Government accused of ‘rushed’ Tata Steel deal that leaves 3,000 jobs at risk
Adam Forrest
Adam Forrest
THE INDEPENDENT
Fri, 15 September 2023
Rishi Sunak’s government has been accused of “rushing” the rescue deal for Tata Steel which will pump up to £500m into the company while leaving as many as 3,000 workers at risk of losing their jobs.
Tata, the Indian conglomerate owner of the Port Talbot steelworks in south Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
The government hailed a “great” deal for the firm, employing around 8,000 people across the UK, which will also see it invest about £750m in the green transition project.
But the company said on Friday the plan will mean “deep potential restructuring”. And the Department for Business and Trade said it will only safeguard around 5,000 jobs out of Tata’s total workforce.
Labour said the deal had been “rushed at the 11th hour”, while union leaders have expressed their anger at job losses and being shut out of talks – describing the agreement as a “disgrace”.
Unite general secretary Sharon Graham said the union will be “fighting tooth and nail not only to save these jobs but to create more jobs in steel”.
Gary Smith, GMB general secretary, said: “The cost to local people and the wider Port Talbot community will be immense. Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Labour claimed the plans would both waste money and hurt workers. Shadow chancellor Rachel Reeves said: “This rushed deal at the 11th hour does not meet the needs of the people who work at those steelworks at Port Talbot.”
Shadow business secretary Jonathan Reynolds added: “Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant.”
Mr Sunak said he was “pleased” by the agreement with Tata to support the steelworks in its “transition”. The PM told broadcasters: “Obviously, there will still be some people affected and I know this will be an anxious time for them.”
He added: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.”
Workers outside Tata Steel's Port Talbot steelworks in south Wales, as around 3,000 jobs are at risk (PA)
The new £1.25bn furnaces are expected to be up and running within three years of approval. Tata said last year its UK operations were under threat unless it secured government funding to help it move to less carbon-intensive furnaces.
The deal also comes two months after parent firm Tata Group confirmed plans to build a £4bn battery factory in the UK after also getting subsidies from the government.
Ministers said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5 per cent”.
Speaking to Sky News, business secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK.”
Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100m to make sure that people have skills to retrain and move on to other things.”
But Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said job losses “will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy”.
Tata said the fresh plans lay out a future for sustainable steel-making in the area. Chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
Fri, 15 September 2023
Rishi Sunak’s government has been accused of “rushing” the rescue deal for Tata Steel which will pump up to £500m into the company while leaving as many as 3,000 workers at risk of losing their jobs.
Tata, the Indian conglomerate owner of the Port Talbot steelworks in south Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
The government hailed a “great” deal for the firm, employing around 8,000 people across the UK, which will also see it invest about £750m in the green transition project.
But the company said on Friday the plan will mean “deep potential restructuring”. And the Department for Business and Trade said it will only safeguard around 5,000 jobs out of Tata’s total workforce.
Labour said the deal had been “rushed at the 11th hour”, while union leaders have expressed their anger at job losses and being shut out of talks – describing the agreement as a “disgrace”.
Unite general secretary Sharon Graham said the union will be “fighting tooth and nail not only to save these jobs but to create more jobs in steel”.
Gary Smith, GMB general secretary, said: “The cost to local people and the wider Port Talbot community will be immense. Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Labour claimed the plans would both waste money and hurt workers. Shadow chancellor Rachel Reeves said: “This rushed deal at the 11th hour does not meet the needs of the people who work at those steelworks at Port Talbot.”
Shadow business secretary Jonathan Reynolds added: “Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant.”
Mr Sunak said he was “pleased” by the agreement with Tata to support the steelworks in its “transition”. The PM told broadcasters: “Obviously, there will still be some people affected and I know this will be an anxious time for them.”
He added: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.”
Workers outside Tata Steel's Port Talbot steelworks in south Wales, as around 3,000 jobs are at risk (PA)
The new £1.25bn furnaces are expected to be up and running within three years of approval. Tata said last year its UK operations were under threat unless it secured government funding to help it move to less carbon-intensive furnaces.
The deal also comes two months after parent firm Tata Group confirmed plans to build a £4bn battery factory in the UK after also getting subsidies from the government.
Ministers said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5 per cent”.
Speaking to Sky News, business secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK.”
Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100m to make sure that people have skills to retrain and move on to other things.”
But Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said job losses “will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy”.
Tata said the fresh plans lay out a future for sustainable steel-making in the area. Chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
Thousands of jobs at risk at Port Talbot steelworks despite £500m state aid
PA Business Staff
Fri, 15 September 2023
The Government is to pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel which could also hit thousands of jobs, sources have said.
Tata, the Indian conglomerate that owns the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
However, the company will also caution on Friday that the plans will lead to consultations over a “deep potential restructuring”.
Tata Steel employs around 8,000 people across the UK (Peter Byrne/PA)
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals, Tata Steel is expected to announce.
Tata warned last year that its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.
Unions have previously said that the move to the new less labour-intensive furnaces could lead to around 3,000 job losses.
PA Business Staff
Fri, 15 September 2023
The Government is to pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel which could also hit thousands of jobs, sources have said.
Tata, the Indian conglomerate that owns the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
However, the company will also caution on Friday that the plans will lead to consultations over a “deep potential restructuring”.
Tata Steel employs around 8,000 people across the UK (Peter Byrne/PA)
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals, Tata Steel is expected to announce.
Tata warned last year that its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.
Unions have previously said that the move to the new less labour-intensive furnaces could lead to around 3,000 job losses.
UK will not follow Biden’s ‘subsidy bowl’ economic policy – Hunt
Dominic McGrath, PA Political Staff
Fri, 15 September 2023
The Government’s £500 million intervention into Britain’s biggest steelworks is not a sign that ministers are set to follow Joe Biden’s “subsidy bowl” economic policy, the Chancellor has said.
Jeremy Hunt insisted that the financial backing for Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, came after “very credible commitments” were received about its own £750 million investment plans.
Speaking to the Financial Times, he said: “We are very clear — we won’t pursue the Inflation Reduction Act subsidy bowl approach to economic policy.
“We are very hard-headed. We will do what is right for the long-term interests of the UK.”
US President Joe Biden’s Inflation Reduction Act has been hailed by Labour
Around 3,000 jobs at risk at steelworks despite £500m Government funding
Henry Saker-Clark, PA Deputy Business Editor
Fri, 15 September 2023
The Government will pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel – but as many as 3,000 workers are set to lose their jobs.
Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.
But the company said on Friday the plans will lead to consultations over a “deep potential restructuring”.
In a separate statement, the department for business and trade said the deal will only safeguard around 5,000 jobs out of Tata’s total workforce.
Union leaders have expressed their anger at being shut out of talks between Tata and the Government and described the deal as a “disgrace”.
Prime Minister Rishi Sunak said: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.
“I’m pleased that the Government has managed to reach an agreement with Tata to support them in that transition, but they will also be making a very substantial capital investment into the plant to secure thousands of jobs.
“Obviously, there will still be some people affected and I know this will be an anxious time for them.”
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals.
Tata said last year its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.
The deal also comes two months after parent firm Tata Group confirmed plans to build a £4 billion battery factory in the UK after also getting subsidies from the UK Government.
Workers outside Tata Steel’s Port Talbot steelworks in South Wales (Ben Birchall/PA)
On Friday, Tata said the fresh plans lay out a future for sustainable steel-making in the area.
Tata Steel’s chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK Government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
The Government said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5%”.
Speaking to Sky News, Business Secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK”.
Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100 million to make sure that people have skills to retrain and move on to other things if they don’t want to stay in the steel industry.”
But union bosses and rival politicians heavily criticised the announcement.
Unite general secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition.
Workers outside Tata Steel’s Port Talbot steelworks (Ben Birchall/PA)
“Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”
Gary Smith, GMB general secretary, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.
“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Labour claimed the plans would both waste money and hurt workers, with shadow business secretary Jonathan Reynolds MP saying: “Only the Tories could spend £500 million of taxpayers’ money to make thousands of British workers redundant.”
Labour’s Stephen Kinnock, who represents the Aberavon constituency, said a single job lost would be “one job loss too many”.
“If they had had a plan that was not just putting all the eggs into the electric arc furnace basket, we would have been able to have much more security about the future and sustaining those jobs.
“If those numbers are right, it would be utterly devastating for the community that I represent.”
Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said: “The potential job losses at Tata’s Port Talbot plant will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy.
“Our solidarity is with the workers at this time and we stand ready to support those who need it.”
Downing Street acknowledged it had been an “anxious time” for employees and their families but insisted the changes were necessary.
