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.
As part of the deal, Tata, which made a pre-tax loss of £279m in the UK, according to the company’s most recent annual results, is expected to inject about £700m into the green initiative.
The business secretary, Kemi Badenoch, and the Welsh secretary, David TC Davies, are expected to visit the south Wales site on Friday to announce the deal.
In July last year, Tata made a £1.5bn demand for government subsidies, with Natarajan Chandrasekaran, the group’s chair, saying: “Without this, we will have to look at closure of sites.”
The agreement with the government is likely to result in up to 3,000 job losses over the long term as a result of decarbonisation.
The government is in talks about a financial support package to assist Tata Steel employees facing redundancy, although some of the job cuts are likely to come from workers taking early retirement.
Charlotte Brumpton-Childs, a GMB national officer, said: “Government intervention in the steel industry is long overdue, but imposing a programme 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.”
