh Government and Plaid have been sniping from the sidelines and contributing nothing financially to the transition board, the UK Government have led the way in investing £500 million into the industry, £100 million into retraining and supporting affected workers, and a long-term ambition to invest in a Celtic free port with huge potential for the people of south-west Wales. 

This feeble and flimsy argument that the Prime Minister hasn't spoken to the First Minister is unfair. You have the phone number of the Secretary of State for Wales, and could phone him at any time, but have failed to do so as far as I can gather. He is a member of the cabinet with direct responsibility for Wales. How more senior can you get? That's the political—[Interruption.] That's the political point. [Interruption.] Nice to see that Plaid Cymru see this issue as funny. I don't—I don't, unfortunately. That's the political point of my contribution, but as a nation—[Interruption.] No, I won't, Hefin, no. Since you were also tweeting inaccuracies about me yesterday, I won't give you the pleasure. 

And in the nation of Wales and, indeed, Britain, we have a rich industrial history dating back many centuries, which has been and continues to be eroded away by global economics. There was one time when nearly every major city and town in Britain was characterised by the product it made—shipbuilding in Glasgow, potteries in Stoke-on-Trent, mining and steel making in south Wales and Yorkshire, to name just a few. And I'm interested in cars, and recently I've been refamiliarising myself with the history of car manufacturing in Britain, an industry that relied on British steel. 

On the way to the Senedd I recently swung by Longbridge near Birmingham, as it's only five minutes off the M5, and sadly there's not much to see these days as a lot of it has been replaced by housing. It's only used now by the Chinese-owned company, MG Motors, for research and development, but this was once home to one of the biggest car factories in the world, and at its peak it employed 25,000 people and was responsible for the manufacturing of well-known former car brands such as MG, Austin, Rovers, Minis, Metros, Maestros et cetera—you probably all remember them from history.

But, unfortunately, production stopped in 2005 and the previously well-known car names were then consigned to the history books. The only car that has survived is the Mini, which is now owned by BMW, and was long rumoured to be the only reason why BMW bought Rover in 1994, because they wanted to redevelop the Mini into the model that we see today. The political edge to this is the now unthinkable decision that the Labour Government decided to buy British Leyland, as it was then, and effectively nationalise it, making the company subject to crippling union influence and strikes during the 1970s and 1980s, which is also largely blamed for its eventual demise years later. Modern business and markets now dictate otherwise, and these car brands were often unreliable performance-wise and had many faults. But at least they were ours and we could say the now nearly extinct phrase, 'made in Britain’.

While that may be seen, as Members are alluding to, as a divergence from the subject matter by some, it’s a highlight of the generic decline of British manufacturing, of which Port Talbot is the latest casualty. [Interruption.] Yes, David.

Photo of David Rees David Rees Labour 4:41, 24 January 2024

Thank you for taking the intervention. I partly enjoyed the history lesson, but do you agree with me, and as just highlighted there, that there is a future industry—not a past industry, there's a future industry—if the investment in green steel and different approaches to green steel is made appropriately and no cliff edge happens? We'll have a workforce that can be trained, we'll have a place that can take it, we've got all the infrastructure in place—it's about the UK Government telling Tata, 'Hold your horses; let's do this properly.' 

Photo of Gareth Davies Gareth Davies Conservative

Yes, I agree, and it's been spoken about by Members on our benches in the last couple of days, looking at the possibilities of a transitional phase, and I can't see why that couldn't be achieved.

But that's the factual reality, for which no specific political party, person, is to blame, necessarily—as I alluded to, global economics and global factors. It's just a sad consequence of Britain becoming an importing nation, which I hope to see reversed, particularly with the new-found freedoms we have after leaving the European Union with Brexit in 2016. We've got huge potential for trade deals across the world, and, as I often say, the world is bigger than just the European Union. Thank you. 

