Sheffield Forgemasters has been nationalised, and government is ‘monitoring developments’ on Liberty Steel

The MoD will acquire Sheffield Forgemasters, and MPs are calling for the same to be done with Liberty Steel

Sheffield Forgemasters has been nationalised, and government is ‘monitoring developments’ on Liberty Steel (Photo credit should read OLI SCARFF/AFP via Getty Images)
Sheffield Forgemasters has been nationalised, and government is ‘monitoring developments’ on Liberty Steel (Photo credit should read OLI SCARFF/AFP via Getty Images)

The UK government will take a major steel manufacturer into public ownership to secure its future in a deal worth millions of pounds.Sheffield Forgemasters will be acquired by the Ministry of Defence for £2.56m, and intends to invest “up to £400m” over the next decade.

The move has been welcomed by Labour, though some MPs are calling for the same approach to be applied to the ailing Liberty Steel group.

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Pre-existing defence links

Sheffield Forgemasters already supplies specialist components for use on the UK’s Trident nuclear submarine programme.

According to an MoD press release, Sheffield Forgemasters “is the only available manufacturer with the skills and capability to produce large scale high-integrity castings and forgings from specialist steels in an integrated facility to the highest standards required for these programmes”.

The historic South Yorkshire firm was formally established in 1805 and has been a large employer, providing skilled jobs in the area, while many of the region’s steel firms have shut down.

Last October Sheffield Forgemasters announced it would cut nearly 100 jobs due to a loss of commercial work during the pandemic.

The company has been struggling financially for some time, and has received support from three of the UK’s largest industrial firms; BAE systems, Babcock International and Rolls Royce Holdings.

Liberty Steel

The move to take over Sheffield Forgemasters is part of a growing desire within government to secure control of assets which are crucial to the UK’s defence and domestic manufacturing industry.

UK steel in particular has struggled due to market fluctuations in recent years, and one of the industries largest employers in the UK, Liberty Steel, has also been hit by major finance issues, linked to the collapse of Greensill Capital.

Business secretary Kwasi Kwarteng has previously said the government “can’t give any guarantees” that it would support UK steel workers should Liberty Steel collapse.

Labour’s shadow minister for steel, Ed Miliband, told NationalWorld his party “welcomes any move to protect jobs and capacity in the UK's critical steel industry”.

He said: “We have long argued that the Government must step up to secure the future of companies of such strategic value.

“But the Conservatives' total lack of an industrial strategy is failing steelworkers and leaving the industry lurching from crisis to crisis.

Miliband added: “Labour would back the whole UK steel sector with a comprehensive plan to secure the industry’s future, achieve sustainable decarbonisation, and protect jobs in steelmaking communities.”

The Yorkshire steel industry

Jobs in the UK steel industry are largely concentrated in the north of England, often in areas which otherwise have a lack of good employment options.

Jonathan Webb, a senior research fellow at the IPPR North think tank, said that the Sheffield Forgemasters decision should be welcomed, but that “other steelmakers in Yorkshire continue to face an uncertain future”.

He said: “To ensure that the UK's steel industry has a long-term future, the UK government must back an ambitious decarbonisation programme which is essential for unlocking future opportunities worth over £3.8 billion and putting UK steel on an environmentally and economically sustainable footing.

“By acting quickly to produce zero carbon steel by the mid-2030s, government could ensure that Yorkshire's steel industry into a world leading, job generating, planet protecting industry of the future”.

Labour MP Sarah Champion, whose Rotherham constituency contains Liberty Speciality Steel’s Narrow Strip Mill in Brinsworth, has called on the government to take the same approach there to protect jobs and the industry.

She told NationalWorld: “The Government has made the right decision over Forgemasters. They now need to apply the same common sense to Liberty Speciality Steels which is an equally strategically important business”.

A spokesperson for the MoD told NationalWorld: “We have acquired Sheffield Forgemasters to secure its unique capabilities to supply large-scale, high-integrity steel components for sensitive defence programmes.

“We continue to monitor developments around Liberty Steel and hope the company succeeds with its plans to refinance. If approached for support, the Government looks at the case for each company based on its merits to ensure that any decisions taken are in the best interests of the British taxpayer.”