Government plans £350 million Speciality Steel UK swoop

The UK’s third-largest steelworks is set to be brought into public ownership in a £350 million deal.

The Government is working on a swoop for 1300-plus-job Speciality Steel UK.

Business Secretary Jonathan Reynolds said Westminster is primed to “develop a proposal for the acquisition” of the business.

He added the process could take up to six months, with the Government needing to “pay off the creditors”, acquire the assets and “inject some working capital over a period between one and three years”.

The move comes after Speciality Steel UK – which operates from bases in Rotherham, Stocksbridge and Brinsworth, in South Yorkshire, and Wednesbury, in the West Midlands – fell into liquidation last year.

Production has been paused in recent months, with many staff placed on furlough with reduced wages.

The acquisition plan follows the breakdown of a proposed deal with Norwegian steel start-up Blastr – which the Government says “could not provide the long-term stability, certainty and value for money” – and a headline deal for British Steel over the summer.

Mr Reynolds said the move will “support growth, jobs and Britain’s industrial future” across areas including the defence sector, thanks to Speciality Steel UK’s history of making parts including aircraft landing gear, helicopter rotors and artillery casings.

Asked by Liberal Democrat Treasury spokeswoman Daisy Cooper “where the money might come from for the deal”, Mr Reynolds said the Government had not yet spent “the lion’s share” of £2.5 billion set aside for the steel industry, which was pledged in Labour’s 2024 manifesto.

He added: “We took a long, hard look at the offer on the table, but the truth is that we had serious concerns about the proposed financing of it, the protections for UK taxpayers and whether it would be able to offer the long-term stability for the local economy and community.

“We are faced with a choice: we can allow events to take their course through the liquidation process, or we can act.

“This move will preserve control and ensure all credible future opportunities can be properly considered before irreversible decisions are taken.”

Trade unions have welcomed the Government’s intervention.

Gareth Stace, UK Steel director-general, said: “This Government is stepping up to do what is needed for the UK steel industry.

“Speciality Steel UK is already well on its way to returning to full operations and retaking its place at the heart of critical UK supply chains.

“It is crucial the custodian of this key asset is the right owner and investor, with the expertise and long-term ambition that the dedicated workforce deserve.”

South Yorkshire mayor Oliver Coppard said the Government’s blueprint represents an “important step forward”.

He added: “This gives us more time to find the best possible outcome for our steelmaking communities – places where people have faced economic challenges and real barriers to opportunity for far too long.

“I know the workforce, their families and our communities are still feeling some uncertainty about the future.

“I’m fully committed to working with our local and national partners to do everything we can to support people as the process continues.”

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