The coronavirus pandemic has brought all the business in a hand to mouth position. According to the reports, Tata Steel UK arm is seeking a 500 million pounds government financial package to get through the lockdown period. Tata Steel owns the largest steelworks in UK’s Port Talbot in Wales. The company is holding discussions with the Welsh government and UK Treasury to seek the 500 million pounds loan being offered under the UK’s Coronavirus Large Business Interruption Loan Scheme (CYBILS).
The company employs 8,385 people in the UK, including about 4,000 people in Port Talbot and 2,800 in other parts of Wales. The government is holding discussions with the company about what supports they require to sustain strong steel manufacturing in the UK and Wales. “We continue to work with both the UK and Welsh governments to identify what support is available,” a company statement said.
The 500 million pounds is the correct estimate for the company to sustain and the support sought is required to compensate a large commercial loan which would be repaid when the demand for steel recovers. Opposition Labour Party MP, Stephen Kinnock said that 500 million pounds that the company is seeking from the government are only 10% of what Tata Steel actually needs. Kinnock’s major constituents make up from the steel workforce in Port Talbot.
Kinnock also raised the issue in the House of Commons and stated, “Tata Steel estimates that it will take around six months to get back to business as usual, or as close as possible to it and the challenge they have is cashflow over that six month period. And the estimation is in the region of 500 million pounds,” to this the First Secretary of State Dominic Raab responded that the UK Chancellor Rishi Sunak is looking carefully into the steel sector. Raab further stated that those companies who are not benefitting from the scheme (CLBILS) would be provided with measures that would be in a targeted way to support all the elements of the economy.