Tata Steel’s Port Talbot blast furnaces expected to close, in “utterly devastating” decision – business live

Today is a bleak one for thousands of UK steel workers, and the community of Port Talbot in Wales.

Tata Steel is to push ahead with plans to close both its blast furnaces in Port Talbot, a move that could lead to up to 3,000 job cuts.

My colleague Rob Davies reports:

The owners of Port Talbot steelworks have rejected a trade union plan designed to keep its blast furnaces running, putting nearly 3,000 jobs at risk and leaving the UK on course to become the only major economy unable to make steel from scratch.

In what one union said would be a “crushing blow” to workers and UK steelmaking, Port Talbot’s parent company, the Indian-owned Tata Steel, told workers’ representatives that it could no longer afford to continue production at the loss-making plant in south Wales while it completed a four-year transition plan to greener production.

The company, which is getting £500m from the government to help with that plan, broke the news during a summit at the five-star St James’ Court hotel in London, which is owned by the Tata Group.

The announcement is expected this morning.

Under the Tata plan, Port Talbot’s blast furnaces will shut down while the company builds electric arc furnaces, which make steel from recycled scrap, a greener and cheaper process.

Shares in Tata Steel have risen 2.6% today, as investors react to this dire news.

This is a very good point, unfortunately:

If Tata Steel closes its Port Talbot blast furnaces, it will make the UK the only G20 country that cannot make steel from raw materials.

Blast furnaces burn coal to melt iron ore to make iron, that then has carbon removed to produce steel.

The electric arc furnace which is expected to replace them are a greener option – as they use electricity (ideally from renewable sources) to melt down scrap steel or iron.

While significantly greener than coal-fired furnaces, the new process is also much less labour intensive, leading to job losses.

Here’s a handy explanation:

But Vaughan Gething, the Welsh government’s economy minister, is concerned that the change will leave the UK unable to make primary steel.

Gething told BBC Radio 4’s Today programme, that it is an “incredibly worrying day, not just for the steel workforce, but for Wales, and I think across Britain”, adding:

“There is hope that in the future electric arc furnaces can produce all grades of steel —they can’t today”

“What this would mean, if this plan goes ahead, is that the UK would be the only G7 country that can’t make primary steel.

“If you don’t wait for the technology to change, you will transfer your ability to do that to other parts of the world and be reliant on imports for a number of years. That is an issue not just for Wales — (it is) a strategic sovereign issue for the UK.”

Stephen Kinnock, Labour MP for Aberavon, home of the Port Talbot steelworks, has urged Tata Steel to “look again” at an alternative union-proposed plan, rather than close its blast furnaces in south Wales with the loss of up to 3,000 jobs.

Ahead of the expected grim news that Port Talbot’s two blast furnaces are to close, Kinnock said there was “still time” for Tata Steel to “pull back from the brink”.

He says it would be an an “utterly devastating” decision for Tata to close blast furnaces at its biggest UK plant.

Speaking to Sky News, Kinnock said:

“Do we really want to be a country, given the dangerous and turbulent world in which we live, that isn’t able to produce its own steel?

“We are very proud of what the Port Talbot steelworks means for Wales and for the entire United Kingdom and we feel passionately here.

“There isn’t a single household in my Aberavon constituency that isn’t connected to the steelworks in some way, and the impact would be utterly devastating.

“So we are urging Tata Steel and the UK Government to get back round the table with the unions.

“There is still time to pull back from the brink and we will be continuing to fight for that with every single fibre of our being.”

Demonstrations against the Davos elite have been taking place in several countries this week, highlighting the challenge the WEF faces as it tries to rebuild trust (the theme of this year’s meeting).

There have been #BetterThanDavos protests in Nepal and New Delhi, and a #BetterThanDavos People’s Assembly in Zimbabwe.

They’re being backed by Oxfam’s interim executive director, Amitabh Behar, who warns we have entered a “decade of division”

Jenny Ricks, Global Convenor of the Fight Inequality Alliance says:

“As the Davos private jets fuel up for their return journeys home, WEF again has done nothing to tackle the growing inequality in our world.

Back down on earth people have spent this week making sure the cry to #TaxTheRich is heard by their governments in protest action. From Delhi to Cape Town and far beyond, people have said their solutions are #BetterThanDavos.”

