Blitz Bureau
WALES: The British steel industry has suffered a blow after 2,500 job cuts at the Port Talbot steelworks were confirmed, despite a £500m taxpayerbacked deal for the south Wales plant.
The Business Secretary, Jonathan Reynolds, has agreed a deal under which the Government will provide £500m towards the construction of a new greener electric arc furnace at the site, with the plant’s Indian owners, Tata Steel, paying £750m.
However, while the deal secures the long-term future of steel production at the south Wales site, the Government was unable to secure guarantees that would save the 2,500 jobs at Port Talbot that Tata is likely to cut over the coming months.
Redundancy package
Under the new deal, those at threat of being axed will now receive improved redundancy packages, while there has also been an increase in how much axed employees could receive if they take part in a Tata-run training programme.
The company has also made commitments to evaluate future investments in steel plants and infrastructure, alongside Labour’s £2.5bn support package for the sector.
The first of Port Talbot’s two blast furnaces shut in July. When the second closes at the end of this month it will bring an end to primary steel production at the south Wales site, with unions and politicians warning of the threat to the UK’s economy and security from a lack of ability to produce steel from scratch domestically.
The electric arc furnace is greener but far less labour intensive, with about 500 jobs being created during its construction. It is expected to be operational in late 2027.
The Labour Government had criticised the Conservative government for striking an agreement to give Tata £500m for the Port Talbot site, without securing any job guarantees.
All to go by March
The last blast furnace will now close on 28 September, with most employees leaving before Christmas after working their notice periods. Tata predicts that almost all of the Port Talbot staff will be gone by March next year.
More than 2,000 workers at Port Talbot have already expressed an interest in taking voluntary redundancy. Those granted it will now be offered 2.8 weeks of salary for every year of service up to 25 years, with a minimum payment of £15,000. The previous offer covered only 2.1 weeks of salary for every year.
