Government in advanced talks over £500m Tata Steel aid package

Published

2 years ago

September 2, 2023

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The government is in advanced talks with Britain’s biggest steel producer to hand over a £500m aid package aimed at securing the long-term future of steelmaking in south Wales.

Sky News can exclusively reveal that Whitehall officials and Tata Steel are close to agreeing a deal that would commit more than £1bn to the future of its Port Talbot steelworks, but which could ultimately result in thousands of job losses.

Sources said this weekend that the terms of an agreement were subject to change, but that there were hopes of finalising it as early as this month.

One insider suggested that Tata Steel had been trying to persuade the government to increase the proposed funding package in recent weeks.

Under the plans currently envisaged, the government would commit approximately £500m of public funding to the company, while Tata Steel’s Indian parent would sign off £700m of capital expenditure over a multi-year period.

Port Talbot employs about 4,000 people – roughly half of Tata Steel’s overall UK workforce of approximately 8,000.

Industry sources close to the discussions said the company had indicated that over the long term, as many as 3,000 of its British-based staff were likely to lose their jobs.

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 government is said to have accepted during the discussions that some job losses would be inevitable as part of the transition to reducing carbon emissions, although an insider said on Saturday that a number of those could be through workers taking early retirement.

The final scope and timing of any redundancies would be negotiated between the company and trade union officials, and sources close to the process insisted that no decisions had been taken.

If a deal can be reached, it would mark the second time this year that the government has bankrolled investment in a manufacturing business owned by Tata Group.

In July, it agreed to commit several hundred million pounds to the company to construct a £4bn battery factory in the UK for its Jaguar Land Rover subsidiary.

Rishi Sunak, the prime minister, described the investment as “a massive vote of confidence” in British industry.

Ministers and Britain’s two biggest steelmakers have been in talks for months about handing over hundreds of millions of pounds of taxpayers’ money to fund the companies’ transition to greener production.

Initially, both Tata Steel and British Steel, its smaller rival, were offered £300m each in government support, but formal agreements have remained elusive.

British Steel’s Chinese owner, Jingye Group, announced hundreds of job losses earlier this year – a move which angered ministers because they coincided with discussions about state funding – but has also yet to reach a deal to secure its plants’ future.

The government originally sought to tie the issue of public funding to a moratorium on redundancies, but it was unclear whether any formal guarantees aimed at limiting job losses would be part of the Tata Steel funding package.

Sources said the offer to Tata Steel had been increased from £300m to about £500m during the course of the summer.

If completed, an agreement with the government would draw a line under years of uncertainty about the medium-term future of Port Talbot, although it was unclear whether the company would make specific commitments about the long-term as part of a deal.

As recently as May this year, Tata Steel warned of a “material uncertainty” over the future of its British business, citing a lack of clarity about potential government support among the factors raising doubts over its prospects.

In an interview with the Financial Times in July last year, Natarajan Chandrasekaran, the Tata Group chairman, said: “A transition to a greener steel plant is the intention that we have . . . But this is only possible with financial help from the government.

“We have been in discussions over the last two years and we should come to an agreement within 12 months.

“Without this, we will have to look at closures of sites.”

In 2020, the Treasury hired bankers and management consultants to draw up a blueprint for the future of the steel industry and advise on talks with Tata Steel about the future of Port Talbot.

During the pandemic, the company floated a plan that would have entailed the government injecting £900m into it in return for an equity stake of up to 50%.

There is not thought to be any equity-linked element to the current aid proposal.

Nevertheless, the proposed scale of the taxpayer support for Tata Steel’s UK operations illustrates the acute political sensitivity that continues to accompany the subject of British steelmaking.

With a general election less than 18 months away, and the Conservatives facing a battle to convince voters that it has a plan to restore the economy to sustainable long-term growth, the closure of one of the country’s most important manufacturing sites would be devastating.

In a letter to Jeremy Hunt, the chancellor, in December, Grant Shapps, the then business secretary, and Michael Gove, the levelling-up secretary, argued that retaining sovereignty over steel production was critical to the UK economy.

“Every other G20 nation has maintained domestic steel production and, while we do not think that this should come at any cost, we do believe it is in HMG’s interest to offer well-designed and targeted funding which unlocks private investment, achieves a good outcome for taxpayers, and enables transformed , decarbonised and viable domestic steel production to continue in the UK in the long-term,” Mr Shapps and Mr Gove wrote.

