(qlmbusinessnews.com Thurs. 12th Sept, 2024) London, UK —
“2,500 Jobs at Risk as UK Government Funds Tata Steel’s Green Transition”
The UK government has confirmed a £500 million grant to Tata Steel to support the construction of a greener electric furnace at Port Talbot, following an agreement with the company. This funding matches the amount proposed by the previous Conservative government.
Despite the subsidy, approximately 2,500 jobs are set to be cut, with a further 300 redundancies expected in the future. Business Secretary Jonathan Reynolds acknowledged the package was not ideal but argued it provided better protections for workers than the earlier deal, including assurances from Tata on future jobs and investments.
The electric arc furnace will be used to melt scrap steel or iron to produce new steel. However, Plaid Cymru criticised the decision to end the ability to produce “virgin” steel in Wales, calling it an “economic blunder” that would harm local communities.
Tata has committed to exploring future investment opportunities, such as a new plate mill for manufacturing wind turbines in South Wales. Although trade unions, including Community and GMB, described the plan as “better than the devastating plan announced back in September 2023,” they also expressed disappointment, noting it was “not something to celebrate.”
Business and Trade Secretary Jonathan Reynolds said the agreement offered “hope for the future of steelmaking in South Wales” and underscored the importance of a cleaner, greener future for the UK steel industry.
The UK government plans to outline its full steel strategy next spring, backed by a commitment to invest £3 billion in the sector.
While the government argues that this is a better deal than the one negotiated by its predecessor, concerns remain over job losses. Tata Steel has promised a “comprehensive training programme” for staff at risk of redundancy, along with a generous severance package.
Despite the new agreement, critics like Plaid Cymru have called the plan a “serious economic mistake,” pointing to substantial investments in steel decarbonisation by other countries. Union leaders also described the failure to secure broader support for an alternative decarbonisation strategy as a “tragic missed opportunity.”
As Port Talbot prepares to shut down its second blast furnace, former steelworker Huw Samuel reflected on the impact, saying, “It's hard to see the positives when so many people will be made redundant.”
The UK government remains committed to supporting the workers and the wider community through the transition to greener steel production.
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