Protecting Steel in the UK

Alun Cairns Excerpts

Tuesday 23rd January 2024 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

There is no question but that this is an extremely worrying time for families in Port Talbot and for the community at large. I know the community extremely well, and my father was a welder at the basic oxygen steelmaking plant in the steelworks for more than 30 years. Port Talbot is a community where everyone knows someone who is related to the steelworks in some way. The scale of the impact that this will have on the community should not be underestimated. It is not just the jobs themselves. There will be the contractual jobs and the associated roles with those contractual jobs, so there is a significant multiplier that follows on.

Of course, this is not the first time that we have been in this position or that the steelworks have been under threat. I can remember tens of thousands of people working there when I was growing up in the 1970s. The reality is that in 2016 we were in a similar position, when Tata planned to close the plant but, in opposition to what the Government are now claiming, the UK Government proactively worked with Tata to encourage a sale and, in the interim, the price of steel rose, which has given us a much longer lifespan for the site.

I want to point out that the commitment that Tata has shown is significant and needs to be recognised, because it has lost millions of pounds over time. In the close of 2018, as Secretary of State for Wales, I went to Mumbai to meet the chairman and chief executive of Tata, and to express my concern that the price of steel at that time was falling, and I wanted to know what their plans were. That is the proactivity with which the Government maintained an interest over time in seeking to support the industry and to support steel.

[Sir John Hayes]

I take my right hon. Friend’s point about commerciality, but the truth is that we can and should protect those core industries that are at the heart of our manufacturing capacity. If we open ourselves up to cheap foreign imports with huge environmental costs, we are bound to end in a situation of the kind he describes. I thank him and, in particular, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for their work, but it is for the Government to prioritise British jobs and British manufacturers.

[Alun Cairns]

My right hon. Friend makes an extremely important point, and I strongly agree with him. That is the proactivity that the Government have sought to pursue. I should correct the record, by the way: it was in November 2019 that I went to Mumbai to meet Tata.

However, the reality is that every time a Member of this House, on either side of the Chamber, has called for us to go further and faster and to be ahead of the curve in the green transition, another nail has been put in the coffin of heavy industry such as Tata in Port Talbot. That is the reality of the position. When we have passed climate change legislation here we have heard many Opposition Members—those who are now seeking to defend the jobs—saying that the Government are not doing enough on our green transition.

The £500 million is a significant sum, and we should not play it down. We must also remember that this is a devolved responsibility. Pre-devolution, that money would have been coming out of the Welsh block. We all know that since 2016 the Welsh Government have done nothing to reinvest in the plant after we managed to save it from closure, so I find it churlish when the Minister in the Welsh Government says he needs hundreds of millions. Those are the people calling for further devolution and further responsibility, but ultimately there is no accountability for the decisions, because investment in industry is a devolved function.

However, thanks to the Union and thanks to the United Kingdom Internal Market Act 2020, the UK Government can invest in the steelworks in Wales. That is the same Act that the Opposition voted against and to which the Welsh Assembly would not even approve a legislative consent motion in order for it to pass.

In the limited time I have, I also want to point out this is a two-blast furnace site; having one blast furnace operational makes it even more inefficient, and it will lose more money. My hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) highlighted a really important point about an arc furnace, and I have not heard the automotive sector say that it is content with that. Finally, I hope we will have a development corporation in order to save the economy in the area.

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[Sarah Jones]

My hon. Friend is absolutely right. He made a brilliant speech earlier and has been a great defender of his constituents. The lack of any plan from the Government over the last 14 years is at the heart of the problems we see today.

As the shadow Secretary of State, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), said in his opening speech, we also risk something much wider: that net zero becomes a zero-sum game for working people and we lose the public consent that we need for the transition. There is no getting away from the facts. The Government have pushed a plan that uses hundreds of millions of pounds to make thousands of people redundant. If Scunthorpe ends up going the same way—the hon. Member for Scunthorpe (Holly Mumby-Croft) made a powerful speech to the contrary—we will be unable to produce primary steel in the UK.

In the Port Talbot plan, the two blast furnaces will shut this year, with a cliff edge for jobs. For at least three years, steel will be completely imported from India and the Netherlands to feed Trostre and Llanwern in south Wales, but there is no guarantee that once the electric arc furnace is built, those jobs will stay. We know that there are huge questions about scrap steel and whether it will produce the steel we need. Many Members, including the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), asked questions to which the Government have so far provided no answers.

[Alun Cairns]

I did not have an opportunity to develop this in my speech, but would the hon. Lady and the Labour party support a development corporation to diversify the economy so that it is not so dependent on one industry and one company?

[Sarah Jones]

The Labour party would support an industrial strategy, which would have myriad plans that would look exactly at some of these issues. Our national wealth fund would fund some of the really important future industries that we need, crowd-in private sector investment at a much greater scale and, hopefully, lead to the manufacturing industry growing and not the managed decline we have seen under this Government.

My hon. Friend the Member for Aberavon (Stephen Kinnock) said that the plan is exporting jobs and importing carbon, and he is exactly right. My dad was from Llanelli, once the tinplate capital of the world. My grandad worked at the tinplate factory that was then called Richard Thomas and Baldwins, and his brother worked at the Salter saucepan works. They would have stood in Stradey Park singing “Sosban Fach,” I am sure bursting with pride.

