Welsh Steelworkers

1. Questions to the Minister for Economy and Transport – in the Senedd on 6 November 2019.

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Photo of David Rees David Rees Labour

(Translated)

1. What action is the Welsh Government taking to protect the jobs of Welsh steelworkers? OAQ54632

Photo of Lee Waters Lee Waters Labour 1:30, 6 November 2019

Thank you. The Welsh Government continues to take a cross-Government approach to support the steel industry and protect the jobs of Welsh steelworkers. We have, over the last three years, provided significant investment to support the industry in key areas, including skills development, environmental improvements, and research and development.

Photo of David Rees David Rees Labour

Thank you for that answer, Deputy Minister. Unlike the UK Government, which has failed to do anything on behalf of steel, and, I understand, even cancelled the latest steel council meeting, which was crucial because there's not one been held for 18 months, and they still haven't got one going—. They've also failed to actually produce an industrial strategy for the steel sector, and they've not even looked at tackling the issues of the equal playing field, particularly in energy costs, that we will need to have when we face a competitive global market in the steel sector.

I know that the Welsh Government, as you quite rightly pointed out, has been very active in supporting this industry and has been at the forefront, particularly for Welsh steelmakers, to ensure that steel stays at the heart of the Welsh industrial strategy. Can you answer as to whether the conditionality that the Welsh Government has put on some of that financial support to the works at Port Talbot, particularly in relation to the £30 million that was allocated to the Port Talbot works for the power plants, has been met, because the release of that money will allow the next stage of the power plant to progress, including, therefore, better use of waste gas, improvements in environmental standards, and more efficient and effective production, and lower cost because they're producing their own electricity rather than having to buy it off the grid at high costs that the UK Government are not addressing?

Photo of Lee Waters Lee Waters Labour 1:32, 6 November 2019

Thank you. I think David Rees has very well summarised there the state of play with the UK Government's absence of leadership on steel and the cancellation of the steel council meeting. We continue to be in close contact with Tata, as we have done for many years. As you noted, in the 2016 steel crisis, we provided £10 million skills funding towards an offer of £12 million towards the development of the workforce of Tata Steel. We've also offered some £666,000 for research and development into new product development. 

In terms of the power plant, we have offered £8 million investment to date, but with the exception of the skills funding, Tata is unable to draw down the funding against these offers until we've agreed the conditions of funding. And, following the announcement in May that the proposed joint venture with Thyssenkrupp would not be going ahead, Tata Steel is now working on a new transformation plan for the company. And in light of these changes, we continue our engagement with the company, including discussions on potential support for the power plant. 

Photo of Mark Isherwood Mark Isherwood Conservative 1:33, 6 November 2019

As you are aware, Tata Steel in Shotton is a dynamic business and major exporter, but dependent upon the supply chain for sustainable British steel, and on feedstock from the heavy end in south Wales. On Monday, I received an e-mail, as did other Members representing the area, from Heathrow Airport, announcing that they're one of the 18 shortlisted Heathrow logistic hub sites, inviting them to formally enter the tender process for the Heathrow expansion. In response, your colleague the Minister for the Economy and Transport said he looked forward to continuing Welsh Government's work with the site promoters and the Heathrow team in this selection process. What will the Welsh Government therefore be doing in that context to support Tata, as well as the port in Cardiff—the other shortlisted Welsh bidder—to maximise the opportunities presented by this?

Photo of Lee Waters Lee Waters Labour 1:34, 6 November 2019

Well, it's excellent news that they've got through to the next round, and we've supported them all along the way, so we'll continue to offer that support to them. This is an investment that we welcome. If there is going to be this large infrastructure scheme in London, it's only fair that the benefits spread across the UK.

Photo of John Griffiths John Griffiths Labour

Minister, the Orb steelworks in Newport should continue in operation, and, with the right level of support from Tata Steel, UK Government and Welsh Government, it would be enabled to produce electrical steels for electric car production in the future. There's a very strong local campaign to keep the Orb works in production, and, indeed, it's been a feature of economic life in Newport since the end of the nineteenth century. Could you reiterate the Welsh Government's support for that, and would you welcome a campaign launched today by the South Wales Argus, which has launched a petition in support of retaining that Orb steelworks plant?

Photo of Lee Waters Lee Waters Labour 1:35, 6 November 2019

Well, I can be very clear to John Griffiths that the Welsh Government does not want the Orb steelworks to close. We've been in discussion with Tata and with Community Union to see what can be done. Tata has continued to state the case that the plant is making substantial losses and there is oversupply in the world market, and they don't feel that there is a viable future. Now, Community Union have commissioned consultants themselves—Sindex—to explore alternatives to closure for Orb, and have created an outline proposal, which indicates that, with Welsh Government funding and a range of other changes by the company, a viable future is possible. We've received a summary of that proposal, and we'll need to understand the detail of it and Tata Steel's response to the recommendations. The First Minister will be meeting Community Union to discuss the proposal, and we'll be making sure that we properly understand what role we can play to give this a viable future.