British Steel

The collapse of British Steel is absolutely devastating for thousands of jobs in Scunthorpe, and could have major knock on effects down the supply chain. Our communities are being betrayed by a Tory government whose free market obsession is threatening Britain’s vital manufacturing base.

The company employs about 4,500 people directly, mainly at its Scunthorpe site but also at their Teesside plants, and as many as 20,000‎ more in its supply chain. According to think-tank IPPR, allowing British Steel to collapse would lead to £2.8bn in lost wages over a 10-year period and cost the government £1.1bn in lost revenue and extra benefit payments.

In 2016 during the steel crisis Greybull Capital acquired the assets from Tata Steel for £1 and rebranded it British Steel as it is known today. Initially, the plant returned to profitability within 100 days of the sale however the current financial situation at British Steel is attracting greater scrutiny of owners Greybull Capital.

The Governments shambolic Brexit negotiations have created uncertainty for business across the UK, including the steel sector. The Government’s threats of a ‘’no deal’’ have had a particularly catastrophic impact on the sector.

British Steel have said the most significant strain at the moment is the slump in European orders as a result of Brexit uncertainty. UK Steel, the body representing the sector said a no deal would be nothing short of ‘’catastrophic’’ for the sector, and could cost the industry £70m a year due to disruptions in administration and complications in trade.

The EU would introduce a range of tariffs on imports of steel containing products (such as 10% on cars) from the UK, reducing export and production of these products and ultimately demand for steel in the UK.As such, a Customs Union is vital to any deal so that frictionless tariff free trade can continue. This is a view supported by the unions and across industry.

I believe The government must act quickly and bring British Steel into public ownership to secure the long term future of the steelworks and protect livelihoods and communities

 

04, Jun, 2019