Britain’s steel industry has seen us through momentous periods in Britain’s national story—the white heat of the industrial revolution; the planes, ships and tanks that saw us through the second world war; and the buildings dotting our skyline across this modern Britain—but if we get nostalgic for the past, we do not look to the future. The world is changing, it is less safe and less secure, and steel is changing. New technologies are transforming how we make and use steel, and it will be as crucial to our future as it has been to our past.

We cannot make solar power without steel. We cannot make electric vehicles without steel. We cannot make wind turbines without steel. We will not reach the Paris climate agreement targets without steel. Steel is used for 3D printing and robotic automation, and everything from the tools that our doctors use to save our lives to the rocket ships that reach into space needs steel. Our pens are made of steel, and Big Ben ticks because of steel. Anyone who does not know that it is magic should read Ed Conway’s book “Material World”. Steel makes the machines, the tools and the factories that make everything possible. It will forge our future, not just our past. The debate is not about nostalgia: it is about looking head. Labour Members know that steel can have a bright future in Britain.

The Government’s last-minute chaotic deal is a masterclass in how not to run the transition. What they offered was never a serious plan for the long-term of our steel industry; it was yet another sticking plaster from a Government lurching from crisis to crisis, unable or unwilling to take a long-term view.

There are other ways forward. Labour has a cast-iron commitment to support our steel industry. We have earmarked up to £3 billion for investment in green steel alongside industry, working with steel communities to ensure that the transition comes with jobs. There are other ways forward that can help us, not least hydrogen. While the Conservatives scramble around for last-minute deals, Labour will make long-term investments. That is the central difference in our approach.

We must think about manufacturing differently. I have lost track of the number of times businesses have said to me, “We would invest in renewables, but the Government make it too hard.” Our manufacturers say, “We want to decarbonise, but we are living hand to mouth because our energy bills are so much higher than in other countries, and Government won’t help us.” This steel debacle speaks to a much wider issue. We do not just need a steel industry: we need glass, ceramics, cement, compost, critical minerals, batteries, composites and cheap energy. We need supply chains that work, an upgraded national grid, planning reform and a job plan to create jobs across every part of this country—a transition from the old to a much cheaper renewable future. In short, we need an industrial strategy. We need a Government who believe in working in partnership with industry, not just telling them to “F off”, and we need a plan that looks to the future of our own country and does not just rely on cheap imports from China.

We are asking the Government to think again, to look at the multi-union plan again and to think about how to defend primary steel capacity in our country. We know that steelworkers are watching this debate, and they must feel wretched. I ask Government Members in all sincerity: are they concerned about our defence capabilities if we lose the capacity to make primary steel? Do they really think the Government’s plan is money well spent? Should decarbonisation really be about cutting jobs? Is manufacturing really a Victorian pursuit best left to the Chinese, as a former Tory Prime Minister is reported as saying?

Or, as the great country that we are, can we harness the skills and talents of our people and create a vibrant manufacturing sector here in the UK? Tonight, can we send a message to the steelworkers here that we want to protect the future of British steelmaking, and that we will not sit by and let managed decline be the hallmark of this great British industry? I commend the motion to the House.

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[David T. C. Davies]

May I just continue, because I have only three minutes left?

I want to say something about those 3,000 people. I worked in a steel plant myself. I worked in Llanwern when I left school, so I am directly involved in this and I feel it. I say to the workers that I have met the trade unions on a number of occasions. In fact, I will cancel what I am supposed to be doing next and I will go out there in the Public Gallery and meet the workers, with the hon. Member for Aberavon (Stephen Kinnock) and anyone from the unions, to explain the Government’s commitment.

There is £100 million on top of the £500 million, which will be there for the community in Port Talbot. It will be there to develop infrastructure to get other companies in. But the most important thing, and the hon. Gentleman knows that I have said this in the transition board meetings, is to ensure that anyone and everyone who loses their job has the absolute maximum opportunity to retrain and do anything that they want to do as far as retraining is concerned—to help to set people up in businesses, to get them licences, to get them any training they want. There is a massive commitment from the UK Government to that and we will not turn our backs on the people of Port Talbot.

[Alun Cairns]

My right hon. Friend is making an extremely powerful and factual case, rather than some of the wilder claims that have been made. Bearing in mind that this is a devolved responsibility, is he aware of any capital sums that the Welsh Government are making available to support the community?

[David T. C. Davies]

The Welsh Government have made it clear that they are not able at the moment to put in the sort of money that would be needed to come up with any kind of different plan. There is no other plan on the table, which is why we find ourselves in the situation we are in.

I will turn very quickly to a couple of points that were made. First, on primary or virgin steel, obviously all the iron ore and coal used in the plant is being imported. We are, therefore, at this moment, dependent on other countries for our virgin steel capacity. The advantage of an arc furnace, although this is not the situation that I want to be in, is that we would not be dependent on foreign countries for the supply of steel because, as the Minister for Industry and Economic Security, my hon. Friend the Member for Wealden (Ms Ghani) pointed out, we currently export 8 million tonnes.