2016 was a turbulent year for the UK steel industry. Featuring in headlines such as, ‘Britain’s steel industry: What’s going wrong?’, and ‘Steel crisis far from over…’, it’s safe to say that the industry has been sorely hit over the last 12 months.
The privately owned Tata Steel has been instrumental in some of the changes we have seen. In January 2016, Tata Steel announced their intentions to cut 1060 jobs in the UK with 750 of those at Port Talbot, the UK’s largest steelworks and one of only two sites in the UK to make steel in a blast furnace. This paved the way for protests in Brussels and London as steelworkers expressed their outrage and worries about the direction taken by Tata Steel. Unions demanded that the EU take action to prevent the importation of cheap, Chinese steel flooding the market and ultimately costing jobs.
Despite a survival plan being drawn up at Port Talbot, the company board initially rejected this and shocked many by announcing their intention to sell their UK steel business entirely. The UK and Welsh governments both offered financial support for a management buyout of the UK plants, however, the company’s pension scheme deterred potential buyers.
In December a deal was finally agreed to keep the Port Talbot plant open, with proposed changes to the pension scheme that would result in a 10% cut to members benefits. Although union leaders have backed the plan, a ballot of steel workers will ultimately decide whether to accept the changes on 30 January 2017. If the deal goes ahead, Tata will commit to a 10 year and £1bn investment plan at Port Talbot as well as keeping the blast furnaces open for a at least the next five years. Whilst this is good new for the UK steel industry, it remains to be seen whether the workers are willing to accept the price.