Recommendations & Conclusions
42 items
1
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
The corporate structure and governance of GFG Alliance companies resulted in no formal oversight or accountability of the decisions taken by Sanjeev Gupta. Mr Gupta put members of his staff in an unacceptable position by employing them with job titles associated with traditional executive functions in well run companies, without …
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The corporate structure and governance of GFG Alliance companies resulted in no formal oversight or accountability of the decisions taken by Sanjeev Gupta. Mr Gupta put members of his staff in an unacceptable position by employing them with job titles associated with traditional executive functions in well run companies, without giving them the required access to information or decision-making powers necessary for them to perform their duties. It is unclear why Mr Gupta opted to structure his companies in this unusual and, given the scale of his operations, unacceptable way.
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Government response AI summary
The government agrees that complex corporate structures should not be a legal barrier to proper scrutiny of companies like the GFG Alliance, while noting it does not wish to restrict business structuring.
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Department for Business and Trade
2
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
We recommend that Ministers reflect on the systemic risks to UK industry posed by such unusual corporate structures and, if deemed necessary, bring forward amendments to the Companies Act. (Paragraph 29) Audit
Government response AI summary
The government acknowledges that complex corporate structures should not hinder scrutiny but states it does not wish to restrict the ability of businesses to structure themselves, without committing to bringing forward amendments to the Companies Act.
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Department for Business and Trade
3
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
We were not reassured by the evidence presented by King & King and note the legal restrictions placed upon Mr Patel, and other auditors who had previously audited GFG Alliance companies, by Sanjeev Gupta.
Government response AI summary
The government acknowledges that complex corporate structures should not be a legal barrier to scrutiny but expresses a desire not to restrict business structuring, without committing to specific actions.
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Department for Business and Trade
4
Conclusion
Fourth Report - Liberty Steel and the f…
Deferred
Despite public statements over a number of years to the contrary, we see, as yet, no tangible evidence that Sanjeev Gupta and GFG Alliance companies are making improvements to corporate governance or improving transparency through the publication of consolidated accounts.
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Despite public statements over a number of years to the contrary, we see, as yet, no tangible evidence that Sanjeev Gupta and GFG Alliance companies are making improvements to corporate governance or improving transparency through the publication of consolidated accounts.
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Government response AI summary
The government redirects the matter to the independent Financial Reporting Council (FRC), which acknowledges the public interest but states the GFG Alliance entities are not within its usual scope of investigation, though it can reclaim matters if in the public interest.
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Department for Business and Trade
5
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 AI summary
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.
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Department for Business and Trade
6
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 it is difficult to see the true financial picture of …
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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 it is difficult to see the true financial picture of Liberty Steel UK. Unless remedied, these deficiencies severely limit the potential of that firm to be viewed as a reliable partner in any long-term strategy for the UK steel industry.
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Government response AI summary
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.
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Department for Business and Trade
7
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 the Audit Enforcement Procedure as a matter of urgent public …
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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 the Audit Enforcement Procedure as a matter of urgent public interest. (Paragraph 51) Liberty Steel and the Future of the UK Steel Industry 63 Government rejection of funding for Liberty Steel UK
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Government response AI summary
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.
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Department for Business and Trade
8
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 centralised, complex and opaque governance structure.
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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 centralised, complex and opaque governance structure.
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Government response AI summary
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.
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Department for Business and Trade
9
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 steel sector deal.
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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 steel sector deal.
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Government response AI summary
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.
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Department for Business and Trade
10
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
We note the recent developments within GFG Alliance and Liberty Steel UK and welcome the injection of capital at Liberty Steel’s Rotherham plant. However, we note that once again Sanjeev Gupta has decided to set up an additional corporate entity to provide financial support to Liberty Steel UK companies without …
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We note the recent developments within GFG Alliance and Liberty Steel UK and welcome the injection of capital at Liberty Steel’s Rotherham plant. However, we note that once again Sanjeev Gupta has decided to set up an additional corporate entity to provide financial support to Liberty Steel UK companies without clear reporting and decision making on the source and terms of use of that funding.
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Government response AI summary
The government, via BEIS and the FRC, acknowledged the public interest in the issues of opaque funding at Liberty Steel, outlining the FRC's investigative remit and procedures for handling such cases, noting the specific entities are not usually within FRC's scope but can be reclaimed.
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Department for Business and Trade
11
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 AI summary
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.
