Tata Steel got 'deal of century' by bagging taxpayers' cash with 2,800 job cuts

31 January 2024 , 13:22

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Tata Steel got 'deal of century' by bagging taxpayers' cash with 2,800 job cuts

Tata Steel has been handed the “deal of the century” after bagging £500milion of taxpayers’ money while axing 2,800 jobs, the firm’s top boss was told.

T V Narendran, the company’s global chief executive, appeared before MPs to defend devastating plans to shut two blast furnaces at its Port Talbot plant in south Wales. Mr Narendran insisted Tata had “tried very hard over the past 15 years to keep this business going.” He said the polluting blast furnaces were reaching the end of their life, with a shift to greener technology.

Tata plans to build an electric arc furnace at Port Talbot to recycle scrap steel. But it is not expected to be built for another four years and will need far fewer jobs. The Government has agreed to stump up £500million of the £1.2billion bill.

Tory MP Stephen Crabb, chair of the Commons Welsh Affairs Committee, said: “We have a plan that doesn’t save the blast furnaces, doesn’t save jobs at Port Talbot, and you have managed to get the UK government to give £500million for it. That must be the deal of the century.” Tata’s proposals were the “bargain basement option”, Mr Crabb claimed.

Some 2,800 jobs are being axed as Tata Steel plans to shut two blast furnaces at its Port Talbot steelworks in south Wales (PA)

Mr Narendran said: “While we have not been able to save the jobs at Port Talbot we have been able to save 5,000 jobs in Tata Steel UK because of the proposals.” Unions earlier told MPs the 2,800 job losses at Port Talbot were just the “tip of the iceberg” in the local area. The GMB also claimed Tata Steel was closing the two blast furnaces at Port Talbot while building three of the same in India and planning to import steel from those back to the UK.

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Tata Steel claims it is losing more than £1million a day in the UK. Mr Narendran said: “The question we are being asked is how much more money will you put into a business that is not giving you returns? “Somewhere you have to make a call because the level of losses is unsustainable.”

However, Tata Steel raked in global profits of £3billion last year. Mr Narendran said keeping the blast furnaces running would cost at least another £600million. He claimed importing steel from blast furnaces in India and the Netherlands was “temporary” and to allay “uncertainty” among its customers.

Charlotte Brumpton-Childs, national officer at the GMB union, said: “The 2,800 job losses proposed are just the tip of the iceberg because of the knock-on effect on people who work in the logistic supply chain, nearby cafes where workers buy their bacon butties, and even dance schools attended by steelworkers’ children.

“We have one member who signed a mortgage agreement two weeks before this announcement was made, and a senior union rep in his late 20s who wants a job for the next 50 or 60 years. This is not a dying industry - it is vibrant and could be providing jobs for the next 100 years.”

Alasdair McDiarmid, assistant general secretary of Community, told MPs: “The stakes couldn’t be higher”. He went on: “The focus has been on price rather than what is best for the industry, the country and the workforce.” Community says it has a plan that would impact 600 jobs at Port Talbot but create others.

Graham Hiscott