Today is a bleak one for thousands of UK steel workers, and the community of Port Talbot in Wales.

Tata Steel is to push ahead with plans to close both its blast furnaces in Port Talbot, a move that could lead to up to 3,000 job cuts.

My colleague Rob Davies reports:

The owners of Port Talbot steelworks have rejected a trade union plan designed to keep its blast furnaces running, putting nearly 3,000 jobs at risk and leaving the UK on course to become the only major economy unable to make steel from scratch.

In what one union said would be a “crushing blow” to workers and UK steelmaking, Port Talbot’s parent company, the Indian-owned Tata Steel, told workers’ representatives that it could no longer afford to continue production at the loss-making plant in south Wales while it completed a four-year transition plan to greener production.

The company, which is getting £500m from the government to help with that plan, broke the news during a summit at the five-star St James’ Court hotel in London, which is owned by the Tata Group.

The announcement is expected this morning.

Under the Tata plan, Port Talbot’s blast furnaces will shut down while the company builds electric arc furnaces, which make steel from recycled scrap, a greener and cheaper process.

Shares in Tata Steel have risen 2.6% today, as investors react to this dire news.

The UK’s economic outlook has darkened this morning, with the news that retail sales plummeted 3.2% year on year in December, as customers cut back.

Heather Bovill, deputy director at the ONS, explains:

“This was the largest overall monthly fall since January 2021, when the reintroduction of pandemic restrictions knocked sales heavily,” said

“Food stores performed very poorly, with their steepest fall since May 2021 as early Christmas shopping led to slow December sales.

Here’s the full story:

Last night in Davos, Google announced it has started construction on a new $1bn (£789m) data centre in the UK.

The news came as chancellor Jeremy Hunt met business leaders at WEF, as he tried to promote “British excellence” in the technology sector.

The new facility will be cited at a 33-acre site at Waltham Cross in Hertfordshire, purchased by Google in October 2020.

Ruth Porat, president and chief investment officer of Google’s parent company Alphabet, said:

“The Waltham Cross data centre represents our latest investment in the UK and the wider digital economy at large.”

Google says the centre would boost the growth of artificial intelligence (AI), and create jobs, initially due to the construction process.

Good morning from Davos, where the final day of this year’s World Economic Forum Annual Meeting is getting underway.

Today, world leaders and business chiefs will be considering what lies ahead in 2024, after several days spent discussing crucial issues such as support for Ukraine, the potential and risks of AI, the Middle East crsisis and the global energy transition:

Davos will wrap up with the traditional set-piece panel on the global economic outlook, where key figures including Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, and Christine Lagarde, President of the European Central Bank.

Lagarde’s views on the outlook for interest rates will be interesting, after global stocks and bond markets weakened this week as hopes of early cuts to borrowing costs faded.

The experts here in Davos fear that the the global economic outlook is fraught with uncertainty. A WEF survey of top economists this week found that over half expect the world economy to weaken this year.

Any escalation of the Middle East conflict risks further disruption to shipping and could push up energy prices – both adding to inflation and slowing growth.

During his visit to Davos, foreign secretary David Cameron has been reiterate the 4 things that must happen for a peaceful solution to the Israel-Hamas war: a Palestinian-led government in Gaza and the West Bank, a concrete plan to help reform and support the Palestinian Authority, a major reconstruction plan for Gaza, and a political horizon towards a two-state solution.

But the news overnight that Israel’s prime minister, Benjamin Netanyahu, has told the Biden White House that he rejects any moves to establish a Palestinian state when Israel ends its offensive against Gaza is a sharp pushback against pressure for a two-state solution.

The agenda

• 9am CET / 8am GMT: A session on the electoral outlook for 2024

• 10.15am CET / 9.15am GMT: A session on how to deal with emerging risks and rapid shocks?

• 10.15am CET / 9.15am GMT: A session on the prospects for the Middle East in 2024

• 11am CET / 10am GMT: The Global Economic Outlook, with Tharman Shanmugaratnam, President of Singapore, Ngozi Okonjo-Iweala, Director-General, World Trade Organization, Mohammed Al-Jadaan, Minister of Finance of Saudi Arabia, David Rubenstein, Co-Chairman of The Carlyle Group, Christine Lagarde, President of the European Central Bank, and Christian Lindner, Germany’s Federal Minister of Finance