Port Talbot

Yes, I know, Port Talbot isn’t the only Tata plant affected by the company’s decision to put its UK operation up for sale, but it is the biggest, and serves as useful shorthand.

Rather than giving instant remedies or exposing my ignorance by trying to discuss EU regulations on state aid, or the impact of carbon tax and business rates, let alone the statistics on Chinese steel production and exports, I shall stick to my comfort zone by considering political responses and impacts, winners and losers, and also the possible outcomes.

But first, let me indulge in a little reminiscing.

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I grew up just around the Bay from Port Talbot steelworks and I can remember the plant in the mid-’60s when it employed 20,000 men and the wages paid earned it the soubriquet ‘Treasure Island’. Much of its steel went on to the tinplate works at Trostre in Llanelli and Velindre on the north side of Swansea (where I worked for a short while). Velindre is long gone, but Trostre has struggled on and is now in the same position as Port Talbot.

And if you’ve driven past and think the smells and the smoke of Port Talbot are bad nowadays, then you should have seen it in the ’60s and ’70s. It wasn’t just that the steelworks produced more smoke and smells back then, there were other plants nearby making their contribution.

Just up the road, on the Swansea side of the steel plant, in Baglan Bay, we had one of the largest petrochemical sites in Europe, employing another 2,500 men. A couple of miles inland there was the Llandarcy oil refinery with the same number of employees. Then there was the Tir John power station taking us up to the eastern outskirts of Swansea, where the East Side made its contribution to the shit and the smell with the never-to-be-forgotten Carbon Black plant.

Llandarcy

This spewed out such filth that it resulted in regular protests by local housewives, who couldn’t put washing on the line to dry without it being covered in a dust that also got indoors and clung to everything.

My first-hand experience of Carbon Black came through a summer job I took when at Coleg Harlech. I was employed to sweep the floors inside the plant, where the filth lay inches thick. I was provided with a brush and a rudimentary face mask . . . and that was it. I handed in my brush after a few hours and went to a nearby pub to ease my throat.

The whole area from the east side of Swansea over to Neath and down to Port Talbot was a complex of heavy industry, a nightmare for any proto-Green. And yet, if we add in Swansea docks, the ancillary jobs in transport and other fields, this triangle of smoke and smells provided tens of thousands of well paid jobs for semi-skilled and unskilled men. Most of these jobs have gone, and will never be replaced.

I had many friends and family members working at these various plants, and of course at the steelworks, and not just for the then owner, the Steel Company of Wales. For example, there was a boy I met in Penlan school with whom I became good friends (after the introductory fight); his family had come down from Kilmarnock and his father worked for British Rail in the steelworks’ marshalling yards, said to be the biggest in the world after those at the Chicago stock yards.

Then there was a friend of ours in the post-school era working in the steel works. One night he went over to Port Talbot to hear a promising young singer named Tom Jones. On the way back into Swansea, driving along the Jersey Marine in his Wolseley 1500, he was somehow thrown from his car, which then rolled over onto him. I think Keith was the first close friend I lost.

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THE POLITICAL DIMENSION

The Conservatives

I suppose the Tories’ attitude was summed up accurately and succinctly by Paul Mason when he wrote, ‘Steel Crisis; they do not give a shit’. There are a number of reasons for this being true beyond the Tories being wedded to a blind and unthinking neoliberalism.

The future the Tories envision for the UK is of smart people doing clever things and making lots of money in clean environments with the economy topped up by sheikhs and oligarchs investing hundreds of billions in property and other deals that can be accomplished with a signature. Fundamentally, it’s a fantasy world in which people make lots of money doing very little, certainly not from producing anything other than hi tech gadgetry or financial packages that no one can understand.

There is no place in this vision for steel works and towns like Port Talbot. Such places are alien to Old Etonian politicians. Not only are they distant in terms of miles, and in considerations of social class, they are also distant in time, because they belong to the past, they have no place the glittering future I bewitched you with in the previous paragraph.

Gold cars

Of course, one of the major problems with this vision is that it’s very London-centric, extending only as far as the Home Counties in which many of the new elite will be living. Because you can bet that Sheikh Mohammed bin Slaveholder al Head-chopper is unlikely to be looking for a £30m mansion in Llanelli or Scunthorpe any time soon. Which explains attempts to placate the increasingly resentful natives north of Watford with ‘beads’ like HS2 and talk of a ‘northern powerhouse’.

On a more pragmatic, electoral level, the Tories have nothing to lose in towns like Port Talbot or any similar community in Wales, Scotland or England. You can’t lose support or seats if you haven’t got any to start with. So the truth is, as Paul Mason says, the Tories don’t give a shit.

Unconvincing expressions of concern will be heard, money will be doled out – there might even be a short-term nationalisation – but this hiccup will not be allowed to interfere with the march towards the post-industrial Bright Tomorrow, in which the sons and daughters of today’s Port Talbot steelworkers will be City traders or internet tycoons . . . or, more likely, working just up the road at the vast Amazon warehouse, on the minimum wage, with one toilet break a week.

Though it will be interesting to see how the local Tories deal with the steel crisis in the Assembly election campaign. Who will they blame?

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The Labour Party

For Labour the steel crisis is much more complex and worrying. Not least because it was the equally laissez-faire New Labour governments that helped get us into this mess by nodding through British Steel’s merger with Koninklijke Hoogovens of the Netherlands in 1999 to form Corus, and then twiddling their thumbs when Corus was bought by Tata Steel of India in 2007.

The New Model Labour Party of Citizen Corbyn seems rather more concerned than the party led by Blair and Broon, but there’s little they can do out of power. Though in fairness to young Owen ap Dai ap Smith he didn’t wait for the fat lady to sing before putting the boot in, here he is at the start of February accusing Cameron and Osborne of kissing China’s arse!

Another scion of an anti-Welsh Labour family, the Boy Kinnock, actually took himself off to Mumbai, where the Tata board was deliberating. Quite what he hoped to achieve beyond a little self-promotion is a bit of a mystery. But then, showboating was always part of his father’s political repertoire, though I advise the young ‘un to avoid beaches with incoming tides.

