UK Tradeshow Programme Closure

Debate between Lord Anderson of Swansea and Lord Johnson of Lainston

Monday 18th March 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am not entirely sure whether that is a question for me, but the noble Earl touches on defence, and I would say that we have been doing a huge amount on defence and security exports to promote our industries. New arrangements, such as AUKUS, are also incredibly powerful in driving our exports in that area. I also draw this House’s attention to the Saudi Great Futures event, which will launch on 14 May. Over the past few days we have sent out literally thousands of invitations to businesses, and we will fly a huge quantity over to Riyadh in the middle of May to celebrate the enormous opportunities that we see in that country, working on projects such as NEOM. Across the board there is an enormous amount that we are doing. I shall have to refer the question about banking to one of my colleagues.

[Lord Anderson of Swansea (Lab)]

My Lords, the Minister has just said that there will be “significant benefits” to this country from the trans-Pacific partnership. How significant is “significant”? Does he recognise that the Government estimate that the benefit to our GDP will be 0.08% and the OBR believes it will be 0.04%? Should the Government not be careful not to overegg their pudding?

[Lord Johnson of Lainston (Con)]

Since many of our exports are going to be food and drink, I think overegging the pudding is precisely what we should be doing when it comes to encouraging our exports. The opportunities that CPTPP presents are, first, a new trade deal with Malaysia, which we do not have; far better arrangements around rules of origin, which noble Lords opposite who have been involved in motor manufacture will see the benefits from; and very important new opportunities to export our agricultural goods. CPTPP is not a single trade deal but a living agreement. We hope new members will join which are aligned to our ambitions. That will allow us to have access to even greater markets. I am very proud of this Government’s record of negotiating trade deals, but there is more to do, so I am excited about the future too.

Tata Steel: Port Talbot

Debate between Lord Anderson of Swansea and Lord Johnson of Lainston

Tuesday 19th September 2023 Lords Chamber

[Lord Anderson of Swansea (Lab)]

My Lords—

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

Apologies, my Lord. I think I have the opportunity now to respond to the two opening speeches and then I will answer questions one at a time, if I have the order correct.

I greatly appreciate the debate we have had so far over what I believe is a pretty sensational recovery of an extremely difficult situation. Noble Lords will be aware that these conversations around Port Talbot have been going on for many years—some say even more than a decade. Certainly, from my own experience in the private sector, I regarded the situation with a great degree of pessimism, to be frank, and I am surprised that the tone of the debate is not more positive. That does not negate the realities of saving the situation and the transformation that will result in the locality.

I will go through the points raised by the noble Baroness, Lady Chapman. I am happy to answer them one by one because we have a strong and coherent policy response to each of the very important points raised. This is a very serious issue. We are not playing politics here; we are dealing with people’s lives and the important commitment of, I believe, all of us in this House to maintain steel production in Port Talbot and to guarantee a future for those communities. What we have ended up with is a powerful opportunity for this country to reshape its industrial base in terms of producing steel and reducing emissions. Noble Lords will be aware of the astonishing level of emissions that Port Talbot alone produces; I think it is 1% of our entire national output. If we are serious—and I think, collectively, we are—about reducing carbon emissions, to reduce one site that produces 1% of the emissions by 80%, which is what this outcome will produce, is significant for the collective challenge we are presented with.

I also find, if I may say so to noble Lords in this House and to the noble Baroness, Lady Chapman, and the noble Lord, Lord Fox, that there is an opportunity to shift. This is a business case—so it is subjective and perfectly reasonable to raise it—for virgin steel, whereby we import the ore, at great cost to emissions and national resilience, and recycle the nine or 10 million-plus tonnes of scrap. This presents an opportunity to us, to Port Talbot, to the people of Wales and to the whole country to realign our steelmaking industry—to rightly make the most of this scrap steel, which otherwise is being exported to Turkey or the US to be recycled. We were losing out on an enormous opportunity to be part of the circular economy.

Let us look at the prima facie business case for what the Government have done, to work in partnership with Tata. I put on record my personal thanks to the leadership of Tata for the extraordinarily good tone of the negotiations that I know it engaged in. From my first meeting with the chairman of Tata a year ago—although I was not involved in these specific negotiations —there was a very clear signal that Tata felt it was important that it reflected its family ownership in terms of commitment to the community of Port Talbot and the United Kingdom. I hope all noble Lords will join me in expressing thanks for the intense amount of good will demonstrated.

The Government have been extremely brave and forward-footed in bringing forward a proposal that will enable us to transform this site, reduce our emissions and, through the transformation to the Celtic freeport projects and the work we shall do—the noble Lord, Lord Fox, rightly raised this—in releasing land that is currently either potentially contaminated or has risk around it, create up to 16,000 new jobs. The noble Baroness, Lady Chapman, is right to call back some of the policy decisions taken in the 1980s, when there probably was not enough sensitivity paid to the transformation process, which affects people but ultimately makes us safer. That is why the Government have been extremely aware of and sensitive to this crucial point that affects people’s lives. Working with Tata—again, a private enterprise—we have created, or are in the process of establishing, a £100 million fund specifically to look after the communities and the people affected. I am aware that specific task forces are being set up to ensure that the process can be properly handled.

