British Steel has gone into receivership putting 4,000 jobs in Scunthorpe at risk.
Talks between the company, its owners and the Government over urgent funding have failed and administrators EY are in court finalising their appointment ahead of the company’s looming collapse.
The Scunthorpe-based company was reported to be on the brink of collapse yesterday for the second time in less than a week.
4,000 jobs in Scunthorpe – are now at risk, along with a further 20,000 positions across the supply chain.
British Steel was reported last week to be looking for an emergency Government loan of £75 million to allow it to keep operating but yesterday, it was said that the amount of money the firm was asking for had reduced to around £30 million.
A company spokeswoman told Sky News last night that British Steel was continuing “to work with all parties to achieve an outcome that secures the future success of British Steel” and that all employees would be paid in full for May.
But labour leader Jeremy Corbyn called for British Steel to be nationalised, saying: “If an agreement cannot be struck with British Steel, the Government must act to take a public stake in the company to secure the long term future of the steelworks and protect peoples’ livelihoods and communities.”
For updates, follow the live blog below.
Greg Clark says loan would have been ‘unlawful’
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.
‘Government must act quickly’ – Labour
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.’’
The Government has confirmed British Steel is in liquidation: A Government statement said: ‘On 22 May 2019 the High Court ordered British Steel Limited into compulsory liquidation. The Official Receiver was appointed as liquidator.’
‘Devastating news for workers and UK industry’
GMB the steelworkers’ union, has described British Steel’s collapse as devastating news for workers and UK industry.
“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 but they either don’t care or wouldn’t take off their ideological blinkers to save hard working people and communities.
“GMB demands urgent reassurances on what the future holds for the thousands of British steel workers and their families.”
The Press Association said: ‘British Steel is to go into official receivership after failing to secure funds for its future’. News agency Reuters reports ‘EY appointed as special manager to assist administration of British Steel’
British Steel goes into receivership
The company has been placed into insolvency – read more here
British Steel insolvency process to ‘start today’
Sky News is reporting that British Steel is expected to be placed into an insolvency process on today. Sky’s City editor Mark Kleinman said he understood administrators for the business services firm EY were in court finalising their appointment ahead of the company’s looming collapse.
Update on staff pay
British Steel has issued an update on staff pay, while a call has been made by the Labour Party for the company to be nationalised. For the latest, click here.
Questions from other northern Lincolnshire MPs
Other MPs representing constituencies across northern Lincolnshire have also been asking questions on the future of British Steel to Business, Energy and Industrial Strategy Minister Andrew Stephenson in the House of Commons.
Grimsby MP Melanie Onn asked for reassurances about the future of apprentices and colleges helping facilitate the training, “in the event Government intervention should not be sufficient”.
Mr Stephenson said: “Media speculation about this site and the future of this site is unhelpful. If we have anything to say we will update the house when there is more information available.”
Brigg and Goole MP Andrew Percy thanked Mr Stephenson for his line of communication over the past week, and brought Brexit back to the fore.
He said: “Certainty is so important and that’s why, with some reservation, I have constantly supported the Prime Minister’s deal to end Brexit uncertainty and I will continue to do so. I hope other colleagues will so do as British Steel has asked of MPs.”
Completing the South Bank set of concerned MPs, Cleethorpes’ Martin Vickers described Scunthorpe’s long products as “absolutely vital for major infrastructure projects such as HS2”, asking for assurances that “those sort of projects will contain British steel, and will he ensure he does everything to ensure it is British manufactured steel in major infrastructure projects”.
Mr Stephenson pointed to the pipeline publication, highlighting opportunities with Hinkley Point C, too.
Nic Dakin speaks in House of Commons debate on British Steel
Speaking in the debate in Parliament this afternoon, Scunthorpe MP Nic Dakin said: “Steel workers and their families in my constituency and across the country are very anxious, as the Minister recognised in his comments.
“Pragmatic decisions in the coming days can sill avert another industrial disaster. Speaking to trade unions, they are clear from the messages they are getting that there is a still a deal to be done.
“It is important we all work across this house and outside this house to make sure this delivers positively for the future steel industry. Does the Minister agree the stakes are too high, for the Government, for us to fail?”
Business, Energy and Industrial Strategy Minister Andrew Stephenson reiterated his comments about not being able to divulge detail, adding that Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, was “one of the most diligent members at coming to the dispatch box” when there was information to share.
Government statement on British Steel
Talks with the Government over the future of British Steel are being discussed in the House of Commons after Business, Energy and Industrial Strategy Minister Andrew Stephenson gave a statement in response to an urgent question from Shadow Steel Minister Gill Furniss. Read the full statement here.
More from Nic Dakin
“Today’s speculation is very unhelpful. Workers and their families will be rightly very concerned at the moment. Everyone including Greybull and the Government needs to remain focused on doing their very best to find a way through the current problem.
“The failure to progress the steel sector deal means that this great UK industry lurches from one crisis to another. It is time for the Government to act not only on sorting out the current crisis but also on delivering a strong steel industry for the future. I am continuing to do all I can to make the Government, Greybull and all other stakeholders do what needs to be done to secure British Steel’s future.”
Nic Dakin – The stakes are too high for the government to fail
Scunthorpe’s MP Nic Dakin has given his thoughts in Parliament this afternoon.
Reaction from Scunthorpe locals
More from Scunthorpe MP Nic Dakin on the importance of British Steel
Scunthorpe MP Nic Dakin has emphasised the importance of British Steel not just to the Scunthorpe area but the country as a whole.
It is right and proper that the Government does everything it can to ensure this business survives, which is not only crucial to our area’s economy but the UK because it is a strategic business. No independent nation can hold its head high without having its own steel-making capacity.
