Welsh secretary pressed on ‘unfunded’ £80m steel claim

Chris Haines ICNN Senedd reporter

Senedd members pressed the Welsh secretary about claims the previous UK Government made an unfunded £80m commitment to a transition fund for steelworkers.

Jo Stevens appeared before the Senedd’s economy committee on November 20 to give evidence on Welsh steelmaking after Port Talbot’s last blast furnace closed in September.

Labour’s Hefin David asked about the £80m transition fund, including last week’s announcement of £13m allocated to business support.

Ms Stevens said the fund was announced to much fanfare in October 2023 but “not a single penny went out of the door to help steelworkers” before July’s general election.

She told the committee: “I was horrified to discover that actually the £80m had not been funded, it was an unfunded spending commitment from the previous government.”

‘Nothing’

Dr David asked: “Given the announcement was made and the money wasn’t then allocated, isn’t it a case of the House of Commons being misled?”

Ms Stevens replied: “I think it’s for my former colleagues who made those announcements in the chamber to justify what they said and why they said it.”

The Welsh secretary told the committee the £80m was confirmed in October’s budget, with the first tranche of £13.5m released in July.

She explained Tata employees and their immediate family members can apply for up to £10,000 to start a business, with grants of up to £250,000 for existing local businesses.

She said: “In 12 weeks, £26.5m has been agreed to go out compared with – in the previous nine months – absolutely nothing.”

‘Disingenuous’

Paul Davies, who chairs the committee, pressed Ms Stevens about her “disingenuous” claim, saying money was spent on an economic assessment before she came into office.

She replied: “I said no money went out of the door to help communities and people affected by the transition and that is accurate. The local economic action plan was commissioned but not a single penny left the transition board and went directly to support anybody.”

Mr Davies, a Conservative, pointed to the deal agreed by the previous UK Government, which included £500m towards the £1.2bn cost of an electric arc furnace.

He said: “In opposition you described this as a ‘reckless’ deal and accused the previous UK Government of paying half a billion pounds to make nearly 3,000 people unemployed.

“However, the deal that you are now claiming as your own involves paying half a billion pounds towards the cost of a £1.2bn electric arc furnace but nearly 3,000 people will still lose their jobs – isn’t this the exact same deal … which you previously condemned?”

Ms Stevens replied: “No, it’s not, there is a demonstrable difference.”

‘Clawback’

She added: “We achieved improved terms and conditions and protections for the entire workforce without additional costs to the taxpayer.”

Ms Stevens pointed to a commitment from Tata Steel to retain 5,000 jobs that includes a clawback clause of £40,000 for each role – a 25% increase on the previous deal.

She also raised a retraining programme for everyone at-risk of compulsory redundancy, saying: “They get a year’s extra employment with a salary and retraining.

“That retraining is on full pay for one month then £27,000 per annum per employee for 11 months and Tata has agreed to fully fund those costs.”

The Cardiff Central MP said Tata has offered its “best-ever” voluntary redundancy package in the UK: 2.8 weeks of earnings for each year of service up to a maximum of 25.

‘Unsustainable’

Ms Stevens, who was appointed following July’s general election, told the committee more than 2,000 people have expressed an interest in voluntary redundancy on those terms.

Mr Davies questioned the Welsh secretary about her “repeated” claims that the defence industry will be affected by the UK “surrendering” sovereign steelmaking capability.

Ms Stevens said the Royal Navy’s Dreadnought-class submarines are already being made by UK electric arc furnace producers, “so there is a route into the defence industry”.

Asked whether one of the blast furnaces could have been kept for a transition period, she said every effort was made to persuade Tata but it was losing an unsustainable £1m a day.

She told the committee a deal has been signed with a contractor for an electric arc furnace and plans have now been submitted to Neath Port Talbot council.