Labour logo

Closer to home, our self-styled ‘Welsh Government’ can only be compared to rabbits caught in the headlights. There are a number of reasons for this. One, they have no experience of business, let alone business on this scale. Two, they simply aren’t aren’t up to the challenge intellectually. Three – and for this they are probably thankful – they don’t have the power to do anything.

That said, this announcement comes at a good time in the electoral cycle for ‘Welsh’ Labour, with Assembly elections just over a month away they can blame the ‘heartless’ Tories for everything and hope that voters don’t remember their party’s role in this tragedy.

And as usual there will be a cynical appeal to the ignorance and confusion of many Welsh voters as Labour – despite being impotent in Cardiff and in opposition in London – urges people to vote for Carwyn and the gang so that Labour can ‘save Port Talbot’.

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Plaid Cymru

The steel crisis should be Plaid Cymru’s Christmas, Easter and St David’s Day all rolled into one. It gives them the chance to attack both major parties, English rule, and foreign ownership of Welsh assets. Thus far, I can only assume that Plaid is waiting its chance, holding its cards close to its chest . . . or maybe it doesn’t realise it has these cards.

I would suggest that rather than asking for anything absurd or impossible – such as demanding that the ‘Welsh’ Government nationalises the steel industry – Plaid Cymru should gather the evidence on the merger and the take-over that Labour allowed to go through when in power, and the Tories’ opposition to the EU raising tariffs on Chinese steel, the refusal by both parties to reduce energy costs for plants like Port Talbot, and compare those betrayals of the Welsh people with what Plaid Cymru would do if it was in power down Cardiff docks.

And stressing a betrayal of the Welsh people should be Plaid Cymru’s approach, rather than going all socialist and linking arms with Labour and the trade unions. Because unless Plaid Cymru’s voice is distinctive, and distinctively Welsh, then there’s really no point to Plaid Cymru, in this debate, or any other situation.

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Liberal Democrats

I know I’m normally harsh on the Lib Dems, but over the years it’s been difficult not to be harsh, and at times almost impossible to take them seriously. And then, in my more mellow moments (not always induced by alcohol!) I think, ‘Weeel, maybe they’re not too bad’. ‘What brings this on?’ you ask.

To start with, there’s Kirsty Williams, the LD leader in Wales. Things have been tough in recent years for her party but she’s stuck with it and deserves a break. She’s a gutsy woman who I’m warming to.

Another LD AM who’s impressed me is William Powell. For one thing, he turns up at Cilmeri in December, where we rarely see Plaid politicians and never Labour or Conservative. (Nor UKIP, come to that!) And then there was the petition I submitted to the Assembly asking that it do something to stop chief executives taking over councils.

Petitions Committee

It was clear that Powell recognised the importance of this issue but the two committee members who ‘discussed’ my petition, Labour’s Joyce Watson and Plaid’s Elin Jones, couldn’t dump it quickly enough. Powell might get my second vote on May 5th.

But I digress.

On the specific issue of the sale of Tata’s UK operations, the Lib Dems – in the shy, retiring form of Peter Black – have called for the Notional Assembly to be recalled. Which might sound like a good idea until we remember that the Assembly is impotent, and what calls itself the ‘Welsh Government’ is nothing but a collection of buffoons. A recall would be nothing more than a pointless gesture and a platform for narcissistic buggers like Black.

In many ways the Lib Dems’ position should not be a lot different to that of Plaid Cymru – ‘A pox on both your houses!’ So I would suggest that Kirsty leads her troops forward with all guns blazing . . . hoping few will remember that her party kept the Tories in power between 2010 and 2015, during which period the problems that have brought us to this crisis were allowed to build and build.

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The Wales Branch of the Green Party of Englandandwales

They won’t like me for saying this, but I know that the Greenies were secretly jumping for joy when they heard that all those smelly, polluting steel plants are to close. But of course they can’t admit that.

What they can do, apparently, is write stupid letters to the press, such as the one below that appeared in Friday’s Wasting Mule. The writer seems to believe that the Port Talbot steel works can be powered by wind turbines, solar panels and fairy dust.

Then again, it could have been a piss-take, for Friday was April 1st.

Green steel

I issue these rebukes with a heavy heart, fearing that I might lose some of the many friends I’ve made in the Green Party over recent years. Oh yes.

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UKIP

If any political party is crass and insensitive enough to make cheap political capital out of tens of thousands of people losing their jobs, then of course that party is UKIP.

Not only does the steel crisis give M. Farage et Co the chance to go nuclear on ‘Europe’, it also provides the opportunity to put the boot into Conservatives and Labour, with the cherry on top being the chance to have a go at the Chinese, the Indians, and just about anybody else they can think of.

UKIP will I’m sure argue that this steel crisis thingy would never have happened if everything was still managed by those splendid chaps down the clubhouse. Better decisions are made after six or seven drinks and a few cigars – everyone knows that! Don’t laugh, a lot of people will believe them.

A few months ago UKIP was predicted to win anything up to nine seats in May’s Assembly elections then, more recently, I’ve seen polls suggesting that support is slipping. The steel crisis could put them back to where they were earlier in the year, and the Tory-supporting media transferring the blame onto the EU might even take the UKIP vote in Wales to new heights.

However you cut it, UKIP is the party with most chance of gaining in May’s elections from the steel crisis.

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SNP

Yes, I know what you’re thinking, but bear with me.

There were a couple of steel plants in Scotland, admittedly much smaller than Port Talbot, that were saved from closure in the past few weeks thanks to decisive action by the Scottish National Party government. Here’s a report from the Guardian.

But this action didn’t please everybody. Here’s a more recent report from the Labour-supporting Daily Record (the Scottish version of the Daily Mirror) telling us that the Labour-controlled Community union is ‘questioning’ the deal.

To explain . . . there are elections in Scotland on May 5th also, and the SNP is almost guaranteed to win by a landslide. So one interpretation of this bizarre intervention by Community is that embittered Labour supporters are prepared to sabotage the Scottish steel deal for short-term political advantage.

Surely Labour wouldn’t do that?

