Protecting Steel in the UK

Stephen Kinnock Excerpts

Tuesday 23rd January 2024 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

The Port Talbot steelworks is the beating heart of our community. Generation after generation have worked in that steelworks. Port Talbot is the steelworks, and the steelworks is Port Talbot. Every time I go into that steelworks, though, I do not see something to be sentimental about; I see a hotbed of innovation. I see a workforce who are deeply committed to change and ready to embrace change. This is not about some kind of request for charity or hand-outs; this is about asking for a level playing field. This is about saying that we make the best steel that money can buy.

But for 14 long years we have been competing with one hand tied behind our backs. For 14 years we have been forced to pay twice as much for our energy as our French and German competitors. For 14 years we have seen Government contracts going to foreign steel companies. For 14 years we have seen our Government completely fail to support our steel industry in anything like the way that our competitors are doing.

Let me be absolutely clear: when we look at the deal that is now on the table, we see that it does not work for jobs, it does not work for decarbonisation, and it does not work for our national security. On jobs, 2,800 jobs are set to go, with £500 million of taxpayers’ money to pay for that privilege. On decarbonisation, the deal is based on importing millions of tons of steel from India, where steel production is 30% to 40% more carbon intensive. I am not sure if anyone has noticed, but India is 5,000 miles away, so the carbon footprint will be huge. We are literally exporting jobs from Wales to India, and importing carbon from India to Wales.

I urge Tata Steel to look again at the multi-union plan and to take the bridge, not the cliff edge. Its deal will send our workforce—our proud communities—over that cliff edge. That is not something we can accept. We have to recognise that the trade unions have put together a compelling plan; a plan that would keep one of the blast furnaces going while the transition to an electric arc furnace takes place. That is the right way—the balanced and sustainable way—of doing this. Our country needs its steel. Let’s value it. Let’s stand up and fight for it.

--- Later in debate ---

[Sarah Jones (Croydon Central) (Lab)]

This has been a powerful debate, reflecting the huge strength of feeling in this place, but also the huge knowledge and ambition for our steel industry. I was disappointed that the Minister came to this place and said that this debate was performative, less than a week after Tata Steel announced nearly 3,000 job losses. I think we all would have expected better from her.

Like many others, this afternoon I met steelworkers and union officials not only from Port Talbot, but from all the other steel sectors and steel sites across the country. They have come because they know what this announcement means for them and their future. These actions will have consequences beyond last week’s announcement. The steelworkers here today, like many of us, are baffled by the Government’s approach. They know that steel is a foundation industry. They know how crucial it is to our economy. They know that the world is uncertain—for goodness’ sake, the Prime Minister was here only this afternoon talking about strikes on Houthis in Yemen—and that having our own supply of primary steel is crucial to our security. Our genuine question is: why are the Government so content to be spending half a billion pounds on a scheme that leads to thousands of job losses?

[Stephen Kinnock]

On jobs, my hon. Friend will have seen that every steel industry across the G20 and around the planet is going through massive change, but the only place where there is a threat of thousands of job losses is the United Kingdom. Why does she think that might be?

[Sarah Jones]

My hon. Friend is absolutely right. He made a brilliant speech earlier and has been a great defender of his constituents. The lack of any plan from the Government over the last 14 years is at the heart of the problems we see today.

As the shadow Secretary of State, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), said in his opening speech, we also risk something much wider: that net zero becomes a zero-sum game for working people and we lose the public consent that we need for the transition. There is no getting away from the facts. The Government have pushed a plan that uses hundreds of millions of pounds to make thousands of people redundant. If Scunthorpe ends up going the same way—the hon. Member for Scunthorpe (Holly Mumby-Croft) made a powerful speech to the contrary—we will be unable to produce primary steel in the UK.

In the Port Talbot plan, the two blast furnaces will shut this year, with a cliff edge for jobs. For at least three years, steel will be completely imported from India and the Netherlands to feed Trostre and Llanwern in south Wales, but there is no guarantee that once the electric arc furnace is built, those jobs will stay. We know that there are huge questions about scrap steel and whether it will produce the steel we need. Many Members, including the Chair of the Business and Trade Committee, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), asked questions to which the Government have so far provided no answers.

