Thousands of jobs at risk as British Steel to go into insolvency
Video report by ITV News Reporter Ben Chapman
Thousands of jobs are at risk as British Steel is set to go into insolvency.
The move threatens to create more uncertainty for workers at the company's plants in the UK, in particular Scunthorpe, where more than 4,000 people are employed.
Greybull Capital, who own British Steel, have been seeking financial support from the Government, said it faced a number of Brexit-related issues.
Workers been told “they are looking for a buyer" and it's "business as usual” in the meeting they’ve just had on Wednesday.
Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, insisted this "is not the end" for the company.
He said: "Well we completely understand that this is a very worrying time, it is a big blow for the people who work in the plants for the suppliers and everyone in the communities.
"But it's not the end. What has happened is that the owners of the business have lost their right to run the business, it now goes to the official receiver and his task, which I will fully support is to find a new owner so that these facilities, these jobs, and this excellent steel-making can continue."
A statement by 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 co-operation.
"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.
"The court also appointed Special Managers to assist me with my work and they are engaging with staff and their representatives to keep them informed, as well as contacting British Steel's customers."
Workers who arrived this morning told ITV News they had been asked to leave and return home.
One said: ''I'm a contract cleaner on zero hours and they've got rid of me for the rest of the week. I've been contracted until the end of the week but one of my bosses has sent me home now.''
Another said: ''It's a company that's been trying so hard to actually make a go of it, so it's heartbreaking really.''
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The general secretary of the Community trade union, Roy Rickhuss, said this must be used as an "opportunity to look for an alternative future".
He said: "It is vital now that cool heads prevail and all parties focus on saving the jobs.
"In these very difficult circumstances we know the workforce will continue to fight for the business as they have done for so many years.
"We would urge the management, contractors, suppliers and customers to support them in that fight for the future."
Theresa May added that British Steel would "continue to operate" and there would be no job losses "at this time".
Mrs May said it would have been unlawful for the Government to bail out British Steel.
At Prime Minister's Questions, 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."
Unite assistant general secretary Steve Turner said it would "fight to secure the future of the company".
Mr Turner also called on the Government to bring British Steel under public ownership until a feasiable buyer could be found.
He said: "While Greybull cannot be allowed to walk away scot-free and must be held to account for its stewardship of Britain's second largest steelmaker, ministers cannot wash their hands of the Brexit farce and ongoing uncertainty that has placed the company in difficulty, nor allow a business of such strategic importance to UK plc to disappear like the steelworks of SSI several years ago.
"To do so would be a betrayal of a loyal workforce that has made great sacrifices to make British Steel a success and send economic shockwaves throughout the steel industry, UK manufacturing and the households of 20,000 workers in the supply chain who rely on the steelmaker for their livelihoods."
Shadow business secretary Rebecca Long Bailey called Wednesday's announcement "absolutely devastating news for the thousands of workers, their families and the communities in Scunthorpe and Teesside and those throughout the supply chain.
"The Tories' legacy will once again be industrial decline whilst they endlessly squabble over the European Union."
Hannah Essex, of the British Chambers of Commerce, added: "Many Chamber businesses will be concerned about the potential impact of British Steel entering insolvency, particularly those in their supply chain who will be directly and deeply affected.
"The company's operations are at the centre of many local communities, generating thousands of direct and indirect jobs.
"Failure to find a buyer would be devastating to many areas which rely so strongly on this industry. Small and medium-sized suppliers and contractors must be at the forefront of the Official Receiver's mind throughout this process."
A spokesman for Greybull Capital said: "Having rescued the business from closure over three years ago, we have worked hard to bring this important company back on its feet.
"Since 2016 we have arranged a financing package of more than £500 million, appointed a new and talented management team, helped the business open up new markets and reduce costs whilst addressing long-term under-investment.
"The turnaround of British Steel was always going to be a challenge, and yet the business overcame many difficulties, and until recently looked set for renewed prosperity.
"The workforce, the trade unions and the management team have worked closely together in their determination to strengthen the business; however, the additional blows dealt by Brexit-related issues have proven insurmountable.
"We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry. We are now focused on assisting all involved as best we can through this process."