Closing summary
Time for a recap
Under the plan, announced this morning, Tata Steel will inject about £750m into Port Talbot to fund a switch to greener forms of steelmaking using electricity rather than coal.
Tata called it “a defining moment for the future of the steel industry,”
Business and Trade Secretary Kemi Badenoch says it will secure a sustainable future for Welsh steel, and save thousands of jobs in the long term. She says:
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.
But Labour were critical, saying:
“Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant.
Unions also battered the plan, which is expected to lead to around 3,000 job losses as the new electric arc furnace needs fewer workers.
The GMB said the deal will have devastating consequences for jobs and workers, and rip the heart out of the Port Talbot community.
The TUC criticised the strategy, saying:
An electric arc furnace-only model for Port Talbot is simply the wrong approach for making our steel greener.
We need a proper long-term plan for zero-carbon steel-making in this country – not 1980s-style deindustrialisation.
And Unite said it would fight “tooth and nail” to save jobs at Port Talbot, and to create more in steel.
In other news…
Company insolvencies in England and Wales have jumped 19% year-on-year, as firms are hit by rising costs and economic uncertainty.
Russia’s central bank has raised interest rates to 13%, up from 12%, as it tries to ease inflationary pressures and support the rouble.
Shares in Arm have risen on their second day’s trading on the Nasdaq, after a 25% jump yesterday.
European stock markets are rallying too, with the UK’s FTSE 100 up 56 points at 7729, its highest level since late May. That puts the Footsie on track for its biggest weekly gains since last autumn.
TikTok has been fined €345m (£296m) for breaking EU data law in its handling of children’s accounts, including failing to shield underage users’ content from public view.
Train drivers have announced two more days of strikes and an overtime ban across England, timed to bring services to a halt at the start and end of the Conservative party conference.
Oil companies have been granted licences by the government that it hopes will enable them to store up to 10% of the UK’s carbon emissions in old oil and gasfields beneath the seabed.
We’ll be back on Monday. GW
Here’s Tony Bosworth, climate campaigner at Friends of the Earth, on the UK-Tata Steel deal:
“Green steel is the future, but it cannot come at the expense of jobs and communities.
“This announcement exposes the flaws and confusion at the heart of the government’s policymaking. Less than a year ago, it approved a new coal mine, in part to supply companies like Tata Steel, which are already moving to decarbonise production.
“Instead of backing more fossil fuel extraction, the government should be investing in supporting workers and communities as part of a just transition to a zero-carbon economy that’s fit for the challenges of the 21st century. This should include a fair deal to secure a long-term future for Port Talbot that protects workers and creates long-term, sustainable jobs.”
Over on Wall Street, shares in UK chip designer Arm Holdings have opened higher, a day after its US stock market debut.
Arm’ shares jumped more 7% at the open to hit $69 on the Nasdaq, giving it a market capitalisation of $70bn.
But they’ve quickly slipped back to $65.98, giving a valuation of $67.7bn.
Arm was valued at over $52bn when owner Softbank sold 10% of the company to investors through this week’s IPO, at a price of $51 per share.
Yesterday, in its first day of trading, it surged by 25%.
Updated
Here’s James Burgess, head of commercial at trade credit firm Atradius UK, on the rise in insolvencies in England and Wales (see earlier post):
“The recent Insolvency Service data shows that businesses across the UK have begun to decline as the number of company insolvencies increased in August to 2,308, a 33% increase from July 2023.
“Our own data reveals that the number of claims for late or failed payments reported to us in Q2 of 2023 was a staggering 26% higher than the same period in 2022, and 165% higher than Q2 in 2021 meaning businesses aren’t yet out of the woods.
This investment will modernise and secure a more sustainable future for the UK steel industry.
— Rishi Sunak (@RishiSunak) September 15, 2023
It will also protect thousands of skilled jobs in the long-term and help grow the economy 🇬🇧 https://t.co/DjbVLEBStt
Back in Wales, there’s a demonstration at the Tata Steel plant in Port Talbot:
Over in Moscow, Russia’s central bank has raised interest rates for the third time in a row as it battles inflationary pressures and the weak rouble.
