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Minimum wage hike: Boon for workers, challenge for businesses

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THE UK Labour government’s plan to raise the minimum wage, set to take effect this April, promises a significant boost for up to 130,000 workers in Wales. However, the move has sparked a debate about its potential impact on businesses and the broader economy.

Workers’ Windfall

Under the new legislation, eligible full-time workers aged 21 and over could see their annual income increase by up to £1,400. In Wales, an estimated 11.1% of the workforce stands to benefit from this rise.

“We are acting to give millions of lower paid workers the pay-rise they deserve,” stated Angela Rayner MP, Deputy Prime Minister and Secretary of State for Housing Communities and Local Government.

The increase is particularly substantial for younger workers:

  • Those aged 18-20 could gain up to £2,000 after tax
  • 16-17 year olds and apprentices will receive an 18% rise

Economic Implications

While the wage hike aims to address living standards, economists and business groups have raised concerns about potential challenges:

  1. Business Costs: Employers face a 6.7% wage increase alongside a National Insurance rise to 15%. For a full-time worker, this translates to approximately £2,270 in additional annual costs.
  2. Inflationary Pressures: Higher wages could boost consumer spending but may also drive price increases if businesses pass on costs to consumers.
  3. Employment Effects: The Low Pay Commission (LPC) has noted “some signs of employers finding it harder to adapt” to previous increases, though current unemployment projections remain stable.

Balancing Act

Baroness Stroud, Chair of the LPC, emphasised the delicate balance required: “These rates secure real-terms pay increases… while taking account of economic factors”.

The government has already made compromises, scaling back original proposals for faster elimination of age-based pay gaps after consultations with businesses.

Long-term Outlook

The success of this policy hinges on whether productivity gains can sustain higher wage floors in the long term. While Labour argues this change will boost living standards, critics question whether it will fully offset the estimated £700 loss in average worker earnings since 2010.

As Jonathan Reynolds MP, Secretary of State for Business and Trade, put it: “This is the change people voted for: putting more money in millions of people’s pockets, alongside the biggest upgrade to workers’ rights in a generation”.

With implementation just weeks away, businesses and workers alike are bracing for the impact of this significant shift in UK labour policy.

Business

Over 150,000 journeys made using new Pay As You Go rail ticketing

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MORE than 150,000 journeys have been completed using the new Pay As You Go ticketing system in South Wales since its launch three months ago, making it Transport for Wales’ (TfW) fastest-growing ticketing product.

TfW became the first train operator outside London and the south-east of England to introduce the system last year. In November 2024, tap-in, tap-out technology was made available at 95 railway stations across South Wales, with fares starting at just £2.60.

The system provides automatic daily and weekly fare capping, offering significant savings compared to standard anytime singles and seven-day season tickets.

Expanding ticketing technology

Similar technology, offering tap-on, tap-off ticketing, is also being used for bus services in North Wales. Recent figures show that over 40% of transactions for those services are now made through the system.

Three years ago, TfW introduced a single integrated ticket covering both bus and rail services, allowing faster and cheaper travel between South Wales and Aberystwyth. Between April and December 2024, around 7,000 people used the integrated ticket for journeys between Carmarthen and Aberystwyth.

Transport leaders welcome success

Cabinet Secretary for Transport and North Wales, Ken Skates, said: “I am delighted that more and more passengers are opting for Pay As You Go, making the most of a simpler and fairer way to pay for rail and bus tickets.”

Alexia Course, Chief Commercial Officer at TfW, added: “We want to offer customers the fastest, easiest, and cheapest ticketing option, and tap-on, tap-off technology enables us to do this.

“We are proud to be one of the first train operators outside London to introduce this system at 95 stations across South Wales. It was a key commitment of the South Wales Metro, and its success as our fastest-selling product reflects strong passenger demand.

“We are also using similar technology for bus services in North Wales, and our integrated ticketing model continues to gain traction. These developments are crucial as we move towards our vision of ‘one network, one timetable, one ticket.’”

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Business

SPARC’s Career Connections event inspires next generation of young women

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MORE than 150 female secondary school students from the SPARC Alliance initiative came together for a successful Career Connections event at Pembrokeshire College this month.

The SPARC Alliance introduced the young women to leading industry professionals to explore career opportunities in renewable energy, construction, engineering, and maritime industries.

Luciana Ciubotariu, CEO of Celtic Freeport and SPARC Patron, delivered an inspiring opening speech, encouraging students to embrace curiosity, stay open to new opportunities, and step boldly into industries where women have historically been underrepresented.

Ms Ciubotariu said: “This event is all about you—your future, your possibilities, and the incredible careers waiting for you. All industries need more women, and even though some spaces haven’t always seemed open to us, they absolutely are. You belong wherever you want to be.”

Designed to inspire, empower, and connect, the event included the recording of a podcast interview hosted by Apollo Engineering, and an inspiring closing talk from Captain Louise Sara and Kristy Dawson (Carnival Corporation), who shared their experiences of navigating the maritime industry.