Photo of Jack Sargeant Jack Sargeant Labour 4:42, 24 January 2024

Presiding Officer, from the other end of Wales, my community stands in solidarity with the people of Port Talbot. It stands in solidarity with the families David Rees has once again spoken up for in this Senedd. Presiding Officer, we too are a community built on steel. Many in Deeside live with the memory of the closure of Shotton steelworks in the 1980s, a closure that saw 6,500 jobs go in one day. Presiding Officer, this experience taught many that a Tory Government with no understanding of what a just transition looks like, with no understanding of working-class communities—in fact, with no care for working-class communities—. I heard the Member for South Wales West in the Conservative Party talk about records this afternoon, and I say to him that the record of the biggest industrial redundancy in a single day in western Europe is surely, for him, not a record to be proud of. And what we see today is exactly what many people saw in the 1980s, and I welcome my own party’s commitments, and I echo those calls for nothing irreversible to be done today, ahead of an upcoming general election.

I plead with Tata Steel’s executives to give Labour’s investment plan a chance. Presiding Officer, colleagues have already stated on these benches about my own unions, Unite and Community, and how they have worked closely with Keir Starmer and his team, and how they’ve worked closely with the Welsh Government and our economy Minister, Vaughan Gething. It is now vital, Presiding Officer, that Tata and their executives listen—they listen, they stand up and they protect steel production in the United Kingdom.

Presiding Officer, workers in my own community at Shotton steel have been in touch with me, rightly concerned about the impact of this Tory-backed Tata plan, and what that could have on their own jobs and their own families’ lives and life chances. Steel production on both sites is linked. I was grateful yesterday to the Minister for his response when I raised the important matter, and, following my own discussions with union reps of Unite and Community at Shotton, I’ve called many times for Wales and the UK to lead the way in developing the carbon-neutral steel of the future for all the things that we've discussed this afternoon, from wind turbines to all the other things in front of us, and the green technologies of the future.

Photo of Hefin David Hefin David Labour

In his speech, Gareth Davies said that you can't get higher than the Secretary of State for Wales. Of course you can. You can get the Prime Minister's interest. Would he agree that it's vital that the UK Government takes an interest in this at prime ministerial level?

Photo of Jack Sargeant Jack Sargeant Labour

I think it's absurd that the Prime Minister hasn't actively sought to speak to the First Minister, never mind—

Photo of Tom Giffard Tom Giffard Conservative

I'm not going to defend the Prime Minister not taking the First Minister's call. I think he should have taken the First Minister's call. But by the same measure, the Secretary of State for Wales called the First Minister on Friday and that call was not returned. Do you condemn that?

Photo of Jack Sargeant Jack Sargeant Labour 4:46, 24 January 2024

I will go back to Hefin's intervention, and I say to him I find it absurd that the Prime Minister hasn't made a conscious effort—[Interruption.] I'm answering Hefin David first—to speak to the First Minister of Wales.

And I will say, collectively, that everyone needs to get round the table to protect jobs. I'll say that's everyone. I say it to you, I say it to all Members of this Senedd, I say it to all Members of the Westminster Government. Because this needs to happen, doesn't it Presiding Officer? And it needs to be done in a way that protects jobs, but not only protects the jobs now, it protects the jobs of the future, it grows the industry of the future.

I thought the economy committee spokesperson delivered a very good speech today and I welcome his committee's inquiries. But I say to the Conservatives Members that the Tory-backed Tata plans as they stand at the moment ignore the opportunity to protect jobs. They ignore the opportunity to grow the industry. What they do is they plan to make thousands of people redundant in a cost-of-living crisis.

I ask them to think again, and I hope the Senedd will support that. If they are so confident in these plans that they've put forward and supported, perhaps they should test them more widely with the general public. Give steelworkers the opportunity to put their case to the public. Call a general election now. Diolch yn fawr. 

