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.
More from our reporters:
We’ll be back on Monday.
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.
Read more here:
Steel industry history from the Guardian archives.
Steel output from Port Talbot in South Wales was once the envy of the industrialised world, with workers at the Margam site breaking records for production, according to a story in the business pages of the Guardian in 1956.
It reported that the Steel Company of Wales had, in one week, produced 37 tonnes. If it had continued at that rate, it would have made over 18 million tonnes of steel in a year – the current site was said to be capable of producing only 5 million tonnes of steel per annum.
In 1967, The Steel Company of Wales was nationalised and absorbed into British Steel Corporation.
Here’s the article (which was accompanied by the latest prices from the Oldham Stock Exchange…)
Labour leader Sir Keir Starmer is urging the government to take another look at the plan proposed by steel unions that would have saved thousands of jobs (see earlier post for details).
Starmer said he was “very concerned” after Tata Steel confirmed plans to close blast furnaces at its plant in Port Talbot, South Wales.
He told broadcasters:
“I was there just in October so I know how this is going to impact on the workforce. The Government said it had a plan for steel. It transpires the plan involves thousands of redundancies. There’s a better plan, a multi-union plan, that the Government needs to look at again.
“That’s a viable way forward. It’s vital we have a viable steel industry in the United Kingdom. Labour has got a plan for that viable future, not just for the next year or two but for decades to come.”
Here’s local MP Stephen Kinnock:
Important discussion earlier with @Jacqui_Smith1 & @IainDale on @GMB on the growing global demand for green steel - and the compelling multi-union plan we need to deliver a bridge to the green economy, not a cliff edge.
— Stephen Kinnock (@SKinnock) January 19, 2024
The Tories are paying Tata £500m for 3,000 job losses. pic.twitter.com/wM6GKsR37V
Kinnock also told Sky News that the move by Tata was “deeply disappointing’, adding:
“We’ve got a plan that’s been cobbled together between Tata Steel and the UK government which is going to use £500 million of taxpayers money to make 3,000 men and women redundant
[It] is also going to remove the British capability to make its own steel from scratch. We would become the only country in the G20 that is no longer able to do that.”
Updated
Gary Keogh, Community member and Vice Chair of the Multi -Union Committee at Port Talbot speaking on @GMB about the "hope" that a @UKLabour government will bring to our steel industry.
— Community Union (@CommunityUnion) January 19, 2024
See the full interview .⬇️#BritainWeNeedOurSteel #SaveOurSteel #TataSteel pic.twitter.com/kBlgJp93qD
Tata Steel to offer £130m+ support package
Tata Steel have pledged to offer a “comprehensive support package” worth “in excess of £130m” o staff who lose their jobs through the transition to an electric arc furnace.
T V Narendran, Tata Steel’s chief executive, defended the plan to shut Port Talbot’s two blast furnaces, saying:
“The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term. Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.
Narendran added that Tata will support the individuals and communities concerned:
In consultation with our union partners, Tata Steel will offer a comprehensive support package to mitigate the impact of any anticipated job losses, including helping employees to retrain and find new jobs. We will continue our work with the UK and Welsh governments, trade unions and the community to help those who may be affected through the proposed transition.”
Updated
Andrew Gutteridge, chairman of the Multi Unions Llanwern works, has told the PA news agency that Tata Steel’s confirmation that it would close blast furnaces at its plant in Port Talbot was “absolutely devastating”.
Mr Gutteridge said:
“Absolutely devastating. Absolutely heartbreaking for the local economy, the local communities and the whole of the UK steel industry.
“If we don’t fight this and get it right, there is no future for the UK steel industry.”
Gutteridge added that the impact on Port Talbot will be severe:
“It will absolute ruin the community. Your local newsagents, your chip shops, your supermarkets – everything in this area will be affected.
“And not just here in this area, in Bridgend, Neath, up in the Valleys which are already decimated from the mines years ago. This is a massive, massive kick for the whole of South Wales really.”
Friends of the Earth: huge blow to workers and the local community
Tata Steel’s decision to close down its coal-fired blast furnaces is a “huge blow” to workers and the local community, says Tony Bosworth, Friends of the Earth energy campaigner, adding:
The world is moving towards green steel production, but the UK government’s lack of a forward-thinking Industrial Strategy has left workers high and dry.
