Job losses from steel crisis could cost the UK government £4.6bn

By Admin
A loss of up to 40,000 jobs from Tata Steel UK and the supply chain, as previously estimated by IPPR, could cost government a total of £4.6bn in t...

A loss of up to 40,000 jobs from Tata Steel UK and the supply chain, as previously estimated by IPPR, could cost government a total of £4.6bn in tax revenue and benefits and reduce household spending in the economy by £3bn, over 10 years.

Following the decision by India’s Tata Steel to sell all or part of its UK business, IPPR looked at the potential job losses at the plants themselves and in the supply chain, in the event that no buyer can be found. Further research now shows the effect this might have on the government’s finances and the economy.

If the UK loses 40,000 jobs this year from Tata Steel plants and their suppliers, the cost to government in 2016/17 could be £0.8bn, or £2.2 million per day. This reflects lost revenue from income taxes and VAT, and additional benefit payments. Over the course of ten years this could come to a cumulative total of £4.6bn. In addition, the economy will also suffer from a drop in spending from affected households by £0.5bn in 2016/17, worth a cumulative total of £3bn over ten years.

Alfie Stirling, IPPR Research Fellow, said: “The effects of plant closures on the UK could be very serious indeed. Our new analysis shows that there is significant fiscal and economic cost to inaction, which the government must take account of when considering its options for Tata Steel.

“It is of the upmost importance that the government recognise that the UK economy is more resilient when we retain a more diverse industrial base. The steel crisis acts as a reminder that we need to work harder to embed our core material producers into supply chains around strategic sectors like car-manufacturing and aerospace engineering.”

 

Follow @ConstructionGL and @NellWalkerMG

Share

Featured Articles

COBOD's BOD2 3D printer used to build a school in Ukraine

Team4UA and 3DCP Group partner with COBOD to construct Europe’s first 3D printed school in Ukraine, hoping to address educational infrastructure needs

All you need to know about Saudi real estate developer ROSHN

Saudi Arabia’s leading real estate developer, ROSHN, is building communities covering 200 million sqm to help boost home ownership to 70% by 2030

Arcadis signs collaboration with Canadian start-up Niricson

Agreement will combine Arcadis’ expertise with Niricson’s predictive analytics platform to develop a non-invasive way to safely inspect and monitor concret

Italy’s Cannon Artes wins $31m Egyptian desalination project

EPC

Saudi Arabia to build three new stadiums for Asian Cup 2027

Construction Projects

Neoen’s Storen Power Reserve begins construction in Sweden

Construction Projects