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[Mr Khalid Mahmood]

rose—

[Stephen Kinnock]

rose—

[David T. C. Davies]

Let me make a little progress, as I only have about six minutes and I think Members will want me to put things on the record. The hon. Member for Birmingham, Perry Barr (Mr Mahmood) waved around the Syndex plan; as a member of Unite, surely he will be aware that it rejected that plan.

Let me go back to the situation we found ourselves in. It was not a decision of the Government to shut down the blast furnace, but one taken by Tata in the light of the losses it was making.

[Stephen Kinnock]

I thank the Secretary of State for giving way. Yes, it is a Tata decision, but £500 million of British taxpayers’ money is going into it. Will he set out what red lines the Government put down around that £500 million? Were there any red lines around jobs?

[David T. C. Davies]

It came down to this: the Government had to find a solution that was acceptable to Tata and that would save the maximum number of jobs. The Government are not paying £500 million to throw 3,000 people out of work—[Interruption.] No, the Government are paying £500 million to save 5,000 jobs, because they will be saved, as well as around 12,500 jobs in the supply chain.

[Stephen Kinnock]

rose—

[David T. C. Davies]

I will give way to the hon. Gentleman in a moment, because he knows more about this than many who have spoken. The reality is that Tata told us that it was looking to pull out completely from the United Kingdom. If the loss of 3,000 jobs is devastating—it certainly is—how much more devastating would 5,000 be, and 12,500 jobs in the supply chain? It was a simple choice for the Government—not a good one—between seeing 3,000 people lose their jobs or around 17,500 people lose their jobs, and possibly even more. That is why the Government committed to pay £500 million towards an arc furnace. Let me make one other thing clear: the Government will not pay a penny to Tata until that arc furnace is built.

[Stephen Kinnock]

I thank the Secretary of State for giving way again; he is being generous. I think there are many reasons why Tata would not be considering full closure, not least the multibillion cost of closing down the Port Talbot steelworks. The remediation costs would be absolutely astronomical, so that was never on the table. The choice was between the bad deal that the Government have done with Tata and the compelling multi-union deal. Can we please just have the facts on the table, which are that this is not about closing the plant versus the Government’s deal, but about the multi-union deal being the right way forward?

[David T. C. Davies]

I understand the hon. Gentleman’s position and he is right to stand up for his workers. This is the reality of the situation: that plan has not persuaded Tata. Tata has not said that it is credible. Tata has said to me that it could not go along with that plan, because although one of the blast furnaces—blast furnace No. 4—has a number of years to run, it would still come to the end of the life of the coke plant and the sintering plant, so if Tata went ahead with that proposal, it would keep open one blast furnace, which is still losing a lot of money, and then have to start importing all the coke and all the sinter that it would need for it.

There is then the technical problem in that Tata says it would be very difficult indeed to build an arc furnace next to a working blast furnace containing molten steel. [Interruption.] The hon. Gentleman can shake his head, but that is what it is saying to us. That is what it has said to us as a Government and that is why we find ourselves in the difficult, unpleasant and awful situation of having to choose between 3,000 people losing their jobs and 17,500 people losing their jobs. That is why we came to the decision we did.

[Stephen Kinnock]

rose—

[David T. C. Davies]

May I just continue, because I have only three minutes left?

I want to say something about those 3,000 people. I worked in a steel plant myself. I worked in Llanwern when I left school, so I am directly involved in this and I feel it. I say to the workers that I have met the trade unions on a number of occasions. In fact, I will cancel what I am supposed to be doing next and I will go out there in the Public Gallery and meet the workers, with the hon. Member for Aberavon (Stephen Kinnock) and anyone from the unions, to explain the Government’s commitment.

There is £100 million on top of the £500 million, which will be there for the community in Port Talbot. It will be there to develop infrastructure to get other companies in. But the most important thing, and the hon. Gentleman knows that I have said this in the transition board meetings, is to ensure that anyone and everyone who loses their job has the absolute maximum opportunity to retrain and do anything that they want to do as far as retraining is concerned—to help to set people up in businesses, to get them licences, to get them any training they want. There is a massive commitment from the UK Government to that and we will not turn our backs on the people of Port Talbot.