“Port Talbot should be at the forefront of a transition to clean steel – with investment in green hydrogen to power virgin steel manufacturing, as well as electric arc furnaces. This would help protect jobs, support homegrown steel production, and boost the UK’s switch to a green economy.
Bosworth adds that it shows the “folly” of the government’s decision to approve a new coal mine in Cumbria a year ago – partly to provide coal for UK steel.
“Ministers must end their support for this polluting and unnecessary coal mine - and put areas like West Cumbria and Port Talbot at the heart of the cleaner future we urgently need.”
The job losses at Port Talbot have also opened up a split between UK unions, who had proposed two different plans to prevent heavy cuts.
My colleague Rob Davies writes:
Amid a schism between trade unions representing steelworkers, the GMB and Community lashed out at Unite, which had put forward a separate £12bn plan to revive UK steelmaking over 12 years that they described as “discredited fantasy”.
Government briefing that Port Talbot blast furnaces are coming to the end of their useful life and need to be replaced is...well, you don't really need to write the punchline to that one.
— Rob Davies (@ByRobDavies) January 19, 2024
The job losses at Tata show why it’s “absolutely vital” for the government to play a stronger role in securing a green and fair transition, says Greenpeace UK’s policy director Dr Doug Parr.
Parr adds:
Clean steel production is the future of this industry, and many countries around the world are already shifting to green steel made with hydrogen technology. Alongside the new electric arc furnaces, this is an option that could have saved jobs at Port Talbot and helped revitalise this industry but it’s now a missed opportunity.
The global race to a low-carbon economy is on, and if the UK doesn’t seize its chance to create those jobs here, they’ll simply go somewhere else. We believe a better future for the workers, the economy and the planet is possible - but both government and businesses need to get serious about it.”
Tata Steel’s announcement is a “social and economic body-blow”, says Vaughan Gething, the Welsh government’s Minister for Economy
Gething explains:
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.
Gething adds that he has raised concerns with the Secretary of State for Business and Trade, Kemi Badenoch MP and Minister of State, Nusrat Ghani MP, adding:
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.
Wales Online report that Wales’ First Minister, Mark Drakeford, was turned down by the prime minister when he requested “urgent discussions” on the job losses announced at Tata’s Port Talbot plant.
Drakeford wrote to Rishi Sunak in the wake of a meeting between unions and steel bosses on Thursday, they say.
Today, Drakeford says his administration will keep working to protect the future of Welsh steel production, and support all those affected by today’s announcement from Tata Steel.
This news will be devastating for steel workers and communities in Wales.
— Mark Drakeford (@PrifWeinidog) January 19, 2024
We will carry on working to protect the future of Welsh steel production and we will do all we can to support all those affected by today’s announcement.https://t.co/VFx41yMHpW
Accounting professor Prem Sikka says the answer is to nationalise the UK’s steel assets, rather than handing large subsidies to private companies:
Tata Steel confirms 2,800 job losses at Port Talbot site, despite £500m subsidy.
— Prem Sikka (@premnsikka) January 19, 2024
Govt hands billions in subsidies to companies; doesn't own shares or have board representation to direct anything.
Money vanishes when companies go.
Nationalise steel.https://t.co/8RwJovrjxJ
Full story: Port Talbot steelworks: blast furnaces to close, costing up to 2,800 jobs
The owner of Port Talbot steelworks has confirmed that the plant’s two blast furnaces will shut down, in what unions have described as an “absolute disgrace” that will cost up to 2,800 jobs directly and many more in the south Wales community, my colleague Rob Davies writes.
Port Talbot’s parent company, the Indian-owned Tata Steel, said it was not “feasible or affordable” to adopt trade union proposals to continue production at the loss-making plant during a transition to greener, cheaper steelmaking operations.
On Friday, after trading on the stock exchange ended in Mumbai, Tata officially confirmed its plans, which will result in most of the plant’s 4,000 workers losing their jobs.
About 200 positions will be saved by maintaining operations at the site’s hot strip mill, which rolls steel slab.
The cuts comes despite the government providing £500m of financial backing for Tata’s £1.25bn four-year plan to build electric arc furnaces, which make steel from scrap metal rather than virgin steel made from scratch.
Updated
Wales Green Party leader Anthony Slaughter has said it is “unacceptable” that the government are allowing Tata to cut so many jobs in Port Talbot, by not following the alternatives proposed by the GMB and Community unions.
