News reports that “British Steel collapses with 25,000 jobs at stake”, have cited rising costs, particularly labour and business rates, as major contributors to the company’s financial issues: 

Colliers International has looked at British Steel’s business rates bills for its sites and has estimated the company has been paying bills 10% higher than before the 2017 Revaluation. Total rates bill would have been around £2.84 million compared to £2.58 million in 2016/7.

British Steel collapse will mean not only jobs are at stake, but also local government finances which rely on business rates for their funding. British Steel’s operations are in some of the most depressed parts of the country- Scunthorpe, Cleveland, Teeside. Should the plants shut and remain empty, business rates will not be paid. Any loss in income will add to the pain of those areas – thousands on benefits and less in the public purse to help these communities.

Some particular sites paying high business rates include sites in South Killingholme, in Lincolnshire and Redcar, Cleveland which pay 74% of the total rates bill of the company.

Location

Business Rates Bill

 2016/7

Business Rates Bill

2019/20

Humber Road, South Killingholme, Lincs

£546,400

£786,240

Lackenby Works, Redcar, Cleveland

£1,441,000

£1,325,880


John Webber, Head of Rating at Colliers International said, 

"British Steel’s predicament mirrors other UK manufacturers trying to balance the uncertainties surrounding Britain’s planned exit from the EU, a reduction in demand and higher costs. British steelmakers pay some of the highest green taxes and energy costs in the world and are saddled with high labour costs and business rates."

 

"The Government surely needs to look at how it can help companies like British Steel, not just by emergency loans, but by reforming the business rates system.  As well as 25,000 jobs at stake, this collapse could well impact on the £2.84m British Steel contributes to the public purse, putting local finances at risk- adding even more to the pain in those depressed parts of the country.”