Skip to main content

The government will support the steel industry.

 Bri­tain’s two largest steel­makers are in line to receive more than half a bil­lion pounds of fund­ing from

Steel

the gov­ern­ment to save thou­sands of jobs. Jeremy Hunt is ready to agree to a sup­port pack­age for Brit­ish Steel and Tata Steel UK as early as next week to help them switch to green tech­no­logy, accord­ing to gov­ern­ment offi­cials. Brit­ish Steel is set to receive £300mn in grants to pre­vent the clos­ure of its blast fur­nace at Scun­thorpe in Lin­colnshire, while Tata Steel UK, owner of the Port Tal­bot site in south Wales, pic­tured, is set to gain a broadly «equi­val­ent» sum of money. Chan­cel­lor Jeremy Hunt is set to sign off a sup­port pack­age for Brit­ish Steel and Tata Steel UK that is worth more than half a bil­lion pounds in a move that will be tied to Bri­tain’s two biggest steel man­u­fac­tur­ers switch­ing to green tech­no­logy.

The FT has learnt that Tata Steel UK, owner of the Port Tal­bot site in south Wales, is also set to get a broadly «equi­val­ent» sum of money to intro­duce green fur­naces at its oper­a­tions, say gov­ern­ment offi­cials close to the talks. Sky News repor­ted that the aid pack­age for Brit­ish Steel would go ahead. Tata employs about 3,500 work­ers at Port Tal­bot, which uses two blast fur­naces to turn iron ore and coal into mol­ten iron and steel. Brit­ish steel­makers have faced soar­ing energy prices and high infla­tion as well as soften­ing demand due to the eco­nomic down­turn.

Liberty Steel, owned by indus­tri­al­ist San­jeev Gupta, last week blamed high energy costs for its decision to cut pro­duc­tion and moth­ball some of its sites, threat­en­ing more than 400 jobs. Jingye res­cued Brit­ish Steel from insolv­ency in 2020 after the gov­ern­ment had spent £588mn keep­ing it oper­a­tional while find­ing a buyer in a 10-month inter­ven­tion. Brit­ish Steel employs close to 4,000 people, of which 1,700 work at the blast fur­nace facil­ity in Scun­thorpe. It warned in Octo­ber that it was los­ing about £1mn a day and needed gov­ern­ment sup­port in the short term as well as in the longer term to help with the trans­ition.

Brit­ish Steel was not avail­able for com­ment but earlier this week said it was «con­tinu­ing formal talks with the gov­ern­ment». Tata Steel UK and the Treas­ury declined to com­ment.

www.sba.tax

Labels:

Comments

  1. Kyle21 January 2023 at 12:56

    I know these workers need to be protected and the companies they work for need to be helped but are we going about this the right way? Or are we just throwing money at a problem that also needs other approaches/solutions?

    ReplyDelete
    Replies
    1. Joe21 January 2023 at 13:36

      This money will help these companies survive for some months but what happens after that time? Another bailout? If they don't have clear plans of how they will start producing more so they can get back on their feet without further help, well, then they will just (eventually) go bankrupt.

      Delete
    2. Simon21 January 2023 at 15:56

      Agreed and the government also mind find ways to reduce the pressure of energy prices and offer further aid so these companies get back on their own feet.

      Delete

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Small business will be excluded from fraud law.

  Min­is­ters are plan­ning to exclude small busi­nesses from anti-fraud legis­la­tion by nar­row­ing the scope of a crim­inal offence tar­get­ing com­pan­ies that fail to pre­vent eco­nomic crimes. MPs and anti-cor­rup­tion cam­paign­ers had hoped the gov­ern­ment would seek to amend the eco­nomic crime and cor­por­ate trans­par­ency bill to ensure the new offence covered all com­pan­ies. The plans to limit the scope of the amend­ments will also dis­ap­point those who had hoped the legis­la­tion would remove key hurdles to the pro­sec­u­tion of white-col­lar crime. A new «fail­ure to pre­vent» offence for fraud would bring it in line with exist­ing sim­ilar cor­por­ate offences for bribery and tax eva­sion. At present, pro­sec­utors need only prove that organ­isa­tions lacked «reas­on­able» or «adequate» con­trols to pur­sue the offence in bribery and tax eva­sion cases. «It would be much more sens­ible for the gov­ern­ment to provide strong guid­ance for SMEs on what these pro­ce...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more