Steel Industry: Wales

Debate between Nusrat Ghani and Nia Griffith

Wednesday 21st February 2024 Westminster Hall

[The Minister for Industry and Economic Security (Ms Nusrat Ghani)]

It is an absolute pleasure, Sir Gary, to serve under your chairmanship.

I congratulate the hon. Member for Llanelli (Dame Nia Griffith) on securing this important debate and on speaking so powerfully on behalf of her constituents, many of whom, as she said, are directly affected by the proposed closure of the blast furnaces at Port Talbot. It was lovely to have on the record the importance of the history of steelmaking, especially the creation of tin cans and canned beer, which is something new to me that I will try to take forward somehow.

All hon. Members here in Westminster Hall today have recognised how vital it is that we have a competitive and thriving steel industry, not just for jobs at the Port Talbot and Trostre plants but because of how important steel is to the broader Welsh economy and its future. I thank hon. Members for their valuable contributions to this debate. It is unfortunate that the hon. Member for Croydon Central (Sarah Jones), the Opposition Front-Bench spokesperson, had to make it so political, but I will try to address as many of the points that have been raised as I can in my reply.

First, however, let me start by expressing my heartfelt sympathy for the hardworking employees across Wales and the rest of the United Kingdom who are affected by Tata Steel’s announcement. Undoubtedly, these are challenging and turbulent times for everyone involved, not only the workers but their families and the communities in which they live. Steel has played a pivotal role in modern Welsh history and Welsh people take immense pride in their industry and workforce. This Government are working hard to secure a long-term sustainable future for Welsh steelmaking and to grow the legacy of this cornerstone industry.

The concerns expressed throughout this debate are indeed our concerns; they are shared by hon. Members across the House. They have been expressed by the Government in our negotiations with Tata. We are indeed holding Tata to account. The transition board has been mentioned and we are ensuring that the transition is managed properly, so that every employee receives the support they deserve.

That is why the Government are making a significant investment of £80 million towards the dedicated transition board; Tata is also contributing £20 million. The board includes representatives from this House, the Welsh Government, the local council and other key areas to ensure that the local community is well represented and supported through this period of change.

In addition, Tata Steel has committed a further £130 million towards a comprehensive support package to assist impacted employees. This Government are indeed working hard to ensure that help and support are there for those who need it throughout this disruptive period.

I will be present at those transition board meetings, as will the unions, which I meet regularly. In fact, I believe I met the unions just this week. I forget exactly when, because my weeks blur into one, but regular meetings with the unions are taking place. The point about ensuring that we are involved in constructive dialogue stands, is noted and is on the record. At the same time, however, we must not forget the context that led Tata to make this decision, because the alternative, regardless of the politics being played out, could have led to no steelmaking at Port Talbot.

[Dame Nia Griffith]

Does the Minister recognise that many of the investment decisions have been taken because over the past few years the difference between energy prices here in the UK and in other countries across Europe, such as France and Germany, have had a significant impact?

[Ms Ghani]

The hon. Member always makes very thoughtful interventions. It is true that energy prices have spiked, partly because of what is happening in Ukraine, and that is most definitely a challenge, but the support that we are providing Tata is the largest grant that has ever been made available to the steel industry. That was not done under the Labour Government, but under this Conservative Government providing the widest and deepest level of support to the steel sector.

[Dame Nia Griffith]

Will the Minister give way?

[Holly Mumby-Croft]

Will the Minister give way?

[Ms Ghani]

I will give way to the hon. Member for Llanelli and then to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft).

[Dame Nia Griffith]

Does the Minister acknowledge that the issue of energy prices pre-dates the events that happened in Ukraine two years ago?

[Ms Ghani]

Energy prices are a component. There is also the challenge that customers and users are seeking cleaner steel and the challenge of managing blast furnaces that are coming to the end of their life. It is a complicated scenario, but, because of the support that we have provided and the transition board that is focused on supporting the staff, there will continue to be steelmaking in Port Talbot.

