British Steel collapses 'over Brexit' with 25,000 jobs at risk
British Steel collapsed into liquidation today putting up to 25,000 jobs at risk.
The “devastating” failure of one of the biggest names in British industry came after last ditch rescue talks with the Government over a £30 million lifeline ended wih no deal.
It makes British Steel the biggest corporate victim yet of the fall-out from Brexit.
The company had been struggling to renew orders with European customers amid uncertainty over future trading relations with the EU.
The Government’s Official Receiver has now taken take control of the company after it was wound up in the High Court this morning.
Three insolvency specialists from accountancy firm EY will take on the role of “special managers” tasked with trying to find a buyer for the business.
Unions and Labour called on ministers to nationalise the company, an option that ministers ruled out as illegal.
Theresa May said it would have been unlawful for the Government to bail out British Steel at PMQs today.
She said: “Obviously we recognise that this is a worrying time for the thousands of dedicated British Steel workers and their families, but also those in the supply chain and local communities.”
She told MPs: “We can only act within the law and it is clear that it would be unlawful to provide a guarantee or loan on the terms requested by the company.”
Business Secretary Greg Clark 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.”
The collapse comes just three weeks after the government gave British Steel an emergency £120m loan to cover an EU bill for carbon dioxide emissions.
The company’s main plant is in Scunthorpe - one of only two blast furnace steelworks left in the UK - but it also has sites in Cumbria, Teesside, Cumbria and North Yorkshire.
In a statement 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 cooperation.
“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.”
British Steel was sold by its former owners the Indian conglomerate Tata to Knightsbridge based private equity firm Greybull Capital for £1 in June 2016.
The failure comes the day after Jamie Oliver’s restaurant empire fell into administration with the loss of around 1,000 jobs.