Shock as British Steel in Scunthorpe goes into official receivership

The move puts the jobs of 4,000 workers at Scunthorpe and 20,000 more in the supply chain at risk.

Hundreds more are employed at sites including Teesside Beam Mill, Lackenby, Special Profiles at Skinningrove and a design consultancy in York.

British Steel's owners Greybull Capital had been seeking a £30m bailout from the Government, saying it faced a number of Brexit-related issues.

Scunthorpe businessman Des Comerford said: "It's the life and soul of our town centre - we lose this turn out the lights."

Mr Comerford, chairman of Keep Scunthorpe Alive, said he was devastated: "It's really bad news, not just for Scunthorpe, but the whole region, the many people working on the plant and thier families.

"My heart goes out to them as it does to all businesses in the town and the region. Everyone is going to suffer."

North Lincolnshire Council leader Rob Waltham said it was "incredibly sad news" and he would oversee a British Steel taskforce to try and provide as "much stability as we can in these uncertain times."

Continuing uncertainty over the future post-Brexit , and the risk of tariffs being imposed in the event of a no-deal, has seen a slump in orders.

Coun Waltham warned that certainty was needed round trading post-Brexit "otherwise we will be permanently in this situation."

Scunthorpe MP Nic Dakin said it was "in the public interest and in the interests of taxpayers" to ensure the steelmaker survives.

He said analysis by thinktank IPPR that British Steel's collapse could lead to £2.8 billion in lost wages over a decade and a cost on the Government of £1.1 billion "is clear evidence of why the Government must do all they can do to protect the steel works".

He said the cost of cleaning up the sprawling 2,200-acre site would cost "many £100 millions."

A statement by the Official Receiver said staff had been paid and would continue to be employed.

It said: "The company in liquidation is continuing to trade and supply its customers while I consider options for the business.

"The court also appointed special managers to assist me with my work and they are engaging with staff and their representatives to keep them informed, as well as contacting British Steel's customers."

Business Secretary Greg Clark said he had been advised that it would be "unlawful" to provide a guarantee or loan on the terms of any proposals that had been made.

He said: "We have shown our willingness to act, having already provided the company with a £120 million bridging facility to enable it to meet its emissions trading compliance costs.

"The Government can only act within the law, which requires any financial support to a steel company to be on a commercial basis.

"This will be a deeply worrying time for the thousands of dedicated British Steel workers, those in the supply chain and local communities.

"In the days and weeks ahead, I will be working with the Official Receiver and a British Steel support group of management, trade unions, companies in the supply chain and local communities, to pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside."

Roy Rickhuss, general secretary of the Community trade union, said: "This news will heap more worries on workers and everyone connected with British Steel, but it will also end the uncertainty under Greybull's ownership and must be seized as an opportunity to look for an alternative future.

"It is vital now that cool heads prevail and all parties focus on saving the jobs."

Unite assistant general secretary Steve Turner said: "Despite today's announcement to place British Steel into official receivership, Unite will continue to engage all parties in the fight to secure the future of the company.

"We are clear that the Government must now step up and step in and bring British Steel into public ownership until a buyer can be found to avoid an economic and industrial catastrophe."

Shadow business secretary Rebecca Long Bailey said: "This is absolutely devastating news for the thousands of workers, their families and the communities in Scunthorpe and Teesside and those throughout the supply chain.

"The Tories' legacy will once again be industrial decline whilst they endlessly squabble over the European Union.

"The Government must act quickly to save this strategically important industry and the livelihoods and communities of those who work in it, by bringing British Steel into public ownership."