7. Statement by the First Minister: Tata Steel

– in the Senedd at 5:53 pm on 14 May 2024.

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Photo of Elin Jones Elin Jones Plaid Cymru 5:53, 14 May 2024


The next item will be the statement by the First Minister on Tata Steel. Vaughan Gething to make the statement.

Photo of Vaughan Gething Vaughan Gething Labour

Diolch, Llywydd. As Members are aware, I travelled to Mumbai on Thursday 9 May to meet with the managing director and the chief financial officer of Tata Steel. They will ultimately decide the future of the Tata's Welsh facilities.

We discussed the significance of the steel sector to Wales and the rest of the UK, together with its essential contribution to economic growth and our collective security. During extensive talks, I strongly emphasised the need to avoid compulsory redundancies across Welsh sites and the importance of maintaining their downstream operations. I want to ensure that production levels are fully maintained, with a longer term future at Trostre, Shotton, Llanwern and Caerphilly.

As a UK general election could arrive as soon as this summer, I reiterated the Welsh Government's call for the company not to make irreversible choices ahead of an election that could materially change the industry's future. We have consistently and proudly made the case from the Welsh Government that Wales deserves the best deal for steel, not the cheapest deal.

It is disappointing that the formal consultation has now concluded, and, as a result, we have to plan on the basis that blast furnace 5 will close in June, and to make preparations for blast furnace 4 closing by the end of September. Negotiations on wider issues affecting the workforce with the steel trades unions are ongoing.

Photo of Vaughan Gething Vaughan Gething Labour 5:55, 14 May 2024

The Cabinet Secretary for Economy, Energy and Welsh Language and I will maintain a close dialogue with trade union colleagues on this matter. The Cabinet Secretary is arranging a visit to Llanwern to discuss in further detail how we can best support the priorities of the workforce as talks continue. As well as urging an approach that avoids compulsory redundancies, it is important that workers who remain with the company are rewarded with the pay that recognises their skills, talent and dedication. The Welsh Government continues to engage with the transition board. We will press the case for rapid action from partners over the coming months.

To focus our support measures, we require detailed information on those affected by transition plans in order to ensure that support can be provided quickly to employees and suppliers. The supply chain within Wales is significant and reaches beyond steel communities directly. The company has now agreed to share this information, and I look forward to the Welsh Government working with them and our wider partners on these crucial details that will impact the lives of thousands of workers and businesses.

In the course of our talks, I also highlighted the difficulties of dealing effectively with the current UK Government and stressed once more that we still do not know the conditions of the £500 million grant from the UK Government. This is an unacceptable situation for any Welsh Government to find itself in. I still find it remarkable that the UK Government's business Secretary refused to meet with me at any point in my time as the economy Minister, and has more recently failed to engage in the transition process.

I recognise the widespread impact that this planned transition will have if Tata implement their publicly stated plan. It will affect communities and people right across Wales. That is why we have urged the business to think again. If they are determined to act ahead of a general election, then they must ensure that current production levels are maintained across the entire downstream operation. It is welcome that, during our talks, the company set out that they have and will have sufficient reserves of hot-rolled coil and slab to guarantee the current production levels of all of their downstream operations. That will be hugely important to the workforce at Trostre, Shotton, Llanwern and Caerphilly.

I've also asked for clarity on Tata's plans for the electric arc furnace build, including, of course, the importance of using Welsh companies as much as possible, supporting local jobs, to build and develop the process. We will work with businesses to explore how the Welsh Government can encourage the urgent work required to maximise the potential investment and employment this could bring to steel communities and Wales as a whole.

It is a fact that there is still community concern that the EAF may not be built. I made it clear to Tata that clarity on the planning process is, therefore, important. I raised concerns over the quality of EAF-produced steel and discussed the need to ensure that customers can rely on steel produced through this process. I understand that research, development and innovation projects will be in place to ensure that all current operations can be supported, and we will, of course, be monitoring progress on this matter very carefully.

We discussed important areas of shared interest, including investment opportunities in and around Port Talbot and collaboration with Welsh universities, particularly Swansea, on all areas of green steel production. This includes scrap processing and construction, amongst other priorities. I was able to highlight the significant investment and jobs opportunity represented by the Global Centre of Rail Excellence in Onllwyn, and I am pleased to confirm that the company agreed to consider a memorandum of understanding with GCRE. Welsh Government officials and Tata senior executives are meeting in Onllwyn today to discuss this MOU. I hope that this work can lead to quality employment opportunities for workers who will be affected directly by the transition. 

The final issue I raised was my concern over funding for the Steel and Metals Institute in Swansea, which is so critical to finding innovative ways of supporting green steel production. I'm pleased to confirm that the company has agreed to consider funding a significant number of positions. My officials will be taking forward this work over the coming weeks, of course, together with the economy and energy Secretary, who is the lead Minister in the Government for our work with Tata. 

Llywydd, it remains the view of this Government that the outcome we are facing and the loss it represents was preventable, and is still preventable. For many years, the Welsh Government has made the case for a fully fledged UK industrial strategy that prizes our sovereign assets and links business investment to long-term growth beyond London and the south-east. This is the fundamental shift that is required to unlock the ambition of our steel industry, and what we should all expect from any UK Government—a level of ambition and practical support that our steelworkers deserve and I believe our country needs. 

Steel is the thread that will run through the economy of today and tomorrow. The UK Government was asked whether it has the ambition to make Wales and the UK the centre of that greener future. So far, it is impossible to describe the answer as anything other than 'no'. Talented Welsh workers make high-quality Welsh steel, and their work is good for growth and good for security. They deserve the backing of an ambitious Government with the tools to back them. Thank you, Llywydd.

