Blow for UK steel industry as 2,500 job losses confirmed at Port Talbot

The British steel industry has suffered a blow after confirmation that 2,500 jobs will go at the Port Talbot steelworks despite a £500m taxpayer-backed deal for the south Wales plant.

- Jack Simpson

The business secretary, Jonathan Reynolds, has agreed a deal in which the government will provide £500m towards the construction of a new greener electric arc furnace at the site, with the plant's Indian owners, Tata Steel, paying £750m.

However, while the deal secures the long-term future of steel production at the south Wales site, the government was unable to secure guarantees that would save the 2,500 jobs at Port Talbot that Tata was likely to cut over the coming months.

Announcing the package in parliament yesterday, Reynolds acknowledged that it "fell short" of his ideal outcome but laid the blame at the previous government's door, accusing the Conservatives of a "dereliction of duty" in talks and letting down the people of Port Talbot.

Under the new deal, those at threat of losing their job will now receive improved redundancy packages, while there has also been an increase in how much axed employees could receive if they take part in a Tata-run training programme.

The company has also made commitments to evaluate future investments in steel plants and infrastructure, alongside Labour's £2.5bn support package for the sector.