Tory Steel Bailout: £500m for Tata, but 3,000 Jobs at Risk

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【Summary】The Tories are set to give Tata Steel £500m to save the Port Talbot steelworks, but 3,000 jobs could still be cut. The deal includes a commitment from Tata Steel's parent company to invest £700m over several years. The steelworks currently employs 4,000 people, but even if the deal goes through, 3,000 UK staff could still lose their jobs. The steel industry is working to reduce carbon emissions, which may lead to job losses.

FutureCar Staff Sep 02, 2023 4:50 PM PT

Tory Steel Bailout: £500m for Tata, but 3,000 Jobs at Risk

Officials are reportedly close to finalizing a deal with an Indian firm to secure the future of the Port Talbot steelworks in South Wales. As part of the agreement, the Tories are said to be planning to provide Tata Steel with £500 million to support the struggling industry. However, despite this financial injection, it is estimated that around 3,000 out of the 8,000 UK staff employed by Tata Steel may still face job cuts.

The proposed bailout involves the allocation of approximately £500 million of UK public funds to the company, with Tata Steel's Indian parent company committing to invest £700 million over the course of several years. This investment is expected to be directed towards the construction of electric arc furnaces, which are known to be less labor-intensive.

Even if the deal goes through, it is anticipated that up to 3,000 employees based in the UK could still lose their jobs. The Port Talbot plant, which currently employs around 4,000 people, accounts for approximately half of Tata Steel's UK workforce. The decision to accept job losses as an inevitable consequence of the steel industry's efforts to reduce carbon emissions has been made by officials involved in the negotiations.

The Department for Business and Trade has declined to comment on the ongoing negotiations, maintaining a level of confidentiality. Community, the steelworkers' union, has expressed its commitment to finding a solution that will preserve blast furnace production and safeguard the future of all UK plants. They are prepared to utilize all available resources to protect jobs and the strategic steel industry.

A spokesperson for Tata Steel has stated that the company is engaged in discussions with the UK government regarding a framework for continuity and decarbonization of steelmaking in the country. They acknowledge the challenging business conditions faced by the company, particularly as some of its heavy-end assets are nearing the end of their lifespan. Given the financial constraints of Tata Steel's UK business, significant changes can only be achieved with government investment and support, as demonstrated in other European countries where governments actively assist companies in decarbonization initiatives.

Since 2015, The Mirror has been running a campaign to Save Our Steel, highlighting the importance of the steel industry and advocating for its preservation.