A funding injection of £13.5m will be given to businesses and workers affected by job losses at Tata Steel, the government will announce.
Up to 2,800 jobs at Tata Steel are expected to be axed at the country’s biggest steelworks in Port Talbot as the company moves over to a greener form of steel production which requires fewer workers.
Jo Stevens, the Welsh secretary, will make the funding announcement at her second meeting as chair of the Tata Steel/Port Talbot transition board on Wednesday.
The package is designed to support businesses that rely on Tata Steel as their main customer, while the money will also be used to help workers who have been made redundant by giving them access to training and qualifications in sectors where there are job vacancies.
As part of the deal, Ms Stevens, the MP for Cardiff East, will also announce that more than 50 businesses have signed a pledge to support any workers forced to leave their jobs in the steelworks.
Negotiations between the government and Tata Steel regarding the future of the Port Talbot plant – where the workforce currently accounts for 12% of the coastal town’s entire population – will continue separately.
Ms Stevens said: “Today’s release of an initial £13.5m in funding demonstrates that we will act decisively to support workers and businesses in Port Talbot, working with Welsh government, unions and the wider community.
“This government will not wait for a crisis to overtake us before acting. We are putting a safety net in place now to ensure we can back workers and businesses, whatever happens.”
Earlier this year, Tata confirmed it would press ahead with plans to close blast furnaces and replace them with electric arc furnaces under its plan to reduce emissions and costs.
It said the move will cut carbon emissions by about 85% and the UK’s overall CO2 output by about 1.5%. The Port Talbot site is the UK’s single largest emitter of CO2.
The new furnace will make steel by using UK-sourced scrap metal as its raw material. The iron ore that the furnaces currently use needs to be imported.
Alun Davies, national officer for steel at the Community union, welcomed the announcement and said the government was “stepping up to provide support both to workers affected by Tata’s decarbonisation plans, and to the wider community in and around Port Talbot”.
“The Welsh secretary Jo Stevens has acted at pace to ensure that this first tranche of funding can be released as swiftly as possible, and we thank her for her steadfast commitment to our steel communities,” he said.
However, Mr Davies said the union’s “wider position on Tata’s bad deal for steel has not changed”.
“We will continue to oppose the company’s damaging proposals, and we will fight to protect jobs. It remains our firm belief that no compulsory redundancies are necessary, and that an alternative approach is still possible.”
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Tata Steel UK’s chief executive Rajesh Nair, added: “The transition board plays a very important role in supporting the transformation of our business to low-CO2 steelmaking and encouraging regeneration and inward investment to the area, whilst helping to mitigate the impacts those changes may have on our people, our supply chain and our communities.
“The transition board has been set up to support both Tata Steel employees and those in local supply chain companies, so today’s announcement and the ambition to help the region and local communities grow in line with the changing needs of the developing industrial ecosystem here in South Wales, is very much welcomed.”