Slaughter says:
“This is devastating news for the local community and beyond. Wales knows only too well what happens when communities are abandoned by government and industries. We saw it with the coal industry and now it is happening again with the steel industry.
“Decarbonisation of industry is vital, but communities and people’s jobs must be protected. That means putting unions and workers at the heart of a just transition.
“The government has provided Tata with £500 million toward the cost of future steel production. It has a responsibility to ensure that money is used to protect Port Talbot and the wider Wales economy.
“Instead, it is allowing the company to ignore viable alternatives to these job losses put forward by the unions. That is unacceptable and must be resisted.”
Updated
GMB & Community: extremely disappointing that plan to save jobs was rejected
The GMB and Community unions say it is “extremely disappointing” that Tata rejected its proposal to keep blast furnaces running, saving 2,300 jobs.
That proposal involved keeping Port Talbot’s Blast Furnace Number 4 running until 2032, and building one smaller Electric Arc Furnace (EAF), and later probably a second EAF, rather than a single larger EAF (as Tata plans to do).
In a joint statement, the unions say:
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.
Instead, more than 3,000 jobs and the future of British steelmaking is at stake, they add, urging the government to take action.
They say:
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.
Updated
Following Tata’s announcement, a UK government spokesperson has said there is help available for those losing their jobs in Port Talbot:
“We are determined to secure a sustainable and competitive future for the UK steel sector, which is why we have committed £500 million of UK Government support that will transform the site and protect thousands of jobs – both in Port Talbot and throughout the supply chain.
“Engagement with trade unions is rightly a company-led process.
“There is a broad range of support for staff affected, including a dedicated Transition Board backed by £80 million funding from UK Government and £20 million from Tata Steel.
“Chaired by the Welsh Secretary with ministerial representation from the Welsh Government, the Board will support both affected employees and the local economy.”
Unite: This is industrial vandalism on a grand scale
The Unite union has pledged to use “everything in its armoury” to defend UK steel workers and the steel industry.
Unite general secretary Sharon Graham condemned Tata’s plan as “industrial vandalism on a grand scale.”
“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.”
Graham adds that the UK government needs to defend workers and communities, as well as Britain’s industrial base and our national security, adding:
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?”
Tata Steel says that it considered independent studies into whether it could keep the blast furnaces running while it built the new electric arc furnace – as UK unions had proposed.
But, it claims, such a plan was not “not feasible”, as it would be too expensive, and not possible due to the “deteriorating” performance of some Port Talbot assets.
Tata Steel says:
The projected operating costs of such a configuration are financially unaffordable
Building the Electric Arc Furnace in an already operating steel melt shop would be fraught with risk, significantly increasing costs, creating a sub-optimal plant layout, delaying implementation of the plan and jeopardising the proposed business transformation programme
The near end-of-life condition and deteriorating operating performance of several heavy end assets in Port Talbot
Another blow: Tata Steel expects that a further 300 roles could be impacted in three years, taking the total at risk to over 3,000.
This culd include “the potential consolidation and rationalisation of cold rolling assets in Llanwern” once the required investments are completed at Port Talbot, Tata says.
Port Talbot decision: The Key Points
Here are the key points from Tata Steel’s devastating announcement that nearly 3,000 jobs are at risk through the closure of its Port Talbot blast furnaces:
The plans follow detailed discussions with the UK multi-trade union representative body (UK Steel Committee) and its advisors, in which Tata Steel carefully considered their endorsed proposal for maintaining a single blast furnace
Having considered that proposal, Tata Steel has agreed to adopt elements of it, but considers that continued blast furnace production is not feasible or affordable
Tata Steel will now commence statutory consultation on the proposed restructuring plan and support arrangements for affected employees
Up to 2,800 employees are expected to be potentially affected, out of which around 2,500 roles would be impacted in the next 18 months
The company will endeavour to maximise voluntary redundancies and proposes to commit in excess of £130 million to a comprehensive support package for affected employees, including redundancy terms, community programmes, skills training and job-seeking initiatives
This is in addition to the £100 million funding for the Transition Board set up with UK and Welsh governments to support affected employees, contractors and communities
Port Talbot’s two high-emission blast furnaces and coke ovens would close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of 2024. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the Continuous Annealing Processing Line (CAPL) in March 2025
In discussion with the UK Steel Committee, Tata Steel has agreed that it would continue to operate the hot strip mill through the proposed transition period and in future. In addition, the downstream and steel processing centres would continue to serve customers by utilising imported semi-finished steel from Tata Steel plants in the Netherlands and India as well as other select strategic suppliers
In a statement, Tata says:
“Tata Steel today announced it will commence statutory consultation as part of its plan to transform and restructure its UK business.
