Government could join forces with private companies in bid to rescue British Steel

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Government could join forces with private companies in bid to rescue British Steel



BRITISH Steel could be saved by private companies joining forces with the Government, it emerged last night.
Business Secretary Greg Clark has drawn up a rescue plan in which public money would be invested.
Alamy The British government could join forces with private firms in a bid to save British Steel
It is being checked by lawyers to see if it would fit in with EU state aid rules which ban a direct loan, said the Financial Times.
The move comes as the UK’s second biggest steel maker collapsed into insolvency yesterday.
However, the investment firm which bought the firm for just £1 has raked in millions.
Greybull Capital took up to £9million in management fees and earned an estimated £50million in loan interest.
The self-styled turnaround specialist’s previous failures include Monarch airlines, which went bust in 2017, and convenience store group My Local, which went under in 2016.
Unless a buyer is found, British Steel’s 5,000 workers — most of them based in Scunthorpe, Lincs — and 20,000 jobs in its supply chain could go.
Mr Clark is likely to face questions over why he approved a £120million loan facility weeks ago to enable the firm to meet an EU environmental bill.
Sources said the money would likely be refunded.
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Greybull bought British Steel from India’s Tata Steel for the nominal fee in 2016.
It failed in the face of lower steel prices and mounting bills — as well as uncertainty over tariffs post Brexit.
Greybull said: “The turnaround was always going to be a challenge.”
The Sun says
PUBLIC money should not be spent ­shoring up British Steel.
Its collapse is devastating for thousands of workers — and the first move must be to try to secure a buyer to make the business viable. That’s a tall order.
The second is to probe why private firm Greybull, which bought it for £1,  presides over so many corporate disasters.
But under EU rules the Government cannot pour state aid directly into a failing business. Nor should it.
It should spend millions instead retraining those workers and funding tax breaks to lure new firms to Scunthorpe.
Admittedly, that would require a coherent industrial strategy Britain lacks.
But the Tories must not abandon this community whose livelihoods are at risk.

PA:Press Association The jobs of British Steel’s workers are at risk – especially those based in Scunthorpe
Greg Clark ​reads a statement to the Commons as British Steel collapses ‘over c’ with 25,000 jobs at risk

 

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