Coronavirus: 800 jobs secure as Celsa Steel gets £30m emergency loan
|bbc.com 02 Jul 2020 at 17:06|
Labour welcomed the loan but called on ministers to make further deals to prevent a wave of redundancies.
As part of the loan, which is expected to be repaid in full, the company - which has sites in Cardiff - must meet a series of legally binding conditions.
These include commitments to protect jobs, on climate change and net zero targets, and restraints on executive pay and bonuses.
Image caption As part of the loan, which is expected to be repaid in full, the company must meet a series of legally binding conditions.
Roy Rickhuss, general secretary of the Community union, welcomed the announcement, adding: "We ve said since the start of this crisis that we need our industry to survive the pandemic and then thrive in the future so it can be at the foundation of the recovery.
"This agreement with Celsa is a vital part of ensuring that can happen and will help to provide some certainty and confidence at a challenging time. We hope this is just the start of steel companies securing the support from Government that they need to get through this crisis."
The UK government loan to Celsa is a significant development as it s the first under what s been called "Project Birch".
This will see the direct financing of strategically important UK businesses by taxpayers.
At £30m, the amount of support is relatively small in comparison to what other companies are requesting, such as £500m for Tata and £1bn for JLR.
It s also significant that this is not a blank cheque.
There are a number of conditions attached to it that fit in with the UK government s agenda on jobs, the environment and business.
It s likely to be the model for any future loan deal with businesses.
It s believed the "Project Birch" loans will also include a stipulation that the UK government will take a stake in the company if the loans are not paid back.
A Conservative government would have been highly unlikely to intervene in businesses in this way prior to Covid-19.
Welsh Secretary Simon Hart said: "The UK Government has worked closely with Celsa and other partners to secure a deal that will protect highly skilled jobs in South Wales and strengthen the economic future of the region.
"We have a long and proud history of steelmaking in Wales. We will continue to work with the team at Celsa to help ensure the company s success."
Shadow business minister Lucy Powell said: "Given the tsunami of job losses we are now seeing throughout the economy, in sectors as diverse as aviation, aerospace, hospitality, and the arts, ministers must conclude further sector deals and stem the tide.