“This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business.
“The transformation would secure most of Tata Steel UK’s existing product capability and maintain the country’s self-sufficiency in steelmaking, while also reducing Tata Steel UK’s CO2 emissions by five million tonnes per year and overall UK country emissions by about 1.5%.”
Tata Steel to cut up to 2,800 UK jobs in blast furnace closures
Newsflash: Tata Steel has announced that, as feared, it plans to close its two blast furnaces in at Port Talbot by the end of this year.
Under Tata Steel’s proposed restructuring programme, Port Talbot’s two high-emission blast furnaces and supporting facilities would be closed in a phased manner.
The first blast furnace and coke ovens closing around mid-2024 and then progressively winding down the remaining heavy end assets during the second half of the calendar year.
It would then build a new Electric Arc Furnace by 2027.
The move means that up to 2,800 workers potentially losing their jobs at its steelworks plant in Wales, with around 2,500 roles impacted in the next 18 months.
As flagged earlier, Stephen Kinnock, Labour MP for Aberavon, home of the Port Talbot steelworks, has said this would be an “utterly devastating” decision.
Updated
Full story: Port Talbot steelworks owners expected to confirm blast furnace shutdown
The owners of the Port Talbot steelworks are expected to confirm the shutdown of its blast furnaces on Friday morning, putting almost 3,000 jobs at risk.
Trade union representatives have gathered outside the gates of the works in south Wales to protest against the decision, which members have said will be a “crushing blow” to workers and UK steelmaking.
The owners of Port Talbot steelworks have rejected a trade union plan designed to keep its blast furnaces running on Thursday.
An announcement confirming the decision is expected before midday on Friday, after trading on the stock exchange ends in Mumbai. Shares in Port Talbot’s owner, Indian-owned Tata, rose 2% in trading, ending a two-day decline.
Stephen Kinnock, the Labour MP for Aberavon, said there was “still time” for Tata Steel to “pull back from the brink” of what he said would be an “utterly devastating” decision to close blast furnaces at its biggest UK plant.
Speaking on Sky News on Friday morning, he said:
“Do we really want to be a country, given the dangerous and turbulent world in which we live, that isn’t able to produce its own steel?”
More here:
The Port Talbot news raises questions over whether the UK have a long-term, strategic plan for industry, warned Jess Ralston, analyst at the Energy and Climate Intelligence Unit.
Ralston said:
“These jobs did not have to be lost. A proper planned transition to the steel industry of the future, including hydrogen, could have kept these jobs in communities that need them. The rest of the world is growing their industry and keeping their jobs in steel. The UK industry will have to transition or face decline.
“We’re currently falling behind Europe in the development of green steel manufacturing, as demand for the product is set to increase. There are around 40 green steel plants in Europe, which are moving away from older coal plants but keeping jobs in steel.
Lord John Mann, the former Labour MP who is now the Independent Adviser to the UK Government on Antisemitism, says the changes at Port Talbot are all about “cost-cutting, not emissions-cutting”.
Tata Steel. Don’t get the wool pulled over your eyes. It means we will pollute the world more by bringing in steel from India, China etc ( including to build wind turbines) . it’s cost cutting, not emissions cutting.
— John Mann (@LordJohnMann) January 19, 2024
Tony Wilson, director of the Institute for Employment Studies, has written a good thread showing how dependent Port Talbot is on Tata Steel for jobs, and how hard it will be to replace the roles at risk:
Putting Tata steel closures in context, below is from the @adzuna Intelligence Portal that we have access to.
— Tony Wilson (@tonywilsonIES) January 19, 2024
Over last year it has been the *single largest hiring employer* in Port Talbot - and virtually the only major employer outside of retail, hospitality, care.
🧵 pic.twitter.com/xKWkpH1I1g
... hiring by Tata Steel has basically collapsed - from around 35 vacancies at any one time before November, to basically none this year.
— Tony Wilson (@tonywilsonIES) January 19, 2024
So where does this leave things in Neath Port Talbot? pic.twitter.com/s5iYDNEf4b
Well there are still a lot of vacancies - over 1,000 this month, and the annual fall has been lower than UK average.