Photo of Jenny Rathbone Jenny Rathbone Labour 4:47, 24 January 2024

Many people have spoken eloquently about the devastation that happens when you chuck thousands of people on the dole, not least David Rees in defence of his own community in Port Talbot. But I remember covering the steel devastation that took place in the 1980s. I went to Shotton, which was then a bustling town, and saw what was happening.

We do indeed have a rich industrial history. The trouble is we've been far too arrogant in trying to maintain that. We simply haven't modernised our industrial economy. We've been plagued by short-term decisions, which have driven our descent from being the most prominent manufacturing economy in the world to being a complacent, arrogant service provider. And given all the challenges that face us as a result of the climate emergency, this simply will not do.

Tom Giffard, you talked about the opportunities of a free port. What future would there be for a free port if there was no steel? Because we should see the whole of the south Wales industrial cluster like a pack of cards. If we don't have steel production, where will the south Wales industrial cluster be? And I absolutely applaud Sioned for saying that there was a bailout of the banks into 2008, so why on earth are we not bailing out the steel industry. 

At lunchtime, many of us took the opportunity to go and speak to Wales & West Utilities about their proposals for a hydrogen pipeline running to Port Talbot from Pembrokeshire. Why is it going to Port Talbot? Because they know that there's steel production going on there and they need the energy that can be provided as an alternative green solution to the green production of virgin energy. That 130 km hydrogen pipeline won't be available until the early 2030s, so we have to have a proper transition plan, which is what is so sadly lacking from the UK Government. We have to—[Interruption.] Altaf.

Photo of Altaf Hussain Altaf Hussain Conservative 4:50, 24 January 2024

When I was here last time, I met Tata directors, and they wanted to have lunch with me. They came here, and I had to do that. At that time, one simple question I asked them, because at that time they were saying again that there would be 8,000 job losses. I don't know, with the UK Government, how much money they have put in, and with the Welsh Government, how much they have given them. One question that I asked them was, 'What are you doing for technology?' There was no answer. That was in 2015, and from there, they have not done anything to change the technology, and that is why we are suffering. 

Photo of Jenny Rathbone Jenny Rathbone Labour 4:51, 24 January 2024

I think what's happening, though, is that Tata is modernising. It's simply modernising elsewhere—in Holland or India—rather than in Port Talbot. As it's such a strategically important industry, it is vital that the UK asserts the need to have a strategic industry like steel.

The south Wales industrial cluster is the second biggest in the UK after Humberside. How can it survive with this short-termist decision of the UK Government to do nothing to save steel? And what will it mean for our net zero targets? How are we going to decarbonise our steel globally? Are we simply going to leave it to other countries to do it? More of that arrogance—that it's somebody else's responsibility.

The UK Government seems to think that we can simply dump our net zero obligations onto other countries. As has already been said—I think by Delyth, although it could have been by somebody else—. Anyway, the point is that if we are simply importing steel from countries where it's made with poorer working conditions and much higher carbon emissions, we are clearly not meeting our obligations to save the world from overheating.

Even China is taking this seriously. They are reducing their steel production because they know that they have to reduce their carbon emissions. What happens then? If steel production worldwide decreases, guess what? The price goes up. It leaves us completely at the mercy of the market.

The Syndex report, which I'm glad to to hear Altaf Hussain was supporting as well, gives us an alternative solution to enable us to continue with the expansion of our wind turbine industry. Where are they going to get the steel from, and will they simply go elsewhere if they can't get the steel locally?

What about our ambitious proposals offshore in the Celtic sea? They sure as hell need quality steel for the resistance of the waves as well as the wind. I really fear that the closure of virgin steel production in south Wales at Port Talbot could cause the south Wales industrial cluster to fall like a pack of cards.  

Photo of Elin Jones Elin Jones Plaid Cymru 4:53, 24 January 2024


The Minister for Economy now to contribute.

