‘We saved the banks in 2008, why can’t we do the same for steel now?’

Plaid Cymru accuse UK Government of ‘short-term vision of lemmings’ on industrial strategy

Plaid Cymru has today (Tuesday 23 January) urged the UK Government to act to save the steel industry through public investment on the scale offered by Germany.

 The party’s Westminster leader, Liz Saville Roberts MP has also called for investment in the capacity to produce primary steel through green hydrogen furnaces, following the example of Spain, Canada and Sweden.

Tata Steel plans to cut 2,800 from its UK workforce and close both blast furnaces in Port Talbot. Tata Steel has said its current operations are financially unviable and will end the production of primary steel, also known as virgin steel, this year. The UK Government is contributing £500m towards the cost of an electric arc furnace.

Germany, in comparison, has invested €2.6 billion (£2.2 billion) to support Stahl-Holding-Saar decarbonise its steel production through hydrogen use in one region alone. Germany's economy ministry is also planning €50 billion (£42.8 billion) in tax breaks over the next four years to help industry and businesses cope with high energy prices.

Ms Saville Roberts drew a comparison with the 2008 financial crash, asking “we could save the banks in 2008, why can’t we do the same for steel now?”

Plaid Cymru leader, Rhun ap Iorwerth MS, also said earlier today in the Senedd the Labour Party’s £3 billion pledge for green steel was not enough when compared to that offered by other European countries.

During the debate in Westminster this evening, Liz Saville Roberts is expected to say:

“Steel is a strategically important industry for the entire UK. It is vital for supporting the green transition, from energy generation to electric cars.

“For decades successive Westminster governments have allowed the steel industry to decay with the short-term vision of lemmings and the sense of social justice of hyenas.

“Plaid Cymru has called for action to ensure that ownership of the Welsh steel industry should be returned to Welsh public control. This would involve nationalisation, then recapitalisation through green bonds, with a view to mutualise and create a Welsh Steel Co-operative.

“We could save the banks in 2008, why can’t we do the same for steel now?

 “Look at Germany, who spent €2.6 billion in state aid to steel producers for decarbonisation projects in 2023. This is the sort of scale of intervention we need.

“We must also learn from other countries such as Spain, Canada and Sweden who are already investing in their capacity to produce primary steel through green hydrogen furnaces.

“There are lessons here for Wales. There are suggestions that a ‘closed-loop cycle’ could be created in south Wales, whereby floating offshore wind is not only used for electricity but to make green hydrogen for local heavy industry, including steel production.

“These are the sorts of exciting opportunities which we should be grasping now in Wales. Yet we are being let down yet again by a Westminster Government who are stripping Welsh assets while leaving the Senedd to bear the costs of communities and individual lives thrown on the scrap heap.”

Speaking in First Minister’s Questions in the Senedd, Plaid Cymru leader, Rhun ap Iorwerth said:

“The current UK Government and a future Labour government must give a far clearer commitment to a willingness to invest far more than what’s on the table.

 “The UK just isn’t investing to help heavy industry prepare for a just transition to a cleaner future like governments in other European countries do.

“There are subsidies of €50 billion available to help energy intensive manufacturers in Germany transition to climate-neutral technologies. €2.6 billion euros is being invested in one region alone in decarbonising its steel industry with hydrogen.

“In a General Election year, the steel industry is looking for a signal that a future government will commit to it in a way in which the current government has not. We have to have a clear message that that investment would be there.

“But whilst money is at the top of the list in many ways – we also need a plan. And the absence of an industrial strategy by either UK or Welsh Government is costing us dearly.”