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Department for Business and Trade
12
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 to define a fit and proper person for the purposes …
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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 to define a fit and proper person for the purposes of receiving any form of Government support. (Paragraph 62) Supply Chain Finance
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Government response AI summary
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.
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Department for Business and Trade
13
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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” and welcome the Serious Fraud Office’s investigation into this matter.
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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” and welcome the Serious Fraud Office’s investigation into this matter.
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Government response AI summary
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.
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Department for Business and Trade
14
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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. By his use of such practices Mr Gupta, the so-called …
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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. By his use of such practices Mr Gupta, the so-called “saviour of steel” is creating uncertainties that further undermine the long term viability of the steel industry in the UK.
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Government response AI summary
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.
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Department for Business and Trade
15
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
We recommend that the Financial Conduct Authority and HM Treasury investigate the use of, and accounting rules for, future or prospective receivables.
Government response AI summary
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.
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Department for Business and Trade
16
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 Liberty Steel and the Future of the UK Steel Industry
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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 Liberty Steel and the Future of the UK Steel Industry
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Government response AI summary
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.
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Department for Business and Trade
17
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
We did not receive evidence that the use of circular trading between companies is a systemic issue, but note the potential criminal liability associated with the worst examples of financial engineering between businesses. Despite repeated reassurances from GFG Alliance, we remain unconvinced by Sanjeev Gupta’s attempts to re- structure and …
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We did not receive evidence that the use of circular trading between companies is a systemic issue, but note the potential criminal liability associated with the worst examples of financial engineering between businesses. Despite repeated reassurances from GFG Alliance, we remain unconvinced by Sanjeev Gupta’s attempts to re- structure and re-finance his businesses. We are not satisfied that Sanjeev Gupta is adequately addressing the many fundamental issues and concerns associated with the corporate governance, leadership, transparency, funding and operations of his businesses and remained concerned that this poses a threat to the long-term prospects of Liberty Steel UK. (Paragraph 87) Coronavirus Large Business Interruption Loans Scheme
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Government response AI summary
The government notes that the International Accounting Standards Board has proposed amendments to reporting supply chain finance, which the UK Endorsement Board and Financial Reporting Council will consider for adoption. The government also states it will continue to closely monitor Liberty Steel UK's restructuring and …
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Department for Business and Trade
18
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
We note that concerns were raised by HM Treasury and shared with BEIS about GFG Alliance and Wyelands Bank during the accreditation process of Greensill Capital to the CLBIL scheme.
Government response AI summary
The government welcomes the Committee's acknowledgment that BEIS acted properly and the British Business Bank operated independently, implicitly addressing the noted concerns about GFG Alliance and Wyelands Bank.
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Department for Business and Trade
19
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
We recognise that the subsequent level of interest from the BEIS Department about the accreditation of Greensill Capital was “unusual” but we are confident that this did not impact the approval process and the British Business Bank’s decision remained independent. Given the potential impact of the financial position of Greensill …
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We recognise that the subsequent level of interest from the BEIS Department about the accreditation of Greensill Capital was “unusual” but we are confident that this did not impact the approval process and the British Business Bank’s decision remained independent. Given the potential impact of the financial position of Greensill Capital on Liberty Steel’s UK operations, we acknowledge the due diligence of both the Secretary of State and his officials in monitoring the accreditation process closely was entirely proper.
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Government response AI summary
The government welcomes the Committee’s acknowledgment that BEIS acted properly and that the British Business Bank operated independently in the Greensill Capital accreditation process.
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Department for Business and Trade
20
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 it should work with the industry to secure a sustainable, …
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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 it should work with the industry to secure a sustainable, long-term future. (Paragraph 104) Challenges and opportunities facing the UK steel industry Electricity prices
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Government response AI summary
The government response consists only of a title and page reference, providing no substantive engagement with the committee's observations or questions.
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Department for Business and Trade
21
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 of the challenge energy prices pose to steel companies in …
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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 of the challenge energy prices pose to steel companies in achieving the transition to net zero and take action to reduce these costs.
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Government response AI summary
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.
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Department for Business and Trade
22
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 urge the Government to support UK steel producers but note …
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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 urge the Government to support UK steel producers but note that short-term bailouts must not be at the expense of a longer-term strategy to secure a level playing field for UK steel producers with their European counterparts.
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Government response AI summary
The government's response was entirely unrelated to the recommendation, instead discussing the International Accounting Standards Board's project on supply chain finance.