Photo of Vaughan Gething Vaughan Gething Labour

Diolch yn fawr, Llywydd. I'd like to start by thanking Members who have contributed to this debate, and to recognise a range of high-quality contributions, I think, to this debate, in both opening it, and recognising both Delyth Jewell and Sioned in the Plaid Cymru group for their own contributions, and, I thought, a very measured and impressive contribution from Paul Davies, Chair of the economy committee, and, indeed from colleagues behind me. Obviously, having direct steelworks in their constituency, John Griffiths and Jack Saregant can be expected to make contributions showing a real level of understanding. But I really do think that the standout contribution thus far has been from David Rees, and understandably so, given where Port Talbot is, and his history and connection to the workforce.

That leads me on to my first substantive point: the human impact of what has been announced, and what could still happen. It is raw and it is real in steel-making communities across our country. All of us need to start by saying that this is not over. There is a proposal that is yet to be formally consulted on; there is not a decision that is being implemented today. The worst thing that any of us, or people talking about the situation, can do is to collapse into a counsel of despair that this is somehow already over, and all we need to do now is to think about what to do with jobs that are guaranteed to go. The consultation must be meaningful. There is an alternative that I'll go on to describe and discuss again. Our job, surely, in this Parliament is to make the case for Wales, for the communities that we represent and to call on others to recognise not just our demand for justice for Wales from our geographic point of view, but actually, to recognise the cost of what would take place if those proposals were to be implemented. And the cost, as well as the human one, is a significant economic one.

Photo of Vaughan Gething Vaughan Gething Labour 4:55, 24 January 2024

I was pleased to hear Paul Davies recognise the words of Professor David Worsley from Swansea University that, of the 2,800 jobs that could go within the next three years, with 2,500 potentially going within the next 18 months, there is a multiplier of at least three and potentially more. So, within the next 18 months, we're talking of north of 10,000 jobs going from our economy right across south Wales. And then, if the job cuts that are slated for Llanwern go ahead, there will be 300 jobs, with likely an extra 900 on top of them in that wider economy. I don't think we should forget that economic cost and what it means in human terms if those people lose their jobs. And it's not just the volume of job losses, it is the reality of the fact that these are well-paid jobs that other people are then reliant on. And again, the point was made by a whole range of other people, from hospitality to steel fixers and contractors, to a whole range of other businesses. I was particularly interested in ITV Wales covering a window business that recognised that, without the money that comes from steelworkers in that town, they would be unlikely to have the business that they have, if they had a business at all. So, there's a real and significant economic impact. I've already discussed with the Confederation of British Industry, with Make UK and, indeed, with the Federation of Small Businesses about what might happen if these proposals were to go ahead.

I want to make clear again that this is not the Welsh Government's view of what a just transition looks like; it is far from that. I believe that offshoring jobs and offshoring emissions is exactly what we should not be doing in getting to a lower carbon future for our economy and our way of life. That is why we say again that we look for a bridge to the future, not a cliff edge. And the future economy will be one where we have to find lower carbon ways of generating wealth for us, for our families and for public services for our future. It's why I created Net Zero Industry Wales—to help set out a practical path to that future, with advice that gathers businesses together to think about what it is possible to do, because there are imperatives for those businesses, for their customer demands and expectations. And actually, Net Zero Industry Wales is already making progress on showing a path to a future that we could and should all be prepared to sign up to. And you think about those opportunities—we've described some of them already: from electric vehicles to hydrogen and what could happen with much greater generation of hydrogen. That's linked to floating offshore wind, and a free port opportunity that I think will be undermined in its impact if we don't see a significant level of employment and capability in the steelworks. And then also, of course, that future for people. Think about the apprentices who are already in the steelworks today, think about all those people who have young families and commitments, rents, mortgages—all of those commitments that will be undermined if they lose their work and cannot replace it with work of the same value. That was made very clear to me on Friday and on Monday when I met directly with steelworkers in Port Talbot.

