Labour and Tories disagree over whether new Tata Steel deal is better

Martin Shipton

A deal that will see thousands of job losses at Port Talbot and a £500m grant to Tata Steel has been hailed by Eluned Morgan as a significant improvement on what was negotiated by the previous UK government.

But Tory MS Laura Anne Jones claimed the First Minister was talking nonsense and that the Labour deal is essentially the same.

‘Enhanced deal’

Baroness Morgan told MSs: “The UK Government has been able to negotiate a much better deal than the plan announced by the previous UK government back in September 2023.

“The enhanced deal confirmed last week includes 100 jobs to be set into a furlough-type scheme, funded with additional money from Tata; redundancy payments of 2.8 weeks for each year of service, which is more generous than the company has given before; a commitment that no-one will be left behind, so those at risk of compulsory redundancy, which now is expected to be no more than 500 roles, will be able to access a training scheme of up to 12 months, with one month full pay and the remainder at 60% funded by the company; more stringent grant conditions, so taxpayers’ money will be clawed back if these commitments are not delivered; and an active commitment to develop over the next 12 months future investment plans beyond the electric arc furnace at Tata sites in Wales.

“The UK Government has struck a better deal not just for the here and now, but for the future. This builds a bridge to a sustainable future for Welsh steel. It’s not the deal we would have wished for, but, given the parameters in which the new government had to work and the time pressures to secure the build of the new electric arc furnace, it is a substantially improved deal.

“The new Labour government has committed a £2.5bn national wealth fund for the steel sector along with a steel strategy, which will be unveiled next spring. I reconfirmed, just last week, to the Secretary of State for Business and Trade that the Welsh Government and UK Government will continue to work in partnership in relation to the future of the steel sector.

Committed

She added: “The Welsh Government remains committed to all workers impacted by the Tata Steel UK transition and will support both the UK Government and the company in putting in place arrangements for the grant funding agreement enhancements where appropriate. A memorandum of understanding, which takes account of the enhancements agreed within the grant funding agreement, has also been finalised between Tata and the UK steel committee, who represent the three steel unions. Community and GMB unions balloted their members last week on the MOU, with the ballot closing at midday yesterday.

“Unite have not balloted their members. With the grant funding agreement and memorandum of understanding now being finalised, Tata Steel is now able to place equipment orders for the electric arc furnace and the ladle metallurgy furnaces, as well as commissioning other new assets. The current heavy-end assets, including blast furnace 4, will be closed by the end of this month, bringing to an end an era of steel making in the traditional way. But what is offered now is the security and hope for a different method of steel making that will be much more environmentally friendly.”

‘Spinning’

But Ms Jones, a regional MS representing South Wales East, wasn’t impressed. She said: “Labour politicians are better at spinning silver tongues than forging steel ingots.

“Tuesday’s Senedd session was a masterclass in déjà vu as First Minister Eluned Morgan stood to announce Tata’s decision to close Port Talbot’s two blast furnaces. The UK Government had two choices: cough up £500m to build an arc furnace, saving 5,000 jobs, or sit back and watch 8,000 vanish.

“Eluned Morgan confirmed that the UK Labour government would pay for the furnace and support redundancies with a well-funded Transition Board. But hold on—wasn’t this the exact same deal the Conservatives floated last year? The one Labour MPs and MSs shredded in public?

“Before the election, Welsh Secretary Jo Stevens slammed the Conservatives for throwing £500m of taxpayers’ money at the loss of 2,800 jobs. Now she’s in government, it’s suddenly a good idea. Labour MPs who once called the deal ‘reckless’ and accused the Tories of betraying steelworkers have gone suspiciously quiet.

“Labour promised a £3bn plan to save every steel job in the UK, painting a picture of keeping one blast furnace open in Port Talbot during arc furnace construction. But Tata had been clear: the blast furnaces were bleeding over £1m a day. Keeping one open while building on-site was out of the question – no one fancies constructing next to a cauldron of molten steel.

“Tata spelled it out: it was either pull out of UK steelmaking, costing 8,000 jobs, or build the arc furnace. Conservative Ministers agreed, Labour condemned – then came to power and delivered the same deal, like a reheated meal.

“So, no surprises today. Yes, 2,800 jobs will be lost, but 5,000 saved. Labour led Welsh steelworkers down the garden path, promising to save them all. Their pre-election grandstanding risked derailing the entire deal, even as I have it on good authority that Tata executives in India were questioning whether continuing was worth the hassle.

“What we have learned today is that the only metal Labour politicians can forge is the silver in their tongues—polished with promises, only to deliver what the Conservatives had already gift-wrapped last year.”