British Steel Should Be Nationalised, Urges Labour

Labour has urged the government to nationalise British Steel in order to protect jobs and the steel industry.

Labour leader Jeremy Corbyn said the collapse of British Steel would have a “devastating impact” on Scunthorpe.

British Steel is on the verge of administration as it continues to lobby for government backing, sources say.

The UK’s second-biggest steel maker had been trying to secure £75m in financial support to help it to address “Brexit-related issues”.

If the firm does not get the cash it would put 5,000 jobs at risk and endanger 20,000 in the supply chain.

The government said it would leave “no stone unturned” in its support for the steel industry.

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Speaking in the House of Commons, Business Minister Andrew Stephenson said: “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.”

UK Steel’s director general, Gareth Stace, said: “The statement from the business minister today provided a glimmer of hope for the Scunthorpe site.

The request for emergency financial support from the government is understood to have been reduced from £75m to about £30m.

In April, British Steel borrowed £100m from the government to enable it to pay an EU carbon bill, so it could avoid a steep fine.

Slump in orders

Last Thursday, British Steel said it had the backing of shareholders and lenders and that operations were continuing as usual while it sought a “permanent solution” from the government to its financial troubles.

British Steel’s troubles have been linked to a slump in orders from European customers ‎due to uncertainty over the Brexit process.

After a difficult few years, Tata sold the Scunthorpe long products division to private equity firm Greybull Capital for a nominal £1.

Greybull’s rescue came during the depths of the steel crisis in 2016 and saved more than 4,000 jobs.

It then rebranded the company as British Steel and recently returned it to profit.

On Monday, the government, trade unions and employers signed a UK Steel Charter in Parliament. The charter calls on the government and large companies to buy British to boost UK industry.

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