8. Debate: The Steel Industry in Wales

– in the Senedd at on 4 June 2024.

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(Translated)

The following amendments have been selected: amendments 1 and 2 in the name of Darren Millar, and amendments 3, 4, 5 and 6 in the name of Heledd Fychan.

Photo of Elin Jones Elin Jones Plaid Cymru 6:20, 4 June 2024

(Translated)

That does enable us to move to the debate on the steel industry in Wales. I call on the Cabinet Secretary for Economy to move the motion—Jeremy Miles.

(Translated)

Motion NNDM8597 Jane Hutt

To propose that the Senedd:

1. Believes there is a viable future for steelmaking in Wales within a transition that supports a stronger, greener future for the Welsh economy.

2. Believes that retaining the capacity to produce primary steel in Wales is central to Wales’s economic interests and the pathway to net-zero.

(Translated)

Motion moved.

Photo of Jeremy Miles Jeremy Miles Labour 6:20, 4 June 2024

(Translated)

Thank you, Llywydd. Steel is an important part of our lives, and we are fortunate to have the opportunity to make primary steel and electric arc steel in Wales. Steel is the basis for our broader manufacturing industry and produces materials that are crucial if we are to move to net zero. As with every sector of our economy, companies in the steel sector have been focusing on how they can too, in order for us to achieve our commitments in terms of the changes to our climate that are seen across the world. It is crucial that the sector continues to be a cornerstone of our economy and continues to be at the heart of our communities. Changing to low-carbon steel is crucially important to reach that objective.

I'm of the view that the steel production industry has a viable future in Wales if we can change in a way that will help to create a stronger, greener future for the Welsh economy. Although the change in Port Talbot means that steel manufacturing will be safeguarded in Wales for the future, I, like you, am very concerned indeed about the scale of the changes by Tata, how quickly they are happening, and about the loss of capacity to produce steel in the short and medium terms.

Photo of Jeremy Miles Jeremy Miles Labour 6:21, 4 June 2024

We recognise, Llywydd, that research and development is taking place to explore how electric arc furnace steel can produce a wider range of products, but key sectors in the UK—automotive and packaging, for example—still require products produced from virgin steel. Tata is having to import the slab and hot rolled coil substrate required during the transition for its downstream businesses.

As Members are aware, Tata Steel announced on 25 April its decision to reject the multi-union proposal. We did not want to see this decision. It will now progress to closing blast furnace 5 in June and blast furnace 4 in September, along with the wind-down of the heavy end at Port Talbot. The continuous annealing processing line will close in March 2025. We believe a better plan is available. Had Tata accepted the recommendations in the multi-union report commissioned by the UK steel committee, this would've meant a longer, slower and fairer transition. It is extremely frustrating that a deal was not reached at an earlier stage in negotiations between Tata Steel and the UK Government. An earlier deal could also have led to a longer and fairer transition. It is also disappointing that the Welsh Government was excluded from negotiations, leaving us unsighted on aspects that touch on devolved competence.

For many months now, steel workers and their families, businesses and communities have been bracing themselves for job losses that would occur as a result of an early transition to electric arc steel production at Port Talbot. The level of job losses that we are facing is devastating. Tata Steel has announced that up to 2,800 jobs are expected to be lost as part of its transition plan, around 2,500 of which would be impacted in tranches over the next 18 months, with the first tranche now expected this September. The company expects that a further 300 roles would be lost in around three years' time at the Llanwern site. The full scale of job losses, including those in the wider economy, is not fully known, but could be up to 9,500.

To ensure immediate support for those impacted, we are working with the Tata transition board to make them aware of and able to access all the support available to the workforce right now. I, and others on the transition board, have made it clear that we want it to be as easy as possible for people to get the support they need and for that to happen quickly. A one-stop-shop information portal has been set up on the Neath Port Talbot website. This provides information on all the support available to people and businesses and I would ask Members for your help in promoting it to your constituents.

The transition board has agreed five broad areas for support. These cover job matching, skills and employability, the establishment of a supply chain transition fund, the establishment of a business growth and start-up fund, support for mental health and well-being, and regeneration projects that will help ensure a future for the economy in Port Talbot. The Welsh Government has programmes already in place to assist employees affected by redundancy to get back into work. Our employability and skills programmes ReAct+ and Communities for Work Plus can provide support for training and mentoring to those who wish to remain in the labour market. Business Wales provides support for individuals facing redundancy should they wish to consider starting their own business, as well as accessing business finance.

Alongside the priority of immediate support to workers, we must look at the opportunities to develop local economies and sustainable employment, particularly in Port Talbot and the surrounding area. We need to retain as many Tata workers as we possibly can. These are highly skilled workers, and we need their talent and their commitment to remain in Wales. The transition board has commissioned a local economic action plan setting out proposals that could, potentially, limit the short-term impacts and provide for a positive future for the region in the longer term. The transition board will use the LEAP as a road map in considering the allocation of funding.

Many of the future economic opportunities are linked to our wider effort to transition to net zero in south Wales. The Celtic free port has a very clear focus on manufacturing and port infrastructure to support floating offshore wind in the Celtic sea, building on their connections to two deep seaports. Celtic has also identified specific opportunities for clean energy linked to hydrogen, sustainable fuel, carbon capture and storage, cleaner steel and low-carbon logistics. From a manufacturing and supply chain perspective, there are opportunities for Wales-based companies in areas such as the development of floating and fixed offshore wind, making our housing stock more energy efficient through the optimised retrofit programme, building our capacity to power vehicles in the future through electric vehicle charging infrastructure, and the manufacture of components for electric vehicles. We are building supply chain maps to help companies bidding for offshore wind licences to be able to find a Welsh supply chain.