— Tony Wilson (@tonywilsonIES) January 19, 2024
But without Tata they're dominated by lower-paying industries, and average salaries are *down* year on year (by 4%) while for UK they've risen strongly (+6%). pic.twitter.com/Tdtg4XXaai
All told then, bad news today and even worse of course for all those directly affected. Lots we'll need to do to help people who will lose their jobs as well as those already out of work (who will find it harder too).
— Tony Wilson (@tonywilsonIES) January 19, 2024
But even more to do in trying to replace the jobs being lost.
Back in Davos, delegates have heard that the tailwinds which supported growth last year are gradually fading.
Christine Lagarde, president of the European Central Bank, pointed out that the strong labour market is now slightly less tight.
And the excess savings which built up in the pandemic, and supported spending, are being run down.
If you combine those, it’s likely that consumption will not be as strong a factor as before, indicates Lagarde.
Following a strange, extraordinary difficult 2023, the President of the @ecb Christine @Lagarde anticipates what is coming in 2024. The world will enter "something that is not going to be normality, so from normalization to non-normality," she says. #wef24 #WTOatWEF24 pic.twitter.com/N5J2vXC1LH
— WTO (@wto) January 19, 2024
Updated
“The closure of these old and loss-making operations [in Port Talbot] will be a step toward more sustainable operations for the company,” said Manav Gogia, an analyst at Yes Securities India Ltd.
“The market is now waiting to see how the trade union plans are formulated.”
Sunak: We're 'absolutely committed' to UK steelmaking
Prime Minister Rishi Sunak has claimed that his government is “absolutely committed” to British steelmaking, as the spectre of heavy job losses haunts Port Talbot today.
Asked whether he was happy about the prospect of job cuts, Mr Sunak told broadcasters:
“I know first of all that it will be a worrying time for everyone affected, and because it’s a commercially sensitive matter, and people appreciate there’s a limit to what I can say.
“But what I can tell you is we are absolutely committed to steelmaking in the UK and that’s why the Government provided half a billion pounds to support Tata.
“The alternative, by the way, was it, the entire plant, will be closed and all 8,000 jobs will be lost, but the Government worked with the company.
“The company is investing more money in order to safeguard thousands of jobs, and that’s something that the UK Government has done.
“The Welsh Government did not participate in that and that’s because we cared about those jobs, and the future of steelmaking in Wales and the UK, because there’s an announcement coming later, but it’s important that we wait for that.”
“We've been banging the drum for having a plan, that properly phased transition to a new future for a decade. Our words have fallen on deaf ears.”
— Times Radio (@TimesRadio) January 19, 2024
MP for Aberavon, Stephen Kinnock says that Tata Steel’s plan to close Port Talbot's blast furnaces is “deeply disappointing". pic.twitter.com/ALBsqB8ITb
The prospect of thousands of job cuts at Port Talbot is particularly galling as the UK government agreed to pump up to £500m into the steelworks last year.
That money was to help fund the as part of plans to produce “greener” steel, through the new electric arc furnace.
As we await confirmation that Tata Steel UK is to cut 3,000 jobs at Port Talbot, here's the business minister Kemi Badenoch agreeing to give them £500m in September. https://t.co/i8CFurPHxv
— Rob Davies (@ByRobDavies) January 19, 2024
Tata Steel and the UK Government jointly agree on a proposal for the largest investment in the UK steel industry for decades.
— Tata Steel UK (@TataSteelUK) September 15, 2023
The proposal lays the decarbonisation pathway towards globally competitive and sustainable steel making in Port Talbot, UK. https://t.co/seQh6Nq6Mz pic.twitter.com/23Sxr5okjG
The issue of how to decarbonise economies has been a theme at Davos this week.
Chrystia Freeland, Canada’s finance minister, told delegates she discussed this issue with a very significant international business leader who’s also a big investor in Canada:
“And he said to me, all the countries in the world need to be very careful that decarbonisation does not mean deindustrialization.
I thought that was an extremely smart comment.
And Canada has absolutely determined that decarbonisation for us will mean more jobs, more growth, more manufacturing, and we recognise that government needs to play a role to make that happen.”
The feared closure of the Port Talbot blast furnaces is part of a wider “deindustrialisation of Europe”, says Dr Kirill Shakhnov, senior lecturer in economics at the University of Surrey.
