Picking up the pieces when companies go bust… Sahaviriya Steel Industries UK

Sajid Javid (Secretary of State for Department of Business, Innovation and Skills) made a speech to the HOC today outlining how the government planned to assist with the managed liquidation of SSI and reduce the impact on workers and the local economy. All important stuff – but this raises important questions about the impact of company closures and how to make sense of such impact. The UK government offered indemnity cover to the receiver and pledged up to #80m to assist former workers (not just in retraining, but also in redundancy payments and pensions contributions). None of this would be recorded as support to a private business that extracted profits in better times – but shouldn’t companies be made to also bear more of the inevitable costs that inevitable fall on communities when profits dry up?

The Guardian later published a piece quoting Anna Turley, MP for Redcar (the constituency affected by the closure) that a large chunk of the #80m was actually a bailout fund for salaries of former workers that were due from their employers!

A link to the Commons Statement is here: Liquidation of Sahaviriya Steel Industries UK Limited:Written statement – HCWS215 – UK Parliament

A link to the Guardian piece is: https://www.theguardian.com/business/2015/oct/21/cameron-accused-of-misleading-steelworkers-over-80m-aid-fund