The UK government has released £13.5 million in emergency funds to support workers and suppliers affected by Tata Steel’s ongoing restructuring at Port Talbot. This move comes as Tata Steel transitions from traditional blast furnaces to more environmentally-friendly electric arc furnaces, potentially leading to significant job losses.
The allocation of funds is the first from a transition board established to manage the effects of Tata’s shift. The company is closing one of its two blast furnaces at Port Talbot, with the second scheduled to shut down early next month. This transition to less carbon-intensive steelmaking forms part of a broader £750 million investment in green steel, which is bolstered by a £500 million government package agreed upon last year. However, the new electric arc furnace will employ fewer workers and will take years to become operational.
In addition to the emergency funds, the government and Tata have jointly set up a transition board, co-led by unions. This board has access to £100 million aimed at skills development and local regeneration, with £80 million contributed by the state and £20 million by Tata. The initial funding is designed to help local businesses, heavily reliant on Tata as their primary customer, diversify into new markets and customers. Additionally, it will provide support for workers impacted by the transition, assisting them in finding new employment opportunities, training, and skills development.
Jo Stevens, the Welsh Secretary and chairwoman of the transition board, will formally announce the £13.5 million funding on Thursday. Stevens, who grew up near the Shotton steelworks, emphasised the need to avoid the devastating effects of mass redundancies previously experienced in the industry. As part of ongoing discussions, Labour has urged Tata to consider keeping one blast furnace operational until the new electric arc furnace becomes functional. However, Tata has rejected this proposal due to the higher costs involved for the taxpayer.
Labour has pledged a £3 billion “green steel” fund to further support the industry’s transition, building on the existing £500 million support package. Stevens is expected to visit local manufacturers and Tata suppliers during her announcement, reiterating the government’s commitment to a sustainable future for the steel industry in Port Talbot. Further funding announcements are anticipated in the near future.
The emergency funding initiative has received support from over 50 local businesses and institutions, including the Royal Mint and Cardiff Metropolitan University, all of which have pledged to assist workers displaced by the steelworks’ transition.
The release of £13.5 million in emergency funding highlights the UK government’s commitment to supporting the steel industry and mitigating the economic impacts of Tata Steel’s shift to greener production methods. However, the long-term success of this transition will depend on continued investment and collaboration with local businesses and institutions.
