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Thousands of jobs at risk as Port Talbot steelworks is set for £500m of state aid

15 Sep 2023 5 minute read
Port Talbot steelworks. Photo Ben Birchall/PA Wire

The UK Government will pump up to £500 million into Port Talbot steelworks as part of plans to produce “greener” steel – but as many as 3,000 workers are set to lose their jobs.

Tata, the Indian conglomerate owner of the steelworks, the biggest in the UK, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.

The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.

But the company said on Friday the plans will lead to consultations over a “deep potential restructuring”.

In a separate statement, the department for business and trade said the deal will only safeguard around 5,000 jobs out of Tata’s total workforce.

Union leaders have expressed their anger at being shut out of talks between Tata and the Government and described the deal as a “disgrace”.

Fears

Prime Minister Rishi Sunak said: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.

“I’m pleased that the Government has managed to reach an agreement with Tata to support them in that transition, but they will also be making a very substantial capital investment into the plant to secure thousands of jobs.

“Obviously, there will still be some people affected and I know this will be an anxious time for them.”

The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals.

Tata said last year its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.

The deal also comes two months after parent firm Tata Group confirmed plans to build a £4 billion battery factory in the UK after also getting subsidies from the UK Government.

On Friday, Tata said the fresh plans lay out a future for sustainable steel-making in the area.

Tata Steel’s chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.

“With the support of the UK Government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”

The Government said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5%”.

‘A great deal’

Speaking to Sky News, Business Secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK”.

Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100 million to make sure that people have skills to retrain and move on to other things if they don’t want to stay in the steel industry.”

But union bosses and rival politicians heavily criticised the announcement.

Unite general secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition.

“Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”

Gary Smith, GMB general secretary, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.

“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”

Labour claimed the plans would both waste money and hurt workers, with shadow business secretary Jonathan Reynolds MP saying: “Only the Tories could spend £500 million of taxpayers’ money to make thousands of British workers redundant.”

Labour’s Stephen Kinnock, who represents the Aberavon constituency, said a single job lost would be “one job loss too many”.

“If they had had a plan that was not just putting all the eggs into the electric arc furnace basket, we would have been able to have much more security about the future and sustaining those jobs.

“If those numbers are right, it would be utterly devastating for the community that I represent.”

Devastating

Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said: “The potential job losses at Tata’s Port Talbot plant will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy.

“Our solidarity is with the workers at this time and we stand ready to support those who need it.”

Downing Street acknowledged it had been an “anxious time” for employees and their families but insisted the changes were necessary.

“We recognise this will have been an anxious time for employees and their families while this work to find the right way forward has taken place,” the Prime Minister’s official spokesman said.

“Simply maintaining blast furnace production, ie the status quo, was not an option with the steel industry needing a sustainable future using more modern technology and practices.”


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Malcolm Jones
Malcolm Jones
5 months ago

Great idea paying millions of pounds for local people to loose their jobs

Dai Ponty
Dai Ponty
5 months ago

Have been looking through the Daily tory rags Wales got a mention only in the daily mail and that was about Drakeford 20 m p h nothing about the massive loss of jobs in PORT TALBOT disgusting rags we should realise we in Wales are an after thought WE NEED OUT OF THIS GOD FORESAKEN DISUNITED KINGDOM

Dai Rob
Dai Rob
5 months ago

The seed was sown 43 years ago. Blame Thatcher, the evil witch. She sold off the State Silver, to help her “Yuppie” friends in the City. That is why PT is one of the safest labour seats in the country, that is why PT had the biggest “YES” vote in the Devolution referendum and that is why PT will NEVER vote Tory. Ever.
10,000 men she laid off, in a single town, in one go. Bet the witch is up there laughing, right now.

Gareth
Gareth
5 months ago
Reply to  Dai Rob

Serious question. Why did they vote for Brexit in NPT. I was delivering goods to the area during the campaign, and there were vote leave UKIP and Brexit party posters everywhere, even in offices I entered to get paperwork done. Looking at the stats you quote, this does not add up, as the Tory party and the right wing were the Brexiteers. I am being genuine in asking, not trying to provoke.

Dai Rob
Dai Rob
5 months ago
Reply to  Gareth

For the same reason that virtually every other working class community in Cymru & the UK did. Ask people in the Noorth of England!

Gareth
Gareth
5 months ago
Reply to  Dai Rob

I am from Pontypridd and we voted remain. I am genuinely perplexed, is it the influence of the press they read, as the EU were backing steel protectionism but the Tory gov voted against the EU and wanted to relax sanctions on Chinese steel. What convinced the people to back the Tories? It is a lesson that the Indy movement needs to understand, to move forward against the propaganda of the rightwing press.

Rob
Rob
5 months ago
Reply to  Gareth

Gareth there are multiple different reasons as to why Wales and England voted to leave, sovereignty, misinformation etc, or the lack of a credible Remain campaign. The Scottish referendum which took place 2 years previously, both sides had 3 years to present their case. The SNP published a book as to what an independent Scotland would work. Gordon Brown a unionist and regardless of what we think of him made a passionate case against independence. Brexit on the other hand was different. Cameron arrogantly believed that he would win, so he wanted the referendum done as soon as possible. Corbyn… Read more »

Malcolm Jones
Malcolm Jones
5 months ago

I would like to know where are they going to get All that electric from??? To run them electric furnaces

Mab Meirion
Mab Meirion
5 months ago

Downing St says “did I do right Modi Ji and Father in Law”?

Annibendod
Annibendod
5 months ago

Death knell for Trostre. It will devastate Llanelli. We’ve already stagnated for decades. Bunch of stuff I can say wrt a better approach to steelmaking in Wales but I feel sick to my stomach with worry for my former colleagues and many friends who now stand to lose their livelihoods. Not too many jobs around Llanelli pay those sorts of wages. Awful news.

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