Tata Steelworks: Newport

Jessica Morden Excerpts

Tuesday 8th October 2019 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered the future of Tata’s Cogent Power steelworks in Newport.

I am immensely grateful to have the opportunity to speak on behalf of the dedicated workforce at Tata’s Cogent Power plant, the Orb works in Newport, representatives of which are in the Public Gallery. They are most welcome.

The need is urgent. This is a steelworks threatened with closure by Tata and it is due to close at the worst possible time, just before Christmas. It is unique, as it is the only steelworks in the UK making electrical steel.

[Nick Smith (Blaenau Gwent) (Lab)]

Losing the Orb plant would be devastating for our economy in south Wales. It would also be a huge missed opportunity. Does my hon. Friend agree that there is still massive potential for the plant?

[Jessica Morden]

My hon. Friend represents a steel community, too, and I completely agree with his point, as I will make clear in my speech.

With the investment and support it needs—there is a plan, which I will come to later—the plant could and should have a bright future, especially at a time when, due to the growth of electric vehicles and electrification generally, demand for this type of steel is only going to grow. It would be a travesty if we were to lose the plant, and my ask of Ministers—I welcome the Wales Minister here today—is that the Government do all they can with Tata to protect this national asset.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I should declare that my father worked in the steelworks throughout his working life and is a British Steel pensioner. As we speak about the future of our automotive sector and moving to electric cars, does my hon. Friend agree that it is simply short-sighted to be losing Orb at this moment?

[Jessica Morden]

I absolutely agree, and I will make that point later.

Tata announced that it would be closing Cogent Orb steelworks on 2 September, with the loss of 380 jobs. This has come as devastating news for a dedicated, highly skilled workforce and their families, and for the city of Newport as a whole, where Orb has been part of the landscape since 1898. I pay tribute to Community, Unite and other unions for the support they have given and continue to give to the workforce, and for their general fight to save our steel industry.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing this very timely debate. I represent a steel community in Scunthorpe, and we know exactly what it is like as a steel community to have these things happen. We stand side by side with the steel community in Newport. Does she think that the work the Community union and others have done through the Syndex report gives a possible way forward for the plant?

[Jessica Morden]

My hon. Friend is indeed a doughty and fantastic champion of his steel community, and the thoughts of our steel community are very much with his community and the difficulties it has had recently. I will talk about the Syndex report, because it is very important.

The attendance of my hon. Friends from Wales and fellow members of the all-party parliamentary group on steel and metal related industries represents the importance of the steel industry to us all. As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) said, many of us have a constituency interest but also a very personal interest. My parents met in the steel industry in Ebbw Vale, and my hon. Friends have close family who have worked in the industry, including my hon. Friend the Member for Cardiff West (Kevin Brennan).

Fewer work places are more ingrained into the life of Newport than Orb. Our iconic transporter bridge was originally built to carry Orb workers over the River Usk. There are street names in Newport such as Dudley, Walsall, Bilston, and Handsworth, and even the Wolverhampton Wanderers-based colours chosen for Newport County AFC commemorate the west midlands migration to Gwent initiated by the Lysaghts family moving their sheet steel production to Newport at the end of the 19th century. Orb played an important role in Newport in both world wars and, from the late 1960s onwards, its activities moved towards cold rolled and electrical steels, a field that became the site’s speciality, as it remains today.

Losing Orb would mean losing the electrical steels skills base that has been built up since the era of Harold Wilson’s “white heat” of technology, and at a time when electrical steels will be more in demand that ever before. Tata’s decision to close Orb, citing losses and wider challenges in the sector, will hit many people in our communities extremely hard. They include recent recruits such as an electrician who joined the company two days before the announcement and is one of 70 new starters over the last two years, and a long-time worker who says, “Orb works has been a part of my family for nearly 60 years. Between my father and brothers we have over 100 years’ combined service. The Orb paid for everything when I was a child and is now supporting my three children.”

