Samuel Glentworth, 19, is pictured arriving for work at the plant this morning, with some fearing they could have no job tomorrow
British Steel is to go into official receivership, sources said, after failing to secure government funding for its future despite ministers pledging to do all they can for the firm.
Workers were yesterday demanding answers as potential collapse threatened 25,000 jobs.
Administrators from EY are reportedly in court this morning to finalise an insolvency process.
A £30million loan from the government was not agreed, it was reported.
British Steel cited ‘Brexit-related’ issues for its troubles, but it also faces competition from cheaper Chinese steel.
Trade union Unite yesterday said it would be an ‘economic catastrophe’ if it went out of business as the government faced calls to nationalise the company.
But going into official receivership means that a bankruptcy court will assign an independent manager of the company. If a ‘winding-up’ order follows, the manager will oversee provisional liquidation.
Business minister Andrew Stephenson told the Commons the Government would do everything it could, within its legal parameters, to support the industry.
‘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,’ he said.
Steel workers arrived for work at the Scunthorpe headquarters this morning, when the company had until the end of the day to come up with a rescue plan
Tim Roache, the GMB union’s General Secretary, said: ‘This is devastating news for the thousands of workers in Scunthorpe and across the UK.
‘Consecutive UK governments have failed to protect our proud steel heritage, and now this Prime Minister is overseeing its demise.
‘Ministers should have been ready to make use of all the options – including nationalisation – in order to save British Steel but they either don’t care or wouldn’t take off their ideological blinkers to save hard working people and communities.
‘GMB demands urgent reassurances on what the future holds for the thousands of British steel workers and their families.’
Pictured: The plant in Scunthorpe faces grave uncertainty as the government promised to ‘leave no stone unturned’ trying to save it
Almost 5,000 workers are employed by the company, mainly in Scunthorpe, with another 20,000 employed by firms in the supply chain.
More than 150,000 UK steel jobs have been lost since the 1980s, according to a new study by the GMB union.
In 1981 the industry employed 186,000 workers but the total has now slumped to around 32,000, it said.
The GMB said Yorkshire and the Humber has suffered the most job losses – 40,000 -followed by the West Midlands with 25,800.
Hundreds of glum-looking British Steel workers were seen leaving the company’s main plant in North Lincolnshire yesterday.
Employees traipsed through the front gate of the company’s headquarters, with a number of workers describing the ‘depressing’ feeling inside the plant. Others said they had been ‘left in the dark’ about their futures.
Contractor Callum Wright, a 30-year-old father of three, said: ‘I’m worried for my job. There are a lot of rumours going around about about being made redundant, I think we could be gone by tomorrow.
‘It’s depressing coming into work at the moment, the atmosphere is rubbish. We’re not really being informed about what’s going on.
‘I think everyone here knows the answer now though, people are preparing what to do next.
‘It’s going to be terrible for the town, everyone in Scunthorpe has a family member who works here so the effect will be huge.
‘I have children so I worry about providing for them, I haven’t got a clue what I’d go and do next. The uncertainty is really frustrating.’
Samuel Glentworth, a 19-year-old warehouse worker who only started at the plant five weeks ago, said: ‘I’ve only just got this job and it would be a real struggle to find another one.
‘I can’t believe we could be out of work just like that, within a few days. The atmosphere on site has been bad because people don’t know what’s happening.’
If British Steel’s government talks fail it could mean 4,000 redundancies at the firm’s large plant in Scunthorpe (pictured) and 20,000 others across the country
Many British Steel employees expressed particular concern that their futures are ‘up in the air’ and that company officials are unable to keep ‘them in the loop’.
One man, who gave his name only as Tony, leaned out his car window and said: ‘The lack of information is the most frustrating thing.
‘Nobody is telling us anything, we have to hear about what’s happening on the news. At least if we had an idea we could start planning for the future, but we don’t.’
Despite the generally depressing feel among most workers making their home, some maintained hope of a happy resolution to the company’s troubles.
One man, who wanted to remain anonymous, said: ‘We still haven’t heard anything official yet so we just keep coming into work and doing our jobs until we’re told not to, that’s all we can do.
‘We have to keep hoping and keep out fingers crossed for good news and that there’s a future for British Steel. It’s out of our hands unfortunately.’