“We do not want to become reliant on steel sources elsewhere in the same way that energy security has become self-evidently important.

Figures from UK Steel, the industry body, revealed earlier this year that crude steel production in 2022 had fallen to 6m tonnes, its lowest level of output since the Great Depression of the 1930s.

A Tata Steel spokesman said in a statement issued to Sky News: “Tata Steel is continuing to discuss with the UK government a framework for continuity and decarbonisation of steelmaking in the UK amidst very challenging underlying business conditions, given that several of its heavy-end assets are approaching the end of life.”

“Given the financially constrained position of our UK business, such significant change is only possible with government investment and support, as also seen in other steelmaking countries in Europe where governments are actively supporting companies in de-carbonisation initiatives

The Treasury referred an enquiry from Sky News to the Department for Business and Trade, which has been contacted for comment.

UK

Man arrested over wildfire that triggered ‘major incident’ in Northern Ireland

Published

3 hours ago

April 6, 2025

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Man arrested over wildfire that triggered 'major incident' in Northern Ireland

A man has been arrested by police investigating a “significant” wildfire that triggered a major incident in Northern Ireland.

More than 100 firefighters and 15 fire appliances were deployed on Saturday to Sandbank Road, Hilltown, to tackle the blaze which is believed to have been caused deliberately, fire chiefs said.

Northern Ireland Fire and Rescue Service (NIFRS) said the fire had a front of approximately two miles “including a large area of forestry close to property”.

It was extinguished at 2.53am on Sunday and the major incident status lifted, the NIFRS said.

“The cause of this fire is believed to have been deliberate,” chief fire and rescue officer Aidan Jennings said.

The Police Service of Northern Ireland said on Sunday that a 25-year-old man had been arrested “on suspicion of arson being reckless as to whether life would be endangered, and non-related driving offences”.

“He remains in custody at this time as enquiries continue into the circumstances surrounding the fire,” the force added.

Various fires erupted across England this week amid uncharacteristically warm and dry conditions for the time of year.

On Saturday, helicopters were deployed to tackle Scotland’s fourth wildfire this week, with police saying a blaze “which started in the Newton Stewart area has spread northwards and is expected to reach the Loch Doon area of East Ayrshire around 12am on Sunday”.

Police Scotland added: “As a precautionary measure members of the public are asked to avoid the Loch Doon area and anyone who may be camping in the area is advised to leave.”

Elsewhere in England, Devon and Cornwall Police said they were assisting the fire service with temporary road closures on the A30 in the Bolventor area as they tackle “a number of fires” on moorland.

In Dorset, Moors Valley Country Park was forced to close after multiple wildfires broke out there on Wednesday.

Separate incidents were then reported at Upton Heath in Poole on Wednesday, and nearby Canford Heath in the early hours of Thursday.

Friday was officially the warmest day of the year so far – with temperatures in the south of England reaching 23C (73.4F) – the highest since 21 September last year, according to the Met Office.

The weather conditions triggered a “severe” wildfire rating for parts of the UK on Tuesday.

UK

Man shot dead in Stanley, County Durham

Published

3 hours ago

April 6, 2025

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Police are investigating after a man was shot dead in County Durham.

Officers were called to an address in Elm Street, Stanley, at about 5.20pm on Saturday after reports of a “disturbance”, Durham Constabulary said.

A man in his 50s was found to have been shot and despite the efforts of paramedics he was pronounced dead at the scene.

His family have been told and are being supported by specially trained officers.

Specialist crime scene investigators are at the scene, and officers are carrying out house-to-house enquiries.

A cordon is in place and is expected to stay there for some time.

Detective Superintendent Neil Fuller said: “This is a truly shocking incident in which a man has been shot and has sadly died.”

He added: “Residents may see an increased police presence in the area. I would like to thank them for their support while we carry out this investigation.

“Our thoughts are with the man’s family at this time.”

Durham Constabulary has urged anyone who witnessed the incident or has dashcam footage or CCTV to contact the force.

UK

Furious row after Labour MPs denied entry to Israel – as Lammy criticises ‘disgraceful’ Badenoch response

Published

3 hours ago

April 6, 2025

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Furious row after Labour MPs denied entry to Israel - as Lammy criticises 'disgraceful' Badenoch response

A furious political row has broken out after two Labour MPs were denied entry to Israel and deported after being accused of planning to “spread anti-Israel hatred”.