‘We need everybody to continue to focus on resolving this issue’
Scunthorpe MP Nic Dakin has spoken to Scunthorpe Live following this morning’s development and said it was important for all concerned to remain focused on finding a solution to the crisis.
He said: “All we have heard this morning is more speculation. We have to recognise that the people close to this process are working very hard to resolve it and we need everybody including the Government, Greybull, British Steel management and trade unions to continue to focus on resolving this issue.
“This is a sound business but because of issues outside its control, mainly the decision to leave the EU, and that has been made a mess of by the Government, which has precipitated this crisis.”
‘It all seems real’
Josh Clarke, who works at the Coke Ovens said: “It’s the uncertainty that is worrying, but now, it all seems real. It actually seems real that we might all end up being out of work. Everyone is worried.”
Union chief speaks on British Steel’s future
Sean Scorer, National Secretary of the Community Union, has told Radio Humberside:
We’ve been talking about [British Steel’s difficulties] for as long as I can remember, the lack of procurement, the lack of strategy and the lack of funding.
We’re being told that the company is a matter of hours from the brink of collapse, and we’re hearing about a 3 o’clock deadline. We’re hearing about a £30 million loan, a £75 million loan – the figures involved are changing week by week, hour by hour.
GMB union – ‘Government must put money where its mouth is’
The GMB union says it has written to British Steel to demand it works with the Government to save Scunthorpe’s steelworks and thousands of highly skilled jobs.
In a statement from the union this morning, Ross Murdoch, GMB National Officer, said:
Given this latest speculation, these are understandably extremely difficult times for our members.
Yesterday the Government, alongside trade unions and employers, signed a UK Steel Charter at Westminster.
They must now put their money where their mouth is.
GMB calls on the Government and Greybull to redouble efforts to save this proud steelworks and the highly skilled jobs.
‘What happens now?’
Another who employee said: “We still have not been told a thing – and in two happens we could go into administration. What happens now? Where do we go from here?!”
‘The impact of job losses would be devastating’
Anna Turley MP from the all party parliamentary group on steel, said:
The Government has to step in. The impact of a huge number of job losses, 4,000 and more in the supply chain, would be devastating for Scunthorpe. Steel production is viable. British Steel is struggling to compete when other countries tries are much more a supportive of their steel industry. It’s devastating to see an industry that should be thriving on the ropes
‘Many families will be broken’
Disgrace it has come to this, it will become a ghost town if this happens, the knock on effect will be straight to the high street/ small businesses/ supermarkets alike… something the government needs to take very seriously. Many families will be broken if this happens!
— Matthew Dawson (@MjDawson777) May 21, 2019
Stew Austen has warned about the future of Scunthorpe, commenting on Facebook:
All the people saying that Scunthorpe steelworks will never close, the steel works in Teesside was a much more up-to-date one and they closed it down without hesitation, reducing a massive area into a ghost town within a year. It’s not negative to say it but the reality is that if it doesn’t shut down it will at least have a massive redundancy moment.
Questions over French acquisition
An employee of the French steelworks that Greybull Capital bought out last year has questioned why it was done when the company was in such a precarious position.
The private equity owner invested £42 million in the plant as they sought a bailout from the British government.
Nies Forny said:
I am an employee of Ascoval factory in France that British Steel has just bought. Here with colleagues we find strange that a company on the verge of bankruptcy happens to buy a French company. a company in a very delicate financial and technical situation because for years no more investment is carried out in this company, and with the redemption of British Steel one speaks to us of massive investment and record production. Understand well that we are perplexed when to the future of our jobs.
‘This is getting ridiculous’
Stephen Greenwood, an employee at British Steel for 15 years said: “I have no idea what I’m supposed to believe. We have gone from being told administration is likely, to then unlikely and we can all be reassured and tell our families to be reassured… to now hearing all of our jobs could be at risk. I think thousands of people right now are very, very scared. This is getting ridiculous.”
One caller has told David Burns on Radio Humberside that politicians shouldn’t have let it get to this point. Steve said:
British Steel makes little profit and the site is old and inefficient. This crisis is the result of short-sighted policy and political cowardice, kicking the can up the road.
Sky News city editor – ‘Final deadline of 3pm set’
Sky News City Editor Mark Kleinman said he had been told a final deadline of 3pm today had been set by British Steel to receive an urgent government loan of £75m to continue operating.
A number of deadlines have come and gone and last night a further deadline of 8pm was missed for the loan to be signed and secured. “As a result the lenders and directors seem to have lost patience and have now set a final deadline for 3pm today beyond which they have said they have resolved to put the company into insolvency.
Union – ‘thousands of jobs depend on a deal’
A spokesman for the Unite Union said: “It is vital that Greybull reaches a deal with the Government. Thousands of British Steel jobs and many more in the supply chain depend on it. Unite will be urgently speaking to Government ministers.”
‘It proves the Government doesn’t care about the industry’
More reaction is coming in after this morning’s shock development.
Christian Ashton said:
If British Steel is allowed to collapse into administration then it just proves that the government doesn’t care about the industry, unless it’s down south. If it’s main plant was in London and not Scunthorpe they’d be doing everything they could to save it.
‘It will ruin the town if this place goes under’
Another employee, who did not wish to be named, said:
I work as a bricklayer at BOS plant and it’s all everyone is talking about, the threat of people being laid off. No-one is concentrating on the job that needs to be done, but who can blame them, to be fair? It will ruin the town if this place goes under. It’s a shame, much more than a shame, that a lot of people could end up in real financial trouble – that can’t be the best solution.