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TBA’s latest news – 29th of January 2024
Tata Steel: Job cuts won’t affect further investment in the UK
The owners of the Port Talbot steelworks are preparing to defend their decision to cut thousands of jobs at the facility in South Wales and present possibilities for creating more employment in the UK during testimony to members of parliament this week. Tata Group, the Indian conglomerate, confirmed this month its plans to close two blast furnaces in Port Talbot, resulting in up to 2,800 job cuts, and further layoffs of 300 people at another plant in Llanwern.
The company and the government face criticism from MPs and unions who believe that with more investment and national support, job opportunities can be preserved. Tata Steel’s global CEO, TV Narendran, and its UK CEO, Rajesh Nair, will attend the Welsh Affairs Committee on Tuesday to discuss the impact of the company’s decision on local communities, the Welsh economy, and the future of the UK steel industry, which is under review.
The decision to close the blast furnaces by Tata and a similar decision by the Chinese-owned British Steel in Scunthorpe have alarmed MPs as it would leave the UK without the capability to produce primary steel directly from iron ore.
In a document sent to employees and the government over the weekend, seen by The Guardian, Tata Steel attempts to fact-check the reporting on its decision, stating that the document presents a “misleading picture.”
Tata is expected to argue that it is willing to invest in a new plant to produce Direct Reduced Iron (DRI), a technology that utilizes methane or hydrogen to produce iron, which is then put into a new electric arc furnace. A major advantage of the DRI process is its ability to produce carbon-neutral steel, potentially playing a crucial role in decarbonization. Tata states that this would also replace around 200 threatened jobs at Port Talbot, though it would still result in thousands being unemployed.
The document states, “Tata Steel also makes it clear that, in the right investment and policy environment, it remains open to further investment, such as a Direct Reduced Iron (DRI) plant in the UK. If commercial conditions are favorable, and there is future government support for additional investment, we would consider establishing a Direct Reduced Iron plant in the UK.”
The document also directly addresses the prospects of a Labour government, adding that the company “remains open to further investment in the future” but wants to first make the Port Talbot plant profitable. Labour has pledged £3 billion in investments to the steel industry and is seriously considering supporting hydrogen steelmaking as an option.
However, some political figures, including local MPs, may be skeptical of Tata receiving hundreds of millions in subsidies shortly after receiving a commitment of around £1 billion in support. Half of it will support Port Talbot’s switch to an electric arc furnace, recycling new steel from the UK’s abundant scrap, while the rest will assist Tata, which also owns Jaguar Land Rover, in constructing a mega-factory to produce electric vehicle batteries.
The company’s executives claim that Tata has been an “extremely patient investor” since acquiring British steelworks in 2007 but has not seen any profits or dividends.
The document is understood to contain the key arguments that Narendran and Nair intend to present during the committee hearing. The committee will also hear testimony from Vaughan Gething, the Welsh Government’s Minister for Economy, and representatives from the community, GMB, and Unite unions.
Tata Steel: Job cuts won’t affect further investment in the UK
A study suggests that due to slow progress by the UK government in achieving household energy efficiency goals, millions of UK households could still be in fuel poverty by 2020, being forced to pay nearly £500 extra annually in bills.
A survey by a fuel poverty charity indicates that by 2030, an estimated 3 million households in the UK may be in fuel poverty, as the government may struggle to meet a legally binding target to “significantly” improve household energy efficiency. The National Energy Action (NEA) in the UK suggests that this study implies the poorest households may pay an additional £480 per year for gas and electricity as they find themselves trapped in “cold, damp, and unhealthy” homes.
The report, authored by consultants from Gemservfor NEA, calls on the government to address a funding gap of at least £18 billion to take sufficient measures to ensure that energy efficiency in low-income households in England meets reasonable standards over the next decade.
Adam Scorer, CEO of NEA, says, “Given the current ‘progress,’ we estimate that by 2030, just in England, 3 million households will still be in fuel poverty — the same number as the current fuel-poor households in England. Three million households will be cold, damp, and unhealthy. The government may struggle to achieve its legal targets, but the risks faced by those living in fuel poverty are much greater.”
Angus Brendan MacNeil, Chairman of the Energy Security and Net Zero Committee, states that this report should be “a wake-up call,” urging the government to redouble its efforts to improve household energy efficiency. He says, “As a committee, we have heard countless times that the energy crisis continues to have a devastating impact on the most vulnerable groups in our society. Due to low household energy efficiency, millions of the poorest households in the UK continue to face the most severe crisis.”
The study finds that strategies devised by the UK government to address fuel poverty — through improving home insulation and other energy efficiency upgrades — are overwhelmed by the scale of the energy cost crisis. In England, the government’s goal is for all fuel-poor households to achieve an EPC rating of C by 2030, but the report finds that the funding gap required to meet this legal requirement is steadily increasing. NEA defines fuel poverty as households needing to spend at least 10% of income to maintain a satisfactory heating system.
NEA estimates that out of the £18 billion needed to reach fuel poverty targets in England, £10.8 billion will come from public funds, with an additional £7 billion to £8 billion from private funding by landlords. If the same targets were set across the entire UK, Wales would require an additional £1 billion in government funds, Scotland £1.6 billion, and Northern Ireland £400 million.