Oh, yes, and remember, the Boy Kinnock was chaperoned on his trip to India by representatives of the same trade union. Whose interests were they looking out for – the steelworkers or the Labour Party?

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EU Referendum

Speaking of the EU reminds us that on June 23rd we have the referendum on whether to stay in or to leave. The fate of the steel industry is bound to influence the way many people vote, especially in Wales. And seeing as Wales gives us the paradox of many Labour voters reading English Tory newspapers then prolonging the crisis can only help the Brexit cause.

Thinking more obliquely, this realisation that the steel crisis could decide a currently too-close-to-call referendum might prompt the EU into action; and if Cameron is serious about staying in the EU, then he might have to discreetly explain to his Chinese chums that – until the referendum is won – he might need to sound a little ‘hostile’, even agreeing to raise tariffs on Chinese steel imports.

When you consider all the possible ramifications you realise that, serious as the crisis in the steel industry is for those directly – or even indirectly – involved, the closure of Port Talbot and the other plants could have long-term and far-reaching implications that overshadow the loss of jobs.

In many ways Prime Minister Cameron is the one to watch, because with the EU referendum complicating things, him not wanting to be seen as a callous toff, yet having to protect the interests of his mates in the City by not offending the Chinese, the next few weeks could be interesting for those who like to watch nifty footwork.

As the Chinese themselves are reported to say, ‘May you live in interesting times’. (Though some say it’s delivered as a curse, not a blessing.)

 

69 thoughts on “Port Talbot

  1. Red Flag

    Late last year we cosied up to the Chinese in order to get them to takeover a billion quid energy project building 2 biomass plants (one at Holyhead on Anglesey and the other in Port Talbot). We also sniffed round them to make a dent in the colossal funding shortfall for the nuclear new builds and for several other multi-billion infrastructure projects. In the main for two reasons. No one in the west will invest in any of this tosh and the Chinese are the only players in town with any serious money.

    Now the chinese are not stupid, always drive a hard bargain and always do what is best for China and bollocks to anyone else. So is it coincidence that all these projects will require colossal amounts of steel – something which China has a massive surplus of? And all these projects require billions of pounds of funding – something that we in the west have little of? Square pegs go in square holes.

    Port Talbot and the likes have been sacrificed in order to get the Chinese to pay for vanity projects which they in turn intend to use to solve their pwn problems. China will have a market for it’s steel, we will have two snazzy biomass plants and eco-parks, a clutch of new nuclear reactors and a host of tunnels, water mains, bridges and other stuff. It was a done deal, last year.

    1. All good points as usual. I didn’t have the space to deal with the nuclear and other deals. For once it’s difficult not to to agree with Owen Smith, but rather than the Tories kissing China’s arse it looks like the head is firmly wedged up said orifice. And yet, would it have been any different with Labour in power?

  2. Ian Perryman

    There was a plan fairly recently to build a power plant on the Port Talbot site which would have burnt waste gases from the furnaces to make electricity and reduce energy costs. Not sure what happened to that.

      1. dafis

        ref your link to cestaffing – these and other agencies have been creaming money from industry ever since the gates got opened to migrant workers. First they exploited Portuguese and others from the Southern Europe/Med zones, then upped a gear when Polish and others came on stream. Apart from sourcing cheap labour at Nat Min rates plus no shift or overtime allowances, the common practice was to place these people into homes of multiple occupancy on single ( unmarried ) status and have rotating shifts in the houses as well as the factories, thus the jokes about coming home to a warm bed ! To rub salt into the wound they would charge premium rental prices for this kind of bunkhouse arrangement plus charge for bussing to work ! Cnuts !

        1. You must be thinking of the kind of accommodation provided by Nathan Gill MEP and his equally Mormon brothers-in-law.

          1. dafis

            likely cut from the same cloth, well I don’t think the Mormon bit applies but the greed factor is very similar !

      2. Red Flag

        Ian Perryman, see my comment at the top #1

        The original companies that were going to build the bio-mass plants at Port Talbot and Holyhead didn’t actually have any capital. They went to the markets seeking to raise nearly a billion quid. After 2 years they managed to get pledges totalling a measly 4 million (the markets aren’t stupid and biomass and nuclear for that matter are not regarded as anything other than white elephants by big investors unless you play a long game over several decades. Which they don’t). In October last year David Cameron arse-licked the Chinese and they took over the biomass projects (and others), formed a company called Orthios – basically a front for a Chinese state investment corporation called SinoFortune, and chucked in a billion just to the two biomass plants like it was confetti and another billion for associated support projects.

        http://www.orthios.com/projects/
        http://www.walesonline.co.uk/business/business-news/chinese-2bn-investment-build-biomass-10292039

        Don’t be thinking that this will lead to a skilled jobs boom. The Chinese have already stated that once built the management and technical staff will come from China. We will provide the lumpen. Dr Zhang told the Good Morning Wales programme: “It’s very hard for us to bring the Chinese ground labour to the UK but definitely we will bring the technicians and expertise to the UK.”

        That said, I live near the one in Holyhead and being as they only shook hands back in October, there is already a 40 strong start-up team there and more has gone on in the last 6 months than the entire previous 2 years. The number of full time jobs this will bring once built will virtually wipe out adult unemployment in the Holyhead area. (Anglesey being very sparsely populated) and with other projects in the pipeline could very well start a wage boom in the northern part of Anglesey due to shortage of even unskilled labour.

  3. dafis

    Port Talbot’s crisis really illustrates the difficulty I ( and many others, no doubt ) have in deciding whether this is a classic example of incompetence or conspiracy.

    In support of the “incompetence” theory I reflect a little on my own experience way back in around 2006 -07 when I worked on a project where an Asian ( non Chinese ) was shipping aluminium extrusions into UK & W.Europe. It was experiencing difficulty with quality, mainly dimensional accuracy of profiles produced at their Chinese plant, an investment capitalising on obvious advantages of setting up in China. A veteran manager in the UK extrusion sector was sent to the Chinese extrusion plant and within 6 – 12 months problem solved, job done, good product shipped reliably from a Chinese extrusion plant at prices well below UK & European levels.

