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Nationalise British Steel if rescue deal cannot be agreed, urges union

Unite said it would be an ‘economic catastrophe’ if the company went out of business.

Union leaders will hold talks with the Government on the future of British Steel (Anna Gowthorpe/PA)
Union leaders will hold talks with the Government on the future of British Steel (Anna Gowthorpe/PA)

The Government is being urged to nationalise British Steel if a deal cannot be reached to avoid the firm collapsing into administration.

The Unite union said it would be an “economic catastrophe” if the company went out of business.

The Government has reassured MPs it will “leave no stone unturned” in supporting the UK steel industry.

Business Minister Andrew Stephenson told the Commons the Government would do everything it could, within its legal parameters, to support the industry.

Andrew Stephenson (Dave Thompson/PA)

“I can reassure the House that, subject to strict legal bounds, the Government will leave no stone unturned in its support for the steel industry,” he said.

There are fears that British Steel could go into administration if it does not receive financial help from the Government to secure its future.

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

Unite 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% 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.”

Alasdair McDiarmid, operations director at the Community union, said it is vital for cool heads to prevail and that British Steel owner Greybull and the Government continue to focus on finding a solution that maintains employment and keeps the business trading.

We do not want to see British Steel becoming a political football, the stakes in this game are too high Alasdair McDiarmid

“The public should know that if British Steel were liquidated, on top of the devastation of yet more steel communities, the clean-up costs for the industrial sites could end up costing taxpayers hundreds of millions of pounds.

“Pragmatic decisions in the coming days could avert another industrial disaster. In that context we do not want to see British Steel becoming a political football, the stakes in this game are too high.”

Manuel Cortes, leader of the TSSA rail union, said: “British Steel has supplied Network Rail with more than half a million tonnes of high-quality rail over the past five years – 95% of Network Rail’s requirement.

“In September British Steel signed a two-year contract extension to supply Network Rail with a further 4,000km of rail.”

Gill Furniss, shadow minister for steel, said: “The UK steel industry is critical to our manufacturing base and is strategically important to UK industry. The Government must intervene.

“Administration would be devastating for the thousands of workers and their families who rely on this key industry in a part of the country which has not had enough support and investment from government over decades.”

Ross Murdoch, national officer of the GMB union, 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.”

Last week British Steel announced it had the backing of key stakeholders and that operations would continue as normal.

The company has asked for a package of support to tackle Brexit-related issues.

UK Steel director-general Gareth Stace said the Government statement provided a “glimmer of hope” for the Scunthorpe site.

“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.

“We can only state again the need for a swift resolution to this issue and the need to avoid a no-deal scenario at all costs. Longstanding issues such as uncompetitive electricity prices and business rates also continue to deter investment in UK manufacturing and action on this, as part of the Government’s Industrial Strategy, should without question be the top priority for Government now.”

Alasdair McDiarmid, of Community, said later: “We’ve been in regular dialogue with the company, the owners and government at the highest levels. Through those conversations we believe that there is a deal to be done between the Government and Greybull.

“The parties appear to be arguing over tens of millions when, if a solution is not found, the taxpayer will end up picking up a bill in the hundreds of millions to clean up the industrial sites and repair these communities.

“There should be no hiding behind state aid rules. The French government put in tens of millions to save 300 jobs at the Ascoval steelworks in France just last week.”

Labour called on the Government to take a public stake in British Steel if necessary to protect jobs and support the UK’s infrastructure and renewable energy systems.

Party leader Jeremy 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 people’s livelihoods and communities.”

A British Steel spokesman said: “The British Steel Group has faced various trading challenges recently. In response to this, we have been working closely with our stakeholders to consider the different funding options available to the group.

“These negotiations have not concluded and we continue to work with all parties to achieve an outcome that secures the future success of British Steel.

“We are aware of speculation that the May salaries may not be paid. For the avoidance of doubt, we can confirm that funding is in place and British Steel employees will be paid their salaries in full.

“We do not want to provide any further comment on the live negotiations, other than to thank our entire team for their dedication and hard work during this challenging period.”



From Belfast Telegraph