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BRITISH STEEL must be nationalised to avoid an “economic catastrophe” if a deal to save the firm from collapsing into administration cannot be reached, unions and Labour said today.
Nearly 5,000 people are employed by the firm in Scunthorpe and around 20,000 people are employed throughout its supply chain.
There are fears that British Steel could go into administration within 48 hours after the company urged the government today to support it with £30 million — reduced from an original request for £75m.
Administrators could be appointed as early as tomorrow if a deal has not been reached.
Labour leader Jeremy Corbyn said the steel industry had a vital role to play in “ushering in a Green Industrial Revolution, securing British manufacturing for a sustainable, green future. It needs support, not a death warrant.
“If an agreement cannot be struck with British Steel, the government must act to take a public stake in the company.”
Just last month, British Steel borrowed £100m from the government to pay an EU carbon emissions bill, so it could avoid a steep fine.
Unite is in continuing talks with the government and British Steel owners Greybull Capital, which bought the company for £1 in 2016.
The private equity firm is tarnished with the collapse of its company Monarch Airlines in 2017 and electrical retailer Comet which collapsed in 2012. The Financial Times has raised questions over Greybull’s relatively small investment in British Steel, which it has charged millions in management fees. It also charged British Steel £17m a year in interest on loans.
Unite assistant general secretary Steve Turner said: “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.
“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 the UK’s rail tracks.
“It would be an economic catastrophe if the worst were to happen and the government was to allow British Steel to collapse. It is a national asset that cannot simply be left to the market.”
Alasdair McDiarmid, operations director at Community, said Greybull and the government should continue to focus on finding a solution that maintains jobs.
He added: “The public should know that if British Steel were liquidated, on top of the devastation of yet more steel communities, the clean-up costs for their industrial sites could end up costing taxpayers hundreds of millions of pounds.”
GMB national officer Ross Murdoch said: “[On Monday] the government, alongside trade unions and employers, signed a UK Steel Charter at Westminster.
“They must now put their money where their mouth is.”
Labour’s shadow steel minister Gill Furniss urged the government to intervene.
In the Commons today, business minister Andrew Stephenson ruled out nationalisation — despite telling MPs that the government will “leave no stone unturned” in supporting the steel industry.
When asked by Ms Furniss if renationalisation would be on the cards, he said that EU and domestic law restricted the ability for the government to do so.
But Communist Party general secretary Robert Griffiths said that the government would be able to renationalise British Steel.
He added: “There are no EU rules that prevent the immediate renationalisation of British Steel, although they would make it very difficult to provide the nationalised company with different types of state assistance.
“Instead of hiding behind EU rules, the government should take all necessary steps to rescue a vital and strategic enterprise and then carry out the necessary policies to invest in the industry regardless of EU restrictions.”
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