Companies affected by job losses at Tata Steel will receive £13.5 million in government support

The government announced that it would provide a cash injection of £13.5 million to companies and workers affected by job cuts at Tata Steel.

Tata Steel plans to cut up to 2,800 jobs at the country's largest steelworks in Port Talbot as the company switches to a more environmentally friendly form of steel production that requires fewer workers.

Jo Stevens, the Welsh minister, made the funding announcement on Thursday at her second meeting as chair of the Tata Steel/Port Talbot transition board.

The package is aimed at supporting companies whose main customer is Tata Steel, while the money will also be used to help laid-off workers by providing them with access to training and skills in sectors where there are vacancies.

As part of the agreement, Ms Stevens, MP for Cardiff East, also announced that more than 50 companies had signed a statement saying they would support all workers forced to leave their jobs at the steelworks.

Negotiations between the government and Tata Steel over the future of the Port Talbot plant – which currently employs 12% of the coastal town's total population – are continuing separately.

Ms Stevens said: “Today's release of an initial £13.5 million in funding shows that we will act decisively to support workers and businesses in Port Talbot, working with Welsh Government, trade unions and the wider public.”

“This government will not wait until a crisis hits us before acting. We are building a safety net now to ensure we can support workers and businesses whatever happens.”

She later denied that Port Talbot steelworkers were bearing the cost of efforts to achieve carbon neutrality.

“Certainly not,” she said when asked if they paid the price for it.

“We have to reduce emissions, that’s what we have to do.”

She said the expansion of renewable energy must be accelerated “because it would lead to lower energy bills for everyone in the UK”.

“We will create jobs, we will reduce energy costs and we will also ensure Britain’s energy security.”

Earlier this year, Tata confirmed that it Push ahead with plans to close blast furnaces and replace them with arc furnaces as part of its plan to reduce emissions and costs.

The plan is expected to reduce CO2 emissions by around 85 percent and the UK's total CO2 emissions by around 1.5 percent. The Port Talbot site is the UK's largest CO2 emitter.

The new furnace will produce steel using British scrap metal as raw material. The iron ore that the furnaces currently use has to be imported.

Alun Davies, steel representative for the Community union, welcomed the announcement and said the government would “increase its support both to workers affected by Tata's decarbonisation plans and to the wider community in Port Talbot and the surrounding area”.

“Welsh Minister Jo Stevens has acted swiftly to ensure this first tranche of funding can be released as quickly as possible and we thank her for her unwavering commitment to our steel communities,” he said.

However, Mr Davies said the union's “overall position on Tata's bad steel deal has not changed”.

“We will continue to oppose the company's damaging proposals and fight to save jobs. We remain firmly convinced that compulsory redundancies are not necessary and that an alternative approach is still possible.”

Read more:
Port Talbot's uncertain future: ecological costs are being felt
Closure of a steel mill “will tear the community to pieces”

Rajesh Nair, Chairman of Tata Steel UK, added: “The Transition Board plays a very important role in supporting our company’s transition to low-carbon steel production and encouraging regeneration and inward investment in the region, while helping to mitigate the impact of these changes on our people, our supply chain and our communities.”

“The transition board has been set up to support both Tata Steel employees and those working in local supply chain companies, so we very much welcome today’s announcement and the ambition to help the region and local communities grow in line with the changing needs of the evolving industrial ecosystem here in South Wales.”