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Department for Business and Trade
23
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 and the Future of the UK Steel Industry 65 producers …
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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 and the Future of the UK Steel Industry 65 producers are unsustainable. Compensation provided by the Government to the UK steel industry to date has fallen far short of the support offered to their competitors and has not translated into a meaningful reduction in the price disparity. Energy policy costs have been brought down but remain twice as high as those in France and Germany while network costs are almost ten times as high. Further support from the UK Government will be needed if the UK steel industry is to compete on a level playing field and attract investment. This issue will only become more urgent as the industry moves to decarbonise and the sector’s demand for electricity rises accordingly.
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Government response AI summary
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.
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Department for Business and Trade
24
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 it will offer beyond the current compensation scheme to reduce …
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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 it will offer beyond the current compensation scheme to reduce the cost of electricity for UK steel producers and bring them in line with those of their competitors. At a minimum, the price disparity should be brought down to within £1/MWh of the total cost faced by key competitors in France and Germany and the Government should track any disparity going forward to ensure it does not widen again.
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Government response AI summary
The government's response was entirely unrelated to the recommendation, instead discussing the International Accounting Standards Board's project on supply chain finance.
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Department for Business and Trade
25
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 steel producers it has been left entirely to Ofgem without …
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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 steel producers it has been left entirely to Ofgem without the opportunity for the Government to intervene.
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Government response AI summary
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.
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Department for Business and Trade
26
Recommendation
Fourth Report - Liberty Steel and the f…
Deferred
Given that UK steel producers are already facing some of the highest electricity prices in Europe and that demand for electricity will only increase as the sector decarbonises, the Government should exempt the steel sector from increased costs arising from Targeted Charging Review reforms. (Paragraph 132) Public Procurement
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Given that UK steel producers are already facing some of the highest electricity prices in Europe and that demand for electricity will only increase as the sector decarbonises, the Government should exempt the steel sector from increased costs arising from Targeted Charging Review reforms. (Paragraph 132) Public Procurement
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Government response AI summary
The government states that decisions on network charges, such as the Targeted Charging Review, are the responsibility of Ofgem, the independent energy market regulator, rather than the government itself.
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Department for Business and Trade
27
Recommendation
Fourth Report - Liberty Steel and the f…
Deferred
Despite advances made since the publication of the Procurement Policy Note in 2015, UK steel producers are still encountering challenges when competing for and securing public contracts. Much of this is due to an opaque and informal approach taken to steel procurement by contracting authorities and action is needed from …
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Despite advances made since the publication of the Procurement Policy Note in 2015, UK steel producers are still encountering challenges when competing for and securing public contracts. Much of this is due to an opaque and informal approach taken to steel procurement by contracting authorities and action is needed from the Government to make this process more transparent. Furthermore, a lack of transparency in steel supply chains together with an absence of explicit guidance on how social and environmental considerations should be applied has meant that broader objectives are being missed. Public procurement of steel has the potential to deliver wider benefits and further action is needed to ensure that the full value offered by UK steel producers is taken into account when supplying steel into public projects.
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Government response AI summary
The government notes its existing review of public procurement rules and the Social Value Model. The points raised by the Committee on steel procurement, including supply chain transparency and updating guidance, are under active consideration by the Steel Procurement Taskforce.
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Department for Business and Trade
28
Recommendation
Fourth Report - Liberty Steel and the f…
Deferred
To ensure full transparency, the Procurement Policy Note (PPN) on steel procurement in major projects should be updated to include a requirement for contracting authorities to provide supply chain plans and publicise supply opportunities for UK steel producers. The Government should also publish updated guidance on how social and environmental …
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To ensure full transparency, the Procurement Policy Note (PPN) on steel procurement in major projects should be updated to include a requirement for contracting authorities to provide supply chain plans and publicise supply opportunities for UK steel producers. The Government should also publish updated guidance on how social and environmental considerations should be made in relation to steel purchases to ensure these are taken into account by contracting authorities. (Paragraph 142) 66 Liberty Steel and the Future of the UK Steel Industry
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Government response AI summary
The government notes its existing review of public procurement rules and the Social Value Model. The specific recommendations, including updating the Procurement Policy Note and publishing new guidance on social and environmental considerations for steel purchases, are under active consideration by the Steel Procurement Taskforce.
