Tim Roache
general secretary, GMB
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 o 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.
Michael Mulligan
insolvency partner, Shakespeare Martineau
The news that British Steel is to enter formal
insolvency is devastating news for its workforce
and the supply chain. The fi rst heavyweight
casualty of Brexit, the business has been
hampered by EU carbon bills, falling
order numbers – exacerbated by the
US-China trade war – and a shifting
manufacturing landscape.
The £30 million bail-out it
required from the government was
relatively small change compared to the
large amounts the Treasury has had to pay
out to support other struggling businesses in
recent years. Unfortunately, it seems as though British Steel
was not considered to be worth saving.
As with all large collapses, it is the employees and supply
chain who will inevitably su er. Customers and suppliers of
British Steel must act quickly to mitigate against a Carillionstyle
domino-e ect. Making the best out of an insolvency
situation requires swift and decisive action. They should take
advice early.
It is essential that directors of businesses in the supply
chain are realistic and avoid burying their heads in the
sand. Suppliers should open dialogue with the insolvency
o ceholders at the earliest opportunity and seek advice
on individual directors’ duties since the collapse of a large
customer like British Steel could leave them potentially
trading insolvently.
If goods are owned, retention of title clauses can prove a
powerful tool for recovering them quickly and minimising the
overall impact on their margins.
JUNE 2019 BRITISH STEEL
Gareth Stace,
director general, UK Steel
This news is a significant blow for
the company, its employees, and
the communities across the UK that
it supports. British Steel does not
sit insolation but is a critical part of
the UK’s wider steel sector, a strategic
British industry underpinning a myriad of
supply chains.
Receivership does at least leave a number of options
on the table, including providing a time to secure a new
buyer. All focus now needs to be on securing the future
of steel production at the site and avoiding the mistakes
seen at Teeside in 2015. We have every confidence that the
government is investigating every available opportunity and
pulling out all the stops to ensure a viable solution is found.
We at UK Steel stand ready to work with the government to
help it deliver this.
Despite the challenges the sector faces at the current time,
the outlook for steel demand and consumption in the UK, and
across the globe, remains positive. Economies around the
world continue to require increasing volumes of steel and UK
steel producers will continue to supply high quality products
to meet this demand. Indeed the government’s own study
recently detailed an additional £4 billion a year opportunity
for the sector in the UK alone and we know what must be
done to seize this.
Of course, many of our challenges are far from unique
to steel – the whole manufacturing sector is crying out
for certainty over Brexit. Unable to decipher the trading
relationship the UK will have with its biggest market in
just five months’ time, planning and decision making
has become nightmarish in its complexity. I must again
state in no uncertain terms the critical need for the UK to
reach agreement with Europe as soon as possible, avoiding
a no-deal Brexit at all costs. Those that claim otherwise
are breathtakingly callous in their attitude towards the
manufacturing sector in this country.
Beyond the cloud of Brexit, long-standing domestic issues
such as uncompetitive electricity prices and business rates
also continue to chisel away at investment. Action on these
issues, as part of the government’s Industrial Strategy, must
now also be a top priority for those in power.
Above all, we must remember that the steel industry is
an enduring and resilient one: it has provided the bedrock
for the UK’s globally-renowned industrial landscape for
over 150 years, since it pioneered mass steel production
techniques, remaining a constant whilst other industries
have come and gone.
In major economies around the world, from China, to
Japan, to the US, strong, innovative steel industries sit
comfortably alongside global tech firms. There is absolutely
no reason why the UK need be any different.
www.manufacturingmanagement.co.uk 23
A.P.S. (UK) / Alamy Stock Photo
/www.manufacturingmanagement.co.uk