Protecting Steel in the UK

Nigel Evans Excerpts

Tuesday 23rd January 2024 Commons Chamber

[Several hon. Members rose—]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I ask everybody to resume their seats. This is a time-limited debate and we do not have much time because of the pressure of other business today. That is why there is a three-minute limit. The Front Benchers will get eight minutes each to respond—I cannot give any less because it is only fair that there is a proper Opposition response and a Government response to that. I ask Members to be mindful when making interventions, please, and to make them short. I call Marion Fellows.

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[Several hon. Members rose—]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. If people could shave about half a minute off their speeches, we will be able to get everybody in. Otherwise, we will not.

[Dame Nia Griffith (Llanelli) (Lab)]

It is both tragic and shocking that we are faced with the potential closure of the last blast furnace in Port Talbot before greener technologies for producing primary steel are developed and operational, and even before the proposed electric arc furnace is up and running. This Conservative UK Government must bear their share of the responsibility for this appalling situation. The Government boast about the grubby little deal they made with Tata in September, spending half a billion pounds to lose 2,800 jobs in Port Talbot and leave the UK as the only country in the G20 without its own steelmaking capacity, at the mercy of world markets with the risk of price hiking, not to mention the national security risk of losing our own primary steelmaking capacity.

Instead, the Government should have been negotiating a proper deal such as the multi-union plan to ensure a just transition. They should have been protecting jobs, keeping the blast furnace going until other production means are fully up and running, and recognising that the electric arc furnace can only be part of the solution. Yes, let us recycle more steel in the UK, but we must recognise that that is not suitable for all our needs. We should also be developing green technologies such as hydrogen and direct reduction of iron to do the primary production of steel, as Labour has proposed, committing £3 billion—not half a billion—to work with the industry to make that just transition a reality.

The tin plate industry is synonymous with Llanelli. It is a central part of our industrial history, and today’s Tata plant in Trostre makes a range of different materials that go on to be used in things like food cans and aerosols. Currently, we receive our steel from Port Talbot, just some 20 miles down the railway track, which makes good economic and environmental sense. Tata tells us that when it closes the blast furnace, we will be importing steel. That imported steel will be made in blast furnaces abroad, so there will be no saving in carbon emissions—quite the opposite. Processes abroad will be much dirtier, and then of course there are the costs and emissions from transporting the steel to Trostre. The challenge will be sourcing an appropriate quality of steel to satisfy Trostre’s needs, and as Trostre makes a number of products and serves a number of different customers, that means steel of the right quality to satisfy all those needs.

We will be very much more vulnerable to logistical difficulties and price fluctuations if we have to import steel. If there is a shortage of supply, foreign producers may well prioritise their home customers.

As for the recycled steel produced in the electric arc furnace, when it eventually comes into production, there is still a lot of work to be done to assess its suitability for the different products that Trostre produces and its acceptability to our customers. It may be that some products can use electric arc furnace steel, but that will depend on the quality of the feedstock that is put in, and there is a strong case for having two smaller electric arc furnaces to provide those different qualities. Then there is the challenge of sourcing the feedstock, and not just sourcing it, but sorting it and trialling it. All this takes time.

In the meantime, we need Tata to keep the blast furnace going. The electric arc furnace should be only part of the solution, the other part being the development of green primary steel-making. I pay tribute to the trade unions, and we now need Tata to work with the trade unions—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Could Members shave time off their speeches, otherwise not everybody will get in?

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Mr Deputy Speaker, you may be wondering why on earth the Member for the northernmost mainland constituency in the UK, very far away from Port Talbot, is taking part in this debate. However, a bit like the hon. Member for Birmingham, Perry Barr (Mr Mahmood), I got my fingers dirty working in an oil fabrication yard in a place called Nigg. Some of the mightiest structures in the North sea were built there, and I am proud to have worked there when I did. Those structures, which are still working today, were made out of the best of British steel. The steel did not come from anywhere else; they were made out of British steel.

I thank the Government for the decision to allow the Cromarty firth in my constituency to become a green freeport. One of the great dreams we have where I live is that with the skills we still have locally—the welders, the fabricators and the riggers who are still of working age—we could start to fabricate floating offshore wind structures in the yard once again. That is our dream. At its height when I worked in that yard, 5,000 people worked in it, and we dream of seeing the flash of the welder’s torch and hearing the clang of steel once again. However, to do that we are going to need the best of British steel—not rubbishy stuff, but the best—that will stand up to the mighty storms of the North sea. What I am saying is that, yes, I hear the impassioned pleas about making virgin steel in the UK, but I am talking about further down the line where we can use it and where we want to use it desperately badly.

I am going to keep this short, but we have fallen a long way back. One of the shattering statistics is that, while we were still in the EU—towards our last days there—the UK had fallen to being the eighth in the whole of the EU in steel production. We were actually behind Belgium. This is the country of Isambard Kingdom Brunel, the country that built the Forth rail bridge, the country of steel, and it was steel that made this country great, so I support the motion with great passion. Believe you me, it has my full support.

[Mr Deputy Speaker]

Thank you very much.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Steel is a strategically important industry for Wales and for the entire UK. It is vital in supporting the green transition, from energy generation to electric cars. This is not just about a fair transition, but about having the security of supply that is essential to any transition at all. As we enter the new era of Great British Nuclear and small modular reactors in places such as Trawsfynydd, there is no sense and no rational strategy in the Government committing their successors to buying thousands of tonnes of new steel—and from where? From China? We do not even know what assessment the Government have made. Does the UK need security of supply from being able to produce virgin steel in future—yes or no—and what is the Government’s role in that respect?

