Kwarteng warns of ‘danger’ that Liberty Steel plants could close
The Business Secretary told MPs the firm had ‘good assets’ but that he could give no guarantees for the future.
Business Secretary Kwasi Kwarteng has warned there is a danger that Liberty Steel could be forced to close some of its UK plants following the collapse of its main financial backer.
Giving evidence to the Commons Business, Energy and Industrial Strategy Committee, Mr Kwarteng said the firm – which has a plant in the Black Country – had “good assets” that could be made to work.
Liberty Steel has 12 plants in the UK, including one in Wednesbury where around 73 people are employed at Liberty Speciality Steels - Bright Bar in All Saints Road.
Mr Kwarteng said that Liberty Steel's parent company, the GFG Alliance, needed to work through its plans to get new financing before there was any question of the Government intervening.
GFG boss Sanjeev Gupta has been seeking to refinance the business – which he has said owes “many billions” – after the finance firm Greensill Capital filed for insolvency, threatening 5,000 steelmaking jobs in the UK.
Greensill has been the subject of intense controversy at Westminster following the disclosure of David Cameron’s lobbying activities on its behalf.
Mr Kwarteng said that the former prime minister had never tried to contact him, saying; “I have never received a single phone call or WhatsApp from Mr Cameron.”
The Business Secretary told the committee he wanted to see Liberty Steel succeed but acknowledged that some parts of the business could be lost.
“There is always that danger. It is something that I speak to government officials (about) and even the Prime Minister I have spoken to about it,” he said.
“I am very keen to see that these assets, which are good assets, continue to operate and the company continues to operate but we can’t strip Liberty Steel from the wider group under which it sits and, as Mr Gupta says, they have billions and billions of debt.”
He added: “This is my own view, these are good assets. I think there are good competent people who are managing them. There is an incredibly talented and focused and passionate workforce who can make it work.
“I think it can work but what I won’t rush into is giving any guarantees in this committee or in any other forum. It is a patient game.”
Mr Kwarteng again defended the Government’s decision to reject an appeal by GFG – which has assets worldwide – for a £170million bailout, saying there was no assurance the money would have stayed in the UK.
“We didn’t have those guarantees. It was a very opaque structure,” he said.
“As officials and ministers we have a responsibility to taxpayers not simply sign off £170million without any knowledge of where that money might ultimately go.”