The Bank of Russia has lifted its key interest rate by 100 basis points, or one percentage point, to 13% from 12% today.
Bank of Russia
Governor Elvira Nabiullina says:
Considering the current conditions, we need to maintain tight monetary policy for a longer period to bring inflation back to the target.
Russia Extends Monetary Tightening as Expected
— TRADING ECONOMICS (@tEconomics) September 15, 2023
The Bank of Russia raised its key interest rate by 100bps to 13% in its September 2023 meeting, consistent with broad expectations from financial markets, and furthering...
More here: https://t.co/QTEGwKMIPn pic.twitter.com/U8H4rBYY6V
Nabiullina points out that price growth significantly sped up in July, before slowing in August, and that Russia’s foreign currency earnings contracted due to a slump in the value of exports this year (as sanctions imposed since the invasion of Ukraine hit its economy).
The Bank of Russia still expects GDP to expand by between 1.5% and 2.5% this year, although a tight labour market is holding back growth.
Nabiullina explained:
In the second quarter, GDP rose by 4.9% year-on-year. Such a high growth rate means that the economy is recovering after last year’s downturn.
Besides, according to our assessments, the part of the economy focusing on domestic demand has generally exceeded the level of late 2021. We expect the expansion to be more moderate in the second half of the year, which is natural after a period of fast recovery growth.
Norway wealth fund tells companies to plan for climate transition
In other news today, Norway’s sovereign wealth fund has revealed stricter demands for how companies it invests in should handle climate risk.
The $1.4trn fund, which is the world’s largest, wants boards to move from target setting to transition planning.
The fund’s Chief Governance and Compliance Officer Carine Smith Ihenacho said in a statement:
“With the effects of climate change becoming more evident, we really saw the need to sharpen our expectations,”
The fund also published a policy concerning the use of voluntary carbon credits, which it said companies could use in certain cases, explaining:
“We believe companies should prioritise reducing own emissions but can use additional and verified credits as a supplement to signal high climate ambitions.”
Carbon credits should not be counted towards science-based interim emission reduction targets, and companies must be transparent about the details of credits they use, it added.
“Ultimately, carbon removals will be needed by many companies seeking to achieve net zero emissions by 2050.”
Back in February, Norway’s sovereign wealth fund warned company directors it will vote against their re-election to the board if they do not up their game on tackling the climate crisis, human rights abuses and boardroom diversity.
Unite mounts campaign to protect steel jobs
The Unite union has described the plans laid out by the UK government and Tata for Port Talbot’s steel works as ‘a disgrace’ and has said it will fight them.
Unite are unhappy that the government has not secured any job guarantees in return for its “mere £500m” investment, to replace the two existing blast furnaces with one electric arc furnace at the Port Talbot steelworks.
The plans follow a decades long path of UK steel industry shrinkage and substantial job losses, it warns.
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.”
“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." @UniteSharon 1/2https://t.co/de7BTfydXU
— Unite the union: join a union (@unitetheunion) September 15, 2023
The UK government insists that maintaining Port Talbort’s existing blast furnaces was not an option, my colleague Peter Walker reports.
Rishi Sunak’s official spokesperson told reporters today:
We recognise that this will have been an anxious time for employees and their families while this work to find the right way forward has taken place for those that are affected.
“We’re working with the Welsh government and with Tata Steel to establish a dedicated transition board which supports employees and the economy affected, worth up to £100m in total.
And there are significant opportunities for people in the area, including through the new Celtic free port which is due to create 16,000 jobs.
But it’s important to note that simply maintaining blast furnace production, ie the status quo, was not an option with the steel industry needing a sustainable future using more modern technology and practices.”
Today’s £500m grant for Tata Steel is the latest hefty subsidy bill in recent months to persuade companies to stay in Britain.
