Government urged to step in to save 3,300 Liberty Steel suppliers
Labour is calling on Government to step in before Liberty Steel becomes insolvent to save more than 3,300 jobs in the supply chain.
The party says ministers should intervene to save workers’ jobs, terms and conditions - and give customers and suppliers confidence that orders will be fulfilled and bills paid.
It says Government should learn the lessons from when Scunthorpe-based British Steel collapsed, cost supply chain firms an estimated £500m, with many going into administration.
It also meant that workers lost their employment rights, which had to be renegotiated, when the business was sold to Chinese company Jingye last year after five months of quasi-nationalisation that cost the taxpayer £588m.
Liberty Steel is in crisis after the collapse of lender Greensill. The firm, which employs 1,600 in Stocksbridge and Rotherham and 11 sites in the UK, owes Greensill ‘many billions’.
Bosses are attempting to find other sources of finance but Labour is calling for the Government to step in now.
Shadow minister for business and consumers, Lucy Powell MP, said: “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 total debt in British Steel at the point of insolvency was £880m. Labour says an estimate of £500m for supply chain liabilities are a ‘reasonable best estimate’.
A Government spokesperson said: “The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions.
“The Government has supported the steel sector extensively, including providing over £500m in recent years to help with the costs of energy. Our unprecedented package of COVID support is still available to the sector to protect jobs and ensure that producers have the right support during this challenging time.”