Significant increases in renewable generation to meet increased demand will require new electricity transmission network infrastructure. Analysis from our 'Future Energy Grids for Wales' report shows that our electricity demand may almost triple by 2050. This will bring significant supply chain opportunities. Through the work carried out by the south Wales industrial cluster, now being taken forward with Net Zero Industry Wales, there is a vision for how industry can be decarbonised right across south Wales. Developments in potential carbon capture utilisation and storage solutions are looking at significant next-stage investments. These could be critical in enabling decarbonisation of industrial assets and accelerating decarbonisation solutions across south Wales, including the supply of hydrogen.

Recently, Celsa was awarded more than £13 million from the industrial energy transformation fund for a new furnace with all of the accompanying site-based infrastructure to operate with up to 100 per cent hydrogen fuel. The project will be a significant step in Celsa's decarbonisation pathway. I welcome the UK Government's shortlisting of Associated British Ports Port Talbot for a share of its £160 million floating offshore manufacturing and infrastructure scheme. However, it is recognised throughout the sector that the Celtic sea requires more than one port to deliver an integrated solution to maximise the economic benefits for the UK, and I am, therefore, keen to explore additional funding from the UK Government for the port of Pembroke.

Llywydd, the loss of jobs due to the speed of the transition away from blast-furnace steel making is heartbreaking. I'm committed to doing all that we can to support workers faced with redundancy, their families and the wider community. The loss of the capability that blast-furnace technology provides is a huge concern for the economy, and I urge Tata Steel to consider options now in light of the decision to hold an early general election and the very welcome prospect of a Labour Government. The loss of jobs in the wider economy is also potentially devastating, and I'm committed to working with our partners, including a future UK Government, to identify and to support future opportunities in new markets. 

Photo of Elin Jones Elin Jones Plaid Cymru 6:29, 4 June 2024

(Translated)

I have selected the six amendments to the motion, and I call on Samuel Kurtz to move amendments 1 and 2.

(Translated)

Amendment 1—Darren Millar

Add as new point at end of motion:

Regrets that since 2019, the Welsh Government has not provided any financial support to Tata Steel.

(Translated)

Amendment 2—Darren Millar

Add as new point at end of motion:

Welcomes the UK Government’s £500 million grant to Tata Steel to support the retention of steel workers’ jobs and the UK Government’s commitment to supporting the £100 million transition fund for retraining and skills.

(Translated)

Amendments 1 and 2 moved.

Photo of Samuel Kurtz Samuel Kurtz Conservative 6:29, 4 June 2024

Diolch, Llywydd. I thank the Government for bringing forward this debate, the topic of which this Senedd has rightly spent much of its time over the last few months debating. I move the amendments in the name of my colleague Darren Millar, and confirm that the Welsh Conservatives will be supporting amendments 3 and 4, but not 5 and 6.

Steel making as an industry is one that contributes to every aspect of the country. We've been clear on this side of the Chamber that we wanted to see one blast furnace remain open during the transition from blast to electric arc. We're disappointed that Tata did not take this course of action.

Cabinet Secretary, I was grateful for the mentions during your opening of this debate to the potential opportunities as we move forward in that transition period. I noticed the mentions to the Celtic free port, floating offshore wind—two elements that I've been a big advocate for. And knowing the contributions of other Members in this Chamber, who I'm sure will speak later on—the Member for Aberavon, for example—the need for that just transition in this instance is really important. The Celtic free port will be an opportunity for new jobs in the area of Port Talbot and the wider communities, but it's that transition from here now to that future point and how we support workers in that area.

I'd also like to commend at this point the work of the Economy, Trade and Rural Affairs committee on their inquiry into steel making following the announcement by Tata last year, ably chaired by Paul Davies, and Luke Fletcher on the committee as well, who I'm sure will follow me in speaking in this debate. I think some good work was done in that committee in exploring steel making in Wales. Some opportunities, yes, but also seeing the challenges they're currently facing. Cabinet Secretary, you raised some of those around grid capacity, as one example. But I think the report by the Economy, Trade and Rural Affairs Committee does need to be taken into consideration when discussing the future of steel making in Wales, because I think the quality of it really does speak for itself.

But while these changes are set to go ahead and the workforce deal with the anxiety of redundancies, let's ask ourselves what this Labour Government has done to support them. Nothing. What funding has the Welsh Labour Government provided to the workers in Port Talbot since 2019? Nothing. What has the Labour Government contributed to the transition board created to support workers and the wider community? Nothing. And while on this topic, the previous First Minister said in March of this year that the Secretary of State, and I quote,

'has never once visited Port Talbot.'

Well, that's just not true, I'm afraid. The Secretary of State has twice visited Port Talbot, in April and September of last year. And when the Secretary of State for Wales offered to speak to the First Minister, that call was not answered. 

I've raised in this Chamber before the concerns that employees who have specific skills will not be able to transfer those skills to other jobs without undertaking more qualifications, because their current accreditation is for Tata employment only. Now, the Labour Government here has often raised that, when it has supported Tata workers—that was before 2019, as I've noted—it was in terms of training and skills development. So, what I'd like to know is what guarantees were there that the support, once given by the Welsh Government, had specific strings attached to it, meaning employees would have fully transferable qualifications, or was previous Welsh Government support given without any caveats?

We welcome the £500 million-worth of support from the UK Government, without which Tata would have shut Port Talbot completely. Steelworkers will be retained, skills won't be lost, and steel will continue to be made in Wales, just not how we would have liked it to have been in terms of that transition period that I'm sure will be touched on further on. 

We also welcome the £100 million transition fund, 80 per cent of which comes from the UK Government, 20 per cent from Tata, that will go towards, as the Cabinet Secretary pointed out, skills and employability, supply chain, business growth and start-ups, supporting mental health and well-being, and the wider regeneration of Port Talbot. We really should lean into this fund and the work that it could do, not just for those made redundant but for the wider community too. So, it is a shame, a real shame, I believe, that this Labour Government has decided not to contribute in monetary terms to this fund. 

