Liberty Steel and the future of the steel industry in the UK: New inquiry launched
27 April 2021
The Business, Energy and Industrial Strategy (BEIS) Committee has launched an inquiry examining the current challenges facing the steel industry and issues concerning the sector's long-term viability. The inquiry will also examine the Government's approach to supporting the steel industry, and the impact the collapse of Greensill Capital on Liberty Steel, its customers and its workforce in the UK.
- Inquiry: Liberty Steel and the Future of the UK Steel Industry
- Business, Energy and Industrial Strategy Committee
The inquiry is also likely to examine issues around audit, corporate governance and supply chain finance which have been raised in relation to Greensill Capital and GFG (Gupta Family Group) Alliance. GFG Alliance is the owner of Liberty Steel.
The Committee's inquiry will begin with an introductory 'scene-setting' evidence session in late May which will examine the sector-wide issues facing the steel industry in the UK.
Following this initial evidence hearing, the BEIS Committee expects in later months—likely June and July—to examine these issues in more detail and to pick up on concerns relating to GFG Alliance and Liberty Steel.
The BEIS Committee will consider the witness line-up for these sessions and announce details in due course.
The BEIS Committee's steel-sector focused inquiry will be coordinated with the separate Select Committee inquiries relating to issues concerning Greensill Capital, finance, and lobbying (currently being undertaken by the Public Administration and Constitutional Affairs Committee, the Public Accounts Committee, and the Treasury Committee).
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee, said:
"The collapse of Greensill Capital and subsequent financing issues affecting the GFG Alliance has put thousands of jobs at Liberty Steel in jeopardy.
"As a Committee, we are keen to examine some of the immediate challenges facing the UK steel industry, including at Liberty Steel, and to consider questions around decarbonisation and the long-term viability of the sector.
"If we consider steel to be a foundation industry, what can the Government do regarding industrial policy to help build a financially and environmentally sustainable steel industry in the UK?
"This episode has also raised a catalogue of concerns relating to corporate governance, audit and supply-chain finance.
"As a Committee, we will want to examine whether reform is needed in these areas and, additionally, access to and use of tax-payers money, including covid related support, and whether adequate checks-and-balances were put in place in return for support from government."
Inquiry terms of reference
The Committee welcomes evidence submissions on the terms of reference.
There is an interim deadline of Friday 14 May 2021 for submissions. It would be helpful if evidence could be received by that date but the Committee will accept later submissions.
- What are the current challenges facing the UK steel industry and its long-term viability?
- What action if any, should the Government take to support Liberty Steel or the UK steel industry more generally, and what lessons could be learnt from how previous crises in the steel industry were managed?
- What role could the UK's post-Brexit state aid regime play in supporting foundation industries?
- What opportunities and challenges do the Government's commitment to the net zero target present for the UK's steel industry?
- What role did audit, corporate governance, supply chain finance and other financing methods such as circular invoicing play in the difficulties facing Greensill Capital, GFG Alliance and Liberty Steel? What reforms might be warranted?
- What financial support have governments provided to GFG? What due diligence was undertaken prior to this support being given, and what checks and balances were put in place in return for this support?
Image: Saad Salim via Unsplash