I beg to move,
That this House has considered the future of Tata’s Cogent Power steelworks in Newport.
I am immensely grateful to have the opportunity to speak on behalf of the dedicated workforce at Tata’s Cogent Power plant, the Orb works in Newport, representatives of which are in the Public Gallery. They are most welcome.
The need is urgent. This is a steelworks threatened with closure by Tata and it is due to close at the worst possible time, just before Christmas. It is unique, as it is the only steelworks in the UK making electrical steel.
Losing the Orb plant would be devastating for our economy in south Wales. It would also be a huge missed opportunity. Does my hon. Friend agree that there is still massive potential for the plant?
My hon. Friend represents a steel community, too, and I completely agree with his point, as I will make clear in my speech.
With the investment and support it needs—there is a plan, which I will come to later—the plant could and should have a bright future, especially at a time when, due to the growth of electric vehicles and electrification generally, demand for this type of steel is only going to grow. It would be a travesty if we were to lose the plant, and my ask of Ministers—I welcome the Wales Minister here today—is that the Government do all they can with Tata to protect this national asset.
I should declare that my father worked in the steelworks throughout his working life and is a British Steel pensioner. As we speak about the future of our automotive sector and moving to electric cars, does my hon. Friend agree that it is simply short-sighted to be losing Orb at this moment?
I absolutely agree, and I will make that point later.
Tata announced that it would be closing Cogent Orb steelworks on 2 September, with the loss of 380 jobs. This has come as devastating news for a dedicated, highly skilled workforce and their families, and for the city of Newport as a whole, where Orb has been part of the landscape since 1898. I pay tribute to Community, Unite and other unions for the support they have given and continue to give to the workforce, and for their general fight to save our steel industry.
I congratulate my hon. Friend on securing this very timely debate. I represent a steel community in Scunthorpe, and we know exactly what it is like as a steel community to have these things happen. We stand side by side with the steel community in Newport. Does she think that the work the Community union and others have done through the Syndex report gives a possible way forward for the plant?
My hon. Friend is indeed a doughty and fantastic champion of his steel community, and the thoughts of our steel community are very much with his community and the difficulties it has had recently. I will talk about the Syndex report, because it is very important.
The attendance of my hon. Friends from Wales and fellow members of the all-party parliamentary group on steel and metal related industries represents the importance of the steel industry to us all. As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) said, many of us have a constituency interest but also a very personal interest. My parents met in the steel industry in Ebbw Vale, and my hon. Friends have close family who have worked in the industry, including my hon. Friend the Member for Cardiff West (Kevin Brennan).
Fewer work places are more ingrained into the life of Newport than Orb. Our iconic transporter bridge was originally built to carry Orb workers over the River Usk. There are street names in Newport such as Dudley, Walsall, Bilston, and Handsworth, and even the Wolverhampton Wanderers-based colours chosen for Newport County AFC commemorate the west midlands migration to Gwent initiated by the Lysaghts family moving their sheet steel production to Newport at the end of the 19th century. Orb played an important role in Newport in both world wars and, from the late 1960s onwards, its activities moved towards cold rolled and electrical steels, a field that became the site’s speciality, as it remains today.
Losing Orb would mean losing the electrical steels skills base that has been built up since the era of Harold Wilson’s “white heat” of technology, and at a time when electrical steels will be more in demand that ever before. Tata’s decision to close Orb, citing losses and wider challenges in the sector, will hit many people in our communities extremely hard. They include recent recruits such as an electrician who joined the company two days before the announcement and is one of 70 new starters over the last two years, and a long-time worker who says, “Orb works has been a part of my family for nearly 60 years. Between my father and brothers we have over 100 years’ combined service. The Orb paid for everything when I was a child and is now supporting my three children.”
Another man’s family came from Tipton; his great-grandfather, grandfather and father all worked there, and their names are on the works’ cenotaph. Mickey, who started work as a 16-year-old messenger boy and ended up as section manager, said, “To allow over 100 years of electrical steelmaking skills simply to disappear is a crime against everyone who contributed to Orb’s history, and the knock-on effect on the Newport community’s economy will be devastating, as these jobs are of high value.”
