UK Government in discussions with Tata Steel for £500m funding package, risking job losses

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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. However, the deal could result in up to 3,000 job losses. Tata Steel's Indian parent company would also contribute £700 million for capital expenditure. The focus would be on building greener electric arc furnaces. Trade unions are critical of the plans and intend to campaign to protect jobs.

FutureCar Staff Sep 02, 2023 4:50 PM PT

UK Government in discussions with Tata Steel for £500m funding package, risking job losses

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

Under the proposed plans, the Government would contribute around £500 million of public funding, while Tata Steel's parent company in India would commit £700 million of capital expenditure over several years. The company is reportedly planning to construct electric arc furnaces, which are more environmentally friendly and require less labor compared to traditional blast furnaces.

Sources in the industry who are close to the negotiations have informed Sky that up to 3,000 employees based in the UK could be affected by job cuts. Port Talbot, where the steelworks are located, is estimated to have a workforce of approximately 4,000 individuals.

A spokesperson for Tata Steel stated to Sky News that the company is currently engaged in discussions with the UK Government to establish a framework for the continuity and decarbonization of steel production in the country. They acknowledged the challenging business conditions and the fact that several of their heavy-end assets are nearing the end of their lifespan. The spokesperson emphasized that significant changes can only be made with government investment and support, as is being seen in other European countries that are actively assisting companies in decarbonization initiatives.

Sharon Graham, the general secretary of Unite, criticized the reported plans and announced that the union will be launching a major campaign to protect jobs. She expressed disappointment that the government is prioritizing job cuts instead of making the UK the leading producer of green steel in Europe. Graham called on the Labour Party to make a serious commitment to securing a better future for the UK steel industry.

No official comments have been provided by the Treasury or the Department for Business and Trade at this time.