And Labour pose—

Photo of David Rees David Rees Labour 6:34, 4 June 2024

It's going to be part of my contribution, but do you accept the fact that—? You've used 2019, I'll go back to 2016, if you want to, and tell you the UK Government failed to do anything in 2016 for the Welsh steelworkers. But let's talk about the current—. Do you accept that the Welsh Government has actually invested money now? There's money available, people are using it, under the PLA for access to learning—the personal learning accounts—because they've actually changed the cap criteria for workers at Tata and the contractors to allow them to access that. So, there is money available today for people to actually retrain, redevelop, under the PLA.

Photo of Samuel Kurtz Samuel Kurtz Conservative

We could go back to the year 2000 and how little was done by the Labour UK Government in the year 2000. But the point that the Member for Aberavon makes is valid, and I will give consideration to the point that changes have been made. But when it comes to the transition board itself, and the specifics aligned to the transition board, the amount of experience and expertise on that transition board—I think that's where there is sadness that the Welsh Government hasn't taken a more proactive funding involvement in that transition board. I'm very conscious of the time, so I will, if I may, just continue ever so slightly, Llywydd. I'm grateful for the intervention from the Member for Aberavon.

In terms of what Labour's choices will be—and we talked about it, and previous Members have spoken before; let's wait and see what a UK Labour Government will bring—what will a Labour Government bring? They've got £3 billion for a green steel programme, but that already equates and includes the £500 million that the Conservative UK Government has allocated to Port Talbot. So, is there any more money coming from that green steel plan from Labour? We might hear some more of that from Members here today. But what else is happening? Because there's no guarantee whatsoever that a UK Labour Government—an incoming, potentially, I hope not, UK Labour Government—would actually do anything different to what's happened at the moment. And there might be Members here who may have to eat their hat—I may be one of them—but I stand to be corrected. I do not see any involvement there in that sense.

I do believe that there is a positive steel-making future for Wales. I think there is an opportunity for steel making in Wales. We've touched on the Celtic free port, we've touched on the opportunities around infrastructure. Procurement I think is also something that we can look to explore, and, obviously, the opportunities around floating offshore wind. But when it comes to the decisions being made by this Parliament, and this Government specifically, I think Members of the south Wales industrial cluster, and areas along the south-Wales corridor, will understand that the Conservative Government have put their hand in their pocket, and Welsh Labour here in the Senedd have not. Diolch, Llywydd.

Photo of Elin Jones Elin Jones Plaid Cymru 6:36, 4 June 2024

(Translated)

I call on Luke Fletcher to move amendments 3, 4, 5 and 6, tabled in the name of Heledd Fychan. Luke Fletcher.

(Translated)

Amendment 3—Heledd Fychan

Add as new point at end of motion:

Regrets that Tata has rejected a multi-union plan which would have protected jobs and kept open one of the blast furnaces at the Port Talbot steelworks.

(Translated)

Amendment 4—Heledd Fychan

Add as new point at end of motion:

Regrets a lack of clarity on how UK Labour's £3 billion plan for steel would protect jobs and support decarbonisation at the Port Talbot steelworks.

(Translated)

Amendment 5—Heledd Fychan

Add as new point at end of motion:

Calls on the next UK Government to take the necessary steps to bring the Port Talbot steelworks into public ownership.

(Translated)

Amendment 6—Heledd Fychan

Add as new point at end of motion:

Calls on the Welsh Government, in the absence of a plan from UK Government, to explore legislative options for the compulsory purchase of the blast furnaces in Port Talbot, as well as the potential of creating a Welsh steel co-operative.

(Translated)

Amendments 3, 4, 5 and 6 moved.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 6:36, 4 June 2024

Diolch, Llywydd. I move the amendments tabled in the name of Heledd Fychan. I'll start by saying that Plaid Cymru support what is set out in the original motion. As far as this goes, we are clear that there is a future for primary steel making in Wales and that our steelworkers should be supported, but this is, frankly, a statement of the obvious. The original motion doesn't get us to taking the actions we need to take to ensure that there is a future for steel in Wales. Without outlining these, there would be little point in passing the motion.

This debate comes at the eleventh hour, with the first blast furnace due to close this month. Despite this, the original text of the motion is almost identical to the one we debated back in February. The motion as presented doesn't condemn Tata's decision, and nor does it set out a vision for a brighter future. It simply says that we believe there should be a future, with no specific steps outlined on the path to it. At a time when workers in the communities are desperate for action, we need to do more than reaffirm what has already been said. We need to move this debate forward as, I must say, I and my colleagues in Plaid Cymru have been trying to do for months.

I will say that I take issue with the way in which the whole debate has been characterised by the Tories. This line being pushed constantly that Welsh Government hasn't contributed financially to Tata is only part of the picture, isn't it? In fairness to the Labour Government, back in 2016, as Dai Rees pointed out, and in fairness, actually, to Carwyn Jones—we all have heard the stories of him camping outside the offices in Mumbai—Tata wouldn't be here if it wasn't for the actions taken back then. I'd also say it's difficult to know where you can slot in support if you're not involved in the initial conversations around setting up the transition board, and are not receiving the correct data either from Tata.

Successive Conservative Governments in Westminster share the lion's share of the blame for why things are the way that they are. They have lacked vision in setting out what the future of steel and, more broadly, the industrial sector could look like, and with straight faces, Conservative Ministers have stood up to say that a £500 million package to Tata in exchange for 9,500 job losses is a fair transaction. They haven't had the courage to take control of the situation and forge a new path—a path independent of a multinational organisation that cares nothing for the communities that rely on it.

