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Ken Skates, Cabinet Secretary for Economy and Infrastructure

First published:
29 November 2016
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

I have committed to keep Members updated on activities relating to Tata Steel and its business in Wales, following my letter to you of 20 October.  

On 24 October Tata Sons announced its Board had replaced Cyrus Mistry as Chairman of Tata Sons and Ratan Tata would be Interim Chairman. The Board of Tata Sons has constituted a Selection Committee to choose a new Chairman and expects to complete this process by the end of February.   This month, in disclosures to the Indian Stock Exchange, Tata Steel announced a change of Chairman of the Board and appointed Mr OP Bhatt on 25 November who will serve until the outcome of an extraordinary general meeting on 21 December to consider changes to the Directors of the company.  These are matters for Tata Sons and Tata Steel.  

Within this context, I have written to Mr Ratan Tata to seek clarification on what these senior level changes mean for the future of Tata’s operations in the UK and in particular, the plants in Wales.  I have also reiterated that the Welsh Government remains fully committed to delivering action to help secure a sustainable and long-term future for steelmaking in Wales.  

On 28 November Tata Steel announced the signing of a Letter of Intent with Liberty House Group to enter into exclusive negotiations for the potential sale of its Speciality Steels Business. Speciality Steels is independent of the UK Strip Products division. Tata also announced it is pursuing a transformation plan to create a sustainable future for its UK strip products business and has approved schemes focusing on improving manufacturing capability and environmental performance at several of its operations in Wales.  

In my last up-date, I explained how we are exploring several potential elements of support with the company, all within State Aid guidelines applicable to the steel sector.  We continue our close engagement on this package of support and I expect to make further announcements in due course.

On 10 November, in partnership with Innovate UK and The Knowledge Transfer Network we organised a Steel R&D workshop.  This was well attended with over 50 people representing the steel industry, supply chain and end users.  The workshop sought views from industry about future markets for steel and the R&D activity which is needed to enable the industry to meet both future and current challenges.  We will be working with partners to consider the feedback and next steps.  We also intend this work to feed into the work being carried out by the UK Steel Council into the Future Capacity and Capability of the Steel Industry.

Our Environmental Protection Scheme enables us to support various activities relating to environmental protection in energy intensive industries.  It is a mechanism that has been notified to the European Commission which allows us to give grant aid to companies for certain activities within EU state aid guidelines.  We are currently working with a number of steel companies on projects which could be supported through this route.

We have consistently pressed the UK Government to take action to reduce energy costs. I was disappointed therefore that the Autumn statement did not announce support for the steel industry and other energy intensive industries across the UK to help enable them to invest in measures to reduce their energy costs.  

We are also, of course, still waiting to see a successful outcome for the British Steel Pension Scheme.      

I will continue to keep Members updated as matters progress.