What discussions has the Welsh Government had regarding the impact on the Welsh steel sector of the joint venture between Tata Steel and ThyssenKrupp AG? (TAQ0044)

Both I and the First Minister have spoken with Tata Steel UK CEO Bimlendra Jha about the announcement of the joint venture.

Well, thank you for that answer, Cabinet Secretary—very brief and very short.

Now, that announcement of a joint venture clearly has been something in the background, and many concerns have been expressed by steelworkers in my constituency and across Wales regarding the future of steel making here in Wales. Only 18 months ago we saw the threat of closure in the Port Talbot works. Beyond that we saw the threat of selling off the steel industry in south Wales, only to find that, eventually, they recognised that the plan, or ‘the bridge’, as it was known, actually did work, and therefore made the steel industry viable, and all those were removed.

But once again we face some uncertainty because of this announcement. I understand the unions have given a cautious welcome, but there are some issues, particularly in the detail, and we need to give confidence to the steelworkers in Wales who have dedicated themselves and committed themselves to improving steel making here in Wales. So, in that respect, can you tell me what discussions you have been having with Tata to ensure that the agreement to invest the £1 billion in steel making is going to be honoured by a new venture, because legally there’s a different entity now in place, or will be in place, particularly as that was at the cost of pensions to many workers?

What actions are you taking as a Welsh Government to ensure that the proposed advanced steel research centre that was being discussed will continue at Swansea University, and not perhaps be hived off for research in other parts of the EU? What assurances have you received for a sustainable future for steel making here in Wales, to ensure that the Port Talbot works is not short term, but is actually continued to be long term, and the jobs are long term? And what actions are you taking with the UK Government who, to be blunt, to this date have been very ineffective—my word is ‘useless’—because historically they’ve done nothing? But you need now to work with them to make sure they buy into steel making here in Wales.

Can I thank Dai Rees for his question and for the interest a number of Members have shown in this subject, not just today, but over many months and indeed years? I’d like to begin in responding to Dai Rees’s questions by putting on record my appreciation to the loyal, dedicated and skilled workers employed by Tata across Wales. They have shown incredible patience and loyalty. They have sacrificed in terms of their pension in reaching the point that we are at today, and they deserve to be shown equal respect and credit by Tata as an employer as they move towards the joint venture.

As I said, I’ve already spoken with the CEO of Tata Steel UK, and I’ve sought and been given a number of assurances. I would agree with the trade unions in the statement that they have issued that today’s announcement is to be welcomed cautiously. This paves the way for Europe’s second-biggest steel business to be formed, which could bring many benefits to the UK—benefits that could align and should align with the sector deal approach being taken forward as part of the UK industrial strategy. Last week, or last month, I met with the Secretary of State in the Department for Business, Energy and Industrial Strategy to discuss, amongst other things, the steel industry and the sector deal and how we needed to ensure that research development and innovation was at the heart of the sector deal approach for steel. I’ve been given assurance over the assets that exist across Wales and the UK—that there will be no closures; that the announcement paves the way to a sustainable and competitive future for the steel industry in Wales. But I will be seeking further discussions, not only with Tata but also ThyssenKrupp to ensure that the interests of Welsh workers are at the very heart of the joint venture.

I can assure the Member that our investment, our interest in the advanced steel innovation centre continues, and that project will be taken forward. I think one of the strengths of the research and development base in Tata Steel’s Wales operations is that it’s linked so strongly to higher education institutions in Wales, that it’s embedded within the higher education institution estate, and so that project will be taken forward.

The most important thing for steel making in the UK is that it is competitive so that it can be sustainable. Of course, the Member rightly raises the role that the UK Government can play in this regard, specifically concerning energy and the disparity between energy prices here and elsewhere. Action is still required in this regard. It is something that has been raised at an official level and at a political level with the UK Government and we still await a satisfactory response. Talks will be ongoing and I am in no doubt that discussions will be ongoing at the UK steel council, involving not just Tata Steel but other steel manufacturers in Wales, to press for a fair deal on energy.

My officials have also been engaged with officials at BEIS in recent days concerning this matter. We’ll be working jointly together in the interests of UK steel operations to ensure that those commitments that were made for the steel plants are honoured. Of course, the primary commitment concerns the blast furnaces at Port Talbot and the £1 billion pledge, which we expect to be honoured. But there are other conditions that will be honoured regardless of the joint venture’s details, concerning the £13 million that we’ve made available to Tata Steel UK. Those conditions include conditions on minimum employment periods of five years for workers, and they will be honoured by the joint venture.

Thank you very much. I particularly thank you for that last answer, Cabinet Secretary, because the five-year condition, of course, is something that you spoke a lot about when there was a possibility of sale for the site. When it comes to a five-year commitment, though, have you had any sense yet of what type of jobs the merged outfit is going to be prepared to commit to, and when will you find out what types of jobs are likely to be affected? Because the long-term sustainability is the crux here, rather than a simple five-year conditionality? One was supposed to lead to the other. The types of jobs that are going to be lost in Port Talbot—we need to know what types of jobs they are in order for us to be able to scrutinise further any plans that they may have on that.

The Welsh Government in the past has pledged to retrain people who have lost their jobs already. I imagine you may want to say something about that in the future as well. Is there anything that can be done on the back of this that will help accelerate interest in the enterprise zone in Port Talbot? And is there any influence that you can bring to bear that may—how can I put this—maximise the number of relevant jobs that can be brought to the new prison that we’ll be discussing this afternoon, if in fact it does come to the area?

And then I just wanted a little bit of reassurance myself on the steel science centre, because obviously this is a focal anchor project of the Swansea bay city deal. It was based on Tata itself, actually—comments that they had made about carbon-positive products and new construction material. I think we need to know whether ThyssenKrupp is also interested in this new way ahead before we can be completely satisfied that the science centre is sustainable.

I thank Suzy Davies for her questions and assure her that steel-making jobs are our priority, not just for Port Talbot but for other sites across Wales. I’ll be seeking specific assurance over jobs within the procurement departments as well within the Welsh assets. In terms of other jobs that have been speculated over elsewhere, I think the unions have made clear that the vast majority of human resources and IT jobs exist outside of the UK and therefore the impact of any reduction in that regard will not have major implications for steel sites within Wales, but I am seeking assurance specifically, as I say, over procurement jobs, and over the steel-making jobs likewise.

In terms of research and development, particularly as we transition to a low-carbon economy, I’m confident that the Welsh sites are in prime position to take advantage of initiatives and support from Welsh Government and from the UK Government, should it be forthcoming within the sector deal. There is no doubt in my mind that the steel innovation centre, which forms a critical part of the Swansea bay city deal, will go ahead with the original aspiration unchanged, delivering through a partnership approach a new form of innovation, research and development that can drive an economy of the future. I have every confidence that that will continue to be a major part of the city deal and will go on to become a major success. Indeed, the investment will be considered by the investment board this week. I was also assured by the CEO of Tata Steel UK that he will continue to fight as hard as he can for Welsh interests within the joint venture. That includes Welsh interests insofar as jobs are concerned and insofar as research and development is concerned. He identified the fact that research and development is strongly embedded within higher education institutions within Wales as a major reason why it’s in such a strong position.

Thank you, Cabinet Secretary. The second question—Bethan Jenkins.