The UK government has announced that it has made a “new and improved deal” with Tata Steel. The deal involves a grant of £500m for the company and will be directed towards the construction of an electric furnace in Port Talbot, which will be more environmentally-friendly. This is the same amount that was agreed by the previous Conservative government. The new technology will result in the loss of at least 2,500 jobs initially, with another 300 jobs set to be lost in the future.
Labour has been accused of raising “false hopes” after previously suggesting that a better deal could be agreed to save jobs. However, Business Secretary Jonathan Reynolds has said that the deal provides more protection for affected employees. He also acknowledged that the deal “falls short of what would be my ideal.” The Community and GMB trade unions have also criticised the plan, stating that it is “not something to celebrate”, but added that it is better than the plan that was announced by Tata and the Tories back in September 2023.
The electric arc furnace produced by Tata will melt scrap steel and iron to produce steel after cement plants. Plaid Cymru has raised concerns about the loss of steelmaking capacity in the Port Talbot plant, but Tata has agreed to explore potential investment opportunities that include the production of wind turbines.
Under the new deal, Tata will offer workers facing compulsory redundancies a comprehensive training program with recognised qualifications. Although the UK government suggests a promising future for steelmaking in south Wales, it has yet to outline its steel strategy. Despite the fact that the grant being directed towards the electric furnace was agreed last year, representatives of the steel unions resolved to negotiate the best possible deal and put it to a ballot of its members
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