Bloomberg reports that:
More broadly, the payment will again underscore the precarious state of British industry in the absence of a state-driven industrial strategy, compounded by the impact of Brexit and the disruption to trade with the European Union.
In July, the government put forward £500 million in support for a new battery plant established by Tata Group’s Jaguar Land Rover. A smaller package was given to BMW AG, who said it would make its Mini electric models in the UK.
Still, it’s not just the UK under pressure. US President Joe Biden’s package of tax credits for green industry has also threatened to lure investment and business away from other nations, setting off an international scramble to keep pace. Sunak is expected to unveil a UK manufacturing plan later this year.
UK will pay up to £500 million to help Tata Steel keep the country’s biggest steelworks running, the latest hefty subsidy bill to persuade companies to stay in Britain https://t.co/IC1vpmtUBV
— Bloomberg (@business) September 15, 2023
'Our biggest concern is job losses'
— Sky News (@SkyNews) September 15, 2023
Sky's @danwnews is in Port Talbort to speak to Barrie Evans, Community Union's Talbot representative, following the news of a £500m government rescue package for Tata Steel.https://t.co/uiXh4SHVUd
📺 Sky 501 and YouTube pic.twitter.com/uQp4BwuNyD
Chancellor Jeremy Hunt says the government is “right to step in” to support Welsh steelmaking at Port Talbot:
This £1.25bn joint investment with @TataSteelUK is a landmark moment for our manufacturing sector: securing the future of steel in the UK, a key strategic industry, while facilitating the transition to the green, high skill jobs of the future.https://t.co/wMQtvAWg0b
— Jeremy Hunt (@Jeremy_Hunt) September 15, 2023
Labour: £500m of taxpayers’ money to make thousands of British workers redundant
Jonathan Reynolds MP, Labour’s Shadow Business and Trade Secretary, has criticised today’s announcement, saying:
“Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant. Britain needs an Industrial Strategy that invests alongside industry delivering a return on taxpayers’ investment whilst protecting our national capabilities and workforce. The Conservatives have presided over a decade of failure when it comes to steel with 13,000 fewer steel workers now than under a Labour government.
“Labour have pledged £3bn for investment alongside industry to decarbonise steel in partnership with workers and industry investing in a range of technologies to ensure we have the clean steel we need to rebuild Britain. Labour’s plans will seize the opportunities of the future and reindustrialise Britain providing good jobs for decades to come.”
It’s not totally clear, by the way, exactly how many jobs will be lost, although many reports say 3,000 are at risk.
The UK government says its agreement with Tata “has the potential to safeguard over 5,000 jobs across the UK”.
Tata Steel employs 8,000 workers in the UK, including 4,000 at Port Talbot, and also supports around 12,500 further jobs in the upstream supply chain.
So, this raising the prospect that there will be as many as 3,000 redundancies across Tata’s workforce, as the lower-carbon electric furnaces are less labour intensive.
Updated
UK thinktank the IPPR fears the deal with Tata Steel is “a bad deal for workers”.
Responding to the government’s deal over the Port Talbot steelworks, Luke Murphy, head of the fair transition unit at IPPR, said:
“The use of coal in steelmaking must come to an end but this looks like a bad deal for workers, the wider community in Port Talbot, and for Britain.
“The steel sector in the UK was desperate for a Sector Deal all the way back in 2017. The nuclear industry got one and secured relatively strong commitments to hire locally and protect jobs. The steel sector didn’t get one and now it’s fighting for its life and workers are suffering.
“The government has failed to give unions and workers a seat at the table throughout this process and their interests have been ignored or abandoned.
“The greening of steel is a race the UK is losing but it didn’t need to be this way. Germany has invested over $53 billion in decarbonising heavy industry and has committed to work with unions and protect jobs.
“The UK has nothing like the scale of this commitment and has done nothing to make conditions more favourable for investment, like tackling very high energy prices for industrial consumers.
“The UK needs a Green Industrial Strategy with jobs and workers at its heart.”
The TUC are very concerned by the job losses which are expected to follow today’s deal.