    I spoke to several people at the time, observing that if these guys could “knock out” extrusions at these prices then primary steel product was well within their reach. More concerning is that there is a UK Government department looking out for “economic intelligence” who should have seen this shock wave coming especially after the crash of 07/08 and the slow pace of recovery thereafter. What analysis, if any, was offered, and who chose to ignore it or failed to understand it, if presented?

    Being unable to accept that well paid civil servants and their political masters can’t be that thick all the time, I have been drawn to the “conspiracy” theory, or maybe more than one concurrent conspiracies. It is attractive to see Cameron’s arse licking of Chinese leaders as a symptom of his and his government’s urge to hedge future bets by cosying up to the Chinese and by so doing undermining the stability of native industry. The amount of major capital spend in large scale infrastructure projects tied into Chinese funding/delivery is quite staggering. The UK used to crow about its capacity for designing and delivering such projects but now there appears to be a lack of skill and funding to get to grips with projects on such a scale. Yet when the projects are commenced many of the major subcontractors will be UK businesses or J.V’s with UK part ownership – so why not have them as lead contarctors ? Because it allows the foreign partner ( Chinese ) to skim margin off the top of the contract while leaving delivery risks to the sub contractors.

    Apart from the Chinese centred conspiracy theory there are other possibilities such as the machinations of the international capital markets who know no boundaries and see national jurisdictions as minor irritants. These are the banksters and related crooks who see the EU ( and dopey Dave ) as willing helpers facilitating the growing sprawl of “globalisation” which has quite a narrow beneficial meaning in their grand scheme of things. TATA may contrive to exit the UK but be under no illusion it will still seek to sell its own cheap steel into EU sourced from another “3rd world ” location and in all probability the dummies in Brussels and London will acquiesce in the name of free trade, given that TATA is a leading member of the growing Asian community of global corporations that are so “good for trade”.

    I could go on and on. However I would welcome further insight – maybe it’s a bit of everything – incompetence, laziness, conspiracy etc etc so any angle that offers more is most welcome.

    1. Brychan

      It’s easy to copy a product, but difficult to improve it.

      They key to quality is better design, of superior material, of superior specification, of greater consistency and of more timely delivery.

      This is called refinement.

      1. This is, roughly, what the Japanese did post WWII, to the point where Japanese cars and other products became as refined as, and usually more reliable than, Western competitors. But then, Japan was a relatively advanced economy with a highly educated workforce pre WWII.

        I’m not sure the Chinese are following the same path. They’re still capitalising on low wages to flood other markets with cheap tat and complementing this with the re-colonisation of Africa – ‘trade deals’ to you and me – plus astute currency and exchange manipulation.

        1. Brychan

          It should be noted that the Chinese are dumping, not undercutting.

          They are selling steel at LESS than the cost of production, even considering their lower wage rates. The United States managed to get tariff barriers agreed with the World Trade Organisation who confirmed that ‘dumping’ is taking place.

  4. The Earthshaker

    Good round up, despite doing precious little, UKIP will be the big winners in the Welsh Assembly elections and the EU referendum from this. Every report I’ve seen and read this week with a steelworker, their family or member of the public they’ve blamed the EU solely for TATA’s problems – UKIP’s job is done, Wales truly is a county of England.

    Which brings me to what now for the pretend party of Wales, what’s their plan for when the UK votes for Brexit and the SNP call indyref 2 and win?, what will the spineless wonders in Plaid Cymru do then?

      1. dafis

        they likely to ask – what’s planning ? But who needs it when you have visions, strategies, pathways, blah blah blah ……………

  5. Rhymney Lad

    I’ve never understood the hype about Adam Price, but his piece on the steel crisis in the Guardian is a small step to addressing the issues you raised about Plaid Cymru’s lack of coordinated attack on the various governments, Adam logically and coherently lays in to the EU, the UK and Welsh Government in no uncertain terms over their handling of stell and he even suggests at the end that devolution could be undermined if Labour doesn’t play its active part. http://www.theguardian.com/commentisfree/2016/apr/03/uk-steel-industry-saved-tata

    All he needs now is for his Plaid Cymru colleagues to land some punches tomorrow in the recalled Assembly and to carry on until May 5th and then until 23rd June and the party may be in reasonable shape.

    And UKIP might well profit, but people should know they like the Tories voted against tariffs on Chinese Steel in the European Parliament, but then hypocrisy is UKIP’s forte.

  6. Red Flag

    It never ceases to amaze me that politicians don’t seem to grasp that an increasingly educated and increasingly skilled third world is always going to undercut them – in fact it will set out specifically to do that either via self production and export or via immigration undercutting wages at home.

    Yet somehow it always catches them by surprise.

  7. Brychan

    Last month there was a ‘parliamentary select committee’ meeting at Westmisnter over the Port Talbot issue, long before Tata decided to pull out. Amoungst the inquisitors was Stephen Kinnock MP (Labour) and Liz Saville-Roberts MP (Plaid).

    Obviously, Kinnock was parachuted into Wales and knows little about the Port Talbot plant. Besides a few Tata minions with statements to read out, there was Anna Soubry MP (Tory) the minister for Business for Westminster. During the discussion there were a number of myths being peddled. So I will debunk them here.

    Myth 1.

    “The plant is over 100 years old’.

    No it isn’t. The old Margam works was demolished many decades ago. The current Spencer site was built in the 1950s on the Morfa and it’s been updated many times. The 1950s/60s blast furnaces No1 and No2 were demolished, and it’s No4 and No5 that is in operation and are up-to-date, having recently been re-lined.

    Myth 2.

    “A national insurance holiday is government subsidy not allowed under EU law”.

    Wrong. This assistance was suggested by Liz, a NI holiday helps with temporary cash flow by delaying the payment date specified by HMRC of due employers NI. Amounts not paid remain as a liability on the employers balance sheet, payable when business improves. If business does not improve the liability to HMRC, being paramount above all other creditors, is paid upon liquidation. It costs the taxpayer nothing, is not bound by EU rules, and is a measure of resolve of the employer to maintain a going concern.

    Myth 3.

    “The EU is too slow in imposing tariff barriers against Chinese dumping unlike the United States”.

