Yesterday I led a Westminster Hall debate on the future of Newport’s Orb Steelworks. I’m very grateful to the Orb workers who came up to Parliament to watch the debate at this difficult time for the plant. I look forward to seeing them again at the March for Orb in Newport this Saturday.
You can read the full transcript from the debate here: http://bit.ly/2AY6yYM. My speech from the debate is copied in bold below.
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.
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.
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.
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.”
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.
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.
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.
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.
I appreciate the (Wales Office) 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.