We've heard from the Conservatives that this isn't what they would have liked to happen, so why accept that this is it? Unfortunately, it's the lack of courage that Labour and this Welsh Labour Government has risked mirroring. Here is an opportunity to set out what exactly is meant by the £3 billion for steel. So far, no-one has been able to tell me precisely how much of that will go to Port Talbot directly. Here is an opportunity to show a way forward, how this Senedd can make a meaningful intervention. Here is an opportunity to live up to the mantra that we do things differently in Wales. I stand by what I've said all along. Why should we allow a multinational half the world away to dictate the future of our communities? Tata won't change their mind, they've made that clear—even if there is a change in Government. So, why should we continue to stare down the barrel of the gun that is post-industrial deprivation that is threatening to rear its head again?

Take control. Nationalise the site in Port Talbot. Let's make the investments ourselves, let's set the strategic direction ourselves and let's regain some dignity. Because right now, our communities are looking to us for leadership, and I fear that we will have failed them if this motion passes unamended. It's not as if there isn't a plan ready to go, the unions have already done the work.

I don't think any of us here would want to look back at this time and wonder whether one thing or another could have worked. Now, he who dares, wins. Well, the Government should dare to win. Let's push for nationalisation of Tata's site. Failing that, let's look at how we can conserve its assets there, to secure a future for primary steel making in Wales. And let's create a path to a new future for our workers and their communities.

Photo of David Rees David Rees Labour 6:41, 4 June 2024

Can I thank the Government for bringing this forward? It is an important debate we have discussed. Because as you've already pointed out—three people already have said—blast furnace No. 5 shuts down this month, blast furnace No. 4 in September. Now, I remember, actually, the explosion at No. 5, where three men lost their lives. That was 20-odd years ago, and it has been rebuilt. So, we understand the timescale for No. 5.

It's about steel making. It's about the industry. The UK has actually been producing steel, and it's one of our sovereign assets. It's a foundational industry. It makes steel in everything we use. How many of us got up this morning and used the microwave for our breakfast, or the toasters? Drove our car in? Came by train? Rode a bike in, possibly? Opened the fridge, got the milk out for their Weetabix this morning. The steel we use every day is here. Some of that, actually, was made in Port Talbot. Whether you've got tins of baked beans, or I fed my dog this morning with a tin. Was that from Port Talbot? We don't know, but it is the steel we use.

It's a foundational industry. It builds our manufacturing base. And yet we are here debating what's happening to that industry. That it's going to disappear. Primary steel making will not be here. We'll get rid of it, or Tata will get rid of it, and unfortunately, the UK Government has supported them in doing that by putting £500 million in without any conditions upon it to ensure there's a transition to other forms of primary steel making.

You can go green with primary steel making. It's a disappointment that the UK government didn't even think about it. And it did take them—what? We nagged and pressurised for how many years to get some form of steel sector deal, or even a strategy on steel? And when they come out with it, their strategy is £500 million, get rid of the blast furnaces. That's it.

So, whether we are living in a geopolitical world or not, we are vulnerable without primary steel making in this country. And so Port Talbot becomes a crucial contributor to that sector. But it's not just steel for our town. It's more than that, because it runs through generations of families in our town. And I go to schools and I see children who want to aspire to what their parents are doing in their job lives, or what their grandparents did, whether that be in the Port Talbot steelworks or in the industries that serve Port Talbot steelworks. They see it. And as one of our Community union officers said at the conference a few years back, steel is in our DNA. It's part of us.

Now, there is an alternative. We've talked about this before. The steel trade unions, as has been highlighted, put this Syndex plan forward. Not their plan, by the way—it's an experts' plan. They put it forward and it has been rejected, and it's a shame Tata just threw it out like that, because it worked. It survived the blast furnaces; No. 4 would keep working whilst they built an electric arc. By the way, the electric arc they're talking about would be the biggest ever built. Most other places are not building 3 million tonne electric arcs, they're building 1.5 million tonne electric arcs, to work with blast furnaces. And Tata are building blast furnaces in India. Germany's building blast furnaces. It seems strange that we're not doing that, that we're getting rid of it, and we're going to rely upon imported steel for our tins and our cars and our microwaves.

But along with steelworkers, we do need to accept change. It's coming. We don’t deny that. But it's how we get that change happening, how we transition into the process of the green direction. And that's what should be grasped. And I hope that any incoming government—and I hope it's a red government, but it could be any government coming in—grasps the opportunity of saying, ‘Actually, let's change it’. Let's work with our communities. Let's get the people who we're putting on the dole, who we're putting out of opportunities, children who are seeing their hope disappear—let’s put something there for them, let's grab those opportunities to do so. And I hope that the UK Government coming in will actually do that. 

Now, the question about £3 billion. Let's be honest about it. We don't know where it'll be spent, but we do know there's a figure there. There was never a figure with the previous Governments. And you do also have to negotiate where that figure is spent and how it's used to actually build a green steel economy. What elements do you want to focus upon? What elements can you encourage other industries to come in and put their revenue in? So, it's important that we know that there's money there, and we know that there is a negotiation that will go on as to how that money is spent. 

The other aspect we've talked about—I'm going to go on; I've got a little time. About the amendments that were put in—. The Conservative amendments, I'm sorry, but, prior to what we've seen in previous years, say MacGregor, 2016, when you did nothing—I'm sorry, I can't listen to those discussions. And I accept what you say—. No. 3, I totally accept amendment 3. No. 4, clarity is okay, we need to get it, but No. 5 and No. 6, I'm listening. I'm keen to listen, but there are so many practicalities. Compulsory purchase of blast furnaces—what does that mean? Who's going to be employed to do that? Are you going to employ people? How is it going to actually transfer raw materials in if you're going to keep it going? Where's the steel going to go if you keep it going? If you shut it down, how is it going to be managed? Where is it going to be staying? How will you operate it? How do you access it, because, actually, the land around it is not accessible?

