Sources close to Tata Steel have stated that the company would continue to cut thousands of jobs at its Port Talbot facility despite being promised hundreds of millions pounds in subsidies by Labor.
According to people familiar with the plans of the company, the money promised by Labour should it win the election will not stop the loss of jobs at the site where Tata claims it loses £1m per day.
The Indian company plans to lay off up to 2,800 workers at the site when it replaces its blast furnaces with an electric version that is less polluting. Shadow ministers claim this decision could have a long-term economic impact.
According to one source, the idea that one blast furnace would remain open while a new electric one is built, as suggested by Labour and unions, was “almost unachievable”. The company had previously said that the proposals were not “feasible” or “affordable”, but shadow ministers hoped to convince executives to change their mind by promising more public subsidies.
Labour’s industrial policy is centered around supporting Port Talbot.
Keir starmer, Labour’s leader, visited steelworks last year to promote his plan for green-steel, which , he claimed , would “bring economic security and growth”. Starmer stated: “Our plans for getting Britain building again will result in fuller orderbooks and greater security for industry and workers.”
In order to keep the Port Talbot steelworks operating beyond this year, the party promised to spend £3bn in an effort to encourage clean steel production across the country.
Last month, Jonathan Reynolds, shadow business secretary met Natarajan Chandrasekaran the chairman of Tata Sons in Mumbai to urge him to extend the life of the steelworks.
Reynolds said at the time that “that is a top priority for us.” We are prepared to consider capital expenditures if necessary. Other Labour figures have encouraged the company to avoid making “irreversible” decisions before an election.
Tata has decided to close its plant despite Labour’s promises. It will build a new electric-arc furnace while the old one is closed.
The new furnace is more efficient and cleaner, but it will cost up to 2,800 direct jobs, and more indirectly in the community and the supply chain.
Around 200 jobs will remain in the hot-strip mill where workers will roll out steel slabs, while temporary positions will be created for the construction of the new furnace. The company plans to hire more than 1,000 workers at the site in three years. However, many are concerned about the damage done to the economy by laying off so many people in the meantime.
Tata recently extended its 45-day consultation period with unions on when and how redundancies would be made. However, the company has yet to announce the results. Those at the site, as well as those in the Labour Party, are hopeful that the company will change its mind and not begin to lay off people.
Jo Stevens said last weekend that the economic and social impact could be comparable to the deindustrialisation in the 1980s.
She told the Guardian that if these jobs were lost, Port Talbot would lose its identity. “There is a proud history of steelmaking in this area… but the danger is there’s nothing to replace it.”
Labour Party spokesperson stated on Monday that “our £3bn commitment total over five years will galvanise the UK Steel Industry, including Port Talbot to create a strong future, protect jobs and our ability to produce primary steel, as well as transition sustainably into green steel production.”
The government has stated that everyone will be included in the redundancy process. “We will hold them accountable on this every step of how.”
The company caused more anger last week among Port Talbot’s steelworkers by unexpectedly closing the final coke oven on the site sooner than planned. Health and safety were cited as the reason.
Coke will need to be imported from overseas, as the oven where coal was transformed for use in furnaces has been closed. Workers are concerned that the company may not be able to get the materials they need and the plant could close sooner than expected.
The company has ruled out the possibility of building a hydrogen powered plant in the future to produce iron for the electric furnace, which would allow it to reduce its long term reliance on imported materials.