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‘No stone unturned’ to support British Steel amid collapse fears, says government | Business News

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The government has insisted it will leave “no stone unturned” to support the UK steel industry amid the crisis engulfing British Steel.

The country’s second-largest steel producer is on the brink of collapse after growing signs that an emergency government loan will fail to materialise, putting close to 25,000 jobs at risk.

Answering an urgent question in the Commons, business minister Andrew Stephenson said speculation over the future of British Steel “will no doubt be creating uncertainty for those employed by the company”.

Andrew Stephenson said he could offer reassurances about support for the steel industry
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Andrew Stephenson said he could offer reassurances about support for the steel industry

He told MPs he could offer reassurances that the “government will leave no stone unturned in its support for the steel industry”.

“We recognise that global economic considerations continue to be challenging for the industry, which is why the government is working with the sector, with unions and with the devolved administrations to support a sustainable, productive and modern UK steel sector,” Mr Stephenson said.

Labour’s shadow steel minister Gill Furniss said the industry was “critical to our manufacturing base” and protecting it “should be of paramount importance to the government”.

“Does the minister accept that this government has simply failed to take the steps necessary to ensure UK steel remains competitive?” she said.

Sky News exclusively reported that British Steel, its lenders and Whitehall are preparing for an insolvency to take place, with administrators expected to be formally appointed on Wednesday unless a deal is struck by Tuesday afternoon.

scunthorpe
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Close to 25,000 jobs are at risk

If last-minute talks fail to secure a solvent deal, British Steel’s collapse could result in more than 4,000 redundancies at its giant Scunthorpe steelworks, job cuts at its other sites, and as many as 20,000 more jobs in its supply chain also jeopardised by the crisis.

Unite said it would be an “economic catastrophe” if the company went out of business and has called for the government to nationalise the firm if a deal to save it cannot be reached.

Insiders told Sky News that a request to the government for emergency financial support had been reduced from £75m to around £30m, with British Steel’s shareholder – Greybull Capital – and lenders agreeing to inject new money into the company.

Lenders are also understood to have released their security in order for a new government loan to be made on secured terms.



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Why is the UK steel industry struggling?

If confirmed, the bankruptcy of such a major employer in Lincolnshire, with a steel plant dating back more than 150 years, would be a shattering blow both to the local economy and the national industry.

It would ignite a fresh row about the extent to which the absence of a Brexit deal is constraining the ability of British exporters to trade with European customers, and will also raise questions about recent financial arrangements entered into between the government and British Steel.

The crisis comes less than two weeks after a joint venture between Tata Steel and Germany’s Thyssenkrupp was abandoned amid opposition from the EU, raising renewed doubts about the future ownership of Tata’s steelworks at Port Talbot.

Collectively, the uncertain fate of the UK’s two largest steel plants heralds further anxiety for steelworkers, thousands of whom have already been forced to agree pay and pension cuts to keep their employers afloat.

The Scunthorpe site is a pivotal part of the UK’s steel production capability, and its purchase from Tata Steel ‎by the private investment firm Greybull almost exactly three years ago was seen as a landmark moment in signalling investor confidence in the industry’s prospects.

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