Government offering Tata £500m to secure future of Port Talbot steelworks, reports claim

The Government has offered Indian multinational Tata a deal worth £500m to secure the future of the Port Talbot steelworks, according to reports.

The plant in south Wales is the largest producer of steel in the UK, employing around 4,000 people and as many as 10,000 in the wider community.

But production has been plummeting amid rising energy prices and competition from cheap imports, most notably from China.

Port Talbot is also one of the largest emitters of carbon in the country as a result of its two blast furnaces.

The Government has been in negotiations with Tata Steel, the owners of Port Talbot, and Jingye, the Chinese owners of Britain’s other steel plant in Scunthorpe, Lincolnshire, over their future for months.

It has been widely reported that both were offered around £300m towards decarbonisation but the companies have been lobbying for more.

According to a report from Sky News on Saturday, negotiations with Tata are now at an “advanced” stage and the government has increased its offer of subsidies to £500m.

Tata would agree to invest around £700m in return, much of which would go towards building electric arc furnaces which require less labour, it is claimed.

But the deal could mean as many as 3,000 job losses in the long term, Sky News reports.

No decision has yet been made and any deal would need to be agreed with unions.

A spokesperson for the Department for Business and Trade told i they could not comment on “ongoing negotiations.”

However, they said the government is “committed to securing a decarbonised, sustainable, and competitive future for the UK steel sector.”

Tata Steel has yet to reply to a request for comment.

It comes after Tata agreed a separate deal, also said to be worth £500m in subsidies, to build a gigafactory to produce electric batteries for the car manufacturing industry in Somerset.

The move divided opinion with some critics arguing the government was handing over too much money in incentives to a business with deep pockets.

Others pointed to the fact that many other countries, including in Europe and the US, have already handed over similar amounts in a bid to get ahead in the electric battery industry.

The latest rumours of a Tata deal comes as Prime Minister Rishi Sunak is due to visit India, where the company is headquartered, for the G20 summit in New Delhi next week.

Mr Sunak’s wife Akshata Murthy and his in-laws, the billionaire co-founder of Infosys, are household names in India and the trip is being billed as an opportunity to secure positive headlines back home – despite floundering progress on a trade deal.