Union leaders are preparing to ramp up industrial action at two south Wales steelworks, in a further escalation of a row over almost 3,000 job losses that threatens to become a big general election issue.
Unite said such moves at the Port Talbot and Llanwern works are planned after the sites’ Indian owner, Tata Steel, threatened to cut redundancy pay as a response to members voting for an overtime ban.
The actions come after Tata rejected a trade union plan this year designed to keep Port Talbot’s blast furnaces running, with their closure putting 2,800 jobs at risk and leaving the UK on course to become the only major economy unable to make steel from scratch.
Tata told workers’ representatives in January that it could no longer afford to continue production at the loss-making Port Talbot plant while it completed a four-year transition plan towards greener production. The company said operating the old furnaces was losing it £1m a day.
The row now threatens to spill over into a general election issue – with what appears to be three competing proposals from the Conservatives, the unions and Labour.
Tata and the Conservative government agreed a deal last year whereby the company would receive £500m in state subsidies to help with the move to new “greener” furnaces – which could cut UK emissions by about 2% if renewable electricity was used. However, the deal also involved starting to close blast furnaces from this month, triggering the job losses.
At the time, the business and trade secretary, Kemi Badenoch, said: “This proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.”
Keir Starmer has signalled that a Labour government would reverse the agreement, stating on a visit to Wales last week: “I will fight for every single job and fight for the future of steel in Wales.”
The shadow Welsh secretary, Jo Stevens, said on Sunday: “We have repeatedly said no irreversible decisions should be made before polling day. Labour’s plans for a steel fund will ensure the future of the industry is fuelled by the skills, talent and ambition of Welsh steelworkers.
“We don’t want to see a single job go at the site but Conservative ministers failed to take steps to protect workers and communities before a general election was called.”
Labour has said it would invest £3bn in the transition to green steel. However, weekend reports suggested that the party would not support an alternative union plan, which proposes keeping a blast furnace in operation while building an electric arc furnace, saving jobs.
The general secretary of Unite, Sharon Graham, said: “Unite and its members will not tolerate Tata’s bullyboy tactics and neither should Labour. The union is now preparing to escalate industrial action in direct response to the company’s threats.
“The company is trying to hold the country to ransom, while needlessly throwing thousands of workers on the scrapheap. If Tata is not prepared to do the right thing, then an incoming Labour government must ensure it does.”
A Tata Steel spokesperson said the redundancy terms on offer were “generous” and that the company was “now considering our legal options regarding the legality of their ballot”.
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He added: “The enhanced package will remain in place unless industrial action is taken, in which case it would revert to our standard terms.
“In light of the ongoing impact on the business, the potential for further disruption, and in order to ensure safe and stable operations, we are now considering bringing forward the dates for the closure of blast furnace 5 and the winding down of operations across the wider heavy-end.”
Under the current plan, about 1,900 jobs are expected to be lost at Port Talbot.
A further 600 jobs are at risk across the rest of the UK and then 300 are expected to go in the next three years.
A Conservative party spokesperson said: “The Conservative government put in place one of the biggest support packages in UK history, investing half a billion pounds in new, modern electric arc furnaces to secure the future of the steelworks in south Wales.
“The Labour party, despite running the Welsh government, have done nothing to help in this process. Any reversal of this ground-breaking deal would inevitably mean thousands of steel jobs were lost, or tens of billions would need to be spent – leading to higher taxes.
“Keir Starmer makes these empty promises because he doesn’t have a plan. While the Conservatives are delivering a regeneration of the area around Port Talbot and a transition board, backed by £80m, to ensure steelworkers are properly supported throughout this process, Labour would take us back to square one, with fewer jobs and higher taxes.”