Liberty Steel and the Future of the UK Steel Industry

Business and Trade Committee Closed Inquiry
Opened: 27 Apr 2021 Closed: 20 Jan 2022 Parliament page
The BEIS Committee is holding an inquiry into Liberty Steel and the Future of the UK Steel Industry. On 8 March 2021, the supply chain finance firm Greensill Capital collapsed into administration after months of speculation about its financial viability. Greensill was the principal financial backer of GFG Alliance, owner … Read more
23 Recommendations
19 Conclusions
1 Report
5 Oral sessions
23 Letters
5 Events
Activity timeline 30 events
20 Jan
2022
Report published
5 Nov
2021
Report published
2 Nov
2021
Correspondence
2 Nov
2021
Correspondence
2 Nov
2021
Correspondence
2 Nov
2021
Correspondence
2 Nov
2021
Correspondence
2 Nov
2021
Correspondence
22 Jul
2021
Correspondence
22 Jul
2021
Correspondence
20 Jul
2021
Oral evidence
19 Jul
2021
Correspondence
Oral evidence sessions 5 sessions
20 Jul 2021
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Liberty Steel and the Future of the UK Steel Industry; Decarbonising heat in homes
Charlotte Baker · Ministry of Housing, Communities and Local Government Rt Hon Christopher Pincher MP · Ministry of Housing, Communities and Local Government Rt Hon Kwasi Kwarteng · Department for Business, Energy and Industrial Strategy
6 Jul 2021
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Oral evidence
Cynthia O'Murchu · Financial Times Dr Javed Siddiqui · Alliance Manchester Business School, The University of Manchester S. Alex Yang · London Business School
29 Jun 2021
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Oral evidence session
Milan Patel · King & King Chartered Accountants Patrick Magee · British Business Bank Stephen Rose · Wyelands Bank
22 Jun 2021
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Liberty Steel and the Future of the UK Steel Industry
Anton Krull · Liberty Steel UK Henrik Adam · Tata Steel Europe Jon Bolton · GFG Global Advisory Board
25 May 2021
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Oral evidence session
Chris McDonald · Materials Processing Institute Edwin Basson · World Steel Association Gareth Stace · UK Steel Roy Rickhuss · Community Trade Union Roz Bulleid · Green Alliance Rt Hon Kwasi Kwarteng · Department for Business, Energy and Industrial Strategy
Title HC No. Published Items Response
Fourth Report - Liberty Steel and the future of the UK steel Ind… HC 821 5 Nov 2021 42 Responded
Recommendations & Conclusions
23 results
Clear
5 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
We found it utterly unconvincing, and do not believe that King & King had the...
We found it utterly unconvincing, and do not believe that King & King had the capacity, expertise, or resources to audit the accounts of multiple large GFG Alliance and Liberty Steel UK companies representing over £2.5 billion of revenue.
Government Response
The government response consists only of a title and page reference, providing no substantive engagement with the committee's finding regarding King & King's auditing capacity.
Department for Business and Trade
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6 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
The reputation of Liberty Steel UK has been threatened by the poor audit and accounting...
The reputation of Liberty Steel UK has been threatened by the poor audit and accounting practices of GFG Alliance, including the changing of accounting deadlines and its inability to produce consolidated accounts. As these accounts are yet to be published … Read more
Government Response
The government's response is only a title and does not address the committee's conclusion regarding Liberty Steel UK's poor audit and accounting practices.
Department for Business and Trade
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7 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
We recommend that the Financial Reporting Council, as the competent authority for audit in the...
We recommend that the Financial Reporting Council, as the competent authority for audit in the UK, refer this case to the relevant Recognised Supervisory Body, the Institute of Chartered Accountants for England and Wales, to investigate King & King under … Read more
Government Response
The government's response is only a title and does not address the recommendation for the Financial Reporting Council to refer the case of King & King for investigation.
Department for Business and Trade
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8 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
We commend the Government’s decision to reject GFG Alliance’s request for £170 million of financial...
We commend the Government’s decision to reject GFG Alliance’s request for £170 million of financial support in March 2021. The Secretary of State was correct to be cautious about providing a large grant to a group of companies with a … Read more
Government Response
The government's response text was merely a header, effectively not addressing the committee's commendation of its decision to reject GFG Alliance's request for financial support.
