‘No stone unturned’ to support British Steel amid collapse fears, says government

The government has insisted it will leave “no stone unturned” to support the UK steel industry amid the crisis engulfing British Steel.

The country’s second-largest steel producer is on the brink of collapse after growing signs that an emergency government loan will fail to materialise, putting close to 25,000 jobs at risk.

Answering an urgent question in the Commons, business minister Andrew Stephenson said speculation over the future of British Steel “will no doubt be creating uncertainty for those employed by the company”.

He told MPs he could offer reassurances that the “government will leave no stone unturned in its support for the steel industry”.

“We recognise that global economic considerations continue to be challenging for the industry, which is why the government is working with the sector, with unions and with the devolved administrations to support a sustainable, productive and modern UK steel sector,” Mr Stephenson said.

Labour’s shadow steel minister Gill Furniss said the industry was “critical to our manufacturing base” and protecting it “should be of paramount importance to the government”.

“Does the minister accept that this government has simply failed to take the steps necessary to ensure UK steel remains competitive?” she said.

Sky News exclusively reported that British Steel, its lenders and Whitehall are preparing for an insolvency to take place, with administrators expected to be formally appointed on Wednesday unless a deal is struck by Tuesday afternoon.

If last-minute talks fail to secure a solvent deal, British Steel’s collapse could result in more than 4,000 redundancies at its giant Scunthorpe steelworks, job cuts at its other sites, and as many as 20,000 more jobs in its supply chain also jeopardised by the crisis.

UK Steel, the industry trade body, said the statement by the business minister “provided a glimmer of hope for the Scunthorpe site”, giving it breathing space to continue at a time when the outlook for UK and global demand for steel remains positive.

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The organisation’s director general Gareth Stace said: “We must remember the steel industry is an enduring resilient one, we have been the bedrock of the UK’s industrial landscape for 150 years since we pioneered mass steel production techniques, through to today and for the future.

“There is no reason why this should not continue to be the case for many years to come.”

Trade union Unite said it would be an “economic catastrophe” if British Steel went out of business and has called for the government to nationalise the firm if a deal to save it cannot be reached.

Insiders have told Sky News that a request to the government for emergency financial support had been reduced from £75m to around £30m, with British Steel’s shareholder – Greybull Capital – and lenders agreeing to inject new money into the company.

Lenders are also understood to have released their security in order for a new government loan to be made on secured terms.

If confirmed, the bankruptcy of such a major employer in Lincolnshire, with a steel plant dating back more than 150 years, would be a shattering blow both to the local economy and the national industry.

It would ignite a fresh row about the extent to which the absence of a Brexit deal is constraining the ability of British exporters to trade with European customers, and will also raise questions about recent financial arrangements entered into between the government and British Steel.

The crisis comes less than two weeks after a joint venture between Tata Steel and Germany’s Thyssenkrupp was abandoned amid opposition from the EU, raising renewed doubts about the future ownership of Tata’s steelworks at Port Talbot.

Collectively, the uncertain fate of the UK’s two largest steel plants heralds further anxiety for steelworkers, thousands of whom have already been forced to agree pay and pension cuts to keep their employers afloat.

The Scunthorpe site is a pivotal part of the UK’s steel production capability, and its purchase from Tata Steel ‎by the private investment firm Greybull almost exactly three years ago was seen as a landmark moment in signalling investor confidence in the industry’s prospects.

(c) Sky News 2019: ‘No stone unturned’ to support British Steel amid collapse fears, says government