I thank my hon. Friend and neighbour from Newport East for giving way, and for her powerful speech. This is an issue of importance to people in Newport West, Newport East and across south Wales, and it is a pleasure to hear her speaking about it. The potential closure of Orb in Newport will mean that hundreds of jobs are put at risk, and our people and communities need certainty. I reassure my hon. Friend of my commitment to work with her to save jobs in Newport. Does she agree that we need a level playing field for UK steel producers by addressing the energy price disparity, preventing steel dumping and investing in research and development, so that the British steel sector can compete and thrive globally?
My hon. Friend and neighbour is absolutely right, and those are many of the asks for which the all-party steel group in Parliament has been calling for many years. It is something on which the Government need to take more action.
Mickey is absolutely right. Although it is important to emphasise Orb’s proud heritage, this debate is not about nostalgia, but about the future. It is about calling on Tata and the Government to ensure a future for a plant with enormous potential at a time when demand for the type of steel Orb could and should produce is set only to grow. Orb is important not just to our community, but to the whole of the UK, because the works is the only plant in the UK with the potential, with investment, to produce the electrical steel needed for electric vehicle motors. The Government, too, say it is important.
Since they first got into power in 2010, the Government have been banging on about how they would be the greenest Government in history. Is it not time that the Government put their money where their mouth is and invest in Orb to bring about the electrical steel that we need and to start reinvigorating the electrical vehicle industry in this country?
My hon. Friend is absolutely right. The Government have said the electric vehicle industry is important to them, and they say it is a priority. In his first speech to the Commons after moving into No. 10, the Prime Minister spoke about his vision for the UK as the “home of electric vehicles,” something he also touched on regularly during his leadership campaign. In a recent response to a question I asked, the Prime Minister also stated his commitment to use UK steel in the supply chain for electric vehicles, but we need electrical steel to create an end-to-end supply chain for those vehicles. If the Prime Minister is serious about the UK being the home of electric vehicles, we must, as Community’s Roy Rickhuss has said, consider the Orb a national asset and step in to protect it.
My hon. Friend is making a really powerful speech. What she said about looking at history and the future is so important, and the dedicated workforce and plant have been so successful because they have encouraged innovation over the years. They have been strategic and looked forward. That is what the Government now need to help the plant do with electrical steel.
My hon. Friend is exactly right, and we need that investment to do it.
Attention has been given to electric car battery production —the Prime Minister mentioned the gigafactories needed to produce high volumes of battery products in his conference speech—but electric motors are an equally important part of the supply chain. They are built from the high-quality, non-oriented electrical steels that could be produced at Orb, and the demand for this type of steel is expected to increase tenfold by 2030.
The number of electric cars on our roads will grow and grow over the next decade. The UK Government are providing millions of pounds to support the roll-out of charging infrastructure, and it is imperative that we use UK steel in all this. The Government have awarded Jaguar Land Rover, which is owned by Tata, a £500 million loan guarantee to help the company sell electric vehicles. In this context, with the Government’s stated support for the electric vehicle industry, I ask what the Government can do for all. Electric cars need electric motors. Why should we have to import them? We have a site here in the UK that, with support, could be part of the supply chain.
We need UK steel every step of the way, and electrical steel is part of that. As members of the all-party group and the unions have long said, the industry can be a key part of building the infrastructure we need to green our economy in the future.
At Labour’s conference, we pledged to accelerate the electric vehicle revolution with 2.5 million interest-free loans for the purchase of electric vehicles, a new requirement for the Government car fleet to be 100% electric by 2025, and action on a private fleet. Labour is determined to ensure that the right conditions are in place for this revolution, and the Government should be, too. If the Orb works is not kept open, the potential to build a supply chain will be squandered. It is not an overstatement to say that the UK could lose its capacity to be a global leader in electric car manufacturing.
Developing a supply chain for electric vehicles will be hugely important for the national balance of trade. Across the UK, 10,000 workers are making internal combustion engines, and Community has emphasised that a failure to develop the supply chain will result in a loss in the export value of those engines. It will be replaced by the import cost of electric motors, which equates to £1.2 billion for every 1 million electric cars. That is why Community has called Orb a
“strategically important business underpinning this vital industry of the future.”