Photo of Andrew RT Davies Andrew RT Davies Conservative 6:01, 14 May 2024

First Minister, thank you for your statement this afternoon. If anyone wants to try and understand the gravity of the situation, the BBC headline this morning on the 2,000 job losses reaching into the communities of Aberavon and the surrounding area, not just the steelworkers, but also the subcontractors, the community facilities that rely, obviously, on such a big employer, it will be a massive, detrimental, I would suggest, transformation in the short term. I've put on record the Welsh Conservatives' position that we would have liked to have seen at least one of those blast furnaces staying open until, obviously, the arc furnaces had come into existence and profitable production.

I do take issue with your point that the UK Government doesn't have ambition when it comes to steel. By putting £500 million on the table and working with Tata Steel, that is making sure that Wales will stay at the forefront of steel-making production here in Wales. But that doesn't underestimate the very serious short-term consequences of the Tata announcement back in September. I think I've heard you say, First Minister, the you regret that the business Secretary has never visited the plant. She was there in September with the Secretary of State when, sadly, that disappointing news about the closure of the blast furnaces was being announced, and also then highlighting the news of the £500 million of UK Government investment, along with the £100 million that has been put on the table for the transition board. It would be worth trying to understand—you make much play of the general election coming in the coming months—if you have had discussions with the frontbench in Westminster of your own party, and have you sought assurances from that frontbench? Those assurances clearly are not strong enough to convince the company to actually stay their hand and ultimately wait, if there were to be a change of government, which I hope there won't be—I hope that the Conservatives win that general election. But, clearly, you went to Mumbai with a set of proposals. Were those proposals identified as Keir Starmer's proposals, which he would adopt if he was to be the Prime Minister? Why did Tata Steel not feel confident enough to say, 'Okay, we'll take you at your word, First Minister. There is an alternative here', rather than proceed with what is on the table—£500 million of UK Government money, with two arc furnaces, protecting jobs and making sure that Wales will be at the forefront of steel-making production?

I also heard you, in response to the Plaid Cymru Member for South Wales West earlier this afternoon, questioning the structure of the transition board. It's the first time I've heard you raise concerns about the transition board and the way it has been constructed. You were vice-chairman of that, I think, when you were Minister for the economy. I believe the new Minister is the current vice-chairman of that. I struggle to see why, if you had such a big role to play in establishing that transition board, you are now casting doubt on its ability to deliver for the workers who sadly will be losing their jobs in Port Talbot, and, obviously, making best use of that money that the UK Government has put on the table.

I'd also like to try and understand from your statement this afternoon what type of data you are trying to secure off Tata Steel to try and understand about the directly employed employees affected by, obviously, this announcement, but, equally importantly, the subcontractors, who most probably tally up to the same number as those who are directly employed, who are sadly going to be losing their livelihoods. So, could I try and understand—? I support you and the Government in your efforts in trying to get hold of this data to, obviously, tailor the support that the Government is potentially able to put on the table, and, notably at the moment, I think I'm correct in saying, there is no Welsh Government money allocated to support retraining purposes; all that retraining is coming out of the transition board money identified by the UK Government.

You highlighted the Global Centre of Rail Excellence and the memorandum of understanding that you hope might be crafted between Tata Steel and the global centre of excellence. Could you highlight a little bit more as to what tangible benefits you would like to see coming from that memorandum of understanding? I hope that it is speedily put in place and that there are direct benefits to both local communities that might well benefit from direct investment from Tata if they are going to put money into that global centre of excellence.

And also, you talk about the institute of steel and the proposals that you put before the Tata representatives that you met in Mumbai about investing in the institute. Could you elaborate a little bit more on exactly what your proposals were and what they are considering making available to the institute, so that we can have the best possible opportunity to cement south Wales's position at the forefront of green steel making? I appreciate there's a political discussion here going on, but, equally, there will be that investment in the site at Port Talbot. There will be security for steel making, going forward, and sadly, in the short term, it is going to be very challenging, but it will rely on co-operative working to make sure that that transition to the arc furnaces is done as smoothly and as timely as possible to secure that steel-making capacity here in south Wales.

Photo of Vaughan Gething Vaughan Gething Labour 6:07, 14 May 2024

Look, I'll try and respond constructively to a range of the points that were made. The challenge that we face is one where we're actually maximising the unity in this Chamber, helping to give us a stronger place to be. In a conversation with both the UK Government and, indeed, with the company, that's where it really was welcomed—the Conservatives voted in favour of the motion when, to be fair, Paul Davies was economy spokesperson for the Welsh Conservatives, in favour of a motion about wanting to see a blast furnace retained on the site. There are lots of good arguments for that, both the direct economic impact of the potentially eye-watering job losses in addition to our sovereign interests and why I do not think it is the right thing for any UK Government of any shade to sign up to a future where we could be the only G7 country that cannot make primary steel. We are then reliant on competitor economies to provide that steel that we still need, and, for the foreseeable future, that is likely to be the case. That then means the economic value is generated somewhere else, as well as the nature of the relationships that go alongside that. So, it was welcome that the Welsh Conservatives agreed with every other party in this place that that was the right thing to do. 

We want to have a constructive engagement with the transition board. The challenge is that, whilst the transition board gets a number of partners into the room, some of the points that are made here and immediately after transition board meetings take us away from our most constructive and positive areas of engagement. We will need a board that can act quickly and recognise that the board isn't there to control all other actors. And I've made this point before, that when there are significant unemployment events, the Welsh Government, our officials across a range of teams, have worked in a really nimble and proactive way with colleagues in Jobcentre Plus. So, there hasn't been a difference between the two different Government, and we've always worked with whoever leads that local authority. And that's been a real strength. That's exactly what we need to see happen here, but the scale of the challenge is even greater. If the transition board isn't nimble enough to do that, then actually we won't see the support that should be deployed in the manner that it could and should be. The money that the UK Government have put on the table is welcome, but if we're going to see the worst-case scenario delivered, then I'm afraid it won't be enough, and the time frame that's envisaged isn't going to deal with what we need.