There is a reasonable case to be made by noble Lords, although I do necessarily agree with it, about the process by which this announcement was made, but I am sure all noble Lords who have been involved in sensitive and complex commercial negotiations will be aware that the specific terms cannot be entirely public. It was quite right that we got to a good decision, rather than one jeopardised by too much general community discussion. However, as the noble Baroness, Lady Chapman, will know well, as will her colleagues on the Front Bench, these discussions have been going on for a very long time. Indeed, the announcement of electric arc furnaces at Port Talbot really should have brought great relief to many people, because the worry in the air was that a far more jeopardous decision would be made.

This gives us an enormous opportunity to restructure our industry and reduce our emissions, which is a core commitment of all sides of this House and this Government. It gives us an opportunity to reinvent a huge site with great potential, creating tens of thousands of jobs. I have tried to take a much more positive view of what is a wonderful partnership between the Government, private enterprise and the community that will safeguard thousands of jobs, when the risk of losing those jobs was so significant.

I am aware that both the noble Baroness, Lady Chapman, and the noble Lord, Lord Fox, asked me specific questions, which I am sure other noble Lords would like answers to. If the noble Baroness will allow me, I will just cover those points I did not cover in my main speech. There is an issue over virgin steel. The noble Lord, Lord Fox, suggested that we guarantee always to have a capacity for virgin steel.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I am very grateful to the noble Lord for his points. I think it would be very unfair to suggest that at any point the Government or myself—I would say this personally—are somehow triumphant about people not having their employment. I think that is very unfair of any noble Lord in this House to suggest that there is triumphalism over an important transformation.

However, it is right to celebrate the saving of many thousands of jobs, and the opportunity to repoint our steel industry, which the noble Lord cares about with his heritage and history. We are surely working as one here in solving an extremely complex problem for the better. I could not think of any other outcome that could be as optimised as this. That does not mean that every outcome does not have an element of compromise. In the short term, there have been very difficult decisions to make, but I have made it very clear that the Government take this incredibly seriously. A huge number of lessons have been learned over the last 40 years in terms of industrial transformation. That is why we are committing £100 million specifically to the transformation fund, to ensure that people are insulated to some extent from the effects, and so that we can service communities and assist individuals who may find themselves without employment in that specific job in the future. We also hope that we will create tens of thousands of jobs for the communities of Port Talbot through this act.

There is a question that has come up often and with which I have sympathy, and I hope the noble Lord will give me credit for that. I understand there is frustration about the consultation process that led to the announcement last week. I am sure that many people would have liked to be consulted, but it is very difficult to engage with a broad group on specific commercial transactions such as this. Having said that, as far as I am aware, there has been a huge number of engagements and consultations with all the unions involved—the three unions at Port Talbot—and with the Welsh Government. It is very important that we have some clarity now that this deal has been announced. The people of Port Talbot and the staff of the plant can now know what the future is, when last week they did not. From my point of view, that is one of the most important flags for the future. It gives us the opportunity to have the structure around which to have proper consultation, which the company is obliged to take part in and would want to do so in any case. So some of these questions will be answered in the near future and I am grateful to the noble Lord for his question.

[Lord Anderson of Swansea (Lab)]

My Lords, as the only person present who lives in the area and knows the decades-long dependence of Swansea Bay city on the steel industry, I say that it is sad that it is the local community that is now likely to pay the price of green steelmaking. How many jobs will be lost? Is it accepted that it will be 3,000? Can we be assured that there will be an attempt to synchronise those job losses and any incoming jobs at a time when there are few large investments in prospect and increased competition? Finally, is there a danger that the transformation will lead to increased imports from countries not subject to the decarbonisation process?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for his questions. On the last point particularly, we are very aware of the need to ensure that our carbon border pricing mechanisms are properly implemented. In this House, we are all aware of the situation of competitive imports that we face in this country, which the noble Lord alluded to. We have been particularly forward-footed in ensuring that our World Trade Organization tariff processes are well deployed in order to protect our economy.

On the question asked by the noble Lord on the synchronicity of the Celtic port investments and the transformation of Port Talbot, we are doing everything we can to ensure that that would be the case. Clearly, it is very difficult, but this is a long-term process. The noble Lord was absolutely right to raise it. It is our intention, through this extraordinarily forward- footed and bold investment partnership with Tata, and working with the freeport and the ports companies operating there, to truly transform this area that the noble Lord has such affinity with into the most astonishingly vibrant, advanced manufacturing and industrial hub.