Labour and Tories argue over whether Port Talbot aid package was funded or not

Martin Shipton

A political row has erupted after Welsh Secretary Jo Stevens accused the previous Tory UK government of failing to fund a promised £80m package to ease the negative impact of job losses at Tata Steel in Port Talbot.

Ms Stevens told BBC Wales that upon entering government Labour ministers discovered the money announced by the previous administration to mitigate the loss of 2,800 jobs “didn’t exist” and “could not be found”.

The former Conservative Welsh Secretary, David TC Davies, described the assertion as “ludicrous”.

Ms Stevens told the BBC that after learning that the money wasn’t in place, “I was then able to persuade the Treasury to specifically confirm £80m worth of [transition] funding and the £20m regeneration scheme for Port Talbot town centre in the Budget,

She said she was also able to get £13.5m released over the summer “which meant we could set up those funds to help supply chain business and workers in the supply chain who were affected”.

Budget

The £80m was confirmed in Labour’s October Budget. The transition fund was first announced in September 2023 by the then Business and Trade Secretary Kemi Badenoch, who was announced as the new Conservative Party leader at the weekend

The transition fund includes £80m from the UK Government and £20m from Tata to coordinate support and training opportunities for affected workers.

A spokesperson for the Community trade union said: “The revelation that the previous Conservative government had not properly allocated funding for the £80m they promised to the transition board at Port Talbot is shocking.”

The union’s national officer for steel, Alun Davies, said it “speaks to the previous government’s total disregard for the future of the steelworkers and communities impacted by the deal they struck with Tata”.

Invalidated

We asked a source close to Ms Stevens for more detail about the discovery that the mitigation package was unfunded. The source said: “There were three mechanisms to fund the scheme originally through the Ministry of Housing Communities and Local Government budget, all of which were invalidated by the horrendous state the finances were left in: 1 It was to be funded from underspends – they had overspent; 2 It was to be funded from a capital to revenue switch – they had overspent against both; 3 It was to be funded from reserves – which had been spent three times over.

A UK Government official said: “The new government has been clear it was handed a challenging inheritance, with £22bn of unfunded in-year spending pressures.

“One of these unfunded commitments was £80m for the Tata Steel Port Talbot Transition Board. Following the October 30 Budget, the Transition Board is now fully funded and will continue its work to support workers and businesses affected.”

David TC Davies, together with all other Tory MPs in Wales, lost his seat at the general election. He now works as a researcher for Laura Anne Jones, the Welsh Conservative Senedd Member for South Wales East.

Misrepresented

Mr Davies told Nation.Cymru: “I’m quite happy to keep a low profile these days, but I can’t sit back and let the situation relating to this fund be misrepresented in the way Labour is currently doing.

“When we were in government, they were constantly claiming that they would get a better deal from Tata than us – something that has proven to be completely untrue, as we knew all along would be the case. The deal the Labour UK

“Initially they claimed the closure of the blast furnaces would cause huge problems for the defence industry – again, completely untrue.

“This latest claim that the transition fund was unfunded is ludicrous. I chaired the transition board, which had Labour politicians on it. Michael Gove attended at least one meeting online when he was the Secretary of State and other ministers represented him on other occasions.

“We were totally committed to providing the money for the fund, and if we had stayed in office it would have been paid. But it wasn’t a case of the £80m all being handed over at once – it would have come over a number of years.

“The redundant workers taking advantage of retraining packages would have had them paid for at the time they were delivered, and the rest of the fund would have been spent over time.

“This really is a ridiculous allegation, and it’s shocking that it has been made.”