Labour Party Urges UK Government to Save Liberty Steel
The Guardian reported that UK’s Labour party has called for British government to step in to save Liberty Steel from an insolvency that could threaten thousands of supply chain jobs if owner Mr Sanjeev Gupta fails to find a new lender to prop up his metals empire. Labour’s Shadow Business Minister Ms Lucy Powell said “A government commitment to stepping in before insolvency could allow suppliers, ranging from cleaners to makers of machine components, to continue to deal with Liberty without fearing losses. The people who lose out most from the option of becoming insolvent are the supply chain. If the government were to indicate this was an option that would inject confidence into the supply chain. Liberty Steel plants support thousands of steel and supply jobs in towns across the country and are of vital strategic importance for our economic prosperity and national security. Ministers are not spectators, they must intervene early to save these plants or we’ll see businesses in places like Hartlepool, Scunthorpe, Rotherham, Stocksbridge and Newport go bust as invoices go unpaid. Steel communities have helped to build Britain. The Conservatives must now back British steel to secure its future, with real action after 10 years of neglect.”
The Conservative government is preparing to intervene to save UK steel jobs only if Liberty Steel fails to refinance and becomes insolvent. Government sources have indicated that a leading option for a potential Liberty collapse is to copy the British Steel rescue. The whole process cost the UK government nearly GBP 600 million. Labour has said that would be too late for as many as 3,300 workers in companies that supply Liberty. In insolvency suppliers’ bills are often left unpaid, even if a business’s assets are later bought.
It is understood that Labour’s preference would be for GFG to find a new lender, preventing the need for any government intervention. The party has previously called for the government to commit to using UK steel for defence and national infrastructure to help the industry.