    Wrong. The US imposed tariff barriers of 260%. The EU made a lower tier tariff barrier available at the same time. But the member state has to sign up to it. Germany and Netherlands did. The UK did not. Once the lower tier tariff barrier is in place the higher tier tariff barrier can be imposed across the EU but requires a vote in the EU parliament. The Tories and Ukip voted against this.

    Myth 4.

    “There is overproduction of steel, and supply outstrips demand.”

    Wrong. There is overproduction of heavy low grade steel, the type used to make girders. That’s made at Scunthorpe. The Port Talbot plant makes high grade strip steel (plate and rollable coil) as well as tensile grade bars which is finished in Newport and Cardiff. There is very good demand for this stuff, mainly in the European car industry.

    Myth 5.

    “The UK government have a good relationship with Tata”.

    Wrong. While the Tata flunkies were dishing out platitudes to Westminster, their top executives were already in negotiation of a joint venture deal with Thyssen in Germany. They hope to take the Port Talbot order book with them. This deal was signed yesterday.

    Myth 6.

    “The Westminster Government have a good remediation package if the plant closes”.

    Wrong. The package will be the same as that for SSI in Redcar. The staff would have had full redundancy terms according to their employment contracts, but as a result of government intervention, this was set aside and they only got the statutory minimum. There is of course a ‘re-training’ scheme, intended to transform steelworkers into hairdressers.

    Myth 7.

    “It’s energy costs that make the Port Talbot plant uneconomic”.

    Wrong. The blast furnaces do not eat electricity. The smelting process is powered by the coke charge. The electricity cost is experienced in the electrolysis method of producing oxygen used blast through the Bessemer converters to transform iron into steel. Electricity is also used in the re-heat for the annealing process for rolling. Like the German plants, in integral power station should be built using the waste heat from the blast furnaces to generate electricity. This would solve the energy cost issue at Port Talbot, make it more environmentally friendly and increase energy efficiency.

    Myth 8.

    “Britain is a small island and cannot sustain a market in global steel production”.

    Wrong. Rolled steel is currently loaded at Margam, and transported by train to Dollands Moor intermodal in Kent before being taken through the channel tunnel into France to produce Peugeot and Renault cars. It’s shipped by train by DB Schenker Rail UK through the channel tunnel. The rail miles into Europe is similar to the more distant parts of Germany.

    Myth 9.

    “There is a huge outstanding debt of pension liability”.

    Wrong. The steelworkers pension scheme is 97% paid up. As more former steelworkers die off, this liability will decrease, and like the miners pension scheme will be in surplus very soon. It’s an investable asset not a liability, which can be used to invest in new technology in Port Talbot rather than squandered by city spivs in London.

    Here are some tips for Anna Soubry MP (Tory) who was the minister of the UK government. (a) Turn up to parliamentry select committees on time and don’t show contempt for Welsh steelworkers by being late, (b) bring your briefing notes with you, (c) don’t chatter like some jolly hockey sticks ladies netball team coach, and (d) for FFS get your facts right.

    Why does the BBC and the Wasting Mule still peddle these myths?

    1. Brychan, there are comments and then there are comments, but I think you’ve excelled yourself here. A lot to digest. It’s a pity those making the decisions, and those reporting on those decisions, don’t get to read it. But I’ll do my best.

      1. Brychan

        In September 2017 the Welsh Government paid over the £60m financial aid package to Tata Steel. It was conditional on Welsh jobs being protected. One month on November 2017 we now find that 70 high tech jobs at Port Talbot are being transferred to India. The Welsh technicians, mainly IT and process control staff, are to loose their roles as they are being moved. The staff reductions were pre-planned as anyone with half a brain would have spotted that Tata were already in the process of re-deploying such grades at their other site at Ijmuiden, Netherlands. It was evident at the time the Welsh Government aid package was mooted. Two imbeciles – Carwyn and Kinnock. They might as well have just thrown the cash into the top of a blast furnace.

      1. Brychan

        Update – When I said “joint venture deal with Thyssen in Germany” in April 2016, not only was I right, but this, despite being let down by the Westminster Government and the British nationalist mutterings of Stephen Kinnock, was the right way to go. ThyssenKrupp agreed to merge with Tata as of June 2018. My comment about the pension funds being boyant and a tradable asset last year, was not only correct, but sadly, many holders of this pension scheme were scammed into accepting lower value conversions in a government sell off. This is a Jacothenorth blog boasting “I told you so”.

    2. dafis

      Brychan

      I second Jac’s remarks regarding your detailed deconstruction of that list of myths/untruths/legends. It highlights the inability of our political class and much of its departmental support staffs to work their way through the body of information that exists out there if only they was bothered to look at the detail ( what on earth are they paid to do ? ). Instead, as with the EU question, the public are fed a mass of lazy generalities coupled with truths misinterpreted, underpinned by a bundle of lies to give the subject bulk ! And Ms Sourpuss is a Class 1 example of the sort of dim wit that contrives to get into that kind of role, one of a long list – unbelievable !

      While the EU question may lead to unforeseen negative outcomes, both the pro and anti stances will have some scope for remedial actions after our vote on June 23rd, but the failure to arrest the demise of Port Talbot and its allied plants throughout the UK will be a massive hammer blow to the industrial and economic future of the UK, and Wales in particular. It could be a singular negative event which future historians may come to mark as the start of yet another period of decline.

      UK governments have found it easy to prop up the Banks and related sectors and have administered a most cosy climate for the poor buggers to recover. Bonuses ? course you can have them, Tougher standards ? well of course but you can write your own. Makes one want to puke.

      A bit of hard nosed “participation” is called for, deploying that £1 million per day for as long as it takes to move the business on. Managers and unions have already drafted a plan for survival, good, then get some real managers from other big manufacturers to critically appraise it but don’t let any f***in’ accountants or civil servants into the room, and when the final drafts are agreed run with it and monitor it. A new buyer will then have confidence to make a bid and close a deal.

      In the meantime dopey Dave and his lackeys better get off to EU and rehash those draft tariff structures so that his Chinese pals know that they may have got a foothold in this country but they won’t get away with consigning our key industries into history. Of course that may be Dave’s last hurrah, because this mess is rightly or wrongly manna from heaven for those Brexit guys who are out to finish him .

