Tata secures £500m support for steelworks, large job losses feared

The UK government is to provide Tata Steel with up to £500m to redevelop the Port Talbot steelworks, after a long-anticipated deal was agreed on Friday.

Thousands of jobs are expected to be lost as a result, however.

Under the deal, the government will provide up to £500m to redevelop the sprawling South Wales site, with Tata Steel - part of Indian conglomerate Tata Group - providing a further £750m.

The vast plant, which has two ageing coal-powered blast furnaces, is the UK’s largest single carbon emitter. The investment will be used to install cleaner electric arc furnaces, which should be up and running within three years of Tata receiving regulatory and planning approvals.

But while the deal will ensure the plant stays open, unions fear around 3,000 jobs will be lost, 2,000 of them at Port Talbot. The site currently employs 4,000 people.

The government, which said the deal had the potential to safeguard over 5,000 jobs across the UK, said it would ensure there was a "broad range of support for any staff who are affected by the transition"”. Tata Steel UK employs 8,000 people in total.

Tata Steel chief executive TV Narendran said: "Tata Steel UK has been facing significant challenges, due to the heavy-end facilities approaching their end of life.

"The proposed project provides an opportunity for an optimal outcome for all stakeholders.

"We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of further risk and opportunities for Tata Steel UK."

Kemi Badenoch, business and trade secretary, said: “This proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.”

Chancellor Jeremy Hunt called the deal a “landmark moment”, adding: “It is right that we are ready to step in to protect this world class manufacturing industry and to support a green growth hub in South Wales."

N Chandrasekaran, Tata Group chair, said: “The agreement with the UK government is a defining moment for the future of the steel industry. The proposed investment will preserve significant employment.”

But Gary Smith, general secretary of the GMB union, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.

“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’, while the bitter reality for workers is them getting the sack.”

In July, Tata Group – which owns Jaguar Land Rover – agreed to build its flagship £4bn electric battery factory in the UK. It is understand the government is providing subsidies for the site in Somerset worth hundreds of millions of pounds.