Deal to keep steel at Port Talbot is ‘best possible’, says Business Secretary

The UK Government’s Business Secretary has defended his deal to protect steel jobs at Tata’s Port Talbot plant as the best he could achieve within two months of taking office.

Jonathan Reynolds said inaction by the outgoing Conservative government before July’s general election had put the industry in increasing danger, which could have seen the steelworks in south Wales shut altogether.

He told the Commons he had been liaising with Tata while in opposition, as well as trade unions and the Welsh Government.

On Wednesday the Government announced a £500 million package to help the plant transition to an electric arc system of production.

Clawed back

About 2,800 jobs will be lost as the blast furnaces are shut down. The funding can be clawed back if Tata does not keep 5,000 jobs across its UK business after the switch.

Mr Reynolds told MPs: “It was like the government had already gone. They were not on the pitch. The first thing I had to do before I even became the Secretary of State was make sure there was something there to save, because it would have gone had it been the party opposite.”

He said earlier: “Since becoming the Secretary of State two months ago, I’ve had to respond to a series of challenges, not just with the steel industry, but also in shipping, such as Harland & Wolff, and in other areas where the previous government had simply ceased to make decisions and decided to leave them for us to deal with.

“This was a dereliction of duty and it has left the steel industry in particular in an extremely perilous position.”

Mr Reynolds added that he wished he could have done more, “but I believe this was the maximum improvement that was possible within two months”.

‘Heart-breaking’

Shadow business secretary Greg Smith said the loss of jobs represents a “heart-breaking transition”.

He added: “It’s also no surprise that, once again, Labour are presiding over the demise of our steel sector.

“Under the last Labour government, output fell 47%, 56% of jobs were lost, and today’s deal now means 100% of output gone at Port Talbot with an electric arc furnace taking, at best, five years to get up and running, with some suggesting eight to nine years before a single new job is created, if we see any new jobs at all.

“This is, as the statement says, a transition, but it is a heart-breaking transition for thousands of people, a transition from people in work to people out of work.”

First Minister Eluned Morgan said: “I welcome today’s funding announcement. The Welsh Government stands shoulder-to-shoulder with the UK Government in doing all we can to support workers at Tata Steel and provide a new future for steel production in Wales.

“In what continues to be an incredibly unsettling situation for many, we will continue to work with all parties to ensure that workers, suppliers and the wider community are supported as the industry transitions to making the green steel that will be vital to the future of the UK economy.”

Reheated

Plaid Cymru spokesperson for Economy and Energy, Luke Fletcher MS described the deal as “nothing more than a reheated version of the deal put forward by the previous Conservative government, despite Labour’s repeated promises of a “better deal” for Wales”.

He added: This is yet another instance of Westminster’s chronic failure to deliver meaningful support for Welsh industries and workers.

“The steel industry a fundamental part of our industrial heritage and a vital strategic asset. Plaid Cymru calls on the Labour government to take decisive action – to preserve jobs and to secure the long-term viability of steel production in Wales through strategic public ownership.

“We are seeing both the Labour and Conservative parties presiding over the biggest industrial policy disaster since the closure of the mines and the dismantling of yet another Welsh industry. We demand answers and real leadership to prevent further erosion of Wales’s industrial base.

“It’s time for Labour to deliver on their promises, not just repeat the mistakes of their predecessors. We need to understand what Labour is offering differently to what the Conservatives have already proposed.”

Chinese Steel

Mr Reynolds later responded to concerns from former home secretary Dame Priti Patel about the impact of cheap Chinese steel being dumped on the market, saying protections are already in place.

“When you consider the legitimate way you can consider social value in government procurement, also when you look at value and quality of the product we produce in the UK, I am very confident in procurement playing a bigger part in the steel industry,” he said.

There are also questions over the future of the steel plant in Scunthorpe, with Mr Reynolds telling MPs he was hindered by a lack of carbon capture infrastructure which would make the transition more viable.

He said: “When it comes to somewhere like Scunthorpe, I do not have in place things like the carbon capture infrastructure yet that would be necessary for the kind of solution I would ideally want, the kind of hybrid (Mr Smith) is putting forward, keeping the blast furnaces open whilst you bring online electric arc furnaces.”