Department for Business and Trade
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9 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
In light of the Greensill Capital collapse and subsequent financial hardship of GFG Alliance and...
In light of the Greensill Capital collapse and subsequent financial hardship of GFG Alliance and Liberty Steel UK, we urge the Government to give consideration to formalising the fit and proper person test for private company directors within any future … Read more
Government Response
The government's response outlined the FRC's investigative remit regarding audit matters, but did not address the specific recommendation to consider formalising a 'fit and proper person test' for private company directors within any future steel sector deal.
Department for Business and Trade
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11 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
We would welcome the Insolvency Service considering whether, on the basis of the evidence we...
We would welcome the Insolvency Service considering whether, on the basis of the evidence we have received, Sanjeev Gupta may have acted in breach of his fiduciary duties as a company director in the United Kingdom.
Government Response
The government response consists only of a title and page reference, providing no substantive engagement with the committee's recommendation for the Insolvency Service to consider potential breaches of fiduciary duties.
Department for Business and Trade
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12 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
More broadly, we believe that until Mr Gupta restructures his GFG Alliance companies into a...
More broadly, we believe that until Mr Gupta restructures his GFG Alliance companies into a more acceptable corporate structure and publishes consolidated accounts that are adequately audited, that he fails to fulfil the criteria that we believe should be applied … Read more
Government Response
The government provided only a title for its response, completely failing to address the conclusion regarding Mr. Gupta's suitability for government support until GFG Alliance is restructured and audited accounts are published.
Department for Business and Trade
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13 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
The way in which future, or prospective, receivables operated between GFG Alliance and Greensill Capital...
The way in which future, or prospective, receivables operated between GFG Alliance and Greensill Capital is disputed by both parties. We note that several claims have been made about the use of future receivables and their relation to “suspect invoices” … Read more
Government Response
The government response expresses gratitude for the committee's agreement on not providing a grant to GFG Alliance, but does not address the observations regarding disputed future receivables or the Serious Fraud Office's investigation.
Department for Business and Trade
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14 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
Steel is a foundational industry in the UK and in need of significant structural reform.
Steel is a foundational industry in the UK and in need of significant structural reform. The use of high-risk financial funding practices, such as future receivables lending, that Greensill Capital and GFG Alliance engaged in are barriers to such reforms. … Read more
Government Response
The government response expresses gratitude for the committee's agreement on not providing a grant to GFG Alliance, but does not address the concerns about high-risk financial practices undermining the steel industry.
Department for Business and Trade
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15 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
We recommend that the Financial Conduct Authority and HM Treasury investigate the use of, and...
We recommend that the Financial Conduct Authority and HM Treasury investigate the use of, and accounting rules for, future or prospective receivables.
Government Response
The government's response thanks the Committee for agreement on the inappropriateness of a grant to GFG Alliance, without addressing the recommendation to investigate accounting rules for future or prospective receivables.
Department for Business and Trade
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16 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
GFG Alliance’s reported engagement in circular trading, or REPO structures, exacerbated a concentration risk to...
GFG Alliance’s reported engagement in circular trading, or REPO structures, exacerbated a concentration risk to Greensill Capital by raising large amounts of working capital against invoices created to raise finance instead of selling steel to genuine customers. (Paragraph 86) 64 … Read more
Government Response
The government's response thanks the Committee for agreement on the inappropriateness of a grant to GFG Alliance, without addressing the conclusion regarding GFG Alliance's circular trading practices.
Department for Business and Trade
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20 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
However, the collapse of Greensill Capital and its impact on Liberty Steel UK highlights the...
However, the collapse of Greensill Capital and its impact on Liberty Steel UK highlights the fragility of the sector in the UK more generally and raises far reaching and fundamental questions for the Government to consider in terms of how … Read more
Government Response
The government response consists only of a title and page reference, providing no substantive engagement with the committee's observations or questions.
Department for Business and Trade
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21 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
High electricity prices are hindering the ability of UK steel producers to compete on the...
