5. Statement by the Minister for Economy and Transport: Tata Steel

Part of the debate – in the Senedd at 3:50 pm on 19 November 2019.

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Photo of Ken Skates Ken Skates Labour 3:50, 19 November 2019

The statement does not provide any information on the geographical spread of job losses or timescales for implementation. However, I have today spoken with the company and I was told that further work will take place in the coming months to identify, function by function, what jobs will be lost. Then, an assessment on the site-by-site impact will be made, with implementation by March 2021. Regular discussions will continue to ensure that we, as a Welsh Government, offer full support to people directly employed across the six sites in Wales and indirectly employed within the supply chain.    

In terms of job losses in Wales, we will do everything that we can to support those affected, and our ReAct programme stands ready to provide assistance to workers across the Welsh Tata Steel sites, including co-ordinated support from local partners. The Welsh Government remains committed to working with the company and trade unions to secure a long-term future for steel making in Wales. 

The statement follows the disappointing news on 2 September concerning Tata Steel’s proposed closure of the Orb Electrical Steels site in Newport. The First Minister and I both visited the Orb site on 13 November to meet with the Community union, which has worked with consultants Syndex to produce a report outlining an alternative to the closure of Orb. Following this visit, I spoke directly to Henrik Adam, chief executive officer of Tata Steel Europe, and raised the importance of allowing sufficient time to consider Community’s proposal and, indeed, any other offers that come forward that might offer a viable future for the plant. I will continue to press the company on this very point.

The steel sector continues to face a huge range of challenges, both globally and domestically, including global overcapacity, rising carbon and raw materials prices, slowing sales, increased imports, high energy prices in the UK and a downturn in demand from key supply-chain sectors such as automotive.

In the face of these challenges, the Welsh Government has provided significant support to the steel industry in Wales over the past three years. Specifically for Tata, in 2016 we provided £11 million in skills funding, of a total offer of £12 million. In addition, we've also offered £8 million investment to support the Port Talbot power plant plans and £660,000 for research and development into new products.

More widely, we have supported the steel industry by providing £2 million of funding for the establishment of the steel and metals institute at Swansea University; we've published a procurement advice notice supporting the sourcing and procurement of sustainable steel in construction and infrastructure projects in Wales; and, of course, we became the very first signatories to the UK steel charter. We have also provided £6.8 million in funding to Celsa Steel for environmental improvement projects for the company's sites here in Cardiff.

I am proud to say that the Welsh Government has demonstrated its steadfast support for the steel industry and has done everything within its power to support the sector. It is now time for the UK Government to do the same and play its part in supporting the steel industry, which is a vital strategic sector for the UK as a whole, sitting at the foundation of many supply chains including construction and automotive.

I continue to call for the UK Government to take action on non-devolved areas such as energy to address the huge electricity price disparity between UK steel producers and their European counterparts, and the adverse impact this has on competitiveness.

I also continue to press the UK Government to urgently progress a sector deal or equivalent for steel, to provide the foundation for a sustainable industry. The sector is calling for certainty around Brexit and its No. 1 ask of Government is tariff-free access to EU markets. Both the Minister for International Relations and the Welsh Language and I continue to raise Brexit-related trade issues with the UK Government at every opportunity.

Dirprwy Lywydd, I wrote to Andrea Leadsom, Secretary of State for Business, Energy and Industrial Strategy on 8 October, asking her again to convene a meeting of the UK Government, Welsh Government and the steel industry, along the lines of the UK Steel Council. I was pleased when the Secretary of State agreed to convene a UK Steel round-table to take place on 24 October, but I was extremely disappointed and frustrated that with less than 24 hours to go, the meeting was cancelled.

Yesterday’s announcement is further proof that the steel industry in Wales and across the UK is continuing to face an extremely challenging operating environment. The UK Government must now treat the situation facing the steel industry with the urgency and importance that it deserves, by reconvening the steel round-table at the earliest opportunity and taking decisive action to address some of the issues facing our steel producers.