Tata needs ‘shot in the arm’ to save Port Talbot steel plant, says MP

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Steel worker

The loss-making steelmaker Tata needs an urgent “shot in the arm” from the taxpayer to help it survive the pandemic, the MP for its giant Port Talbot plant has warned.

Stephen Kinnock, whose Aberavon constituency is home to Tata’s base, made the appeal for “immediate” help as negotiations with ministers about a £500m lifeline drag on.

The Government has been in talks about a support package since last ­summer after the pandemic resulted in a collapse in demand for steel, with Tata’s Indian parent having warned it was no longer willing to keep funding its British arm’s losses, casting doubts over its 8,000 staff in the UK.

Mr Kinnock said: “Tata is fighting hard on a number of fronts because of pressures such as Covid, Brexit quotas and tariffs, and high energy costs. There is an argument for an immediate shot in the arm from the Government to address the impact of the pandemic and Brexit, in parallel with a separate conversation about the long-term future of the British steel industry.”

Tata’s chairman is understood to be heading negotiations with ministers about how a support package backed by the UK could be arranged that would help fund investment in Port Talbot to make it more efficient and competitive. The money could also be used to decarbonise the site, swapping the existing blast furnace set up, which is highly polluting, for electric arc furnaces that melt scrap steel in a greener process.

However, talks are understood to have become mired in concerns about return on investment for the taxpayer, job losses and potential liabilities around cleaning up industrial sites.

Tata Steel steel plant at Port Talbot, south Wales. - AFP
Tata Steel steel plant at Port Talbot, south Wales. – AFP

MPs from four Welsh constituencies containing Tata plants wrote to Kwasi Kwarteng, the Business Secretary, warning that the country’s steel “forms the backbone of our manufacturing sector” and will be crucial to recovery.

Tata said: “Tata Steel continues its dialogue with the UK Government on potential measures to safeguard the long-term future of Tata Steel UK.”

A BEIS spokesman said: “This is a commercial matter for Tata, but we continue to engage constructively with the company as it shapes its strategy.”

Read more: ‘Man of Steel’ Sanjeev Gupta banks on a green future for industry

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