“We recognise this will have been an anxious time for employees and their families while this work to find the right way forward has taken place,” the Prime Minister’s official spokesman said.
“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.”
Chris Price
Tata Steel seals £500m UK support package but big job losses feared
Mark Sweney
What is green steel and why are there potential job losses at Tata?
Danny Halpin, PA Environment Correspondent
Fri, 15 September 2023
The Government has announced a support package worth £500 million to Tata Steel that would see its coal-fired blast furnace in Port Talbot replaced in a move towards producing more green steel.
However, the company cautioned that the plans will lead to consultations over a “deep potential restructuring” and as many as 3,000 workers are set to lose their jobs.
Ministers have said the support package would prevent even more job losses while energy analysts have said other decarbonisation routes are available that would be less impactful on workers.
The PA news agency looks into the details of how and why the Government is decarbonising steel and whether job losses are necessary.
The plant currently employs around 4,000 people and is looking to replace its coal-fired blast furnace (Ben Birchall/PA)
– What is green steel?
Steel that is produced with power generated renewably. Currently, virgin steel is made using coal-fired blast furnaces which is a significant contributor of greenhouse gases.
There are four coal furnaces in the UK, two of which are owned by Tata, which make the steel industry responsible for 14.2% of the total manufacturing emissions in the UK and 95% of emissions from the UK’s steel sector.
– How can the steel industry decarbonise?
Producing virgin steel by using green hydrogen – which is made using renewable electricity – or producing recycled steel using an electric arc furnace would remove many of the current greenhouse gas emissions.
Carbon capture and storage is another option whereby CO2 would be caught at the factory before entering the atmosphere and stored underground.
– Why are there job losses?
The proposed agreement would see the Port Talbot plant change from producing virgin steel to recycled steel, which requires less workers.
Energy analysts said the upfront costs of changing to recycling rather than investing in hydrogen-powered virgin steel are cheaper.
Tata Steel’s plant does not earn enough to pay for decarbonising on its own and needs support from the Government, who have said the plant has been running at a loss for years.
– Why is the industry decarbonising?
To reduce the amount of greenhouse gases pumped into the atmosphere and stop the Earth heating up which would help to maintain a safe climate.
It is also a legal requirement to decarbonise under the Government’s net zero plan as well as in keeping with its international obligations under the Paris Agreement.
The Climate Change Committee has suggested the Government “set targets for ore-based steelmaking to reach near-zero emissions by 2035”.
All four coal furnaces are approaching the end of their lifespan and must be replaced. The Government said replacing all coal furnaces would reduce the UK’s carbon emissions by around 1.5%.
– How are other countries decarbonising steel?
There are are currently 38 green steel projects in progress across the EU, nine of which are in Germany.
No country is yet producing steel using green hydrogen though Germany has one plant using blue hydrogen, meaning the gas is made from fossil fuels.
The UK has one project in the pipeline on the Humber which would use blue hydrogen.
– Why produce virgin steel?
Aside from retaining more jobs, energy analysts say the Port Talbot plant should be converted to green hydrogen-produced virgin steel because there is a growing demand for it in cars, construction and other industries central to the modern economy.
In the drive to net zero, manufacturers are increasingly wanting to source materials produced without carbon emissions.
Switching away from fossil fuels could also lower production costs by untying from increasingly volatile international markets, energy experts said.
Dominic McGrath, PA Political Staff
Fri, 15 September 2023
The Government’s £500 million intervention into Britain’s biggest steelworks is not a sign that ministers are set to follow Joe Biden’s “subsidy bowl” economic policy, the Chancellor has said.
Jeremy Hunt insisted that the financial backing for Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, came after “very credible commitments” were received about its own £750 million investment plans.
Speaking to the Financial Times, he said: “We are very clear — we won’t pursue the Inflation Reduction Act subsidy bowl approach to economic policy.
“We are very hard-headed. We will do what is right for the long-term interests of the UK.”
US President Joe Biden’s Inflation Reduction Act has been hailed by Labour
(Paul Ellis/PA)
The Democrat president’s Inflation Reduction Act has been hailed as a major shift in American economic policy, with the green subsidy push winning praise in the UK from Sir Keir Starmer’s Labour.
The Opposition has been particularly critical of what it says is the lack of an industrial strategy from Rishi Sunak’s government.
