3. Statement by the Minister for Economy, Transport and North Wales: Tata Steel

Part of the debate – in the Senedd at 3:29 pm on 17 November 2020.

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Photo of Ken Skates Ken Skates Labour 3:29, 17 November 2020

Can I thank Helen Mary Jones for her questions? Of course, Helen Mary Jones is right to point to the fact that it's not just Port Talbot we're talking about, and thousands of workers at Port Talbot, but the other Tata Steel plants across Wales, which employ huge numbers of people who are very well paid. In fact, the steel sector in the United Kingdom pays an average salary of £36,000. And, bearing in mind that many steel sites in the UK are in areas that require levelling up, the loss of any of those jobs within those communities would be very damaging indeed, which is why, I think, the UK Government is acutely aware of its responsibilities in regard to supporting Tata. The indications that we've received from the UK Government, and from Tata, are that discussions are proceeding, and that they have been positive, and that an outcome may be with us soon. But, obviously, every day that is lost intensifies anxiety within the workforce, and therefore, those negotiations have to be taken forward at maximum pace. And it's hugely important, as I've mentioned, to the levelling up agenda, given that Tata Steel sites are in some of the most deprived communities in the United Kingdom, which require direct state intervention to enable them to appreciate a greater level of prosperity. 

Now, Helen Mary Jones raises a number of questions about both the technologies that are used and the ownership models that might be considered. I'm not going to be drawn on the potential use of hydrogen or electric arc furnaces today, because, right now, our focus is on making sure that Tata Steel draw down the necessary funding from the UK Government in an agreement, in a common purpose, to transition the sites into a position where they are globally competitive. And let me just assure Members that Tata Steel employs the most skilled, the best steel workforce in Europe, if not the world. Given the right tools and investment, Tata Steel operations in the UK can outcompete any other facility anywhere around the world. So, the UK Government can act as an enabler for this hugely important sector to become the world's finest.

Now, during my time in this position, I've worked with four different Secretaries of State for the Department for Business, Energy and Industrial Strategy, and each one has given assurance that they wish to see the steel sector brought into a position where it's highly competitive, and where it has a strong and sustainable future. This fourth Secretary of State that I've been working with, Alok Sharma, can be the person that delivers the goods. And that is absolutely vital in the interests of the employees, not just directly employed by Tata, but also the supply chain.

Now, talk of nationalising Tata, I don't think it answers the exam question that we face. The exam question is: how can Tata's operations transition in the context of our net-zero aspirations? How can Tata Steel's operations operate in a competitive way given the disproportionate costs of energy in terms of the business model? And whether or not you nationalise the operations, you are still going to be faced with those energy costs, which only the UK Government can do something about, and the need to decarbonise. And, so, actually, the ownership model is a debate, whilst very interesting to us—and I've just recently nationalised the railways—I can say that it is not relevant to the challenge that we face right now, that steel faces right now. The major challenge that we face right now is in ensuring that the transition is safe and can be secured in a way that guarantees the maximum number of jobs, and that means having a transition, utilising whatever technology might be preferred, a transition that takes not just a few years, but 10 years, to guarantee those jobs, to ensure that, as Helen Mary Jones rightly said, we don't rely on imports from other operators that are polluting the planet, but that we have a safe transition period put in place to guarantee jobs, and to make sure that we can, in a safe way, meet our net-zero ambitions.