Port Talbot Steelworks

Debate between David T C Davies and Stephen Kinnock

Tuesday 30th April 2024 Commons Chamber

[David T. C. Davies]

My hon. Friend is right that if we wanted to, we could probably find iron ore, coke, coal and limestone in the UK, but I do not see any great enthusiasm at the moment for opening up the mines to do that. As for the 8 million tonnes of scrap in the UK that will go into the arc furnaces, officials from the Department for Business and Trade and EY have gone over very carefully the business plan being put forward by Tata. Let me point out to my hon. Friend that not only are the UK Government investing half a billion pounds, but Tata is investing £750 million, so Tata obviously feels that there is a good, strong, commercial case for building that arc furnace, and is putting its money where its mouth is.

[Stephen Kinnock (Aberavon) (Lab)]

The Port Talbot steelworkers in my constituency have given their life to the steel industry and to Tata Steel. The reckless deal that has been done by the UK Government and Tata is a hammer blow for them, and we hope that there is still time for the employer and the unions to come together, drop the bad deal for steel, and adopt the compelling and robust multi-union deal instead.

May I ask the Secretary of State about the role of contractors in all this? Everyone knows that for every job lost in a steelworks, between two and three more are lost through supply chains and contractors, so the figure of 2,800 that is being used is a massive underestimate of the devastating impact, as there will be job losses through supply chains and subcontractors. Does he agree that the number of job losses will be far higher than 2,800 if this reckless deal is adopted? If so, does he agree that it is time for everyone to pull back from the brink and adopt the multi-union plan, which offers us a bridge to the future, rather than the cliff edge that is currently being pursued?

[David T. C. Davies]

Clearly, there will be an impact on those in the supply chain; there has been absolutely no doubt about that. At the last transition board meeting, at which the hon. Gentleman was present, we discussed that, and we agreed that we would want to support anyone in the supply chain who has been affected, but we cannot start putting numbers on this. It would be irresponsible to start guessing the number of people who will lose their job, but I agree with the hon. Gentleman that there will clearly be an effect.

The hon. Gentleman talks about a reckless plan, but ours was the only plan on the table. He keeps suggesting that we adopt the Syndex plan, but it is not a plan unless Tata agrees to it. I have discussed the Syndex plan with senior management at Tata and with the head of Tata Holdings, Mr Chandrasekaran, in Mumbai. He does not believe that it is commercially viable, and he believes that it would be technically far too difficult to try to build an electric arc furnace on the site of the steel melt shop.

[Stephen Kinnock]

indicated dissent.

[David T. C. Davies]

The hon. Gentleman shakes his head. I do not know what the answer is; he says that it is possible to implement the Syndex plan, but Tata says that it is not. What the hon. Gentleman has to realise is that it is not the UK Government he has to convince; it is Tata. The UK Government have never said that they would be against the Syndex plan. It is Tata that has to be persuaded.

Protecting Steel in the UK

Debate between David T C Davies and Stephen Kinnock

Tuesday 23rd January 2024 Commons Chamber

[Mr Khalid Mahmood]

rose—

[Stephen Kinnock]

rose—

[David T. C. Davies]

Let me make a little progress, as I only have about six minutes and I think Members will want me to put things on the record. The hon. Member for Birmingham, Perry Barr (Mr Mahmood) waved around the Syndex plan; as a member of Unite, surely he will be aware that it rejected that plan.

Let me go back to the situation we found ourselves in. It was not a decision of the Government to shut down the blast furnace, but one taken by Tata in the light of the losses it was making.

[Stephen Kinnock]

I thank the Secretary of State for giving way. Yes, it is a Tata decision, but £500 million of British taxpayers’ money is going into it. Will he set out what red lines the Government put down around that £500 million? Were there any red lines around jobs?

[David T. C. Davies]

It came down to this: the Government had to find a solution that was acceptable to Tata and that would save the maximum number of jobs. The Government are not paying £500 million to throw 3,000 people out of work—[Interruption.] No, the Government are paying £500 million to save 5,000 jobs, because they will be saved, as well as around 12,500 jobs in the supply chain.

