We’ve been here before.
If you’re not aware, British Steel Ltd was formerly owned by Tata Steel Europe, a company based in India (if I recall correctly). This Site (and many others) reported on the government’s reluctance to do anything when Tata indicated it would pull out of its UK holdings – indeed, then-Business Secretary Sajid Javid was on a junket to Australia when the situation was at crisis point.
The UK business was eventually bought by Greybull Capital for the princely sum of £1, with a possibility of £400m investment to follow. In fact, it seems less than £20m was provided. Now Greybull wants a £75m investment package to keep British Steel trading – on top of a previously-agreed £120m loan*. In the two years following its acquisition, Greybull had charged British Steel £6m in management fees and £34m in loan interest. Links to the evidence in support of these statements may be found here.
Now Greybull and the company’s lenders are putting £30m into British Steel, and have revised their rescue package request down to £30m.
All things considered, one could almost sympathise with the Tory government for being unwilling to help out. Still, perhaps Mr Javid should have exerted himself towards finding a better buyer at the appropriate time. You will certainly, I hope, understand why I tweeted the following:
British Steel on the way out? I can see the .@Conservatives reaction already: "There is no magic money tree! If it collapses, we'll get our steel cheap from China and build things with that. THEY won't collapse for a few years yet!" #PoliticsLive
— Mike Sivier (@MidWalesMike) May 21, 2019
I was referring to the Kolkata flyover collapse of 2016, when it was believed that substandard steel (sourced from China?) had buckled after concrete was poured onto it. The disaster killed 50 people and injured a further 80.
Unite the Union has called for British Steel to be nationalised if a rescue package cannot be finalised.
And the Labour Party has said it would nationalise the firm, to save the industry – if it were in government.
But the Conservatives – the party of government – have been dragging their feet.
They won’t nationalise.
But they haven’t produced another solution.
Until they do, the possibility of an influx of cheap and nasty Chinese steel endangering our construction projects is rising.
*This was to cover an EU bill for carbon dioxide emissions. At a time when environmental harm is high on the political agenda, this is extremely damaging.
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