Kwasi Kwarteng says the Government COULD bail out Liberty Steel
Business Secretary Kwasi Kwarteng says the Government COULD bail out Liberty Steel but insists ministers will need a ‘guarantee that money would stay in the UK and would protect British jobs’ amid concerns over ‘very opaque structure’ of ownership group
- Ministers rejected an appeal from Liberty Steel for £170m in financial support
- Business Secretary Kwasi Kwarteng today suggested there could be a bail out
- But he said he needs guarantees the money ‘would actually stay in the UK’
Business Secretary Kwasi Kwarteng today said ministers could bail out Liberty Steel but suggested the Government will need guarantees the money ‘would stay in the UK and would protect British jobs’ before it is offered.
The Government rejected an appeal from the firm for £170million in financial support after it requested help to pay operating expenses and deal with recent losses.
Concerns over the future of the company have been expressed after financial backer, Greensill Capital, went bust.
Mr Kwarteng said the Government has concerns ‘about the very opaque structure’ of Sanjeev Gupta’s GFG Alliance which includes Liberty Steel.
He also said that ‘all options at the moment are on the table’ amid calls from unions to nationalise Liberty Steel.
Business Secretary Kwasi Kwarteng today said ministers could bail out Liberty Steel but suggested the Government will need guarantees the money ‘would stay in the UK and would protect British jobs’ before it is offered
Greensill Capital was the main lender to Mr Gupta’s GFG Alliance, with his business empire employing approximately 5,000 people in the UK.
A majority of those people work for Liberty Steel across its 11 sites throughout England, Scotland and Wales.
Following the decision to reject the request for £170million of support, a Government spokesman said ministers are ‘closely monitoring developments around Liberty Steel’.
Mr Kwarteng told BBC Radio 4’s Today programme: ‘One of the critical things about the £170 million is that obviously we are custodians of taxpayers’ money and there were concerns about the very opaque structure at the GFG group and we feel that if we gave the money there was no guarantee that money would stay in the UK and would protect British jobs.
‘It’s a multinational enterprise, they have assets all over the world, and we were very keen that any support the British Government gave would actually stay in the UK and protect British assets.’
Mr Kwarteng said ‘opaque structures are not particularly helpful’, adding: ‘We can’t be giving taxpayers’ money, essentially putting it into a black box where we don’t know what the money will be used for.’
The Business Secretary said Liberty Steel is a ‘really important national asset and… we have to distinguish between Liberty Steel and the company that sits above it’.
‘We’re looking at all plans at the moment and you will appreciate that it’s commercially very sensitive,’ he said.
‘I think that the current owner is looking at ways of refinancing the group and I’ve been very clear that I want to see his plans worked through and before we actually go into anything in terms of a further plan to keep the jobs and the plant safe.’
Mr Kwarteng said the Government has concerns ‘about the very opaque structure’ of Sanjeev Gupta’s GFG Alliance which includes Liberty Steel
Asked about the possibility of public ownership of Liberty Steel, he said: ‘All options at the moment are on the table, we think that the steel industry has a future in the UK.’
A spokesman for Liberty’s GFG Alliance said on Sunday: ‘GFG Alliance as a whole is operationally strong and we are benefiting from strong markets in steel, aluminium and iron ore.
‘While Greensill’s difficulties have created a challenging situation, we have adequate funding for our current needs.
‘Discussions to secure alternative long-term funding continue to make good progress and while this takes place we have asked all of our businesses to manage cash carefully.’
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