The Chancellor told the paper that the Conservatives’ approach on industrial strategy was “alive and kicking”.
“The UK Government is taking a very holistic approach when it comes to industrial strategy,” he said.
He insisted that Friday’s steelworks announcement was not a sign that the Government was looking at “big pots of subsidies” for other key British sectors.
But he added: “Where there’s a strategic opportunity to progress, we will take it.”
The Democrat president’s Inflation Reduction Act has been hailed as a major shift in American economic policy, with the green subsidy push winning praise in the UK from Sir Keir Starmer’s Labour.
The Opposition has been particularly critical of what it says is the lack of an industrial strategy from Rishi Sunak’s government.
The Chancellor told the paper that the Conservatives’ approach on industrial strategy was “alive and kicking”.
“The UK Government is taking a very holistic approach when it comes to industrial strategy,” he said.
He insisted that Friday’s steelworks announcement was not a sign that the Government was looking at “big pots of subsidies” for other key British sectors.
But he added: “Where there’s a strategic opportunity to progress, we will take it.”
Henry Saker-Clark, PA Deputy Business Editor
Fri, 15 September 2023
The Government will pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel – but as many as 3,000 workers are set to lose their jobs.
Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.
But the company said on Friday the plans will lead to consultations over a “deep potential restructuring”.
In a separate statement, the department for business and trade said the deal will only safeguard around 5,000 jobs out of Tata’s total workforce.
Union leaders have expressed their anger at being shut out of talks between Tata and the Government and described the deal as a “disgrace”.
Prime Minister Rishi Sunak said: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.
“I’m pleased that the Government has managed to reach an agreement with Tata to support them in that transition, but they will also be making a very substantial capital investment into the plant to secure thousands of jobs.
“Obviously, there will still be some people affected and I know this will be an anxious time for them.”
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals.
Tata said last year its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.
The deal also comes two months after parent firm Tata Group confirmed plans to build a £4 billion battery factory in the UK after also getting subsidies from the UK Government.
Workers outside Tata Steel’s Port Talbot steelworks in South Wales (Ben Birchall/PA)
On Friday, Tata said the fresh plans lay out a future for sustainable steel-making in the area.
Tata Steel’s chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK Government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
The Government said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5%”.
Speaking to Sky News, Business Secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK”.
Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100 million to make sure that people have skills to retrain and move on to other things if they don’t want to stay in the steel industry.”
But union bosses and rival politicians heavily criticised the announcement.
Unite general secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition.
Workers outside Tata Steel’s Port Talbot steelworks (Ben Birchall/PA)
“Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”
Gary Smith, GMB general secretary, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.
“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Labour claimed the plans would both waste money and hurt workers, with shadow business secretary Jonathan Reynolds MP saying: “Only the Tories could spend £500 million of taxpayers’ money to make thousands of British workers redundant.”
Labour’s Stephen Kinnock, who represents the Aberavon constituency, said a single job lost would be “one job loss too many”.
“If they had had a plan that was not just putting all the eggs into the electric arc furnace basket, we would have been able to have much more security about the future and sustaining those jobs.
“If those numbers are right, it would be utterly devastating for the community that I represent.”
Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said: “The potential job losses at Tata’s Port Talbot plant will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy.
“Our solidarity is with the workers at this time and we stand ready to support those who need it.”
Downing Street acknowledged it had been an “anxious time” for employees and their families but insisted the changes were necessary.
“We recognise this will have been an anxious time for employees and their families while this work to find the right way forward has taken place,” the Prime Minister’s official spokesman said.
“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.”
Steel workers facing job losses under net zero plan at Port Talbot
Chris Price
THE TELEGRAPH
Fri, 15 September 2023
A worker in the blast furnace at Tata Steel's Port Talbot plant
Fri, 15 September 2023
A worker in the blast furnace at Tata Steel's Port Talbot plant
- GEOFF CADDICK/AFP via Getty Images
Thousands of workers at Britain’s biggest steel mill are facing redundancy under a taxpayer-funded net zero plan.
Tata Steel will be given £500m of taxpayer cash to fund its switch to net zero at its Port Talbot steelworks.
The Indian conglomerate is expected to invest £1.25bn, including the £500m of taxpayer money, in retooling the site to produce “greener” steel, which ministers said will reduce the UK’s entire carbon emissions by around 1.5pc.