TUC General Secretary Paul Nowak said:
“This is a devastating blow for workers at Port Talbot and the opposite of a just transition.
Ministers must press pause and urgently get around the table with unions. It beggars belief that they have been locked out of talks.
Instead of safeguarding livelihoods in the steel industry, this deal will see thousands of good, unionised jobs potentially lost forever.
An electric arc furnace-only model for Port Talbot is simply the wrong approach for making our steel greener.
We need a proper long-term plan for zero-carbon steel-making in this country – not 1980s-style deindustrialisation.
Other countries – like America and Germany – are working in partnership with unions and employers to protect their manufacturing heartlands. We should be doing the same.
“Tackling climate change can go hand in hand with creating and protecting good jobs. The Conservatives are presenting a false choice.”
UK Steel, the trade association for the UK steel industry, has welcomed the £500m funding package for Port Talbot:
UK Steel director general, Gareth Stace says:
“This is an important day for the UK steel sector. Government has confirmed its firm and bold commitment to the future of steelmaking here in the UK.
The UK steel industry is committed to decarbonising by 2035. A year ago, the UK steel sector published an ambitious roadmap to Net Zero. Today we take a significant step to realising that vision.
A Net Zero economy needs more steel, not less. For our steel sector to not only survive but actually thrive and deliver a massive boost to Net Zero Britain, we need a strong, long-term partnership between government and industry. Today’s announcement confirms that commitment.”
Updated
Welsh Secretary David TC Davies says Wales’s steel industry now has a “bright future”:
Steelmaking remains a vital part of the Welsh economy and this huge support package from the UK Government ensures that the industry now has a bright future to match its long and proud history in South Wales.
We are investing in our steel industry as it makes the necessary transition to greener methods of production and are also putting support in place for the local workers affected by the changes.
Badenoch: this will save thousands of jobs in the long term
The UK government has declared that Welsh steel’s future has been secured by today’s deal with Tata, which will see taxpayers provide a £500m grant towards the £1.25bn cost of new greener furnaces.
The Department for Business and Trade says:
UK Government agrees proposal with Tata Steel to invest in greener steelmaking at Port Talbot, protecting the future of steel production and skilled jobs in Wales.
Transformational investment – including one of the largest UK Government support packages in history – would modernise production with state-of-the-art Electric Arc Furnace steelmaking and reduce UK’s entire carbon emissions by around 1.5%.
Without substantial investment, Port Talbot would otherwise be at serious threat and Tata Steel’s operations in the UK employing 8,000 people would be at risk.
Significant investment alongside Celtic Freeport will drive long-term green growth and create skilled jobs in South Wales and UK economies.
Business and Trade Secretary Kemi Badenoch (who began the week announcing a deal with BMW to save its Oxford car plant), insists the package with Tata will save jobs in the long run.
Badenoch says:
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.
Tata Steel says it will soon start a consultation on its proposal and the transition period that will be needed.
This, it warns, will include a “potential deep restructuring for the carbon-intensive, unsustainable iron and steelmaking facilities at Port Talbot” – which unions fear will mean heavy job losses.
Many of the site’s existing ‘heavy end’ assets —such as blast furnaces and coke ovens—are reaching the end of their operational life, Tata adds.
Stephen Kinnock, Labour MP for the Welsh constituency of Aberavon, has warned that today’s deal with Tata Steel isn’t ambitious enough:
“While investment to decarbonise our Port Talbot steelworks is necessary and long overdue, I am deeply concerned that the UK Government is 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.
“At the heart of this failure is the narrow focus on electric arc furnace (EAF) technology, which will not only result in more job losses than necessary, but which simply cannot produce the qualities and grades of steel needed to meet the full spectrum of Tata’s customer base.
“Our European competitors are investing in a range of green steel-making capabilities in addition to EAFs – such as hydrogen, direct reduced iron and carbon capture – thus giving them the versatility that is needed to meet customer demand.
“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.”