Tata has publicly confirmed that, with investment, the Orb works can produce the steels required for the future production of electric vehicles. Community’s steel consultant, Syndex, has researched and concluded that with a new strategy and some public support, there could be a sustainable future for the business. So what is the plan? The new strategy for Orb would mean transitioning to a new model and producing non-oriented steels, in addition to grain-oriented steels, based on a new Wales-only supply chain and using coil from Port Talbot. To fund the necessary capex, the profits from the sale of Cogent Power Inc—another part of the business, which is wholly owned by the Orb—would be reinvested into the business, along with the money set aside to finance a closure.
My hon. Friend is making a very powerful speech. The Government often criticise us for critiquing their failure to support the steel industry without proposing a constructive plan, but she has just outlined an absolutely compelling and viable plan. One of the vital parts of it is that we would be relocating the supply chain for hot rolled coil from IJmuiden to Port Talbot. Surely if the Government are talking about backing British business, they should back the Syndex plan.
My hon. Friend is exactly right. It is a very important and well-thought-out plan, and I hope Ministers are listening to it. The 2018 memorandum of understanding agreed with Tata in advance of the failed joint venture contained a commitment to reinvest the proceeds of the sale of any UK-owned assets back into the UK. Tata should honour the spirit of that agreement. That would leave a shortfall of just £30 million, and we could look to central and devolved Government to contribute to the new strategy. Given the role that Orb can play as a strategic business of the future, enabling the Government to deliver on their climate commitments, there is a compelling case for Government support.
The strategy advocated by Syndex includes three key aspects: a new annealing line at Orb, investment in automation to make Orb’s grain-oriented products more competitive, and relocation of the hot rolled coil supply chain from IJmuiden to Port Talbot.
I want to put forward a series of asks to the Government. First, will the Minister ask the Secretary of State to call a UK steel council urgently, with Orb at the top of the agenda? We have not had one since June 2018, and the need is urgent. Will Ministers commit to meet urgently with trade unions and local politicians to look at what can be done to support Orb and its workers at this time? Community has requested meetings with the Welsh and UK Governments to present the Syndex plan directly to them. Will the Minister and the Department for Business, Energy and Industrial Strategy agree to meet it?
The Prime Minister committed last month to ensure that UK steel forms part of the supply chain for electric vehicles. Will Ministers ensure that that actually happens? While I am on that subject, we now more than ever need a sector deal for steel—something we have been asking for for a long time.
This Saturday, hon. Members will be joining Community, Unite and other unions in a march through Newport to save Orb steel. We are fighting for it, and I hope everyone will join us. Orb is a site that could be underpinning a dynamic UK automotive industry, and could be at the cutting edge of new steel technologies. Newport, Wales and the UK would be worse off if the Government fail to work with Tata to grasp its enormous potential before it is too late. If the Government are serious about an industrial strategy, will they back up their words with proactive action?
I am calling on the Government to prioritise our industrial policy and to support our steel industry, including electrical steels, and building an electric vehicle industry. The Prime Minister says he wants to do that. I say yes, and so do the Welsh Government. Who else needs to say yes to save the Orb plan? I ask Tata to say yes too. Together, let us save Orb and build a new electrical steel economy in the UK.
It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate the hon. Member for Newport East (Jessica Morden) on securing this debate, which has given us the opportunity to come together to discuss a topic that is important not just for Newport but for the whole of Wales. She has always been, and was today, an energetic and passionate advocate for her constituents and those affected by the potential closure of Tata’s Cogent Orb plant.
It is clear that there is a shared understanding of the important role the steel sector plays in communities and its critical place as a foundation industry in the national economy, especially in Wales. That is evidenced by the number of Members attending this debate. I have heard their comments and the request to meet the unions. I understand that the Secretary of State for Wales has already been in contact with them, and I am more than happy to facilitate meetings. I will pass on the request for a meeting of the steel council. That is something we are always happy to do, and certainly if hon. Members request it. Those who have dealt with me previously know that I am only too happy to meet Members, particularly if it relates to matters in their constituencies that are this important. I would be happy to facilitate that.
Is the Minister saying that he will go back to his colleagues and recommend that the UK steel council meets, as my hon. Friend the Member for Newport East (Jessica Morden) has requested?
I will pass on the strong demand that the hon. Member for Newport East has made for the council to meet. In terms of what I can offer, and the direct request for meetings with Ministers about the Orb plant, I am more than happy to arrange to do that. That was the second part of her request.