High electricity prices are hindering the ability of UK steel producers to compete on the international market and are a deterrent to inward investment. If the Government is serious about decarbonising the steel industry, it must first recognise the severity … Read more
Government Response
The government response consists only of a title and page reference, providing no substantive engagement with the committee's recommendation to address high electricity prices.
Department for Business and Trade
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22 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
UK steel producers were already facing some of the highest electricity prices in Europe prior...
UK steel producers were already facing some of the highest electricity prices in Europe prior to recent rises in the wholesale price of gas. Soaring gas prices have since transformed what was a long-standing problem into an immediate crisis. We … Read more
Government Response
The government's response was entirely unrelated to the recommendation, instead discussing the International Accounting Standards Board's project on supply chain finance.
Department for Business and Trade
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23 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
We recognise that decisions on how and whether to compensate industry for the costs of...
We recognise that decisions on how and whether to compensate industry for the costs of electricity will, by necessity, have implications for consumers and other network users. However, it is clear that current electricity costs for UK steel Liberty Steel … Read more
Government Response
The government's response discusses the IASB's project on supply chain finance and proposed accounting amendments, which does not address the committee's call for further support to reduce electricity costs for the steel industry.
Department for Business and Trade
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24 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
If additional support is not forthcoming, high electricity prices will continue to have a pernicious...
If additional support is not forthcoming, high electricity prices will continue to have a pernicious effect on the UK steel industry, resulting in long-term decline and future crises. The Government should set out, following a consultation with industry, what support … Read more
Government Response
The government's response was entirely unrelated to the recommendation, instead discussing the International Accounting Standards Board's project on supply chain finance.
Department for Business and Trade
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25 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
When implemented, the Targeted Charging Review has the potential to burden UK steel producers with...
When implemented, the Targeted Charging Review has the potential to burden UK steel producers with costs exceeding relief provided to the sector as an energy intensive industry. We note that despite this decision having a potentially significant impact on UK … Read more
Government Response
The government's response discusses the IASB's project on supply chain finance and proposed accounting amendments, which does not address the committee's concerns about the Targeted Charging Review or Ofgem.
Department for Business and Trade
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30 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
A requirement should be set for all Government projects, including steel contracts awarded by the...
A requirement should be set for all Government projects, including steel contracts awarded by the Contracts for Difference scheme and Highways England, to fully report on the value and origin of their steel requirements.
Government Response
The government's response provided no content to address the recommendation for a requirement for all government projects to report on the value and origin of their steel requirements.
Department for Business and Trade
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31 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
Decisive action should be taken to ensure that UK steel producers do not miss out...
Decisive action should be taken to ensure that UK steel producers do not miss out on the Government’s ambitious infrastructure programme. Setting minimum UK steel content targets for major public projects would serve as an important first step to improving … Read more
Government Response
The government's response is boilerplate text about BEIS and the British Business Bank, failing to address the recommendation to introduce minimum UK steel content targets for major public projects.
Department for Business and Trade
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32 Conclusion Not Addressed
Fourth Report - Liberty Steel and …
Given that global steel markets continue to be heavily distorted by state subsidisation and that...
Given that global steel markets continue to be heavily distorted by state subsidisation and that the EU and the US continue to apply tariffs on imported steel, the UK requires a response from Government regarding potential trade divergence towards UK … Read more
Government Response
The government's response is boilerplate text about BEIS and the British Business Bank, failing to address the conclusion about global steel market distortions and the need for a government response to trade divergence.
Department for Business and Trade
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33 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
We share the concerns expressed to us that the Trade Remedies Authority’s recommendation to revoke...
We share the concerns expressed to us that the Trade Remedies Authority’s recommendation to revoke safeguards on nine categories of steel imports was not based on an open dialogue with industry and had therefore missed the wider impact its decision … Read more
Government Response
The government welcomed the committee's acknowledgment of BEIS and the British Business Bank's proper and independent actions, but did not address the recommendation for the Trade Remedies Authority to ensure future recommendations are informed by open dialogue with industry.
Department for Business and Trade
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37 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
The Government should commit to a pilot of hydrogen-based steel production in the UK as...
The Government should commit to a pilot of hydrogen-based steel production in the UK as part of its industrial decarbonisation strategy. Funding for the project should be sought in partnership with interested steel businesses or backed in part by the … Read more
Government Response
The government's response addresses general concerns about high gas and electricity prices and ongoing industry engagement, completely failing to address the recommendation for a pilot of hydrogen-based steel production.
