Battle to save 25,000 jobs at British Steel

Ministers pledge to leave no stone unturned as Labour calls for company to be nationalised

‘Strategically important’

EVERY effort will be made to save British Steel from disaster, ministers vowed last night.

The firm’s owners are demanding a state bailout – with sources putting the chance of saving 25,000 jobs at no better than 50/50.

Business minister Andrew Stephenson told the Commons yesterday that confidential talks were being held with the beleaguered company.

He added: ‘I can, however, reassure the House that, subject to strict legal bounds, the Government will leave no stone unturned in their support of the steel industry.’

British Steel had been trying to secure £75million in financial support to help it to address ‘Brexit-related issues’ – although it has now reduced its plea to £30million. Labour’s Jeremy Corbyn said the firm should be partnationalised if no deal was reached.

British Steel is owned by Greybull Capital, which promised in 2016 to put the firm’s ailing Scunthorpe plant ‘back on the map as one of the world’s leading steelmaking centres’.

But last year the Government was forced to lend the company £100million and, without a rescue package, it could go into administration as early as today. If it is not possible to sell the business as a going concern it will be closed down.

‘It’s still very much 50/50 on whether it is on the brink,’ said an industry source. ‘Discussions are still ongoing and I would say there’s a timing issue here – the Government is going to make sure that British Steel doesn’t collapse between now and Thursday.

‘The last thing the Government would need is the collapse of British Steel just before the European elections. Andrew Stephenson has said the Government will leave no stone unturned, but they could still say no.’

Almost 5,000 workers are employed by the company, mainly in Scunthorpe, with another 20,000 employed by firms in its supply chain.

Mr Corbyn said: ‘ The collapse of British Steel would have a devastating impact on thousands of jobs in Scunthorpe, and could have major knock- on effects on wider supply chains. Once again, our communities are being betrayed by a Tory Government whose free market obsession is threatening Britain’s vital manufacturing base – just as they were under Margaret Thatcher.

‘Britain’s proud steel industry has a major role to play in ushering in a green industrial revolution, securing British manufacturing for a sustainable, green future.

‘It needs support, not a death warrant. 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.’ The union Unite said it would be an economic catastrophe if the company went under.

Assistant general secretary Steve Turner said: ‘While Unite is in continuing dialogue with British Steel and the UK Government, we are very clear that if a deal cannot be struck to secure the long-term future of the steelmaker under private ownership, that the Government must bring it under public control in the national interest. British Steel’s success is key to any future UK industrial strategy. It is a strategically important business which supplies other UK steelmakers with product and provides 95 per cent of the UK’s rail tracks.

‘ It would be an economic catastrophe if the worst were to happen and government was to allow British Steel to collapse. It is a national asset supporting UK plc that cannot simply be left to the market.’

Gareth Stace, of industry group UK Steel, said: ‘Many of the challenges we face are not unique to the steel sector.

‘The whole manufacturing sector is crying out for certainty over Brexit, unable at present to plan with any accuracy the trading relationship it will have with its biggest market in just five months’ time.

Greybull Capital, which observers said should put more money into the business, declined to comment.