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

Part of the debate – in the Senedd at 4:09 pm on 19 November 2019.

Alert me about debates like this

Photo of Ken Skates Ken Skates Labour 4:09, 19 November 2019

Can I thank Rhun ap Iorwerth for his questions and for identifying some very significant and important points? One: the question of how much influence Welsh Government has over what is largely a UK problem—and you could extend it and say that it's actually, in some respects, a European problem, and in other respects, it's a global problem. Does Welsh Government have the ability to truly influence global capacity issues? No. Does Welsh Government have the ability to address the disproportionately high energy costs? No, that's UK Government, and it must act. Does Welsh Government have the ability to influence falling demand for steel from within the automotive sector in China and in the United States? No. Therefore, what Welsh Government must do is focus on those challenges that we can help Tata to address, to work in collaboration with Tata. And where we can clearly assist, and where we have been clearly assisting, is with the development of skills that are going to be required for advanced manufacturing in the future, including steel. We can help with decarbonisation of their footprint; indeed, we are doing just that. We can help with R&D, and, again, we're doing just that. But the big changes that could be made to assist Tata in its transformation programme within the UK are in the hands of the UK Government.

The UK Government could do three things quickly and relatively straightforwardly. First of all, convene that steel council. Secondly, the UK Government could address price disparities on energy, and it's a fact that UK steel producers face 80 per cent higher costs for energy than the French, and 62 per cent higher costs than the Germans. That could be dealt with by UK Government, by the Department for Business, Energy and Industrial Strategy and the Treasury working together. The third area where the UK Government could make significant progress is with that sector deal. Why? Well, because the sector deal requires contributions, investment, from steel businesses. Now, in order to get that sector deal over the line, they need to make sure that enough money is put on the table to unlock investment from Tata and other steel businesses. Tata told me just this morning that this transformation programme is about making sure that they can invest in capital expenditure in order to sustain the sites that we have in the UK and in Europe.

Now, Welsh Government will assist where it can, but that question that Rhun ap Iorwerth posed was incredibly important, and it's absolutely right that we look at what UK Government has done to date, but we look more closely again at where the UK Government needs to deliver in the future. And, I'm not going to act as a commentator on what Tata did or did not do, or should or should not have done at the time that the joint venture talks with ThyssenKrupp collapsed, but it is quite clear that the transformation programme is that plan B that unions have asked for. Now, we will work with the sector as a whole, we will work with Tata to identify opportunities to provide resilience where we possibly can, but we have to work in collaboration with other Governments.