For more than a century, the steelworkers of Port Talbot have poured molten metal: it has been the lifeblood flowing through the heart of their coastal south Wales town.
Rising between Swansea Bay and the heather-clad hills of west Glamorgan, the plant’s steaming chimney stacks have shaped not just the skyline but the history, economics and even culture of the community.
“People’s fathers and grandfathers are steelworkers,” says Gavin John, who owns Afan Ales, a craft beer shop in the town centre. “It’s ingrained in you from a young age: once you’re older you can get a job at the steelworks and you’re made.”
Many of his regulars work at the steelworks or one of its suppliers, or have family who do. The plant, which employs more than 4,000 people in a town of about 32,000, is emblematic not just of the community but of the entire steel sector, and even of the vestiges of UK industrial prowess.
Trade unions and industry figures say this year is shaping up to be a crunch one for Port Talbot and for British steel, a “crossroads” from which the sector will either limp on in managed decline or thrive anew.
Unite, Britain’s biggest trade union, is about to present the government with a £12bn plan that it says can ensure a phoenix-like renaissance. The blueprint, a summary of which was shared with the Observer, is a response to several perceived threats.
Indian giant Tata Steel, which has owned the site since 2007, is expected to announce plans to mothball its blast furnaces for four years while it builds a greener, cheaper electric alternative. In November, Tata postponed official confirmation of the closures, which unions say could cost 2,500 jobs directly, and hundreds more in the wider community.
But industry sources believe the stay of execution was temporary, with the axe falling early this year. This would be controversial given that Tata’s plan involves £500m of taxpayer subsidy.
In Scunthorpe, the UK’s only other blast furnace site, a similar £1.25bn plan is raising questions over the future of about 2,000 workers. That plant’s owner, Chinese firm Jingye, rescued British Steel in 2020, promising a “new chapter” in UK steelmaking. It, too is expected to ask for £500m in government support.
Both Jingye and Tata want to build electric arc furnaces, which offer the ability to recycle scrap steel using clean electricity. Blast furnaces rely on coking coal, which emits large amounts of carbon.
In the meantime, Britain would be the only major economy in Europe and the G20 with no ability to make steel from scratch in a blast furnace, relying instead on imported steel for the aerospace and automotive sectors and to make hundreds of miles of railway track.
Unite believes the eco-friendly switch can be made without devastating communities through job cuts, or letting the blast furnaces go cold.
“Over the past 40 years, the once-great UK steel industry has been reduced to a shadow of its former self,” says Unite general secretary Sharon Graham. “The transition to green, low-carbon steel is a golden opportunity to reverse those decades of managed decline.”
The union quotes a report by McKinsey which estimates that global demand for green steel will rise tenfold by 2030, to 200m tonnes. Graham says: “We know we will be using more steel – especially more green steel – in the UK over the next decade. The question is, where will it be made?”
Under Unite’s proposals, the government would invest £12bn over 12 years to spur a steel renaissance which, it says, would pay for itself in 10 years via increased tax receipts. Its plan would keep the blast furnaces open during a transition to fully decarbonised steelmaking involving electric arc furnaces and direct reduced iron furnaces (DRIs). DRIs can use green hydrogen – extracted from water using renewable energy – rather than gas, to make virgin steel.
Fellow steelworker unions the GMB and Community have previously put DRIs and electric arc furnaces at the heart of their own plan to save jobs at Port Talbot, a proposal that would keep a blast furnace running until 2032. But Unite’s plan is broader and, crucially, proposes a 40% subsidy for the crippling energy costs that have made UK steelmaking an exercise in burning money in recent years.
British manufacturers pay 86% more for their energy than competitors in Germany and 62% more than in France, and charges for connection to the National Grid are particularly high. The move to green steel will require even greater electricity usage, says Unite, so industry must be prioritised for upgraded connections to the grid.
The union would also like to see procurement rules changed, with a “Buy British” clause offering financial incentives to encourage the purchase of UK-made steel. The government has already announced plans for a carbon tax on imported steel from 2027, but Unite is backing calls from industry body UK Steel to bring this forward to 2026, in line with European Union plans.
All of this, says Unite, could double UK steel output, which has declined since 1971 from 25m tonnes to about 6m tonnes. The decline has meant a fall in jobs too, from more than 250,000 to just under 34,000.
It is not just direct employment that suffers when a steelworks goes cold. Cafes that feed hungry workers, pubs that slake their thirst, suppliers, contractors and local shops all have a stake in what happens next, not just in Port Talbot but in the great steelmaking centres of Scunthorpe and Sheffield – not to mention Teesside, which is still holding out hope of a revival. These communities are summoning their strength to fight for an industry that has been in a long-term downward spiral.
In Port Talbot, supporters of Unite’s campaign range from the local mosque to the local football club and karate association. In Scunthorpe and Sheffield, backers include knitting clubs, boxing gyms, Methodist churches and a tattoo parlour.
Unite has been quick to point out that these organisations account for many thousands of voters. In Port Talbot that may not worry the government too much, given that Labour MP Stephen Kinnock has a majority of more than 10,000. But in Scunthorpe, Tory Holly Mumby-Croft, who rarely fails to mention that she is the granddaughter of a steelworker, has an overturnable majority of 6,451. In Redcar, Teesside, where British Steel wants to build an electric arc furnace, Tory Jacob Young’s majority is even slimmer, at 3,527.
Back at Afan Ales, Gavin John thinks the government hasn’t grasped the opportunities of investing in green steel: “Everyone here stands together but one of the biggest things for us is that politicians seem to be sitting on the fence. The money they’ve put in is all right, but it’s managed decline.”
Voters and trade unions are watching developments closely, as is UK Steel. “The sector is ready to deliver, in a committed partnership with government, and transform how the UK makes steel,” says its director general, Gareth Stace.