The Welsh Government has already identified, across a range of our areas, the levers that we can use: the changes already made to the threshold for support from personal learning accounts—it's been changed specifically to take account of the Tata workforce; the fact that we have ReAct funding that has been reworked; the fact there is Communities for Work funding; the fact that we continue to support the apprenticeship framework. And one of our key asks is making sure that apprenticeships have the public assurance that their apprenticeships will be seen to conclusion. These are practical things, backed up by real Welsh Government resources, at a time when everyone knows our resources are particularly pressured, after 14 years of our budget being reduced in real terms, and that's just the undeniable truth. And yet, we are prepared to do everything we could and should do, within the budgets available, to support that workforce. And I do wish that the Welsh Government would have the support of Welsh Conservatives in standing up for this workforce rather than constantly trying to find a way to attack the Welsh Government and our desire to see those workers have the decent future that they deserve.

I'm afraid I don't share his view that this is just a short-term transition. And if Andrew R.T. Davies disagrees, he should go and talk to people from Shotton, he should go and talk to people who remember Ebbw Vale being a steel town and what happened when that transition took place. All of those challenges show that this is a longer term challenge, not simply a short-term event. A number of skilled workers could find immediate employment. The challenge will be will it be at the same rate and will they be able to stay in their communities for that work to happen. The next challenge is that wider group of workers, and that's why both the economy Secretary and I have been very clear about the need to access the information about the current workforce as soon as possible, but, crucially, the contractor workforce. And I am a little frustrated at the fact that, even now, we don't have access to that information. There are contractors who are making choices now about their current workforce. Tata know who their contractors are and they could share that information with us. We've never broken a confidence when it comes to information provided to us, and we've always managed to work in a really constructive way. We could and should be able to work with the local authorities—plural—who are most directly affected, with those contractors, with Jobcentre Plus, and with the company, to actually help those workers who are being directly affected now. We're not able to do that because the information hasn't be provided to us. I've been given the assurance that will be provided within days, and that will allow us to try and do the right thing for workers now as well as those who will be affected, potentially, in the future.

We'll then have a much wider challenge about the impact on a wider workforce—those people reliant on the significant spend. That's why not just the direct workforce, but, potentially, 7,000 to 9,000 extra jobs are affected by the change we're talking about. And if Tata proceed on their current plans, we need to be clear the greatest job losses will take place after the second blast furnace is closed, and those job losses could take place in the run-up to the end of the calendar year. So, October, November and December could be the three months with the biggest job losses, in the run-up to Christmas and the new year. I think that is a situation that we should avoid if at all possible. It's why I continue to make the case for a longer transition and make the case to wait for a general election that is imminent. And I spoke to Keir Starmer before flying out, and we're very clear that the UK Labour position is that the £0.5 billion on the table now is added to by £2.5 billion in a green steel transformation fund. A significant additional investment that is available for the capital, and also a manifesto that I think will see a need to invest in the future of steel making; we need more steel, not less, in our future.

The reality is, though, that I think the company are choosing to want to implement their plan before a general election. And they're not publicly going to move away from that. Whilst there hasn't been a general election, they're not about to say in public they will of course change their mind. It's important that we carry on making the case, though. If we're not prepared to fight for these jobs and for the sector, who is going to do it, because that isn't the message we're getting from UK Ministers at present? I want to see that change, and I want the maximum impact from people across this Chamber to try and deliver the best outcome for Welsh workers and, I believe, the best outcome for the UK in retaining this key sovereign asset.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 6:14, 14 May 2024

Genuinely, I held out some hope that you'd return with something substantial, First Minister. And I say 'substantial' because, to be fair, you've highlighted some things in your statement. I mean, the potential for Tata to fund some researchers in Swansea University, but it was to consider funding; it wasn't actually delivering anything, was it? Let's be honest here, the time to go to India had long passed.

We first heard rumblings about the possible closure of the blast furnaces and job losses in Port Talbot last year. Where was the urgency then? The bosses of Tata were in the UK two weeks ago. Why didn't you meet with them then? Did you ask for a meeting? As far as I can see now, you went to India with no specific asks, no inclination from Tata that anything would change as a result of your visit, so what was the purpose? If anything, based on your statement, you've wasted time, to be quite frank. What is now happening at Port Talbot is monumental policy failure at both a UK Government and Welsh Government level over several years, if not decades. After all, we have been in this situation before, haven't we? A multinational company holding both Governments to ransom, looking for Government bung. For Tata, it's been a semi-regular occurrence.

You said in your statement that Tata should wait until after the next general election. It's a line repeated time and time again. Well, at the election will be too late. You said it yourself: blast furnace 5 closed by June, 4 in September. We need action now. And what is Labour's offer exactly? It's £3 billion for steel, not just for Port Talbot, but for the entire UK. Perhaps the First Minister could actually clarify the £2.5 billion or £2.6 billion that he mentioned to the leader of the opposition just now, because last time I checked, that wasn't Labour's policy. We were quick enough to criticise the sum on the table from UK Government. I mean, scratch the surface of the £3 billion and you'll quickly realise that it's not much better, if we were to divide that amongst all the steel sites in the UK. So, £3 billion for the entire UK when, on the continent, they're investing upwards of £2.6 billion in single sites. 

Now, let's be clear: once the blast furnaces are turned off, that's it, you can't turn them back on; they're not like the computers that we have in front of us here. Tata won't wait around for what would potentially be the same level of financial support, nor will they hang on for an election that nobody knows when it's actually going to happen. I'll repeat what I said last week: all parties in this Chamber have said that the blast furnaces should stay open; we had that reiterated by the leader of the opposition, that we need a genuine transition period, so what are we going to do?

