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Opinion

Welsh steelmaking secured for many decades to come

19 Feb 2024 5 minute read

Welsh Secretary David TC Davies in discussion with TATA Steel’s CEO, T.V. Narendran, at the TATA Group’s HQ in Mumbai

David TC Davies, Secretary of State for Wales

Port Talbot steelworks had to undergo enormous operational changes, or the entire site would have been forced to close – that was the stark reality the UK Conservative Government faced.

Tata Steel, which owns the South Wales site, warned us that they were losing more than £1 million every day – a financial shortfall that no company can possibly sustain.

And had the site been wound down, more than 10,000 jobs would have been lost, causing catastrophic consequences for Port Talbot and other towns in the vicinity.

Quite simply, the UK Government had to act quickly and decisively to save as many jobs at the site as possible and secure a future for steelmaking in South Wales.

The UK Conservative Government worked around the clock to convince Tata to stay in Wales; and late last year Kemi Badenoch and I jointly announced in Port Talbot a £500 million UK Government support package for Tata Steel – one of the biggest support packages in UK steel making history. Tata will also be putting in £700 million of their own money into the deal, securing their commitment to the Port Talbot site.

Modernise production

The agreement that the UK Conservative Government and Tata reached will modernise production, develop a state-of-the-art electric arc furnace and, crucially, protect thousands of skilled jobs, as well as over 10,000 in the larger supply chain.

Crucially an electric arc furnace will make us less dependent on imports because it will recycle domestic scrap steel, which Britain has millions of tonnes of, to make a new product. Currently, the UK exports most of this scrap, meaning we will become more self-sufficient in the long term.

The transition to sustainable steelmaking at Port Talbot is also expected to reduce the UK’s entire business and industry carbon emissions by seven per cent, Wales’s overall emissions by 22 per cent and the Port Talbot site’s emissions by 85 per cent.

Without this deal, we would have witnessed the death of Welsh steelmaking.

This fact was reiterated to me last week when I flew to India for meetings with both Tata Steel CEO, T.V. Narendran, and the Managing Director of parent company Tata Group, Natarajan Chandrasekaran. They both stressed that the deal has secured the long-term future of steelmaking in South Wales.

But as I’ve said before, the announcement of our support package was not a cause for celebration, as around 3,000 workers will lose their jobs.

Job losses

Unlike traditional blast furnaces, the electric arc furnace will not require as many people to operate it, and that is why job losses are sadly inevitable.

However, the answer is not to resort to unconstructive criticism or to raise false hope with vague ideas about undeveloped technologies or even to keep the blast furnaces open for longer at huge extra expense and with the same end result.

Instead, we have plotted a credible path to a sustainable future for steelmaking at the same time as making huge investments across the economy of South Wales to ensure that there are jobs and opportunities for those affected.

Port Talbot is part of the new Celtic Freeport, backed by up to £26 million in UK Government investment and with the potential to unlock up to 16,000 new jobs over the coming years.

The Celtic Sea is also a prime location for floating offshore wind, and any future development could see thousands of skilled jobs created. Meanwhile, the Swansea Bay City Deal – which covers Port Talbot – continues to deliver significant investment across the region.

I will do everything I can as Secretary of State for Wales to help deliver this investment so we can fully unlock the huge potential of the Port Talbot area.

During my meetings with Tata in Mumbai we discussed in detail the crucial work of the transition board, which is backed by £80 million from the UK Conservative Government and £20 million from Tata Steel.

The body, which I chair, will support and re-train those who lose their jobs – and Tata Steel is firmly committed to it.

Reassurance

For all those impacted by Tata’s deal, allow me to provide you some reassurance: you will receive and will be equipped with the necessary skills to re-enter a wide array of employment.

Alongside the work of the Transition Board, I continue to speak to the steel unions, steelworkers from Port Talbot and major employers across south Wales about how this challenging process can work best for everyone involved.

Yet, despite the government’s best efforts, that has not prevented many individuals from the Labour-run Welsh Government from playing “party politics”.

While it is easy to criticise when jobs are lost and tough decisions need to be made, many will have already noted the ongoing lack of tangible action from the Labour Welsh Government.

In fact, they haven’t contributed a penny towards the £100 million transition board fund.

Welsh Labour seems to be more interested in spending over £100 million on creating more Senedd Members and £33 million on 20mph default speed limits.

And, despite talking up their £3 billion fund for green steel, Keir Starmer’s Labour Party hasn’t put their proposal to Tata and can’t say how they will find the money and what the funding will even do.

Quite simply, Labour don’t have a plan.

In contrast, the UK Government is doing all it can to make the transition to greener steelmaking take place as efficiently as possible.

