Steel Industry: Wales

Debate between Gary Streeter and Nia Griffith

Wednesday 21st February 2024 Westminster Hall

[Sir Gary Streeter (in the Chair)]

Order. I remind Members that interventions should be brief and on the subject of the steel industry in Wales.

[Dame Nia Griffith]

Indeed, we do seek a just transition for the steel industry.

Of course, it is not just Trostre that Port Talbot supplies. If, as current plans indicate, the idea is to close the blast furnaces several years before the electric arc furnace is ready, all the downstream customers will need supplies. The Government could argue that if Tata closes the blast furnace in 2024 or 2025 but does not have an electric arc furnace up and running before 2027, how it bridges that gap, how it sources supplies elsewhere and how it keeps its customers happy are its problem. However, if those supplies are not there, downstream businesses could go out of business, causing huge job losses. It would be catastrophic for us in Llanelli to lose Trostre. Because the Government are putting half a billion pounds in, and because of the worry about job losses, they should seek assurances from Tata about Trostre, which is why I asked the Minister that question.

We accept that the electric arc furnace has a role to play. Indeed, CELSA Steel UK in Cardiff, a very successful business, produces steel from an electric arc furnace. However, there is work to be done to assess the suitability of the steel produced in electric arc furnaces to meet all the requirements of the products produced in Trostre. It is not as simple as throwing any old scrap into the electric arc furnace; clearly, the quality of the source material is important. I understand that a certain amount of metallics are required, which are not necessarily easy to source. We currently export scrap steel, and it is easy to see the logic of recycling that steel here in electric arc furnaces. However, we cannot assume that all that scrap steel will just turn up at the electric arc furnace in Port Talbot or at the one that I understand is planned for Scunthorpe: it must be sourced.

--- Later in debate ---

[Dame Nia Griffith]

Anyone who can have influence over Tata would be welcome to make those suggestions.

A moment ago, I was talking about specific negotiated packages that this UK Government have offered. Although there have been those packages, we can see why when steel and high-energy industries make decisions, they cannot rely on limping from package to another but need long-term security with low energy prices, requiring substantial measures from the Government such as massive investment in renewables and reform of the energy market. We in Llanelli look across at IJmuiden in the Netherlands, where Tata has a tin plant works similar to ours. However, in close proximity to IJmuiden, Tata will keep a blast furnace open and develop a direct reduced iron facility. This is the reality we are facing: greater investment for the future going elsewhere. The UK Government need to ask themselves why. I hope that in responding today the Minister will answer my specific questions about the challenges facing Tata’s tinplate works at Trostre, as well as the broader issues facing the steel industry across Wales.

[Sir Gary Streeter (in the Chair)]

I call Christina Rees —and happy birthday!