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British Steel is wound up after lifeline talks collapse

24 May 2019

The Official Receiver said British Steel Ltd had been wound up in the High Court.

Statement from the Official ReceiverThe immediate priority following my appointment as liquidator of British Steel is to continue safe operation of the site.

British Steel operates two giant blast furnaces at Scunthorpe in northeast England specializing in steel for construction and rail lines. This article is strictly for informational purposes only. It also reassured employees that their salaries will be paid in full for May.

The move follows a breakdown in rescue talks between the government and the company's owner, Greybull.

Unions warned earlier this year that government's plans to cut global import tariffs on steel to zero would "destroy" jobs in the event of a no-deal Brexit. Greybull paid former British Steel owners Tata Steel £1 for the company in 2016.

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Employees of Saint-Saulve former Ascoval steel mill, recently bought by British steel are gathered outside their plant on May 22, 2019 in Saint-Saulve, following the announcement of the collapse of British Steel after last-ditch talks with the United Kingdom government failed to secure a financial rescue.

Michael Mulligan, insolvency partner at law firm, Shakespeare Martineau said, "The news that British Steel, the UK's second biggest steel manufacturer, is to enter formal insolvency is devastating news for its workforce and supply chain".

"While Greybull can not be allowed to walk away scot-free and must be held to account for its stewardship of Britain's second-largest steelmaker, ministers can not wash their hands of the Brexit farce and ongoing uncertainty that has placed the company in difficulty", Steve Turner, assistant general secretary of the Unite union, said Wednesday.

British Steel will continue trading in the meantime.

"The actual outlook for the demand for the consumption of our products remains high, there is absolutely no reason why with the right measures in place we can't have and continue to have a very profitable, sustainable steel industry in the UK", Warren said. It also calls into question the fate of Britain's largest steelworks in Port Talbot, Wales, owned by Tata Steel.

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Turning a profit in steel is especially hard in Britain, where steelmakers pay some of the highest green taxes and energy costs in the world and are saddled with high labour costs and business rates.

Compounding their problems is the continuing uncertainty surrounding Britain's planned departure from the European Union.

Up to 4,000 jobs in Scunthorpe (left), North Lincolnshire, 800 in Teesside and 20,000 in the United Kingdom supply chain are at risk (top-right, workers leaving the site, telling reporters they "used" to be employed).

Christopher Greenough, commercial director at Shrewsbury-based pressings specialist Salop Design, said: "Again we see that the lack of investment in United Kingdom steel has led it to become uncompetitive in a very much productivity focused sector".

In 1981 the industry employed 186,000 workers, but the total has now slumped to around 32,000, said the GMB union. British Steel had banked on using 2019 permits to cover its scheme commitments for 2018.

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Scunthorpe site employs 3,000 employees and Scunthorpe has 800 workers, other workers are in the Netherlands, France and other locations across the world.

British Steel is wound up after lifeline talks collapse