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 on suspicion of murder as three children and a woman die in house fire

Published

8 hours ago

May 24, 2025

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Man arrested on suspicion of murder as three children and a woman die in house fire

A man has been arrested on suspicion of murder after three children and a woman died in a house fire in Brent, northwest London.

Metropolitan Police officers are investigating after being called to assist firefighters in Stonebridge, near Wembley, shortly after 1.20am.

A 43-year-old woman and three children, a 15-year-old girl, an eight-year-old boy and a four-year-old boy, died at the scene, the force said. Their next of kin have been informed.

Police are waiting for an update on the conditions of two others who were taken to hospital.

A 41-year-old man was arrested at the scene in connection with the incident and remains in custody.

Eight fire engines and around 60 firefighters responded to the blaze, the London Fire Brigade (LFB) said.

Two terrace houses, each with three floors, were severely damaged in the fire, which was under control by around 3.25am, the fire service added.

Firefighters rescued the woman and one of the children from the second floor of the house, but they were declared dead by air ambulance crews.

The two other children were found inside the property and were also declared dead at the scene, LFB said.

LFB assistant commissioner Keeley Foster said: “Upon arrival, firefighters were met with a well-developed fire, involving two adjoining properties. Crews immediately set to work carrying out firefighting operations in order to bring the incident under control.

“Sadly, a woman and three children have died as a result of this fire.

“Crews wearing breathing apparatus were able to rescue the woman and one of the children from the second floor, but they were later declared deceased at the scene.

“A further two children were discovered to have died in the fire, as crews carried out a search of the properties involved.”

She added: “This is an extremely tragic incident, and the thoughts of everyone across the brigade are with those impacted by this incident.”

London Ambulance Service said an air ambulance, incident response officers, advanced paramedic and hazardous area response team were deployed to the scene.

Superintendent Steve Allen, from the Met’s local policing team in northwest London, said: “This is an extremely tragic incident and our thoughts are with everyone involved.

“Officers arrested a man at the scene and we continue to work alongside investigators from the London Fire Brigade to establish the cause of the fire.

“Emergency services will remain in Tillett Close throughout the day as these enquiries take place.”

Mayor of London Sadiq Khan said in a post on X: “This is devastating news and my thoughts are with the family, friends and wider community of the four people who sadly have lost their lives.

“I remain in close contact with the London Fire Brigade and Metropolitan Police as they work to establish the cause of the fire and offer support to all those impacted.”

Dawn Butler, the local Labour MP for Brent East, posted: “Devastated to see the fatal fire at homes in Tillett Close last night.

“My prayers are with the family and friends affected by this is a very sad tragedy.

“@LFB_Brent worked hard to get it under control, thank you.”

UK

Southport attack victim’s teachers ‘don’t want her to be forgotten’

Published

14 hours ago

May 24, 2025

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Southport attack victim's teachers 'don't want her to be forgotten'

The teacher of one of the Southport stabbing victims has told Sky News they “don’t want her to be forgotten”, 10 months after the knife attack in which she was murdered.

Seven-year-old Elsie Dot Stancombe was killed along with Bebe King, six, and nine-year-old Alice da Silva Aguiar in an attack by Axel Rudakubana at a Taylor Swift-themed dance class last July.

Jennifer Sephton, headteacher of Farnborough Road Infant School, will be skydiving to raise funds for the Elsie’s Story charitable trust, which has been set up in memory of the former pupil.

“She’d been with us for four years, throughout her education,” Ms Sephton told Sky News, “and we just want everybody to know Elsie’s spirit.”

Describing Elsie as “such a determined young lady,” Ms Sephton said Elsie had “a real zest for life, and a sparkle in her eye all the time.”

She added that Elsie’s Story, which has been set up by Elsie’s family, is about “continuing that legacy.”

In the aftermath of the July 2024 attack, the gates outside Elsie’s school were lined with flowers, balloons, and cards bearing her name.

Since then, memorial benches and a tree have been planted in the school grounds, providing pupils and staff with a place to “remember and reflect”, Ms Sefton says.

“[Elsie’s death] had such an impact on all our community,” the teacher said, “it’s had an impact on her friends, their siblings, our school as a community and our staff.”

‘We want her name to live on’

Ms Sephton will be joined in the skydive by Adrian Antell, headteacher at the adjoining junior school where Elsie had been due to start.

“Elsie was due to come to us last September,” he told Sky News, “but what we’ve learned about her is that she had a wonderful impact in the infant school, and we don’t want her to be forgotten.

“We want her name to have to live on and to be thought of in a positive way.”

Mr Antell said they continue to support Elsie’s classmates, who joined the new school without her.

“There’s no instruction manual for this,” he explained, “every day is different, and every day is one step at a time.

“So all we can do as a school is to think about individual children and support them in the best way we can.”

UK

Scientists embark on crucial study to save Britain’s bees

Published

17 hours ago

May 24, 2025

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Scientists embark on crucial study to save Britain's bees

Scientists from Kew Gardens are using a new study to track which trees bees prefer to try to stem the decline in our vital pollinators.

Bee populations are falling all over the world due to a mixture of habitat loss, climate change, and the use of pesticides, with a devastating impact on our biodiversity and food production.

But it’s feared that not enough comprehensive, global research is being done to understand the issue or find solutions.

UK becoming a no-fly zone

Researchers based at Wakehurst in Sussex, known as Kew’s “Wild Botanic Garden”, have begun placing advanced bio-acoustics sensors in some of their trees to track which ones bees favour.

They hope it’ll help urban planners know which trees to plant in built-up areas, as a way of combating the worrying decline in bee numbers.

Pollination research lead Dr Janine Griffiths-Lee said: “Nearly 90% of our flowering plants depend on the contribution of pollinators, but in the UK the population of flying insects in the last 20 years has decreased by around 60%.

“It’s really hard to be able to put a figure on the decline of our pollinators, but we do know that globally the number is declining.

“And with that comes crop yield instability and the loss of an essential ecosystem service.”

Their new, non-invasive monitors listen for the buzz created by bees’ wing beats, building up heat maps of the most popular spots.

‘We’re facing twin crises’

Dr Griffiths-Lee said: “If you think about the tree’s footprint, it’s very small, but they’re huge 3D structures covered in pollen and nectar, which are essential resources of pollinators.

“So we really wanted to think about which are the best trees for bees for us to plant, and that can inform landscape planners, urban architects.”

Eight different species of tree were chosen for the study, including horse chestnut and lime trees, with a mixture of native and non-native species.

The scientists have also been gathering DNA from pollen, which also helps them to map which plants and flowers the insects prefer.

Wakehurst’s director, Susan Raikes, calls the 535-acre estate a “living laboratory”, and said the project’s all about searching for nature-based solutions to the impacts of climate change.

“The stakes couldn’t be higher, really. We know that we’re facing these twin crises of biodiversity loss and climate change,” she added.

“We need to be able to understand, as the climate changes, which plants from warmer climes will be good here in the UK for pollinators in the future.

“If all of our native plants are struggling, then we need to find new sources of pollen – for us all to survive.”