[Stephen Kinnock]

rose—

[David T. C. Davies]

I will give way to the hon. Gentleman in a moment, because he knows more about this than many who have spoken. The reality is that Tata told us that it was looking to pull out completely from the United Kingdom. If the loss of 3,000 jobs is devastating—it certainly is—how much more devastating would 5,000 be, and 12,500 jobs in the supply chain? It was a simple choice for the Government—not a good one—between seeing 3,000 people lose their jobs or around 17,500 people lose their jobs, and possibly even more. That is why the Government committed to pay £500 million towards an arc furnace. Let me make one other thing clear: the Government will not pay a penny to Tata until that arc furnace is built.

[Stephen Kinnock]

I thank the Secretary of State for giving way again; he is being generous. I think there are many reasons why Tata would not be considering full closure, not least the multibillion cost of closing down the Port Talbot steelworks. The remediation costs would be absolutely astronomical, so that was never on the table. The choice was between the bad deal that the Government have done with Tata and the compelling multi-union deal. Can we please just have the facts on the table, which are that this is not about closing the plant versus the Government’s deal, but about the multi-union deal being the right way forward?

[David T. C. Davies]

I understand the hon. Gentleman’s position and he is right to stand up for his workers. This is the reality of the situation: that plan has not persuaded Tata. Tata has not said that it is credible. Tata has said to me that it could not go along with that plan, because although one of the blast furnaces—blast furnace No. 4—has a number of years to run, it would still come to the end of the life of the coke plant and the sintering plant, so if Tata went ahead with that proposal, it would keep open one blast furnace, which is still losing a lot of money, and then have to start importing all the coke and all the sinter that it would need for it.

There is then the technical problem in that Tata says it would be very difficult indeed to build an arc furnace next to a working blast furnace containing molten steel. [Interruption.] The hon. Gentleman can shake his head, but that is what it is saying to us. That is what it has said to us as a Government and that is why we find ourselves in the difficult, unpleasant and awful situation of having to choose between 3,000 people losing their jobs and 17,500 people losing their jobs. That is why we came to the decision we did.

[Stephen Kinnock]

rose—

[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.

Support for the Welsh Economy and Funding for the Devolved Institutions

Debate between David T C Davies and Stephen Kinnock

Tuesday 5th July 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

Does the hon. Gentleman agree that in the last year for which agricultural funding was calculated, £337 million was spent on agriculture—in 2019 before Brexit— and that in each year afterwards £337 million is being spent? If my figures are correct, Wales has not lost out by one penny as a result of leaving the European Union.

[Stephen Kinnock]

I thank the Minister for intervening, but these figures are from the House of Commons Library briefing, they have been checked and triple-checked, and the reality is that Wales’s rural communities are £243 million worse off than they should be. If the Minister wishes to contest that claim he is welcome to do so, but those are the facts of the matter.

The Government are also undertaking a game of smoke and mirrors around the pot of money being offered to Wales through the UK shared prosperity fund, which, of course, is replacing EU funding. What is absolutely clear is that over the coming decade and beyond—not just the next three years, which is the commitment that the Government have made, but the next three decades—the funding that Wales receives must match the amount that the EU would have given to Wales. Ahead of us now is a cliff edge. We need guarantees that when the £1.5 billion-a-year UK-wide commitment falls away, the £1.5 billion will continue, and I hope that the Secretary of State will confirm that from the Dispatch Box today. This is an issue of long-term planning that supersedes party politics and manifestos. It is about the key stakeholders who are on the coalface of delivering these shared prosperity fund projects. They need much more long-term planning capability than this three-year cliff edge is allowing them.

It is also essential that the Welsh Government are given a real and meaningful say in how these funds are administered. Devolution must be respected, and it is deeply disappointing that the UK Government are seeking to ride roughshod over fundamental constitutional principles, as manifested in the UK shared prosperity fund and the way in which it works.

It is time that the Conservative Government started to take levelling up seriously. Tory inflation and under-investment risk levelling down communities like mine in Aberavon. The decision not to support the Swansea Bay tidal lagoon, as well as the failure to implement the green steel deal that Labour is proposing, has shown a disregard for parts of our country that are desperately in need of investment and development. This must start with a fairer package of funding for Wales, less smoke and mirrors around budgets, and an emergency budget to meet the Tory cost of living crisis.

Let me end by saying that I agreed wholeheartedly with the right hon. Member for Preseli Pembrokeshire when he said he objected to the “older, sicker, poorer” narrative. We are a proud people: a proud, dynamic, entrepreneurial, innovative people. We are not victims and we are not looking for charity, but we need a level playing field, and that level playing field can only be delivered by a UK Government in Westminster—a Labour UK Government, delivering in partnership with the Welsh Labour Government for the people of Wales.

