Thousands of workers in Port Talbot will lose their jobs next month as Britain’s biggest steelworks go green — raising questions about the consequences for the labour market from the net zero transition.
Rishi Sunak promised in September that a taxpayer subsidy of £500mn for Tata Steel would “safeguard thousands of jobs” at the totemic site in south Wales.
But the prime minister’s pledge now rings hollow for the 2,800 employees left on the scrapheap by the Indian-owned conglomerate’s decision to close the last two blast furnaces at Port Talbot.
Politicians from both main parties have hailed the green transition as a latter-day employment Klondike gold rush. Boris Johnson said, when prime minister, the switch to net zero would be the biggest creator of jobs since the industrial revolution: “Everywhere you look, in every part of our United Kingdom, there will be jobs.”
Meanwhile, Ed Miliband, Labour’s shadow energy secretary, has talked of the need for Britain to compete in a “global race for green jobs”, as it seeks to cut net greenhouse gas emissions to zero by the middle of the century.
For academics, the issue is more nuanced. The UK’s clean energy transition should not, overall, be a “destroyer of jobs”, according to Anna Valero, a fellow at the London School of Economics’ Centre for Economic Performance.
In contrast with previous periods of rapid industrial change, including the collapse of coal mining that has left bitter memories in the Welsh valleys near Port Talbot, the shift is more likely to alter existing roles than wipe out entire industries.
Job losses will be localised, while new vacancies — for example retrofitting buildings — are likely to be widely dispersed with higher-paid roles clustered near the capital, according to analysts.
Carl Sizer, head of regions for consultancy PwC in the UK, warned the creation of new green roles held a risk of regional inequality. Those advertised last year were concentrated in and around London.
Paul Nowak, general secretary of the Trades Union Congress, accused the government of being “asleep at the wheel” and called for more support. The TUC estimated that about 800,000 manufacturing and supply chain jobs could be axed without generous state subsidies.
“We need to get to net zero in a way that protects steel, chemicals, fundamental industries we need for Britain to have a successful future,” he added.
Shaun, a veteran who has worked at the site in Wales for 44 years, described the cuts as “devastating” as he stood outside the Houses of Parliament in London during a recent demonstration against Tata’s plans.
“The community will be wiped out,” said the 66-year-old machinist, who did not want to give his full name. “There are 3,000 jobs directly affected but for every one of those there are four or five contractors, there will be massive knock-on effects.”
The government said the UK was “leading the world” and it expected to support the creation of 480,000 green jobs by 2030. It added it would publish its “green jobs plan” this year.
Nowak’s concerns reflect the fact that job losses are likely to be in places that rely heavily on a single sector or employer, with few well-paid alternatives.
This is clear in Port Talbot, where the largest employer after Tata Steel is supermarket chain Tesco. Median earnings there are well below the UK average.
This underlines the need for “a forward-looking strategy where change is anticipated . . . thinking about how an area can plausibly diversify”, Valero said.
Aside from foresight and planning, economists and policymakers are split on the best way to help places such as Port Talbot. Some share the arguments made by unions that the UK could sustain domestic steelmaking if it had a better industrial strategy, connecting plants with upgraded ports, giving them access to cheaper, cleaner energy, and helping them meet demand for new infrastructure.
But economists warn this kind of approach would not necessarily protect workers from change, as manufacturing became less labour-intensive.
“Rather than protecting jobs, we should ask what type of steel industry we need for the energy transition, to build infrastructure and for national security and supply chain resilience,” said Jeegar Kakkad, an expert in industrial policy at the Tony Blair Institute.
This makes it essential to diversify the local economy in places where workers face the most disruption.
“More of the same cannot be the answer . . . It has to be something different, but achieving that is not guaranteed,” said Paul Swinney, director of policy at the Centre for Cities think-tank, who pointed to the plight of Aberdeen.
The port city in north-east Scotland was once known as the oil capital of the UK, but average incomes there have fallen more than in any other urban centre since 2010 due to the decline of North Sea production.
About 120,000 people work in the UK’s offshore oil and gas sector today. A recent report by the Energy Transition Institute at Robert Gordon University predicted this would fall to 87,000 by 2030 in a “managed and just” transition but plunge to 60,000 if there was a sudden halt to new investment.
Yet, economists have said that rather than replacing the jobs lost with equivalent roles in “green” manufacturing, the goal should be to ensure people can find good jobs reasonably close to home. “No one knows what a green job is . . . People just want work. They want to know, how are they going to earn a decent wage,” Kakkad said.