British Steel

Debate between Nusrat Ghani and Nia Griffith

Wednesday 8th November 2023 Commons Chamber

[Ms Ghani]

I cannot disagree with that. I have been reading up on Scunthorpe steel: it has been used to create structures ranging from the Sydney Harbour Bridge to the London Eye, which demonstrates the breadth and the depth of its history.

[Dame Nia Griffith (Llanelli) (Lab)]

The feedstock for the Trostre tinplate works in Llanelli is steel of a quality that can currently only be produced in the blast furnace process. Following the devastating news that Port Talbot blast furnaces will be closed by the end of March, leaving Trostre dependent on imported steel—quite possibly produced to lower environmental standards abroad, and certainly not saving on emissions—may I ask the Minister to stop just quoting commercial decisions, and tell us what strategy the Government have to develop the green technologies of the future here in the UK and to keep virgin steel production here as well?

[Ms Ghani]

I had a feeling that I had mentioned that a few times. We have a fund of about £1.5 million, partly aimed to ensure that we are adopting, testing and commercialising new technologies to enable the steel sector to decarbonise. We have done a huge amount of work on electricity and we are also considering the possibilities of hydrogen, so we are looking into alternative sources of energy to help the sector in the UK. I know there are challenges for places such as the hon. Lady’s constituency because of the sort of steel that they need, but the fact remains that more and more different types of steel can be made to a high standard and a high grade in electric arc furnaces.

Tata Steel: Port Talbot

Debate between Nusrat Ghani and Nia Griffith

Monday 18th September 2023 Commons Chamber

[Ms Ghani]

My right hon. Friend, who spent a considerable amount of time as Welsh Secretary, knows very well how these relationships work. He is absolutely right: the negotiations and securing the £500 million investment have taken place via the Government here. It was important for us to make sure that the Secretary of State for Wales and everyone else involved were across this, too. He is absolutely right that there is a difference in the steel produced—my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), the hon. Lady for steel, pointed out the importance of virgin steel—but there is a growing circular economy for steel produced in electric arc furnaces. It utilises scrap metal that is in abundance in the UK—we export tonnes of it—so there is a huge amount of work to be done in electric arc furnaces. That is why the business model is so substantial and why Tata put in so much money, with our £500 million going into the £1.25 billion commitment in total.

[Dame Nia Griffith (Llanelli) (Lab)]

The future viability of Tata’s tinplate works at Trostre in Llanelli depends both on the proximity of Port Talbot and on the production there of the grade of steel that can currently only be produced in the blast furnace process. While I welcome the recognition of the need for increased electric arc furnace capacity in the UK, what assurances can the Minister give me that the Port Talbot blast furnace will continue to supply steel to Trostre until such time as greener technologies are developed there? What will she do to support the development of those technologies in Port Talbot?

[Ms Ghani]

I am pleased that the hon. Lady recognises that whole new supply chains will be created and whole new businesses set up, with many more jobs in place too. There will now be a consultation in place. Tata has already put up its business plan for how it will continue to supply steel, but also for the work it will do with supply chains downstream. That work will continue to take place. As far as I am aware, there is no other change in any other sites. Now that the deal is out in public, work will continue at pace. I will continue to meet the chair of the steel APPG and the steel sector to ensure we are doing everything we can to back UK steel and UK manufacturing, and all the businesses in the supply chains too.

Oral Answers to Questions

Debate between Nusrat Ghani and Nia Griffith

Thursday 18th May 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Dame Nia Griffith (Llanelli) (Lab)]

I congratulate my hon. Friend the Member for Swansea West (Geraint Davies) on his work on this report, which includes calling out the energy charter treaty used by fossil fuel companies to sue Governments for introducing climate policies. It is now nearly a year since the Minister’s colleague, the right hon. Member for Chelsea and Fulham (Greg Hands), said:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges”.

Can the Minister tell us when the Government will follow the example of other major European countries and commit to withdrawing from the energy charter treaty?

