Port Talbot steelworks gets £500m UK Government funding to remain open – but major job losses still feared

Tata Steel has announced that it is also investing £700m in it’s Port Talbot steelworks as part of the joint funding package which will see the installation of new electric arc furnaces for steelmaking.

According to the UK Government, Port Talbot’s steelworks are currently the UK’s largest single carbon emitter.

The new electric arc furnaces would replace the existing coal-powered blast furnaces – which are nearing the end of their effective life – and reduce the UK’s entire carbon emissions by around 1.5 percent as a result.

The UK Government say that it is expected that the proposal announced today – which remains subject to information and consultation processes led by Tata Steel – has the potential to safeguard over 5,000 jobs across the UK.

Tata Steel currently employs over 8,000 people across the UK, including at Port Talbot.

The UK Government said it would also ensure a broad range of support for any staff who are affected by the transition, working with the Welsh Government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy, with up to £100m funding.

Commenting on the announcement, Tata Group Chairman N Chandrasekaran said: “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. It has been an absolute pleasure to work with the His Majesty’s Government and the Prime Minister Rt Hon Rishi Sunak in developing the proposed transition pathway for the future of sustainable steelmaking in the UK.

“The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner.”

Tata Steel’s Chief Executive Officer and Managing Director, T V Narendran said: “Tata Steel UK has been facing significant challenges due to the heavy-end facilities approaching their end of life. The proposed project, with one of the largest investments in the UK steel industry in recent decades, provides an opportunity for an optimal outcome for all stakeholders.

“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.”

UK Business and Trade Secretary Kemi Badenoch said: “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.

“This is an historic package of support from the UK Government and will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry.

Chancellor of the Exchequer Jeremy Hunt said: “This proposal is a landmark moment for maintaining ongoing UK steel production – supporting sustainable economic growth, cutting emissions, and creating green jobs.

“It is right that we are ready to step in to protect this world class manufacturing industry and to support a green growth hub in South Wales.

The Unite union has criticised the proposals and their impacts to the thousands of workers at Port Talbot describing the plans as “a disgrace”.

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

Welsh Conservative Shadow Economy Minister, Paul Davies MS said: “Our thoughts are with the employees, their families and the wider community following the announcement today, The UK Government announcement will secure jobs in the long term to ensure steel production remains in Port Talbot by investing £500 million in order to modernise and protect steel production in the area.

“Without UK Government investment, there would be a bigger risk to jobs and steel production in an area dependent on the industry.

“With negotiations still ongoing, the Prime Minister is securing the future of steel production in Port Talbot, which will be more focussed on reducing carbon emissions and protecting the environment. Along with the recent announcement of the Celtic freeports in Wales, creating more jobs and boosting the Welsh economy, Rishi Sunak will continue to deliver for the people of Wales.”

Welsh Conservative regional members for South Wales West, Tom Giffard MS and Dr Altaf Hussain MS added: “It is regrettable that there are potential job losses at Tata Steel. However, I am confident the UK Government is doing all it can to ensure the future of the industry and protect steel production in Port Talbot.

“The Prime Minister has a track record of tackling long term issues, securing a £4 billion investment with over 4,000 jobs for a Tata Steel gigafactory only 2 months ago.

“Rishi Sunak will continue to work with the steel industry to bring about a long-term green steel future for Wales.”

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.”