UK government secures better severance deal for workers at country's biggest steel plant

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Britain’s government has unveiled details of a new support package for workers who face losing their jobs at the country’s biggest steel plant ahead of its transition to a greener way of production

LONDON — Britain's government unveiled on Wednesday details of a new support package for workers who face losing their jobs at the country's biggest steel plant ahead of its transition to a greener way of production.

Business Secretary Jonathan Reynolds said workers will be offered improved severance terms and a reskilling package if they choose. He also said that the new Labour government, elected in July, will honor a pledge by the previous Conservative government to give Tata 500 million pounds ($650 million) to help ease the transition to the new electric furnace.

Earlier this year, Tata Steel said its plan to close its remaining two blast furnaces ahead of switching production to a new electric furnace, which emits less carbon and requires fewer workers, will potentially lead to the loss of up to 2,800 jobs. One of the furnaces has already closed, while the other is due to cease production later this month.

Tata has said the switch to the 1.25 billion-pound electric furnace, which produces steel from scrap metal, will be completed by 2027.

Reynolds admitted that the deal was “not ideal” as he sought to blame the previous government for failing to negotiate a better outcome with Tata much earlier in the transition process. He also confirmed that the government will invest a further 2.5 billion pounds in the industry in the years ahead.

“Steel is essential to delivering on our net zero goals and building the next generation of green infrastructure,” he said. “I believe that this is both a better deal than was on the table