However, the new processes will require fewer jobs and Tata will consult on a restructuring that could lead to 3,000 redundancies.
The Unite union described the plans as a “disgrace” and vowed to fight them. TUC general secretary Paul Nowak said it was a “devastating blow for workers at Port Talbot and the opposite of a just transition”.
Tata has been in talks with the Government for months about state aid to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
Business Secretary Kemi Badenoch said the Government “is backing our steel sector” and said the proposal would “save thousands of jobs in the long term”.
Ministers confirmed the deal had the potential to safeguard over 5,000 jobs across the UK. Tata presently employs about 8,000 steel workers.
Ms Badenoch said: “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.”
Chancellor Jeremy Hunt added: “It is right that we are ready to step in to protect this world class manufacturing industry and to support a green growth hub in South Wales.”
The state aid comes after Tata Steel fell from an £82m profit in 2021 to a £279m loss last year as the cost of everything from energy to raw materials like iron soared.
Tata chairman Natarajan Chandrasekaran called the agreement with the Government a “defining moment for the future of the steel industry”.
He added: “The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.”
However, Stephen Kinnock, the Labour MP for Aberavon, said: “While the 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.”
He added: “The investment today may seem like a lot of money, but it pales in comparison to the investments made by European governments to competitor plants.”
A spokesman for the Welsh Government said: “This is a very worrying time for the whole community and it is essential Tata now has a meaningful consultation with employees and their trade unions about these proposals.”
Thousands of workers at Britain’s biggest steel mill are facing redundancy under a taxpayer-funded net zero plan.
Tata Steel will be given £500m of taxpayer cash to fund its switch to net zero at its Port Talbot steelworks.
The Indian conglomerate is expected to invest £1.25bn, including the £500m of taxpayer money, in retooling the site to produce “greener” steel, which ministers said will reduce the UK’s entire carbon emissions by around 1.5pc.
However, the new processes will require fewer jobs and Tata will consult on a restructuring that could lead to 3,000 redundancies.
The Unite union described the plans as a “disgrace” and vowed to fight them. TUC general secretary Paul Nowak said it was a “devastating blow for workers at Port Talbot and the opposite of a just transition”.
Tata has been in talks with the Government for months about state aid to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
Business Secretary Kemi Badenoch said the Government “is backing our steel sector” and said the proposal would “save thousands of jobs in the long term”.
Ministers confirmed the deal had the potential to safeguard over 5,000 jobs across the UK. Tata presently employs about 8,000 steel workers.
Ms Badenoch said: “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.”
Chancellor Jeremy Hunt added: “It is right that we are ready to step in to protect this world class manufacturing industry and to support a green growth hub in South Wales.”
The state aid comes after Tata Steel fell from an £82m profit in 2021 to a £279m loss last year as the cost of everything from energy to raw materials like iron soared.
Tata chairman Natarajan Chandrasekaran called the agreement with the Government a “defining moment for the future of the steel industry”.
He added: “The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.”
However, Stephen Kinnock, the Labour MP for Aberavon, said: “While the 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.”
He added: “The investment today may seem like a lot of money, but it pales in comparison to the investments made by European governments to competitor plants.”
A spokesman for the Welsh Government said: “This is a very worrying time for the whole community and it is essential Tata now has a meaningful consultation with employees and their trade unions about these proposals.”
Tata Steel seals £500m UK support package but big job losses feared
Mark Sweney
THE GUARDIAN
Fri, 15 September 2023
Photograph: Geoff Caddick/AFP/Getty Images
The UK government has agreed a £500m support package for Tata Steel to secure the future of the Port Talbot steelworks, in a deal unions said 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.
“The agreement with the UK government is a defining moment for the future of the steel industry,” said Natarajan Chandrasekaran, the chair of Tata Group.
“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.”
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.
Tata, which made a pre-tax loss of £279m in the UK, according to the company’s most recent annual results, is expected to cut about 3,000 jobs over the long term as a result of decarbonisation.
It marks the second time this year that the government has pledged taxpayer support to the Tata Group, after it agreed in July to provide the owner of Jaguar Land Rover several hundred million pounds towards a £4bn electric car battery gigafactory.
TV Narendran, the chief executive of Tata Steel, positioned the Port Talbot deal as a positive, describing it as the largest investment in the UK steel industry for decades, but confirmed that job cuts would follow.
