UK Government finalising £500m rescue package for Tata’s Port Talbot plant

The UK Government is working to finalise a rescue deal worth £500 million for Tata Steel’s Port Talbot plant this week, following the closure of its blast furnaces, according to reports.

The package of support had been drawn up by the previous Conservative government.

It was set to aid Tata with its plans to build an electric arc furnace, replacing the existing coal-powered process, under ambitions to switch to a more environmentally-friendly form of production.

The Indian steelmaking giant said it would invest £750 million in building the furnace, alongside funding a support package for the employees expected to be made redundant during the transition.

Job losses

Some 2,800 jobs losses are expected as a result of closing down two blast furnaces at its major plant in south Wales, the first of which was shut in July.

Business Secretary Jonathan Reynolds is planning to make a statement to parliament on Wednesday about the deal, after Prime Minister’s Questions, according to reporting.

It is thought that it will be broadly similar to the previous government’s commitment.

Mr Reynolds previously said he believes there is a “better deal available” for Port Talbot and the steel industry as a whole, as he confirmed that negotiations with Tata were continuing under the new Labour government.

He also said he would “make sure that job guarantees” were part of the discussions.

Ongoing negotiations

The Government did not comment on the reports that the state-backed deal could be announced this week amid ongoing negotiations with Tata.

A spokesperson for the Department for Business and Trade said: “Steel is vital for a vibrant, secure economy.

“Our steel sector needs a government working in partnership with trade unions and business to secure a green steel transition that’s both right for the workforce and delivers economic growth.

“Decarbonisation does not mean deindustrialisation, and we will be working to safeguard jobs as part of these negotiations, securing the future of steelmaking communities for generations to come.”

The Shadow Welsh Secretary, Lord Davies of Gower said: “It would seem at long last Labour has come to its senses by abandoning irresponsible comments and finally accepting that there is no better deal than the one previously negotiated by the last UK Conservative government.

“Bluntly, without the efforts of the last government, there would be no steel industry in south Wales.

“I urge the Labour UK government to now turn its attention quickly to ensuring financial aid reaches the affected workers without any delay.”

Responding to the news of the UK government’s planned £500m subsidy for Tata Steel, Anthony Slaughter, leader of Wales Green Party said: “During the election, Labour promised again and again they would protect the future of steel production in Wales. The Welsh Labour Government assured us that a Labour administration at the other end of the M4 would make the difference, yet today’s announcement offers nothing more than the inadequate subsidy already promised by the previous Conservative government.

“The imminent closure of the second blast furnace will have a devastating effect on the highly skilled workforce, their families and the surrounding communities. The need for the transition to green steel production has been understood for decades. Yet successive governments in Westminster and Wales have left the future of communities at the whims of a multinational company. The people of Wales know only too well what happens when governments and industries walk away.

“From wind turbines to trains, we need steel to turn our economy green. Bringing well-paid, dignified jobs back to Wales is at the heart of the change we need. The steel industry should be in public ownership, enabling us to lead the green industrial revolution. Nationalisation, not subsidising multinationals for the benefit of their shareholders, is the only way to secure a future for Green steel production in Wales.”

Tata Steel has been contacted for comment.