Government: Redcar bailout cash would be lost to overseas banks

Sajid Javid, the Business Secretary.
Sajid Javid, the Business Secretary.
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Any Government cash put into the closed SSI steelworks in Redcar would risk being swallowed up by the Thai banks which backed its bankrupt owners, Business Secretary Sajid Javid has warned.

His comments came as a Durham-based mining group distanced itself from reports that it is weighing up an 11th-hour rescue of the stricken plant.

Mr Javid said the Government would take action to help the 1,700 steelworkers to find new work but would not put “a single pound” of taxpayers’ money in to keep the plant’s ovens going.

He suggested it was still possible for liquidators to find a commercial deal which would allow some of the jobs at the plant to be saved.

“We don’t own the ovens, they are owned by a company in Thailand,” Mr Javid told BBC1’s Sunday Politics.

“It’s been made clear to me that both these companies are now in bankruptcy and if we put a single pound of British taxpayers’ money into the company, there is no guarantee it would help a single British worker.

“It would help banks in Thailand and I am not going to use British taxpayers’ money to bail out Thai banks. I will use British taxpayers’ money to help British workers.

“Right now, the company is under the control of a liquidator. Who knows what might happen next in terms of a commercial agreement? Is this an attractive asset? Some jobs may be saved.

“Regrettably, some jobs will certainly be lost. My job is to make sure we are providing those workers with whatever support we can.”

The Sunday Times said Hargreaves Services, which is based in Durham, has been working on a deal to maintain the plant until steel prices recover.

However, a spokesman for Hargreaves Services told The Yorkshire Post: “There is no truth in Hargreaves looking to buy the steelworks with a view to restarting the blast furnace when market conditions improve.”

PwC, the accountancy firm advising the Official Receiver, said it was not in a position to comment.

A spokeswoman for the Department for Business Innovation and Skills told The Yorkshire Post that she was not aware of any business interest in the plant. The spokeswoman added that the department is expecting an update from the receiver on Monday.

Mr Javid said it was “of course not good when anyone is losing their job” and said workers at the Teesside plant were “facing very challenging, difficult circumstances”.

He added: “I have to focus on what the British Government can do. I can tell you, I can’t change the global price of steel. It has collapsed by half in the last 12 months.

“There are 300 million tons of excess capacity. That’s about 20 times Britain’s total production each year. I can’t change that.

“What I can do is help those workers get back into work. One reason we can do that is because we have a growing economy.

“The other reason we can do that is we can use some of the strength of the economy to help people retrain, get people back into work, help the north-east economy and help it grow.”