The UK government is set to confirm a £500 million ($655 million) support package for Tata Steel’s plant in Port Talbot, one of the first major tests of Labour’s industrial policy.
Business Secretary Jonathan Reynolds is due to announce the details of the package in the House of Commons on Wednesday, according to a person familiar with the matter.
Though £500 million of support for the steelworks was agreed by the last Conservative government, the specific terms hadn’t been ratified and had been a point of negotiation with the new Labour administration. Reynolds has said he would want to see jobs saved at the site in Wales, as Tata Steel replaces the blast furnaces with greener but less labor-intensive electric arc furnaces.
India-based Tata Steel is one of Britain’s biggest steelmakers. In April, the company said it would proceed with a £1.25 billion plan to build an electric arc furnace at Port Talbot and start closing existing heavy-end assets. That followed months of national-level discussions with UK trade unions that threatened industrial action over expected job losses.
Tata had said the plan to close the blast furnaces would affect up to 2,800 workers, and was designed to reverse more than a decade of losses at the plant. Whether those job losses will be reduced is expected to be part of Reynolds’s announcement on Wednesday.
Tata’s British steelmaking operations have struggled for years to turn a profit. Sales in Europe have been weak amid rising cost pressures and competition from Asian imports. Yet the new Labour government has said it wants to support Britain’s steel industry, and made a commitment in its manifesto to establish a £2.5 billion green steel fund.