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Department for Business and Trade
29
Recommendation
Fourth Report - Liberty Steel and the f…
Accepted in Part
High-quality data will be essential for monitoring and improving compliance with steel procurement policy. However, this data is currently incomplete with only partial data being reported by Government Departments and Arm’s Length Bodies. We welcome the work of the Steel Procurement Taskforce in working to improve the quality of this …
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High-quality data will be essential for monitoring and improving compliance with steel procurement policy. However, this data is currently incomplete with only partial data being reported by Government Departments and Arm’s Length Bodies. We welcome the work of the Steel Procurement Taskforce in working to improve the quality of this data. However, at the very least, all Government projects should be fully reporting on the value and origin of their steel requirements.
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Government response AI summary
The government notes the points on steel procurement and states the Steel Procurement Taskforce is actively considering improving data robustness and updating policy. It commits to working with departments to continuously improve data quality and simplify collection in the coming years, citing National Highways' commitment …
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Department for Business and Trade
30
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 AI summary
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.
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Department for Business and Trade
31
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 opportunities for UK steel producers. The Government should introduce minimum …
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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 opportunities for UK steel producers. The Government should introduce minimum UK steel content targets for major public projects, starting with High Speed 2. (Paragraph 151) Trade
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Government response AI summary
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.
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Department for Business and Trade
32
Conclusion
Fourth Report - Liberty Steel and the f…
Not Addressed
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 markets and significant injury to UK steel producers.
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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 markets and significant injury to UK steel producers.
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Government response AI summary
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.
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Department for Business and Trade
33
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 would have had on UK steel producers. These concerns also …
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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 would have had on UK steel producers. These concerns also appear to be shared by the UK Government as demonstrated by its decision to overrule the Trade Remedies Authority’s recommendation and grant industry more time to appeal its decision. A two-way dialogue with industry must inform future recommendations by the Trade Remedies Authority and we welcome the opportunity given to both parties to do so. (Paragraph 165) Decarbonisation
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Government response AI summary
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.
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Department for Business and Trade
34
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
There is a clear lack of direction with respect to the future of the nation’s blast furnaces both within the Government and in industry. A range of options exist for the decarbonisation of primary steelmaking, including carbon capture and storage (CCS), hydrogen, or a mixture of technologies running in parallel. …
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There is a clear lack of direction with respect to the future of the nation’s blast furnaces both within the Government and in industry. A range of options exist for the decarbonisation of primary steelmaking, including carbon capture and storage (CCS), hydrogen, or a mixture of technologies running in parallel. It will ultimately be for the sector and each individual business, with its own unique sites and products, to work out which technology is optimal for them. However, to enable these decisions industry requires certainty from Government on infrastructure and wider system changes.
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Government response AI summary
The government acknowledges the sector's decarbonisation plans, stating that the optimal route is a commercial decision for individual companies, and points to existing support mechanisms in the Net Zero Strategy.
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Department for Business and Trade
35
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
We found broad agreement that the UK should retain a primary steelmaking capacity rather than push its emissions and business abroad, a point recognised in the Government’s own Industrial Decarbonisation Strategy. However, if the Government is serious about its emissions targets and given that the nation’s blast Liberty Steel and …
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We found broad agreement that the UK should retain a primary steelmaking capacity rather than push its emissions and business abroad, a point recognised in the Government’s own Industrial Decarbonisation Strategy. However, if the Government is serious about its emissions targets and given that the nation’s blast Liberty Steel and the Future of the UK Steel Industry 67 furnaces will soon need to be replaced, if the UK is to retain its primary steelmaking capacity then key decisions and certainty are needed imminently. The Government’s Industrial Decarbonisation strategy has so far failed to provide this certainty and the Government must step up its efforts to provide industry with direction and a supportive policy environment to enable it to transition to a low carbon future.
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Government response AI summary
The government states it is working with the steel sector to understand decarbonisation plans and highlights existing support through the Net Zero Strategy. It emphasizes that the optimal decarbonisation route is a commercial decision for companies, without committing to new specific actions to provide immediate …
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Department for Business and Trade
36
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
We identified enthusiasm from many witnesses for the use of hydrogen direct reduced iron as a technology well-suited to decarbonising the UK steel industry. However, as with other potential solutions, it is a technology that remains untested at scale. A pilot of hydrogen-based steel production in the UK would help …
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We identified enthusiasm from many witnesses for the use of hydrogen direct reduced iron as a technology well-suited to decarbonising the UK steel industry. However, as with other potential solutions, it is a technology that remains untested at scale. A pilot of hydrogen-based steel production in the UK would help to inform future decisions on decarbonisation; create initial capability; develop UK-based expertise; and facilitate a switch to hydrogen once the technology is proven.