It is also, of course, about today's economy. As I said yesterday, cans, cars and construction—they all rely on steel that is made in Tata's plant in Port Talbot today. The material that goes to Trostre to make every single can of Heinz baked beans and others comes from Port Talbot. You can't yet make those products just with steel from an electric arc furnace; you need virgin steel. You can't deliver all of the materials for our auto industry today, and again, Llanwern is one of the suppliers there. Again, they need virgin steel to be part of the mix to create those products. And when it comes to construction, some of the products that are made at Shotton, you need virgin steel to be part of the mix of that steel to create all of those products for today, never mind the future we all want, which will, of course, involve more construction in commercial properties, in the homes that we know we need to make sure that every family has a home here in Wales and beyond.

Photo of Vaughan Gething Vaughan Gething Labour 5:00, 24 January 2024

And it's not just around those three steel towns in addition to Port Talbot, it is also about the reality of the spread of employment. These aren't just workers in Neath Port Talbot, there are over 500 steelworkers who live in Bridgend, over 500 steelworkers who live in Swansea. In Carmarthenshire, more than 700 workers are directly employed at Trostre. If you then think about Llanwern, not just in Newport, but I know, and Hefin David's made this point, there are over 150 steelworkers in Caerphilly who work in Llanwern. This is a wide reach for each of those areas, in its economic impact and in which counties the people live where there would be a direct effect.

Virgin steel isn't just about the economic impact of not having it created here. It is also, of course, a matter for UK security, to be the only G20 country that cannot make steel from scrap. Now, you'll have heard that point made loudly and clearly by our Labour colleagues Stephen Kinnock, Jessica Morden, Jonathan Reynolds and Stephen Doughty in yesterday's debate in Parliament. But as this is a UK issue, you also heard that point made by the Conservative MP for Scunthorpe, and, indeed, a former Conservative UK security Minister. This is a risk not to take in the uncertainties of the world that we face now and to agree to hand over that virgin steel-making capacity to competitor economies in a less certain world than the one that most of us were privileged to grow up in, with what that then means for the supply chains to be consistently relying on imports of steel made in other parts of the world. We won't just be transferring security, we'll be transferring Welsh workers' jobs and transferring Welsh emissions to be more reliant on other parts of the world. I don't think that is a wise choice for the UK, never mind the communities we represent here in Wales.

Now, I want to try and address the politics in a way that is as productive as possible. I recognise why some people want to talk about the position of the Welsh Government and say this is all down to Welsh Labour people not doing their job. I recognise why Conservatives will want to do that in the spirited way that Tom Giffard has done today again. But it is a matter of fact that the Prime Minister not only would not take a call from the First Minister, but went out of his way from a seat in the stands at Southampton Football Club to attack the Welsh Government. I thought it was not a well-judged intervention, and the point has been made before, when Ford announced they were going to close Bridgend, the Conservative Prime Minister, Theresa May, took a call on the same day the request was made from the First Minister. It does show it is entirely possible for a Conservative Prime Minister to recognise their broader public service responsibilities in a different way than Prime Minister Sunak has responded thus far. It is still not too late for him to return to a point where there could be agreement, or, if nothing else, honest disagreement between ourselves about what the future path is.

I was disappointed with the response of the steel Minister Nusrat Ghani yesterday in the Commons. I was disappointed in the response of the Secretary of State for Wales, who is, I think, collapsing into that counsel of despair that this decision has already been made and there is nothing to be done. I disagree. I think the Secretary of State for Wales of any party should be fighting our corner around the Cabinet table, and not telling us to be grateful for the fact that there are only 10,000-plus job losses to come in the next 18 months. I think that he has a different responsibility to all of us, regardless of party. In that future economy, in the advanced manufacturing future that we could have, in foundational economies like housing, we won't just need steel, we will need skills, steel and things like semiconductors too. All of those things that will make up a modern economy. You can't make all of those things without steel.

