2025-04-02

Steelworkers at Port Talbot and Llanwern to start working to rule action

More than 1,500 steelworkers at Port Talbot and Llanwern will begin working to rule next week as well as an overtime ban in its dispute with Tata over its plans to end blast furnace steelmaking.

The Indian-owned company said it will not shift from its position of closing the two blast furnaces at its Port Talbot steelworks.

This will see blast furnace No 5 shutting down at end of this month and No 4 at the end of September. Instead the steelmaker plans to build a new electric arc furnace (EAF) which would make steel from scrap.

The move will see 2,800 jobs losses at its UK-wide operations, where it employs 8,000. However, the biggest impact, with nearly 2,000 jobs, will be felt at Port Talbot where Tata has already closed its coke ovens.

Unite’s overtime ban and work to rule is the first time in 40 years that there has been industrial action in the UK steel industry. In its General Election manifesto the Labour Party has committed to a £2.5bn fund to support the decarbonisation of UK steelmaking over the next decade.

It is unclear how much of that could be assigned to Port Talbot. Labour has backed a union plan for a phased approach to decarbonisation at Port Talbot by running blast furnace no 4 until its expiry date in 2032.

Tata insists it will not shift no its decision to close the blast furnaces regardless of a Labour taking power at Westminster following the General Election on July 4th.

Unite general secretary Sharon Graham said: “Tata’s workers are taking this industrial action because they know the company’s claim that jobs cannot be retained in South Wales during the transition to green steel is a lie. They are standing up and fighting for a better future, one in which Tata’s British business can take full advantage of the coming green steel boom and not be sacrificed to benefit its operations abroad.

“The current UK Government have backed Tata’s disastrous deal for Britain without even getting any job guarantees. But in less than a month, Tata will almost certainly be dealing with a new political reality. Labour has told Tata to wait for the £2.5bn steel investment fund, a commitment secured by Unite. That is what it must do. Unite will use every weapon in its armoury to ensure that it does.” Other steel unions have also balloted in favour of industrial action.

Tata insists Port Talbot as a blast furnace operation is unsustainable, with a move to an EAF operation the only way to provide long-term security for remaining staff.

The UK Government has committed £500m towards Tata’s £1.2bn EAF investment commitment. Until it is operational its downstream plants, which in Wales include those at Llanwern, Trostre, Shotton and Caerphilly, would utilise imported semi-finished steel.

Tata claims that the steelworks is currently losing £1m daily, although it has been profitable in the past.

.For its end of March, 2022 financial year Tata Steel UK made profits of £206m on £3.124bn of revenues - although boosted by a tax credit of £126m. In its last full financial year to March, 2023, it posted pre-tax losses of £674m, which were inflated by a £395m tax charge, on revenues of £3.127bn.

Of its revenues the UK market generates nearly two-thirds £1.77bn, with mainland Europe £1.18bn and just £165m with the rest of the world. It had borrowings of £1.15bn. This includes inter group and parent borrowings of £503m. Combined loans of £175m to Tata Steel UK and Tata Netherlands Holdings have interest charges ranging from 5.25% to 6%.

Before Tata split its UK operations from its Dutch steel operations in 2021, there were those who believed that legitimate inter-company charges were used to make the trading position of Port Talbot less favourable than those in Holland. The Mumbai-based group also charges Tata Steel UK for use of the Tata name.

A Tata Steel spokesperson said: “Of the 4,500 Tata Steel UK employees in Port Talbot and Llanwern, 1,366 Unite members were balloted, 857 voted and of those 468 members voted for industrial action including strike action.

“We have challenged the legality of their ballot process on multiple occasions and our position is that their industrial action is unlawful.

“Furthermore, through extensive negotiations with unions the company twice substantially improved our support offering for affected employees - the most generous package in our history - we would have expected Unite to put this offer to their members.

“Having now received notice of Unite’s industrial action, we have regrettably reverted our employee support package to closer to our standard terms.

“We have written to our workforce to make sure that any employee subject to Unite’s notice and considering taking part in any industrial action is fully aware and understands that their contract of employment, associated collective agreements, and job description, as well as terms implied by established custom and practice and/or by law, may require them to work additional hours and continue to support and cover activities as outlined in Unite’s notices of industrial action.