Cumbria is well placed to avoid job losses following the collapse of British Steel, the county’s Chamber of Commerce says.
TSP Engineering in Workington is a subsidiary of British Steel.
But while British Steel is in the hands of the Official Receiver – the High Court put the company into compulsory liquidation on Wednesday – TSP is not and is trading normally.
Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, is confident that TSP has a bright future regardless of what happens to its troubled parent company.
He said: “TSP is a profitable business with a healthy order book including significant contracts with the nuclear industry.
“Although owned by British Steel, it is a separate company with its own funds and isn’t in liquidation. We’ve spoken to TSP and it’s very much business as usual.”
The Official Receiver is looking to sell British Steel as an entity but, if that fails, is likely to dispose of TSP Engineering separately to help pay the parent company’s debts.
Rob added: “We don’t think there will be a shortage of potential buyers for what is a very successful business.
“TSP has a bright future. Indeed, there are opportunities to grow the business particularly in export markets.”
TSP Engineering employs up to 220 people at Workington.
Greybull Capital bought the business in 2016 as part of an acquisition of Tata Steel’s Long Products division. It rebranded the operation as British Steel.
The collapse of British Steel puts 5,000 jobs at risk at its sites in Scunthorpe and Teesside plus, potentially, another 20,000 jobs across suppliers.
Businesses with a vested interest in seeing it survive include West Cumbria Mining, which plans to extract coking coal for the steel industry from a new mine at Whitehaven.
Rob said: “British Steel was set to buy around five per cent of the output from the proposed Woodhouse Colliery.
“The demise of British Steel would-be a setback for West Cumbria Mining but doesn’t undermine the viability of the project. Most of the coking coal is destined for export markets.”
The Government is under pressure from Labour to nationalise British Steel if the Official Receiver cannot find a buyer.
However, any intervention could fall foul of EU State Aid rules, which are designed to stop governments from distorting markets by subsidising favoured industries.
Rob said: “The Government could argue that the steel industry is essential for national security.
“That argument isn’t helped by the fact that the high-strength steel for the Dreadnought submarines being built in Barrow isn’t made in the UK anymore. We’re importing it from France.”
