Unite has called for British Steel to be taken under public control if a deal cannot be reached between owners Greybull, its lenders and the government that avoids the threat of the company collapsing into administration.
Responding to reports today (May 21) that British Steel, the UK’s second largest steel producer, is preparing to call in administrators tomorrow (May 22) unless it secures £30m in emergency funding from the government, Unite assistant general secretary Steve Turner said the union’s call was unequivocal.
“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,” he said.
“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 UK’s rail tracks.”
Turner further highlighted the importance of British Steel — whose main plant is in Scunthorpe but also has sites in Teesside, Cumbria and North Yorkshire — to local and national economies.
“Sustaining over 4,000 jobs across the UK and a further 20,000 in the supply chain, 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,” he said.
Unite’s intervention comes as British Steel was raised in an urgent question in the House of Commons today (May 21) from Labour’s shadow business minister Gill Furniss, who demanded a statement over the discussions the government has had over British Steel’s future.
“It goes without saying that the UK steel industry is critical to our manufacturing base and protecting this industry should be of paramount importance to the government,” she said as she called on the government to clarify its position over the support it will provide to save British Steel.
Business minister Andrew Stevens responded by saying that, “subject to strict legal bounds, the government will leave no stone unturned in its support for the steel industry”.
But Furniss hit back by highlighting how the government has so far failed the steel industry.
“The Government could have taken steps such as greater procurement of UK steel, agreeing a Sector Deal as the industry was requesting and taking action on energy prices,” she said. “Does the Minister accept that this Government has simply failed to take the steps necessary to ensure the UK steel industry remains competitive?”
Unite’s Steve Turner also highlighted the steps the government must take to ensure the UK steel industry has a continued future.
“Going forward ministers must tackle the underlying problems facing the steel industry that has been hit by Brexit uncertainty and high energy costs which leave UK steelmakers paying twice as much for electricity as their competitors in France and 50 per cent more than in Germany,” he said.
“The government must also use its buying power to put UK steel at the heart of major UK infrastructure projects as part of a joined up industrial strategy that supports UK manufacturing.”
Turning to Greybull, owners of British Steel, Turner said, “While Brexit uncertainty has undoubtedly hit the steelmaker’s order book and high iron ore prices have increased operating costs, many steelworkers will be questioning how Greybull could find the finance to fund the acquisition of a French steel works last week while pushing British Steel to the brink of collapse.
“Greybull has a business model and history of collapsing successful businesses to line its own pockets,” he added. “If it thinks it is going to run off into the sun with tens of millions of pounds after allowing the collapse of British Steel into administration it can dream on. This is a national asset and we will not allow that to happen.”
Earlier this month, British Steel, secured a £100m loan from the government to pay its carbon emissions bills.
But Unite continues to call on the government to do more against a backdrop of government failure to robustly support the industry to date. Earlier this year, for example, a government report found that less than half of the steel the UK government bought for projects in the last year was procured from the UK.