[Ms Ghani]

The energy charter treaty, which is under review, falls under the responsibilities of the Department for Energy Security and Net Zero, which has been formed from half of my previous Department. In their negotiations to modernise the ECT, the former Departments for International Trade and for Business, Energy and Industrial Strategy worked in close collaboration and DIT led on the investment provisions, so there is no doubt that the hon. Lady’s question would be better focused at the other Department.

UK Car Industry

Debate between Nusrat Ghani and Nia Griffith

Wednesday 17th May 2023 Commons Chamber

[Ms Ghani]

The hon. Member is absolutely right: there is a fantastic project with Nissan and Envision that will support 6,200 jobs in that supply chain, with more than 900 new Nissan jobs and 750 new jobs at the Envision gigafactory. By 2025, that site will see a projected 100,000 battery electric vehicles produced each year by Nissan; it is the first in the UK at that scale. All the other programmes of investment that I explained, whether that is the automotive transformation fund or the Faraday battery challenge, are what we are using to attract further investment in the UK, especially in gigafactories. That is exactly what we are working on—it is what I am working on as the co-chair of the Automotive Council.

[Dame Nia Griffith (Llanelli) (Lab)]

The transition to electric vehicles means not only new battery and engine factories, but significant investment in car component factories such as Gestamp in my constituency, which has developed lighter, tougher car body parts. Multinational companies such as Gestamp are currently making crucial decisions about where to site the production lines of the future, so with the US Inflation Reduction Act and the EU refining its response, what are the Government going to do to reduce energy costs both now and in the long term, to provide a coherent industrial vision and strategy, and real incentives for companies such as Gestamp to invest their new lines here in the UK?

British Steel: Negotiations

Debate between Nusrat Ghani and Nia Griffith

Thursday 2nd February 2023 Commons Chamber

[Ms Ghani]

Absolutely. That is why we are working so closely with the companies and the unions. I have met with the unions, most recently last week. Hopefully I am not divulging too much information, but they also claimed that they struggled to have good levels of communication with Jingye and British Steel, so it is not lost on all of us. We are very committed to the sector.

We have also been buying more British steel. In 2021-22, the Government procured £268 million of UK-produced steel for major projects, which was an increase of £160 million on the figure from the previous year—this is based on departmental reports. I have been the HS2 Minister, and I have always been concerned about why we could not procure more UK steel in our rail and road projects, and in all others, including those for shipping—I have also been maritime Minister. So there is even a greater future ahead. As I mentioned, the UK’s steel demand is going to rise by 20%; this is a good space to be in. We are just in a peculiar situation while we are having ongoing negotiations, and the decision was taken to have this meeting with the unions yesterday.

[Dame Nia Griffith (Llanelli) (Lab)]

I know that the Minister is sympathetic, but Ministers across Government need to realise that this is a crucial time for steel companies, as they are making decisions about where to invest for the future worldwide. What discussions has she had with colleagues across Government about giving guarantees that far more than £300 million will be there for developing the steel technologies of the future, that there will be a proper Government procurement strategy for British steel and that there will be a fair deal on energy prices for the future?

[Ms Ghani]

I appreciate that this is a very tricky moment for the sector, as it is worldwide. We have spoken about this previously, and it is incredibly important for us to get it right. We have been focused on the present real-time negotiations. Let me put it on record that we are, as always, available to continue those discussions and we are hoping that they will continue regardless of the announcement of the discussions that took place yesterday. I cannot stress enough the long-term and strategic benefit of having a £1.5 billion fund in place to help us decarbonise—that is providing a huge amount of support.

We have spoken previously about procurement, and when I moved away from BEIS Committee after, I realised how life comes at you fast when you are a Minister and you cannot commit to the recommendations you made in your report. However, we are working hard on procurement, too. We want to make sure that there is more British steel in our defence projects. Let me put it on record that the Ministry of Defence purchased £4.3 million of UK-produced steel through its contracts in 2020-21, which is an increase of 42%, from £3 million in 2019-20. There is a huge market here, which is why we are so committed to ensuring not only that we negotiate well, because this is about British taxpayers’ money, but that we have the right resources and infrastructure in place for a long-term future for British steel.