UK Government confirms commitment to invest £500m in Tata Steel

• ITV's Rob Osborne has the latest from Port Talbot.

Tata Steel will receive a £500 million investment from the UK Government, the Business and Trade Secretary has announced.

Jonathan Reynolds told the House of Commons the deal "does what previous deals failed to do" and gives "hope for the future of steelmaking in South Wales".

But he admitted it "falls short" of the ideal deal.

Tata is changing how it produces steel at its site in Port Talbot, with the loss of up to 2,800 jobs across the UK.

The steel company confirmed in February that it would go ahead with plans to shut down Port Talbot's two blast furnaces. Blast Furnace 5 shut down at the start of July with the second likely to shut at the end of September, bringing an end to traditional steelmaking in Port Talbot.

The government's deal remains largely unchanged from the previous Conservative government's plan to invest £500 million in the Port Talbot works.

Shadow Scottish secretary John Lamont, who responded on behalf of the opposition, said: "It seems that the core of this new deal is the same deal, worth hundreds of millions of pounds, that was agreed by the last Conservative government."

• Jonathan Reynolds addressed the House of Commons this lunchtime (11 September).

But the UK Government says under the new arrangements, Tata Steel will have to commit to delivering redundancy payments and future training opportunities to maintain the investment.

Tata Steel's CEO said the grant means the transition of the site has potential to make the it one of "Europe’s premier centres for green steelmaking".

The Business and Trade Secretary apologised to the people of Port Talbot for the nearly 2,000 jobs which will be lost from the site.

He said: “They were let down by the previous government and whilst this deal is much improved, I acknowledge very much that this deal falls short of what would have been my ideal.

“However, I have been to Port Talbot. I have met the workforce there, the reps, the generations of families that have literally forged Port Talbot as we know it.

“I warned my predecessor not to proceed with what they had negotiated. Why? Because I was confident the government could secure a better deal."

"The road ahead is not without its challenges", as he told MPs the government would ensure Tata committed to a minimum redundancy payment of £15,000, plus a retention payment of £5,000.

The "new and improved" plan will make sure staff who are made redundant will receive a comprehensive training programme, he said.

Mr Reynolds said the government would withdraw the £500m investment in the Port Talbot works if Tata Steel does not fulfil these commitments.

“We have secured that deal but I would like to reiterate that if we had the opportunity the previous government had over so many years we could have done more.", Mr Reynolds said.

T V Narendran, Tata Steel Chief Executive Officer and Managing Director, said: “With the UK government’s critical support, this complex and ambitious transformation of Port Talbot has the potential to make the plant one of Europe’s premier centres for green steelmaking.

"I would like to thank the UK Steel Committee and various departments of the UK and Welsh governments for their support in reaching this agreement.

"We now look forward to the efficient and speedy execution of the EAF project. We will also continue our work with the Transition Board and the UK and Welsh governments to enable this project to be a catalyst for economic regeneration and job creation in South Wales.”

When quizzed at Prime Minister’s Questions, Keir Starmer insisted the UK will need “more steel, not less” if his government is to carry out its plans.

Jessica Morden, the MP for Newport East, asked the PM: “We know deindustrialisation can be devastating to communities, so can the Prime Minister tell me how the government is safeguarding jobs as securing the future of steelmaking for communities like ours for generations to come?”

In response, the Prime Minister said: “We’re taking every step we can in relation to the steel industry because it’s vital we give it the support it needs.

“We need steel in this country. We need steel made in this country and our plans and our missions mean we’re going to need more steel, not less.

“And it’s the government’s responsibility to ensure jobs and communities aren’t ignored in the transition and that jobs are protected.”

• Sir Keir Starmer was quizzed by MP at the dispatch box earlier today.

However, the Conservative Party has accused Labour of extending a deal for Tata Steel that it had previously criticised when in opposition.

The Conservatives' John Lamont said, "it seems that the core of this new deal is the same deal, worth hundreds of millions of pounds, that was agreed by the last Conservative government.

“At the time, the minister and the Welsh Labour Party appeared to rubbish the deal and suggested that a better deal was possible. Does the minister now regret previous criticism of the deal by the Labour Party?”

Unions have reacted to the government's announcement today. In a joint statement, the Community and GMB trade unions said, "This deal is not something to celebrate, but it is better than the devastating plan announced by Tata and the Tories back in September 2023".

"Community and GMB published the Multi-Union Plan, an alternative approach that would have safeguarded Port Talbot steelmaking and secured a just transition for the workforce."

A spokesperson for the Unite Union welcomed Wednesday's announcement, criticising the last government. The general secretary said, "The present crisis is a direct result of it (the former government) failing to invest in the UK steel industry.

“It is now imperative on Tata to bring forward the second stage proposals to develop increased steel capacity at its South Wales sites, a jobless transition will not occur on our watch.”

In Cardiff Bay, the First Minister welcomed the announcement, despite what she described as an "incredibly unsettling situation for many".

Eluned Morgan said "The Welsh Government stands shoulder-to-shoulder with the UK Government in doing all we can to support workers at Tata Steel and provide a new future for steel production in Wales.

Plaid Cymru's Economy and Energy spokesperson described the deal as a "reheated version of the deal put forward by the previous Conservative government".

He called on the UK Government "to preserve jobs and to secure the long-term viability of steel production in Wales through strategic public ownership".

The Welsh Conservatives said, "Unfortunately, there is no new money yet allocated by the Labour Government that promised much more during the election campaign.

The Shadow Economy and Energy Minister, Samuel Kurtz MS said, “The new terms also risk future job losses by threatening the withdrawal of this vital support package agreed by the Conservative Government. This is wrong."

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