He said: "The growing uncertainty around Brexit is a major contributory factor in the compulsory liquidation of British Steel which saw a slump in orders from EU customers. Similar risks may have come from non-EU customers as Brexit would have removed the UK from trade agreements currently in place with third countries. While not the only factor, Brexit has added weight in snapping British Steel.
"These factors will make the liquidators' job of finding fresh investment more difficult and it will also be hard to secure Government support under EU and World Trade Organisation (WTO) rules on subsidies. The EU does not permit state aid to the steel industry unless there is a sound Government restructuring plan, similar to what a private investor would do under current market conditions. Similarly, the WTO does not allow export subsidies which may lead to actions by competitors whenever British Steel exports. Insofar as a trade agreement with the EU is undefined, the risk of orders decreasing further increases by the day and so do the liabilities of the company that the Government may be called to cover in the absence of interest by investors. Any Government rescue plan may therefore be short-lived, in particular since structural overcapacity in the steel industry is a long-term issue. It would also surely be reliant on an agreement being in place on Brexit and a trade agreement with the EU."
