Steel Industry: Wales

Debate between Jonathan Edwards and Christina Rees

Wednesday 21st February 2024 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

Thank you, Sir Gary—21 again! As always, it is a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the wonderful Member for Llanelli (Dame Nia Griffith) on securing this vital and timely debate. As we contemplate the future of the steel industry in Wales, we are discussing not merely the fate of an industrial sector but the heartbeat of a nation’s economy and identity, and nowhere more so than in the Swansea bay region generally and Port Talbot specifically. The area that includes my Neath constituency and its town has long been synonymous with steel production, its history intertwined with the rise and fall of coal and the resilience of its workforce. Today we stand at a pivotal moment in that narrative, poised to script the next chapter in the saga of Welsh steel.

The challenges facing the steel industry are undeniable. Global competition, fluctuating market demands and environmental concerns loom large on the horizon, yet alongside those challenges lies the opportunity to bring about transformation and renewal. The industry cannot do that against a backdrop of uncertainty and a diminished workforce. The idea that 2,800 jobs will be lost from Tata Steel operations across the UK—the majority from Port Talbot—is unthinkable. The rejection of well thought out union plans for a gradual transition to decarbonisation means the almost immediate closure of two blast furnaces. The single electric arc furnace replacement will obviously produce less carbon dioxide, but also fewer jobs.

First and foremost, innovation must be at the fore- front of our endeavours, from embracing advanced manufacturing techniques to investing in research and development. We must harness the power of technology to drive efficiency and sustainability. Innovation will always be the cornerstone of a vibrant steel industry in Wales, but electric arc furnaces do not produce virgin steel and the difference must be considered. The UK has only two sites that use conventional blast furnaces—Scunthorpe and Port Talbot—which collectively produce 5.9 million tonnes of steel per year and make up 82% of UK steel production. Despite the UK importing most of its virgin steel, the notion that we become a country that produces none is beyond the pale. British Steel, the owner of the Scunthorpe plant, is also planning to replace its virgin steel production by 2025. Should that happen, the UK will become the only G20 country that does not produce its own virgin steel. The consequences need to be fully understood.

Secondly, collaboration is essential for success. Alongside partnerships forged between industry, academia and the community, the UK Government need to step up to the table. A £500 million grant is welcome, but much more can be done on energy prices, R&D support and fiscal leverage. In addition, neither the Welsh Government nor the unions were involved in discussions prior to the announcement of the investment deal. The multi-union plan called for an additional investment of £683 million, involving a two-stage transition that would protect a further 2,300 jobs for over a decade, and not involving a single compulsory redundancy. The plan accepted that one blast furnace, and potentially the coking ovens, would close during a managed transitionary period that involved producing iron for use in the new electric arc to be installed by 2031. The second blast furnace would close in 2032.

It is clear that sustainability must be a guiding principle. We are all aware that the steel industry has a significant environmental footprint, and we cannot ignore our responsibility to future generations. By investing in clean technologies, reducing carbon emissions and promoting circular-economy practices, we can minimise our impact on the planet, while maximising our long-term viability. Sustainability is not just a moral imperative; it is also a business imperative, as consumers and investors increasingly demand ethical and eco-conscious products.

Although I appreciate the need for decarbonisation, we must remember that steel accounts for only 14% of industrial emissions in the UK, which in turn is around only 2% of total national emissions. Importing virgin steel simply transfers the emissions and decarbonisation responsibility. Such overseas manufacturing is also far more carbon-intensive.

Lastly, we must never forget the human element at the heart of the steel industry. Our success is built on the dedication and skill of the men and women who toil day in, day out. As we navigate the challenges of the future, we must prioritise the wellbeing of our workforce today, ensuring fair wages, safe working conditions and opportunities for growth and advancement. A thriving steel industry is not just about profits; it is about empowering communities and enriching lives. Employment in the steel industry is not what it used to be, but a quarter of all steel industry employees work in Wales. As such, job losses are disproportionately felt in Welsh communities.

[Jonathan Edwards]

I commend the hon. Member on her excellent contribution. Is the reason for the backlash to this announcement not the fact that it appears that the UK Government are providing £500 million to lose 3,000 jobs in Wales, which has been a massive PR disaster for them?

[Christina Rees]

I completely agree with the hon. Gentleman, and thank him for his important point.

The future of the steel industry in Wales is not predetermined; it is ours to shape and define. By embracing innovation, fostering collaboration, championing sustainability and prioritising our people, we can build a future where Welsh steel shines brightly on the global stage. The story of steel should not feature uncertainty, job losses and community adversity. Let us write the next chapter in the industry’s history: one of resilience, renewal and prosperity for generations to come.

