Business and Economics

Brexit blamed for closure of Tata Steel

On 2nd April 2016, just weeks after David Cameron had called for a referendum on the UK’s membership of the European Union, Nigel Farage took to Twitter with a stark warning to anyone considering voting Remain.

Stay in the EU, the Brexiteer said, and it will be “the end of the steel industry in this country”. Vote out, and it will be saved.

Areas with dominant steel industries seemed to hang on every word he and others involved in the campaign to Leave said. People in Scunthorpe voted for Brexit by a margin of two to one. In Port Talbot, some 57 per cent of voters backed the exit.

Now, blast furnaces in both areas are set to close.

Tata’s decision to close blast furnaces at its biggest UK plant in Port Talbot, with the loss of up to 2,800 jobs, has been dubbed a “massive kick for the whole of South Wales”.

About 2,500 jobs could be lost in the next 18 months at the plant, as Tata presses ahead with making steel more environmentally friendly, requiring a smaller workforce.

A further 300 roles could be affected over the next few years, which could include the potential consolidation and rationalisation of cold rolling assets in Llanwern, Newport, once the required investments are completed at Port Talbot.

Suggestions that Net Zero could be to blame for the loss of jobs have been dismissed by former first minister, Carwyn Jones, who says Brexit should bear responsibility for the closure.

He noted that other steelworks in the EU, including Tata Steel operations there, are proceeding as normal with no job losses, with Wales bearing the brunt of the cuts.

Speaking to Byline TV, he said:

”It is inevitable that if there are barriers put up between one market and another, that’s not going to help somebody selling into that second market.

“And that’s what we’ve seen recently, of course. I think the uncertainty surrounding Brexit, the uncertainty in terms of the future, the civil war that’s taking place inside the Conservative Party, all these things are factors that any business that’s looking to export to the EU will take into account when deciding to invest in the UK.”

He added that, as reported in this newspaper, the current first minister has been trying to get a meeting with colleagues in London, but that hasn’t happened.

“They just seem to be sitting back and doing nothing. And I think people will judge them on that. Yes, they’re not directly closing the plant, as Margaret Thatcher did with the mines. But they’re sitting back and allowing this to happen.”

Related:  ‘Like a pin to a balloon’ – Banking jobs in London down 79% since Brexit

Jack Peat

Jack is a business and economics journalist and the founder of The London Economic (TLE). He has contributed articles to VICE, Huffington Post and Independent and is a published author. Jack read History at the University of Wales, Bangor and has a Masters in Journalism from the University of Newcastle-upon-Tyne.

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