“[It] provides an optimal outcome for all stakeholders,” he said. “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK. We will work to transform Tata Steel UK into a green, modern, future-ready business.”
Tata Steel said it would soon start a consultation on its plans, including “potential deep restructuring of the carbon-intensive, unsustainable iron and steelmaking facilities at Port Talbot”.
However, the GMB union said the deal would be devastating for the steel industry and “rip the heart out” of the Port Talbot community that is dependent on the site.
“This deal will have devastating consequences for jobs and workers,” said Gary Smith, the general secretary of the GMB. “It will rip the heart out of the Port Talbot community.”
Smith added that the GMB had been calling for investment in the UK steel industry for years but said the government has “dithered and delayed until it is too late. Thousands of workers, their families and communities will pay the price.”
The company said it would now be able to “ensure [the] continuity of steelmaking in Port Talbot” and that the government support meant “the project has a robust investment case”.
However, Labour accused the government of failing the steel industry in a deal that uses taxpayers’ money to make mass job cuts.
“Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant,” said Jonathan Reynolds, Labour’s shadow business and trade secretary. “The Conservatives have presided over a decade of failure when it comes to steel, with 13,000 fewer steelworkers now than under a Labour government.”
Tata said that the capital cost of the redevelopment on Port Talbot would cost £1.25bn, including a grant from the UK government of “up to” £500m, and could be completed within three years of gaining all regulatory and planning approvals.
The government said modernising the furnaces at Port Talbot would reduce the UK’s entire carbon emissions by 1.5% – the site is the UK’s largest single carbon emitter – and “safeguard over 5,000 jobs across the UK”.
The business and trade secretary, Kemi Badenoch, said: “The UK government is backing our steel sector. This proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.”
The government said it was also working with Tata Steel and the Welsh government to set up a transition board with up to £100m funding to support employees and the local economy affected by the large-scale job cuts.
The company said its overhaul of Port Talbot would result in Tata Steel’s balance sheet being restructured, including the “elimination of the current cash losses in the UK”.
Tata Steel also intends to invest £20m over four years to set up two innovation and technology centres, one in Manchester and one in London, focusing on research in sustainable design and manufacturing.
Fri, 15 September 2023
Photograph: Geoff Caddick/AFP/Getty Images
The UK government has agreed a £500m support package for Tata Steel to secure the future of the Port Talbot steelworks, in a deal unions said 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.
“The agreement with the UK government is a defining moment for the future of the steel industry,” said Natarajan Chandrasekaran, the chair of Tata Group.
“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.”
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.
Tata, which made a pre-tax loss of £279m in the UK, according to the company’s most recent annual results, is expected to cut about 3,000 jobs over the long term as a result of decarbonisation.
It marks the second time this year that the government has pledged taxpayer support to the Tata Group, after it agreed in July to provide the owner of Jaguar Land Rover several hundred million pounds towards a £4bn electric car battery gigafactory.
TV Narendran, the chief executive of Tata Steel, positioned the Port Talbot deal as a positive, describing it as the largest investment in the UK steel industry for decades, but confirmed that job cuts would follow.
“[It] provides an optimal outcome for all stakeholders,” he said. “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK. We will work to transform Tata Steel UK into a green, modern, future-ready business.”
Tata Steel said it would soon start a consultation on its plans, including “potential deep restructuring of the carbon-intensive, unsustainable iron and steelmaking facilities at Port Talbot”.
However, the GMB union said the deal would be devastating for the steel industry and “rip the heart out” of the Port Talbot community that is dependent on the site.
“This deal will have devastating consequences for jobs and workers,” said Gary Smith, the general secretary of the GMB. “It will rip the heart out of the Port Talbot community.”
Smith added that the GMB had been calling for investment in the UK steel industry for years but said the government has “dithered and delayed until it is too late. Thousands of workers, their families and communities will pay the price.”
The company said it would now be able to “ensure [the] continuity of steelmaking in Port Talbot” and that the government support meant “the project has a robust investment case”.
However, Labour accused the government of failing the steel industry in a deal that uses taxpayers’ money to make mass job cuts.
“Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant,” said Jonathan Reynolds, Labour’s shadow business and trade secretary. “The Conservatives have presided over a decade of failure when it comes to steel, with 13,000 fewer steelworkers now than under a Labour government.”
