New blow as Redcar steel plant goes into liquidation

The Department for Business Innovation and Skills also confirmed that it rejected “an unrealistic proposal” from the Thai owners for the taxpayer to make an open-ended commitment to maintain the coke ovens.

Ministers announced an £80m support package for the 1,700 workers who have lost their jobs as Sahaviriya Steel Industries UK Limited was wound up in the High Court.

Business Secretary Sajid Javid said: “This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy.

Why we bailed out banks but not steel in Redcar - by ‘Northern Powerhouse’ minister

“Across Government we will continue to focus on providing assistance where we can.”

But Labour politicians condemned the Government for not doing more to help. Redcar’s Labour MP Anna Turley said ministers had “thrown in the towel and turned its back on steelmaking in Teesside”.

She added: “We do not accept their view that a hard closure is the only option and I am deeply disappointed they have rejected all of the options presented to them so far.”

John McDonnell, Shadow Chancellor, said: “It’s not good enough for George Osborne to stand aside and do nothing to preserve steelmaking on Teesside. The least the Government can do is provide the receiver with the resources to mothball the plant to secure its future potential.”

The official receiver is now working with restructuring partners from accountancy firm PwC to ensure the coke ovens continue to operate over the weekend . They will also consider any interest in the assets.

The Community union said: “This is of course yet further devastating news for the workforce, their families and the community. We will be taking steps to ensure our members’ interests are represented through this process and putting claims forward for what they are owed.”

BIS highlighted the challenges facing the global steel industry, saying the price of steel slab has almost halved over the past year, global overproduction remains a problem and currency fluctuations have added further pressures.

Former Business Secretary Sir Vince Cable told The Yorkshire Post he had to deal with Redcar more or less continuously throughout his period in office from 2010-15.

He said: “The position is very difficult, not because of British Government but because the steel market in Asia has collapsed and the Thais can get their steel from China at a fraction of the price of buying it from Redcar.”

Sir Vince said that while European rules on state aid prevent direct subsidy to the steel industry, the Government could develop his compensation scheme for energy-intensive industries to help them recover some of their electricity costs, which are higher than their international competitors.

A BIS spokesman said the Government has paid out £47.7m in compensation to steelmakers to mitigate the impact of climate change policy on electricity costs.

Gareth Stace, director of UK Steel, said: “It may be too late for SSI, but the situation in Redcar brings the problems facing the UK steel sector into sharp relief. The Government must now spearhead efforts to support the steel industry and the supply chains it feeds.”