Oral Answers to Questions

Debate between David T C Davies and Stephen Kinnock

Wednesday 18th November 2020 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

What recent discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the long-term future of the steel industry in Wales.

[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

I know how committed the hon. Gentleman is to steelmaking from our time on the Welsh Affairs Committee. I reassure him that the UK Government are similarly committed to a long-term sustainable future for steelmaking in Wales. We have already met Tata and the Welsh Government, and BEIS will continue to work with the company as it shapes its business strategy in the future.

[Stephen Kinnock]

The Minister will be concerned by the recent news that Tata Steel is selling its Dutch operations to a Swedish company. The steel industry is helping so much in the current crisis, and it is the basis of our entire manufacturing sector, so can the Minister please give us a bit more detail about what discussions are taking place with the Government and with Tata Steel, and when we can hear some positive good news, because we need our steel industry?

[David T. C. Davies]

I agree with the basis of the hon. Gentleman’s question. I cannot go into great detail about what discussions are taking place, but I can reassure him that discussions have taken place with Tata and with BEIS, and the UK Government stand ready to work with all to ensure that we have that steelmaking future in Wales. If the hon. Gentleman has any doubt at all, he only needs to look at the work that my right hon. Friend the Secretary of State did to ensure that Celsa received a £30 million loan—a loan that has saved 800 jobs in Wales and demonstrates firmly our commitment to the Welsh steelmaking industry.

Welsh Affairs

Debate between David T C Davies and Stephen Kinnock

Thursday 27th February 2020 Commons Chamber

[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

I thank all Members for their contribution to the debate. I will do my utmost to try to address as many of those contributions as possible.

I thank my friend and constituency neighbour the hon. Member for Torfaen (Nick Thomas-Symonds) for his comments. We may disagree on rather a lot, but on the issue of revolving doors in the Wales Office I stand with him 100%. Perhaps at another time we will discuss some of the other issues.

A third member of the Wales Office team has just been appointed: my hon. Friend the Member for Wrexham (Sarah Atherton). She has in common with the other two members of the team the fact that she, too, has worn the uniform of the British Army, although I believe for rather longer than either I or the Secretary of State did, and in a full-time capacity. I thank her for her help.

As Minister, I look forward to working closely not only with the Secretary of State but with all Members of Parliament from all parties and, of course, Members of the Welsh Assembly from all parties.

The hon. Member for Swansea East (Carolyn Harris) made a powerful contribution, as she always does, and channelled her inner Bonnie Tyler. She made a very good point: she achieved a change in the law, not just in Wales but in the rest of the United Kingdom as well, because people were willing to listen to what she had to say, and she was willing to work with members of other parties. That is something we must continue to do.

I thank my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), who will take over as Chair of the Welsh Affairs Committee, for his comments. I am sure that he will do an outstanding job and continue the tradition of ensuring that members of that Committee are willing to travel the length and breadth of Wales to find out anything that may be of importance to that Committee’s inquiries.

Let me turn to the flooding that has devastated Wales. We heard about the issues from my hon. Friend the Member for Montgomeryshire (Craig Williams) and the hon. Members for Caerphilly (Wayne David), for Pontypridd (Alex Davies-Jones), for Aberavon (Stephen Kinnock), for Cynon Valley (Beth Winter) and for Newport East (Jessica Morden). I echo the thanks that all Members gave to the emergency services—to the police, the fire service and the rescue services, including the Royal National Lifeboat Institution, the Severn Area Rescue Association and others.

Various Members also mentioned perhaps forgotten heroes. Like a few other speakers, I pay tribute to local authority workers. I was privileged to be able to thank those who helped out recently in Monmouthshire at a depot, where they had worked 24 hours a day to fill thousands upon thousands of sandbags and get them out. I have to say that when I got a complaint from one constituent that somebody’s bin had not been put back in the right place in the garden, I had to restrain myself from sending a rather strong message, given what workers in Monmouthshire and across Wales had been responsible for.