Groceries Supply Code of Practice

Debate between Jonathan Edwards and Christina Rees

Monday 22nd January 2024 Westminster Hall

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I congratulate my hon. Friend on her introductory remarks and welcome the debate. The last few years have been very difficult for farmers, with inflation in the wider economy increasing their input costs substantially: we need only to look at fertiliser for one example. The reality is that they are very exposed in the supply chain, so we need to look at how we can strengthen support for our primary producers.

[Christina Rees]

My hon. Friend is a champion for the farmers in his constituency, and I hope to come to those issues later in my speech.

Welsh Affairs

Debate between Jonathan Edwards and Christina Rees

Thursday 27th February 2020 Commons Chamber

[Christina Rees]

Thank you, Madam Deputy Speaker. I am going to finish now, because I am sure that lots of other Members want to speak.

[Jonathan Edwards]

Will the hon. Member take a friendly intervention before she moves on?

[Christina Rees]

I was getting to the good bit, but I will give way to my constituency neighbour.

[Jonathan Edwards]

I am sure the hon. Member will also have some concern about the negotiating mandate set out today by the British Government in relation to the second phase of Brexit and the trade negotiations. Indeed, the Welsh Government have issued a stern statement indicating that they were not consulted at all about the mandate. I fear that the best we can hope for is a bare-bones free trade agreement. The Welsh economy will be more exposed because of our reliance on exports into the single market. What does the hon. Member think the Welsh Government should do now, since the British Government clearly are not taking any notice of Wales’s position?

[Christina Rees]

The hon. Member makes some very good points. It has been a concern of mine for a long time that the Welsh Government have not been involved in the negotiations. They have to be involved; this is the future of Wales that we are talking about. I am really disappointed that they have not been involved to the extent that they should have been.

Now I come to the good bit. The House will know how passionate I am about sport. Wales is a sporting nation. When Wales wins the people of Wales are very happy. When we lose it is the end of the world. I went to the Wales versus Italy match, which was a great result, as the House knows—I don’t think I want to talk about the other matches, so I will move swiftly on.

My constituency of Neath has a proud sporting history. The Welsh Rugby Union was created in the Castle Hotel in Neath. The best player in the world, Gareth Edwards, was born and bred in Gwaun-Cae-Gurwen. Dan Biggar’s family was born and bred in the Dulais valley, where I live, as was Dennis Gethin, who recently stood down as chair of the WRU. Of course, Neath RFC are also called the All Blacks—a great tribute.

In a former life I was a squash player and played for Wales over 100 times. It was a great honour to pull on the red jersey of Wales. I became national coach for Squash Wales, and one of my roles was to develop squash for all ages and all standards throughout Wales. We have a superb junior development structure, which has produced some great players. I am very proud to say that on St David’s Day we will have two senior players ranked in the top 10 in the world, and they have both come through the junior structure: Tesni Evans, based in Prestatyn, is two times British champion and bronze medallist at the last Commonwealth games; and Joel Makin from Aberdare, a member of the Welsh men’s team who came third in the last world championships. Wales is again showing that we are punching above our weight.

Welsh Affairs

Debate between Jonathan Edwards and Christina Rees

Monday 19th March 2018 Commons Chamber

[Christina Rees]

The Labour party advocates a customs union.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the hon. Lady give way on that point, because this is a very interesting debate?

[Christina Rees]

I am being very kind today.

[Jonathan Edwards]

The hon. Lady is being very kind. As I understand it, the Labour party’s policy is that it supports being in a customs union, not the customs union. She will know that as a member of the customs union we benefit from trade deals with over 60 countries across the world, accounting for £150 billion-worth of trade at UK level—there are no figures for Wales, of course. If we are in a customs union, we will lose those trade deals. Surely, it would be far better for the Welsh economy if we stayed in the customs union, rather than trying to create some kind of a customs union, which is more or less a trumped up trade deal?

[Christina Rees]

Technically, when we leave, we leave the customs union, so we advocate a customs union and a very close relationship to the single market.

[Jonathan Edwards]

Will the hon. Lady give way again?

[Christina Rees]

No.

[Jonathan Edwards]

But that’s just spin, isn’t it?

[Christina Rees]

No, it’s not.

There are, at present, no signs that the Tory Government understand this agenda, let alone how to respond to it. As I have said, serious matters confront us and the clock is ticking.

