Ministers will only throw a threatened steel firm a lifeline if bosses can guarantee taxpayers' cash will stay in the UK, the Government signalled today.
Business Secretary Kwasi Kwarteng faces mounting calls to intervene to save Liberty Steel, which employs 3,000 workers in Britain and is part of the Gupta Family Group Alliance.
Liberty's future was plunged into jeopardy after its main lender, Greensill Capital, collapsed.
Unions and MPs have demanded help for the stricken steel arm, which has 11 sites across the UK.
But the Government rebuffed pleas for a £170million package fearing the money would be diverted to other parts of GFG's holdings based overseas.
Stressing that rescue plans were “commercially very sensitive”, Mr Kwarteng said: "One of the critical things about the £170m is that obviously we are custodians of taxpayers' money and there were concerns about the very opaque structure at the GFG group and we feel that if we gave the money there was no guarantee that money would stay in the UK and would protect British jobs.
“It's a multinational enterprise, they have assets all over the world, and we were very keen that any support the British Government gave would actually stay in the UK and protect British assets."
He said group chief Sanjeev Gupta was “looking at ways of refinancing the group and I've been very clear that I want to see his plans worked through before we actually go into anything in terms of a further plan to keep the jobs and the plant safe”.
Community steelworkers' union's operations director Alasdair McDiarmid warned: “The reality is no government is going to write a big cheque without receiving strong assurances, and it doesn’t help our steelworkers if taxpayers’ money disappears into GFG.
“We hope Sanjeev Gupta will find a way to give government the confidence they need to support the future for Liberty Steel.
“However Mr Gupta’s plans to refinance the organisation may not succeed, and government must be ready to intervene to safeguard jobs and the strategic steel assets.”
Shadow Business Minister Lucy Powell said: “It’s been clear for a while the Government wasn’t going to give a bailout to GFG Alliance, including Liberty Steel, because of its complex financial structure – that’s why Labour has been asking for weeks for a Plan B to protect these jobs and secure the industry.
“This is now more urgent than ever to ensure customers and suppliers don’t lose confidence and cause jobs and business to seep out of the company because there’s so much growing uncertainty.
"The Government must keep all options on the table, including public ownership, and not be blinkered by ideology."
A GFG Alliance spokesman said: “We are taking prudent steps across our global portfolio to manage resources while we try to negotiate a formal standstill agreement with Greensill’s administrators and refinance the businesses.
“We are in regular dialogue with our employees, unions, customers, suppliers, and governments to keep them informed and to explore ways we can work together through the current situation.”
The Mirror has been campaigning to Save Our Steel since 2015 when the industry was battered by plant closures and thousands of job losses.
