To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 22
May (HL15809), whether the review and assessment process followed by the British Business
Bank also applied to the process supporting their grant of a £120 million loan to
British Steel; and whether that process included a review of the (1) capital structure,
(2) tax planning, and (3) managerial record, of Greybull Capital and its associates.
To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 6
June (HL15957), whether the placement of British Steel in receivership on 25 May (1)
disqualifies that company from receiving, or (2) places it at risk of not receiving,
2019 carbon credits; if so, what are the implications for the £120 million loan they
made to British Steel; and whether they will now answer the original question put,
namely, whether that loan was guaranteed by Greybull Capital or related parties.
<p>The Deed of Forfeiture bridge facility agreed between Government and British Steel
Limited provides legal protections to give Government control of 2019 EU ETS allowances,
even under the scenario of insolvency.</p><p> </p><p>Under the Deed of Forfeiture
agreed between the company and British Steel Limited, the company’s 2019 allowances
will be assigned to the Government once issued, and the proceeds from selling these
is expected to cover the costs of purchasing the allowances. Greybull are not party
to this Deed of Forfeiture, and as a result of the liquidation, day-to-day control
has passed to the liquidator of British Steel Limited.</p><p> </p><p>The terms of
the commercial agreement between Government and British Steel are set out in letters
from the Permanent Secretary of the Department for Business, Energy and Industrial
Strategy to the Chair of the Public Accounts Committee and the Comptroller & Auditor
General, copies of which have been placed in the Libraries of both Houses.</p>
To ask the Chancellor of the Exchequer, what recent assessment he has made of the
effect of the £120 million Government loan to British Steel in May 2019 on that company's
viability; and what assessment he has made of the role of Greybull Capital in that
company's insolvency.
<p>As the Secretary of State for BEIS set out in his statement to the House on 1 May,
the government entered into a commercial agreement with British Steel on 23 April,
which provided a short term bridge facility valued at around £120 million. This ensured
the company met its obligations under the EU Emissions Trading Scheme for the 2018
scheme year.</p><p> </p><p>Following the recent insolvency of British Steel, the government
has indemnified the Official Receive to carry out its statutory duties as liquidator.
The Official Receiver is required by law to investigate the reasons for the failure
of any company that enters compulsory liquidation.</p>