Welsh Liberal Democrats urge urgent Budget action to ‘save Welsh steel’

The Welsh Liberal Democrats have called on the UK Government to take “immediate and decisive action” in next week’s Budget to protect thousands of jobs in Wales’s steel industry.

The party says that Welsh steelmakers currently pay around 40% more for electricity than their European competitors in France and Germany, with promised Government support delayed until 2027.

They also warned that new EU tariffs on UK steel could take effect as early as next year, threatening exports from Port Talbot, Celsa in Cardiff, Shotton, Trostre, and Llanwern.

During a visit to Port Talbot last week with Lib Dem Deputy Leader Daisy Cooper, Welsh Liberal Democrat MP David Chadwick accused the UK Government of “holding back one of Wales’s most important industries” through inaction on energy reform and trade negotiations.

“The men and women at Port Talbot have done everything asked of them to modernise and adapt, yet Labour — and the previous Conservative Government — have failed to act on energy and trade, forcing Welsh steel to fight with one hand tied behind its back,” Mr Chadwick said.

“This Budget is Labour’s chance to prove it will back Welsh jobs with real action, not warm words. Our message is simple: cut costs now, secure trade with Europe, and invest in a green Welsh-steel future.”

Although ministers have pledged to increase Network Charging Compensation from 60% to 90%, the change will not take effect until 2027, leaving UK producers facing an estimated £14.5 million in extra costs next year alone.

Port Talbot’s new electric arc furnace is due to be commissioned in late 2027/early 2028, but union leaders and industry groups have warned that tariffs and high energy prices could undermine the transition before it begins.

Crisis

The Welsh Liberal Democrats said the crisis highlights the urgent need to rebuild Britain’s trade relationship with Europe and restore tariff-free access to EU steel markets. “Labour’s silence on the single market and customs cooperation is costing Welsh jobs,” the party said.

The party has set out a Four-Point Plan to safeguard and revitalise Welsh steel:

Cut energy costs now, not in 2027 – Bring forward the rise in compensation immediately so producers pay fair, competitive rates.

Rebuild trade with Europe – Negotiate a steel trade pact with the EU and US to protect exports and maintain market access.

Back British-made steel – Use public procurement to prioritise UK steel for major infrastructure, defence, and energy projects.

Fix the industrial energy system – Decouple clean power prices from gas, invest in renewables and grid upgrades in South Wales.

Mr Chadwick added: “We cannot save Welsh steel while cutting ourselves off from our biggest market. Signing a steel deal with the EU must happen now.”

A UK Government spokesperson said: “We acted decisively to ensure that steelmaking would continue in Port Talbot by negotiating an improved deal with Tata and confirming a £500m grant for the building of the electric arc furnace which secures 5,000 steel jobs.

“We have allocated the full £80m from the Port Talbot Tata Steel Transition Board to support steelworkers, supply chain businesses, and the wider community with funding for retraining, business investment and regeneration projects.

“The UK Government’s new Steel Strategy will deliver £2.5 billion of investment to rebuild the UK industry, maintain jobs and drive growth.”