Tata Steel 'seeking £500m government support' due to coronavirus slump
25 April 2020, 14:22 | Updated: 25 April 2020, 14:29
Tata Steel is seeking hundreds of millions in government support due to a slump in global orders caused by the coronavirus outbreak.
The biggest steel producer in the UK, which owns the Port Talbot steelworks in South Wales, has asked for a funding package worth £500million.
The request is said to be under discussion with the Treasury and the Department for Business, Energy and Industrial Strategy, Sky News reports.
It comes as Tata Steel's biggest customers - such as car manufacturers - have called a halt to production across Europe because of the Covid-19 pandemic.
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 8,000 people in the UK and has already been hit by a rise in raw material costs.
In addition, around 1,500 members of its UK workforce have been furloughed under the coronavirus job retention scheme, Sky News added.
A spokesperson for Tata Steel said: "A number of European governments have introduced job retention schemes to support businesses impacted by coronavirus which Tata Steel will be using wherever appropriate.
"This includes a scheme in the UK which will lead to some employees being asked to take temporary leave.
"As a responsible employer, we will use this and other national schemes while available, and where our own activities are much reduced.
"It will allow us to retain the skills and experience we need for when steel demand recovers."
Labour's Stephen Kinnock warned there will be "no post-pandemic recovery for our country unless we have a strong and healthy Welsh and British steel industry".
There can be no post-pandemic economic recovery without a strong and healthy steel industry. https://t.co/OmuQbL2bMO— Stephen Kinnock (@SKinnock) April 23, 2020
He said: "The government's coronavirus large business interruption loan scheme is capped at £50 million, which is only a tenth of what Tata Steel believe will be the cash flow impact on the company over a six-month period.
"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?"
Mr Raab replied: "I know that the Chancellor is looking very carefully at the sector in his constituency, the steel sector, and all of those who are not directly benefiting from this particular scheme to make sure that in the round we're providing the measures that we need in a targeted way to support all the different, crucial elements of the economy."