      1. Brychan

        The £1million loss per day statistic is meaningless.

        Major steel contracts are made on spot agreements, like oil. The sales contract will says something like “£1k per tonne above spot”. When the spot price is low you rack in huge losses but conversely when the spot price is high you rack in huge profits. This is the reason why the Chinese are dumping, to get more contracts on their order book. Also, as the production process is continuous, you can’t switch on and off a blast furnace, the balance sheet of a steel company often monitizes the order book as a form of goodwill. This is why Tata have run off with the Port Talbot order book (more valuable than the plant itself) to Tyssen. They are using this as capitalisation in the joint venture, with EU tariff barrier guarantees.

        The blast furnaces at Port Talbot will be abandoned and what will be left are just the finishing lines. This you can switch on and off, according to spot rate. Essentially Port Talbot will be reduced to a big scrap metal business using arc technology. It just means you need a reliable source of electricity, unlike Mumbai.

        Is the Tata debacle just the Brits ‘taking the eye off the ball’ or ‘deliberate sabotage’? At least the Scottish Government know how to do business. All we’ve got is Redwina and Kinnokio.

    3. The Earthshaker

      Great comment and you probably know the answer because the Western Mail, Daily Post and most south Wales valleys newspapers are owned by Trinity Mirror who support the Labour Party and BBC Wales and ITV Wales to a lesser extent represents the British establishment in Wales.

      But the bigger issue is why the Welsh national movement (including Plaid Cymru) doesn’t have an English language daily newspaper available in the most populated part of Wales and an online media of its own to counter the distortions in the ‘welsh’ press and present facts like you’ve shared to make an altenrative case to the public. The BBC and Waleonline wont do Wales or Plaid Cymru any favours, not with journalists like Martin Shipton in senior roles.

      1. There was a Welsh language daily online newspaper – Daily Wales – that ran for 16 months. It was getting quite popular but was unceremoniously hacked to pieces by persons who remain unknown. The archives on the Daily Wales server, containing over 1000 original pieces, were also destroyed but some have survived on the web archive. There is a link at the Periodic Wales website.

    4. I’m very impressed by Brychan’s comment but I have to take a slight issue with the final point on Myth 7 where it is said that an integral power station would make the plant more environmentally friendly. I take issue because Tata have already confirmed that while an integral power station would help reduce Co2 by reusing gasses otherwise burnt off, it’s would nevertheless increase particulates matter by using natural gas as well. But, as energy cost are only about 6% of the cost of steel production the whole energy cost argument seems like a red herring anyway.

      1. Brychan

        A three stacks method deals with particulates. Firstly there’s electrostatic precipitation that extracts ionisable particles, then there’s the pressurised condenser that transforms the carbonates to recyclable tar (for road building) and finally the catalytic condensers for filtering any non-ferrous residue. In Germany it’s called the Krupps array. Doesn’t WJEC do O levels in steel making anymore? The process was invented about the same time as Carbon Black gave Jac his broomstick.

        1. Bychan,

          It was my understanding that the proposed power plant could attract funding from the European Fund for Strategic Investment which, like other EU pots, favours environmental improvement. This would help to sidestep some of the fog around the state aid argument.

          What are your thoughts on this, and to what extent has this been complicated by the investigation into how the ILVA Group used its EFSI funding?

          Cheers,

          Duncan Higgitt

          1. Brychan

            EFSI is a scheme for new developments, often used to turn Romanian goat herders into advanced Europeans. It is not a rescue programme. If this were to used at Port Talbot it would be something like a state of the art biomass plant, using residual assets like the dredged wharf, creating an electrified rail intermodel, or hydrogen fuel extraction plant. It would need to tie up with a regional plan, which might include the Swansea Bay barrage. Leverage from EFSI is only gained with a strategic vision. A change in government in Wales would be necessary and a wide-open plan for the future without being the ‘also rans’ blindfolded nag of Westminster.

          2. Duncan, you may remember we spoke back in January 2014 after I contacted Bethan Jenkins regarding increased emissions that would be produced at the proposed power plant.

            Initially you indicated that there had been little discussion over emissions but you kindly wrote to Robert Dangerfield, Tata’s Public affairs manager, querying the matter. Sometime after that you telephoned me after coming off the phone with Mr Dangerfield to confirm that while Carbon Dioxide emissions would be reduced, there would however be a slight increase in particulates from the proposed power plant.

            Can you still confirm this or have the plans since changed so that there would be no increase in emissions from particulates?

            1. Duncan Higgitt

              Hi Paul, this is specifically for the power plant rather than Prenergy’s biomass proposal? If not, I’m not sure as Robert had gone and, as far as I know, no one has replaced him. Leave it with me – I’ll see if I can find out.

            2. Brychan

              Duncan

              I think Tata were pulling your little green legs on their aim to reduce emissions at Port Talbot. The new Hisana process (blasting a cyclone of oxygen into the top of a modified blast column) almost halves the CO2 emissions. The process removes the Bessemer stage.

              Hisana was pioneered in the Netherlands at Ijmuiden. It’s part of the Ultra-Low Carbon Dioxide Steelmaking Project in the EU. Tata got funding for this and it was spent it in Holland. There was no commitment from Tata to reduce emissions in Wales. Had the Welsh Government campaigned for a ULCOS investment in the 2005/07 funding round then Tata would not have been able so easily to hand back the keys at Port Talbot.

              With business investments, it’s the job of a Plaid Cymru AM is to tell the local public relations clowns to piss off. Then you ask to speak to an engineer. Also, when asking for information from a DTI representative (or whatever it’s called now) in London you need to grab him by the lapels and smash the cunt against a wall (metaphorically speaking) to get the full story. Hope you get elected and take this example/lesson with you.

            3. Duncan Higgitt

              I’ll take your advice on board, Brychan. We need more violence in public life, metaphorically or otherwise.

              Tata’s true intentions have bothered me for some time. It’s increasingly hard to escape the view that they really wanted Ijmuiden but PT etc came with the package, and they’ve never really known what to do with it. Boys at the works tell me it costs 5x salary to get rid of staff there, too. That would tend to incentivise improvements, I guess.