Another man’s family came from Tipton; his great-grandfather, grandfather and father all worked there, and their names are on the works’ cenotaph. Mickey, who started work as a 16-year-old messenger boy and ended up as section manager, said, “To allow over 100 years of electrical steelmaking skills simply to disappear is a crime against everyone who contributed to Orb’s history, and the knock-on effect on the Newport community’s economy will be devastating, as these jobs are of high value.”

[Ruth Jones (Newport West) (Lab)]

I thank my hon. Friend and neighbour from Newport East for giving way, and for her powerful speech. This is an issue of importance to people in Newport West, Newport East and across south Wales, and it is a pleasure to hear her speaking about it. The potential closure of Orb in Newport will mean that hundreds of jobs are put at risk, and our people and communities need certainty. I reassure my hon. Friend of my commitment to work with her to save jobs in Newport. Does she agree that we need a level playing field for UK steel producers by addressing the energy price disparity, preventing steel dumping and investing in research and development, so that the British steel sector can compete and thrive globally?

[Jessica Morden]

My hon. Friend and neighbour is absolutely right, and those are many of the asks for which the all-party steel group in Parliament has been calling for many years. It is something on which the Government need to take more action.

Mickey is absolutely right. Although it is important to emphasise Orb’s proud heritage, this debate is not about nostalgia, but about the future. It is about calling on Tata and the Government to ensure a future for a plant with enormous potential at a time when demand for the type of steel Orb could and should produce is set only to grow. Orb is important not just to our community, but to the whole of the UK, because the works is the only plant in the UK with the potential, with investment, to produce the electrical steel needed for electric vehicle motors. The Government, too, say it is important.

[Chris Evans (Islwyn) (Lab/Co-op)]

Since they first got into power in 2010, the Government have been banging on about how they would be the greenest Government in history. Is it not time that the Government put their money where their mouth is and invest in Orb to bring about the electrical steel that we need and to start reinvigorating the electrical vehicle industry in this country?

[Jessica Morden]

My hon. Friend is absolutely right. The Government have said the electric vehicle industry is important to them, and they say it is a priority. In his first speech to the Commons after moving into No. 10, the Prime Minister spoke about his vision for the UK as the “home of electric vehicles,” something he also touched on regularly during his leadership campaign. In a recent response to a question I asked, the Prime Minister also stated his commitment to use UK steel in the supply chain for electric vehicles, but we need electrical steel to create an end-to-end supply chain for those vehicles. If the Prime Minister is serious about the UK being the home of electric vehicles, we must, as Community’s Roy Rickhuss has said, consider the Orb a national asset and step in to protect it.

[Jo Stevens (Cardiff Central) (Lab)]

My hon. Friend is making a really powerful speech. What she said about looking at history and the future is so important, and the dedicated workforce and plant have been so successful because they have encouraged innovation over the years. They have been strategic and looked forward. That is what the Government now need to help the plant do with electrical steel.

[Jessica Morden]

My hon. Friend is exactly right, and we need that investment to do it.

Attention has been given to electric car battery production —the Prime Minister mentioned the gigafactories needed to produce high volumes of battery products in his conference speech—but electric motors are an equally important part of the supply chain. They are built from the high-quality, non-oriented electrical steels that could be produced at Orb, and the demand for this type of steel is expected to increase tenfold by 2030.

The number of electric cars on our roads will grow and grow over the next decade. The UK Government are providing millions of pounds to support the roll-out of charging infrastructure, and it is imperative that we use UK steel in all this. The Government have awarded Jaguar Land Rover, which is owned by Tata, a £500 million loan guarantee to help the company sell electric vehicles. In this context, with the Government’s stated support for the electric vehicle industry, I ask what the Government can do for all. Electric cars need electric motors. Why should we have to import them? We have a site here in the UK that, with support, could be part of the supply chain.

