4. 4. Statement: Tata Steel

Part of the debate – in the Senedd at 4:12 pm on 8 June 2016.

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Photo of Carwyn Jones Carwyn Jones Labour 4:12, 8 June 2016

In terms of the questions that have been asked, in terms of the heavy end, the two bidders that I have had contact with wish to preserve the heavy end. They have different approaches to it, and this is public—it’s known that one of the bidders wants to look at the use of scrap in the future, rather than iron ore. The other bidder would keep the process as it is. But, nevertheless, the heavy end at Port Talbot would remain. It’s a more difficult question, I think, if bidders are asked to guarantee that every single job will remain in place. I don’t think that bidders can offer that assurance at this stage, but they can offer the assurance—the two that I have spoken to—that the heavy end will continue, and that’s hugely important. Because once the heavy end goes, it will never be reinstated. Now, when market conditions continue to improve, it’s possible then to employ more people, and that’s important. So, the protection of the heavy end is there.

We would not support, in any way, a bid that included the closure of steel making in Port Talbot because that’s where the substantial chunk of the employment is, and then there will be a detrimental effect on the rest of the operations around Wales in terms of tinplate, Tata Steel Colors and specialists like Orb in Llanwern.

Before Christmas, in a meeting that I had, it was made clear to me that a sale was not on the cards—that it was either carry on or close. After Christmas, the situation changed. Better that than closure, that much is true, but it’s right to say that there was a change in thinking in Tata at that time. Now we find ourselves in a position where a sale is on the cards. Before Christmas, the indications were that the McKinsey report was being taken seriously and that a turnaround would be looked at seriously. It wasn’t suggested before Christmas that closure was on the cards, if I can put it that way, but certainly a sale wasn’t on the cards at any time before that time. We know that that’s what’s happening now.

Of course, the package that we’ve put on the table has been intended primarily for new bidders. That was at a time when it wasn’t believed that Tata would want to stay in any event. There’s no doubt that there will be a need to give certain guarantees as far as any Government help is concerned, whether it’s the UK Government or whether it’s Welsh Government. We can’t put money on the table to find that, in a year or two’s time, that money has effectively disappeared because the assets are being reduced in terms of job numbers and in terms of production, and that applies to the UK Government as much as it applies to us. And we recognise that, in fairness, because that would need to be done.

If a new bidder comes in who is an established steel maker, it’s a reasonable assumption to make that they will want to continue with steel making in any event. If you have asset strippers come in, then obviously there’s a very different thought process. It’s never clear, of course, where you have an existing operator, what their intention in the future might be, and, yes, there will be a need, as far as the workforce is concerned and as far as the public purse is concerned, to obtain certain guarantees as to future investment and a plan for the future for the Welsh steel industry.

In terms of job support, again, that is something that the city region will be looking at. The Member will know that we have an established process for dealing with situations like this, which involve a number of organisations that have come together to offer that support. It’s absolutely crucial, of course, that the skills that are on offer are the skills that are required in the local economy and, of course, the city region board will have a very useful input in terms of being able to make that assessment as to what skills need to be provided in order for people to get the secure jobs that they need.