So, there are a lot of practicalities here. Great headlines, but what actually does it mean to the people in the town, to the people in the works to actually see how it can work? And if you want to mothball it, that's what they're doing now. So, it's no different to what Tata are proposing, just shutting it down and mothballing it. So, it is important, what are the deals there, and with the—. Nationalisation, you and I both, Luke, went to the talk on nationalisation. He put forward a temporary nationalisation just to keep it going temporarily until we actually get somebody to buy into it, but, the investment required to do all that, where's that going to come from? Because, let's be honest, we haven't got it in this Government, in this Senedd. It's not just the £3 billion that we're talking about; we need joint investment in that case, so if you're going to talk about nationalisation, how are you going to fund the nationalisation? How are you going to get the marketplaces? Who's going to manage it? How is it going to be delivered? Because you're in a business world, not a public service world. So, there are a lot of questions I want to hear answers to on those points that I haven't yet heard.

I've gone over my time, Llywydd; I'm going to stop. But one thing. The people of Port Talbot want to see this Government fight for them. They want to see us working for them. They want to see UK Government doing so. And that's why, in my view, we have to change the Government, because the previous Governments have not done that. 

Photo of Sioned Williams Sioned Williams Plaid Cymru 6:47, 4 June 2024

In every statement and debate we have on Tata—and we've had a few, as Members have mentioned—we always hear the Welsh Government refer to the difference a Westminster Labour Government could make to the future of the plant at Port Talbot and the fate of the thousands of its workers, and today was no exception. And, of course, we heard Keir Starmer say when he was in Wales last week that he would fight for every single job and for the future of steel in Wales. But there were no details on what that actually looks like, and you asked a number of questions, David Rees. Well, I would say that the Welsh Government and Keir Starmer are the people who need to work and should have been working on the answers to those questions, because the political reporters who were reporting on Keir Starmer's visit pointed this out. Gareth Lewis of BBC Wales was among those who said of the statement that no-one is quite sure what it means, and of this £3 billion steel fund, what exactly are they going to do with it, Gareth Lewis asked. And so, for me, the question that really needs to be answered today, although it should have been answered, perhaps, months ago, is: what is the plan? 

Tata have not indicated they've got any interest in keeping the blast furnaces open, even if Labour win this election and are in Government by July. So, what exactly will a Labour Government in Westminster do to convince Tata to change their minds? What's the deal that will keep the blast furnaces running? Or is there another plan, as our amendments make clear and outline? Will Keir Starmer act on these calls to nationalise Port Talbot steelworks temporarily? All the ideas that Adam Price and Luke Fletcher have contributed to this debate over many months. 

What will change? Because the workers, their families, their communities and all the businesses that serve them, the clubs and groups that depend on society and social life in this area, they really deserve more than soundbites. They need more than warm words. We have called on Welsh Government to act in that regard. As I said, we've spelt out ways in which Welsh jobs and Welsh steel could be safeguarded, but that action could now be backed and supported by a Labour Government in Westminster earlier than was anticipated. So, we need planning, action and details—yes, we do. What dialogue is happening with Tata? It's Government's job to work these things out, to look at the scenarios, answer the questions, do the modelling. It is disappointing that Tata have rejected the unions' plan, but we can't just wring our hands, we can't say, 'There's a shame.' There are questions here that need to be answered by this Government and the incoming Labour Government in Westminster.

Photo of Mike Hedges Mike Hedges Labour 6:50, 4 June 2024

As somebody who used to work in the research centre in Port Talbot pre MacGregor, and when it was under public ownership, I have some comments I'd like to make.

The Port Talbot steelworks is currently an integrated steel production plant, capable of producing nearly 5 million tonnes of steel slab per annum from iron ore. 'Integrated' means that you get the iron ore and the coke in, and you send out the cold rolled steel. So, everything is done on the one site. It's the larger of the two major steel plants in the UK. Over 4,000 people currently work at the plant, probably the same number again are working for contractors, and there's probably the same number again that are dependent on the works. The slab is rolled either on site at Port Talbot or taken to Llanwern to make steel strip products. Iron coming into Port Talbot, iron oxide, needs to be extracted from the ore in a blast furnace. The oxygen must be removed from the iron oxide in order to leave the iron. That's iron making; it's not steel making—steel making takes place later on in the process, at the basic oxygen steel plant. It then moves into steel making. Modern steel-making processes can be divided into three steps: primary, secondary and tertiary. Primary steel making involves smelting iron into steel. Secondary steel making involves adding or removing other elements, such as alloying agents and dissolved gases. Tertiary steel making involves casting into sheet, rolls or other forms.

With an electric arc furnace, you are effectively recycling previously used steel. An electric arc furnace is a furnace that heats steel by using an electric arc, hence the name. To produce a tonne of steel in an electric arc furnace requires approximately 400 kWh per tonne. There are two main problems with electric arc furnaces. The first is the cost of electricity. In 2021, ArcelorMittal temporarily paused production at some of its plants at peak time, as soaring energy costs hit Europe's largest steel maker. That's happened with lots of other people who are using electric arc, when they discover that the cost of using electricity becomes uncompetitive. The company said the pause was aligned with the hourly daily changes in electricity prices, adding that they were in response to the high energy prices, which were making it very challenging to produce steel at an economical price.