Scunthorpe Unite trade union official, Martin Foster, spoke outside the British Steel front gates this afternoon (21/5) to demand urgent answers from the government.
He said: ‘We need decisions right now. We have had problems before but this has a scary feel of finality to it.
‘This plant closing would mean thousands of people looking for jobs. The workers here give absolutely everything, they do everything that’s asked of them and they deserve better.
‘Their futures are in the hands of people who really have no understanding of their lives or what effect closing the plant would have on them.’
Unite assistant general secretary Steve Turner said: ‘While Unite is in continuing dialogue with British Steel and the UK Government, 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.
Unite’s Tony Brady said the union will carry on fighting for the future of British Steel
‘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 Government was to allow British Steel to collapse. It is a national asset supporting UK plc that cannot simply be left to the market.’
Alasdair McDiarmid, operations director at the Community union, said it is vital for cool heads to prevail and British Steel owners Greybull and the Government continue to focus on finding a solution that maintains employment and keeps the business trading.
‘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 the industrial sites could end up costing taxpayers hundreds of millions of pounds.
‘Pragmatic decisions in the coming days could avert another industrial disaster. In that context we do not want to see British Steel becoming a political football, the stakes in this game are too high.’
Manuel Cortes, leader of the TSSA rail union, said: ‘British Steel has supplied Network Rail with more than half a million tonnes of high-quality rail over the past five years’ – 95% of Network Rail’s requirement.
‘In September British Steel signed a two-year contract extension to supply Network Rail with a further 4,000km of rail.’
Gill Furniss, shadow minister for steel, said: ‘The UK steel industry is critical to our manufacturing base and is strategically important to UK industry. The Government must intervene.
‘Administration would be devastating for the thousands of workers and their families who rely on this key industry in a part of the country which has not had enough support and investment from government over decades.’
Ross Murdoch, national officer of the GMB union, said: ‘Given this latest speculation, these are understandably extremely difficult times for our members.
‘Yesterday the Government, alongside trade unions and employers, signed a UK Steel Charter at Westminster. They must now put their money where their mouth is.’
British Steel had asked for a £75million package of support to tackle ‘Brexit-related issues’ and has been holding talks with the Government.
Sources have told Sky the potential loan has been reduced to £30million, with today’s deadline fast approaching.
Shareholder Greybull had previously offered assurances on the company’s future, promising it did have enough to continue operating.
But unions were less convinced, with Unite national officer Tony Brady saying last week: ‘Unite has been in dialogue with the company to ensure wages continue to be paid and orders fulfilled, in addition to talking to Government ministers to ensure the future of British Steel is secured.
British Steel, its lenders and Whitehall officials have until Tuesday afternoon to agree a deal, at which point it could go into administration. File image used
‘These are deeply unsettling times for our members and their families. Unite will continue to fight for the future of British Steel to ensure it continues to be a source of decent, well-paid jobs which sustains communities across the UK.
‘We urge the Government and Greybull to agree a package which guarantees the long-term future of British Steel as quickly as possible to safeguard jobs and confidence in the company.’
British Steel, Greybull and the Department for Business, Energy and Industrial Strategy are yet to comment.
In April, British Steel secured a £100million loan from the government to pay its EU carbon bill and avoid a hefty fine.
The bloc’s trading rules mean industrial polluters can pay for their previous year’s emissions using carbon credits. Companies can also trade their credits to raise cash.
The EU suspended UK businesses’ access to free carbon permits – alowing the emission of 1,000kg of CO2 – until the ratification of a Brexit deal.
The UK voted to leave the bloc in June 2016. Parliament voted to trigger legislation that set our departure date at March 29 this year. But Britain is now set to cease being a member on October 31 this year.
British Steel’s forerunner, the nationalised company of the same name, was privatised in 1988 by Margaret Thatcher.
The company merged with Koninklijke Hoogovens and become Corus Group, which Tata bought in 2007. The Indian firm renamed it Tata Steel Europe in 2010. It sold off the ‘long products division’ to Greybull Capital three years ago.
After saving more than 4,000 jobs, they rebranded it as British Steel, with sites in Scunthorpe and Teesside.