Britain's government has announced a new support package for workers facing job losses at the country's largest steel plant as it transitions to a more environmentally friendly mode of production. The plan includes improved severance terms and a reskilling package for affected workers. The government will also honor a commitment made by the previous administration to provide Tata Steel with 500 million pounds ($650 million) to facilitate the shift to a new electric furnace.
Tata Steel's decision to close its remaining blast furnaces in favor of a new electric furnace, which emits less carbon and requires fewer workers, could potentially result in up to 2,800 job losses. The company plans to complete the transition to the 1.25 billion-pound electric furnace, which produces steel from scrap metal, by 2027.
Business Secretary Jonathan Reynolds acknowledged that the deal was not ideal and criticized the previous government for not securing a better outcome with Tata earlier in the transition process. The government has committed to investing an additional 2.5 billion pounds in the steel industry in the coming years.
Unions representing steelworkers have urged the government to provide more robust support to safeguard jobs. While the unions described the deal as a necessary improvement over the initial plan, they emphasized the importance of ensuring that decarbonization efforts do not lead to deindustrialization.
The closure of the blast furnaces has dealt a significant blow to Port Talbot, a town with a long history in the steel industry. Once employing around 20,000 people in the 1960s, the steelworks now support a fraction of that number due to global competition and changing market dynamics. The steel industry currently contributes 0.1% to the British economy and accounts for 2.4% of the country's greenhouse gas emissions.
