Closing summary
It has been a devastating day for Port Talbot residents nearly 3,000 workers set to lose their jobs after Tata Steel’s confirmed plans to shut its blast furnaces.
Tata said said it considered independent studies in whether it could keep blast furnaces running while it built new furnaces, but determined it was too expensive not “not feasible”, due to the “deteriorating” performance of some Port Talbot assets.
Instead it has pledged a “comprehensive support package” worth £130m for workers impacted by its he transition to an electric arc furnace – meant to recycle scrap, rather than create virgin steel – there are growing concerns about the ripple effects of the job cuts.
However, Andrew Gutteridge, chairman of the Multi Unions Llanwern works, told the PA news agency that Tata Steel’s confirmation that the decision was “absolutely devastating”, while Vaughan Gething, the Welsh government’s Minister for Economy, called it a “social and economic body-blow”.
Even environmental campaigners at Friends of the Earth hit out at the decision, workers had been left “high and dry” by the government’s lack for foresight and investment in greening virgin steel manufacturing that could have supported staff and givin
Labour leader Sir Kier Starmer is now urging government to review unions plans that could have staved off cuts.
A UK government spokesperson has said there is help available for those losing their jobs in Port Talbot, including a dedicated Transition Board backed by £80 million funding from UK Government.
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The crisis in the steel industry has been 40 years in the making, people were saying almost a decade ago during one of Tata Steel’s earlier panics about its losses in the UK.
And it’s true that the forces of globalisation, Chinese dumping of steel on world markets, weak tariffs and punitively high energy costs in the UK are not new. On top, one can add the fresh imperative to decarbonise a polluting industry.
But the Indian-owned company’s decision to close its two blast furnaces at Port Talbot in south Wales contains a genuinely new feature. For the first time since the creation of the industry, the UK will be left without capacity to make steel from scratch.
The replacement electric arc furnace (EAF) on the site, due to open in 2027 with the help of a £500m government grant, will be fed by recycled scrap. The only other blast furnaces, under Chinese ownership in Scunthorpe, are already due to close and be replaced by EAFs too.
The newer technology is cleaner, more efficient and requires substantially fewer workers. But, quite aside from the damage to the town of Port Talbot from the loss of up to 2,800 jobs, there is an enormous question of industrial strategy here.
Can Tata’s new EAF, assuming it is built, really be a like-for-like replacement for the blast furnaces that will be lost? If not, is it sensible for the UK to leave itself without the capacity to make virgin steel? No other G20 country has taken that radical step.
Fans of EAFs argue the range of steel products that can be produced is wide and securing top grades is really a question of getting good-quality scrap; and, since the UK exports more scrap metal than it uses, supply should not be an insurmountable problem.
Sceptics regard that description as too breezy: the output from EAFs is problematic for the automotive industry, introduces hidden costs and relies on a supply chain that may not be secure. A resilient steel industry, goes the argument, cannot bet the house on EAFs: it has to have the ability to produce virgin product.
Who’s right? Well, the point is surely that the government hasn’t seriously addressed the question.
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