Tata Steel: Port Talbot

Alan Brown Excerpts

Monday 18th September 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Madam Deputy Speaker,

“I’m not going to shy away from the fact that this is still terrible news.”

Those are not my words but those of the Wales Secretary, who is sat next to the Minister. How did we get to a stage where £0.5 billion of UK-wide taxpayers’ money is being used to prop up a deal that is classed as “terrible news” by a Government Minister?

We know that we need to decarbonise, but with this level of taxpayer investment we should be looking at proper, green, virgin steel manufacturing and job creation, not the loss of 3,000 jobs, and not settling for lower-grade steel production from recycling. What will the lower-grade steel production mean for Port Talbot’s ability to supply key UK infrastructure programmes? What UK-based supply chain guarantees are being sought for the £1.25 billion of investment that the Government say is coming forward into the plant? Why were the unions not involved in the discussions? Why were the Welsh Government not involved? Is it not hypocritical to propose to involve the Welsh Government in the taskforce for job losses but not to have included them in the initial discussions on options for the plant going forward?

Not that long ago, the Tata Group also received a reported £0.5 billion for a proposed electric battery factory—another deal lacking in transparency at this stage. How can the Tata Group secure £1 billion so easily from the Government? It is the same with EDF, with more than £1 billion allocated to the development of the Sizewell C nuclear power station. Too many deals are done behind closed doors, based on who has got the Government’s ear and where the Government think there is some political capital. Does it not prove yet again that there needs to be a structured, coherent, long-term strategy to address the competition from the Inflation Reduction Act in the United States and the EU’s green industrial plan? Does it not also prove that in the current constitutional framework and fiscal straitjackets imposed on the Welsh and Scottish Governments, our communities will always be at the mercy of decisions made at Westminster?

[Ms Ghani]

There were so many questions, but I will do my best to address the most important ones. Conversations at Port Talbot have been going on for years—one could argue more than a decade. It is not news that the site needed financial support to ensure that it continued to be viable. Steel companies lose more than £1 million a day producing steel, and it is no longer viable without Government support. That is a route that many countries have taken.

The blast furnaces in Port Talbot can be operated for 15 to 20 years only before a major investment decision is reached, either to be relined or to be rebuilt. There was a very tight timeframe; it was important to find alternative energy—electric—to make sure that it would work with the timeframe of the new furnaces coming on site. That is why it is electric, not hydrogen—there are no hydrogen alternatives that can give us the steel that we need on the scale that we need. This is not only a £500 million investment. There is also £100 million to deal with the transition. As I said, the transition board will comprise union members, staffers, the Welsh Government and the Welsh Secretary of State. The conversation will take place, and consultation will occur. Those conversations have been happening for quite some time.

It is important to note that the sector is now secure. In a part of the UK that is incredibly important to us, thousands of jobs will be created—up to 16,000 jobs in the Celtic freeport proposal, which is linked to the renewables at Port Talbot. That will create even more jobs. Any transition that requires a consultation on jobs is always sensitive, which it is why it is important that the transition board will be stood up to provide the support needed. The site needed to make a decision. The best decision was for it to continue to make steel. That is what we will support it to do.