GMB: this will rip the heart out of the Port Talbot community
The GMB union fears that the deal between the UK and Tata Steel would be devastating for the steel industry and “rip the heart out” of the Port Talbot community that is dependent on the site.
Gary Smith, GMB General Secretary, says:
“This deal will have devastating consequences for jobs and workers. It will rip the heart out of the Port Talbot community.
For years, GMB has called for investment in this critically important industry. Instead of listening the government dithered and delayed until it is too late, and thousands of workers, their families and communities will pay the price.
Our country cannot be secure without a functioning domestic steel industry and workers must be at the heart of plans to modernise it.
Tata: it's the largest investment in the UK steel industry for decades.
Today’s agreement with the UK government is “a defining moment for the future of the steel industry,” said Natarajan Chandrasekaran, chairman of Tata Group.
Tata says today’s deal to invest £1.25bn in “state-of-the-art electric arc furnace steelmaking” is the largest investment in the UK Steel Industry for decades.
Chandrasekaran explains it will create a decarbonisation pathway towards globally competitive and sustainable steel making in Port Talbot.
He adds:
“The proposed investment will preserve significant employment and represents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.”
Tata Steel seals £500m UK support package but big job losses feared
Newsflash: The UK government has agreed a £500m support package for Tata Steel to secure the future of the Port Talbot steelworks, my colleague Mark Sweney reports.
Unions said the deal will have “devastating consequences”, with as many as 3,000 workers expected to lose their jobs.
India’s Tata group, which owns the vast steelworks in south Wales – Britain’s biggest – is also expected to inject about £725m to help it transition to greener production methods.
The country’s largest steel producer, which employs about 8,000 staff in the UK, with about half based at Port Talbot, had warned that it faced site closures if a financial support package could not be agreed.
Under the agreement, the government will provide a state aid package worth up to £500m to help switch Port Talbot’s two coal-powered blast furnaces to greener electric arc versions that can run on zero carbon electricity.
Here’s the full story:
PA: Tata to consult over a “potential deep restructuring” alongside £500m state aid
Back in the steel industry, the PA news agency are reporting that Tata Steel is to receive up to £500m from the Government for investment plans at its Port Talbot steelworks, as we flagged this morning.
The money will help to install new electric arc furnaces for steelmaking at the site in Wales, which could be up and running within three years of getting regulatory and planning approvals.
But, Tata will also consult over a “potential deep restructuring”, which could mean significant job cuts at the site (reminder, there are fears that 3,000 jobs could be lost through a transition to greener production methods).
#Breaking Tata Steel is to receive up to £500 million from the Government for investment plans at its Port Talbot steelworks but will consult over a “potential deep restructuring”, sources have told the PA news agency pic.twitter.com/eYNCZRu6bt
— PA Media (@PA) September 15, 2023
Updated
In another transport dispute, railway catering workers have launched a 48-hour strike in a dispute over pay and pensions.
Members of the Rail, Maritime and Transport union (RMT) employed by Rail Gourmet on TransPennine Express services walked out on Friday until midnight on Saturday.
RMT general secretary Mick Lynch said:
“Rail Gourmet bosses are dragging their feet in this dispute.
“They are a profitable company who could easily pay the modest rise our members expect and deliver on sick pay and pensions.
“The company should be in no doubt that our members are determined to get a just settlement and will continue their industrial campaign for as long as it takes.”
Mick Whelan, ASLEF’s general secretary, explains that train drivers are striking in their ongoing dispute over pay.
‘While we regret having to take this action – we don’t want to lose a day’s pay, or disrupt passengers, as they try to travel by train – the government, and the employers, have forced us into this position.
Our members have not, now, had a pay rise for four years – since 2019 – and that’s not right when prices have soared in that time. Train drivers, perfectly reasonably, want to be able to buy now what they could buy four years ago.’
Whelan also criticises the government, and train operators, for not engaging with the union, saying:
‘Do you remember Where’s Wally? Well, what we want to know is Where’s Harper? We last saw the Secretary of State for Transport in December. We last saw Huw Merriman, the Rail Minister, in January. And we last saw the train companies in April.
