The new government will push for “job guarantees” as part of negotiations with Tata Steel about the future of its Port Talbot site, the new business secretary has said.
Britain’s biggest steel producer started the closure of one of its carbon-intensive blast furnaces last Thursday, while the shutdown of the other is slated for September, resulting in the loss of up to 2,800 jobs at Port Talbot in south Wales.
Jonathan Reynolds, the business minister, said that “there is a better deal available” for Port Talbot and the wider steel industry as he confirmed that preserving jobs was “part of the negotiation that we are having”.
The new government will need to sign a £500 million support package that the previous administration agreed with the Mumbai-based Tata Steel to help to build a lower-carbon electric arc furnace, but unions are hoping that is conditional on an improved deal with Tata that could avert some job losses.
“We see this as a major priority,” Reynolds told the BBC. “I do want things in exchange for money we will co-invest with the private sector around jobs and technology. I think that’s a reasonable way to make sure public money is being well spent. We have to make sure this is a transition that works for working people.”
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In September, and without consultation with unions, Tata laid out a plan to build the electric arc furnace but also to shut down the more labour-intensive blast furnace operations. The announcement came with news that the government had backed the proposal with £500 million, despite the large number of redundancies that would result.
Tata has said it would make every effort to mitigate the impact of the transformation on affected employees and the local community. It said it had put forward the most favourable financial package of support it had ever offered, including facilities for training, alongside finance for small and medium-sized businesses through the UK Steel Enterprise regeneration and a job creation scheme.
Unions, which have opposed the plans, had urged Tata to wait until the outcome of the general election. Strikes planned for this month have been suspended.
Sharon Graham, Unite’s general secretary, said on the same BBC programme that there was “no doubt” of the Labour Party’s “intent of what they want to do is a good thing” and that “the devil will be the detail” when it comes to any jobs guarantee in return for state financial support.
The two blast furnaces at Port Talbot sit at the heart of British steel production, making “flat” steel for the car industry. Customers include Jaguar Land Rover and Nissan in the northeast.
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Labour, which before its election success had promised to negotiate a better deal for the steel industry if it came into power, previously has urged Tata to reconsider a compromise plan supported by Community and GMB, the unions, to retain one of the blast furnaces, which could run to the early 2030s, until the eclectic arc furnace is operational.
Sir Chris Bryant, the MP for Rhondda and Ogmore, is hopeful that a decision between the government and Tata can be made to save jobs. “We need to make sure that Tata don’t make any sudden moves that make it impossible for us to unpick what was a very bad deal that was originally agreed by the Conservative government,” he said.
