However, whilst we had hoped that the future of steel making was assured following the actions of the sector and the Welsh Government, we now face up to more challenging times. The high energy costs continue to present difficult economic challenges within the industry, and now the uncertainty of Brexit is making those challenges bigger and deeper. It is critical that at this time all parties work together to secure the future of steel as it once again hits uncertain times, ensuring that we safeguard the local economies of Port Talbot, Llanelli, Cardiff, Newport and Shotton, let alone protecting our industrial skylines.

During the recent difficult times that our steel communities have experienced, the Welsh Labour Government's focus has been on securing a successful and sustainable future for the steel industry in Wales, one that targets the retention of steel production and jobs. They've invested in all three major steel makers, provided support for research and development, given a commitment to decarbonisation, and continued support for employees. The Welsh Labour Government has demonstrated that they will not abandon the steel industry here in Wales.

However, the challenges being posed to the sector by Brexit and high energy costs cannot be resolved by the Welsh Government. It is now time that a commitment from the UK Government is given to steel producers and their employees. They want assurances that the steel industry will not be forgotten during Brexit and the UK Government will finally deliver on the promises of tackling the disparity on energy costs between the UK and the EU. These are the areas I will concentrate on today, but I'm sure there will be more. Otherwise, I'll be here all afternoon. I don't intend to, Dirprwy Lywydd. 

Just two weeks ago, steel producers and trade union reps attended the steel cross-party group here in the Assembly, which I chair. In that meeting, we heard damning evidence from the sector about the disadvantages they face on a daily basis when it comes to energy costs. This was further compounded this week by UK Steel's annual report on energy costs here in the UK compared to France and Germany. In 2017, the Tory manifesto committed the Westminster Government to seek delivery of the lowest energy costs in Europe for both domestic and industrial consumers. Two years later, the industry is still waiting. In 2018, the same Tory Government released its industrial strategy, which once again promised to make the UK the best place to start and grow a business, yet steel was a byline in that document. 

There has been some action since then on energy efficiency. However, no amount of energy efficiency improvement will counteract having to pay 50 per cent to 100 per cent more for your electricity than your competitors. At our CPG, we were told that energy costs in the UK are 110 per cent higher than France and 55 per cent higher than Germany. There are worries that this is going to get worse, not better. Support at £65 per MWh was needed to close today's gap, let alone what may happen in the future. 

We have argued for many years that all our steelworkers are asking for is a level playing field, to make them competitive in a global marketplace. Our steelworkers, in my view, are the best in the world, and their commitment to the industry over recent years shows that they can play their part. But they need the UK Government to step up to the plate now. They want the UK Government to actually respond to UK Steel's report on energy costs. That outlines nine measures for the UK Government to implement immediately in order to give the industry a fighting chance in the changing global economy.

To give the UK Government incentive to take action, the UK's five largest steel producers made a firm and direct commitment that all savings on electricity costs would be put back into the industry in the UK, thus delivering cost parity with Germany, which would deliver a £55 million a year investment over and above business as usual. This represents a 30 per cent increase. With this commitment from the steel sector, to me, it's a no-brainer that the UK Government should join in. Such funding would provide vital research and development funding for the industry in years ahead, particularly as we will see the loss of around £40 million a year from the coal and steel research grant administered by the EU, which, as I mentioned last week, will be paid back to the UK Government's Treasury. This money was paid into the EU by the steel and coal industry and is money that they are entitled to and should have full access to, yet the UK Government has refused to ring-fence this for those industries. Research and development is vital as we move ahead to ensure that we stay ahead of global competitors. In the UK, we have seen fantastic research and development initiatives going ahead, particularly here in Wales, and I'm sure colleagues may want to mention some of that, especially as it's in my constituency. Now, I find this absolutely appalling. I want to continue to fight alongside the industry to ensure that this money—money that is actually from the industry itself—is going back to the industry. It belongs there, it should stay there post Brexit. I'm sorry, Dirprwy Lywydd—it does lead me on to the B word. I hoped to get away with it this week, but there we are.

On Monday, UK Steel published its report, 'Implications of a No-Deal Brexit for UK Steel Companies'—genuine fears of a 'no deal' Brexit. And I appreciate that we're not there yet, but it's looking more likely. In that report, they identified seven key areas that would be impacted upon to different levels as a result of Brexit: movement of goods, EU tariffs, free trade agreements and non-EU tariffs, rules of origin—which sometimes we forget about—trade remedies, safeguards and research and development. I'm not going to discuss all of those in this contribution, but I'll just focus on three, which are some blatant and obvious ones: movement of goods, rules of origin and safeguards. And they'll have a direct impact on the steel industry in my constituency in Port Talbot, because 30 per cent of the steel from Port Talbot goes to the automotive industry, 80 per cent of that being UK based, which sounds positive—here it is in the UK, so we don't have to worry about it—but when you put the fact that those cars are exported to the EU, and those cars will be subject to tariffs, then you can see the impact. We saw only this weekend the decision of Nissan to reduce or remove the X-Trail production here, Nissan being a possible client of Tata. I know they do the Juke, but here we have a situation where again we're seeing the automotive industry moving away from the UK.

Now, that has major implications for Welsh steel being sold on the global market, because we want to see more Welsh steel on the global market as a consequence of that, and that is going to be challenging. Now, this exported steel will be subject to EU tariffs if we have no deal, and the tariff is estimated between 4 per cent and 5 per cent. We currently export 2.6 million tonnes to the EU, and Turkey will want to grab some of that marketplace. We export 300,000 tonnes of steel to them, and they could actually impose 15 per cent more tariffs on top of that. So, if there's a deal, no risk. If there's no deal, we have some serious trouble, and we will also be facing tariffs of the US and other countries, and even facing EU tariffs, because we have no protection anymore. These are really disastrous possibilities.

A 'no deal' Brexit will see UK steel or UK-manufactured components—because don't forget, steel goes into components and other aspects, and there are your rules of origin coming in—. Therefore, EU manufacturers will look at exactly how much steel is in their components, because where the rules of origin will take place, will they have to reduce UK steel for EU steel? You might say Tata has places in both, but we are looking at the industry here in Wales, and it will impact on the industry here in Wales. Now, I do know the UK Government is looking to replicate the existing EU free trade agreements, and as a result, 50 per cent of a car produced in the UK is made of UK steel. It will be subject to tariffs, and we've got to look at that very carefully.

Dirprwy Lywydd, we need to protect safeguards, combined with various tariffs. I'm concerned a little bit about the Trade Bill and the trade remedies in that, because 97 per cent of our current exports go out under EU FTAs and if we don't have protection there, we will be facing real challenges. To conclude my contribution, Dirprwy Lywydd, UK steel is on a precipice once more, I'm afraid. I am proud that this is a Welsh Labour Government that has been proactive, but I'm worried that the UK Government is failing our industry. For me, it's time they stood up and acted to save our steel industry. They didn't last time, and now it's time to do it. Our fantastic steelworkers want it, our producers want it, and our local communities deserve it.