The government and Tata Steel are on the brink of an agreement that will secure the future of the country’s biggest steelworks but pave the way for thousands of long-term job losses.
Sky News has learnt that Whitehall officials are in preliminary talks about a financial support package to assist Tata Steel employees who may face redundancy as the Port Talbot plant transitions from blast furnaces to greener steel production.
Sources said on Wednesday that the government and the Indian-owned company were hopeful of finalising a deal as soon as the end of this week, although they acknowledged that the timetable could still slip.
Under the agreement, an aid package worth in the region of £500m will be handed to Tata Steel, while the company itself is expected to commit approximately £700m to modernising the Port Talbot plant.
Sky News revealed details of the talks earlier this month.
Government insiders said they had agreed to the funding package because without it, 8,000 manufacturing jobs were likely to be lost.
Tata Steel is understood to have sought a much larger sum of British taxpayers’ money earlier in the negotiations.
Port Talbot employs about 4,000 people – roughly half of Tata Steel’s overall UK workforce.
The company is said to have indicated that as many as 3,000 of its British-based staff were likely to lose their jobs, even with the government’s financial support.
Electric arc furnaces, which Tata Steel would commit to building as part of the agreement with government, utilise different, less labour-intensive, processes to produce steel than traditional blast furnaces.
The…
