Port Talbot Steelworks

Jo Stevens Excerpts

Tuesday 30th April 2024 Commons Chamber

[Jo Stevens (Cardiff Central) (Lab)]

(Urgent Question): To ask the Secretary of State for Wales if he will make a statement on Tata ending the statutory consultation on redundancies at Port Talbot steelworks.

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

On 25 April Tata announced its strategic direction to proceed with its Port Talbot transformation, following the launch of the formal national consultation with the unions on 6 February. Technically, the consultation has not concluded at national or local level. The statutory consultation remains under way, and I understand that the company intends to move to local consultation with staff who may be affected.

This is a deeply concerning time for the Tata workforce and the wider community. I hold regular conversations and meetings with the unions and management, and will continue to do so as we develop interventions to build a brighter future for Port Talbot. On 15 September we announced an unprecedented £500 million Government grant as part of the £1.25 billion investment by Tata Steel to build a new electric arc furnace. Tata Steel employs more than 8,000 people, including at Port Talbot. All those jobs— along with many thousands more in the supply chain—would be under threat were it not for the agreement that we struck. The transformation will be difficult but the funding has saved 5,000 jobs in the company. It is not the case that we have paid money to put people out of work—we have paid a lot of money to save 5,000 jobs. We are also looking to modernise production and ensure that steelmaking in south Wales can continue for generations to come.

Going beyond that, to support those affected by Tata’s decision we have put £100 million towards the creation of the transition board, which I chair, and which includes representatives of the UK and Welsh Governments, local authorities and industry. The funding includes £80 million from the UK Government and £20 million from Tata—nothing as yet from the Welsh Government, but we hope that there will be some. It will be used to achieve the transition board’s priorities, the first of which is to support those affected employees to find new, well-paid jobs. The board’s priorities also include supporting businesses in the supply chain and the longer-term regeneration of the region.

In its most recent meeting last week the transition board endorsed a local economic action plan, which will act as a road map for how best to use the funding to support those affected. While the ongoing consultation is a matter between the trade unions and the company, we will continue discussions with all parties. We hope a resolution is found that avoids industrial action. The Government will continue to work closely with industry to secure a sustainable and competitive future for the Welsh steel sector.

I am confident of a good future for Port Talbot and the region, with the UK Government progressing the bid by Associated British Ports to the next stage for up to £160 million of funding to support our nascent floating offshore wind industry, and our progress towards establishing the Celtic freeport, backed by £26 million of UK Government funding.

--- Later in debate ---

[Jo Stevens]

Last Thursday’s news was a gut punch for workers in Port Talbot, with economic consequences that could reverberate across south Wales for decades. Last month, I met workers at the plant. The sense of the threat to nearly 3,000 people’s livelihoods was all-consuming. The wider supply chain in Llanwern, Shotton and Trostre is vulnerable, too. We again urge Tata not to make any irreversible decisions before a general election.

My hon. Friends the Members for Aberavon (Stephen Kinnock), for Newport East (Jessica Morden), for Newport West (Ruth Jones) and for Llanelli (Dame Nia Griffith) have been proud vocal advocates for their constituents. In contrast, the Government have forked out £500 million of taxpayers’ cash for the loss of 3,000 jobs. That is their deal and they own it.

In addition, the loss of sovereign steelmaking is a fundamental threat to our UK economy and security. It will constrain our ability to build the floating offshore wind we need to lower energy bills, deliver energy security and create the jobs of the future.

We are now around a month away from blast furnace No. 5 potentially closing, so what assessment have the Government made of the impact of the closure on job losses at the plant and in the supply chain across Wales? With the talks ongoing between unions and Tata this week, does the Secretary of State, like me, want to see an agreement from Tata that compulsory redundancies will be avoided? What steps will he take to encourage such an agreement? He has said that no one will be left behind if they lose their jobs. Will he publish the local economic plan that the transition board has agreed as the basis for its investment decisions?

With Labour’s national wealth fund, the future of UK steel will be fuelled by the skills, talent and ambition of Welsh steelworkers, but until the country is given the chance to have its say at a general election, I want workers across Wales to know that Labour Members have their backs.

[David T. C. Davies]

Let me take the hon. Lady’s points one by one. First, the £500 million investment will save 3,000 jobs. We are not paying money to throw people out of work; we do not want to see anyone thrown out of work. Tata has made a decision to close blast furnaces based on the losses it is making. When it came to us, we said, “What can we do to keep people in work?” This was the plan it came up with.

Secondly, the plan will have no impact on sovereign steelmaking. The hon. Lady, if she talks to Tata, will understand—[Interruption.] She is chuntering, but all the iron ore that goes into the blast furnaces comes from abroad, all the coal that is turned into coke comes in from abroad, and all the limestone comes in from abroad. It therefore has no impact whatever on our sovereign steelmaking ability. In fact, we have 8 million tonnes of scrap steel in this country, much of which has been exported abroad. We are going to use that scrap steel and put it in the electric arc furnace, which will increase our sovereign ability.

The hon. Lady says that the plan will have an impact on our ability to create floating offshore wind. Last time, she said it would have an impact on our ability to create battleships. She needs to understand that battleships are made using steel plate and that floating offshore wind turbines are also made using steel plate. Steel plate is not made by Tata at Port Talbot. Tata at Port Talbot produces coil, which is thin and not strong enough to make either battleships or floating offshore wind turbines.

The hon. Lady asked about the number of people affected. We have been very clear about that from the start. [Interruption.] I am trying to answer the hon. Lady’s questions. She asked the questions; I listed them and I am answering them. She asked about the number of jobs affected. We have said all along that we expect it to be around 2,800, but it is for Tata to confirm that once it has gone through the statutory consultation procedure.

The hon. Lady asked whether we would encourage Tata to come to an agreement so that there are no compulsory redundancies. Of course, we would. We do not want anyone to be made redundant against their wishes. We did not want this process to happen in the first place, but as I said to her several times, Tata came to the UK Government with a threat to pull out, which would have cost 8,000 jobs and the entire supply chain.

The hon. Lady asked if the local area action plan can be published. It is not fully finalised yet—it is a road map—but she will surely be aware that the current First Minister was sitting on the board as the economic development Minister. The Labour economic development Minister in the Senedd is on the board. The local Member of Parliament is on the board, as is the local Senedd Member, the chief executive of the local authority, and the representatives of three trade unions, so it is hardly a secret document. It is not as if the transition board is meeting in conditions of great secrecy.

If the hon. Lady has any further questions, I am more than happy to answer them.