UK Says $655 Million Tata Deal Helps Workers Despite Job Cuts

The UK government confirmed a £500 million ($655 million) support package for Tata Steel’s plant in Port Talbot, one of the first major tests of Labour’s promise to boost British industry.

Business Secretary Jonathan Reynolds said the deal—which was drawn up by the last Conservative government but had been subject to further negotiation by the new Labour administration—included better support for workers facing redundancy, as Tata closes its blast furnaces and invests in a new, greener, less labor-intensive electric arc furnace. But he also blamed the Tories for the situation that Labour had inherited at Port
Talbot.

“Whilst this deal is much improved, I acknowledge very much it falls short of what would be my ideal,” Reynolds said in the House of Commons on Wednesday. “We could have done more.”

Reynolds had previously said he wanted to see jobs saved at the site in Wales, with Tata warning the blast furnace closures would put 2,800 jobs at risk. Yet the deal didn’t achieve the protection of those roles. Instead, the government said voluntary redundancy would be more generous than under the previous Tory deal, and there’d be more opportunities for re-
training.

India-based Tata Steel is one of Britain’s biggest steelmakers. In April, the company said it would proceed with a £1.25 billion plan to build an electric arc furnace at Port Talbot and start closing existing heavy-end assets. That followed months of national-level discussions with UK trade unions that threatened industrial action over expected job losses.

Tata’s British steelmaking operations have struggled for years to turn a profit. Sales in Europe have been weak amid rising cost pressures and competition from Asian imports. Yet the new Labour government has said it wants to support Britain’s steel industry, and made a commitment in its manifesto to establish a £2.5 billion green steel fund.