Although there are considerable challenges, we believe there remain great opportunities for the industry to secure a successful, sustainable future at the centre of British manufacturing. The announcement on 2 September 2019 that Tata is to close its Orb Electrical Steels plant in Newport has understandably been a huge blow for employees, their families, contractors, suppliers and customers. I am grateful to the hon. Lady for her commitment to working with Government and other stakeholders, including the Community union, to help secure the future of the business, both in her role as MP for Newport East and as an officer for the all-party parliamentary group on steel and metal-related industries, many of whose members are in the Chamber.
The Government have worked with Tata to seek possible solutions to the financial challenges facing the company. We have also met with the unions to discuss the concerns of the workers and their families. This was a commercial decision by Tata Steel Europe. The Orb Electrical Steels plant has been on sale for two years, but sadly Tata was unable to find a buyer. We are open to considering plans that would deliver a long-term, sustainable future, based on a clear business plan, but as I am sure hon. Members realise, that cannot just be based on an ongoing subsidy or on merely hoping that business will come forward. We have sought and had reassurance from Tata that every effort will be made to mitigate the impact on affected employees. It is offering alternative employment opportunities where possible at other Tata Steel sites. The UK Government are committed to working with Tata to avoid job losses as a result of any closure of the Orb steel plant, as Tata is one of the most important employers in Wales. We will keep all options open to support a sustainable future for that plant and for Tata elsewhere in Wales.
The Minister says that the Government have met Tata, but what has he been able to offer it to help keep Orb open and keep steel going in south Wales? Can he be clear about what the Government are willing to put on the table?
The Government are clear that if a sustainable, long-term business plan can be produced, we will consider support packages, but the key part is that it must be sustainable for the long term, and it must be based on a clear business plan.
We have heard today about the Syndex report, which places a way forward on the table. Will the Government meet the unions, Syndex and Tata to see how that could be turned into the sort of plan that would deliver not only for this workforce and industry, but for UK plc?
We are more than happy to meet. Obviously we cannot guarantee that a third party would wish to be involved in those meetings, but certainly from the perspective of the Government and the Wales Office, we would be more than happy to arrange a meeting with the unions and Syndex to see how their plan could be taken further. The key part has to be whether it can provide a long-term sustainable future, and we note that the plant has been for sale for two years with no purchaser having come forward. Certainly, UK Government Ministers are more than happy to meet interested parties to discuss what we could do.
In the context of the wider steel industry, the Government have made up to £800 million of funding available to support decarbonisation and innovation in the industry. We remain committed to supporting the Welsh steel sector in accessing this funding and ensuring that it is able to compete with the best in the world. Recent and ongoing work to support the steel sector includes establishing the £250 million clean steel fund, which was announced in August and will support the sector’s transition to lower-carbon iron and steel production through new technologies and processes. It will also maximise longevity and resilience in the UK steel sector by building on longstanding expertise and skills and harnessing clean growth opportunities.
Our industrial energy transformation fund is a £315 million fund supporting short-term projects in both energy efficiency and decarbonisation for businesses with high energy use. The fund will help businesses with high energy use, including steel companies, to cut their bills and transition UK industry to a low carbon future.
The industrial decarbonisation challenge is a £170 million fund aimed at the UK’s industrial carbon emissions clusters. South Wales has been identified as one of six clusters in the UK that will benefit from that fund, which supports our grand challenge mission to develop a net zero emissions cluster by 2040 through the development of innovative low- carbon solutions. It will provide long-term support to the industry, ensuring Britain’s long term sustainable future.
The Minister is making some laudable points about laudable plans for the future of the steel industry, but does he not agree that closing the only electrical steel plant in the UK makes absolutely no sense in terms of future planning? That is not joined-up thinking at all.
This is a commercial decision by the company and the plant has been for sale for two years, but as I have already said, we are more than happy to meet stakeholders to see if the Government can provide some support. That support would have to be based on a sustainable long-term business plan for the future.
We are also providing up to £66 million through the industrial strategy challenge fund to help steel and other foundation industries develop radical new technologies and establish innovation centres of excellence in those sectors. This challenge will create a pilot facility to demonstrate new technologies, and develop a cross-sectoral approach for research, innovation and skills. To date, the UK Government have provided more than £312 million in compensation to the steel sector since 2013 to make energy costs more competitive, including over £53 million during 2018.