There are three options, as far as I can see it, that are on the table, just like last week: nationalisation, preservation or managed decline. By the way, I'd welcome other options if there are any for consideration. That's why I submitted a no named day motion; let's debate these options, and let's come to a decision, because so far, all I've heard from both Governments is meek acceptance of the impending loss of up to 10,000 jobs in my region, and that simply is not acceptable. No fight, no desire, no passion, only fear of rocking the boat. Meanwhile, Tata isn't rocking the boat, they're capsizing it.

Photo of Vaughan Gething Vaughan Gething Labour 6:18, 14 May 2024

I don't accept virtually all of what the Member has said, and I regret the tone and the manner in which it's been put. This Government has fought for the steel sector over a number of years. Since the proposals were made, we have worked alongside trade unions and their representatives, not just in national office, but the reps within the workplace as well. The steelworkers themselves are genuine experts in how to run the site. If you were to talk to a group of steelworkers and their reps, I don't think they would say that this Government has not fought for them and is not continuing to fight for them; I don't think you would find that they believe that the time to go to India has long since passed.

We've been working with steel trade unions in understanding the nature of the negotiations they're having and when ministerial intervention could make a difference. And, in fact, when the leadership of Tata were here for two days, they were in talks with the steel trade unions; that's what they were doing. And we need to understand what is taking place within those negotiations, how we use our influence. That's why the economy and energy Secretary had a conversation with the steel trade unions last week, to understand where things have gone. That's why we had to make immediate choices about whether to go to Mumbai or not. I believe any First Minister of any party would, should and must have gone to Mumbai in the time frame that I did. It was the right thing to do, and I'm proud to have done so, and prouder still to keep on making the case and fighting for the investment that I believe could make a difference.

I reject the way that he categorised investment in key sectors of the economy as a bung for private industry. That sort of language will not go down well with the workforce who work there. You could say the same thing about lots of our other anchor employers. You wouldn't talk about the investment in skills in Airbus as a bung for the company to stay here. It's part of the grown-up relationship we need to have about how we grow our economy and secure work and investment in here for the communities that we are privileged to represent.

When it comes to the future of the EAF, I think it's really important that we recognise that an EAF is part of the future. There will be more EAF production, and I think that's the right thing to see happen. As a Government, we always have to be able to and prepared to do more than one thing at the same time. That's making the case for the future we want, and preparing for the futures that could come down to us. No-one would forgive us if we did not make preparations for Tata to implement the plan they're talking about publicly. That's exactly what we're doing. It is not acceptance that that will simply happen, and we are going along or just coalescing in that. Our fight is a genuine one for the future, and I'd hope that, within and outside the Chamber, we can get back to having as joined up a response as possible to maximise the impact that this Parliament and this Government can make for a future that I believe our steelworkers deserve.

Photo of David Rees David Rees Labour 6:21, 14 May 2024

Can I thank the First Minister for his statement, but not just for his statement? The people I talk to in Port Talbot—my neighbours, friends, colleagues—are thankful for you actually going out to Mumbai and showing leadership because, so far, we've not seen that from the UK Government. So, thank you very much for that and very much for putting the strong case for primary steel making to be kept here in Wales, and specifically in Port Talbot, because that seems to be something that the UK Government has lost sight of.

I've heard this afternoon some comments, but let me just be clear: people in Port Talbot, the steelworkers of Port Talbot, welcome your actions and this Government's actions. They are disappointed in the UK Government's failures, and they are angry at Tata themselves for actually making the decision to close down those blast furnaces without justification. This is not a green agenda; this is a financial decision by Tata. Can I make it clear on that? They are looking at the money side of it, not at the community side of it, not looking at the people side of it. And that's important to remind people of.

We all know the devastating impact this will have on the workforce—2,800 has been mentioned. Let's make it clear: as somebody said, it's about 9,000 with the supply chain and contractors. Some contractors are already laying off people now, before the blast furnaces even shut down. That's important. But, for this Government, let's think back to what we can be doing. I thank you for the PLA, because I know I pushed the agenda on the PLA, and making sure Tata workers and contractors are able to have that now and access that funding, because it's all about training and development where we can help them go somewhere else. The disappointment is that people are already leaving now. They're going to work in England now. We're losing that economy now. That's really hugely damaging to our local economy.

Now, just a couple of quick questions, because I know my time is up. The transition board, you mentioned that. Will you make sure that the Treasury release that £80 million? Because, so far, it's going nowhere. We've had notification of Tata's contribution of £20 million, and they've already said where they will spend it, how they will spend it, and how they will manage it. I've not heard that from the UK Government yet, so we need a commitment at the next transition board, because I sit on it, as does someone else in this Chamber, and someone else in this Chamber. We need that commitment that they will spend it, not just talk about it, and spend it quickly, because the workforce is going in a month’s time, and as you've said, in September, most of it. We don't want to be still talking in September, saying, 'Oh, where will we spend this?' We want commitments now. So, can you please ensure that that commitment is given?

And, secondly, will you please ensure that Tata put forward the planning application for the EAF? Because, as you say, there are workers in the steelworks who do not believe that the EAF will come. We need to see an application going in for planning, so that we can have confidence that they will actually deliver the EAF.

Photo of Vaughan Gething Vaughan Gething Labour 6:24, 14 May 2024

Thank you for the comments and the questions. I completely agree with David Rees: we should not be the only G7 country who surrenders our capacity to make primary steel. That is a sovereign issue for the UK Government. And there was a deal on the table that was available three years ago, and it would have been a better deal at the time, with a better glide path and, actually, I believe we would have had more workers still in employment with a different future, and we could have taken a step forward on having increased electric arc production alongside a more secure future for blast furnace production as well.

