Yesterday the UK Government took control of Liberty Steel, which has three sites, two in Rotherham and another in Sheffield.Before the PM’s panic privatisation was ordered yesterday the firm, which has been making steel in Rotherham for 202 years; employs 1,500 workers, and was reignited in 2018 by King Charles, was wound up at insolvency court after creditors owed hundreds of millions in debts.
Liberty, which uses scrap metal to manufacture steel used in specialist products for the automotive, construction and engineering industries, will be placed in the hands of a government appointed liquidator.
Government Steps In, But at What Cost?
The government has agreed to cover on-going wages and costs of the plant while a buyer is sought.
While it’s laudable the government is stepping in to save these jobs, it’s also ironic it’s a move that comes from an administration that hasn’t thought twice about causing thousands of SMEs to reconsider their employment plans, including considering redundancies, due to the increase in the cost of employing people brought in by Rachel Reeves in the Budget.
50,000 Firms at Risk. Where’s Their Bailout?
It was only last month that insolvency specialists, Begbies Traynor, revealed research that suggests 50,000 firms are under immense strain and nearing collapse. Would they give these businesses the same help?
A Company ‘Hopelessly Insolvent’
During the hearing, Mr Justice Mellor, described the firm as “hopelessly insolvent” with only £600,000 in the bank, a monthly wage bill of £3.7m, being paid by a parent group facing 15 insolvency proceedings in nine jurisdictions. My sympathies go out to all the families affected in the meltdown of the UK’s third largest steel maker, but it seems to me that the 70 odd million people, living and working in the UK are in just as deep.
Is the Government the Right Buyer?
What the hell does a skint government with debts of £2.71 trillion want with a clapped-out steel business that time and again the biggest players in the steel industry couldn’t make a quid out of?
In what universe does a company (in this case a government) with so much debt, bad sales (stagnant growth), and a senior leadership team that has never run a successful business, buy into another loss-making basket case!!?? I honestly think in another reality Starmer, Reeves and Rayner would be struck from running businesses!
Soaring Debt and Gilt Prices Raise Alarm
If you think that giant debt is bad enough, since Labour have been in power that borrowing has rocketed up another £186.2 billion, so if we as a country paid off all our debts in one lump sum, we’d only have £10.84 billion left. And if the numbers are blowing your mind up, think about this one – in 2023/2024 the NHS budget was £188 billion.
Just to keep public services at their crappy level The Office for Budgetary Responsibility (OBR) over the next three years estimates the Government will need to borrow around another £250 billion. And the salt in the wound here is that the price of 10-year UK GILTS (the bonds the UK sells to borrow money are up almost 20% since Labour entered office.
The whole damn thing is crazy, and I’m not sure why people aren’t looking at the numbers and running off to live in a cave. The interest alone on our national debts was £105 billion last year, and this year is expected to jump to £111 billion.
Parallels With Corporate Collapses: Will History Repeat Itself?
There have been loads of examples of when a massive corporate takes over other huge companies, think Enron or WorldCom, from a few years ago. In both cases the company books were so bent by a succession of bosses hiding evidence of fraud and incompetence that they imploded on themselves, sending executives from both companies to jail.
I’m not alleging fraud here, but it definitely looks like the numbers will never add up unless workers in the UK pay more in taxes. No wonder the chancellor is pursuing crazy and damaging ideas like the ‘£500k house tax’.