Tata said that the capital cost of the redevelopment on Port Talbot would cost £1.25bn, including a grant from the UK government of “up to” £500m, and could be completed within three years of gaining all regulatory and planning approvals.
The government said modernising the furnaces at Port Talbot would reduce the UK’s entire carbon emissions by 1.5% – the site is the UK’s largest single carbon emitter – and “safeguard over 5,000 jobs across the UK”.
The business and trade secretary, Kemi Badenoch, said: “The UK government is backing our steel sector. This proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.”
The government said it was also working with Tata Steel and the Welsh government to set up a transition board with up to £100m funding to support employees and the local economy affected by the large-scale job cuts.
The company said its overhaul of Port Talbot would result in Tata Steel’s balance sheet being restructured, including the “elimination of the current cash losses in the UK”.
Tata Steel also intends to invest £20m over four years to set up two innovation and technology centres, one in Manchester and one in London, focusing on research in sustainable design and manufacturing.
What is green steel and why are there potential job losses at Tata?
Danny Halpin, PA Environment Correspondent
Fri, 15 September 2023
The Government has announced a support package worth £500 million to Tata Steel that would see its coal-fired blast furnace in Port Talbot replaced in a move towards producing more green steel.
However, the company cautioned that the plans will lead to consultations over a “deep potential restructuring” and as many as 3,000 workers are set to lose their jobs.
Ministers have said the support package would prevent even more job losses while energy analysts have said other decarbonisation routes are available that would be less impactful on workers.
The PA news agency looks into the details of how and why the Government is decarbonising steel and whether job losses are necessary.
The plant currently employs around 4,000 people and is looking to replace its coal-fired blast furnace (Ben Birchall/PA)
– What is green steel?
Steel that is produced with power generated renewably. Currently, virgin steel is made using coal-fired blast furnaces which is a significant contributor of greenhouse gases.
There are four coal furnaces in the UK, two of which are owned by Tata, which make the steel industry responsible for 14.2% of the total manufacturing emissions in the UK and 95% of emissions from the UK’s steel sector.
– How can the steel industry decarbonise?
Producing virgin steel by using green hydrogen – which is made using renewable electricity – or producing recycled steel using an electric arc furnace would remove many of the current greenhouse gas emissions.
Carbon capture and storage is another option whereby CO2 would be caught at the factory before entering the atmosphere and stored underground.
– Why are there job losses?
The proposed agreement would see the Port Talbot plant change from producing virgin steel to recycled steel, which requires less workers.
Energy analysts said the upfront costs of changing to recycling rather than investing in hydrogen-powered virgin steel are cheaper.
Tata Steel’s plant does not earn enough to pay for decarbonising on its own and needs support from the Government, who have said the plant has been running at a loss for years.
– Why is the industry decarbonising?
To reduce the amount of greenhouse gases pumped into the atmosphere and stop the Earth heating up which would help to maintain a safe climate.
It is also a legal requirement to decarbonise under the Government’s net zero plan as well as in keeping with its international obligations under the Paris Agreement.
The Climate Change Committee has suggested the Government “set targets for ore-based steelmaking to reach near-zero emissions by 2035”.
All four coal furnaces are approaching the end of their lifespan and must be replaced. The Government said replacing all coal furnaces would reduce the UK’s carbon emissions by around 1.5%.
– How are other countries decarbonising steel?
There are are currently 38 green steel projects in progress across the EU, nine of which are in Germany.
No country is yet producing steel using green hydrogen though Germany has one plant using blue hydrogen, meaning the gas is made from fossil fuels.
The UK has one project in the pipeline on the Humber which would use blue hydrogen.
– Why produce virgin steel?
Aside from retaining more jobs, energy analysts say the Port Talbot plant should be converted to green hydrogen-produced virgin steel because there is a growing demand for it in cars, construction and other industries central to the modern economy.
In the drive to net zero, manufacturers are increasingly wanting to source materials produced without carbon emissions.
Switching away from fossil fuels could also lower production costs by untying from increasingly volatile international markets, energy experts said.
Tata Steel poised for £500m subsidy to secure future of Port Talbot site
Mark Sweney
Mark Sweney
THE GUARDIAN
Fri, 15 September 2023
Photograph: Geoff Caddick/AFP/Getty Images
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.”
Fri, 15 September 2023
Photograph: Geoff Caddick/AFP/Getty Images
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.”
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