Steel Industry: Wales

Beth Winter Excerpts

Wednesday 21st February 2024 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

It is a pleasure to serve under your chairship, Sir Gary. I congratulate my hon. Friend the Member for Llanelli (Dame Nia Griffith) on securing a debate on this issue, which is so important for the people of south Wales and for the economy of Britain as a whole.

I will limit my contribution to asking the Minister two short questions, based on what the Welsh Affairs Committee heard in its evidence sessions on Port Talbot last month. During those sessions, I asked Tata:

“If the funding were available, would you reconsider your decision?”

Tata’s response was:

“If somebody were to give us money…fine: we can look at other options going forward.”

I also put questions to the trade unions representing the workforce—and I commend the trade union movement in Wales for the work it does in unity with the steelworkers. I asked:

“What levels of investment are needed for the plans and where should that come from? ... Should the Government have a stake in steelmaking?”

In response, the representative of Unite, the main steelworkers’ union, said:

“The need to retain virgin steel production in the UK is too important to be left to the decisions of one multinational company,”

and:

“We think that there is a role for the Government to take a stake in the plant as well”.

My first question to the Minister is this: since Tata said it would be open to other options, have the Government considered that, and have they discussed finding additional funding to save thousands of jobs at Port Talbot? Secondly, in relation to the nature of funding, have the Government considered taking a public stake in the steelworks to ensure the continuation of our virgin steel manufacturing capacity?

In conclusion, as my hon. Friends have already stated—

[Stephen Kinnock]

I know that my hon. Friend is reaching the end of her speech, but something just occurred to me. I was very pleased to join the Welsh Affairs Committee evidence sessions, and during the second session I asked the Secretary of State for Wales whether the UK Government have attached any strings to their £500 million in the form of job guarantees, and whether he was clear that the electric arc furnace model is going to work without access to iron ore-based metallics. In response, he referred me to the Department for Business and Trade, and said, “Well, they struck the deal, so they should be able to answer your questions.” I wonder whether my hon. Friend might wish to add another question to her list—whether there were any strings at all attached to the £500 million.

[Beth Winter]

That is an extremely important question. Another question that my hon. Friend raised to which we did not get a response was on the timeframe within which the £500 million is going to be paid. A series of questions were asked during the four evidence sessions that day—if the Minister has not seen the transcript, I urge her to look at it—and a number of them remain unanswered. We have brought some of them to light here today.

My hon. Friends have spoken in much more detail about the devastating impact that the closure of the steelworks in Port Talbot, and many other businesses in Wales, is going to have on our communities. Wales was at the forefront of the industrial revolution—our communities were built on coal, iron and steel—but our history is one of wealth being extracted from our country for the benefit of a few, and that continues. This is a prime example of the lack of consideration given to the people and communities of Wales.

We can and will be at the forefront of change. The multi-union deal—indeed, all the deals that have been proposed by the trade unions—offers a solution. Wales can be at the forefront of a green industrial revolution, where the wealth is not only created in Wales but retained in our communities, so that we no longer suffer unacceptable levels of poverty and deprivation. We are a wealthy nation in terms of our natural resources, and we deserve a different future. We will continue to stand in solidarity with our workers as well as our trade unions to say that we are not going to put up with the continued extraction and exploitation of our communities in Wales. I look forward to hearing the Minister’s response to my specific questions. Diolch yn fawr.

[Sir Gary Streeter (in the Chair)]

We now turn to our Front-Bench speakers. I call Sarah Jones.

--- Later in debate ---

[Ms Ghani]

I will make some progress before I take any further interventions. If the hon. Lady paid more attention to the business model, she would know that we cannot use more scrap steel in the UK economy because we do not have the capacity. But we will with the electric arc furnaces, which will be the dynamic change that is definitely needed.

Furthermore, by reducing our reliance on raw materials such as iron ore and coking coal, electric arc furnace technology offers a more sustainable alternative. Unlike blast furnaces, electric arc furnaces use scrap materials that are readily available—as I said, we have around 11 million tonnes circulating—from abundant domestic sources in the UK. In fact, the UK ranks among the top exporters of steel scrap globally, second only to the United States. Leveraging our ample supply of steel scrap for electric arc furnace production enables us to create new steel products locally, supporting British and international manufacturers alike. Every tonne of steel scrap that is sourced domestically diminishes our dependence on raw material imports from overseas countries, none of them near neighbours.

Wider support for the steel industry was raised in the debate. More widely, we are backing UK-made steel and, crucially, we are backing it in the right way, investing hundreds of millions of pounds to help the industry to thrive in increasingly challenging global markets. We are launching initiatives such as the British industry supercharger, which reduces electricity costs for the steel industry and other energy-intensive sectors, bringing them closer in line with the charges of other major economies. That is complemented by the £730 million in energy cost relief given to the steel sector since 2013. We have given specific support through our energy bill relief scheme and energy bills discount scheme.

We are, then, ensuring the resilience and prosperity of the UK steel industry in the face of increasingly competitive global markets. This work is preparing UK steelmaking for the coming years, but it is not the final word in future-proofing the industry. The SUSTAIN future manufacturing research hub, which is led by Swansea University, is the largest fundamental research activity centre working right now to decarbonise and improve the efficiency of steelmaking in the UK. I believe it is also looking at the quality of scrap steel and new technologies to ensure that we can make even more products using steel in the UK.

Other points were raised by the hon. Member for Cynon Valley (Beth Winter), who serves on the Welsh Affairs Committee. I will go through the transcript from that Committee; I am across most of the issues raised. She asked about an unlimited budget; I am not sure that having an unlimited budget is a good use of taxpayers’ money, nor does it answer the question about the demands of customers looking for cleaner green steel.

A question was asked about absorbing further technologies. We are looking at electric arc furnaces at the moment, but that product is just the first step. As other technologies become commercial, they could be considered in future. I thought the question about our taking a stake in the company was curious because that is not something that we do. Regarding the condition on the grant, the consultation is taking place, and agreements are still being finalised and will include appropriate conditions on the grant. That is why the transition board is vital to that conversation. The grant will be paid in arrears against set milestones for the build of the electric arc furnace.

[Beth Winter]

I am not sure you have answered all the specific questions from the Opposition. You made a comment earlier about the consultation process that left me slightly confused. You met the unions on Monday and said you want to wait to see what happens in the next few weeks. Is this a done deal—or does the consultation process actually have some teeth in terms of potential outcomes? The unions are pushing the multi-union deal. You met them this week and just intimated that we should wait to see what happens in the next few weeks so—this is my understanding of a consultation process—are you still open to alternative options? Tata may not be, but the UK Government could be, just as the Labour party has proposed if and when we get into government.

[Sir Gary Streeter (in the Chair)]

Order. That was another long intervention. I remind the hon. Lady that any reference to “you” is a reference to me. I am certainly open to further negotiations, but that does not really matter.