Steelworkers whose jobs hang in the balance were today told that nationalisation is the “least likely” option to tackling the Liberty Steel crisis.
About 1,500 staff at the firm were plunged deeper into worry this week when Liberty's parent company, Gupta Family Group Alliance, announced plans to sell a string of plants, including its site at Stocksbridge, South Yorks.
The company is “restructuring” its business, which was thrown into turmoil after the collapse of its main lender Greensill Capital in March.
Labour has called on Business Secretary Kwasi Kwarteng to keep the door open to rescuing the mills.
But, speaking to the Commons Business Select Committee, the Cabinet Minister quashed hopes the Government was set to step in.
"The issue that Liberty had was to do with financial engineering, the opaque bit, if you like, of GFG, the leverage, the finance, the debt they had incurred,” he said.
“Without that I think there is a healthy interest in the assets and I think they have a viable future.”
He added: "I don't rule anything in or out, but I think that nationalisation – of all the options – is the least likely.”
Later in the Commons, Labour's Newport East MP Jessica Morden, secretary of Westminster's All-Party Parliamentary Group on Steel, said the Government “must do all it can to protect these strategically vital businesses which are very important to our communities”.
Shadow Business Minister Matthew Pennycook accused the Tories of being at the "back of the pack" on efforts to make the steel industry more environmentally friendly – seen as key to its future success.
He said: "The crisis at Liberty Steel is yet further evidence of the need to break the cycle of crisis management that has defined the approach of successive governments to this critical sector.
"The Secretary of State knows full well that there is a global race under way to green the steel industry and that our country is currently at the back of the pack with no concrete plans for trialling hydrogen-based primary production and only vague plans for a single carbon capture-based project.”
The UK has pledged to slash 80% of carbon emissions from steel manufacturing by 2045.
But trade body UK Steel warned low-carbon methods were still unproven.
Director-general Gareth Stace earlier told the select committee: "Carbon capture and storage are largely untested at scale and zero-carbon hydrogen is a long way off... we haven't even taken the first step.”
Mr Kwarteng warned MPs: "I think there is a strategic place for UK steel but it has to be decarbonised, and we're working together with the industry, the unions to find a sustainable path.
"Government support is conditional on decarbonisation and green steel."
The Business Secretary, who rebuffed Liberty's pleas for a £170million Government rescue package amid fears the cash would be diverted to other GFG companies abroad, also claimed Labour MPs had been “hollering and screaming and saying we should nationalise” Liberty.
“My actions and those of the officials have been vindicated,” he insisted.
“I am monitoring the situation closely and I remain strategically committed to a steel industry in this sector."