We need UK steel every step of the way, and electrical steel is part of that. As members of the all-party group and the unions have long said, the industry can be a key part of building the infrastructure we need to green our economy in the future.

At Labour’s conference, we pledged to accelerate the electric vehicle revolution with 2.5 million interest-free loans for the purchase of electric vehicles, a new requirement for the Government car fleet to be 100% electric by 2025, and action on a private fleet. Labour is determined to ensure that the right conditions are in place for this revolution, and the Government should be, too. If the Orb works is not kept open, the potential to build a supply chain will be squandered. It is not an overstatement to say that the UK could lose its capacity to be a global leader in electric car manufacturing.

Developing a supply chain for electric vehicles will be hugely important for the national balance of trade. Across the UK, 10,000 workers are making internal combustion engines, and Community has emphasised that a failure to develop the supply chain will result in a loss in the export value of those engines. It will be replaced by the import cost of electric motors, which equates to £1.2 billion for every 1 million electric cars. That is why Community has called Orb a

“strategically important business underpinning this vital industry of the future.”

Tata has publicly confirmed that, with investment, the Orb works can produce the steels required for the future production of electric vehicles. Community’s steel consultant, Syndex, has researched and concluded that with a new strategy and some public support, there could be a sustainable future for the business. So what is the plan? The new strategy for Orb would mean transitioning to a new model and producing non-oriented steels, in addition to grain-oriented steels, based on a new Wales-only supply chain and using coil from Port Talbot. To fund the necessary capex, the profits from the sale of Cogent Power Inc—another part of the business, which is wholly owned by the Orb—would be reinvested into the business, along with the money set aside to finance a closure.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making a very powerful speech. The Government often criticise us for critiquing their failure to support the steel industry without proposing a constructive plan, but she has just outlined an absolutely compelling and viable plan. One of the vital parts of it is that we would be relocating the supply chain for hot rolled coil from IJmuiden to Port Talbot. Surely if the Government are talking about backing British business, they should back the Syndex plan.

--- Later in debate ---

[Jessica Morden]

My hon. Friend is exactly right. It is a very important and well-thought-out plan, and I hope Ministers are listening to it. The 2018 memorandum of understanding agreed with Tata in advance of the failed joint venture contained a commitment to reinvest the proceeds of the sale of any UK-owned assets back into the UK. Tata should honour the spirit of that agreement. That would leave a shortfall of just £30 million, and we could look to central and devolved Government to contribute to the new strategy. Given the role that Orb can play as a strategic business of the future, enabling the Government to deliver on their climate commitments, there is a compelling case for Government support.

The strategy advocated by Syndex includes three key aspects: a new annealing line at Orb, investment in automation to make Orb’s grain-oriented products more competitive, and relocation of the hot rolled coil supply chain from IJmuiden to Port Talbot.

I want to put forward a series of asks to the Government. First, will the Minister ask the Secretary of State to call a UK steel council urgently, with Orb at the top of the agenda? We have not had one since June 2018, and the need is urgent. Will Ministers commit to meet urgently with trade unions and local politicians to look at what can be done to support Orb and its workers at this time? Community has requested meetings with the Welsh and UK Governments to present the Syndex plan directly to them. Will the Minister and the Department for Business, Energy and Industrial Strategy agree to meet it?

The Prime Minister committed last month to ensure that UK steel forms part of the supply chain for electric vehicles. Will Ministers ensure that that actually happens? While I am on that subject, we now more than ever need a sector deal for steel—something we have been asking for for a long time.

This Saturday, hon. Members will be joining Community, Unite and other unions in a march through Newport to save Orb steel. We are fighting for it, and I hope everyone will join us. Orb is a site that could be underpinning a dynamic UK automotive industry, and could be at the cutting edge of new steel technologies. Newport, Wales and the UK would be worse off if the Government fail to work with Tata to grasp its enormous potential before it is too late. If the Government are serious about an industrial strategy, will they back up their words with proactive action?

