Tata Steel workers and suppliers receive £13.5 million in emergency funding amid Port Talbot restructuring

The UK government has announced £13.5m of emergency funding to support supply chain companies and workers affected by Tata Steel’s restructuring plans at its Port Talbot site in South Wales.

The funding represents the first allocation from a transitional board set up to manage the impact of Tata’s switch from conventional blast furnaces to more environmentally friendly electric arc furnaces, which could result in the loss of up to 2,800 jobs.

Tata Steel, which is closing one of its blast furnaces at Port Talbot and is due to close a second early next month, is moving towards making less carbon-intensive steel. The move is part of a wider £750m investment in green steel, backed by a £500m government package agreed last year. However, the new electric arc furnace is expected to employ fewer workers and will take years to come online.

In addition to the emergency funds, the government and Tata have set up a transition board, co-led by the unions, with access to £100m aimed at skills development and local renewal, with £80m from the state and £20m from Tata. This initial funding is intended to help local businesses, which rely heavily on Tata as a key customer, diversify into new markets and customers. It will also provide support to workers affected by the transition, helping them find new jobs, training and skills development.

Jo Stevens, Welsh Secretary and chair of the Transition Council, will formally announce the £13.5m funding on Thursday. Stevens, who has a personal connection to the steel industry having grown up near the Shotton steelworks, stressed the importance of avoiding the devastating effects of mass redundancies that have occurred in the past.

As part of ongoing negotiations, Labour has called on Tata to consider retaining one blast furnace until the new electric arc furnace is up and running. However, Tata has rejected this proposal, citing the high cost to the taxpayer. Labour has also pledged to create a £3bn “green steel” fund to support the industry’s transition, building on the £500m support package already agreed.

Stevens is expected to visit local manufacturers and Tata suppliers during her announcement, underlining the government’s commitment to securing a sustainable future for Port Talbot’s steel industry. Further funding announcements are expected in the coming weeks.

The emergency funding initiative has received support from more than 50 local businesses and organisations, including the Royal Mint and Cardiff Metropolitan University, who have pledged to help workers displaced by the relocation of steelworks.