UK Government to invest £500m in to Tata Steel, Port Talbot
A union leader has criticised the company which owns the Port Talbot steelworks over plans which could lead to the loss of 3,000 jobs.
Last updated 15th Sep 2023
The Government has agreed to provide up to half a billion pounds for Tata Steel to install new electric arc furnaces for steelmaking at its Port Talbot site in Wales, sources have told the PA news agency.
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals, Tata Steel is expected to announce.
The Government has said that its deal with Tata Steel will safeguard 5,000 jobs across the UK out of the 8,000 that the company currently employs.
However, today's announcement has angered unions. Alasdair McDiarmid, assistant general secretary of Community, the steelworkers' union, said: "Community is absolutely clear that we do not believe this is the right strategy for our economy or our industry.
"Putting all our eggs in the electric arc basket will come at the cost of thousands of jobs, our economic security and the independence of our industry.
"Tata and the Government should have consulted with the unions well in advance of the announcement and their failure to do so has put unnecessary worry on the workers at Port Talbot.
"We will do everything in our power to protect our industry and our members from the implications of today's misguided decarbonisation-on-the-cheap announcement."
A Welsh Government spokesperson said: “We have worked closely with Tata for many years to safeguard the long-term future of steel production in Wales and have urged the UK Government to provide the investment needed to support the move to greener methods of steel production.
“This is a very worrying time for the whole community and it is essential Tata now has a meaningful consultation with employees and their trades unions about these proposals.
“While today’s announcement contains significant investment for the longer term, it is inevitable that Tata employees, and their families, are focused on the impact it will have on jobs in Port Talbot and Tata’s downstream facilities.
“We now need to consider the announcement and proposed timeline in detail.
“Meanwhile, we will continue to work closely with the trades unions and the company and do everything we can to minimise job losses.”
Business secretary Kemi Badenoch said the Government’s planned £500 million support for Tata Steel will “protect skilled jobs in Wales”.
“The UK Government is backing our steel sector and this proposal will secure a sustainable future for Welsh steel, and is expected to save thousands of jobs in the long-term.”
Unions have previously said the move to the new less labour-intensive furnaces could lead to thousands of job losses.
Alasdair McDiarmid added: "We are extremely disappointed and angry actually about the actions of Tata here.
"They gave us assurances at the highest levels that their discussions with the Government would be confined to their joint financial commitments to support Port Talbot and that any and all decisions on investment and the deployment of whatever technology it may be would be made in partnership with the unions.
"From what we are hearing, it does seem Tata and the Government have done their deal... whilst sacrificing thousands of jobs. That, for us, is completely unacceptable. It's not the way companies and the Government should be doing their business."
Stephen Kinnock, Labour MP for Aberavon, said: “While investment to decarbonise our Port Talbot steelworks is necessary and long overdue, I am deeply concerned that the UK Government is failing to deliver the just transition to green steel that my hardworking constituents deserve, not least because ministers have failed to adequately consult steel unions Community and GMB.
“At the heart of this failure is the narrow focus on electric arc furnace (EAF) technology, which will not only result in more job losses than necessary, but which simply cannot produce the qualities and grades of steel needed to meet the full spectrum of Tata’s customer base.”
After Tata Steel announced a Government investment which will allow it to install new steelmaking furnaces at its Port Talbot site, the chairman of Tata Group Natarajan Chandrasekaran said it will “preserve significant employment”.
“The agreement with the UK Government is a defining moment for the future of the steel industry, and indeed the industrial value chain in the UK.”
UK Steel director general Gareth Stace said: “This is an important day for the UK steel sector. Government has confirmed its firm and bold commitment to the future of steelmaking here in the UK.
“The UK steel industry is committed to decarbonising by 2035. A year ago, the UK steel sector published an ambitious road map to net zero. Today we take a significant step to realising that vision.”
TUC general secretary Paul Nowak said: “This is a devastating blow for workers at Port Talbot and the opposite of a just transition.
“Ministers must press pause and urgently get around the table with unions. It beggars belief that they have been locked out of talks.
“Instead of safeguarding livelihoods in the steel industry, this deal will see thousands of good, unionised jobs potentially lost forever.”
Unite described the plans as a “disgrace” and vowed to fight them tooth and nail.
The union said it is launching a major “Workers’ Plan for Steel” campaign in steel communities across the UK.
General secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition.
“Steel is a foundation industry and the opportunity is being missed to make the UK a world leader in steel production.”
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.”
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.”
Luke Murphy, head of the fair transition unit at the IPPR think tank, said the Government had “ignored or abandoned” the interests of unions and workers at the Port Talbot steelworks.
“The use of coal in steelmaking must come to an end but this looks like a bad deal for workers, the wider community in Port Talbot, and for Britain.”