Wednesday, March 24, 2021

News: Government pressed on support for steel


The Government is monitoring the issues at Liberty Steel "extremely closely" but is unable to say what support it may offer as the steelmaker attempts to refinance.

Rothbiz reported earlier this month on meetings between Liberty and steel unions. The company, part of the GFG Alliance, employs hundreds of staff in South Yorkshire, including in Rotherham.

Reports have linked GFG Alliance to Greensill, a specialist in invoice financing that operates with less regulation than the traditional banks and that is now in administration.

Unions said that Liberty "intends to secure a refinancing of the debt to provide the business with the necessary liquidity going forward."

Some staff in the region have now gone back on furlough.

Sarah Champion, MP for Rotherham, stood up for steel in the commons this week, addressing Kwasi Kwarteng MP, Secretary of State at the Department of Business, Energy and Industrial Strategy.

Champion said: "More than 5,000 workers at Liberty Steel, including 900 in Rotherham, are facing an uncertain future following the collapse of Greensill Capital. Will the Secretary of State now commit, as other Governments in Europe have done, to step in, if necessary, to safeguard this vital strategic industry?"

Kwarteng replied: "In my meetings with management and relevant union leaders, I have always stressed that the management plans need to be worked through. We are monitoring the situation extremely closely. The hon. Lady will know that I have a direct interest in the future of Liberty Steel."

Shadow business secretary, Ed Miliband, also questioned the minister on the issue. He said: "No ideology or dogma must stand in the way of protecting the jobs of 5,000 people and many more in the supply chain. This is a critical part of our national infrastructure and it is critical to those communities. Will he now do what he has failed to do so far and say that he will do whatever it takes, including public ownership if it is the best value for money choice, to save those jobs if it is necessary?"

Kwarteng replied: "The right hon. Gentleman will be absolutely aware that this is an ongoing commercial matter. He will know that I have seen local management, representatives of the unions and a number of people who are very, very keenly involved in the steel sector, and it would not be appropriate for me to enter into what is a commercially sensitive situation. My heart goes out to the workers. They are an excellent workforce, and Liberty Steel has a fine tradition in this space, but it would be inappropriate for me to enter into what are live, commercially sensitive issues."

When British Steel entered liquidation in 2019, the government provided the Official Receiver with an indemnity to cover the costs which enabled the company to continue to trade until it was bought by Jingye Group, a leading Chinese steelmaker, in 2020. The indemnity is reported to have cost in the region £800m.

Images: Liberty Steel


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