Port Talbot: Tata Steel would have left UK without aid - Welsh secretary

Image source, PA Media

Port Talbot steelworks employs 4,000 of Tata's 8,000 workforce

Tata Steel could have closed its Port Talbot plant and pulled out of the UK if the government had not stepped in, according to the Welsh secretary.

David TC Davies said UK ministers agreed £500m for a new furnace and to secure 5,000 out of 8,000 jobs, of which 4,000 are based at the plant.

He said it was "terribly sad" not all jobs could be saved and up to £100m in funding would help affected workers.

Tata has been asked to comment but has said its plant was losing £1.5m a day.

In a frank interview on BBC Radio Wales' Sunday Supplement, Mr Davies said: "We did everything we can to save jobs and to make sure the steel continues to be made, but I'm not going to shy away from the fact that this is still terrible news.

"Tata are currently losing over a million pounds a day [at Port Talbot]... and no company is ever going to accept losses like that.

"So they decided they were going to close that plant down.

"When we became aware of that we entered into negotiations with them as a government to say 'well, look, can we do anything to keep steel being made there? What do we need to do to keep Tata here?'"

The £1.2bn deal announced on Friday involves switching from using blast furnaces powered by fossil fuels to electric arc furnaces which can be powered by using renewable energy.

And instead of producing virgin steel, the Port Talbot plant would produce recycled steel, with Tata investing an additional £700m.

Mr Davies said it was "not going to save every job but that is going to save [jobs] overall because Tata were looking to pull out of the UK, so that would have been 8,000 jobs gone, plus the supply chain.

"Not only would Port Talbot have closed but the other plants would have gone as well."

Tata Steel also has workers at plants at Shotton, Llanwern, Trostre, Corby, Hartlepool and Shapfell.

Image source, Getty Images

The UK government said it would ensure a "broad range of support for any staff who are affected by the transition"

On Friday, Tata Steel managing director T.V. Narendran told BBC Wales Today that the Port Talbot plant was "bleeding" up to £1.5m a day and some assets were coming to the end of their life which the business was "not able to support".

"We were reaching a point where we had to make a call and I think we've been public about that.

"We said that, a few months back, that we probably have a year left to decide one way or the other.

"The timing of this [deal] has been very opportune - at least we've secured the future of the site."

The UK government said it would ensure a "broad range of support for any staff who are affected by the transition, working with the Welsh government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy with up to £100m funding".