Brexit uncertainty blamed as British Steel on verge of collapse

Cornelia Mascio
Мая 18, 2019

The company employs 4,500 and up to as many as 20,000 people within the supply chain.

It added: "We are holding constructive discussions with our stakeholders on how to navigate them".

The spokesperson said the company was in talks about "a package of additional support to assist the company address broader Brexit-related issues, while continuing with its investment plans".

The Department of Business, Energy and Industrial Strategy said it could not comment on speculation about its role in any rescue talks.

Government ministers are drawing up plans in an effort to prevent British Steel from collapse, according to Sky News reports this could lead to thousands of job losses.

The company, which employs 4,500 staff mostly at its Scunthorpe steelworks, confirmed it had asked for more cash on top of a £120m loan negotiated with ministers last week to cover its bills for an European Union climate credits scheme.

The inital loan of £100 million enabled British Steel to avoid a hefty EU fine related to carbon emissions; it has since met again to discuss a new loan covering a slump in orders from European customers due to Brexit uncertainty, claims the BBC.

British Steel has been squeezed in recent months by ongoing Brexit uncertainty weighing on the pound and repercussions of the US-China trade war. The weakness of Sterling since the referendum has meant that the value of exports has also declined.

Union officials are now urging the Government to guarantee the future of British Steel and safeguard thousands of jobs.

Ross Murdoch, national officer of the GMB union, said: 'This Government has a track record of sitting on its hands while United Kingdom manufacturing collapses round its ears.

"Now is the time to take action".

"British Steel is a sound business providing high skilled jobs", he said.

Workers had to take pay cuts and reductions in their pensions in return, and the company recently returned to profit.

The news comes amid uncertainty over the future of Tata Steel's main European operations based in the United Kingdom after German industrial conglomerate Thyssenkrupp last week scrapped merger plans with the Indian giant.

Tata said its United Kingdom business would keep running, but admitted it was facing tough operating conditions in the UK.

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