Now, the transition board is something that I will continue to play a constructive role in, partly because many of the interventions they are looking at are plainly devolved, and we will need to work together. So, we will need to use devolved resources along some of those if we see significant unemployment resulting from the proposals that have been announced. I've always understood devolved levers would need to be used and devolved money put into answers. However, the Welsh Government was never going to pay for access to that conversation. Why on earth would we? Who on earth would think it is reasonable to demand that for the Welsh Government to understand how we use our budgets and our levers we must pay an arbitrary sum for a seat around the table? That is not kind of union that I believe in. I believe that the £100 million may not be enough, given the long-term harm we have seen from significant economic events in the past, including, as many people of have said, not just the redundancies at Shotton or what took place in the collapse of the mining industry. I want to see a long-term answer that engages the responsibilities of this devolved Government as well as this devolved Parliament in a way that has not taken place to date yet.

An alternative is possible; we see it in the Netherlands, where Tata has a different relationship with the Government of that country. They're investing in different ways of steel making, they're investing in different alternatives to support their workforce in the future. They're also investing in research around electric arc steel making as well. The same Government here could do that, indeed, with Swansea University, one of the leading research institutions on future metals indeed across the UK.

We also need to make progress on procurement. We need to make progress on recycling scrap metal, keeping more of it here, not exporting it to other parts of the world—all things this Government could do to safeguard part of the future that must take place where no progress has been made to date. Not only a different approach that a £3 billion green-steel fund could provide, but a different approach that requires Tata not to make irreversible choices based on UK Government support, a different choice for UK security, where we choose whether we make steel or import steel, to be reliant on other parts of the world, where we're all prepared to work with other partners—a UK Government of any shade, with Tata, and the trade unions, and this Government. I'm proud to say that this Welsh Government will continue to make the case for a future for the Welsh steel industry and we will continue to make the case for the best deal for steel, not simply the cheapest deal. Diolch, Llywydd.

Photo of Elin Jones Elin Jones Plaid Cymru 5:06, 24 January 2024


Rhun ap Iorwerth now to close the debate.

Photo of Rhun ap Iorwerth Rhun ap Iorwerth Plaid Cymru


Thank you, Llywydd. And may I thank Members across the Chamber for supporting this urgent debate today? May I thank Luke Fletcher particularly for pushing for this debate and for speaking so eloquently for his constituents? This feeling and the willingness to discuss this again shows a spirit of real support for the workforce and the community, but at the eleventh hour for an industry of huge economic, social and strategic importance, we need far more than goodwill. Unless Governments understand the need to raise their game significantly in their response to the current crisis, the opportunity that we have to safeguard jobs and transition fairly towards a sustainable future for the steel industry could be lost. There's been too much dragging of feet already, I fear, over a period of years, opportunities to be proactive, opportunities to invest and modernise, opportunities for the UK Government to show that they understand the true value of the industry, to show that they care about communities and about Wales. And it's not a lack of urgency now or historically that we only have, but it's also a lack of scale in the response also, as others have already mentioned. The offer of £0.5 billion to decarbonise in Port Talbot is entirely inadequate.

Photo of Rhun ap Iorwerth Rhun ap Iorwerth Plaid Cymru 5:08, 24 January 2024

We have needed Governments to be more boldly proactive in thinking about the future of steel, and let's be honest here: yes, I will push Welsh Government hard to play its part in supporting our steel communities now and in the future, but it is to the UK Government, current and future, that we look primarily at this time, and remember, it is a UK Prime Minister who had his 'out of office' on when Wales called wanting to talk about this crisis that we face. It was a shameful response from the Prime Minister and one which speaks volumes.

'A just transition', though, is a term bandied about widely, but seldom I think do we see actions that match what is needed to deliver it. Governments talk about the need to shift to a lower carbon economy, but have been too reactive in putting the appropriate social and economic interventions in place to protect workers' livelihoods. Valuing jobs and caring for the environment have to be a joint mission, and a just transition has to mean working strategically, getting ducks in a row, joined-up thinking, investing and lining up the technology, hydrogen technology, direct reduced iron; I met with Wales & West Utilities this morning to talk about plans for the pipeline to bring hydrogen into Port Talbot. We need to talk about cleaner energy sources, carbon capture. Developments are happening at pace all around the world, but Port Talbot has to be at the heart of that. And it's about getting the timing right, not shutting down the blast furnaces and losing all those jobs and skills until the new technologies are ready to come on line and replace them. That is what 'transition' means. And the plans announced last week don't represent any form of transition, let alone a just one. 

