MINISTERS have confirmed a “less than ideal” package of aid to keep steel production at Port Talbot in a deal which will nevertheless see 2,500 jobs go.
Business Secretary Jonathan Reynolds told MPs that the government had reached agreement with steel monopoly Tata over a new investment package in the south Wales plant.
The taxpayer will put up £500 million to help convert production from the existing blast furnaces, one of which has already closed with the other closure impending, to a greener electric arc furnace.
Mr Reynolds told the Commons that the “deal that enables Tata to order their electric arc furnace as part of a significantly improved package” represented more progress than the Tories achieved in the last parliament.
“If we had started these negotiations a year ago, I have no doubt we would have secured an even better deal for the community,” he added, apologising to the people of Port Talbot for the Tories’ failures.
“While this deal is much improved, it falls short of what would be my ideal,” Mr Reynolds acknowledged.
In a joint statement, the general secretaries of the Community and GMB unions, Roy Rickhuss and Gary Smith, said “this deal is not something to celebrate,” but was nevertheless an improvement on the “devastating plan announced by Tata and the Tories” in 2023.
They said: “Clearly this is not where we wanted to be, and we know that a better plan was available.
“Community and GMB published an alternative approach that would have safeguarded Port Talbot steel-making and secured a just transition for the workforce.
“Ultimately the company rejected the basis of our proposals, representing a tragic missed opportunity.
“The government must do everything in its power to ensure that decarbonisation does not mean deindustrialisation — you can't build a greener economy without a healthy steel industry.”
They added that members would decide whether or not to endorse the deal.
Unite welcomed the agreement, which should lead to further investment in south Wales plants over the next year.
General secretary Sharon Graham said: “The two-stage government commitment to provide serious funding for steel in south Wales is vital for local communities and the long-term future of the steel industry.
“The last government was quite frankly asleep at the wheel.
“Unite, which secured the additional funding, will ensure that the substantial second-stage investment in south Wales means new jobs will be available and secure the future of Port Talbot and Llanwern.
“It is now imperative on Tata to bring forward the second-stage proposals to develop increased steel capacity at its south Wales sites, a jobless transition will not occur on our watch.”