Plaid Cymru has called for action to ensure that ownership of the Welsh steel industry is returned to Welsh public control. This would involve nationalisation, and then recapitalisation through green bonds, with a view to mutualising and creating a Welsh steel co-operative. We could save the banks in 2008; why can we not save steel now? Look at Germany, where the Government spent €2.6 billion in state aid to steel producers for decarbonisation projects only last year. That is the scale of intervention that we need. We must also learn from countries such as Spain, Canada and Sweden, which are already investing in their capacity to produce primary steel through green hydrogen furnaces. There are lessons here for Wales. There are suggestions that a closed-loop cycle could be created in south Wales, whereby floating offshore wind is not only used for electricity but to make green hydrogen for local heavy industry, including steel production.

If we had better control over the Crown Estate, we could tie these procurement requirements into those contracts. We could put local procurement as a priority. Where is the vision? Where is the vision in saying that only central Government can manage this, given the current state of the nation in the United Kingdom? These are the sorts of exciting opportunities we should be grasping now in Wales, yet we are being let down once again by a Westminster Government who are intent on stripping Welsh assets while leaving the Senedd to bear the costs of communities and individual lives thrown on the scrap heap.

Yes, the Labour party is also promising a transition fund for the steel industry, but how can we believe it will ever be implemented, when it continues to scale back on its £28 billion green investment pledge? Solutions from Westminster are a dead end; only with control over our own resources, such as through a Welsh steel co-operative and the devolution of the Crown Estate, can Wales embark on its own journey towards a greener and fairer future.

To close, Mr Speaker—

[Mr Deputy Speaker (Mr Nigel Evans)]

I am afraid that time is up; I do apologise.

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[Richard Thomson (Gordon) (SNP)]

First, I express my concerns on behalf of the 2,800 workers at Port Talbot who will lose their jobs and the many others in that community and the surrounding area who will feel the knock-on ramifications of this decision. It is a situation that all too many communities in Scotland, and indeed across the UK, remember from the toxic legacy of the Government’s industrial policies in the 1980s, when the rapid enforced decline of heavy industry across too many places was progressed with. That toxic legacy gives us a prime example, if we needed one, of how not to go about an industrial transition. With the rejection of the multi-union plan, it seems that the present-day Government have learned no lesson in that regard.

Make no mistake: this decision is economically, environmentally and strategically inept. It means that the UK takes a step closer to being the only state in the G20 without the capacity to make its own virgin steel. That is a risk to security, but it also means that the UK is effectively outsourcing the emissions associated with the production of that virgin steel, while unforgivably offshoring the jobs. That is not a just transition; it is just plain daft.

The green transition that we know we need to make should be a main driver of economic growth in the decades ahead, and we can see how Governments in the EU and in the US who get to grips with that challenge can drive forward that investment. In contrast, in Port Talbot we see a £500-million UK Government investment leading to the direct loss of 2,800 jobs. That is a transition of a sort, I suppose, but it does not come anywhere close to meeting the needs of the communities there, the economy or the planet.

Finally, I say as gently as I can to those on the Labour Front Bench that if decarbonisation is not to mean deindustrialisation, they should please have a word with their leader and make sure that he does not water down any further his £28 billion pledge, because communities that depend on our getting the transition right, such as mine, deserve and expect no less.

[Mr Deputy Speaker (Mr Nigel Evans)]

To resume her seat no later than 6.44 pm, I call Ruth Jones.

[Ruth Jones (Newport West) (Lab)]

It is good to participate in this debate, but it is not good to recognise the thousands of job losses coming down the track and the devastating effect that will have on our local communities. We cannot underestimate the anxiety and anguish caused by this callous announcement by Tata, and the lack of thought by the UK Government in just going along with it. It is not just about the direct job losses, but about the thousands of other workers and families involved in the supply chain of the steelworks in south Wales.

This announcement is a massive blow for everyone across Wales and the UK. It is all the more frustrating, because we know that this decision to shed 2,800 jobs is completely avoidable. We know that the steel industry has to decarbonise, and we must achieve our goal of net zero, but we do not have to do it overnight. We can transition to green steel. Decarbonisation cannot mean deindustrialisation. The route to green steel involves a mix of all the available technologies, not just electric arc furnaces. We will move towards our goal of net zero, but in partnership and co-operation, leaving no one behind. That is the fair way; that is Labour’s way.

In contrast, this Government are so deaf to the problem that the Prime Minister would not even answer the phone to the First Minister Mark Drakeford when he rang to discuss the proposed job losses. That tells us volumes about how ready to listen this Government are. As we are talking about Government responses, will the Minister meet the unions? I believe that the last meeting was way back in May 2023. It would be good to have a commitment from the Minister.

There is also a knock-on effect, because while we are mainly concerned with jobs in Port Talbot today, there will be an impact on its sister site Llanwern in the constituency of my hon. Friend the Member for Newport East (Jessica Morden). Many people in Newport West work in Llanwern, and let us not forget the other steel companies, such as Island Steel and Sims Metal recycling, which are also suffering because of a lack of coherence and strategy from the current UK Government. It is unbelievable.

Like all the speakers on the Labour Benches, I pay tribute to the union representatives here in the Public Gallery today, and I thank them for their diligent and proactive work. I call on the UK Government to engage with them and work with Tata to ensure that the UK retains its steel production capabilities and that our automotive, defence, manufacturing, construction and renewables industries can procure and use our own British steel.

[Mr Deputy Speaker (Mr Nigel Evans)]

To start the wind-ups, I call the Opposition spokesperson.