I also pay tribute to other forgotten heroes: the workers of Dŵr Cymru—Welsh Water. The water treatment centre in Monmouth was inundated over that terrible weekend. As soon as it was safe to do so, Welsh Water went in there and took out all the pumps, dried them out, replaced them, and put in more electrical fittings. Again, they were working 24 hours a day, although in 12-hour shifts. At the same time, Monmouth and its surrounding areas faced running out of water within 12 hours, so 40 tankers were sent in to make sure that water was still pumped into homes—ironically, it came from England—and there was bottled water ready. The chief executive of Welsh Water, Peter Perry, did an absolutely outstanding job. He was on the phone to me, my right hon. Friend the Secretary of State and others at all hours of the day and night. He made himself available, and I absolutely pay absolute tribute to him and to Welsh Water—

[Stephen Kinnock]

That is the co-operative model.

[David T. C. Davies]

Sorry?

Welsh Affairs

Debate between David T C Davies and Stephen Kinnock

Thursday 3rd March 2016 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House has considered Welsh affairs.

I can confirm that, this morning, I enjoyed a meeting with the Secretary of State, at which we discussed the crisis in the Welsh steel industry, so he was certainly available for discussions then.

It is a great honour to open this debate today, and I am grateful to the Backbench Business Committee for allowing a St David’s day debate. The debate offers us the opportunity to speak about the challenges and opportunities affecting Wales. I am sure that Members will wish to touch on a wide range of different matters. I want to open today’s debate by concentrating on what I believe are some of the most salient, political, cultural and economic matters facing our country and our people today.

This will be a momentous year for Wales. First, we are on course for a championship-deciding clash with England in the Six Nations. I remind the House that it is traditional for Wales to win the Six Nations after a World cup. Perhaps the most momentous sporting occasion will be when the rugby team’s round-ball counterparts make their debut in the European championships in France this summer. It has been 58 years since we have been at an international finals. That is far too long for a country that has produced footballing greats—such as Allchurch, Rush, Hughes and Giggs—to be absent from major footballing tournaments. “Together Stronger” was the mantra of the team and the supporters through qualification, and it is a philosophy that can be applied across many of the issues that I wish to speak about today.

When Bale, Ashley Williams and Ramsey are flying the flag for Wales in that contest, campaigners from this House and across Wales will be making the case for Wales and the whole of the UK to remain in the European Union. We will do it with special zeal. Wales is a net beneficiary of EU funding. Our membership of the European Union is vital to our economy, security and our place in the world. A Brexit would be a massive gamble for Wales, putting jobs, investment, trade and therefore the safety of our communities at risk. The very last thing that we need now is the instability that the possibility of secession from the EU inflicts on a country that already endures economic fragility and social disadvantage.

[David T. C. Davies (Monmouth) (Con)]

I am very grateful to the hon. Gentleman for giving way on that point. Does he accept the Library figure that the UK makes a net payment of around £8 billion to £8.5 billion each year to the European Union, and that if that money were taken and Barnettised and 5% of it were handed over to Wales, Wales would become a net beneficiary from exiting the European Union?

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention, but I am afraid that he is confusing the budget of the European Union with the British economy. The British economy benefits to the tune of £227 billion a year in the exports that it makes to the European Union, thanks to its membership of the single market. If we are looking for value for money, £9 billion to £227 billion looks like a pretty good deal to me.

More immediately, many share my concerns about the months between now and 23 June and ask whether it is realistic to expect rational decisions to be made around a Cabinet table that is beset by mutual loathing.

Hundreds of thousands of Welsh jobs are linked to EU membership, and that membership is our largest source of investment, bringing growth, quality employment and higher wages. Much of our global investment from outside the EU is made possible by the fact that, inside the EU, we provide a gateway to the single market. That is a major reason for international firms such as Tata Steel in my constituency to locate in Wales.

As Members will be aware, the Welsh steel industry finds itself in a precarious position and nowhere in Wales is that felt more acutely than in my constituency. The works in Port Talbot are the productive core of our local economy and community, so the announcement at the start of the year of 750 job losses was a bitter blow, which will be compounded when the impact starts to be felt through the supply chain and the wider local economy.

Although the steel crisis may be partly the result of global trends and events, what cannot be ignored is that the Government have been asleep at the wheel for the past five years. Far more could and should have been done to give the British steel industry a fighting chance. From the blatantly unfair and distortive dumping of Chinese steel to the incompetent and complacent management of public procurement, this Government have failed to give justified support or stimulus to steel.

