Port Talbot’s derelict Plaza Cinema is a boarded-up patchwork of neglect and decay. Even the colourful murals, which adorn the exterior, of the town’s most famous sons – Michael Sheen, Richard Burton and Sir Anthony Hopkins – cannot conceal the broken windows and soot-smudged facade of this once-loved building.
It closed in 1999 and while there has been much talk of a regeneration plan for the town, including restoring the cinema to its former glory, it has not been backed up with much action. Port Talbot has been in decline for decades. The slow decay of the town has mirrored the slow death of its main industry – steel.
Last week, Tata Steel, which owns the remnants of the formerly state-run British Steel, appeared to sound the death knell for this once mighty industry by putting its loss-making UK assets up for sale. There appears little or no chance of finding a buyer.
“The works”, as it is known here, is Britain’s biggest steel plant, accounting for more than a third of the country’s 10m tonnes of annual production. But the steel produced here has become uneconomical. A cruel combination of slowing demand, high energy costs and knockdown Chinese competition has sent Britain’s steel industry into what many fear is a terminal decline.
Michael Evans, 71, who worked at the plant for 30 years, sums up the predicament: “Who wants to buy a business that is losing £1m a day?”
With 4,000 jobs under threat at the Port Talbot works, and 15,000 at Tata steel plants around Britain, David Cameron is under intense pressure to step in to save British steelmaking. There are fears that Tata could just pull the plug and walk away within weeks unless a saviour is found. If this happens, Evans says, Port Talbot and the surrounding area would become a near-ghost town of poverty and deprivation.
“Look at what happened when the mines were closed,” he says. “It led to devastation through the valleys and right across south Wales. And when you go there [the valleys] now, nothing has changed.”
The steel veteran’s observation is a poignant one in these parts of south Wales, where families living in former coalmining areas are still cursed by the industry’s poisonous legacy. A report published in 2014 – The State of the Coalfields, commissioned by the Coalfields Regeneration Trust – provides a sobering insight into the continuing struggle of former coalmining communities across Britain.
The UK’s former coalfields are home to 5.5 million people, representing about one in 11 of the country’s population. The report, conducted by Sheffield Hallam University’s centre for economic and social research, found:
■ 14% – one in seven – of all adults of working age in the coalfields are out of work and in receipt of benefits.
■ In most of the coalfields, the share of pensioners living in poverty, measured by the Pension Credit claimant rate, is around double the average in south-east England.
■ 43% of all neighbourhoods in the coalfields fall into the lowest 30% in Britain in indices of deprivation.
■ Austerity cuts to local authority funding in England have hit deprived areas disproportionately hard.
The report concludes: “The legacy of job loss [after the miners’ strike] continued to be substantial unemployment and in particular a very large diversion of working-age men out of the labour market into ‘economic inactivity’, often on incapacity benefits.”
Karel Williams, professor of political economy at Manchester University, says the omens are not good for Port Talbot. He says previous cases involving the loss of a key industry, such as the coalfields or the closure of an aluminium smelter on Anglesey, followed a similar pattern. Elite working-class jobs were replaced by low-paid and low-quality service or manual warehousing roles. “From history, the experience is that good jobs are lost and not found again, and the result is a dis-employed population on benefits,” he says. “As a society, we are kidding ourselves about what happens when you put communities out of work.”
He reckons that Port Talbot without its steel industry would be exposed to a similar fate. Evans agrees: “If Port Talbot is not known for steel, what is there? There’s nothing else, is there?”
This town has honed the ancient industrial art of iron and steelmaking over hundreds of years. Iron-making in this part of south Wales dates back to the 13th century. The Port Talbot works takes its name from the dock, opened in 1837, and named after Christopher Rice Mansel Talbot of Margam, its principal sponsor.
After modern steelmaking began on the site in 1902 additions were made to the plant in 1923, when the Margam works was completed. The steel plant was rebuilt after the second world war, and at its peak in the 1960s the Port Talbot works employed nearly 20,000 people and the town enjoyed virtually full employment.
Those days have become a vanishing memory in a community blighted by high unemployment and poverty. The Sandfields council estate, built between 1947 and 1955, was once the biggest in Europe. It is home to 19,000 people and was originally conceived to house workers for the then burgeoning steel mill, whose imposing blast furnaces and cooling towers loom over the 8,500 households. This densely populated community is regularly cited as one of the most economically and socially deprived areas in Wales.
At the Rolls Choice cafe in the town’s Aberafan shopping centre, Kath believes shutting down the works would plunge many more into poverty.
Kath, who does not want to give her full name, works at Tesco about 16 miles farther east in Bridgend. The store accepts and hands out donations of tinned food and other goods to support the local food bank.
“I know of people from Port Talbot who travel to Tesco in Bridgend just to get food from the food bank,” she says. “They would rather go [to Bridgend] because they are too ashamed to go to the one in Port Talbot. They don’t want people they know to see them taking handouts.”
On Aberavon beach front, at the north-eastern edge of Swansea Bay in Sandfields, it is easy to imagine what could be. Aberavon beach is a three-mile stretch of golden sand that is popular with surfers. The busy promenade is bustling with dog walkers, cyclists and families enjoying the Easter holiday sunshine.
The local authority has previously drawn up grand plans to maximise the potential of the beach and promenade to boost the economy with more tourist and leisure activities. However several efforts have failed or stalled and it remains an untapped economic resource.
Ray Di Francesco, 64, owns Franco’s restaurant on the promenade, which has been here for 40 years. Like everyone else in the town, he is worried about the future of the works, but remains optimistic that Port Talbot will survive. “It’s obviously horrendous for the town,” he says. “But we’ll bounce back; we are a resilient town.”
THE VIEW FROM EUROPE
Any attempt by Britain to bail out its steel industry by using state funds is likely to be met with fierce resistance by the European commission.
In January, competition commissioner Margrethe Vestager announced an investigation into €2bn (£1.6bn) of state support that the Italian government gave to struggling steelmaker Ilva.
On the same day, she ordered the Walloon regional government in Belgium to recoup €211m it had provided to steel companies in the country’s depressed industrial southern regions that are part of the Duferco group.
Vestager said: “EU countries and the commission have put in place strict safeguards against state aid to rescue and restructure steel companies in difficulty. This avoids harmful subsidy races between EU countries and [the risk] that uncontrolled state aid in one EU country can unfairly put at risk thousands of jobs across the EU … State aid rules enable member states to, for example, support research activities or relieve energy costs of steel companies.”
Brussels is trying to avoid clashing with the UK government before June’s referendum on Britain’s membership of the EU, and the commission said last week that it was not aware of any contact from the British authorities about steel.
However, this stance will be severely tested if David Cameron is forced to step in to save Tata Steel’s UK arm from collapse.
According to state aid rules, any country wishing to bail out a key business must show that the funding is being made available to lessen the social impact of closures rather than to prop up an uncompetitive industry.
The EU’s competition authorities would study any rescue deal to determine whether it gave the Port Talbot steelworks, and Tata’s other UK plants, an unfair advantage against rivals.
It is thought the most likely buyer for Port Talbot will be a management and workforce proposal, which would require significant help from the UK government.
Any nationalisation of Britain’s steel industry would also come under close scrutiny from Brussels, as competition authorities would need to ensure the government pays a realistic market price. But determining a fair price would be difficult without a number of interested buyers to provide a benchmark.
In addition, support for the British steel industry would compromise the EU’s ability to take action against China for dumping cheap, subsidised steel on the European market.
Europe’s standard defence against dumping is retaliatory tariffs. The industry says that these can be too slow and too low, but do have some effect.
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