Government accused of ‘rushed’ Tata Steel deal that leaves 3,000 jobs at risk

Unions call agreement a ‘disgrace’ and vow to ‘fight tooth and nail’ to save jobs

Rishi Sunak’s government has been accused of “rushing” the rescue deal for Tata Steel which will pump up to £500m into the company while leaving as many as 3,000 workers at risk of losing their jobs.

Tata, the Indian conglomerate owner of the Port Talbot steelworks in south Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.

The government hailed a “great” deal for the firm, employing around 8,000 people across the UK, which will also see it invest about £750m in the green transition project.

But the company said on Friday the plan will mean “deep potential restructuring”. And the Department for Business and Trade said it will only safeguard around 5,000 jobs out of Tata’s total workforce.

Labour said the deal had been “rushed at the 11th hour”, while union leaders have expressed their anger at job losses and being shut out of talks – describing the agreement as a “disgrace”.

Unite general secretary Sharon Graham said the union will be “fighting tooth and nail not only to save these jobs but to create more jobs in steel”.

Gary Smith, GMB general secretary, said: “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.”

Labour claimed the plans would both waste money and hurt workers. Shadow chancellor Rachel Reeves said: “This rushed deal at the 11th hour does not meet the needs of the people who work at those steelworks at Port Talbot.”

Shadow business secretary Jonathan Reynolds added: “Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant.”

Mr Sunak said he was “pleased” by the agreement with Tata to support the steelworks in its “transition”. The PM told broadcasters: “Obviously, there will still be some people affected and I know this will be an anxious time for them.”

He added: “There were fears that around 8,000 jobs could be lost if steelmaking was lost at that plant. That clearly was a risk because those two blast furnaces there are reaching the end of their life.”

Workers outside Tata Steel's Port Talbot steelworks in south Wales, as around 3,000 jobs are at risk

(PA)

The new £1.25bn furnaces are expected to be up and running within three years of approval. Tata said last year its UK operations were under threat unless it secured government funding to help it move to less carbon-intensive furnaces.

The deal also comes two months after parent firm Tata Group confirmed plans to build a £4bn battery factory in the UK after also getting subsidies from the government.

Ministers said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5 per cent”.

Speaking to Sky News, business secretary Kemi Badenoch said the agreement was “a great deal. Not just for Port Talbot, but for the UK.”

Ms Badenoch said: “What I would say to people who are concerned about job losses is that we do understand and we have a transition plan in place that’s funded up to about £100m to make sure that people have skills to retrain and move on to other things.”

But Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said job losses “will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy”.

Tata said the fresh plans lay out a future for sustainable steel-making in the area. Chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.

“With the support of the UK government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”