Tata Steel rejects trade union plan, putting UK steelmaking at risk

Tata Steel, the owners of Port Talbot steelworks in South Wales, have rejected a trade union plan aimed at keeping its blast furnaces running. This decision puts nearly 3,000 jobs at risk and leaves the UK on track to become the only major economy unable to produce steel from scratch. The parent company, the Indian-owned Tata Steel, informed workers’ representatives at a summit in London’s St James’ Court hotel that it can no longer afford to continue production at the loss-making plant while transitioning towards greener production methods.

Although Tata Steel is receiving £500m from the UK government to support the four-year transition plan, it did not offer a guarantee on job security. This move has sparked criticism from the shadow business secretary, Jonathan Reynolds, who accused the government of funding Tata’s green transition at the expense of 3,000 jobs.

Under Tata’s plan, the blast furnaces at Port Talbot will be shut down, and the company will build electric arc furnaces that use recycled scrap to produce steel, a greener and cheaper process. While a proposal to keep some of the site’s mills open may save around 200 jobs, the closure of the blast furnaces deals a significant blow to a town heavily reliant on the steelworks.

The trade unions Community and GMB had suggested a staggered transition plan to protect workers, with the blast furnaces operational until 2032. However, Tata Steel deemed the proposal unaffordable, given the estimated £1m daily losses at Port Talbot. The UK’s only other blast furnaces, located in Scunthorpe, are also set to be shut down as part of a similar transition process, leaving the UK as the sole G20 country unable to produce steel from raw materials.

Stephen Kinnock, Labour MP for Aberavon, called on the government to reconsider and implement the trade union’s proposal to protect jobs during the transition. The government’s failure to address this plan during talks was seen as disregarding the interests of workers, according to Charlotte Brumpton-Childs, a GMB national officer. The potential loss of numerous jobs would have detrimental effects on Port Talbot and the overall UK manufacturing sector.

This potential shutdown of Port Talbot’s blast furnaces marks another troubling milestone in the decline of the UK steel industry, which has seen production drop from 25 million tonnes in 1971 to 6 million tonnes, and employment in the sector plummet from 250,000 to under 34,000. Without the ability to produce steel from raw materials, the UK also risks losing the capacity to manufacture certain high-grade steel products, potentially relying heavily on imports.

The UK government has stated its commitment to a sustainable and competitive future for the steel sector. They have pledged £500m in support to transform the Port Talbot site and protect thousands of jobs. The government has also emphasized the existence of various forms of support for affected staff, including an £80m dedicated transition board funded by the UK government and an additional £20m from Tata Steel. The board, chaired by the Welsh secretary with ministerial representation from the Welsh government, will provide support to both affected employees and the local economy.