Spending Review and Autumn Statement: Wales

Debate between Jonathan Edwards and Christina Rees

Tuesday 15th December 2015 Westminster Hall

[Christina Rees (Neath) (Lab)]

I beg to move,

That this House has considered the effect of the Spending Review and Autumn Statement 2015 on Wales.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Last month’s autumn statement was an opportunity for the Government to deliver a fair deal for Wales; to support Welsh families, to invest in skills and infrastructure and to give the Welsh Government the tools that they need to fund the vital public services that we all depend on. Unfortunately, however, the Chancellor of the Exchequer did none of that. Instead, he delivered yet more cuts to the Welsh budget and to the budgets of thousands of families across Wales.

Thanks to Labour’s campaign, the Chancellor was forced to abandon his plans to cut tax credits that would have hit 135,000 working families in Wales. However, we now know that those cuts have been delayed, not dropped altogether, and thousands of Welsh families will be hit just as hard through the Government’s cuts to universal credit. Families across the UK are expected to lose £1 billion this year and over £3 billion by the end of the Parliament because of the cuts to universal credit. The Institute for Fiscal Studies has predicted losses of £1,600 a year for 2.6 million working families and cuts of £2,500 a year for 1.2 million families who are out of work.

Although fewer than 6,000 Welsh people are currently on universal credit, the number will rise significantly over the next few years, as other benefits such as tax credits and jobseeker’s allowance are phased out. In my constituency, 656 people are currently on universal credit, but 14,250 people are claiming one of the main out-of-work benefits.

Working people in Wales will be worse off on universal credit, leaving those who are currently on tax credits with a perverse incentive not to take on a new job or extra hours for fear that it will change their circumstances and cause them to be moved on to universal credit. In Wales, 167,400 working families will feel the impact, 134,600 of whom are families with children.

In Neath, 6,200 families were on tax credits as of April this year; 5,300 of those were families with children, all of whom will be negatively affected by the changes and cuts to universal credit, should they take place. That neither meets the Government’s aim of making work pay, nor ensures that those on middle and low incomes are protected. Wales already has the highest level of child poverty of any of the nations of the UK. One in three children lives below the poverty line. Half of the people deemed to be living in poverty are actually working—an unfortunate truth that is often ignored when painting a picture of worklessness and a benefit-claiming culture of poverty and deprivation.

On the autumn statement, the Joseph Rowntree Foundation made it clear:

“There was little in this Statement to tackle the causes of poverty and it was a missed opportunity to support low income families. Without action”—

the foundation warns, our economic recovery will be

“built on rising poverty and insecurity.”

In Wales, we are particularly at risk, and the Chancellor’s plans are bad news for low and middle-income earners across the country. However, just as we successfully opposed his pernicious cuts to tax credits, we will continue to highlight the fact that the Chancellor’s plans will leave Welsh families worse off.

The autumn statement also saw yet another cut to the Welsh budget. Over the next five years, Wales will see a real-terms revenue cut of 4.5% and a cut to its overall budget of 3.6%. When Labour was in government in Westminster, we increased the Welsh budget from £7 billion in 1999 to £16 billion in 2010.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I congratulate the hon. Lady on securing this important debate. In my recollection, going into the last UK election, the Labour party said that it would broadly copy the fiscal policy put forward by the Conservative party. Will she tell us what the cut would have been to the Welsh budget under Labour?

[Christina Rees]

No, we did not actually say that—if the hon. Gentleman checks his facts, he will see that we did not.

As I was saying, by the time this Conservative Government leave office in 2020, we will have seen an 11% cut in the Welsh budget. For all the Government’s talk of economic recovery, they have delivered a mountain of cuts since 2010, and their decisions will do further harm to the Welsh economy over the next five years.

--- Later in debate ---

[Christina Rees]

We have to look at this issue. When spending in Wales is falling, that level is too low, so surely the best thing is to generate an economically viable situation in Wales so that spending increases.

[Jonathan Edwards]

Will the hon. Lady take a further intervention?

[Christina Rees]

Not at the moment—I have to make progress.

We are all well aware of the Chancellor’s habit of slashing funding from central Government then expecting local government and the devolved Administrations to make up the shortfall. That policy ensures that the poorest areas are hardest hit. If the Chancellor plans to use the devolution of income tax to Wales as a cover to cut Welsh funding further and to lower the Barnett floor, that will understandably be seen by the people of Wales as an unacceptable outcome.

