4,000 jobs to be cut in Port Talbot steel deal revealed

The closure of blast furnaces at Britain’s biggest steelworks will lead to far bigger job losses than previously thought, the Mail can reveal.

Tata Steel’s deal with the Labour government over the future of Port Talbot will result in more than 4,000 workers being made redundant.

This is 1,200 more than the 2,800 previously announced.

The true scale of the job losses was obscured in the Indian steel giant’s planning document for the Port Talbot plant.

This comes as Chinese-owned rival British Steel races to agree a rescue package with the government, with 2,500 jobs at risk at its Scunthorpe plant.

Last week, Labour agreed a similar £500m taxpayer-funded deal with Tata Steel to help it transition to green steel production at Port Talbot.

The plant’s coal-fired blast furnaces will be replaced by an electric arc furnace in an effort to achieve net-zero emissions. Tata Steel, which owns the plant in South Wales, will invest £750m.

Ministers hailed the improved deal after months of negotiations with the Mumbai-based company and unions.

But Business Secretary Jonathan Reynolds faced criticism for simply modifying a deal struck under the Conservative government.

Thousands of jobs remain at risk and the taxpayer is left footing the £500m bill. The latest figure takes into account the huge impact the £1.25bn redevelopment will have on the UK supply chain and other businesses. In a planning document, Tata said there was “likely to be a net reduction of 4,070 full-time equivalent jobs in the UK, of which 2,830 will be lost in Wales”.

The documents revealed that Tata expects the development to have a “significant” negative socio-economic impact.

The company had already revealed that 2,500 jobs will be lost in the next 18 months and that another 300 will be at risk within three years.

A Tata Steel spokesman said: ‘The figure of 4,070 jobs at UK level reflects the known potential reduction of Tata Steel UK jobs at the plant, the potential reduction of other jobs within the business’ supply chain and the potential reduction of jobs that are supported by people who spend their wages in the wider economy on a wide range of goods and services.

‘We are working closely with our suppliers to create contractual opportunities during decommissioning and once the EAF is operational to minimise any potential reduction in the supply chain.’

The retrenched workers who were employed directly by Tata Steel will receive 2.8 weeks’ pay for each year of service, up to a maximum of 25 years. With the average salary for a steelworker in Port Talbot around £40,000, an employee with 25 years’ service could be entitled to compensation of almost £54,000.

The minimum severance pay will be £15,000 for full-time employees. And Tata Steel staff facing compulsory redundancy will be offered a one-year paid training scheme.

Ministers will be able to claw back money 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 trade secretary, said:

‘Only the Conservatives could spend £500m of taxpayers’ money to sack thousands of British workers.’

The government has secured better redundancy terms for workers and a training programme for the dismissed employees. Reynolds said the deal was the best he had been able to secure in the two months the Labour Party has been in power.