Tata Steel: UK Government to invest £500m in Port Talbot but thousands of jobs at risk

Tata employs a 4,000-strong workforce at the site in Port Talbot Credit: PA Images

The UK Government has agreed to invest £500m of public money to secure the future of Tata Steel in Port Talbot, but thousands of jobs are still at risk.

On Friday, it was confirmed the deal is intended to secure the survival of the plant which employs half of Tata Steel’s 8,000-strong UK workforce as the company moves to less carbon-intensive steelmaking.

The subsidy, alongside a £700m investment from the Indian company into the operations, is likely to see around 3,000 jobs go at the site.

Unions strongly criticised the plans which they claim are "short sighted and lack ambition".

In a statement on Friday, the UK Government said its grant was "one of the largest government support packages in history – in a new Electric Arc Furnace for greener steel production at Port Talbot, which is currently the UK’s largest single carbon emitter."

"This 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."

Business Secretary Kemi Badenoch said the government investment is likely to "save thousands of jobs in the long term" Credit: PA Images

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.”

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 company warn there will be a "transition period including potential deep restructuring" at the plant.

Tata Steel’s Chief Executive Officer and Managing Director, T V 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 Welsh Government said it will work with "closely with the trades unions and the company and do everything we can to minimise job losses.”

On Thursday, the union representing workers at the plant as well as the Welsh Government and Labour ministers, complained they had been shut out of negotiations over the deal.

Labour MP Stephen Kinnock said the investment by the UK Government 'pales in comparison' to investments made by European competitors

Stephen Kinnock, Labour MP for Aberavon, said although the money may "seem like a lot of money", it "pales in comparison" to investments made by European competitors.

He added he was "deeply concerned" that the UK Government was "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."

"The investment announced today may seem like a lot of money, but it pales in comparison to the investments made by European governments to competitor steel plants, meaning that British steelmakers are once again being made to compete with one hand tied behind their backs.

"We need a plan that both protects the current order book whilst also building for the future, but this plan comes up short on both counts.

"The deliberate exclusion of the steel unions from this whole process is also deeply disappointing."

Unite union said it will fight the proposed job losses "tooth and nail" Credit: PA Images

Union Unite branded the plans as a "disgrace" and said it has launched a "serious campaign" to protect the proposed job losses "tooth and nail".

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.”