- Closure of the blast furnaces will lead to far more job losses than thought
- Deal between Tata Steel and Labour will see more than 4,000 workers axed
- That is 1,200 more than than the 2,800 previously announced
The closure of the blast furnaces at Britain’s biggest steelworks will lead to far more job losses than thought, the Mail can reveal.
The deal between Tata Steel and the Labour government over the future of Port Talbot will see more than 4,000 workers axed.
That is 1,200 more than than the 2,800 previously announced.
The true scale of the job losses was buried in the Indian steel giant’s planning document for the Port Talbot plant.
It comes as China-owned rival British Steel scrambles to agree a rescue package with the Government, with 2,500 jobs under threat at its Scunthorpe site.
Hit hard: The deal between Tata Steel and the Labour government over the future of Port Talbot will see more than 4,000 workers axed
Labour last week agreed a similar taxpayer-funded £500m deal with Tata Steel to help it make the switch to green steelmaking at Port Talbot.
The site’s coal-powered blast furnaces will be replaced with an electric arc furnace in a push towards net-zero. Tata Steel, which owns the site in south Wales, will invest £750m.
Ministers hailed an improved deal after months of negotiations with the Mumbai-based company and the unions.
But Business Secretary Jonathan Reynolds faced criticism for merely tweaking an agreement thrashed out under the Tory government.
Thousands of jobs remain at risk with the taxpayer footing the half a billion pound bill. The latest figure considers the huge impact of the £1.25billion redevelopment on the supply chain and other businesses across the UK. In a planning document, Tata said that ‘there is likely to be a net reduction of 4,070 full-time equivalent jobs in the UK, with 2,830 of those jobs being lost in Wales’.
Papers revealed that Tata expects the development to have a ‘significant’ negative socio-economic impact.
The firm had already revealed that 2,500 jobs will be lost in the next 18 months, with a further 300 at risk within three years.
A Tata Steel spokesman said: ‘The figure of 4,070 jobs at a UK level reflects the known potential reduction of Tata Steel UK jobs on the site, the potential for a reduction in other jobs within the supply chain of businesses and the potential for a reduction in jobs that are supported by people spending their wages in the wider economy on a wide range of goods and services.
‘We are working closely with our suppliers to create contract opportunities during decommissioning and once the electric arc furnace is operational to minimise any potential reductions in the supply chain.’
Redundant workers employed directly by Tata Steel will be paid 2.8 weeks’ earnings for each year of service, up to a maximum of 25 years. As the average pay for a steelworker at Port Talbot is around £40,000, an employee with 25 years of service could get a payoff of nearly £54,000.
The minimum redundancy payment will be £15,000 for full-time employees. And Tata Steel staff facing compulsory redundancy will be offered a paid year-long retraining scheme.
Ministers will be able to claw back cash if Tata does not continue to employ at least 5,000 workers in the UK.
Labour MPs were outraged when the deal was announced in October last year. At the time Reynolds, then-shadow business secretary, said:
‘Only the Tories could spend £500m of taxpayers’ money to make thousands of British workers redundant.’
The Government managed to secure better redundancy terms for workers and a skills programme for laid-off employees. Reynolds said the deal is the best he could have signed within the two months that Labour has been in power.
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