Workers' Weekly On-Line
Volume 49 Number 11, June 4, 2019 ARCHIVE HOME JBCENTRE SUBSCRIBE

Workers' Forum

Collapse of British Steel

Workers in the steel industry are once again facing further wrecking of steel production. The latest placing of the British Steel in administration threatens the future of the Steel plants and the jobs of 5,000 workers producing construction steel, rails, wire rod, and other steel products at Scunthorpe, Rotherham, Teesside, Skinningrove, Alblasserdam (Netherlands), Hayange (France) and elsewhere. A further 20,000 jobs in the related supply chains are also reported to be under threat.

Reports[1] said that the High Court ordered the compulsory liquidation of the company, although staff will remain employed for now as the liquidator oversees the operation. Greybull Capital, which paid former owners Tata Steel a nominal one pound for the company three years ago renamed it British Steel. The same report also said that Greybull Capital claimed it had tried to keep British Steel alive but the challenges of Britain's looming exit from the European Union proved insurmountable. British Steel had asked the government for a 75 million pound loan, later reducing its demand to 30 million pounds after Greybull agreed to put up more money, according to a source close to the negotiations. It had already secured a government loan of around 120 million pounds this month for its liabilities under the EU's Emissions Trading System rules which taxes carbon emissions.

The collapse of British Steel comes after Germany's Thyssenkrupp and India's Tata Steel ditched a plan this month to merge their European steel assets to create the EU's second largest steel-maker after ArcelorMittal. Reports claim that this failed merger left the wider EU steel sector fragmented and vulnerable to economic downturns. It also called into question the fate of Britain's largest steelworks in Port Talbot, Wales, owned by Tata Steel.

In his immediate reaction, the Business Minister Greg Clark said British Steel was open to new buyers, while the opposition Labour Party called on the government to bring it back into public ownership. This was dismissed by the Prime Minister Theresa May who said it would be "unlawful" to provide a guarantee or loan on the terms requested by the company. She said there were no job losses "at this time" with workers still being employed and paid.

The present crisis of Britain's steel industry today is the culmination of years of closing of plants and selling off the remaining assets of what was previously the state owned British Steel Corporation which was a state owned global monopoly made up of companies with some 200 factories. Since the 1980s, successive governments have continued to wash their hands of responsibility for the steel industry, have allowed the profiteering of the various private monopoly owners, sanctioning the closures and asset stripping, and leaving the steel industry to the profiteering of finance capital, consultancy firms, energy monopolies and so on. They have refused to make the investment required to maintain a modern steel industry on which the social economy relies.

[1] Reuters:
https://uk.reuters.com/article/us-britain-steel/british-steel-collapses-after-failing-to-secure-extra-funding-idUKKCN1SS0Q1


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