My concern there was—. I recognise the point the Member has made about the anger within the community that is real, and not just within the workforce but on a wider level, and I know that is directed at both the UK Government and the company. I have never lost sight of the people directly in the middle of all of this: the workforce in Tata, the contractors who know they're reliant on the business continuing, and people in the wider community who know that if you take out lots of well-paid workers from that economy, it will have an impact on all of them. I mentioned earlier the realities of different steel-making towns and the future that they have been left with. I don't want to see that for Port Talbot or indeed for the remaining works in Llanwern, and I want to see Trostre and Shotton have a healthy future with the operations they have, which is why it was so important to make the point about providing the slab and the coil for their future.

But on your point around contractors, I think I am very clear that we need the information about that, and people are being made redundant now. It's why the information is so important and so time critical. I also want to be clear about future training packages and what they could look like. Some workers will have skills in the business that aren't accredited, so they can't go and get a job with a different employer if they don't have the accreditation for this. The training will be really important to allow people to move on, and, again, some of that could and should be decent work that's available.

We don't yet have a plan for the £80 million, and I've seen that Tata have indicated how they want to spend their £20 million they've put on the table. It's part of the reason why I said what I said before, about the nimbleness and the speed of the transition board being able to make choices. Some of those choices will be required in the nearer future and with a rhythm that won't wait for a monthly meeting. We're going to need to have something that designs and brings together the different stakeholders with decision-making powers and responsibility, to understand how that resource will be used—not planned to be used, but will actually be used—and the transition board needs to recognise that it can't do all of that through the current pattern of meetings. That's a practical point that isn't politically controversial, I think. You either want the money to be used well, alongside the resource that we and other partners have, or you don't, and I think it would be the wrong thing to try to stick to a pattern that is convenient if you're going to the meeting, not convenient if you want to see the right outcomes for the workforce.

And I take on board the Member's point around the EAF planning application. Even in outline, it would be a helpful signal to the wider community that the EAF is going to be built, because if the blast furnace production ceases, there will be a gap of several years before you can have EAF production, and if you're importing steel to be rolled, there are always going to be concerns about whether, actually, the wider production will come on board. The sooner that concrete signal is sent out, the better.

Photo of Tom Giffard Tom Giffard Conservative 6:28, 14 May 2024

The First Minister says he never lost sight of the workforce in Port Talbot and I'm glad to hear that, but let's remind ourselves of his record. The UK Government has put £80 million on the table for that transition board to support workers. Tata themselves have put £20 million. He and his Government, Llywydd, have put nothing—not one single penny to support workers through that transition board. That's his record in terms of supporting steelworkers in Port Talbot. Now, his only solution—. He's gone to Mumbai, and frankly it doesn't sound like he's secured anything from that meeting. He's been on that trip. So, the only thing that he can seem to point at as a potential solution appears to be a general election, and this £3 billion, which is fine, but the First Minister has now been asked twice to confirm the proportion of that £3 billion that would be spent specifically in Port Talbot, because if he can't make that clear to us in the Senedd, he certainly didn't make it clear in Mumbai to Tata. So, can you confirm the exact proportion of that £3 billion earmarked for Port Talbot?

Photo of Vaughan Gething Vaughan Gething Labour 6:29, 14 May 2024

Well, I think the tone of that contribution will really grate with families who are going to sleep anxiously and understanding whether there are people on their side in the fight for their future. I just think the Member should every now and again consider not just whether there are interesting clips for Welsh Conservative social media, but actually your wider responsibilities. I don't think you're getting anywhere close to those.

It is simply not true to say that the Welsh Government has not supported Tata financially, although we are not prepared to invest in the future of the workforce if the job losses that are currently being proposed go ahead. I have mentioned it more than once: personal learning accounts, the ReAct programme, Communities for Work, what we're doing with apprenticeships. There is a wide range of measures that we are prepared to take to support that workforce, as we have done in every other significant unemployment event and the way we have deliberately worked together with local managers and Jobcentre Plus to do that, and indeed local authorities of any and every political leadership.

I think when it comes to the demand that I set out to apportion the £3 billion green steel transformation fund—that's £2.5 billion, plus the £0.5 billion that's on the table and is not spent thus far—no-one in the sector will seriously believe that you could or should try and apportion that now without the conversation you need to have with the business about how they could use some of that money for a green steel transformation. If the Member wants to make a serious contribution, he'll get a serious response. I think the pantomime approach he is taking reflects very poorly on him, and it is recognised and understood very clearly by the directly affected workforce and communities. He should think again.

Photo of Sioned Williams Sioned Williams Plaid Cymru 6:30, 14 May 2024

I'm disappointed to hear that the First Minister hasn't returned with any tangible good news for the workers and residents of Port Talbot, and I know many of the people I represent are going to be devastated. Workers are already being forced to leave their communities, and sometimes their families, due to the uncertainty of the last months and Tata's catastrophic job cut plans. In the wake of economic devastation, community life is going to be decimated. Plaid Cymru county councillor for Aberavon Andrew Dacey is vice-chair of the mighty Aberavon Quins rugby club, more than half of whose team have jobs either in the steelworks or connected to it. As well as his fears, obviously, for the future of the club, its viability and sponsorship, Councillor Dacey has spoken of disappointment being the main emotion being felt and the fact that his members are feeling so low they can't even talk about what's happening. So, what will be done to address this aspect, specifically, this economic, social and cultural cost that anyone who grew up in a mining community will recognise only too well? Because the job losses don't just impact the workforce, but all the companies that rely on them, and all of these people who are part of the organisations, clubs and societies that make Port Talbot and the surrounding communities what it is. So, how will you ensure that all those who are going to be affected are going to be considered and supported over the next months, and how are they going to be involved in any plans that the Government have of support? How can we protect the vitally important social fabric of Port Talbot?

