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Wed June 19 2019

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Structural steel boss blames EU for British Steel collapse

23 May British Steel collapsed into insolvency yesterday and while some are blaming Brexit and the economic uncertainty that has followed, one of its customers says the real fault lies with the UK’s continued membership of the European Union.

The Official Receiver is now running British Steel after Greybull Capital failed
The Official Receiver is now running British Steel after Greybull Capital failed

Simon Boyd, managing director of Dorset-based structural steel company Reid Steel, reckons that if the UK was free of EU rules and allowed to prop up ailing companies with state subsidies like the pre-Thatcherite old days, then none of this would have happened.

He is calling for immediate state intervention, and hang the legalities.

Simon Boyd said of the collapse of British Steel: “This is not something which has just suddenly happened overnight. It has been going on for some time following the purchase of the company by Greybull from Tata in 2016. I understand that since then, the team at British Steel have been in the process of restructuring to ensure the company’s long term future.

“It would be an absolute disaster for the UK if British Steel was not supported by the government,” he said. “It is another appalling example of what membership of the EU has meant for British manufacturing; whereby the government is citing EU state aid rules as a barrier to it being able to prevent the loss of this vital industry, and terrible fallout for local communities that reply upon the business.

“It is ironic for some to say that the demise of British Steel is a result of ending our membership of the EU. Over the past 40 years that we have been in EU we have seen demise of ship building, steel manufacturing and car making, and other industries with British manufacturing jobs exported to other areas of the EU and even outside the EU abetted by grants from the EU itself.

“British Steel is seen as the finest steel produced in the world and I don’t care what the EU rules say on this. The government must intervene to save British Steel. If our country ends up relying on foreign products for such an important industry it would be one of the biggest mistakes ever made by the British government.”

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He added: “The loss of British Steel could affect every UK manufacturer that uses steel down the line. We must be able to rely on British Steel to ensure our future capabilities through the wide range of steel products our country needs, particularly for defence and infrastructure as well as other important industries. Without British Steel we will be reliant on our stockholders being able to acquire steel for our particular industry while it may not be so easy for other UK customers of British Steel to find a reliable and timely alternative.

For the government, business secretary Greg Clark said: “The government has worked tirelessly with British Steel, its owner Greybull Capital, and lenders to explore all potential options to secure a solution for British Steel.

“We have shown our willingness to act, having already provided the company with a £120 million bridging facility to enable it to meet its emissions trading compliance costs.

“The government can only act within the law, which requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made.

“This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities. In the days and weeks ahead, I will be working with the Official Receiver and a British Steel support group of management, trade unions, companies in the supply chain and local communities, to pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside.”

MPU

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