4. 4. Plaid Cymru Debate: Tata Steel

Part of the debate – in the Senedd at 3:44 pm on 18 January 2017.

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Photo of David Rees David Rees Labour 3:44, 18 January 2017

Can I start my contribution by declaring that I’m a proud member of Unite, one of the unions that’s obviously represented in the steelworks, along with Community and GMB? I hope by now that Members in this Chamber will be aware of my passion for the steel industry, my belief in a strong, vibrant future, my respect for the steelworkers, and my total commitment to them, their families and my communities.

The crisis in steel was abundantly clear over 18 months ago when SSI announced the closure of Redcar, and the UK Government actually started to wake up a little bit to the challenges facing one of our foundation industries. It’s only 12 months ago that the loss of over 1,000 jobs in Tata Steel UK was announced, and we started to see the impact of that crisis here in Wales—followed within months by an announcement to sell the Tata Steel UK operations. Since then, steelworkers and their families, particularly those in my home town, have gone through hell not knowing whether there would even be a steelworks remaining in the town and a job to go to.

During this time, strong leadership to secure steel making in Wales has been given by both this Welsh Labour Government and the steel unions. I think it’s disgraceful the UK Government has not shown the same commitment to our steel industry. In fact, since the change of Prime Minister, since last summer, we have struggled to actually hear any reference to retaining a strong and vibrant steel industry from any member of Theresa May’s Government. That does need to change. They need to be more public with that support.

The challenges facing our steel industry have not gone away. Yes, the drop in the pound has helped the sector improve its financial position, but long-term sustainability cannot be based upon the fluctuations, which are volatile, in exchange rates. In the EU and UK, the steel demand growth rate for 2016 was up 0.8 per cent and forecasts for 2017 are up 1.4 per cent. That’s still more than 20 per cent down on the demand figures for 2007. The OECD actually estimates the global overcapacity of steel as 700 million tonnes next year—400 million tonnes of which will be Chinese steel, by the way—and that global competition will continue to be challenging and dumping will still be a threat.

When we add to this the likely impact of Brexit and the announcement yesterday that the UK will leave the single market—and this is particularly important as Tata actually exports three times as much to the EU-27 as it does to any other country—there is clearly still a long way to go to provide a secure and sustainable industry. We must continue to do what we can to deliver that.

This Labour Government has already agreed over £16 million of investment to Tata to support skills training for the future workforce, and for work on redeveloping the power plant in Port Talbot as part of the £16 million identified as support for Welsh steel making—funding that is conditional upon a commitment from Tata of continuing with two blast furnaces at the heavy end of Port Talbot—and future investment. It has also indicated an ambition to establish a steel research centre in collaboration with Swansea University, thus looking to make Wales a centre of production of premium steel.

The steel unions have worked tirelessly to reach agreements on the transformation plan, to challenge the UK and EU Governments and to secure investment and job security for the workforce. The current proposal being considered by the steelworkers is the culmination of tough and lengthy negotiations undertaken by the unions with that aim. They have been and will be there for their members, and for anyone to claim that they are doing their members a disservice is deplorable. Anyone making such comments, in my view, should withdraw them and apologise to the unions.

Now is a time to show respect to steelworkers and allow them to seek out the full facts of this agreement on offer. I agree with my colleague from Llanelli; these proposals are not great, they’re not fantastic and there are serious challenges. My personal view: when the public sector issues were raised under the UK Government, I was totally in support of ensuring that anyone who was in a scheme was allowed to stay in that scheme—they bought into it, they should stay in it. I’m still of that view. I haven’t changed my mind. But in this case, I’m not going to express an opinion as to which way they should vote on this.

It is important that we allow them to seek the full facts from a variety of sources—and I actually raised this with the CEO of Tata Steel UK: ‘Get independent advice for your workers and make sure that it is independent’—for them to weigh up the proposals and the possible outcomes, so whichever way they vote, it will be based upon their personal considerations and not on rumour or political manoeuvring.

Llywydd, today’s motion is calling on the Welsh Government to intervene in this process, ignore those discussions and replace unions in any further negotiations with the company on an agreement for the workers. That’s what it says. I hope Plaid Cymru is not now saying that the unions should no longer have a role in reaching agreements with the company and put in offers to members by Governments instead.

We all understand that the steel industry is a volatile and cyclical business. It’s extremely sensitive to fluctuations of the global economy.