In 2019, according to the World Steel Association, there were over 3,500 different grades of steel, encompassing unique physical, chemical and environmental properties. Far too often, we use the word 'steel' in the same way as we use the word 'plastic', as if it is one thing. It's a series of different items. The carbon content of steel is from 0.1 per cent to 1.5 per cent, but most is 0.1 per cent to 0.25 per cent carbon. There are four main types of steel, namely carbon steel, alloy steel, stainless steel, tool steel, plus, we have electrical steel, which the old works used to work on before it was, unfortunately, closed. While carbon steels contain trace amounts of alloying elements, and account for 90 per cent of total steel production, they can be further categorised into low-carbon steels, medium-carbon steels, and high-carbon steels. From this, it's obvious that just collecting steel and melting it will not work. It will need grading into types of steel.

To compulsorily purchase the blast furnaces, first, the Welsh Government need to try and negotiate to buy them. Why would Tata not want to transfer them to someone else, because, when iron and steel making end, they will be a liability? Unless you have a steel-making plant to send the iron ore to, then a blast furnace is of no use. In January this year, Saltzgitter blast furnace A was fired up following a complete modernisation, lasting just over 100 days. With the complete relining of the blast furnace concluded, the Saltzgitter group took a key operational step forward, securing its pig iron supply as it transforms towards low-carbon dioxide steel production by 2033. During the construction phase, blast furnace A was completely relined. Amongst other things, the refractory lining was renewed, with 3,000 tonnes of carbon bricks and other refractory material. The complex process and control technology was also modernised; just over €100 million was invested in the relining and upgrading. Why can the Saltzgitter group upgrade their blast furnace and Tata can't? Why, throughout the rest of the world, are people having blast furnaces that are becoming low-carbon blast furnaces? And although it's not a fully proven technology, the use of hydrogen, instead of carbon, to reduce the iron oxide into iron is feasible, and I think it's a direction in which I would like to see us going. I don't believe there's a future for electric arc furnaces; I think that's just stage 1 of the closure process. And I think that we do need to keep the blast furnace, we do need to keep making iron and steel, and I think that, whatever we do, we may need to, again, take it back into public ownership, like it was when I was working there, though the people who worked there during that time will say those weren't exactly halcyon days.

Photo of Adam Price Adam Price Plaid Cymru 6:55, 4 June 2024

We need to turn 'save our steel' from a slogan into a plan, don't we, and we've only got days, possibly weeks, to do that. So, we have to work together, and the resources of Government now have to be used, because it's only Government, ultimately, that have the ability, working with the unions, to actually bring forward a plan. And we've seen, haven't we, in the statements in the last few days, the complete arrogance from Tata. We now have to meet that arrogance with steely resolve on our part. Look at what the CEO, Rajesh Nair, has said just in the last few days: (a) they've taken off the table now the offer, in terms of the redundancy payments to the workers, because the workers have had the affront of using their trade union democratic vote to actually vote to defend their communities and their jobs. And so Tata have said, 'Well, we're no longer giving that to you.' But not only that, they've said that they're now

'reviewing whether we should now plan to bring forward the dates for the closure of BF5', meant to close already this month. And what they're saying is, 'Look, we're going to go in quicker, in the next few days.' So, we need to act. We need to act now. Now, we've got, probably—almost certainly—a change of Government at Westminster in four weeks' time, so that's the gap, right, and we've got to fill that gap. We've got to defend the steel industry in Wales for the next four weeks. We're not going to get any help from Westminster in the meantime; the Parliament there is dissolved. This is the only Parliament for Wales at the moment, and it's the only one that can act. And we have the powers. We have the powers. We've checked. The Government lawyers will say the same, no doubt, as the Senedd lawyers: we have the powers to bring forward emergency legislation, using our Standing Orders—the Deputy Presiding Officer will know the method. It could be done in days. It could be done in days to bring forward a short Bill that will impose a compulsory purchase on those blast furnaces and the heavy end.

Now, Dai Rees, you're absolutely right. The critical thing here is the method of the decommissioning and, you know, there are umpteen different ways in which a blast furnace can be decommissioned, can be switched off, and some of them allow you—. Because sometimes there are outages, in terms of sometimes you manage demand, et cetera, so this happens. Sometimes you do it in order to reline. There are sometimes ways in which you switch off the furnace in order to restart it, and that has happened, indeed, at Port Talbot, hasn't it? It's happened at many steelworks around the world. But there are other ways that you can decommission a blast furnace, because you are absolutely clear that the direction of travel is in one direction only, and there is no way coming back economically from that. And that's what we have to prevent. That's the plan that we need, and what I suggest is: let's work with the consultants that worked with the unions, Syndex, to come up with a plan that actually builds the bridge over the next few weeks. I give way.

Photo of David Rees David Rees Labour 6:59, 4 June 2024

I thank the Member for giving way, and I fully understand what you're saying, the plan about decommissioning. You're quite right: decommissioning can either basically decommission it to be reused or decommission it to close it down, effectively. But I still ask the question—a compulsory purchase order on a blast furnace; I understand what you're saying—what do you do with the blast furnace? Who do you employ? How do you employ? What are all those other aspects that I need to know about? I'm trying to get answers for those aspects: how it would actually work and deliver for the people to ensure that we can shut it down and therefore enter a situation in which it can be reignited.

Photo of Adam Price Adam Price Plaid Cymru 7:00, 4 June 2024

We will have to create a company, a holding company, that will run the blast furnace and the associated heavy end for that period at the minimum that is necessary in order to maintain the integrity of the asset, and we need to do work very, very quickly—over the next few days, ideally—to work out what is the cost of that, what exactly—. The best experts are the ones that you know, Dai—the people that work there. So, there are answers to all of these questions that can be found working with the unions and also with the unions' advisers, the Syndex consultants who are experts in the steel industry, to come up with a plan for a Welsh steel holding company, at least, while we consider what the future could look like. As other Members have said, I believe that the long-term future is in public ownership, though the idea of a Welsh steel co-operative as well should be considered as part of the mix. But our immediate plan has to defend the site against Tata's stated intention, which is to get rid of it, to turn it off in a way that it can be never restored. We have the legal power to prevent that; let's get the plan ready and bring that legislation forward on the floor of the Senedd.

