The Government is under pressure to nationalise British Steel in order to save jobs.
Labour and trade unions demanded Ministers bring the business into public ownership – but the call has also been taken up by Conservative MP Simon Clarke, who represents Middlesbrough South and East.
He confirmed his backing for partial or total nationalisation, amid fears that 700 Teesside jobs could be lost immediately, with thousands more hit in the long term.
Speaking in the House of Commons, Mr Clarke urged Ministers: “May I emphasise the case for public ownership or, indeed, a public-private partnership in order to serve as a bridge to new ownership?
“The priority is to save jobs. Everything else – all matters of ideology – must come second.”
His comments echo a statement issued by Labour shadow business secretary Rebecca Long Bailey, who said:”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.”
Unions have issued a similar plea. GMB General Secretary Tim Roache said: “Ministers should have been ready to make use of all the options – including nationalisation – in order to save British Steel.”
And Mick Cash, General Secretary of rail union the RMT, said: “British Steel should be nationalised. If it was good enough for the banks then it’s good enough for steel making in the UK and the jobs and infrastructure it supports.”
The steelworks at Skinningrove, Teesside, is at risk if British Steel folds.
Across the country 4,500 people are directly employed by British Steel, many at its primary steel plant in Scunthorpe, Lincolnshire.
Think tank the IPPR said a further 7,000 jobs in the supply chain would be in jeopardy, many also in the North East. In total 12,000 jobs could be lost.
And it said allowing British Steel to collapse could lead to £2.8 billion in lost wages over a 10-year period, cost the government £1.1bn in lost revenue and extra benefit payments and reduce household spending by £1.2bn over the same period.
James Ramsbotham, Chief Executive of North East England Chamber of Commerce, said: “This is devastating news both for the North East and the UK as a whole.
“In refusing to step in and provide assistance to the Company is a gross misjudgement by the Government.
“Steel is a strategic industry and an integral part of the UK supply chain and ending our ability to produce steel leaves us at the mercy of overseas producers.
“The Teesside mills at Lackenby and Skinningrove are two facilities of national importance and everything possible should now be done to ensure a buyer for those profitable sites is found.”
On Wednesday, a High Court judge made an immediate winding up order for British Steel following an application by its directors.
At an out-of-hours evening hearing, Mr Justice Snowden heard the company’s debts as at March 31 stood at £880m – with cash flow forecasts indicating it will run out of cash by the end of the week with a shortage of £14.8m.
The company, owned by Greybull Capital, will continue to trade while the Government’s Official Receiver searches for a buyer to rescue plants, including the giant steelworks at Scunthorpe.
Greybull had been seeking financial support from the Government, saying it faced a number of Brexit-related issues, but talks failed to reach an agreement.
Business Secretary Greg Clark said the Government had worked “tirelessly” to explore all potential options, and was willing to consider making a loan, but there was no reasonable prospect that it would have been repaid.
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He said: “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.”
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