The Minister talks about this being a commercial decision, but it is absolutely clear that the underlying conditions for the British steel industry are completely undermined by the energy price disparity. Is he aware of the fact that it costs £50 per MWh in the UK, compared with £31 per MWh in Germany, a disparity of 62%? The disparity with French energy costs is 80%. The Minister cannot claim that this is a purely commercial decision; it is a commercial decision based on the utter failure of the British Government to deal with this energy price disparity.
As has been mentioned, to make energy costs more competitive, we have made £312 million in compensation available to the steel sector since 2013, including £53 million in 2018 alone.
We have commissioned independent research to identify high-value market opportunities for UK steel producers that will be worth up to £3.8 billion a year by 2030. The UK is a supplier of steel for a range of high-value applications and is a strategic part of the supply chain for the automotive, aerospace, construction, defence and oil and gas sectors. We are successfully working with the steel industry to introduce steel procurement guidance that will ensure that Government and the wider public sector take into account social and environmental benefits when procuring and designing their major projects.
Will the Minister give way?
I have to conclude, as I am starting to get close to time.
We have also signed up to the UK steel charter, acknowledging and supporting that initiative from industry. We continue to press for the introduction of trade defence instruments to protect UK steel producers from unfair steel dumping. Tata has confirmed the closures are not linked to Brexit; instead competition from much larger players in China and Japan is understood to be the key reason.
On a point of order, Mr Hanson, this kind of debate is supposed to be a conversation between the Minister and the Member who secured it. There are five minutes left in the debate; surely it would be appropriate for the Minister to give way to the person who secured the debate.
As you well know, Mr Brennan, it is for the Minister to decide whether he wishes to give way. Clearly at the moment he does not wish to do so.
Thank you, Mr Hanson. I will take another intervention as I come nearer to the end of my speech, but I have not been ungenerous in taking interventions from Opposition Members so far.
The UK Government are stepping up their efforts to ensure businesses are ready to leave the EU on 31 October via their national communication and engagement campaign. We are also urgently identifying and delivering actions to support businesses in improving readiness. The Government will take economic measures to mitigate any short-run disruption, to support the economy through the transition and to boost the long-term potential of the UK economy, taking advantage of the opportunities outside the EU. As I said, the Government are prepared to look at and discuss any plans that present a long-term, sustainable option for the plant.
I appreciate the Minister responding today, but members of the all-party parliamentary group on steel have not yet had a real opportunity in a debate to question the new steel Minister. I ask the Minister to convey to the new steel Minister the urgency of the situation, because if we lose Orb, we lose the opportunity of an end-to-end supply chain for electric vehicles before Christmas.
I will certainly convey the hon. Lady’s message to the steel Minister. I have to say, looking at the many Opposition Members here and given my knowledge of their determination to stand up for the communities they represent, that I have a feeling that the steel Minister will get a number of opportunities in the very near future to discuss steel on the Floor of the House, if not in a debate in this Chamber. Certainly as a Minister, I would be badly mistaken to think I can ignore some of the people on the Opposition Benches.
However, it is worth reflecting on the fact that there are currently 46 trade defence measures in place to protect UK steel products from unfair steel dumping. As we operate an independent trade policy, the UK will continue to champion free trade and take a proportionate approach to trade remedies, with a view to continuing the defence of our industry where necessary. The steel industry is an important industry in Wales, as reflected by today’s turnout among Members representing Welsh constituencies. The UK Government are committed to supporting companies, such as Tata, that have contributed to the local economy in Wales for decades, and we will continue to work with the sector, the unions and the devolved Administration to support the UK’s steel sector in developing a long-term, viable solution for that industry.
In closing, I thank all hon. Members who have contributed to today’s debate, and the hon. Member for Newport East for having secured it. I know that she will continue to be a strong advocate for those she represents and will ensure that the Government hear loud and clear their views and what she believes the options to be. I would certainly be more than happy to have a longer discussion with her about some of the proposals that are being put forward; I look forward to the opportunity to do so. However, as I say, those proposals must be based on providing a long-term, sustainable future for the plant, not just subsidy with a hope of something coming along.
Question put and agreed to.