Government discussing £500m funding package with Tata Steel

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【Summary】The UK government is reportedly in talks with Tata Steel to provide a £500 million funding package to secure the future of the Port Talbot steelworks. The deal would involve £1 billion in total, but could result in up to 3,000 job losses. The funding would support the implementation of greener ways of producing steel and help with the decarbonization of the industry. Unite, a union, criticized the plans and vowed to campaign for job protection.

FutureCar Staff Sep 02, 2023 9:58 AM PT

Government discussing £500m funding package with Tata Steel

The Government is said to be in advanced discussions with Tata Steel regarding a £500 million funding package aimed at securing the future of a crucial part of the UK steel industry. According to Sky News, this deal would provide £1 billion for Tata Steel's Port Talbot steelworks but could result in the loss of up to 3,000 jobs.

As per preliminary plans, the Government would contribute approximately £500 million in public funding, while Tata Steel's parent company in India would invest £700 million in capital expenditure over several years. The report also suggests that the company would commit to constructing electric arc furnaces, which are more environmentally friendly and require less labor compared to traditional blast furnaces.

Industry insiders familiar with the negotiations have informed Sky that up to 3,000 employees based in the UK could potentially face job cuts. Currently, Port Talbot employs around 4,000 workers.

A spokesperson from Tata Steel provided a statement to Sky News, stating, "Tata Steel is actively discussing with the UK Government a framework for the continued operation and decarbonization of steel production in the UK, despite challenging business conditions. This is particularly important as some of our major assets are reaching the end of their life. Given the financial constraints of our UK business, significant changes can only be made with government investment and support, as seen in other European countries where governments actively assist companies in decarbonization initiatives."

Sharon Graham, the general secretary of Unite, expressed criticism towards the reported plans and announced that the union would launch a substantial campaign to protect jobs. She stated, "Instead of making the UK the leading producer of green steel in Europe, this government is choosing to pursue a strategy of job cuts. Unite will spare no effort in fighting for jobs. We will now embark on a major campaign on this matter and we expect the Labour Party to make a genuine commitment to securing a better future for UK steel."

Comments have been sought from Tata Steel, the Treasury, and the Department for Business and Trade.