Government takes control of Specialty Steel in South Yorkshire in a bid to save jobs

The government has taken control of the UK's third largest steelworks in a bid to save 1,450 jobs at the site.

The high court confirmed on Thursday that Speciality Steel - previously part of Sanjeev Gupta'sLiberty Steel business - would face a compulsory liquidation.

The operation, which has plants in Rotherham and Stocksbridge in South Yorkshire, will be placed into the hands of the Official Receiver and special managers from advisory firm Teneo.

However, bosses at Speciality Steel said the move to wind up the business is "irrational".

Jeffrey Kabel, chief transformation officer said:

"The decision to push Speciality Steel UK into compulsory liquidation, especially when we have support from the world's largest asset manager to resume operations and facilitate creditor recovery is irrational.

"The plan that GFG (Sanjeev Gupta's parent business) presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight.

"Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution."

Responding to the news of Liberty Steel in Sheffield and Rotherham collapsing, Charlotte Brumpton-Childs, GMB National Officer, said:

“This is another tragedy for UK steel - and the people of South Yorkshire - this time brought on by years of chronic mismanagement by the owners.

“But this represents an opportunity for the Government to take decisive action, as it did with British steel, to protect this vital UK industry.”

Responding to the latest development with Liberty Steel, South Yorkshire's Mayor, Oliver Coppard, said:

"Today’s news about Liberty Steel is difficult, but offers the opportunity for clarity and a path forward. There is and will continue to be a period of uncertainty for workers at Liberty’s two sites in South Yorkshire.

"So I welcome the positive comments from the Secretary of State for Business in the wake of the Court’s decision. I now want to see swift progress from government to safeguard the unique steel making capabilities we have here in our region.

"I will be seeking a conversation with Ministers as a matter of urgency and will do everything I can to make sure that workers at Liberty Steel and the steel industry that is so integral to our identity, have the brightest possible future."

Unite general secretary Sharon Graham said:

“The government must provide long-term guarantees that it will protect jobs but also the company itself which forms part of the UK’s critical infrastructure.

“The products that Liberty Steel produces are crucial for the success of the UK economy. If the right buyer cannot be found then the government should be prepared to run the company itself and ensure it is ready to meet the challenges of the future.”