TATA STEEL, the Indian-owned parent company of Port Talbot steelworks, has confirmed the closure of the plant’s two blast furnaces. This decision, described as a “crushing blow” by unions, is poised to cost about 3,000 jobs directly, casting a long shadow over the South Wales community.
The announcement came after a critical meeting with workers’ representatives on Thursday, where Tata Steel conveyed its inability to sustain the loss-making plant during its transition to greener production. On Friday, following the close of trading in Mumbai, the company officially confirmed its plans. The closure will lead to most of the plant’s 4,000 workers facing redundancy.
Despite the severe job cuts, around 200 jobs will be preserved in operations at the site’s hot strip mill, which rolls steel slab. This comes in the backdrop of the UK government providing £500m in financial support for Tata’s four-year plan to construct more sustainable and cost-effective electric arc furnaces. These furnaces are designed to produce steel from scrap metal rather than from iron ore, marking a significant shift towards environmentally friendly practices.
The government’s intervention, however, has been met with criticism. Labour’s shadow business minister, Jonathan Reynolds, has pointedly described the strategy as “£500m for 3,000 job losses”. This sentiment underscores the deep unease about the government’s role and the future of the British steel industry.
Notably, Tata Steel rejected a proposal from the Community and GMB unions that aimed to keep the blast furnaces operational and protect jobs during the transition period. The company’s decision, mirroring similar moves at the Chinese-owned Scunthorpe plant, indicates a seismic shift in the UK steel industry. The closure of these facilities is set to position the UK as the only G20 economy lacking the capability to produce virgin steel, a significant reduction in its industrial capabilities.
In response to the Port Talbot announcement, UK Prime Minister Rishi Sunak affirmed the government’s commitment to British steelmaking but acknowledged the limitations in discussing this “commercially sensitive matter.” He expressed understanding of the concerns faced by those affected, indicating a period of uncertainty and adjustment for the workforce and the wider community.
Economy Minister, Vaughan Gething said: “We are in discussion with Tata Steel UK and the recognised trades unions and have approached the UK Government regarding proposals concerning the future of the company’s operations in Wales.
“This is not just an issue for Wales, steel is a sovereign asset and should be treated as such by the UK Government.”
Commenting on the Tata Steel announcement, Andrew RT Davies MS, Leader of the Welsh Conservatives said: “Today is an incredibly difficult day for Wales, my thoughts are with those steel workers and subcontractors who will be losing their jobs in the coming months and their families. This situation must be handled with care by all decision makers involved – I’m confident that the transition board will achieve this.
“I remain unconvinced that a blast furnace could not be kept open during the transition to the arc furnaces that Tata have agreed to, protecting many jobs in the short to medium term – this needs to be explained fully as to why this hasn’t been done by the company.
“Many thousands of jobs have been protected, with record investment from the UK Conservative Government, the story of Port Talbot Steel is far from over with its sustainable future secured.”
In a joint statement, local Senedd Members for South Wales West, Dr Altaf Hussain MS and Tom Giffard MS said: “This news is devastating for our community and for those losing their jobs as a result of this news.
“We welcome the introduction of a UK Government-funded £100m transition fund to help workers and the wider community bounce back from today’s announcement. We will be working to ensure that the fund supports those workers and the community over the coming months and years.”
UNITE WANTS TO PRESERVE LARGE SCALE STEELMAKING
Unite, the UK’s leading union, has warned that the government needs to take immediate action to preserve large scale steelmaking in the UK. The union made its call after Tata steel announced plans to close both its blast furnaces with the proposed loss of approximately 2,500 jobs, principally at Port Talbot in South Wales.
Unite general secretary Sharon Graham said: “Unite is ready to use everything in its armoury to defend steel workers and our steel industry. We have detailed research demonstrating how and why Tata should be expanding UK steel production in line with growing demand, not slashing its workforce. We have secured funding from a future Labour government that could do this. Tata’s plan to close the blast furnaces is simply industrial vandalism on a grand scale.”
