Britain’s second-largest steelmaker has been forced into liquidation as attempts continue to secure £75m (€85m) to help mitigate Brexit-related issues.
ADVERTISEMENTBritain’s second-largest steelmaker has been forced into liquidation as attempts continue to secure £75m (€85m) to help mitigate Brexit-related issues.
The collapse of British Steel puts at risk 5,000 jobs, most of them in Scunthorpe, a town in north-east England that is also heavily reliant on the firm’s supply chain.
The government, which has been trying to secure a bailout for the firm, said it would be unlawful to provide the loan requested by the firm's private equity owners.
Ministers are working "tirelessly" to try and find a solution that is "within the law," Prime Minister Theresa May told the House of Commons.
The main opposition party, Labour, called on the company to be nationalised and brought under the control of the government.
The collapse came less than 24 hours before polls open in Britain for the 2019 European Parliament elections.
'Nightmarish' Brexit complexity
The Unite union called for the government to nationalise the business, while the Community union urged British Steel owners Greybull and the government continue to focus on finding a solution to keep it trading.
"Pragmatic decisions in the coming days could avert another industrial disaster," said Alasdair McDiarmid, operations director at the Community union. "In that context, we do not want to see British Steel becoming a political football. The stakes in this game are too high."
The crisis underscores the anxieties of British manufacturers, who have been demanding clarity around Brexit.
Longstanding issues such as uncompetitive electricity prices also continue to deter investment in UK manufacturing, said Gareth Stace, the director-general of UK Steel, the trade association of the industry.
"Many of our challenges are far from unique to steel — the whole manufacturing sector is crying out for certainty over Brexit," Stace said. "Unable to decipher the trading relationship the U.K. will have with its biggest market in just five months' time, planning and decision making has become nightmarish in its complexity."
David Chapman, the Official Receiver, said workers at British Steel would continue to be paid and employed.
"The immediate priority following my appointment as liquidator of British Steel is to continue safe operation," he said in a statement, "I appreciate that this a difficult time for the company’s employees and I want to thank them for their ongoing cooperation."