        2. dafis

          most so called dirty processes can be cleaned up using innovative chemistry/engineering, and sometimes stuff that’s been available in text books since God was a boy. Initially there is a cost in development but once haressed they can be replicated or modified as circumstances change.
          Take coal fired power stations, a big bogey if there ever was one. Using columns of chalk in the stacks the sulphur compounds in the exhaust gases going up the chimney were used to turn chalk into gypsum, which could then be removed to make a range of boards etc for the building industry and as a raw material for other industrial use. However, instead of progressively cleaning up the use of coal the lazy bastards running UK and EU elected to close it down.

          Oh, and China still uses coal fired power stations without any attempt to inhibit pollution.

    5. Brychan

      Myth 10.

      “Unlike other European sites there is no future for smelting at Port Talbot due to raw material being imported”. (Javid/Gupta).

      Wrong. The coke that is imported (6 million tones in 2014) from the United States 48%, from Russia 22% and from Australia 20%. A similar import is made to the Netherlands and Germany and so is just as geographically costly. Similarly, the iron ore comes from Australia and Brazil. It is completely false to say that Port Talbot is more geographically challenged than Dutch or German blast furnaces. In fact the opposite is the case as Port Talbot boasts a 12m draught channel for bulk carriers and direct bunkering on the westerly approach.

      1. I understand that arc furnaces are said to be a lot more environmentally friendly compared to blast furnaces, so could it be they are actually saying that there is no future for smelting at Port Talbot due its location adjacent to a notorious bottleneck on the M4 where air pollution is already relatively high? And perhaps the claim of a blast furnace not being viable due to ‘raw material being imported’ is just a PR rationalisation to play down the problem with local emissions?

        1. . . . which raises an interesting point. If the ‘Welsh’ Government is so concerned with the M4 why has it consistently ignored the “bottleneck” in Port Talbot? It’s galling to hear Redwina banging on about spending over a billion to make it easier to get to Cardiff while ignoring access to her home city.

          But that’s one of the great failings of devolution – third-rate talents become AMs and forget the areas that elected them, falling into line to fund and support ‘The Cardiff Project’.

          1. It’s my understanding that repeated attempts to address the bottleneck, such as the Air Quality Action Plan, which tried closing some local motorway junctions to improve traffic flow, and the Clean Air for Port Talbot Short-Term Action Plan, which also tried to improve the flow of traffic using average speed cameras on that part of the M4, have only had a small effect on air quality in the area, quite possibly because air pollution around the area is not predominantly caused by traffic emissions, even if traffic emissions are adding to the problem.

            1. I assume closing some local motorway junctions and using average speed cameras on that part of the M4 were attempts to to improve traffic flow and cure the bottleneck.

            2. Vehicles stuck in slow-moving or stationary traffic cause air pollution. The real solution is to widen the motorway, but that would cost money, and it’s west of Cardiff.

          2. Brychan

            The M4 bottleneck is west of the Afan.
            Port Talbot steelworks is east of the Afan.

            To run arc furnances you need (a) vast amounts of electricity and (b) a substantial supply of scrap metal. This is the reason why Gupta (Liberty) have bought the Clydebridge plant in Scotland.

            The Scottish Government were able to provide re-assurances for vast amounts of off-peak pump storage and hydro-electric power. It’s a bit like aluminium production. Scotland has the Lochaber hydroelectric scheme (owned by Rio-Tinto) and the SSE Sloy-Awe hydro installations. If you were to commercially invest in arc furnances in Wales and be environmentally responsible it would have to be at Dolgarrog or Dinorwig. Anything else is just asset stripping and grant farming.

            Port Talbot steelworks is there because of it’s a good smelting site. A harbour for bulk ore and coke, a mile long rolling mill, a few reserviours for water, and a massive rail marshalling yard for shipping out product.

            Closing the plant completely would result in the dirty end where the blast furnances and rolling mill is. This would require vast amounts of government clean-up cash (there is no Tata escrow deal) and the clean end which consists of a vast acareage of valuable development land in the form of Kenfig Nature Reserve, Eglwys Nunydd lakes, golf course and the remaining morfa.

            A Machynys type development springs to mind, more apartments for tellytubbies.

    6. Brychan

      In 2016 I explained the Myth 9, above, relating to the pension fund. I also warned the dangers of offloading this to city spivs. Now it’s finally been exposed that the Welsh Government decided to grant £118,500 to an enterprise doing exactly that. The pension funded was looted and the pensioners were robbed.
      https://www.bbc.co.uk/news/uk-wales-50183915
      An event such as this just shows that the Labour Party in Wales are only acting for the spivs in London and care nothing about the people of Wales. I pointed this out on this blog at the time.

  8. This Message to my Facebook page from a construction worker suggests that the steelworkers aren’t the only ones being messed about in Port Talbot.

    http://www.unitetheunion.org/news/construction-workers-target-energy-projects-in-pay-the-rate-protests/

    “A huge kick in the teeth and on Port Talbot’s doorstep.

    I attended a ‘pay the rate’ protest as a GMB member on the gate of the new Biomass being built at Margam. I saw endless amounts of Polish artic loads of pre-fabricated steel structures accessing the site, and bus loads of foreign tradesmen who get paid a labourers rate.

    This seems to be the norm across the UK at the moment as good tradesmen are struggling to find employment in the Engineering construction industry.

    Until now the NAECI agreement has been used on major projects as in Pembroke power station or South Hook LNG, where everyone got paid the same regardless of their nationality and encouraging employers to exhaust local labour first before employing travelling contractors.

    Unfortunately this agreement is under threat as small projects ignore it as it’s not mandatory.”

    1. Brychan

      So why is GMB still funding the Labour Party?

      All workers, regardless of where they’re from should be paid the skilled rate for the job. A NAECI agreement can be applied to a project of any scale (see the blue folder) and can be mandatory on sub-contractors by the projects primary lead. While Babcock Wilcox Volund and Interserve were significant contractors, the primary was a joint venture between Eco2 and the Western Logs Group. As the plant is 40MW it fell within the remit of the Welsh Government to specify the development. In fact David Williams was CEO of Eco2 and was chairman of the Energy and Environment sector panel appointed by the Welsh Government.