Since then, nothing. Nada. Zilch. Not a letter, not an email, not a text message, not a phone call, not a WhatsApp. Not a word!’
More UK train strikes announced
Newsflash: UK train drivers are to hold two more days of stike action, coinciding with the Conservative party annual conference.
ASLEF, the train drivers’ union, has announced another two days of strike action – on Saturday 30 September and Wednesday 4 October.
That will dovetail with the Tory party conference, being held between Sunday 1 October and Wednesday 4 October in Manchester.
Aslef have also announced an overtime ban across the UK rail network on Friday 29 September and from Monday 2 to Friday 6 October, which will create further disruption.
Aslef says:
The strike will force the train operating companies to cancel all services and the ban on overtime will seriously disrupt the network as the privatised train companies have always failed to employ enough drivers to provide a proper service – the service they promise passengers, businesses, and the government they will deliver – without asking drivers to work their rest days.
The 16 companies affected include: Avanti West Coast; Chiltern Railways; c2c; CrossCountry; East Midlands Railway; Greater Anglia; GTR Great Northern Thameslink; Great Western Railway; Island Line; LNER; Northern Trains; Southeastern; Southern/Gatwick Express; South Western Railway; TransPennine Express; and West Midlands Trains.
Public satisfaction with Bank of England’s inflation strategy hits record low
Public satisfaction with the Bank of England’s strategy to battle inflation has fallen to a record low.
New quartetly data from the Bank shows that dissatisfaction over how it is “doing its job to set interest rates to control inflation” is at a record level.
Just 19% of those surveyed were satisfied with the BoE’s performance, while 40% were dissatisfied, giving a net satisfaction reading of -21.
That’s the worst on record, going back to 1999, beating the previous low of -13% set three months ago when the Bank last released this data.
Another 33% of people were ‘neither satisfied nor dissatisfied’ with the Bank, which has raised interest rates 14 times in a row since December 2021, to a 15-year high, while 9% didn’t know.
Inflation has cooled since last autun, dropping to 6.8% in July, but that’s still more than three times over the Bank’s 2% target.
Updated
David Hudson, restructuring advisory partner at FRP, fears more companies will collapse in the months ahead.
Reacting to today’s figures, showing a 19% year-on-year jump in insolvences in August, Hudson says:
“The coming year will bring more and more insolvencies as the damage from months of rising borrowing rates, falling demand and high inflation gradually feed through.
“Old challenges could still rear their head again too. As the mercury drops, higher costs for electricity, gas or fuel could return as a significant pressure on energy-intensive companies, particularly those in manufacturing. Altogether, this means that for much of UK Plc the watchwords will continue to be resilience and adaptation.
“An important emerging trend is a rise in compulsory liquidations. In many cases, these are a result of winding-up petitions against businesses from HMRC.
“After its leniency during the pandemic, we’ve seen the taxman become far more assertive in collecting outstanding liabilities. At a time when more businesses are struggling to settle tax debts due to cash and profitability pressure, a request to settle up can be an ask too far. The good news is that ‘time to pay’ arrangements can still be negotiated and secured with the right planning and preparation.”
Company insolvencies jump 19% year-on-year in August
Newsflash: Company insolvencies in England and Wales have jumped by almost a fifth, year-on-year.
New figures just released by the Insolvency Service show there were 2,308 registered company insolvencies across England and Wales in August, which is 19% more than in August 2022.
The increase was driven by a rise in creditors’ voluntary liquidations (CVLs), in which a company is voluntarily wound up either by its directors or its shareholders. There were 1,880 CVLs last month, 13% higher than in August 2022.
The number of administrations was also higher than in August 2022.
And there were 221 compulsory liquidations in August, 45% higher than in August 2022 – this is where an insolvency procedure is started by a court order - a winding-up order.
The Insolvency Service says.
Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HMRC.
Updated
There’s also important industrial news in the US today, where car workers have launched the most ambitious industrial labor action in decades.
