Around £10.5 million will go towards helping the local economy, and employees impacted by the 1,200 job cuts expected to take place at Tata Steel’s long products division in the UK, in a joint initiative between the company and the UK government. The move comes days after the steel maker announced a consultation on the cuts as part of a restructuring of its long products division centred in northern England and Scotland, and highlights the growing pressure on the UK government to support the steel industry.

Much of the support will focus on the northern English town of Scunthorpe, where just under 900 of the Tata Steel employees are expected to be impacted by the restructuring.  Tata Steel will spend around £3 million on job creation in the town, and a further £1.5 million for communities around its Scottish sites at Dalzell, and Clydebridge. The British government is putting £3 million, also towards job creation in Scunthorpe and a further £3 million towards training impacted employees. The Tata funds come on top of the £10-million already put aside by its UK Steel Enterprise regeneration arm, to help steel communities across the country.   

Separately, the Scottish government has also announced plans to support affected employees, and said that it would do everything possible to try to find a buyer for the Scottish sites, and maintain production via a task force.  The mothballing of the two Scottish sites effectively brings an end to Scottish steel production.

Unions gave Tata Steel and UK government plans a cautious welcome, contrasting the Central government’s approach to that of Scotland. “There is still a consultation process to go through and no worker will be redundant until that is completed. Community is focused on looking at the rationale behind the proposals and all possible alternatives that will save jobs,” said Roy Rickhuss of the Community union. “It will be challenging but all parties should be focused on the consultation.”

During Prime Ministers Questions this week, British Prime Minister David Cameron defended his government’s track record on supporting the steel industry and its industrial policy more widely. The steel industry, which employed around 30,000 people at the start of the year, is facing a number of pressures including the dumping of steel produce from outside Europe and tepid demand. “It is in a very difficult situation, world prices have collapsed by more than half, the surplus capacity in the global market is more than 50 times the UK output,” Cameron said. “Our plan is to take action in four key areas: procurement, energy costs, unfair competition and dumping, and tax and government support."