UK Government's £500m funding package with Tata Steel could result in job losses.

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【Summary】The UK government is in talks with Tata Steel to provide a £500 million funding package to secure the future of the Port Talbot steelworks. The deal could result in up to 3,000 job losses. Tata Steel's Indian parent company would also contribute £700 million in capital expenditure. The plans involve building electric arc furnaces for greener steel production. The company cited challenging business conditions and the need for government support for such significant changes.

FutureCar Staff Sep 02, 2023 9:58 AM PT

UK Government's £500m funding package with Tata Steel could result in job losses.

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

According to the draft plans, the Government would contribute approximately £500 million of public funding, while Tata Steel's Indian parent company would commit £700 million of capital expenditure over several years. The company is expected to invest in electric arc furnaces, which are considered to be more environmentally friendly and require less labor compared to traditional blast furnaces.

Sources within the industry have informed Sky that as many as 3,000 employees based in the UK could be affected by these negotiations. It is estimated that Port Talbot currently employs around 4,000 workers.

A spokesperson for Tata Steel stated that the company is engaged in ongoing discussions with the UK Government to establish a framework for the continuity and decarbonization of steel production in the country. They emphasized the challenging business conditions faced by Tata Steel, particularly as certain assets near the end of their operational lives. The spokesperson also highlighted that 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 that the government has the opportunity to make the UK the leading green steel producer in Europe but is instead pursuing a job cuts agenda. Graham called on the Labour Party to make a serious commitment to a better future for the UK's steel industry. The Treasury and the Department for Business and Trade have been contacted for comment.