US auto workers launched a series of strikes after their union failed to reach agreement with America’s three largest manufacturers over a new contract.
The deadline for talks between Ford, General Motors, Stellantis and the United Auto Workers (UAW) expired at midnight on Thursday, with the sides still far apart on the union’s new contract priorities.
The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US. More here.
Full story: Tata Steel poised for £500m subsidy to secure Port Talbot's future
The government is poised to announce a £500m support package for Tata Steel to secure the future of the Port Talbot steelworks, in an agreement that could lead to as many as 3,000 job losses.
India’s Tata group, which owns the vast steelworks in south Wales – Britain’s biggest – has been in negotiations over government subsidies to help it either transition to greener production methods or look at site closures.
Tata Steel UK, which employs about 8,000 staff at two of Britain’s four remaining blast furnaces, does not earn enough to cover the cost of decarbonisation on its own. About 4,000 people are employed at Port Talbot.
Under the agreement, the government will provide a state aid package to help switch Port Talbot’s two coal-powered blast furnaces to greener electric arc versions that can run on zero carbon electricity. More here.
The Government may be trying to do the right thing with its subsidy deal with Tata, but “if this deal leads to 3,000 job loses it can’t be right”.
That’s the view of Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit (ECIU).
Cran-McGreehin explains:
Having a long-term vision that leads to hydrogen-based steel manufacture at Port Talbot, as well as the arc furnaces that recycle used steel, could protect many more jobs.
The UK steel industry can’t stand still with demand for cleaner steel growing and Europe already stealing a march with new technologies. Stasis is a recipe for decline, but the deals done have to be right and have to be future proof.”
It is a “very anxious morning” due to fears of job losses at the Port Talbot steelworks in south Wales, says Welsh First Minister Mark Drakeford.
Drakeford hopes that any cuts to the workforce at the plant could be phased in over a number of years rather than “a rush to lose jobs”.
He told BBC Breakfast:
“This will be a very anxious morning for many, many families in Port Talbot waiting to see the detail of whatever has been agreed between the UK Government and the company. We haven’t seen any of the details as yet.
“On the one hand, it does seem that there is to be investment at the plant that will secure the long-term future of jobs in that town.
“But if the price is thousands of jobs to be lost, then that is a very high price, and lots will depend on the detail.
It will depend on just how many jobs can be saved and it will depend upon the length of time over which there is a transition – if that is what it is to be – from the blast furnace production to the electric arc production of the future.
“A rush to lose jobs, I think, will be very difficult indeed. A transition plan that allows all this to happen over a period of years, that will be more manageable.”
'A rush to lose jobs will be very difficult indeed'
— BBC Breakfast (@BBCBreakfast) September 15, 2023
Mark Drakeford, First Minister of Wales, spoke to #BBCBreakfast on reports 3,000 jobs could be lost at the Tata steelworks in Port Talbot to help it decarbonise and reach net zero statushttps://t.co/CkZEHC9pyB pic.twitter.com/GAkskwTxk9
Here’s a video clip explaining why the blast furnaces at Port Talbot could be replaced with newer, greener, electric arc furnaces that require fewer workers to operate:
Steelworkers have said reports of 3,000 potential job losses in Port Talbot were "frightening" and called for certainty about a deal to decarbonise.
— BBC Breakfast (@BBCBreakfast) September 15, 2023
Tomos Morgan had more details on #BBCBreakfast https://t.co/CkZEHC9pyB pic.twitter.com/NknvpD7XCy
Yesterday, Wales’s economy minister Vaughan Gething criticised UK business secretary Kemi Badenoch over a ‘lack of dialogue’ over the impending Port Talbot state aid deal.
On X (formerly called Twitter), Gething called for “a regular formal dialogue” on the issue, and published two letters he had written to Badenoch.
In one of them, Gething said:
With the reports in the press that a deal might be imminent, it was critical that we had the opportunity to discuss the progress of your negotiations with Tata Steel and the implications not only for the company but for the workforce, the community and the whole of the sector.
