The Government must ensure a steel plant on the outskirts of Sheffield will remain open, Labour has said, after Liberty Steel announced it was looking for a buyer for a number of sites.
Liberty Steel announced on Monday that it is looking for a buyer for its aerospace and steel business in Stocksbridge as part of a major restructuring in the wake of its main financial backer, Greensill Capital, in March.
The company has also started a formal sale process for Coventry’s Liberty Pressing Solutions, and Liberty Aluminium Technologies, which has sites in Essex and Kidderminster.
And it will also try to sell its manufacturing facilities in Brinsworth, South Yorkshire, and in West Bromwich.
Between them all, the plants for sale employ around 1,500 people.
But Labour said the Government should step in, and that public ownership of the company should still be considered.
Shadow business secretary Ed Miliband said: “It’s absolutely vital the Government and Liberty secure legal assurances that the Stocksbridge plant, which is a British asset supplying our aerospace and defence industries and providing good jobs, will remain open and the workforce will be protected.
“Crucially we also need assurances about all of Liberty’s other plants.
“The Government must show it has a plan B to protect the long-term future of our steel industry, including at Liberty – and public ownership must remain an option on the table.”
Labour metro mayor for the Sheffield City Region Dan Jarvis added that the Government should be “prepared to help provide finance to bridge any transition period until a new buyer is found”.
He said: “British steel has a bright future as a zero-carbon, high quality, internationally competitive product.
“It would be a travesty for South Yorkshire and for the whole country if that potential was lost through lack of action.”
It comes as part of a major restructuring following the collapse of Greensill Capital in March this year.
When the financing company went into administration, its lawyers revealed that it had around five billion dollars (£3.5 billion) of exposure to Liberty’s parent company GFG Alliance.
It sparked worries about Liberty’s future, and that of its 5,000 UK staff.
The aerospace and special alloys steel business in Stocksbridge is “a unique, high-quality business servicing marquee customers in aerospace, auto and other highly engineered applications”, the business said.
However it is not a core part of Liberty’s Greensteel plan to create more environmentally-friendly steel.
By selling, Liberty hopes it can focus on scaling up its plant in Rotherham to make two million tonnes of green steel.
“The plant will make use of some of the millions of tonnes of steel scrap currently exported by the UK to make more of the quality steel needed in the UK, which is currently being imported,” Liberty said.
The announcement follows a weekend of meetings in Dubai between GFG founder Sanjeev Gupta, once hailed as the hope of UK steel, and Swiss bank Credit Suisse.
The two sides have reached a so-called standstill agreement over Liberty Primary Metals Australia.
A spokesperson for the National Trade Union Steel Co-ordinating Committee said: “Stocksbridge and its downstream plants are strategically important businesses vital to our country’s defence, energy and aerospace sectors.
“The future for these businesses must be secured and the trade unions will hold Sanjeev Gupta to his promise that none of our steel plants will close on his watch.
“Liberty must act as a responsible seller and run a transparent sales process which fully engages the trade unions.
“We will expect to meet any potential buyer to scrutinise their plans and test their commitment to the workforce and our industry.”
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.
“As always, we stand ready to support their dedicated employees and their families affected by any developments.
“We have provided extensive support to the steel sector to help with the costs of electricity and are working with them to support their low carbon transition.
“Our unprecedented package of Covid support is still available to protect jobs and support producers during this challenging time.”