Photo of Rhun ap Iorwerth Rhun ap Iorwerth Plaid Cymru 5:10, 24 January 2024

Unions have put their plans on the table to help with that transition. The unions, the workforce representatives, must be heard. And remember what is at stake here—for families, yes, directly affected, anxiety that is immeasurable, but the impact and the scale of what's at stake for Wales. In 2021 Tata contributed 3 per cent of total Welsh economic output, making it the largest private sector contributor by this measure. We should be using its economic potency to maximise job opportunities now and in the future, within an environmentally ambitious landscape. We want future Welsh renewable developments, as we've heard this afternoon, to be built using Welsh steel, and instead we're blunting our ambition with the threat of allowing a strategic industry to wither on the vine and all the personal heartbreak that comes with it. 

And as for the price the UK Government puts on supporting communities, on protecting jobs, on protecting primary steel-making capacity in Wales and the UK, the sum of money is clearly too small. The £500 million on the table from the UK Government is a paltry sum when you consider the threat to jobs, and a derisory offer when compared to the scale of response to other emergencies. As we've heard, the banks were saved, now it's time to save our steel. And Governments in other countries have understood what needs to happen in terms of investment, as we've heard from Luke. We know about the £50 billion available for decarbonising industry in Germany. This is the scale of the response that we need here in Wales and here in the UK. 

Whilst the UK Conservative Government needs to wake up and be ready to pay up, yes, in significantly greater amounts, a prospective Labour Government, we have to be honest, must also up its game. And that offer of £3 billion split across five sites in the United Kingdom over 10 years is barely more generous than what's on the table now. Everybody has to understand the scale of the investment that's needed. But as well as the money, we need all ideas on the table. I've referred to the ideas put forward by the unions; they have to be considered. Co-investment with Tata has to be considered—co-ownership, even, nationalisation. We can leave no stone unturned to build a long-term future for the steel industry. 

Wales has the proudest of steel-making traditions. Plants are woven into the fabric of communities. There are streets where every household has a connection with a steel-making plant. But the world doesn't and hasn't stayed still, and Governments have needed to be far more awake to that. As Jenny Rathbone said, there's been an enormous amount of complacency—'arrogance' is the word that Jenny used. In 2013 a report commissioned by the Welsh Government made the right noises. Titled 'Towards a Welsh industrial strategy', it correctly identified globalisation, prolonged economic crisis, a skewed UK economy as reasons why Wales needed to look to itself to mobilise new sources of sustainable industrial investment. That was over a decade ago. In the 'A Manufacturing Future for Wales' policy document, the ministerial foreword talks of 

'A prosperous economy which requires a steady focus on resilience and a capacity for transformation.'

And yet here we are urgently debating the lack of resilience in a strategically important sector. Now, I implore the Minister, Welsh Government, to bring forward a meaningful industrial strategy for Wales to include industry thinking and intelligence in its development, along with academics, unions of course, the expertise of our workforce, and make a better fist of matching up the skills of our workforce with the opportunities that I have no doubt will arise for Wales and will be there for Wales to embrace tomorrow and in the future. 

Now, I know Wales's steel-making heartlands are resilient, close-knit communities, but I also know that too many communities like them were left behind in Wales by Government inaction, when other heavy industries were left to die with little or no alternative employment locally. We can avoid repeating the mistakes of the past, but only if today's clarion call is matched by concrete action. Let us stand with steelworkers today and give them a future.

Photo of Elin Jones Elin Jones Plaid Cymru 5:15, 24 January 2024


That concludes the urgent debate.