Department for Business and Trade
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38 Recommendation Not Addressed
Fourth Report - Liberty Steel and …
Previously used steel, also known as scrap, will play a central role in efforts to...
Previously used steel, also known as scrap, will play a central role in efforts to decarbonise the UK steel industry. The high availability of scrap in the UK represents a valuable resource which is under-utilised, and a range of measures … Read more
Government Response
The government's response acknowledged energy price pressures and general industry engagement but did not address the recommendation for Ministers from BEIS and DEFRA to work with the UK Steel Council to optimise steel recycling in the UK.
Department for Business and Trade
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Government Response AI assessment · 42 of 23 classified
Accepted in Part 1
Acknowledged 14
Deferred 4
Not Addressed 23
Total 23 recs + 19 conclusions
Correspondence 23 letters
2 Nov 2021 To committee Letter from the Secretary of State on Liberty Steel and the UK steel industry
Parliament page
2 Nov 2021 To committee Letter from the Secretary of State on evidence given on Liberty Steel and the future of the UK Steel Industry inquiry
Parliament page
2 Nov 2021 To committee Letter from the Secretary of State on the possibility of a deal for the UK steel sector
Parliament page
2 Nov 2021 To committee Letter from GFG Alliance in response to BEIS Committee written questions
Parliament page
2 Nov 2021 Email to the Chair from Lex Greensill relating to Greensill Capital, received 21 July
Parliament page
2 Nov 2021 To committee Letter from Grant Thornton UK LLP relating to Greensill Capital
Parliament page
22 Jul 2021 To committee Letter from the British Business Bank on Greensill Capital's application for accreditation under the Coronavirus Large Business Interruption Scheme (CLBILS)
Parliament page
22 Jul 2021 To committee Letter from Grant Thornton UK LLP responding to questions on the financial arrangements of GFG Alliance companies
Parliament page
19 Jul 2021 To committee Letter from the Chair to Grant Thornton UK LLP regarding Greensill Capital
Parliament page
14 Jul 2021 Email to the Chair from Lex Greensill relating to Greensill Capital
Parliament page
14 Jul 2021 To committee Letter from the Chair to Sanjeev Gupta on GFG Alliance and Liberty Steel
Parliament page
13 Jul 2021 To committee Letter from the British Business Bank on CLBILS and Greensill Capital
Parliament page
13 Jul 2021 From committee Letter to Grant Thornton UK LLP on Simec Lochaber Hydropower 2
Parliament page
13 Jul 2021 To committee Letter from the Secretary of State and the Secretary of State for International Trade relating to the UK steel industry
Parliament page
8 Jul 2021 To committee Letter from GFG Alliance declining the invitation to give oral evidence to the Committee’s Liberty Steel and the Future of the UK Steel Industry inquiry
Parliament page
8 Jul 2021 To committee Letter from the Secretary of state for International Trade and the Secretary of State for BEIS relating to the Trade Remedies Investigations Directorate and UK steel safeguards
Parliament page
8 Jul 2021 To committee Letter from the Chair of the British Business Bank relating to Greensill Capital
Parliament page
8 Jul 2021 To committee Letter from the former CEO of the British Business Bank relating to Greensill Capital
Parliament page
8 Jul 2021 To committee Letter from Grant Thornton UK LLP relating to Simec Lochaber Hydropower 2
Parliament page
30 Jun 2021 To committee Response from Mr Lex Greensill in answer to the Chair's letters of 7 and 16 June in relation to the Liberty Steel and UK steel industry inquiry
Parliament page
30 Jun 2021 To committee Letter from the Chair to Lex Greensill regarding questions relating to the Committee's inquiry on Liberty Steel and the future of the UK steel industry
Parliament page
16 Jun 2021 To committee Letter from Chair to Mr Lex Greensill relating to request to give evidence to the Committee
Parliament page
28 May 2021 To committee Letter from the Chair to the Secretaries of State for Business, Energy and Industrial Strategy and for International Trade relating to recommendations from the Trade Remedies Investigation Directorate
Parliament page