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Government response AI summary
The government states it is working with the sector to understand decarbonisation investment plans, noting that the optimal route is a commercial decision for companies, and points to existing support in the Net Zero Strategy for which the steel sector can bid, without committing to …
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Department for Business and Trade
37
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 Clean Steel Fund. The Government should further consult on the …
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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 Clean Steel Fund. The Government should further consult on the most appropriate location for the pilot which would deliver the widest benefit for industry as a whole.
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Government response AI summary
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.
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Department for Business and Trade
38
Recommendation
Fourth Report - Liberty Steel and the f…
Not Addressed
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 will be needed to ensure that the recycling of scrap …
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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 will be needed to ensure that the recycling of scrap is a more attractive option for UK steel producers than exporting it abroad for others to recycle. We welcome the work of the UK Steel Council in attempting to find solutions to this issue and call on Ministers from both the Department for Business, Energy and Industrial Strategy and the Department for Environment, Food and Rural Affairs (with respect to waste policy) to work with the Council to optimise steel recycling in the UK. (Paragraph 191) The future of the UK steel industry
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Government response AI summary
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.
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Department for Business and Trade
39
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
Many of the challenges facing the UK steel industry today are long-running and have led to crises in the past. Without fundamental reform of energy pricing and a clear decarbonisation strategy, the sector will fail to attract much needed investment and continue on a path of accelerating decline. The Government’s …
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Many of the challenges facing the UK steel industry today are long-running and have led to crises in the past. Without fundamental reform of energy pricing and a clear decarbonisation strategy, the sector will fail to attract much needed investment and continue on a path of accelerating decline. The Government’s rhetoric on the strategic importance of the sector must be matched by supportive policy.
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Government response AI summary
The government acknowledged the pressures faced by businesses due to rising energy prices and stated that extensive engagement with industry continues, but did not commit to fundamental reform of energy pricing or a clear decarbonisation strategy.
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Department for Business and Trade
40
Conclusion
Fourth Report - Liberty Steel and the f…
Acknowledged
A successful transition to net zero will be dependent on addressing the wider challenges and opportunities facing the UK steel industry. These issues will need to be tackled as part of a broader, strategic approach to decarbonisation.
Government response AI summary
The government acknowledged pressures from energy prices and noted ongoing engagement with industry but did not specifically commit to a broader, strategic approach to decarbonisation for the steel industry as suggested.
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Department for Business and Trade
41
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
The steel industry has faced a number of crises in recent years but action to support the sector has been taken on a mostly ad hoc, reactive basis. The sector cannot continue to lurch from crisis to crisis and action is needed now if the UK is to retain a …
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The steel industry has faced a number of crises in recent years but action to support the sector has been taken on a mostly ad hoc, reactive basis. The sector cannot continue to lurch from crisis to crisis and action is needed now if the UK is to retain a resilient and competitive domestic industry. Decarbonisation presents a unique opportunity to realign the sector but this will require a comprehensive, joined- up policy framework to remove barriers to transformation and enable critical investment decisions. (Paragraph 208) 68 Liberty Steel and the Future of the UK Steel Industry
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Government response AI summary
The government recognises the pressures on businesses due to energy prices and states that extensive engagement with industry is continuing across government.
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Department for Business and Trade
42
Recommendation
Fourth Report - Liberty Steel and the f…
Acknowledged
We call on Ministers to establish a new Sector Deal for the steel industry. The Sector Deal should address long-running challenges to the sector’s competitiveness as part of a cohesive plan for decarbonising the industry. It should set out a range of supportive policies to assist this transition and a …
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We call on Ministers to establish a new Sector Deal for the steel industry. The Sector Deal should address long-running challenges to the sector’s competitiveness as part of a cohesive plan for decarbonising the industry. It should set out a range of supportive policies to assist this transition and a clear roadmap for how the industry will decarbonise in line with the Government’s target to cut emissions by 78% by 2035 and reach net zero by 2050. This Sector Deal should be developed in response to the Steel Council’s report later this year and announced no later than Summer 2022. (Paragraph 209) Liberty Steel and the Future of the UK Steel Industry 69
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Government response AI summary
The government recognizes the pressures on businesses and ongoing engagement with the industry but does not commit to establishing a new Sector Deal for the steel industry or providing a decarbonisation roadmap as recommended.
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Department for Business and Trade