Photo of John Griffiths John Griffiths Labour 7:01, 4 June 2024

As David Rees mentioned with Port Talbot, so too with Llanwern in Newport: there's a tremendous history of steel making that resonates today, and many people still think of Newport as, to some extent, a steel town, now city.

In the early 1960s, when Llanwern was opened, some 13,000 employees and contractors were on site and there was a huge amount of accommodation created locally to house those workers, and many of the housing estates around Newport were at least partially built for Llanwern steelworkers. It was very much modern and state-of-the-art when it was first opened and very much integrated, and of course it's gone through a series of very drastic changes since that time, with the end of steel making and other partial closures of the works and redevelopment of part of the site. But it still remains a major employer locally in Newport, and of course very significant for employment in the wider south-east Wales area, including many of our Valleys communities.

So, the idea that some 300 jobs will go at Llanwern in a few years' time, as proposed under the current plans, is obviously very, very unwelcome in the Newport and wider area. We have a role to play, those of us who are local politicians, to make sure that Llanwern is considered in that overall steel picture in Wales, because understandably, of course, there is huge concentration on Port Talbot because of the number of jobs there, the capacity there, and of course the integration of Port Talbot with the other steelworks in Wales, but Llanwern, as I say, is very significant as an employer as well, and as with the other steel plants, it's not just those directly employed there; it's the contractors, it's the spend in the local economy, it's suppliers, it's all those wider issues. And the average age of the workforce at Llanwern is much younger than people think, in the early 30s, and we have quite a number of apprentices who very much want a future within the industry. 

When you talk to people—just to echo again what David Rees and others have said—they really do express astonishment at the attitude of the current UK Labour Government in not seeming to realise that fundamental importance of the steel industry, for defence, for example, in what we know is such a dangerous and uncertain world at the moment; the importance for infrastructure, which we so badly need; for renewables, with their significance for the future; for construction and for manufacturing. People are absolutely amazed that there doesn't seem to be enough of an appreciation in the UK Government of that strategic, fundamental importance of our steel industry. So, of course, what we hope for in the Labour movement, working with our trade union colleagues and the workforce, is that we will have that new UK Labour Government in short order, with that £3 billion on the table to be used, with a very new approach, a very different attitude to the importance of steel making and the importance of our steel communities.

And I must say, when I was at the event in Abergavenny, Keir Starmer spoke very, very strongly and very passionately about the steel industry and the need to protect those jobs, the need to take that industry forward. There was a very strong commitment and a very strong sense of prioritisation, and it was one of the issues that he very much stressed on that occasion, and I think that augurs well for the partnership that we can have between a Labour Government in Wales and a new Labour Government in the UK.

The unions have done a lot of work with Syndex. There is a very significant amount of detail. It's there on the table to be used. Yes, decisions have been taken, but the timing of the election has now changed this, as others have mentioned. It's much earlier than nearly everybody expected, and that does give us new opportunities. The question is: will those opportunities be grasped, even at this late stage, by Tata, to understand the difference of this election date and the commitment from a new UK Labour Government? It's not too late. Let's hope sense prevails.

Photo of Rhianon Passmore Rhianon Passmore Labour 7:07, 4 June 2024

So, I rise to support the motion tabled by Jane Hutt, and I'm fundamentally of the mind that the motion is of profound importance to UK and Wales plc, namely that this Senedd believes retaining the capacity to produce primary steel in Wales is central to Wales's economic interests and the pathway to net zero. And I stress again, not only to Wales, but the United Kingdom. And 'a devolved administration', 'a DA', is how the UK Cabinet refers to Wales, and I can only state what a diminished, blinkered and myopic view of Wales and the United Kingdom the Tories have if they do not wish to see Wales and the UK retain its core ability to produce primary steel in Wales.

A UK Labour Government will invest in our steel industry. It will ensure the just transition to green steel, which is fuelled by the strong skills and true talent and amazing ambition of our Welsh steelworkers. Indeed, as has been said, Labour has earmarked £3 billion in total of investment over five years across the UK steel industry if we are elected. UK Labour's national wealth fund will invest £2.5 billion on top of the Government's planned measly £500 million in UK steel over the course of the next Parliament, and that is significant. Indeed, historic investments are now being made by our European steel-making competitors in green steel, but the Tory Government's chronic lack of ambition for Britain and its abysmal vacuum of any long-term strategy has let thousands of skilled workers down. It has also let their families down, and ultimately will result, if this continues, in a less safe United Kingdom.

Employment in the steel industry has been critically important to the communities of Islwyn throughout the recent decades, and has played a pivotal role in growing the Welsh economy and rising living standards. Indeed, in Islwyn is Tŷ Sign, and that's the largest housing estate in Caerphilly borough council, built in the early 1960s as a housing village for the Llanwern steelworks. It's a proud and strong community, and it's where three of my children were born and where I raised my family, and I know first-hand the importance of the steel industry to communities such as mine. And indeed, the Zodiac plant is critical to the automotive sector too.

But the Welsh Government has, on several occasions, explained to the Welsh Conservatives that Tata has not formally requested any funding since 2019. Over a period of many years, when Tata has applied for funding, whether it be for skills, research and development, or environmental projects, the Welsh Government has provided financial support, amounting to more than £17.5 million since 2009, and it's recognised by the business, by the steel trade unions and the UK Government, as a matter of common sense and fact, that the Welsh Government does not possess the requisite resources or powers that would allow it to intervene on the scale required for the transition necessary. And that's a fundamental issue. The UK Government has offered the £500 million pot to secure the current deal with Tata Steel UK, but this amount is equal to only 2.2 per cent of the annual budget Welsh Ministers are able to allocate directly. And for context, 2.2 per cent of the equivalent annual budget for the UK that Ministers can call on is not worth that; it's worth £11 billion. That context is everything.

