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Welsh Secretary denies UK Government has ‘paid money to put people out of work’ with Tata deal

30 Apr 2024 5 minute read
Welsh Secretary David TC Davies

Wales Secretary David T C Davies has denied that the UK Government has “paid money to put people out of work” following confirmation from steel giant Tata that it will shut down blast furnaces at Port Talbot steelworks.

Mr Davies made the comments during an urgent question at Westminster on Tata ending consultation on redundancies at Port Talbot steelworks.

He said: “Technically, the consultation is not concluded either at the national or the local level, the statutory consultation remains under way.

“I understand the company intends to move to local level consultation with staff who may be affected. I know this is a deeply concerning time for the Tata workforce and the wider community.”

He added: “Tata Steel employ over 8,000 people, including at Port Talbot, and all of those jobs would be under threat if it weren’t for the agreement that we had struck, along with many thousands more in the supply chain. So, transformation is going to be difficult, but the funding has saved 5,000 jobs in the company.

“It is not the case that we’ve paid money to put people out of work. We’ve paid a lot of money out and have paid money out to save 5,000 jobs. We’re also looking to modernise production and ensure that steelmaking in South Wales can continue for generations to come.”

‘Gut punch’

The news of job losses was “a gut punch for workers in Port Talbot with economic consequences that could reverberate across South Wales for decades”, shadow Wales secretary Jo Stevens has said.

She told the Commons: “This Government has forked out £500 million taxpayers’ cash for the loss of 3,000 jobs and this is their deal, and they own it.

“Added to that, the loss of sovereign steelmaking is a fundamental threat to our UK economy and security. It will constrain our ability to build floating offshore wind that we need to lower energy bills, deliver energy security and create the jobs of the future.

“We’re now around a month away from blast furnace number five potentially closing, so what assessment has the Government made of the impact of the closure on job losses at the plant and in the supply chain across Wales?

“And with the talks ongoing between unions and Tata this week, will the Secretary of State, like me, want to see an agreement from Tata that compulsory redundancies will be avoided?”

Ambition

Plaid Cymru’s Westminster leader Liz Saville Roberts accused the UK Government for failing to show the same ambition as Germany and the Netherlands to preserve the the future of the steel industry.

She pointed out that political pressure in the Netherlands has resulted in Tata protecting jobs and that producers in the western German state of Saarland have been granted 2.6 billion euros (£2.2 billion) in state support to transform their production procedures towards climate neutrality.  This is over four times the £500 million given by the UK Government.

“In the Netherlands, political pressure has resulted in Tata investing in an electric arc furnace and direct reduced iron technology, all the while protecting jobs and keeping blast furnaces open”, she said.

“The German government is spending £2.2bn – over four times more than the UK – to transform its steel industry towards hydrogen.

“Why is the UK so uniquely incapable of effective investment in our strategic steel future?”

Union plea

Tata confirmed last week it will shut down blast furnaces at its Port Talbot plant with the loss of thousands of jobs after rejecting a last-minute union plea to change its plans.

The company said that after seven months of discussions with unions it will proceed with its £1.25 billion investment to build an electric arc furnace in Port Talbot and start closure of the existing heavy end assets in the following months.

Unions and Labour criticised the decision, warning it will have a devastating effect on the industry and Welsh economy.

Tata said it was planning the biggest investment in the steel industry for decades, safeguarding the industry, preserving 5,000 jobs and securing future supplies to customers.

Unite members have already voted to strike in protest at the plans while Community and the GMB are currently holding ballots for industrial action.

Tata told unions on 25 April that Port Talbot’s two blast furnaces will close by end of June and end of September respectively.

The company said a multi-union proposal to maintain one blast furnace through the transition would have incurred at least £1.6 billion of additional costs.

‘Generous severance terms’

Tata said it has offered its most generous severance terms ever to affected employees, under a financial support plan, alongside wide-ranging retraining and community support schemes.

A voluntary redundancy process will be launched in May.

Tata Steel’s chief executive and managing director, T V Narendran, said: “Having looked carefully at all the options over the past seven months in consultation with union representatives, we have decided to proceed with our proposed restructuring and transition.

“This is the most viable proposal, in contrast to the unions’ unaffordable plan which has high inherent operational and safety risk.

“Our proposal secures a long-term future for the business and preserves the majority of jobs in the UK.

“We will continue to work with the trade unions over the following two weeks to agree a memorandum of understanding on the future of the UK business and the impact on our people.

“Tata Steel is committed to creating a low-CO2 steel business at the heart of a green industrial ecosystem in Wales and the wider UK to safeguard steel supplies and create economic opportunities for generations to come.”


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Dai Ponty
Dai Ponty
22 days ago

Only fools believe what comes out of a Tory mouth

Geoffrey Harris
Geoffrey Harris
22 days ago

The true and lasting outcome of Brexit

Gareth
Gareth
22 days ago

Contrast the actions of the Tory UK Gov, where thousands will lose their jobs and steel making is impacted, to the actions of the German ,French, and Dutch Govs, where the transition to green steel making is being conducted without mass redundancies, or the loss of ability to make steel that does not compromise the state. For a country that was once a world leader, the Tory party have ruined, the coal, gas , water, railways, electricity industries, and now steel.

Jeff
Jeff
22 days ago

Owners of the Steel works are not UK. They will take as much UK Gov funding as they can wring out with the threat of job losses. We are small fry, my money is the place will be asset stripped over the next few years then shut and demolished leaving no viable works before they sell the land for flats and houses.

National ownership in a way that prevents the works being damaged is the only way.

Glwyo
Glwyo
22 days ago
Reply to  Jeff

Would flats on industrial land in Port Talbot go for much? That said, I agree that foreign-owned strategic infrastructure is madness.

Jeff
Jeff
21 days ago
Reply to  Glwyo

Sea views, foreign investment, ££££££££££

Frank
Frank
22 days ago

No surprise here. Although this guy is the Welsh Secretary he has no loyalty to the country and will do or say anything to harm Cymru.

Valerie Matthews
Valerie Matthews
22 days ago

He would wouldn’t he? Truth is an anathema to these useless people!

stuart stanton
stuart stanton
21 days ago

Sitting here in Leeds, home for the last 20 years, I cannot but ask ‘When does the Revolution begin?’ It really kicked off on Hirwaun Common back in 1831, seems to be in a state of suspended animation ever since. C.mon Cymru, grab the standard…syth ymlaen!

Glwyo
Glwyo
21 days ago
Reply to  stuart stanton

Call me cynical, but it appears little matters like enclosure and Chartism got airbrushed out of history so culture war could take its place. Everybody is worse off for it of course, most of all those with grievances that the culture war is designed to appeal to.

Y Cymro
Y Cymro
21 days ago

Englishman David TC Davies is lying. He and the Conservatives have assisted Tata putting nearly 3000 hardworking Welsh steelworkers in Port Talbot on the employment scrapheap to secure jobs in Tata’s English sites in turn destroying local businesses and suppliers in the wider area as done during the 1980s with the mining communities which have never recovered. It seems whatever the Tories touch is forever tainted.

Last edited 21 days ago by Y Cymro

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