Commitment to Welsh steel industry outlined by bailout
SECRETARY of State for Wales Simon Hart yesterday reiterated the UK Government’s commitment to supporting the nation’s steel industry.
He said the UK Government was “completely sold by the importance of a steel-making footprint in Wales”, as underlined by last week’s bailout of Celsa Steel.
After weeks of negotiations with the Treasury, Catalan-owned recycled steel business Celsa Steel UK – which employs 800 in south Wales, the majority at its mill in Cardiff – secured a £30m loan on Thursday, which came with a series of legally-binding conditions and must be repaid by the company in full.
It is the first taxpayer-funded bailout under the UK Government’s Project Birch scheme, which is aimed at helping major UK employers struggling during the coronavirus pandemic.
During an interview with BBC Wales yesterday, Mr Hart said: “Celsa was the first of its kind so it took a while to get it over the line, but it did save, I think, between 800-1,000 jobs, so it was really good news from that point of view.
“What it also did was it set the standard and so this is the type of criteria which companies need to meet to secure those loans. That does take us forward a bit, whether that is the steel industry or others.
“It shows we are prepared to make really substantial multi-million-pound commitments to viable industries. To my mind, it really is a step forward.”
Alongside the UK Government, the Welsh Government has provided Celsa with a £2.9m loan and nonrepayable finance of £690,000 from its Economic Resilience Fund.
Mr Hart, MP for Carmarthen West and South Pembrokeshire, added: “What the Celsa deal demonstrates is that we are completely sold by the importance of a having an important steel-making footprint in Wales. That should be a good sign.”
Mr Hart said both the UK Government and Indian-owned Tata Steel UK were determined to safeguard the latter’s future in Port Talbot in the wake of the crisis.
It is understood discussions involve a bespoke loan of about £500m, with the UK Treasury to support its lossmaking operation in the UK, where it employs 7,000 in Wales – 4,000 at the Port Talbot steel-making plant, plus Tata businesses in Trostre, Llanelli; Caerphilly; Llanwern, Newport; and Shotton, Flintshire.
He said: “There’s a lot of negotiations to be done around a lot of conditions with any company. It is about viability and what the situation was before Covid and, as far as we can all tell, what the situation is going to be after Covid. It’s not a straightforward situation.
“It’s going to rumble on for a bit but the ambition from both the point of view of Tata and the UK Government is that we are going to try every possible means of seeing how we are going to secure a sustainable future.”
Mr Hart also indicated there was ongoing discussion over Airbus’ future in Broughton, Flintshire.