[David T. C. Davies]

The hon. Gentleman is being very generous in giving way. May I draw his mind back to the evidence that we took from management and the unions about those terrible job losses? Both said that the European Union had delayed bringing in tariffs on Chinese rebar and had taken a very long time to agree the compensation package—for which the Government had to ask permission from the EU— in order to give back to companies such as Tata some of the money that had already been taken as a result of energy taxes.

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention. Membership of the European Union is defined by how a country engages and how it works with partners in Brussels—both with the European Commission and the other member states. What we have is a Government who, in 2011, recognised that there should be an energy-intensive industries compensation package, but then failed to knock on the door in Brussels and make it happen. How can it be that it took five years to deliver that deal?

When it comes to the dumping of steel, the British Government are the ringleader of a set of member states that do not want to reform the anti-dumping rules—so we still have the lesser duty rule—and are cheerleaders for China, lobbying for it to have market economy status. I am afraid that we need to draw a line under this constant scapegoating of Brussels. The blame should be laid squarely at the doors of Nos. 10 and 11 Downing Street and the rest of the Cabinet. Unlike other member states, they have failed to engage in Brussels in a way that wins for British business.

The Government operate in a fog of laissez-faire ideology. They pray to the gods of the free market, and then they hope for the best. In reality, the market economy can function effectively only if it is regulated. Just as football requires the off-side rule to ensure fair competition, so our steel industry requires the right regulatory framework, so that it can trade in equitable conditions—on a level playing field. Instead, the Government’s blithe faith in the free market is driving them to lobby for China to be given market economy status, and to refuse to support the scrapping of the lesser duty rule.

I wish to state now, with utmost gravity, that if speedy action is not taken to prevent the dumping of Chinese steel, we will witness the beginning of the end of UK steel making. The Government know full well that this foundation industry is hanging by a thread. Neither free market dogma nor cosying up to Beijing should be allowed to impede their patriotic duty to emulate other EU countries and stand up for the men and women who are the backbone of the British economy.

The Minister for Enterprise and the Secretary of State for Business, Innovation and Skills recently visited my constituency, and I hope they will return so that they can go to the homes of some of my constituents who have lost their jobs. I hope they will look those men, women and families in the eye and explain themselves—explain how they can claim publicly that they are supporting the steel industry, while fighting tooth and nail behind closed doors against the lifting of the lesser duty rule and for market economy status for China.

I hope those Ministers will explain how they can claim publicly that they are changing public procurement to maximise the use of British steel, while allowing the Ministry of Defence to build the latest flotilla of Royal Navy frigates with Swedish steel. I hope they will come to Aberavon and explain the breath-taking contrast between their words and their deeds, for the people of my constituency deserve an explanation.

I am certain that the British steel industry has a promising future if it is given the right support by Government. The men and women at the Port Talbot works make the finest steel that money can buy and they are breaking all production and efficiency records, but the industry requires a long-term industrial strategy based on a sustained, comprehensive approach to skills, investment, regulation, energy and industrial relations. That is why I am proud to co-chair a working group of the all-party parliamentary group on steel, which will produce a report, “Steel 2020”, on formulating a long-term industrial strategy for British and Welsh steel.

Our strategy for the future of the Welsh economy must not be limited to steel. We need a new industrial revolution grounded in the new economy of renewables and connected technology, a fourth industrial revolution such as the one that was spoken of at the recent meeting of the World Economic Forum in Davos. I see Wales at the forefront of that revolution. The Swansea Bay tidal lagoon could transform the energy industry, but frustratingly, its future is under threat owing to the Government’s perpetual flip-flopping. A positive decision on the lagoon would not only put a much needed tick in the Government’s ever-diminishing green credentials, but deliver a massive boost to the local economy. By committing to sourcing as much steel as possible from the UK, it would significantly help the UK steel industry. That project needs and deserves rapid advance. The Government need to get off the fence, and fast.

The Government’s short-sightedness is undermining other forms of renewable energy, such as wind and solar. These are burgeoning industries in my constituency, with hundreds of jobs at stake, but they are under threat because of the Government’s moves to cut price stabilisation mechanisms, such as the feed-in tariffs. The Government have been on a policy descent from “Hug a huskie” to, in the words of the Prime Minister, “Let’s cut the green crap”.