Photo of Vaughan Gething Vaughan Gething Labour 6:32, 14 May 2024

This is one of the key drivers in this Government's action in understanding this isn't just an economic picture. It's not just a short-term relocation. If the jobs are lost at the scale and the speed that is being proposed, we know, sadly, from other parts of Wales, other steel towns, other communities, that there will be a long-lasting impact to that. That's exactly what we've been seeking to avoid, that social impact that I hear from everyone and anyone, when I've been to the town, when I've met with local councillors. And, of course, David Rees never loses an opportunity to talk about this, as indeed do other representatives of the area, and I would not expect people not to do that.

My concern is not just the economic and social impact, but about the fact that you've got a plan, and if people believe that the transition board with £100 million is going to resolve all of this, I don't think that actually meets the scale of the challenge. I don't think that's an honest engagement with the public. So, we've got to be clear this will require Government support and intervention to provide the training, the skills and the opportunities for the workforce to transition, and the speed of the transition. It was one of the points I had a regular conversation with the former First Minister about—not just if there's to be a loss, but the time over which it takes place makes a huge difference, because lots of people will leave the area. People can go to other parts of the world, as David Rees said, and if they've gone you can't guarantee they're going to come back. It also means the support you can otherwise have in place in the shorter term is actually much more difficult to marshal to give people the sort of hope they will need, as well as the practical, real experience.

I want to pick up on one of the points the Member made, and that is the broader point about well-being, about how people feel, that they feel able to talk about it. It's so important we find ways for people to talk. Often, collective environments where people are used to talking with each other about everything and anything are a useful way for that to happen. I've always been concerned about the potential mental health impact. There's a long run of evidence that large unemployment events lead to very real challenges in mental health and well-being, with very difficult consequences. So, that's why, during our time—and I know Jeremy Miles continues to make this case—there's a need for health board engagement around it. But to do that, we'll need to understand with more clarity the plans, the proposals and the impact on contractors, because those people would otherwise be lost, and we'll only see them if they engage in our services, rather than proactively engaging with them.

So, this isn't just a matter of job loss; it is much more than that. I want to see a future for Port Talbot that is a proud one, that builds on the legacy they have, rather than simply saying, 'We've done our bit', and at the end of the year, we're no longer there. That, I'm afraid, is what could happen if we only have the transition board process to work through, with a finite sum of money and the time frame that Tata are currently describing to deliver all of those significant redundancies.

Photo of John Griffiths John Griffiths Labour 6:35, 14 May 2024

First Minister, I know that you're fully aware of the importance of Llanwern to the regional economy, the people directly employed at the plant, the contractors, the suppliers and the spend in the local economy. The average age at Llanwern now is, I think, in the early thirties, and, of course, there are a number of apprentices there. So, it's easy to understand why there's a great deal of concern locally about the future of the plant, given the projected job losses that will come towards us in the future. It is integrated with Port Talbot, as you also know, of course, First Minister. I think that gives a lot of concern about the work of the transition board, just to make sure that Llanwern is fully considered, appropriately considered in the work of that board and the decisions that are made.

It was good to hear you talking about the monitoring of research and development in terms of the quality of steel that an electric arc furnace would produce, because, obviously, the automotive aspect of production at Llanwern is very much allied to that quality of steel. And it's very good to hear that you will be visiting Llanwern soon, as well. But I just wonder if you could give some assurances about the work of the transition board, specifically in terms of the issues that Llanwern has.

Photo of Vaughan Gething Vaughan Gething Labour 6:37, 14 May 2024

I'm very happy to give the Member the assurance that we continue to take an interest not just in Port Talbot, but in all of the downstream businesses, and Llanwern in particular, because in the proposals that Tata have made public, they expect there will be direct job losses in Llanwern in two to three years. Actually, the business at Llanwern, in particular its engagement with the auto sector, is highly regarded and it's an area where, if you look at the future needs of the UK economy and the way that vehicles will change, we'll still need those vehicles and we'll still need steel in them as well. So, I do think there's a case to be made that was part of the discussion about what future investment in all of those downstream businesses looks like. And it's why it was so important to make the ask and to get the commitment for coil and slab to be provided for downstream businesses. If you're waiting for an electric arc and you're potentially waiting for two or three years, or potentially more than three years, actually, where does that supply come from for those downstream operations and the hundreds of jobs on each of those sites that are directly employed, as well as all of the indirect ones?

And then also, what do you do—which is why the research point is important—in generating the right type of steel? It's also why I think the UK should not be the only G7 country not able to make primary steel. You're reliant on other parts of the world, potentially on other steel companies from Tata's point of view, because if a carbon border mechanism does come in at some point in 2027, they won't have the option of importing from India, that'll all have to come from the Netherlands, and will they have the capacity to do that? That's a practical challenge that I think needs to be worked through so that there's real confidence that those businesses won't be moved away. Because the quality of what comes from Shotton, Caerphilly, Trostre and Llanwern is highly regarded. The company recognises that and, crucially, their customers do as well.

There's a final point that I think is worth making. It's your point around the people with responsibilities. I think lots of people think that the steel workforce is an ageing workforce, but actually that hasn't been true for a long time. So, if these changes are made, lots of people with ongoing and real material responsibilities and financial liabilities could lose their jobs. If you're in your thirties, it's entirely possible that you have a house, with rent or with a mortgage, with children, with other bills to pay, and if you lose that employment, how long can a redundancy package make sure that you're still able to meet those responsibilities? The dislocation, socially and economically, is really significant. And that's also why we have consistently made the case in and around the transition board to make sure that, if people are made redundant, there's a route to having proper financial advice that is reputable. Because we have seen in the past, when people have large redundancy payments made, that it doesn't generate the best behaviour from people who see that as an opportunity to make money in an unscrupulous manner. So, we continue to make that case. That's why, in other instances, the company has actually paid for financial advice from a reputable source to be made available. It's an ongoing conversation that we need to be able to have. And again, I reiterate, we need to be able to make the primary case for the best possible outcome and then every other step around that, if we don't get the outcome we want, to try and make sure we have the best possible outcome for the people we're privileged to represent.

