Reports: Tata Steel seeking £500m in government loans to help it steer through the COVID-19 crisis
Tata Steel is seeking hundreds of millions of pounds in government support to help it through the coronavirus pandemic, according to media reports.
A request from Tata Steel for a funding package worth £500million is said to be under discussion with the Treasury and the Department for Business, Energy and Industrial Strategy, according to a Sky News report.
The move comes as Tata Steel’s biggest customers – such as car manufacturers – have stopped production across Europe because of the coronavirus pandemic.
Sky News notes: “Although some plants are to reopen in the coming weeks, economists believe a recovery in industrial production will be slow and protracted with demand continuing to be weak for some time, and manufacturers forced to cope with long-term social distancing measures.
Economists believe a recovery in industrial production will be slow and protracted with demand continuing to be weak for some time.”
A Tata Steel spokesman said: “We continue to work with both the UK and Welsh governments to identify what support is available.”
Tata Steel employs around 8,300 people in the UK including 700 at its Shotton plant.
The Guardian reports that Aberavon MP Stephen Kinnock raised the issue on Wednesday, urging the government to raise the limit on its Coronavirus Large Business Interruption Loan Scheme.
“The government [CLBILS] is capped at £50m, which is only one 10th of what Tata Steel believes will be the cashflow impact on the company over a six-month period,” he said.
“Will the government now urgently take steps to lift the loan cap to a level that will give our steel industry a fighting chance of surviving this crisis?”
In reply the foreign secretary, Dominic Raab, said: “I know that the chancellor is looking carefully at the steel sector in the hon. gentleman’s constituency, and at all those who are not directly benefiting from this particular scheme to ensure that in the round we are providing the measures that we need in a targeted way to support all the different crucial elements of the economy.”
A Welsh Government spokesman told the BBC: “We continue to have ongoing discussions with Tata Steel about what support it needs to sustain a strong steel making presence in the UK and in Wales.”
Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, said: “Steel is a vital sector for the UK in the jobs it provides and its role in Britain’s domestic manufacturing. UK produced steel is critical to ensuring our economy recovers quickly and to make our domestic manufacturing more resilient in the future.
“It is right for the government to work with the industry to protect employment, which is the lifeblood of communities, while ensuring tax payer value for money.”
UK press coverage:
SKY: Coronavirus: Port Talbot-owner Tata Steel seeks £500m state bailout
ITV: Tata Steel to ask for half a billion pounds government loan after slump in orders.
The Guardian: Tata Steel needs ‘£500m government bailout’ as Covid-19 halts production
BBC: Coronavirus: Tata Steel ‘needs £500m government support’
FT: (Paywalled) Tata Steel calls on UK to lift £50m cap on coronavirus aid
This is Money: Port Talbot steelworks’ owner Tata Steel seeks £500m loan from UK Government
Mirror: Tata Steel ask for £500m taxpayer bailout as coronavirus halts industry demand
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