New UK govt to push for job retention in Tata Steel talks

The UK’s new business secretary, Jonathan Reynolds, has said that the newly elected Labour government will demand saving jobs at Tata’s steelworks in Wales in exchange for state support for the industry.

The statement comes after Tata Steel expressed concerns over policy difference between Tori and Labour Parties putting its £1.25 billion ($1.55 billion) investment at Port Talbot in peril.

Speaking to the BBC on Sunday, Reynolds said he and new Prime Minister Keir Starmer have already spoken to Tata Steel about the company’s plan to shut the blast furnace at its plant in South Wales, which could affect some 2,800 workers.

Last month, the steelmaker said it would continue with its announced closure of assets and restructuring program at the plant in the coming months. Tata Steel had urged the current and incoming government, post-elections, to adhere to and safeguard the agreed terms of the £500 million package of support for the electric arc furnace (EAF) project announced in September 2023.

In September last year, the steelmaker announced it would invest £1.25 billion, including a £500 million ($620 million) UK government grant, to boost its greener steelmaking initiatives at Port Talbot in Wales.

The deal was to modernize the production of greener steel and protect skilled jobs, subject to consultation and regulatory approvals.

Reynolds said, “I am going to make sure that job guarantees are part of the negotiations that we are having. It’s not about underwriting loss-making businesses in perhaps a way we have thought about industrial policy in the past. It is about being a partner for investment in the future.”

The potential job loss at Tata Steel comes as an early test for the new UK government’s industrial policy.

Labour’s election manifesto has promised £2.5 billion ($3.2 billion) support to the steel industry.

Reynolds told the BBC, “There is more money available” for the steel industry under a Labour government, but the same would come with conditions.

He added that talks are a priority but conceded that the timescale is insignificant. “There is a better deal available for Port Talbot and the steel industry as whole, “Reynolds said, adding, “We have to make sure that decarbonisation is not deindustrialisation.”