Threat to small businesses after Cleveland Bridge collapse

The Federation of Small Businesses in the region warned that many SMEs in the supply  chain would need help and Seema Malhotra MP, Labour's Shadow Minister for Business and Consumers, said urgent action need to be taken.

The FSB called for the right support in the right places.

Reshma Begum, Development Manager for the region said: "Small businesses don’t have the luxury of significant cash reserves to offset the detrimental impact of losing a large contract, so it is essential that support is provided to both the employees and the businesses impacted by the crisis.

"The Cleveland Bridge crisis will undoubtedly cause serious concerns amongst the businesses across the country, operating within their supply chain.

"Small businesses are often required to dedicate significant proportions of their resource and capacity to service large scale contracts, and the threat of losing the same could be devastating for already hard-hit businesses navigating their way out of the Covid pandemic."

Seema Malhotra said: "This is extremely worrying news and my immediate thoughts are with every affected employee who may be feeling anxious about their livelihood."

"The Government must explain as a matter of urgency what it is doing to protect these jobs. And Ministers must also dig deeper and explain how it can be possible that an engineering company of this significance, a major employer in the North responsible for building landmarks across our country, can be in such a perilous position. 

"This news underlines again that we need a long-term plan for our steel industry which is vital for our economy and national security. The UK has a proud manufacturing history and it's crucial government backs Britain's manufacturers to secure their proud future."

Business Secretary Kwasi Kwarteng

The Business Secretary Kwasi Kwarteng is understood to have asked his team at the Department for Business, Energy & Industrial Strategy to find out what happened in a bid to understand how it could all have ended so badly so quickly.

The Northern Echo understands that Tees Valley Mayor Ben Houchen has been asked to help the investigation.

A BEIS spokesperson said: "We recognise that this will be distressing news for Cleveland Bridge employees and their families. Government officials are engaging with local partners in Tees Valley to understand the situation in more detail.

 “We are working hard to make sure that the sector has the best possible chance of competing for and winning public contracts. All Government departments and arms-length bodies are required to consider socio-economic factors when procuring steel.”

The department has already established a new joint industry and BEIS Steel Procurement Taskforce with the aim of working with the sector to promote the unique selling points of UK steel and explore how best to support and position the industry for success in forthcoming major public contracts.

The is also the £315m Industrial Energy Transformation Fund which aims to support businesses with high energy use to cut their bills and reduce carbon emissions. 
The department says it has also provided up to £66m through the Industrial Strategy Challenge Fund to help steel and other foundation industries develop radical new technologies and establish innovation centres of excellence in these sectors.

And Kwasi Kwarteng has reformed and co-chaired the UK Steel Council for 2021. There have been three meetings so far, the latest only on Wednesday, to work in partnership on the shared objective of creating an achievable, long-term plan to support the sector’s transition to a competitive, sustainable and low carbon future.The news broke just a few days ago that Cleveland Bridge - one of the great engineering icons of the North - had called in administrators, putting hundreds of jobs at risk.

Read more: Jobs threat as Darlington's Cleveland Bridge 'calls in administrators'

That team of administrators then confirmed that it was the Covid pandemic that had pushed the company over the edge, and they warned: "No business is immune to the far-reaching impact of the pandemic, which has delayed major infrastructure projects around the world and put significant financial pressure on the teams behind them."

Read more: Administrators blame Covid for Darlington's Cleveland Bridge crisis

Cleveland Bridge on Yarm Road

But it also thought that the Government may have to answer for more deep-rooted problems in the sector as firms face major problems in the global marketplace.

There is anger at the lack of a level playing field and concern in many quarters that Government support is not welded together.

Read more: Cleveland Bridge: The six questions we still need answering on Darlington firm's future

Alex Cunningham, MP for Stockton North, has already clearly blamed the Government, saying: “Too often we’ve seen the Tories fail our industries and workers in the Tees Valley.  When we needed help to save the Redcar SSI blast furnace they turned their backs and when the Sirius mine project needed a helping hand the Government and the Tees Mayor were content to see it taken over by a multi-national company leaving local investors, some of whom sunk their life savings into it, high and dry.  

“Too many jobs have been lost in the Tees Valley in recent years – some 12000 since the start of the pandemic and we have one of the highest unemployment rates in the country.  This time the Government, without the restrictions on aid they could have faced because of the EU, must ensure these jobs and this internationally renowned company are saved.”