The autumn statement was also largely silent on the vital infrastructure projects that Wales needs. Despite its strategic importance to the Swansea bay city region, of which my constituency is a part, there was not a single mention of the Swansea bay tidal lagoon in the Chancellor’s statement. Along with the 22% cuts that the Chancellor announced to the Department of Energy and Climate Change, perhaps that silence signals the Government’s lack of commitment to green energy.

In light of the landmark agreement reached in Paris last weekend, we know that projects such as the tidal lagoon are essential if this country is to meet its international obligations to combat climate change. Unfortunately, although important progress was made in Paris, I understand that the pledges will not achieve the aim of limiting global average temperature rise to below 2 °C, so further action is urgently needed.

--- Later in debate ---

[Christina Rees]

I do not quite understand what that intervention means. We are not causing the uncertainty; the Government are.

The Swansea bay tidal project is also of critical importance because of the potential jobs and investment that it will bring across south Wales, as well as the apprenticeships promised to institutions such as the Neath Port Talbot College group. It is estimated that up to 1,900 jobs could be created during the lagoon’s construction phase, with many more jobs being created in the supply chains. Local businesses are eagerly anticipating the investment that the project will bring, so it would be a travesty if the UK Government failed to deliver this opportunity. Will the Minister confirm that the Government remain committed to the project and to agreeing a strike price for the tidal lagoon?

Another project that is of vital importance to the whole of south Wales is the electrification of the Great Western line from London to Swansea. Again, the Chancellor paid lip service to the scheme during the autumn statement, but he did not give any further details and now we know why. Since the autumn statement, it has emerged that electrification of the line between Cardiff and Swansea, which was due by 2018, will not be completed until between 2019 and 2024. That is an unacceptable delay and one that has the potential to damage the economies of south-west Wales, which will still be waiting for electrification years after electrification to Cardiff is complete.

[Jonathan Edwards]

Will the hon. Member take another intervention on that point?

[Christina Rees]

I will try it.

[Jonathan Edwards]

I am extremely grateful to the hon. Member; she is being extremely generous in giving way again. I agree with everything she has said about the electrification to Swansea; we have been seriously let down on that particular issue by the UK Government since the election.

The comprehensive spending review came with the statement of funding policy document, which refers to High Speed 2. In that document, Wales gets a 0% rating, which has a drastic effect on the overall comparability percentage when the Barnett formula is applied. Can the hon. Member explain why the Labour Government in Cardiff are accepting the line of the Tory Government here in London that Wales will not lose out on many millions of pounds in the future because of that decision?

[Christina Rees]

That was such a long intervention that I cannot remember now what the beginning was. We also have north Wales to consider and surely—

[Jonathan Edwards]

The south Wales economy is getting blasted.

Sorry, Mr Hollobone.

[Christina Rees]

The news about HS2 comes just weeks after the Public Accounts Committee concluded that the £1.5 billion rise in the cost of electrification to Cardiff was “staggering and unacceptable”. It is now down to the Government to get a grip of the project, to ensure that the upgraded line is delivered quickly and with the maximum value for money for the taxpayer. With that in mind, can the Minister please tell us when he expects the electrification to Swansea to be complete?

The Chancellor was also noticeably lukewarm about proposals to develop city regions in Swansea and Cardiff, which are landmark developments with the capacity to transform transport and economic opportunity across 10 local authorities. The Welsh Government have committed £580 million to the project and the local councils have pledged £120 million, but the autumn statement just confirmed that the Government were committed “in principle” to the proposals. Can the Minister please confirm whether the UK Government will match the funding pledged by the Welsh Government?

Finally, the Chancellor confirmed that highly skilled Welsh workers in Wrexham, Swansea and Porthmadog will lose their jobs with the closure of more tax offices across Wales. We have already suffered through the closure of offices in Carmarthen, Merthyr, Pembroke Dock and Colwyn Bay in 2013, which, for example, forced workers from Colwyn Bay to travel to Wrexham to work. Are those employees now expected to travel to Cardiff to work?

The effects of the autumn statement will soon be felt by families across Wales, many of whom have suffered because of the last five years of cuts. The spending review should have been about delivering a sustainable settlement to boost the Welsh economy. Instead, the Chancellor avoided the big infrastructure challenges facing Wales and delivered another cut to the budget of the Welsh Government, and his cuts to universal credit mean that thousands of Welsh families will begin losing out from next year. What is more, we learned that the Government are removing the requirement of a referendum on devolving tax powers to Wales. I regret that the autumn statement did not have the interests of Wales at its heart, and people in Wales will suffer as a consequence.