Senedd committee sets out recommendations for Tata transition

Emily Price

The Senedd Committee leading on the response to Tata job losses has written to the First Minister and UK Government outlining its recommendations for the future of Welsh steel.

The UK Government is currently in negotiations with Tata to try to save jobs at the Port Talbot site which could see the loss of 2,800 posts.

The steel giant plans to close its second blast furnace in September and has begun the process of asking employees if they would accept voluntary redundancy.

The closure of its blast furnaces is part of Tata’s move to greener production with a new electric arc furnace which will require fewer workers.

Since September 2023, the Economy, Trade and Rural Affairs Committee has held a number of evidence sessions with key players in the steel industry.

The previous Conservative UK Government pledged £500m to fund the installation of the new electric arc furnaces for steelmaking.

With a new Labour UK Government in place, the Committee has set out its position on the impact of Tata’s proposed transition.

‘Best value’

In a letter to First Minister Vaughan Gething, Secretary of State for Business and Trade Jonathan Reynolds and Secretary of State for Wales Jo Stevens, Committee Chair Paul Davies said he recognised the need for best value for public money but urged the UK and Welsh Governments to take a “wider view” by considering the needs of workers.

He wrote: “We must find a long term solution that works for everyone. It is not long since the Port Talbot steelworks faced a similar uncertain future, and it is not fair on the workers or their communities to go through the fear this uncertainty brings a third time.

“We believe the Port Talbot plant has the potential to play an important role supporting the UK to maintain a primary steel-making capability, to produce a product that can be used to support decarbonisation efforts and to continue to provide good quality, productive jobs.

“It is vital that the UK and Welsh Governments work with partners including Tata and the trade unions to realise this potential, and to support the steelworkers, their families and their community.”

The Committee’s recommendations include:

• The UK Government should prioritise securing the continued operation of blast furnace 4 through the transition period in its negotiations with Tata.
• The Welsh Government should urgently develop proposals in devolved areas such as skills and procurement that complements UK Government investment in Tata.
• Once an agreement has been concluded with Tata, the UK Government should undertake a robust lessons learned exercise in relation to its investment at Port Talbot.
• The UK Government should prioritise securing wider investment in Tata’s sites as part of its negotiations.
• The UK Government should ensure that trade unions play a role in the remainder of its negotiations with Tata so that employers and unions are aware of its expectations.
• The UK Government should prioritise developing plans to reduce electricity prices for the steel sector and other energy-intensive industries.
• The UK Government should introduce measures to restrict scrap exports to countries with lower environmental standards, and ensure that high-quality UK scrap steel is used by domestic producers.
• The Welsh and UK Governments should both consider setting procurement targets for use of domestically-produced steel in public sector infrastructure contracts.
• The UK Government should address the concerns of the steel industry about the EU’s Carbon Border Adjustment Mechanism and bring forward the introduction of a UK CBAM to 2026,
• The UK and Welsh Governments should work with the Transition Board at pace to develop proposals to support redundant workers and the local community to recover from any job losses that take place.

Last week, Welsh Secretary Jo Stevens chaired her first meeting of the Tata Steel Transition Board which was set up to support workers and businesses affected by the plans..

She said: “We will work collaboratively with a single focus to support our steel industry and affected communities.

“But businesses and workers are already feeling the impact of Tata Steel’s transition. The time for talking is over.”