Eluned Morgan MS, First Minister
I met with the Prime Minister last week, and I pressed what is now the urgent need for the UK Government to act on policy developments that will support our steel industry and steel workers here in Wales.
As a foundation industry, steel enables economically important sectors such as construction and manufacturing. It is essential to infrastructure projects for buildings, transport, utilities and communication systems, as well as for many of our consumer products. Wales is home to a significant proportion of the UK’s steel capability, and we continue to take every opportunity to advocate strongly for the sector and its future. With the transition of Tata Steel to electric arc steelmaking firmly underway and ongoing development of the 7 Steel plant, it is critical that the sector and its supply chains have a supportive operating environment.
The challenges facing the UK steel sector are varied. They include energy prices, global overcapacity, and trade barriers and tariffs. We know that the current uncertainty regarding trade measures is causing considerable anxiety for the workforce in our manufacturers and supply chains. Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning, heard firsthand from the steel unions last week about their concerns for the sector.
EU trade measures have the potential to have drastic consequences for the Welsh steel sector at a time when it is already under immense trading pressure due to US tariffs and global overcapacity. The EU is our closest and strongest trading partner on steel, and we have been very clear with the UK Government that we urgently need to see it make a strong case for the EU to preserve our existing arrangements, especially at a time when our sector is transitioning to net zero.
We have been clear that Wales and the UK cannot be left in a situation where all our major partners are implementing solutions to protect their steel sector, only to leave us open to potential dumping. The Cabinet Secretary for Economy, Energy and Planning and I have stressed this point to UK Government on multiple occasions.
We have also pressed the critical need for the UK to have robust steel measures to replace the UK steel safeguards post June 2026. Robust steel measures are vital to the preservation of the steel industry in Wales and the UK, especially when considering the global overcapacity of steel, and increased steel tariffs driven primarily by US tariffs on the sector. Despite the challenges, the US continues to be an important market for Welsh steel, and we continue to work with the UK government to find a solution with the US that supports our steel sector. We understand that the recent US Supreme Court ruling has no bearing on steel and therefore we need the UK government to agree and implement the tariff free quota for UK steel into the US as agreed under the UK-US economic prosperity deal, whilst considering the unique transitioning needs of the Welsh steel sector.
More broadly we understand that the sector wants to see a truly competitive electricity pricing structure, greater leverage for using UK steel through public procurement, robust trade remedies and protection against carbon leakage.
We are supporting the sector by working with the UK Government, steel companies, and trade unions. We have a seat on the UK Steel Council, and we have been actively contributing to the development of the proposed UK Steel Strategy that will take account of the various external and policy issues facing the sector as well as identifying areas for investment.
The proposed UK Government Steel Strategy is an important piece of work investigating the policy issues that our domestic steel sector continues to face, as well as researching the best opportunities for capital investment. The steel industry has identified several priorities that they wish to see in the Strategy needed to support sustainable steelmaking. These include ongoing support to decarbonise, energy costs, the supply of quality scrap steel, the public procurement of steel and of course matters affecting steel trade.
It is important that the Steel Strategy not only meets the needs of today but also of tomorrow - and research and development is critical to ensuring that our sector remains sustainable and forward thinking. We have been working with the UK Government to press the importance of these matters for the sector.
We understand that the UK Steel Strategy is now due to be published in March. The Welsh Government is calling for the strategy to be afforded the absolute top priority that it deserves, and that publication is made as a matter of utmost urgency. Industry needs clarity, and our steel workforce needs transparency and confidence.