Video captionFuture of Tata Steelworks in Port Talbot ‘a huge priority’ – ReynoldsArticle informationAuthor, Hugh ThomasTitle, BBC Wales News Business Correspondent7 July 2024, 10:15 BST
Updated 6 hours ago
The UK government’s new business secretary has said a “job guarantee” will be part of negotiations with steel giant Tata over its Port Talbot facility.
Jonathan Reynolds said the factory was “on better terms” for the future, but said newer technology would result in fewer jobs.
Reynolds said he and Chancellor Sir Keir Starmer had already spoken to Tata and were in active negotiations over the future of the Port Talbot plant.
Asked if that meant all jobs could be guaranteed, he replied: “Blast furnaces employ more people than some of the newer technologies available.”
“There’s a lot of different things that we have to understand, but I completely agree that we have to ensure that this transition works for workers and that workers are part of it.”
Image caption: One of Port Talbot’s furnaces closed last Friday, the other is due to close in September
Mr Reynolds said the timescale for the Government’s negotiations was “not very long”.
He said Labour’s manifesto promised £2.5bn on top of the £500m already agreed by the previous government.
“This isn’t about taking on loss-making companies, as perhaps past industrial policies have done, but about being partners in investing in the future,” he said.
“The Government’s plan provides more funding for the steel industry, but it means we have to work with the private sector to ensure this transition happens, and we have to ensure that decarbonisation is not deindustrialisation, and we have to do it together.”
“But there can be a better deal for Port Talbot and the steel industry as a whole, I’m convinced of that.”
Light of hope
The idea of future investment offers a ray of hope to those seeking to cushion the impact of Tata’s plans.
The Labour Party had discussed supporting future investment in Port Talbot during the general election campaign and Tata executives were open to the idea.
But future investments will not sustain jobs in the short term. Even an existing commitment by Tata Steel to build an electric arc furnace next year would require far fewer workers than are currently employed in the heavy industrial sector’s blast furnace production.
Image caption: Labour promises £2.5bn of steel investment on top of the £500m already agreed by the previous government
Sharon Graham, general secretary of the Unite trade union, said the steel industry had been devastated.
She said there needed to be investment, a jobs guarantee and procurement legislation that would mean “all UK infrastructure projects should use British steel”.
“We need to support the British steel industry, we need to support British businesses – investment will be key,” she told the BBC.
Tata Steel UK Managing Director Rajesh Nair said the company looked forward to working with the UK government to expand environmentally friendly steel production.
“We will be discussing with new ministers ambitious plans to invest in and transform Port Talbot with electric steelmaking, and support workers during this necessary but difficult transition,” he said earlier this week.
Image credit: Getty Images
Image caption: Tata says its Port Talbot blast furnace operation is losing £1 million a day
The company said it was losing £1 million a day on its blast furnace operations and that it was financially unsustainable.
Tata has been in talks with unions since January, when it announced plans to overhaul its operations to address financial losses and reduce carbon emissions.
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