Dr Shakhnov explains:
“Steel production is an energy-intensive and environmentally impactful process. The cut in energy supplies to Europe from Russia has led to the deindustrialisation of Europe in general.
The Russian energy supplies were redirected to India.
This is a very good point, unfortunately:
Can we stop pretending that the job losses at Port Talbot will be 3000. The contractors, sub contractors, agencies and local businesses will feel the ramifications of this across the whole of South Wales. #Steeltown #Tata #home pic.twitter.com/FRwBAySEhP
— Kelly Andrews (@KellyRed777) January 19, 2024
Updated
If Tata Steel closes its Port Talbot blast furnaces, it will make the UK the only G20 country that cannot make steel from raw materials.
Blast furnaces burn coal to melt iron ore to make iron, that then has carbon removed to produce steel.
The electric arc furnace which is expected to replace them are a greener option – as they use electricity (ideally from renewable sources) to melt down scrap steel or iron.
While significantly greener than coal-fired furnaces, the new process is also much less labour intensive, leading to job losses.
Here’s a handy explanation:
But Vaughan Gething, the Welsh government’s economy minister, is concerned that the change will leave the UK unable to make primary steel.
Gething told BBC Radio 4’s Today programme, that it is an “incredibly worrying day, not just for the steel workforce, but for Wales, and I think across Britain”, adding:
“There is hope that in the future electric arc furnaces can produce all grades of steel —they can’t today”
“What this would mean, if this plan goes ahead, is that the UK would be the only G7 country that can’t make primary steel.
“If you don’t wait for the technology to change, you will transfer your ability to do that to other parts of the world and be reliant on imports for a number of years. That is an issue not just for Wales — (it is) a strategic sovereign issue for the UK.”
Updated
Kinnock: Blast furnace closures would be “utterly devastating” decision
Stephen Kinnock, Labour MP for Aberavon, home of the Port Talbot steelworks, has urged Tata Steel to “look again” at an alternative union-proposed plan, rather than close its blast furnaces in south Wales with the loss of up to 3,000 jobs.
Ahead of the expected grim news that Port Talbot’s two blast furnaces are to close, Kinnock said there was “still time” for Tata Steel to “pull back from the brink”.
He says it would be an an “utterly devastating” decision for Tata to close blast furnaces at its biggest UK plant.
Speaking to Sky News, Kinnock said:
“Do we really want to be a country, given the dangerous and turbulent world in which we live, that isn’t able to produce its own steel?
“We are very proud of what the Port Talbot steelworks means for Wales and for the entire United Kingdom and we feel passionately here.
“There isn’t a single household in my Aberavon constituency that isn’t connected to the steelworks in some way, and the impact would be utterly devastating.
“So we are urging Tata Steel and the UK Government to get back round the table with the unions.
“There is still time to pull back from the brink and we will be continuing to fight for that with every single fibre of our being.”
Demonstrations against the Davos elite have been taking place in several countries this week, highlighting the challenge the WEF faces as it tries to rebuild trust (the theme of this year’s meeting).
There have been #BetterThanDavos protests in Nepal and New Delhi, and a #BetterThanDavos People’s Assembly in Zimbabwe.
They’re being backed by Oxfam’s interim executive director, Amitabh Behar, who warns we have entered a “decade of division”
Our Executive Director @AmitabhBehar sends a message of solidarity from snow-covered Davos to #BetterThanDavos protestors around the world.
— Oxfam International (@Oxfam) January 18, 2024
We join our allies @FightInequality in saying it's time to #TaxTheRich and push for a #Ceasefire_In_Gaza_Now! pic.twitter.com/FlBDgi4QHr
Jenny Ricks, Global Convenor of the Fight Inequality Alliance says:
“As the Davos private jets fuel up for their return journeys home, WEF again has done nothing to tackle the growing inequality in our world.
Back down on earth people have spent this week making sure the cry to #TaxTheRich is heard by their governments in protest action. From Delhi to Cape Town and far beyond, people have said their solutions are #BetterThanDavos.”
Tata Steel to shut down Port Talbot blast furnaces, putting 3,000 jobs at risk
Today is a bleak one for thousands of UK steel workers, and the community of Port Talbot in Wales.
Tata Steel is to push ahead with plans to close both its blast furnaces in Port Talbot, a move that could lead to up to 3,000 job cuts.