      I suggest that the GMB withdraw any support they give to Labour MPs and AMs in Wales.

  9. dafis

    you tweeted earlier that Welsh Labour had “killed off the Circuit of Wales”. I suspect it’s more a case of the idea dying of exposure from chill winds on the Beacons !

    Labour regime had initially greeted the idea with its usual “rejoice, rejoice” line of bullshit, then found that the project’s advocates were bringing little more than the idea to the table and were seeking stacks of cash and guarantees from the Welsh government to get the venture to a point of viability. So much for modern entrepreneurial spirit – lets find a daft government to fund our ventures – up there with the best examples of grant grabbing from the “private” sector.

    Labour’s big weakness was that it did not reject the deal earlier, or at least laid down some clear stiff terms for any backing. Instead we had the usual hedging of bets with oblique references to the project when bragging about how good the Bay were at bringing in investments but never an outright endorsement for good and obvious reasons. Perhaps someone did eventually go round a few of the established venues in England to benchmark what it takes to just break even in that sector. Now that would have been an innovative move for a start !.

    Real test of integrity will be Labour’s ability to get a replacement project for the Blaenau Gwent area. TVR was announced recently but that company also has “form” with ownership changes, funding issues and other symptoms of being a bit unsteady on its feet ( or wheels). If the good people of Blaenau Gwent suddenly get a bout of clear judgement on election day then we could have a constituency voting for regime change down the Bay, but don’t put money on it.

    1. As resident of Ebbw Vale I fully endorse your sentiments with regard to the CoW. The desperation of the Labour administration in Cardiff to attract inward investment, any investment at almost any cost to the taxpayer unfortunately found the ideal partner here in Blaenau Gwent. The fiasco that was Meryweather is conveniently tucked away in the Gwent Archives or just maybe never happened at all for some of our fine elected representatives in the hallowed halls of BGBC. Time to put this fantasy to bed once and for all and cut our losses, £9 million already wasted is £9 million that would have found a better home in developing the rail link between Ebbw Vale and Newport,.Remember that project which no one seems to want to discuss any longer ?

      As a former steel worker my heart goes out to the people now caught up in the perfect storm at Tata, not only at Port Talbot but across the UK. But a word of caution with regard to potential knights in shinning armour astride a white charger. Three things are needed in the current situation.

      1) A sense of realisim.
      2) A workable business plan.
      and
      3) A change government, preferably both in the Principality and at Westminster. However if a choice has to be made then the crony capitalism currently practised at Westminster surely needs to be shown the door first and foremost.

      Pretty sure that SKG cannot deliver on point 3 and I have reservations whether he can deliver on points 1 & 2.
      Having listened to Gupta who I believe to be an honourable man, a scarce commodity in the modern business world. I mean who else would pay their employees full / half pay for eighteen months unless their business ethics were of the highest order ? Does he have the realism and business plan to tackle the enormity of the challenge that is thev UK steel industry ?

      Which brings me back to the original subject, does the HoVDC have a realistic and workable business plan that would bring a ROI going forward ? Living in the area I personally think not.

  10. Neil Singleton

    Circuit of Wales is, and always has been, a non-starter. The most “successful” motorcycle racing circuit in the UK is Donnington Park. It is located right on the M1 motorway in the centre of the Nottingham/Derby/Leicester triangle. It’s catchment area is 10 million people within one hour and, when race meetings take place, the motorway and surrounding roads are clogged with tens of thousands of spectatators – yet it still loses hundreds of thousands of pounds a year (subsidised by other year round revenue producers eg the Donnington Motor Museum, regular Sunday markets etc). The Welsh Circuit “dream-scheme” in the middle of nowhere, does not appear to have been the subject of much in the way of due dilligence by Welsh Government………any fanciful project is capable of getting private sector funding if Welsh Government guaratees it! I seem to recall a similar “joke project” – a holiday/ski village to be located at the top of the Afan Valley….whateverever happened to that? And don’t get me started on “Valleywood!”

    1. dafis

      precisely, the absence of due diligence is a regular blight on the history of public sector “support” to Welsh industrial/commercial investment. At least this time they have woken up before the entire budget got pissed down the drain but the volume on badly assessed ventures is now pretty thick. Bit rich too for people to offer comments like it’s up to Government to take the lead on such ventures when it obviously isn’t. Government has a role to play in facilitating and supporting properly appraised ventures but to sit out on a limb when there is no visible means of support is madness.

  11. Neil Singleton

    Jac, just heard that a rumour that Lambert Smith Hampton have been retained by TATA to sell Port Talbot Works. I don’t know if this is correct (other contributors may know), but if true, this would add insult to injury to the people of Wales, bearing in mind LSH’s antics in the RIFW scandal.

      1. Neil Singleton

        The Government has retained Ernst and Young to advise it re: TATA. TATA has retained PWC to advise on the sale of the business, and KPMG to advise on the pension fund. Boy, are these three firms going to clean up……..trebles all round, as they say!

  12. dafis

    now we hear that the great Fatwina and her cohorts are working on reviving the Circuit proposal at a more “respectable” level of Welsh government guarantee, which was referred to by a Circuit executive as being in region of 80% , 80% f***in’ % which is pretty damn close to underwriting the whole thing !!! Who’s kidding who here ? Labour adopts a “hard” stance and can’t keep it up for more than 24 hours total bloody sham. Anything to do with motor sport sucks up cash like a gigantic blotting paper and is only right for an ambitious private speculator attracting some grant aid and soft loans. This arouses even more suspicion that we’re in for a major white elephant exercise.

    1. Oh ye of little faith! I’m sure that Redwina will do a wonderful job, as always. Then again, she’s standing down next month, so she might not give a toss!

  13. Ieu

    He seems to be the Peter Thomas involved with rugby
    Championship Rugby Clubs Limited Active Director 12/05/09 29/07/09
    Europa Motorsport Management And Events Limited Active Director 18/11/09
    First Division Rugby Limited Active Director 05/03/08 27/07/09

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