Photo of Adam Price Adam Price Plaid Cymru 6:40, 14 May 2024

This catastrophic loss of jobs, as you said, First Minister, is preventable. We in this Senedd have the power to bring forward emergency legislation that would allow us to place a compulsory purchase order against blast furnace 4 and the heavy end related to it, which would allow us to prevent the decommissioning of that blast furnace. It would allow us to build a bridge to a change in Government and a new industrial policy in October and November, which would allow then the just transition to be implemented. How much would it cost? Well, we've got the figures. How much would it cost to maintain a mothballed blast furnace? When ThyssenKrupp did exactly that in Duisburg, it cost about £500,000 a month. When US Steel did the same in Fairfield, Alabama in 2015, it cost about the same. When Tata did it—they mothballed a blast furnace in Port Talbot between 2009 and 2013—it cost about the same amount. So, two months, £2 million. Wouldn't that be the best investment that this Welsh Government has ever made on behalf of Welsh workers and the Welsh economy?

Photo of Vaughan Gething Vaughan Gething Labour 6:41, 14 May 2024

I respect the fact that the Member wants to think of ideas and solutions, but we've got to think about whether we can implement them and whether they'll actually deliver the end that he wants. I don't think the final bill would be as he suggests. We've then got to have a discussion around what happens now with what is taking place, what comes next and, if we were to try to intervene, whether that operation would continue at all. I'm not convinced that is the route to preventing the eye-watering job losses that would otherwise happen. I know that the Member comes from a place of goodwill in making that suggestion.

He does make an important point, though, and that is that the manner of the decommissioning matters. You can decommission the furnace in a way that it could never be restarted, it would end up being damaged in the decommissioning process, or you could do it in such a way where it would be possible, albeit with costs to restart to actually ensure that a blast furnace is there post any changes made. That, though, requires an understanding of the investment in capital and in operational support for that to take place, and indeed the market for steel within the UK and wider as well.

So, there are practical things for us to keep on talking about. I'm committed, as indeed I know the economy Secretary is as well, to having any sensible conversation, any realistic conversation, around what we can do to try to maintain the future that our workers deserve, alongside the fact that we need to prepare for what would happen if Tata's plans were to go ahead to the time frame that they indicate they want to act. And of course, within that, there are several moving parts that land at the same time. This isn't a counsel of despair, it's a counsel of honesty about the leadership we require, the future that we could have, and the responsibilities we have in Government to prepare for more than one outcome.

Photo of Jack Sargeant Jack Sargeant Labour 6:43, 14 May 2024

First Minister, as a representative of a steel community that has seen the impact of devastating job losses in this sector, can I again thank you for all your work, and the economy Secretary for his work, in supporting the industry in Wales? The commitment from the Welsh Government, year after year, is in stark contrast to the UK Government's and their complete neglect of Welsh steelworkers and their abandonment of the Welsh steel industry.

First Minister, you rightly referred in your statement to the importance of maintaining downstream operations of the steel industry, including Shotton steelworks. Can I ask you if you will continue to fight for the downstream operations in Shotton steelworks with representatives both in this place and trade union colleagues of ours of those sites for the production of primary steelmaking in Wales, a vital necessity for any country of the G7?

Photo of Vaughan Gething Vaughan Gething Labour 6:44, 14 May 2024

Thank you, and thank you for again making the case for the future of Shotton. I know the Member does so consistently. It's a significant employer in the area. If those jobs were not secure, then actually that is not just an issue for Shotton, but actually for the wider area and the ecosystem and the jobs relying on it around it. There are two things, I think. The first is the amount of electric arc steel that Shotton is able to use in the future, because some of its operations could use electric arc, and some customers are interested in the carbon footprint of the steel they have. There is a range of steel products, but at the moment it's only possible to make them through a primary process, and we can either have that steel made in Wales for the UK, or that steel can be made elsewhere and we can import it. Now, if Tata are going to go ahead, we're going to need to make sure that that primary steel is imported in significant numbers. That's a really significant logistical operation. You've got to think about the capacity to get that steel into the country, and then to move it around in a manner in which it's required. So, there'll be a significant challenge, in freight terms, in not just getting stuff into docks, but then moving it around on our network. They're all the practical things that Tata will need to be able to deliver to ensure that the indications they've made that downstream businesses will be supplied are practical. But, as I say, I don't resile from the fact that I want to see a different approach, and I want to see a different reality, because I do bear in mind the point the Member regularly makes about what happens with significant large-scale redundancies without a plan for the future, and what that means for communities in the longer term, not just the immediate headlines. 

Photo of Lee Waters Lee Waters Labour 6:46, 14 May 2024

The words 'devastating' and 'catastrophic' have been used, and it's hard to find a sufficient superlative that describes the impact this is going to have. This will make Wales poorer. This is going to significantly make the economy of south Wales poorer for generations to come. I don't think we should underestimate the size of the impact of this on our economy and our society. And I for one welcome every opportunity the First Minister has made to speak to the management of Tata, both to try and get them to shift their decision, but also to make sure that we have some guarantees of what is left. I think, from what I understand from Tata over a number of years, they've been trying to get constructive conversation with the UK Government. We don't have the fire power to bring the sort of investments needed for a sustainable future for steel. Can he tell us if, in these conversations with the chief executives, he discussed how many efforts they had made to engage the UK Government in a serious conversation, and what the response was? 

