Tata closes in on government bailout - as Corby steelworkers workers brace themselves for 'announcement'

The firm is seeking a £500m government loan to safeguard thousands of steel jobs

Corby steelworks. Copyright: Northants Telegraph
Corby steelworks. Copyright: Northants Telegraph

Tata steel look set to be handed a lifeline by the government to help safeguard 8,000 UK jobs including several hundred in Corby.

The firm, which produces 250,000 tonnes of welded tube in Corby each year, is hoping for a state loan of up to £500m as part of the government's Operation Birch Covid-19 mitigation strategy.

The Financial Times has reported that the loss-making steel firm is asking for the huge loan after exhausting other funding possibilities.

The paper claims that Labour MP Stephen Kinnock whose constituency includes the Port Talbot works that provides the steel strips used in Corby, said that 'frustrations are boiling over', describing the situation as 'deeply troubling'.

But Corby workers have told the Northants Telegraph, they have been told to prepare for an announcement on July 1 which they fear may mean job losses. Managers at the Corby site in Weldon Road were asked earlier this month to take a wage deferral. Others have been placed on furlough.

Last year the company told workers in Corby that the business was facing its 'most serious downturn for many years.' An internal memo leaked to the Northants Telegraph alerted workers to the fact that improvements to the business were not happening quickly enough, that profits were 'shrinking fast' and the company was 'spending cash it doesn't have'.

In the memo Tata Steel European CEO Mr Henrik Adam said: "We need to prepare for difficult months ahead of us. Our business is experiencing its most serious downturn in many years. The economic indicators are flashing red and our biggest markets, such as Germany and the UK, are close to recession."

Tata Steel told the FT: “Our position continues to be that we have been [seeking] and continue to seek government support in the UK, the Netherlands and all geographies we operate in. It would not be appropriate to comment on ongoing discussions with governments.”

The UK Department for Business, Energy and Industrial Strategy said: “We are in regular discussions with companies across a range of sectors. We do not comment on the commercial or financial affairs of individual companies.”