The UK government will demand that jobs are saved at Tata’s steelworks in Port Talbot, Wales, in exchange for state support for the industry, new Business Secretary Jonathan Reynolds said.
“I’m going to make sure that job guarantees are part of the negotiation that we are having,” he said. “It’s not about underwriting loss making businesses in perhaps a way we might have thought about industrial policy in the past. It is about being a partner for investment in the future.”
The fate of the jobs at the steelworks is an early test of the new government’s industrial policy. Tata is planning to cut jobs as it replaces the blast furnaces at with greener but less labour-intensive electric arc furnaces.
Reynolds pointed to Labour’s election manifesto pledge to plough £2.5 billion (US$3.2 billion) into the steel industry, on top of £500 million that was already in the outgoing Tory government’s plans, telling the BBC “there is more money available” for the steel industry under a Labour government but that it will come with conditions. He added that the talks are a “priority” but conceded the “timescale is not a large one”.
“There is a better deal available for Port Talbot and the steel industry as a whole,” Reynolds said. “We have to make sure that decarbonisation is not deindustrialisation.”
Nevertheless, Reynolds hinted that some jobs will have to go, saying “blast furnaces employ more people than some of the newer technologies available”, and adding “there’s a range of things you have to understand”.
Tata announced its plan in January after reaching a deal with the Conservative government for £500 million of support. The company is investing £1.25 billion in the project, and was aiming to close down the blast furnaces by September. Unions had hoped to keep one of the furnaces running during the transition, but the company said doing so would not be feasible because of the heavy losses involved in running the plants.
Sharon Graham, head of the union Unite, warned that the Starmer government “won’t have a lot of a honeymoon period” as she urged it to take action to support the steel industry.
“I’m asking for two things: One is investment in steel with jobs guarantees and the other one is on procurement legislation that all UK infrastructure projects should use UK steel,” she said in a BBC interview.
Starmer is expected to visit Wales in the coming days as part of a tour of the UK nations following Labour’s landslide victory in Thursday’s general election.