There was also an interactive ‘Career Connections’ session where SPARC pupils used Career Passports to engage directly with industry professionals and discover skills essential for Wales’ fastest-growing sectors.

Despite progress, women remain underrepresented in STEM careers and with the UK’s low-carbon energy workforce set to grow by nearly 500,000 jobs by 2030, initiatives like SPARC play a critical role in ensuring young women see themselves in these careers and have the confidence and knowledge to pursue them.

Throughout the day, students engaged in career discussions, interactive activities, and hands-on experiences with professionals from Apollo Engineering, Blue Gem Wind, Celtic Freeport, ERM, Laing Rourke, Ledwood Engineering, Lincweld, , KIER, INSITE Technical, Morgan Sindall, Marine Power Systems, Pembrokeshire College, Pembrokeshire Coastal Forum, the Port of Milford Haven and RWE.

Hayley Williams (Pembrokeshire College), Rob Hillier (Pembrokeshire County Council), and Holly Skyrme (Pembrokeshire Coastal Forum), who coordinated the event, expressed their gratitude to industry partners for making the event such a success.

“Your engagement and enthusiasm have made a real impact, helping students to recognise the exciting career paths available to them. We’re looking forward to seeing what this incredible cohort of young women achieves in the future,” they added.

For further information about the SPARC Alliance and future events, please contact [email protected] or follow on Facebook https://www.facebook.com/PCFCiC

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Business

Green light for Tata Steel UK’s £1.25bn Electric Arc Furnace project

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TATA STEEL UK’S proposals for a £1.25bn Electric Arc Furnace (EAF) based steel making facility at its Port Talbot site have been approved by Neath Port Talbot Council’s Planning Committee.

The decision taken on Tuesday, February 18th, 2025, paves the way for a new era of green steel making in Port Talbot just months after Tata closed its traditional blast furnaces in the town at the cost of thousands of jobs.

The Planning Committee granted approval for the project subject to a long list of conditions and the signing of legal agreements which include securing long term ecological management and mitigation at the site.

While primary steelmaking at Port Talbot ended last September with the closure of the blast furnaces and the ‘heavy end’ of the plant, the new EAF will produce steel by effectively melting scrap steel using high intensity electric currents.

The Port Talbot EAF will be accompanied by two new ladle furnaces in which liquid steel produced by the EAF will be further processed. The new furnaces are due to start operating in 2027 with a crude steel capacity of 3m metric tonnes per year. Molten metal will be tapped from the EAF at a rate of 320 tonnes every 42 minutes.

Traditional steelmaking at Port Talbot used three main raw materials; iron ore, coal and lime. Iron ore will not be required in EAF steelmaking and lime use will be much reduced. Coal will still be required as a reducing agent but in much smaller quantities.

The Tata proposals, described in a planning officers’ report as being of “national strategic importance”, will see the demolition of a number of existing buildings and structures within the current steelworks boundary alongside construction of the new EAF.

This proposal forms part of a £1.25bn investment in the Port Talbot facility supported by the UK and Welsh Governments.

Tata Steel said in its planning application that since 2007 it had lost £4bn at Port Talbot – the position deteriorating further after 2023 due to a leap in energy costs and “ageing assets at the site which are expensive to maintain and operate”.

Tata added in its submissions: “EAF presents the most appropriate solution for the continued use of the Port Talbot site in comparison to alternative options. It will focus on recycling steel – the UK has a large surplus 8 million tonnes exported every year, which is more than any other country in the world – and with ultra-low emissions if the electricity supplied to EAF comes from renewable sources.”

The committee heard there will be a “significant reduction” in emissions to air from the steelmaking process through the transition to EAF steel production.

The Leader of Neath Port Talbot Council, Cllr Steve Hunt, said: “Our primary focus in the move to less carbon intensive steel production at Port Talbot has been on mitigating the effect of the net loss of jobs on our communities here in Neath Port Talbot and further afield.

“Through the Tata Steel UK Transition Board, of which I am a member, we have access to up to £100m (£80m from the UK government and £20m from Tata Steel UK) which is being invested in skills and regeneration programmes for this area.

“The board and associated funding is being concentrated on immediate support for the people, businesses and communities directly affected by the transition to greener steelmaking and is being used to develop a plan for local regeneration and economic growth for the next decade.

“As the new £1.25bn EAF at Port Talbot given planning permission today forms part of that plan we must now work together to ensure it is a success.”

Welsh Secretary Jo Stevens said: “This decision is a significant step forward, providing more certainty over Tata’s plans for the site and for the future of steelmaking in South Wales.

“As part of our improved deal with Tata Steel, we have provided £500m to support the company’s transition to greener steelmaking.

“This is backed by a further £80m which we are investing directly into the community to support individual steelworkers and their families, businesses in the supply chain and on the regeneration of Port Talbot as we drive future economic growth in the area.

“We promised that we would deliver for our steel communities, and through this investment and the Steel Strategy we are doing just that.”

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