So, given the high, but disproportionate role the Welsh steel industry plays in the wider UK sector, it is well understood, outside of political points scoring, that the UK as a whole bears a responsibility for the sovereign asset. This is why the forthcoming general election is so vital for Wales and the United Kingdom. And Labour will prioritise protecting our steel industry and the Tories will not.   

Photo of Elin Jones Elin Jones Plaid Cymru 7:11, 4 June 2024

(Translated)

The Cabinet Secretary to respond to the debate, Jeremy Miles

Photo of Jeremy Miles Jeremy Miles Labour

Diolch, Llywydd. Well, we've heard in the debate this evening a shared view across the Chamber that there is a viable future for steel making in Wales within that transition that supports a stronger, greener future for the Welsh economy. And I think it is very important that that is a clear message that this Senedd sends on a cross-party basis. We've heard today, in particular, from David Rees and John Griffiths, but from others as well, about how extraordinarily difficult things are right now for employees and their families, as well as those within local communities. 

I want to address a number of points made in the debate, briefly, in closing. Sam Kurtz made a speech, which I felt was unusually, if I may say, defensive and misrepresentative of the situation. I don't believe there is an audience for political knockabout in relation to a situation where there are 9,000 plus jobs at risk, and the debate should be based upon facts, even where we disagree. So, for the sake of correcting the Record, let me explain what the financial commitments that each party has made are: the £500 million from the Conservative Party, I don't believe has yet even been spent; the £80 million, which has been earmarked for the transition board, not a single penny of that has, actually, been spent. Not a single penny of it is helping a single worker. That's the reality on the ground. The Welsh Government is committing funds. We have budgets around ReAct and Communities for Work, which total about £25 million on a Wales-wide basis. Our personal learning accounts budget on a Wales-wide basis is around £21 million. We've extended the eligibility of that for workers at Tata and in the supply chain. They'll be able to claim against those budgets. Those funds are being spent already. Those funds are actively being spent to support the workforce already. So, I think it's important to have that proper context for the discussion. And he talks about 'strings attached'. If the strings that the UK Government have attached to the £500 million are going to lead to 9,000 plus job losses, I think that's a bad deal. I think that is a bad deal and a better deal could have been struck by a better UK Government. 

I'll address the points that both Luke Fletcher and Adam Price made, in an effort—and I accept the goodwill effort—to seek alternatives to the plan. I don't see how the compulsory purchase of one asset in an integrated steel production facility by a body that has no capacity to manage those assets can be part of the solution. I think that the points that David Rees made in the debate exploring that are good points, they're valid points, they show an open mind. But I think there are very significant questions around that proposal. Similarly, in relation to the nationalisation of Tata, I don't think that reflects—

Photo of Adam Price Adam Price Plaid Cymru

Everyone accepts that there are important questions to answer. The issue is that only you, as the Government, have the resources to be able to provide those answers. So, will you be voting, will you be accepting the amendment that refers to this option? And will you then be commissioning that work from your officials, working together with the trade unions and their advisers? 

Photo of Jeremy Miles Jeremy Miles Labour

It's important for the Government to engage with the realities on the ground. And whilst the points that Adam Price and Luke Fletcher are making are important contributions to the debate, I don't think they reflect the reality on the ground at Tata. And I think at this point, it's important that we engage with that.

It is essential that the company does everything it can to avoid compulsory redundancies within a workforce that has been particularly loyal. It is essential that it works with the transition board to ensure that employees get the help and support to reskill that they need, and it is essential that the transition board works faster to deliver that support. [Interruption.]

Photo of David Rees David Rees Labour 7:15, 4 June 2024

Thank you for taking the intervention. Do you agree—I think Adam Price highlighted the point—that we do need to talk to Tata, because the threat that Tata are putting on their workforce is totally unacceptable? They've come to an agreement, and now, because the workers have actually come to a view, they wish to express their view of how bad the deal is, and they wish to take action. By the way, it's not strike action; this is just work to rule and this is simply stopping overtime. So, it's not that, actually, they're going on strike, but the threat of taking away the offer to the workers has to be rescinded, and will you talk to Tata to ensure that they too understand that what they're doing, actually, is making the situation a lot worse than it could be?

Photo of Jeremy Miles Jeremy Miles Labour 7:16, 4 June 2024

Yes, and I agree with that point. I think David Rees makes a very, very important point. There have been negotiations around the terms of support for workers, and there has been an enhanced package, as it's been described, and it's important that continues to be available to workers so they have the best available support that Tata can provide. So, I would absolutely endorse the point that David Rees has made. 

What we are seeing is the speed of the transition to electric arc furnace steel making already having an impact today. The loss of the capability that blast furnace technology provides is a huge concern to our economy and makes us effectively reliant upon imports. We have now a decision to call an early general election. That does change the landscape in which Tata has taken its decision, and I would urge them not to take decisions that are irreversible against the context of that new landscape, when we have the prospect of a new Government with a new commitment to an industrial strategy, a new commitment to renewable energy infrastructure and a new commitment to steel production. That is the new reality, and I think Tata needs to reflect on that and look again at the decisions it's taken. We will then have a partner working with us as a Welsh Labour Government to protect steel making in Wales.

Photo of Elin Jones Elin Jones Plaid Cymru 7:17, 4 June 2024

(Translated)

The proposal is to agree amendment 1. Does any Member object? [Objection.] Yes, there is objection to amendment 1. Therefore, we will defer voting under this item, and the rest of the amendments and the motion, until voting time. And unless three Members wish for the bell to be rung, we will now move immediately to voting time. There are no objections to that.

(Translated)

Voting deferred until voting time.