'Most generous voluntary redundancy package ever' offered to staff at Britain's biggest steelworks

Thousands of workers being made redundant at Britain's biggest steelworks will receive at least £20,000 under government intervention to reduce the fallout from the closure of its blast furnaces.

As many as 2,800 jobs are to be lost, despite the previous government issuing £500m of funding. In return, the company would invest £750m.

Labour, which had expressed hope in opposition to reduce the number of redundancies, confirmed its intervention in government had failed to secure a rethink on the company's plans.

The last blast furnace currently used to produce steel is being closed and an electric arc furnace, which requires less labour, will be built to replace it.

The Tata Steel site in Port Talbot is the UK's single biggest source of CO2 emissions and its closure will reduce the UK's overall CO2 emissions by around 1.5%.

It is understood most job losses will have happened by Christmas, with the remaining redundancies taking place by March 2025.

What is the government and Tata doing?

The government said on Wednesday that it had managed to secure better terms for the workforce affected and on future guarantees.

A training programme for laid off staff will be offered and funded by Tata. While on the scheme people will be on full pay for the first month and £27,000 for the following 11 months.

No funding beyond the original £500m will be advanced by the government and financial penalties will be applied should Tata renege on the agreement and funding can be clawed back, the Department for Business and Trade (DBT) said

The company committed to retaining 5,000 jobs across its UK business - 500 staff will be needed to build the electric furnace.

A government streel strategy developed with industry will be published in the new year in an effort to secure the future of the industry in Britain.

The 'most generous voluntary redundancy package ever'

Minimum redundancy payments of £15,000 pro-rota will be offered plus a payment of £5,000 will be given to redundant workers.

As many as 2,000 staff members expressed interest in voluntary redundancy, the DBT added.

Those who choose redundancy will be paid 2.8 weeks' pay per year of service, up to a maximum of 25 years.

The package was described by the government as the "most generous voluntary redundancy package ever for a restructure of this size".

Reaction

The announcement has been welcomed by unions as Unite's general secretary Sharon Graham said the move was "vital for local communities and the long-term future of the steel industry".

"Make no mistake Unite will be holding Tata's to account to ensure new investment, new lines and new jobs are fully developed," she said.

"Unite has secured work for nearly all its members, avoiding compulsory redundancies and is in talks with government and Tata to create new jobs," she added.

A 'tragic missed opportunity'

Not all unions responded as positively.

A statement from the Community and GMB trade unions said the deal is "not something to celebrate".

"But - with the improvements the unions and the government have negotiated - it is better than the devastating plan announced by Tata and the Tories back in September 2023," a statement read.

"Clearly this is not where we wanted to be, and we know that a better plan was available."

It added: "Back in November last year, 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.

"Regretfully we couldn't secure the support of all stakeholders for our credible alternative decarbonisation strategy, and ultimately the company rejected the basis of our proposals, representing a tragic missed opportunity."