Welsh Semiconductor Factory “in Crisis”
The Labour Party criticizes the government for showing “hesitation and delay” in the proposed acquisition of the UK’s largest semiconductor factory by an American company, warning that this could lead to further job cuts at the Newport Wafer Fab in South Wales. Over the past two years, the UK government has expressed concerns for the first time about the acquisition of Nexperia, a company owned by China, in 2021, casting uncertainty over the fate of the Newport Wafer Fab. Due to national security concerns related to semiconductor technology owned by a company with ties to China, the government ordered Nexperia to sell the factory in November 2022, raising questions about its future.
During this period, about 100 workers at the factory have faced layoffs and resignations, including 60 who were forced to leave at the end of last year. In November 2023, the American semiconductor company Vishay Intertechnology agreed to purchase the factory for $177 million and plans a global investment of $1.2 billion, with some of the investment potentially benefiting Newport. While the Welsh Labour government welcomes this deal, Westminster ministers have yet to approve the acquisition after nearly three months.
Shadow Secretary of State for Wales Jo Stevens wrote a letter to the Secretary of State for Wales, David TC Davies, criticizing the government’s “dragging its heels” in deciding whether to allow the Vishay acquisition. The letter points out that this delay puts workers in a “destructive state of uncertainty, potentially leading to further losses of investment and job opportunities,” and adds that some layoffs have already occurred during the period of “hesitation and delay.”
Deputy Prime Minister and Cabinet Office Secretary Oliver Dowden holds the final decision-making power on whether to approve the acquisition that meets national security requirements.
Mary Curtis, the project manager at Newport Wafer Fab, stated that due to the delay, the factory cannot accept new orders, and all development work has ceased, impacting the workers.
Train drivers continue strike to increase focus on “pay dispute”
The ASLEF union has issued a warning, stating that train drivers, who have not received a pay raise in five years, will continue their strike to raise awareness of the contentious issue as a week-long rolling strike is set to take place across England.
Mick Whelan, the General Secretary of ASLEF, believes that the government will take new measures to push train companies to use the controversial new anti-strike laws, even though the union has already forced some concessions from them.
An overtime ban will disrupt services starting on Monday, and then from Tuesday, national railway operators across England will take turns striking, with trains suspended for 24 hours. Drivers from Southeastern Railway, Southern/Gatwick Express, Great Northern Railway, Thameslink, and Southwest Railway will strike on Tuesday, January 30; Northern Trains and TransPennine Express on Wednesday, January 31; LNER, Greater Anglia, and C2C on Friday, February 2; West Midlands Trains, Avanti West Coast, and East Midlands Railway on Saturday, February 3; and Great Western, CrossCountry, and Chiltern on Monday, February 5.
On their respective strike days, trains from most operators may not run, and alternative route services may experience increased demand.
This series of strikes is expected to be the first test of the Minimum Service Level regulations, designed to allow train operators to run 40% of normal timetables. Only LNER, one of the three operators directly managed by the Department for Transport, plans to use the new powers to require drivers to end the strike. ASLEF has promptly escalated, calling for another five days of strike at LNER to push for further concessions.
Before the strike law was introduced, industry bosses and unions expressed their reservations during negotiations and special committee hearings, with the strike law also applying to disputes involving health, education, and firefighters. The Labour Party has stated that, if elected, they would immediately repeal these laws.
Pub Industry Faces Most Challenging January Ever
Sales of drinks in pubs and bars have seen a significant decline. More people are choosing to drink less or abstain altogether. New data indicates that even older individuals are starting to abstain from alcohol, much like teenagers and those in their twenties. With just a few days left in January, it is proving to be a tough month for pub owners.
The British Beer and Pub Association (BBPA) states that pubs must adapt quickly, stock more “low-alcohol” options, and open more frequently to make communities feel warm during the cold winter.
“Most of us want to compensate for the indulgence during Christmas, and January seems to be the best time to do that,” said Emma McClarkin, CEO of the BBPA. “What we want to convey is that we are the heart of the community, the heart of the town centre, and people can come here whether they drink or not.”
Market research company CGA tracks weekly alcohol sales in bars, and in the last two weeks, sales have dropped by at least 7% compared to last year, with spirits seeing a 19% decrease in sales last week.
Bad weather and economic conditions are partially to blame, but Jonathan Jones, the company’s Managing Director, states that “Dry January” is also a reason “to help bars get through tough times.” Over the past year, the sales of low and non-alcoholic beverages in bars and supermarkets have surged — up 23% by June 2023 compared to January, with further increases expected as more products become available.
The dusty bottle of Kaliber, sitting in an unpopular corner, is now gone. Drinkers can now find refreshing lagers, IPAs, pale ales, pilsners, alcohol-free stouts, and light ales.
The organization behind the “Dry January” initiative, Alcohol Change UK, founded 11 years ago, reports a record number of downloads for its Try Dry smartphone app. A survey by BBPA last week revealed that almost as many people tried abstaining from alcohol in January this year as any year in the past decade. Of the 2,230 respondents in the Find Out Now survey, 263 (11%) participated in Dry January, with one-third doing it for the first time.
The survey shows that more young people are starting to abstain from alcohol, which may not be surprising. The so-called Generation Z has avoided drugs and alcohol for years, frustrating some of their red-nosed elders. About a quarter of those under 25 now don’t drink at all, as people become increasingly aware of the health effects of alcohol and are concerned about the potential for misbehavior after drinking being posted on social media.
According to BBPA data, 509 pubs closed last year, and approximately 6% of pubs have left the UK in the past six years. Some shops are closing early or not opening every day due to energy prices and inflation. Others are being sold for housing.