Yuan Yang and Abtisam Mohamed were rejected because they were suspected of plans to “document the activities of security forces and spread anti-Israel hatred”, according to a statement from the Israeli immigration ministry.

Ms Yang, who represents Earley and Woodley, and Ms Mohamed, the MP for Sheffield Central, both flew to the country from Luton on Saturday – and later said they were “astounded” by their treatment.

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The Israeli immigration ministry said the MPs were accompanied by two assistants on the trip and during questioning, they claimed they were visiting Israel “as part of an official parliamentary delegation”.

But Israeli officials said immigration officers found “no evidence to support the claim… they were travelling as part of an official delegation”. “No politicians or government officials were aware they were coming,” they added.

The Council for Arab-British Understanding (CAABU) contradicted Israeli officials, saying the women were part of a “parliamentary delegation” on a trip organised by them and Medical Aid for Palestinians (MAP).

Conservative leader Kemi Badenoch told Sunday Morning With Trevor Phillips she was “not surprised” the MPs were detained and that “every country should be able to control its borders, and that’s what Israel is doing, as far as I understand”.

She said she was “very concerned” about the “rhetoric” on the Middle East from Labour MPs and six independents, and claimed there is “a lot of repeating of misinformation, repeating of conspiracy theories” during Prime Minister’s Questions.

UK Foreign Secretary David Lammy criticised Ms Badenoch’s comments, writing in a post on X: “It’s disgraceful you are cheerleading another country for detaining and deporting two British MPs. Do you say the same about Tory MPs banned from China?.”

Ms Badenoch retorted, saying: “Unlike China, Israel is our ally and a democracy. A good Foreign Sec would be able to make that distinction.”

One of Ms Badenoch’s ministers Richard Fuller appeared to contradict her, however, telling Times Radio: “Any member of Parliament who goes on an official trip should be, I would think, welcomed in any country.”

Chair of the foreign affairs select committee Emily Thornberry MP described Israel’s treatment of the two women as an “insult to our country and to Parliament”.

In a joint statement, Ms Yang and Ms Mohamed said they were “astounded at the unprecedented step taken by the Israeli authorities”.

“It is vital that parliamentarians are able to witness, first-hand, the situation in the occupied Palestinian territory,” they said.

“We are two, out of scores of MPs, who have spoken out in Parliament in recent months on the Israel-Palestine conflict and the importance of complying with international humanitarian law. Parliamentarians should feel free to speak truthfully in the House of Commons, without fear of being targeted.”

They said they had travelled to “visit humanitarian aid projects and communities in the West Bank” with “UK charity partners who have over a decade of experience in taking parliamentary delegations”.

Israel’s UK embassy said the MPs were denied entry because they had “accused Israel of false claims, were actively involved in promoting sanctions against Israeli ministers, and supported campaigns aimed at boycotting the state of Israel”.

It said the women “chose not to exercise their right under Israeli law to petition the court to reconsider the decision”.

As a result, they were “offered hotel accommodation, which they declined” and their return flight was covered by the Israeli state.

“The visit was intended to provoke anti-Israel activities at a time when Israel is at war and under attack on seven fronts. Its purpose was to harm Israel and Israeli citizens and spread falsehoods about them,” the statement added.

“The state of Israel has both the authority and the duty to prevent the entry of individuals whose presence in the country is intended to cause harm to its citizens – just as such authority exists in the United Kingdom.”

Earlier in a statement to Sky News, Mr Lammy said it was “unacceptable, counterproductive, and deeply concerning that two British MPs on a parliamentary delegation to Israel have been detained and refused entry by the Israeli authorities”.

“I have made clear to my counterparts in the Israeli government that this is no way to treat British parliamentarians, and we have been in contact with both MPs tonight to offer our support.

“The UK government’s focus remains securing a return to the ceasefire and negotiations to stop the bloodshed, free the hostages and end the conflict in Gaza.”

In an interview with Sky News, Dame Emily Thornberry said her two colleagues are “highly intelligent, well informed” and “really well respected”.

“They speak on behalf of a lot of people,” said the Labour MP, warning Israel that instead of “alienating” and “humiliating” them it should “engage” with them.

She confirmed the women have landed back in the UK and that “they’ll be okay”. But she added: “I am so angry.”

Labour Friends of Israel said it was “wrong and counterproductive for Israel to refuse entry to British members of Parliament”.

“Over the years we’ve taken hundreds of MPs to Israel and Palestine; it’s vital parliamentarians are able to visit and understand the situation on the ground,” it said.