'This deal is not something to celebrate' - UK Government signs new Port Talbot steelworks deal with Tata

Unions say they had a better plan which would have secured jobs for a longer period

The UK Government has signed a deal to give Indian steel giant Tata £500m. The deal, originally announced under the previous Conservative government, has been confirmed today 11 Sep by Labour’s cabinet minister Jonathan Reynolds.

The deal means the company, which is contributing the remaining £750m of the £1.25bn plan, can progress its plan to build an electric arc furnace to recycle previously-used steel at Port Talbot.

 It is a greener way of making steel but the end product has more limited uses and the plan will result in 2,800 direct job losses across Tata UK. The bulk of those will be at Port Talbot but other Welsh sites are also impacted.

There will also be a knock-on impact to contractors and other linked businesses. Some estimates say the total job loss impact in the whole supply chain will be around 10,000.

Labour and unions claim the deal confirmed today is better than the one negotiated by the previous administrations but it is largely the same.

Tata said this was a "defining moment for the future of steel making in the UK", describing it as "the largest investment in the UK steel industry for decades" which will safeguard 5,000 jobs in the UK and secure steelmaking at Port Talbot.

The Indian-owned steel giant said: "The new assets will reduce the UK’s entire industrial carbon emissions by 8% (and Port Talbot’s by 90%) while setting a benchmark in circularity, utilising UK scrap."

It said that basic engineering was already complete and orders would soon be placed for the furnace and ladle metallurgy furnaces, a new coil box and crop shear for the hot strip mill, a cranes package, and for construction management and civil engineering.

Blast furnace five was turned off in July and the remaining blast furnace, number four, is expected to be turned off this month. The company said that supply chain arrangements were in place to serve customers through the transition period until the EAF is commissioned.

A joint statement from the Community and GMB trade unions has said this deal is "not something to celebrate" but is "the best possible deal".

"Clearly this is not where we wanted to be, and we know that a better plan was available,” a statement from Roy Rickhuss CBE, general secretary for Community and Gary Smith, general secretary of GMB, reads.

"Back in November last year, Community and GMB published the Multi-Union Plan, an alternative approach that would have safeguarded Port Talbot steelmaking and secured a just transition for the workforce. Regretfully we couldn’t secure the support of all stakeholders for our credible alternative decarbonisation strategy, and ultimately the company rejected the basis of our proposals, representing a tragic missed opportunity.

"Going forward the government must review existing policies and do everything in its power to ensure that decarbonisation does not mean deindustrialisation - you can't build a greener economy without a healthy steel industry."…

Through the MOU discussions the unions were able to secure concessions including a comprehensive skills and retention programme, and extensive investment commitments. We welcome the Labour government’s intervention which has served to strengthen and lock down the terms of the MOU."

In March, Tata published details of the redundancy package it was offering workers. The company described it as "the most generous in its history".