Our support of Tata has secured Welsh steelmaking and I am proud to be the Welsh Secretary who is helping deliver the transition process which will result in a bright future for the industry in our country.

David TC Davies is the Member of Parliament for Monmouth and the Secretary of State for Wales


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Fi yn unig
Fi yn unig
1 month ago

‘What a great headline’ I thought until I read on to find out it was a sick wind up by the Secretary of State for keeping Wales down.

Dai Ponty
Dai Ponty
1 month ago

There is 2 things people of Wales should do 1 NEVER BELIEVE A TORY 2 NEVER TRUST A TORY they have done to much damage to Cymru and still do and Welsh Tory secs like this weasel Davies never fight Wales corner in his pathetic government he only puts Wales down

Ann
Ann
1 month ago

Tata Steel are playing games about becoming greener as they are building a new coal fired furnace in India while claiming they are losing money in UK!

hdavies15
hdavies15
1 month ago
Reply to  Ann

Eventually they will close Port Talbot citing uncompetitive green technology unable to produce the steels their markets demand. Of course they will have bolstered their coke driven technology in India and other cheap labour locations and we the Welsh public will be paying through the nose for the downstream end product if we can afford it at all. The impulse to “go green” would be great if every major industrial country moved broadly in unison. Thinking that Wales alone or even the UK can save the world is just straight out of a fantasy script.

Jeff
Jeff
1 month ago

Problem is the Conservative party has a long history of promise’s and next to none of them landing.
40 hospitals eh? HS2? Stop the boats? NHS waiting lists? Dentists? Nuclear power? Green energy? I could go on.

Gareth
Gareth
1 month ago

In contrast, the German gov is giving Thyssenkrupp €2billion for its plant in Duisberg, it will give ArcellorMittal €1.3 billion for the Bremen plant, to enable the closure of old furnaces and the implementation of new electric arc furnaces without huge job losses. The £500 million is small potatoes and still does not protect the thousands due to lose their jobs. One Gov is serious, the other giving a token gesture.

Last edited 1 month ago by Gareth
Annibendod
Annibendod
1 month ago
Reply to  Gareth

This.

Y Cymro
Y Cymro
1 month ago

Is this the same treacherous compulsive liar David TC Davies who stated to the BBC back in 2016 that if Wales voted for Brexit would mean more money? Wales has lost hundreds of millions in funding. Lost freedom to travel , work & study in Europe. Our farming industry is suffering due to red tape. Wales economy is on its knees thanks to the likes of David “Turn Coat” Davies narrowminded little England ideology. Please refer to the 2016 BBC Wales link in question below: BBC News – EU referendum: More money for Wales, says pro-Brexit MPhttps://www.bbc.co.uk/news/uk-politics-eu-referendum-36625798 And remember Wales… Read more »

Annibendod
Annibendod
1 month ago
Reply to  Y Cymro

You know what T.C. stands for?

Barbara H.
Barbara H.
1 month ago

I started to read this article and my skin was crawling from the gaslighting. So David TC Davies and Kemi Badenoch get to make decisions for Wales. £500 to effectively kill off Port Talbot.
Not a clue!

Mab Meirion
Mab Meirion
1 month ago

Brexit means death to hill farmers etc…but we mustn’t tell them in case they sell up…this is true for Cymru in general…we are expendable…

Richard Davies
Richard Davies
1 month ago

Instead of investing in the technology such as hydrogen to produce green virgin steel, it is to be electric arc furnaces for recycling scrap steel. This is steel of a lower quality so companies requiring the highest quality will end up importing steel from other countries. We certainly are going in the wrong direction and are being gaslit by this Dic Siôn Dafydd!

hdavies15
hdavies15
1 month ago
Reply to  Richard Davies

Most of the decision makers in Wales and UK are so removed from the real world they don’t even understand the huge differences between the processes and inputs involved in steel manufacturing. However they will use the shortcomings of recycled steel sometime later, say 5-10 years down the track, as an excuse to shut the site completely. And the Bay regime will bleat like a bunch of sheep but do nothing about it.

Richard Davies
Richard Davies
1 month ago
Reply to  hdavies15

The “Bay regime” doesn’t have the financial levers to provide the necessary investment required. It is the uk government that has that ability but they choose not to. Compare how Germany is investing billions to transition to green virgin steel production.

hdavies15
hdavies15
1 month ago
Reply to  Richard Davies

The Bay regime has consistently displayed an inability to understand the differing product specifications and related processes. They think that electric arc will protect the long term viability of that site when its ability to produce top quality virgin steel will be gone.

Lord Custard
Lord Custard
1 month ago

With the threat of a prolonged war in Europe looming, shutting down the blast furnaces is possibly the stupidest thing this clown show ‘government’ has done yet – and that’s saying something.

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