Tata Steel would push ahead with thousands of job losses at its Port Talbot site even with hundreds of millions of pounds of subsidies being promised by Labour, sources close to the company said.
People familiar with the company’s plans say the money being promised by Labour if it wins the election would not prevent wide-scale job losses at the site, where Tata says it is losing £1mn a day.
The Indian-owned company is planning to make as many as 2,800 people redundant at the site as it closes its blast furnaces and replaces them with a less polluting electric one, a decision which shadow ministers say could cause decades of economic damage.
One source described the idea of keeping one blast furnace open while building an electric one, as proposed by Labour and trade unions, as “almost impossible to achieve”. The company has previously described the proposals as not “feasible or affordable”, but shadow ministers had hoped to persuade executives to change their minds with the promise of more public subsidies under a Labour government.
Labour has put supporting the Port Talbot site at the heart of its industrial policy. Last year Keir Starmer, the Labour leader, visited the steelworks to promote his plan for green steel, which he said would “bring growth and economic security”. Starmer said: “Our plans to get Britain building again will mean fuller order books and security for both industry and worker.”
As part of that plan, the party has promised to spend £3bn to incentivise clean steel manufacturing across the country, a portion of which the party has promised will go to Port Talbot in the hope of keeping the steelworks open beyond the end of this year.
Jonathan Reynolds, the shadow business secretary, met Natarajan Chandrasekaran, the chair of Tata Sons, in Mumbai last month to urge him to keep the steelworks open longer. Despite Labour’s promises of extra money, Tata is pushing ahead with its plans to close the plant while it builds a new electric arc furnace.