No bailout for stricken steel giant
BORIS JOHNSON has said he is ‘very hopeful’ that the Government can save a steelmaker left on the brink by the collapse of a lender that David Cameron worked for.
The Prime Minister said it would be ‘crazy’ if the UK could not use its post-Brexit freedom to support Liberty Steel and protect thousands of jobs.
A £170million bailout of parent company GFG Alliance, left struggling when main lender Greensill Capital went bust, has been rejected over fears taxpayers’ money could be used to prop up operations abroad. But UK plants could be kept going if awarded government contracts for major infrastructure projects such as the HS2 railway.
Firms under the Liberty group could even be nationalised if they go into administration. Ministers have more scope to throw them a lifeline now that the UK is no longer bound by EU ‘state aid’ rules that make it difficult for member states to prop up their steel industries.
During a visit to Middlesbrough, a former steelworks stronghold, Mr Johnson said: ‘We have learned during the pandemic that it is not a good idea to be excessively reliant in times of trouble on imports of critical things. We need a strong steel industry. I am very hopeful that we will get a solution. It would be crazy if we were not to use this post-Brexit moment to use the flexibility we have to buy British steel.’
He said Business Secretary Kwasi Kwarteng was in ‘daily contact’ with owners of Liberty. The Government is expected to see if it can find new finance or is forced to shut before deciding how to intervene.
It came after group boss Sanjeev Gupta insisted that no UK plants would close on his watch. GFG employs 5,000 people in the UK, of which 3,000 are steelworkers.
He told BBC Radio 4’s Today programme: ‘Our overall global operations are profitable, we have refinancing offers, we will refinance and we will support our UK business also. None of my steel plants under my watch will be shut down.’
Mr Gupta said he had had no ‘interactions’ with Mr Cameron, who lobbied the Government last year to get lender Greensill access to the Bank of England’s Covid support loan scheme. The ex-PM joined as an adviser in 2018. Mr Gupta admitted his firms owe ‘ many billions’ to Greensill.
A spokesman for steelworkers’ union Community said he ‘ must find a way to assure government that any financial support would be ring-fenced to support UK jobs’.
‘No plant will shut under my watch’