Around 40,000 jobs could be lost if no buyer is found for Tata Steel’s UK business, according to a new analysis.
The IPPR think tank said the firm’s UK business employs 15,000 people, with a further 25,000 jobs in the supply chain estimated to depend on steel plants.
The supply chain job losses are likely to hit manufacturers and suppliers of iron, manufacturers of machinery, and processors and suppliers of coke and petroleum, some of which will be based outside of the UK, it was found.
IPPR warned the likely job losses related to the closure of Tata steel plants will be higher as these estimates do not capture the further impact of lost demand in the local economies from reduced spending power of workers and their families. This could lead to further business closures and job losses outside of the steel sector.
Alfie Stirling of IPPR said: “British steel is facing extremely difficult trading conditions with slowing demand for steel from China having knock-on effects for the industry right across the world.
“In addition there is currently significant state investment in new steel facilities and plants from regions that are traditionally net importers of steel, such as North Africa and South East Asia.
“Combined with existing excess capacity in Europe, the US, Russia and China, this is widening the gap between the amount of steel the world can make and the amount it actually needs.
“The costs of sustaining all this excess capacity is biting heavily into the profit margins of steel producers around the world.”