“The government needs to invest in British industry in order to defend workers and communities as well as our industrial base and our national security. Instead, they are giving Tata hundreds of millions of pounds to fund their plan to cut jobs, cut capacity and give more business to their plants in other countries, like India and the Netherlands. How is that acceptable?”
Statement from Community and GMB – 19 January 2024
The steel unions – Community, Unite and GMB – met yesterday with senior representatives of Tata Steel, who formally responded to reject the Multi-Union Plan that the unions presented to the company on the 17th of November.
This is of course extremely disappointing. In one area the company did accept the Multi-Union recommendation, which is to keep the Hot Strip Mill open to roll slab over a transition period, supporting hundreds of jobs there, but Tata have rejected our broader proposals to safeguard production capacity and protect jobs
Since Tata Steel and the UK Government announced their bad deal for steel on the 15th of September, the unions have been clear that proposals to install a 3mt Electric Arc Furnace (EAF) are completely unacceptable. As Community and the GMB, our experts and Tata Steel all understand, the installation of a 3mt EAF Port Talbot inevitably means the end of the blast furnaces, major production cuts and thousands of job losses before 2027.
It is extremely regretful that despite the incontrovertible evidence one union has refused to accept the facts, and continues to undermine the Multi-Union through their support for a 3mt EAF and unilaterally campaigning for discredited fantasy solutions. We urge them, once again, to get back on board and work with us to deliver the best possible outcomes for all of our members.
The Multi-Union Plan was developed in line with the steel unions’ red lines agreed three years ago, which are to secure the future of Port Talbot steelmaking, to protect production capacity and the future of all the downstream plants, and to avoid any compulsory redundancies. The Multi-Union Plan was previously endorsed by all the steel unions and, as the company has acknowledged, proposes a credible alternative strategy for the decarbonisation of Tata Steel UK.
More than 3,000 jobs and the future of British steelmaking is at stake. It is an absolute disgrace that Tata Steel, and the UK Government, appear intent on pursuing the cheapest instead of the best plan for our industry, our steelworkers and our country. It’s unbelievable any Government would give a company £500m to throw 3,000 workers on the scrapheap, and our Government must reevaluate its miserly offer to support investment at Tata Steel.
The German, French and Spanish Governments are all committing billions to secure the future of their strategically important steel industries, and our Government must show similar ambition. It is encouraging that the Labour Party have reaffirmed their commitment to the £3bn Green Steel Fund, and using it to supporting a just transition at Tata Steel UK. Tata must think again, and work with the UK Government and Labour to unlock the investment our industry needs and deserves.
Community and GMB do not accept Tata Steel’s rejection of the Multi-Union Plan and confirmation they intend to press forward with their original devastating proposals. We will now consult our members on next steps and all options to protect jobs are on the table, including industrial action.
Tata Steel and the UK Government must reconsider their positions in order to safeguard the future of British steelmaking, and head off a major industrial dispute. Since Tata acquired our business in 2007 they have been a responsible owner, and we recognise they have taken a long-term view where others might not have done. The coming weeks will put Tata’s values to the test.
Full statement from Vaughan Gething MS, Minister for Economy
TODAY’S announcement by Tata Steel UK (TSUK) leaves thousands of workers and their families, in Tata Steel and across the wider supply chain, facing an uncertain future.
TSUK currently employs directly more than 6500 employees in Wales and a further 1500 in the rest of the UK.
The Welsh Government has worked closely with TSUK and the recognised steel trades unions for many years to safeguard these vital jobs and the long-term future of steel production in Wales.
Steel is one of the most important materials in any modern economy and Wales and the rest of the UK are better off and more secure with significant, sovereign steelmaking capabilities.
The Welsh contribution to the UK steel sector is decisive and the industry is part of our nation’s story. It represents an economic strength with global reach and serves as a marker of Welsh excellence.
