UK government agrees support package for Tata Steel

Tata Steel has received a £500 million support package to secure the future of the Port Talbot steelworks. Unions say the deal will be "devastating" as around 3,000 workers are expected to lose their jobs.

India's Tata group, which owns a huge steel plant in South Wales - the UK's largest - is also expected to invest around £725 million to help it move to greener production methods.

The country's largest steelmaker, which employs around 8,000 people in the UK, about half of whom are based in Port Talbot, warned it faces plant closures unless a financial support package is agreed.

“The agreement with the UK government is a defining moment for the future of the steel industry,” said Natarajan Chandrasekaran, Chairman of Tata Group.

“The proposed investment will retain significant employment and represents an excellent opportunity to develop a green technology-based industrial ecosystem in South Wales.”

Under the agreement, the government will provide a government aid package worth up to £500 million to help convert Port Talbot's two coal blast furnaces to greener electric arc versions that can run on zero-carbon electricity.

Tata, which suffered a pre-tax loss of £279 million in the UK, is expected to cut around 3,000 jobs over the long term as a result of decarbonisation, according to the company's latest annual results.

It is the second time this year that the government has pledged taxpayer support to the Tata Group after it agreed in July to give Jaguar Land Rover owner several hundred million pounds to build a giant £4 billion electric vehicle battery plant.