British Steel going into receivership after Government talks fail
British Steel is to go into official receivership after talks with the Government failed to secure its future.
The move threatens more uncertainty for thousands of workers at the company’s plants, mainly at Scunthorpe where more than 4,000 are employed.
British Steel’s owners Greybull Capital had been seeking financial support from the Government, saying it faced a number of Brexit-related issues.
Roy Rickhuss, general secretary of the Community trade union, said: “This news will heap more worries on workers and everyone connected with British Steel, but it will also end the uncertainty under Greybull’s ownership and must be seized as an opportunity to look for an alternative future.
“It is vital now that cool heads prevail and all parties focus on saving the jobs.
“In these very difficult circumstances we know the workforce will continue to fight for the business as they have done for so many years.
“We would urge the management, contractors, suppliers and customers to support them in that fight for the future.”
Unite assistant general secretary Steve Turner said: “Despite today’s announcement to place British Steel into official receivership, Unite will continue to engage all parties in the fight to secure the future of the company.
“We are clear that the Government must now step up and step in and bring British Steel into public ownership until a buyer can be found to avoid an economic and industrial catastrophe.
“While Greybull cannot be allowed to walk away scot-free and must be held to account for its stewardship of Britain’s second largest steelmaker, ministers cannot wash their hands of the Brexit farce and ongoing uncertainty that has placed the company in difficulty, nor allow a business of such strategic importance to UK plc to disappear like the steelworks of SSI several years ago.
“To do so would be a betrayal of a loyal workforce that has made great sacrifices to make British Steel a success and send economic shockwaves throughout the steel industry, UK manufacturing and the households of 20,000 workers in the supply chain who rely on the steelmaker for their livelihoods.”
Tim Roache, GMB general secretary, said: “This is devastating news for the thousands of workers in Scunthorpe and across the UK.
“Consecutive UK governments have failed to protect our proud steel heritage, and now this Prime Minister is overseeing its demise.
“Ministers should have been ready to make use of all the options – including nationalisation – in order to save British Steel.”
A statement by the Official Receiver said: “The immediate priority following my appointment as liquidator of British Steel is to continue safe operation of the site. I appreciate that this a difficult time for the company’s employees and I want to thank them for their ongoing co-operation.
“The company in liquidation is continuing to trade and supply its customers while I consider options for the business. Staff have been paid and will continue to be employed.
“The court also appointed special managers to assist me with my work and they are engaging with staff and their representatives to keep them informed, as well as contacting British Steel’s customers.”
Business Secretary Greg Clark said: “The Government has worked tirelessly with British Steel, its owner Greybull Capital, and lenders to explore all potential options to secure a solution for British Steel.
“We have shown our willingness to act, having already provided the company with a £120 million bridging facility to enable it to meet its emissions trading compliance costs.
“The Government can only act within the law, which requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made.
“This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities.
“In the days and weeks ahead, I will be working with the Official Receiver and a British Steel support group of management, trade unions, companies in the supply chain and local communities, to pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside.”
The Government must act quickly to save this strategically important industry and the livelihoods and communities of those who work in it, by bringing British Steel into public ownership.
— Rebecca Long-Bailey (@RLong_Bailey) May 22, 2019
Shadow business secretary Rebecca Long Bailey said: “This is absolutely devastating news for the thousands of workers, their families and the communities in Scunthorpe and Teesside and those throughout the supply chain.
“The Tories’ legacy will once again be industrial decline whilst they endlessly squabble over the European Union.
“The Government must act quickly to save this strategically important industry and the livelihoods and communities of those who work in it, by bringing British Steel into public ownership.”