The scale of the operation at Port Talbot brings together a vibrant mix of cutting-edge skills and specialisms that ought to be understood, promoted and respected at every level of government. The workforce boasts the skills, experience and know-how to unlock an ambitious green transition that exploits new technologies and the enormous demand a low carbon economy will command. Our rapidly changing economy will need more steel and unless UK Ministers and TSUK act together with urgency, less of that steel will be produced in Wales as we become increasingly reliant upon imports.
In choosing not to pursue a modern industrial strategy with steel at its core, the UK Government has damaged our ability to create the long term, reliable growth that would turn net zero measures into more sustainable, green jobs in Wales.
We have repeatedly urged the UK Government to act at scale with the investment needed to support the move to greener methods of steel production and for the Company to lead on a fair and just transition for its workers and those UK companies within its extensive supply chain.
Today’s announcement presents a social and economic body-blow with profound and far-reaching implications for Wales. It is our firm view that the Prime Minister and his cabinet do have levers at their disposal that could prevent the worst case scenario and the scale of economic loss we now face. UK Ministers must now work rapidly in the coming hours and days to convene talks that explore all avenues to bring about a longer, fairer transition that supports a larger, more secure steel industry.
I have raised my concern on the need to act at this level with the Secretary of State for Business and Trade, Kemi Badenoch MP and Minister of State, Nusrat Ghani MP.
It is a matter of deep regret that the UK Government – and in particular the Department for Business and Trade – has to date demonstrated no recognition of the strategic importance of the sector. Unlike previous Business Secretaries, the current UK Secretary of State for Business and Trade has refused to meet with Welsh Ministers at a time of unrivalled uncertainty and risk for the sector. This has allowed opportunities for earlier shared action that could have prevented today’s announcement to be missed.
In September 2023, TSUK and the UK Government finally announced a joint agreement on a proposal to invest in state-of-the-art electric arc furnace steelmaking at the Port Talbot site, with a capital investment of £1.25bn including a grant from the UK Government of up to £500m. The proposals included a restructuring of the existing TSUK business followed by an investment in electric arc technology. The Welsh Government was not party to any discussions around this agreement.
Whilst the announcement contained significant investment for the longer term, it was inevitable that TSUK employees, and their families, became extremely anxious for their jobs and the social impact they and their communities would have to bear should workers lose the dignity of employment. In both direct meetings and public statements, I have cautioned against UK Government Ministers basing assumptions on the worst case scenario because such actions actively undermine negotiations that require space, time and expertise. These requests were not heeded, and I am deeply concerned at the confused and, at times, indifferent approach adopted by the UK Government on this matter.
Today’s announcement has realised the workforce’s fears with the news that around 2,500 jobs could be lost across Tata’s Welsh sites, and this is before the impact on the Company’s supply chain is fully understood.
It is by now clear that the case set out for a future that does not require the scaling back covered in today’s announcement has not been fully explored. A key recommendation, that of operating one blast furnace for a significantly longer period was both economically convincing and underpinned a fair and just transition for TSUK. This proposal highlighted that the Company could have maintained a significant workforce whilst remaining commercially viable. Both TSUK and the UK Government must fully consider the options that exist to maximise the jobs the Port Talbot site can support with a sustainable plan for the future. We are yet to see a compelling account from UK Ministers or the Company that sets out why alternative options are not deliverable.
It is essential that TSUK conducts a meaningful consultation with its employees and the trade unions about their chosen transition course. As Tata Steel has stated, any agreement is subject to relevant regulatory approvals, information and consultation processes, and the finalisation of detailed terms and conditions. We urge the Company not to make any irreversible choices based on the current levels of UK Government support.
Any decision will have a profound impact on TSUK’s supply chain and the wider region, particularly across a manufacturing sector with ambitious plans for maximising the net zero opportunities presented around the Celtic Freeport.
I spoke with trade union representatives and senior management from the Company yesterday. The First Minister requested an urgent call with the Prime Minister to discuss the action that could still be taken to secure a more ambitious future for this important sovereign asset.
The Welsh Government will continue to work closely with the trade unions and the Company to do everything we can to minimise job losses.
I plan to make an Oral Statement regarding this matter on Tuesday 23rd January.
