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

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

Tariffs on UK electric cars.

  The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act. Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers ...
Post a Comment
Read more