I want to update the House on the latest developments regarding British Steel Limited.
On 22 May British Steel entered insolvency, and control of the company passed to the court appointed Official Receiver. The Government provided an indemnity to the Official Receiver which enabled British Steel to continue to trade, customers to receive orders, key suppliers to maintain their services, and staff to continue to be employed.
Since then, the Official Receiver has been running an independent sales process with a view to finding a secure future for British Steel. The Government has worked tirelessly with the Official Receiver and all interested parties to leave no stone unturned to find a suitable buyer for the company and to keep steel coming off the production line.
Following several weeks of discussions with a number of interested parties, on the 16 August the Official Receiver confirmed it had accepted a bid from Ataer Holding AS for the whole business. This is an important and positive step towards protecting thousands of direct jobs and many more in the supply chain, and to securing steelmaking operations at British Steel’s sites in Scunthorpe, Skinningrove and on Teesside.
Work is now continuing to seek to finalise the details of a sale and the Government will continue to work closely with the Official Receiver and the preferred bidder during this process.
This has been a worrying time for British Steel’s dedicated workers, their families, those in the supply chain and their wider communities. Throughout this process their welfare has been paramount. This positive step, and the ability to secure a new owner, is due in large part to their commitment to securing the future of the company. This commitment and drive was abundantly clear in my visit to the site in Scunthorpe with the Industry Minister, during my first week as Business Secretary.
The Government’s determination, coupled with the support of members from across the House of Commons, ensured every possible step was taken to secure a buyer and throughout the process our focus remained firmly on securing a buyer who could take the whole business forward.
While much remains to be achieved, Ataer has a long-term, strategic vision for growing British Steel with their parent company OYAK publicly stating that if this sale goes through their priority will be to increase production capacity and investment. Ataer is already in the steel industry, as the largest shareholder in Erdermir, Turkey’s largest flat steel producer. In the first three months of this year alone, Erdermir posted profits of $186m and 2.4m tonnes of liquid steel production.
While the completion of the sale is by no means certain, the Government will continue to fully engage with all relevant parties as the sales process continues.
I would like to pay special tribute to the excellent work and dedication of the British Steel Support Group as well as that of my predecessor, the Rt. Hon member for Tunbridge Wells. The Support Group includes members from across the House of Commons, local political leaders, local enterprise partnerships, trade union representatives, British Steel management, in addition to Make UK and the FSB. Working constructively with Government, this body has been instrumental in helping to move to the next stage of this process.
While there are challenges in the global steel market, the opportunities for growth are substantial – including an additional £3.8bn per year of potential domestic sales for UK steel producers from 2030. Britain and the rest of the world will continue to need high-quality steel, and British steel is among the best in the world. The Government has already taken wide-ranging action to support the industry including compensation for energy costs and introducing specific public procurement guidelines for steel.
Each one of British Steel’s sites has a proud record of steelmaking excellence which we are determined to see continue. I want to reassure colleagues that the Government remains firmly committed to securing a bright future for British Steel. In the days and weeks ahead we will continue to work closely with all parties to leave no stone unturned to finalise the sale and will take every possible step to ensure a long-term future for these valuable operations.
This statement has also been made in the House of Lords