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British Steel future hanging in the balance | British Steel future hanging in the balance |
(about 3 hours later) | |
The future of 5,000 British Steel workers remains uncertain as its owners continue to lobby for government backing. | The future of 5,000 British Steel workers remains uncertain as its owners continue to lobby for government backing. |
The UK's second-biggest steel maker had been trying to secure £75m in financial support to help it to address "Brexit-related issues". | 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 money it would put 5,000 jobs at risk and endanger 20,000 in the supply chain. | If the firm does not get the money it would put 5,000 jobs at risk and endanger 20,000 in the supply chain. |
Labour has urged the government to nationalise British Steel. | Labour has urged the government to nationalise British Steel. |
But Treasury sources say the only way nationalisation would be contemplated is if there were credible buyers waiting in the wings. | |
And - says BBC business editor Simon Jack - "there are no clear candidates to buy a weak company in a challenged sector". | |
The company's request for emergency support from the government is understood to have been reduced from £75m to about £30m. | The company's request for emergency 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. | 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. |
The government said it would leave "no stone unturned" in its support for the steel industry. British Steel's main plant is at Scunthorpe, but it also has a site in Teesside. | |
According to think-tank IPPR, allowing British Steel to collapse would lead to £2.8bn in lost wages over a 10-year period and cost the government £1.1bn in lost revenue and extra benefit payments. | According to think-tank IPPR, allowing British Steel to collapse would lead to £2.8bn in lost wages over a 10-year period and cost the government £1.1bn in lost revenue and extra benefit payments. |
Such a decision would also reduce household spending by £1.2bn, which would have an impact on the economy. | Such a decision would also reduce household spending by £1.2bn, which would have an impact on the economy. |
IPPR's chief economist Carys Roberts said: "We need a UK-wide industrial strategy that supports strong supply chains, including the foundation industries such as steelmaking that manufacture core materials for use in other industries." | IPPR's chief economist Carys Roberts said: "We need a UK-wide industrial strategy that supports strong supply chains, including the foundation industries such as steelmaking that manufacture core materials for use in other industries." |
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. | 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. |
It is understood that along with administration, nationalisation or a management buyout are being discussed as fall-back options for the company. | It is understood that along with administration, nationalisation or a management buyout are being discussed as fall-back options for the company. |
British Steel's troubles have been linked to a slump in orders from European customers due to uncertainty over the Brexit process. | British Steel's troubles have been linked to a slump in orders from European customers due to uncertainty over the Brexit process. |
The firm has also been struggling with the weakness of the pound since the EU referendum in June 2016 and the escalating trade US-China trade war. | The firm has also been struggling with the weakness of the pound since the EU referendum in June 2016 and the escalating trade US-China trade war. |
One of its biggest customers is Network Rail, 95% of whose rails are supplied by British Steel's Scunthorpe plant. | One of its biggest customers is Network Rail, 95% of whose rails are supplied by British Steel's Scunthorpe plant. |
In 2007, India's Tata conglomerate entered the UK steel market when it bought the Anglo-Dutch group, Corus. In 2010, the business was renamed Tata Steel Europe. | In 2007, India's Tata conglomerate entered the UK steel market when it bought the Anglo-Dutch group, Corus. In 2010, the business was renamed Tata Steel Europe. |
After a difficult few years, Tata sold the Scunthorpe long products division to private equity firm Greybull Capital for a nominal £1. | 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. | 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. | It then rebranded the company as British Steel and recently returned it to profit. |