And just on the situation of Trostre in Llanelli, I was glad to hear you say that you were told that there were sufficient reserves of hot rolled coil and slab to guarantee the production levels of their downstream operations. As we know, for Tata we use the word 'downstream'; it essentially means all the plants across Wales are linked, and the fate of one depends upon the others. Because the signals I'm getting from the workforce in Llanelli are much more alarmed than that reassurance suggests. They tell me that there are not sufficient stockpiles of the key ingredients of tin plate, that the progress in securing more has fallen behind, that Tata could make decisions to prioritise stockpiling Trostre over other operations in Europe and haven't done so, and not just the short-term supply, but what about the medium and long-term supply when they will be reliant on third party suppliers, and for the quality? Did he discuss them keeping the second blast furnace open long enough to make sure there were sufficient stockpiles, and what detail can he now press them on to make good that broad commitment they've given him?

Photo of Vaughan Gething Vaughan Gething Labour 6:48, 14 May 2024

Thank you for the questions. The Member makes a point that I completely agree with and has underpinned our approach to this issue all the way through, that if the Tata proposals go ahead, it has a significant national impact. This isn't just an issue for steel communities. The footprint is so significant in economic activity and it would have long-term consequences. I have had a number of discussions, including in Mumbai, about UK Government engagement. The company don't give a list of all of the meetings they had, and you wouldn't expect them to necessarily say their fully unreserved view on the level of engagement that they have had. But I'm aware, from when I started the job as the economy Minister, that there was a proposal on the table, which was essentially ready to go, which would have seen co-investment in the future facilities in Port Talbot, and would not have had the consequences we are discussing now. You might remember Kwasi Kwarteng for his later appearance in public life, but, actually, at the time, he was making the case that the UK should be a steel-making country, and that, actually, the challenge was the occupants of 10 and 11 Downing Street agreeing on what that approach should be. If we had managed to secure agreement then, we would be in a different position today, workers would be in a different position today, the company’s commitment to the future would have been sealed at that point, and I believe that people would have much greater certainty about their future.

When it comes to metals, the type and the stock, the Member’s absolutely right. So, the tin-plate plant at Trostre—every Heinz can around the country and much more comes from that plant. It’s got really high-quality ratings, it’s really reliable, very well regarded in terms of what it does. The challenge, though, is how much metal they need, where it comes from, will they be reliant on competitors, and if you’re producing primary steel from a plant in the Netherlands, will that come to Trostre or will it go to the tin-plate plant that is next door to the blast furnace in the Netherlands? And how much steel can come in from other parts of the Tata business before a carbon border adjustment mechanism that could come in in 2027? So, the scale of what’s required is really significant and not to be taken for granted.

I had, to my face, a commitment that the businesses would be fully loaded. Now, I want to see that commitment kept. If it isn’t, there won’t just be the challenge of not giving a commitment to me. In real terms, what that will mean about the company’s relationship with its workforce, and its ability to look after workers—. In India, Tata has a good reputation. This, though, this event, I think will challenge that fundamentally within steel-making communities right across our country.

Photo of Elin Jones Elin Jones Plaid Cymru 6:51, 14 May 2024


Finally, Rhianon Passmore.

Photo of Rhianon Passmore Rhianon Passmore Labour

Diolch, Llywydd. First Minister, I welcome your statement and your clearly expressed desire to see the UK remain a primary steel-making nation. We cannot become the only G7 nation without this capacity, forced to rely on competitor states for steel, which strengthen, or not, the United Kingdom. So, whilst the critics carp from the sidelines, a Welsh First Minister must, as you have done, pull out all the stops to rage against what is being allowed to unfold before our eyes.

And today the world timely remembers the great Welsh poet, Dylan Thomas, on Dylan Thomas Day. First Minister, we all in this Senedd Cymru Welsh Parliament must say and join together,

‘Do not go gentle into that good night,' but

‘Rage, rage against the dying of the light’ of the Welsh and UK steel industries, before it goes out for good. Two thousand eight hundred skilled jobs expected to go, 10,000 people impacted indirectly.

So, First Minister, how receptive were Tata representatives to your call for them to pause and wait until the political composition of the UK Government is known following the forthcoming general election? What does your Government intend to do in conjunction with Keir Starmer, the leader of His Majesty’s opposition, to make Tata change course and to safeguard the ability of Britain to make steel, to safeguard those well-paid skilled jobs of so many in my constituency and across Wales?

Photo of Vaughan Gething Vaughan Gething Labour 6:53, 14 May 2024

Thank you for the comments and the questions. Much of this comes down to the starting point of whether the UK should be the only G7 nation not able to make its own primary steel. I think that would be a poor strategic choice for the UK and has real consequences for Welsh workers today and in the immediate future.

Now, we have called repeatedly, including when Mark Drakeford was the First Minister, for no irreversible choices to be made this side of a general election that is not far off. That is the clear call from Keir Starmer too. Our challenge, though—. My concern is that the company have decided they want to make those choices before a Labour Government is in place, and that is a really significant challenge for us. If that irreversible choice is made, we will be left with the consequences.

Now, there are practical things that would need to be done before a second blast furnace is no longer operating, and the point I’ve made to Adam Price on the manner in which that is decommissioned would really matter as well. We will carry on making the very practical case that there is a different Government that I believe could and should be elected in the coming months that would have an entirely different view on what it is prepared to invest in and why—a very different partnership with clear expectations about how the company behaves as well. I still think that is a case that is worth making and fighting for. That’s certainly what I’ll be doing as a First Minister. I know the economy Minister is equally committed to making that case, and at the same time being prepared to prepare for Tata implementing their plan before a change in UK Government. No irreversible choices, I believe, would be no regrets for the UK, if only there were partners in the UK Government who shared our ambition and understanding of what is at stake.