The company sits at the heart of one of the UK’s most industrialised regions. Decisions by Tata Steel on the nature and timeframe of its decarbonisation journey will have a profound impact on wider strategic planning for the region.
I have met with the First Minister and Climate Change Minister to discuss today’s media reports.
— Vaughan Gething (@vaughangething) September 14, 2023
In the interests of the industry, workers, and their communities, we need a regular formal dialogue on this matter.
My message to the Business Secretary here: https://t.co/zub6Dy8Tfq
Union leader Alasdair McDiarmid, assistant general secretary of Community, has criticised Tata Steel today.
McDiarmid told the BBC Radio 4 Today programme that Tata and the government’s have been focused on rushing through “the cheapest and easiest deal”, rather than the best deal for the steel industry, the Port Talbot workforce and the country.”
McDiarmid said:
“We are extremely disappointed and angry actually about the actions of Tata here.
“They gave us assurances at the highest levels that their discussions with the Government would be confined to their joint financial commitments to support Port Talbot and that any and all decisions on investment and the deployment of whatever technology it may be would be made in partnership with the unions.
“From what we are hearing, it does seem Tata and the Government have done their deal … whilst sacrificing thousands of jobs. That, for us, is completely unacceptable. It’s not the way companies and the Government should be doing their business.”
Aid deal is "spending half a billion pounds to make 3,000 people unemployed”.
Steelworkers have told the BBC that reports of potential job losses in Port Talbot were “frightening” and called for certainty about a deal to decarbonise.
Shadow Business Secretary Jonathan Reynolds met steelworkers after reports the UK government could offer £500m to Tata Steel to help it reach net zero.
Mr Reynolds said it seemed ministers were “spending half a billion pounds to make 3,000 people unemployed”.
Tata Steel UK said it was “fully committed to meaningful consultation”.
The Community union, which represents steel workers, are also concerned that job losses are set to be announced at Britain’s biggest steelworks under plans to produce “greener” steel.
Alun Davies, national officer for Community union, says:
“There must be a full and meaningful consultation on all the options to decarbonise steelmaking and secure the future of every UK plant.
“Community will do everything within its powers to support our members and protect their jobs.”
Introduction: Job loss fears at Port Talbot
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The spectre of possible job losses is stalking Britain’s biggest steelworkers today, as the UK government and Tata Steel close in on an agreement to secure the future of the site.
The Port Talbot steelworks in south Wales is home to two of Britain’s four remaining blast furnaces, employing around 4,000 workers.
After months of talks, the government and the Indian-owned company are thought to be close to announcing an aid package to help Port Talbot transition to produce “greener” steel, possibly as soon as today.
That could include a £500m aid package from the UK, with Tata providing around £700m, to switch the plant’s two coal-fired blast furnaces to electric arc versions. They would be less polluting and run on zero-carbon electricity.
But the shift could still lead to hefty job losses, with unions angry that they have been locked out of the talks.
Charlotte Brumpton-Childs, GMB national officer, said:
“Government intervention in the steel industry is long overdue, but imposing a program without proper worker consultation is unacceptable.
“GMB has urged ministers and Tata Steel to have a longer-term view on the decarbonisation of steel.
“It is not a just transition if thousands of jobs are sacrificed in the name of short-term environmental gains.
“We wholeheartedly support the move to modernise and decarbonise the industry, in fact we have sought this type of investment for years.
“But ignoring technologies outside of electric arc furnaces will mean tens of thousands of people will lose their livelihoods.”
Business Secretary Kemi Badenoch and Welsh Secretary David TC Davies are expected to visit the South Wales site today to announce the deal.
But The Mirror newspaper is reporting that at least 2,000 jobs could be lost at Port Talbot, in a devastating blow to the local economy.
The agenda
7.45am BST: French inflation report for August
10am BST: Eurozone trade balance for July
2.15pm BST: US industrial production data for August
3pm BST: US consumer confidence report from the University of Michigan
Updated
