The government must step in and do everything in its power to secure a long-term future for Liberty Steel, Unite has said, after the company’s request for a £170m state rescue loan was rejected.
Liberty Steel is at risk of falling into administration, with around 5,000 jobs potentially on the line at 12 different sites across the UK including sites at Rotherham, Motherwell and Newport.
Concerns over Liberty Steel’s future viability had grown in recent weeks after Greensill Capital, the main financial backer of Liberty Steel’s owners GFG Alliance, filed for insolvency earlier this month.
Last Thursday (March 25), business secretary Kwasi Kwarteng told MPs that it would look at ‘all options’ to ensure Liberty Steel has a future.
Kwarteng said that “there is a future for steel in the UK” and that the government was looking to support the company “in its entirety”.
“We are doing all we can to look at all options to make sure that this vital piece of infrastructure continues and remains a going concern,” he said.
It is understood that the government had rejected the requested rescue loan because it was concerned about the ‘opaque’ nature of Liberty Steel founder Sanjeev Gupta’s sprawling global steel empire GFG Alliance, which employs 35,000 people around the world, the BBC reported.
Government sources told the BBC that state support would most likely come after the company falls into administration, in the same way that British Steel was supported by the taxpayer after it collapsed into administration until a new buyer was found in March last year.
Commenting on the latest news that the state had refused Liberty Steel the £170m rescue loan, Labour’s shadow business secretary Ed Miliband tweeted, “The Government must have a Plan B for Liberty Steel to protect thousands of jobs and our steelmaking capacity, which is vital for our communities and our national security. All options should be on the table, including public ownership.”
Unite has likewise called for the consideration of all options, including nationalisation.
Unite assistant general secretary for manufacturing Steve Turner said, “Steel is a foundation industry and is essential for the recovery of the UK economy as we rebuild from Covid-19.
“Unite is urging the government to do everything that is necessary in order to preserve Liberty Steel and secure its long-term future,” he added. “This is key to protecting the jobs of its workforce and the communities where it is based, to safeguard its supply chain and ensure its customers receive the products they require.
“No option should be ruled out in protecting the long-term future of Liberty Steel and that must include the option of nationalising the business.
“Unite has met the business secretary on several occasions as well as the senior management team at GFG Alliance and the company’s key customers, in order to ensure that no stone is left unturned in our efforts to secure its future,” Turner continued.
“It is imperative that such partnership working continues until the long-term future of Liberty Steel is determined.
“The success of Liberty Steel is essential if the government is to deliver on its levelling up agenda and the development of the nation’s core infrastructure outside the South East,” he went on to say.
“The loss of Liberty Steel and the specialist products it manufacturers for the aerospace, automotive and oil and gas sectors would have damaging consequences beyond the steel sector itself.
“While the loss of the thousands of skilled, well paid, unionised, jobs it provides is unthinkable, deskilling whole communities, ripping hope of a secure, job from future generations and damaging regional economies in areas of the country where unemployment is already high and wage rates are below average.”
By Hajera Blagg