My colleague Rob Davies reports:
The owners of Port Talbot steelworks have rejected a trade union plan designed to keep its blast furnaces running, putting nearly 3,000 jobs at risk and leaving the UK on course to become the only major economy unable to make steel from scratch.
In what one union said would be a “crushing blow” to workers and UK steelmaking, Port Talbot’s parent company, the Indian-owned Tata Steel, told workers’ representatives that it could no longer afford to continue production at the loss-making plant in south Wales while it completed a four-year transition plan to greener production.
The company, which is getting £500m from the government to help with that plan, broke the news during a summit at the five-star St James’ Court hotel in London, which is owned by the Tata Group.
The announcement is expected this morning.
Under the Tata plan, Port Talbot’s blast furnaces will shut down while the company builds electric arc furnaces, which make steel from recycled scrap, a greener and cheaper process.
Shares in Tata Steel have risen 2.6% today, as investors react to this dire news.
Updated
The UK’s economic outlook has darkened this morning, with the news that retail sales plummeted 3.2% month on month in December, as customers cut back.
Retail sales fell 3.2% in December 2023, down from a rise of 1.4% in November 2023.
— Office for National Statistics (ONS) (@ONS) January 19, 2024
➡️ https://t.co/hFSA5yQ5mO pic.twitter.com/Y4yfkKFLEh
Heather Bovill, deputy director at the ONS, explains:
“This was the largest overall monthly fall since January 2021, when the reintroduction of pandemic restrictions knocked sales heavily,” said
“Food stores performed very poorly, with their steepest fall since May 2021 as early Christmas shopping led to slow December sales.
Here’s the full story:
Updated
Last night in Davos, Google announced it has started construction on a new $1bn (£789m) data centre in the UK.
The news came as chancellor Jeremy Hunt met business leaders at WEF, as he tried to promote “British excellence” in the technology sector.
The new facility will be cited at a 33-acre site at Waltham Cross in Hertfordshire, purchased by Google in October 2020.
Ruth Porat, president and chief investment officer of Google’s parent company Alphabet, said:
“The Waltham Cross data centre represents our latest investment in the UK and the wider digital economy at large.”
Google says the centre would boost the growth of artificial intelligence (AI), and create jobs, initially due to the construction process.
Introduction: Econonic outlook in focus on final day of Davos
Good morning from Davos, where the final day of this year’s World Economic Forum Annual Meeting is getting underway.
Today, world leaders and business chiefs will be considering what lies ahead in 2024, after several days spent discussing crucial issues such as support for Ukraine, the potential and risks of AI, the Middle East crsisis and the global energy transition:
Davos will wrap up with the traditional set-piece panel on the global economic outlook, where key figures including Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, and Christine Lagarde, President of the European Central Bank.
Lagarde’s views on the outlook for interest rates will be interesting, after global stocks and bond markets weakened this week as hopes of early cuts to borrowing costs faded.
The experts here in Davos fear that the the global economic outlook is fraught with uncertainty. A WEF survey of top economists this week found that over half expect the world economy to weaken this year.
Any escalation of the Middle East conflict risks further disruption to shipping and could push up energy prices – both adding to inflation and slowing growth.
During his visit to Davos, foreign secretary David Cameron has been reiterate the 4 things that must happen for a peaceful solution to the Israel-Hamas war: a Palestinian-led government in Gaza and the West Bank, a concrete plan to help reform and support the Palestinian Authority, a major reconstruction plan for Gaza, and a political horizon towards a two-state solution.
But the news overnight that Israel’s prime minister, Benjamin Netanyahu, has told the Biden White House that he rejects any moves to establish a Palestinian state when Israel ends its offensive against Gaza is a sharp pushback against pressure for a two-state solution.
The agenda
9am CET / 8am GMT: A session on the electoral outlook for 2024
10.15am CET / 9.15am GMT: A session on how to deal with emerging risks and rapid shocks?
10.15am CET / 9.15am GMT: A session on the prospects for the Middle East in 2024
11am CET / 10am GMT: The Global Economic Outlook, with Tharman Shanmugaratnam, President of Singapore, Ngozi Okonjo-Iweala, Director-General, World Trade Organization, Mohammed Al-Jadaan, Minister of Finance of Saudi Arabia, David Rubenstein, Co-Chairman of The Carlyle Group, Christine Lagarde, President of the European Central Bank, and Christian Lindner, Germany’s Federal Minister of Finance
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