I am calling on the Government to prioritise our industrial policy and to support our steel industry, including electrical steels, and building an electric vehicle industry. The Prime Minister says he wants to do that. I say yes, and so do the Welsh Government. Who else needs to say yes to save the Orb plant? I ask Tata to say yes too. Together, let us save Orb and build a new electrical steel economy in the UK.

--- Later in debate ---

[Kevin Foster]

As has been mentioned, to make energy costs more competitive, we have made £312 million in compensation available to the steel sector since 2013, including £53 million in 2018 alone.

We have commissioned independent research to identify high-value market opportunities for UK steel producers that will be worth up to £3.8 billion a year by 2030. The UK is a supplier of steel for a range of high-value applications and is a strategic part of the supply chain for the automotive, aerospace, construction, defence and oil and gas sectors. We are successfully working with the steel industry to introduce steel procurement guidance that will ensure that Government and the wider public sector take into account social and environmental benefits when procuring and designing their major projects.

[Jessica Morden]

Will the Minister give way?

[Kevin Foster]

I have to conclude, as I am starting to get close to time.

We have also signed up to the UK steel charter, acknowledging and supporting that initiative from industry. We continue to press for the introduction of trade defence instruments to protect UK steel producers from unfair steel dumping. Tata has confirmed the closures are not linked to Brexit; instead competition from much larger players in China and Japan is understood to be the key reason.

--- Later in debate ---

[Kevin Foster]

Thank you, Mr Hanson. I will take another intervention as I come nearer to the end of my speech, but I have not been ungenerous in taking interventions from Opposition Members so far.

The UK Government are stepping up their efforts to ensure businesses are ready to leave the EU on 31 October via their national communication and engagement campaign. We are also urgently identifying and delivering actions to support businesses in improving readiness. The Government will take economic measures to mitigate any short-run disruption, to support the economy through the transition and to boost the long-term potential of the UK economy, taking advantage of the opportunities outside the EU. As I said, the Government are prepared to look at and discuss any plans that present a long-term, sustainable option for the plant.

[Jessica Morden]

I appreciate the Minister responding today, but members of the all-party parliamentary group on steel have not yet had a real opportunity in a debate to question the new steel Minister. I ask the Minister to convey to the new steel Minister the urgency of the situation, because if we lose Orb, we lose the opportunity of an end-to-end supply chain for electric vehicles before Christmas.

[Kevin Foster]

I will certainly convey the hon. Lady’s message to the steel Minister. I have to say, looking at the many Opposition Members here and given my knowledge of their determination to stand up for the communities they represent, that I have a feeling that the steel Minister will get a number of opportunities in the very near future to discuss steel on the Floor of the House, if not in a debate in this Chamber. Certainly as a Minister, I would be badly mistaken to think I can ignore some of the people on the Opposition Benches.

However, it is worth reflecting on the fact that there are currently 46 trade defence measures in place to protect UK steel products from unfair steel dumping. As we operate an independent trade policy, the UK will continue to champion free trade and take a proportionate approach to trade remedies, with a view to continuing the defence of our industry where necessary. The steel industry is an important industry in Wales, as reflected by today’s turnout among Members representing Welsh constituencies. The UK Government are committed to supporting companies, such as Tata, that have contributed to the local economy in Wales for decades, and we will continue to work with the sector, the unions and the devolved Administration to support the UK’s steel sector in developing a long-term, viable solution for that industry.

In closing, I thank all hon. Members who have contributed to today’s debate, and the hon. Member for Newport East for having secured it. I know that she will continue to be a strong advocate for those she represents and will ensure that the Government hear loud and clear their views and what she believes the options to be. I would certainly be more than happy to have a longer discussion with her about some of the proposals that are being put forward; I look forward to the opportunity to do so. However, as I say, those proposals must be based on providing a long-term, sustainable future for the plant, not just subsidy with a hope of something coming along.

Question put and agreed to.