The owner of Port Talbot steelworks has confirmed that the plant’s two blast furnaces will shut down, in what unions have described as an “absolute disgrace” that will cost up to 2,800 jobs directly and many more in the south Wales community.
Port Talbot’s parent company, the Indian-owned Tata Steel, said it was not “feasible or affordable” to adopt trade union proposals to continue production at the loss-making plant during a transition to greener, cheaper steelmaking operations.
On Friday, after trading on the stock exchange ended in Mumbai, Tata officially confirmed its plans, which will result in most of the plant’s 4,000 workers losing their jobs.
About 200 positions will be saved by maintaining operations at the site’s hot strip mill, which rolls steel slab.
The cuts comes despite the government providing £500m of financial backing for Tata’s £1.25bn four-year plan to build electric arc furnaces, which make steel from scrap metal rather than virgin steel made from scratch.
Rishi Sunak insisted that the government’s investment showed it was “absolutely committed” to British steelmaking but Labour’s shadow business minister, Jonathan Reynolds, has described its strategy as “£500m for 3,000 job losses”.
The closure, together with similar proposals at the Chinese-owned British Steel plant in Scunthorpe, is set to leave the UK as the only G20 economy without the ability to make steel from scratch, known as virgin steel.
Tata, which says the plant is currently losing £1m a day, said it would seek voluntary redundancies where possible and would provide £130m to fund severance payments, community programmes, skills training and job-seeking initiatives.
Tata rejected a proposal put forward by the Community and GMB unions that would have kept the blast furnaces open, protecting jobs during the transition.
The two unions said that governments in France, Germany and Spain were all “committing billions to secure the future of their strategically important steel industries, and our government must show similar ambition”.
They added: “More than 3,000 jobs and the future of British steelmaking are at stake. It is an absolute disgrace that Tata Steel, and the UK government, appear intent on pursuing the cheapest instead of the best plan for our industry, our steelworkers and our country.
“It’s unbelievable any government would give a company £500m to throw 3,000 workers on the scrapheap, and our government must re-evaluate its miserly offer to support investment at Tata Steel.”
Amid a schism between trade unions representing steelworkers, the GMB and Community also lashed out at Unite, which had put forward a separate £12bn plan to revive UK steelmaking over 12 years that they described as “discredited fantasy”.
Unite’s general secretary, Sharon Graham, said the union, the UK’s largest, “was ready to use everything in its armoury” to save jobs at Port Talbot.
Asked about the Port Talbot announcement, Sunak said the government was “absolutely committed” to British steelmaking.
The prime minister said: “I know first of all that it will be a worrying time for everyone affected, and because it’s a commercially sensitive matter, and people appreciate there’s a limit to what I can say.”
TV Narendran, Tata Steel’s global chief executive and managing director, said: “The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5bn in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long term.
“Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.”