New row over Tata Port Talbot compensation package

Martin Shipton

A fresh row has broken out between Labour and the Conservatives over the funding of measures aimed at mitigating thousands of job losses at Tata Steel’s Port Talbot plant, where two blast furnaces have been closed down.

In November Labour’s Secretary of State for Wales Jo Stevens accused the previous Tory UK Government of failing to fund a promised £80m aid package. She said the new Labour government had come to the rescue and provided the cash that was needed.

Grant Funding Agreement

However, a political source drew to Nation.Cymru’s attention a statement released by Tata Steel this week that said, referring to the UK Government: “In September they signed-off a Grant Funding Agreement with Tata Steel, allowing the steelmaker to proceed with its plan to invest £1.25bn in a state of the art electric arc furnace (EAF) at the site in Port Talbot, inclusive of £500mn in Government funding.”

The political source said: “Confirms that Labour didn’t sign the agreement with Tata until September. Confirmation that Jo Stevens is talking rubbish about no money. Money couldn’t be spent until the agreement with Tata had been signed.”

Shadow Secretary of State for Wales Mims Davies said: “This shocking revelation is absolutely damning and truly sheds a new light on the utter incompetence of the Labour UK Government and its untruths to the people of Wales.

“For Labour politicians to only get round to sign-off on the deal that we had previously negotiated, after two months of sitting on their hands, really does speak volumes about how they care about jobs and livelihoods.

“If crucial money did not reach our steelworkers in a timely fashion, then the fault lies firmly at the doors of the Labour-run Wales Office and there are questions to answer.”

‘Unfounded claims’

Ms Davies added: “For months Welsh Secretary Jo Stevens MP had bandied around all sorts of unfounded claims. She now needs to do the decent thing and apologise for letting down the people of Wales.”

A spokesperson for Ms Stevens responded: “I am afraid the Conservatives’ charge is totally inaccurate as the Transition Board money [intended to mitigate the job losses] was totally separate from the Grant Funding Agreement.”

Asked whether the two elements weren’t part of the same package, the spokesperson said: “The Transition Board funding is separate to the £500m Grant Funding Agreement for the EAF. The previous government’s statement on the founding of the Transition Board confirms this.”

The spokesperson cited a joint statement from a Transition Board meeting which said: “Tata Steel announced proposals in September 2023 to invest £1.25bn, including a UK Government grant worth up to £500m, to enable greener steel production at Port Talbot. A Transition Board to support the people, businesses and communities affected by the proposed transition to low-CO₂ steelmaking, was established in October with £100m in funding – £80m from the UK Government and £20m from Tata Steel.”

David TC Davies

The spokesperson also asserted that former Conservative Secretary of State for Wales David TC Davies had confirmed the £80m was separate from the Grant Funding Agreement in an article he wrote for the Daily Express in support of Kemi Badenoch’s successful campaign to become the Tory leader. He stated: “Kemi stepped up to solve one of the biggest crises facing the country, securing a £500m government investment to build an EAF, saving around 5,000 jobs and ensuring steel production continued.

“Of course, even with this major win, 3,000 redundancies still loomed. Yet Kemi didn’t stop there. She fought to secure an additional £80m from the Treasury to re-train those affected and invest in infrastructure that would attract new businesses to Port Talbot.”

Talking to the BBC, Ms Stevens said she had been 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 [by the cuts at Port Talbot]”.

We asked when payments had actually been made to supply chain businesses and affected workers in the supply chain, and which businesses (and employees of which businesses) were given such funding “over the summer”.

Ms Stevens’ spokesperson responded:”Supply chain businesses could contact and express their interest in the fund from the date of the announcement on August 15.

“It is right that once contact has been made and applications received, it takes time for due diligence to be performed to ensure that businesses provide evidence of their exposure to Tata Steel so that public money does not go to the wrong organisations, ie to prevent fraud.

“Employees were given assistance from August 15 onwards to find jobs via the Neath Port Talbot council’s employability team, supported by the Transition Board.

“Supply chain businesses could formally make applications for funding from September 30.”

Asks

In their statement issued this week, Tata put forward seven “asks” to the UK Government:

* Partner with the steel industry to capitalise on the opportunities offered by the future growth of UK manufacturing;

* Address UK industry’s high energy costs;

* Resolve the threat of carbon leakage and secure the UK’s carbon border;

* Place scrap steel at the heart of the green, circular economy;

* Ensure the UK is protected from global steel overcapacity;

* Support UK Steel producers through increased public procurement;

* Put UK steel at the heart of the green economy.

Tata Steel’s head of public affairs and community Tom Evans said: “This government has several challenges to address in order to create a sustainable future environment for the UK steel industry.

“Tata Steel has long pushed for a clear and strong industrial strategy that encourages investment, growth and competitiveness in the UK.

“We are urging the Government to consider our key policy asks, alongside those of our partners in the sector, to create a sustainable steel industry that can support the growth of renewable energy, domestic manufacturing and employment across Wales and the UK.”