The jobs lost if Tata Steel was to close would cost the Government £4.6bn over the next ten years, according to new analysis by a think tank.
The IPPR said the loss of 40,000 jobs would cost the Government £2.2m a day through reduced revenue from income tax and VAT and increased benefit payments.
The research into the effect the closure would have on the government’s finances and the economy also shows household spending would fall by £3bn over 10 years.
Alfie Stirling, IPPR research fellow, said: ‘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 Government hopes to secure a buyer for Tata UK’s operations, which will be formally be put up for sale on 11 April.
Business secretary Sajid Javid said: ‘We’re listening, we’ve worked on this for a while, and we want to work with any potential buyer to see how we can help. The government will do everything it can to find a viable, long-term solution for Port Talbot and British steel.’
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