Poundland could be nationalised to save it from collapse, says Labour business minister

Poundland could be nationalised to save it from collapse, a government minister suggested today.Business minister Lord Leong refused to rule out a taxpayer subsidy or even full-blown state control of the troubled discount chain.The comment was seized on by the Tories as evidence of Labour chaos and a lack of understanding of business.It came as Andy Burnham said the government was ‘prepared to find what we can do’ to help save the chain.Shadow chancellor Andrew Griffith said nationalising Poundland would be ‘insane’.He added: 'The hard truth is that in a dynamic economy, businesses are created, whilst others sadly fail. We cannot expect taxpayers to step in and solve all of life's problems.‘Labour business policy is in chaos. When you get a government with so little business experience as this one, this is what results.’ Poundland is on the brink of collapse - putting 600 stores and 12,000 jobs at riskPoundland, which was bought by private equity group Gordon Brothers for £1 last year, could crash into administration as early as this week – putting 600 stores and 12,000 jobs at risk in the run-up to Christmas.A Poundland distribution centre employing 270 staff in Makerfield – Mr Burnham’s constituency in Greater Manchester – is also at risk.Asked what his message was to Poundland owners and executives, the Prime Minister said: ‘Focus on the people in your employment.‘Come up with a practical solution that saves jobs and saves those stores because many of them are viable propositions.‘They’re on high streets. They matter in our communities. There is a solution to be found here. Sit down with us and let’s find it.’Speaking to reporters while attending the Commonwealth Heads of Government meeting in Antigua, Mr Burnham acknowledged there was a limit to what ministers could do but he suggested there were ways forward for the firm.‘There’s always a limit, but we’re prepared to to find what we can do,’ he said.‘We believe in this instance there is a solution. There are many viable outlets here. Other retailers are expressing interest. Get around the table. Let’s find a solution.’The comments came as Business Secretary Jonathan Reynolds was set to meet US-based Gordon Brothers amid Government criticism of their handling of the retailer.Business minister Kate Dearden is also due to hold talks with Poundland’s chief executive and chief finance officer.Asked in the House of Lords if he could ‘rule out specific Poundland subsidy or nationalisation as a solution’, Lord Leong said: ‘The answer is no.’He was later slapped down by departmental officials who said he had ‘misspoken’. Company advisers are still in talks with parties interested in buying the brand and swathes of stores, around two months after a sale process was launched.Tesco has held talks over proposals to buy up to 150 Poundland stores while Poundstretcher owner Fortress also showed its interest in purchasing as many as 250 shops.It is understood that other grocery chains, such as Iceland and Lidl, are also in the frame to acquire some stores.Wilko and The Range owner CDS Superstores and B&M have also expressed their interest in sites.Downing Street has been critical of Gordon Brothers’ handling of the sale process.‘It appears they’re not acting in the best interests of their loyal UK staff and stores,’ the Prime Minister’s official spokesman said.It is an ‘extremely worrying situation for Poundland staff, their families and communities’ and the Government was staying close to the situation, the spokesman said.‘Both the Prime Minister and the Business Secretary have been clear: they want to know what’s happening and Gordon Brothers need to explain why they haven’t accepted any offer to keep the company going.’Gordon Brothers could also face questioning in Parliament over its actions.Liam Byrne said the Commons Business, Innovation, Science and Trade Committee which he chairs has ‘issued a request to Gordon Brothers to come before us next week to answer questions’.The crisis at Poundland has raised fresh questions over private equity ownership of household names across Britian’s high streets and beyond.Other big firms taken over by private equity include struggling supermarket chains Asda and Morrisons.Richard Walker, the boss of Iceland, accused Gordon Brothers of ‘private equity opportunism’ amid fears it would rather put Poundland into administration and sell off sites piecemeal than find a buyer to rescue the whole business.He said: ‘You could say that it’s in my own interest to have one less competitor on the high street. But I say that we need our high streets to be places offering variety and vitality – with as many shops as we can sustain trading successfully, satisfying customers and providing good jobs.‘Sure, it’s a tough market. As I’ve long argued, retail just gets harder and harder – not helped by government imposing more and more cost and complexity on businesses.‘But Poundland isn’t bust. All the signs are that it’s been trading OK. Administration seems more about private equity opportunism than business necessity.‘Good capitalism is about doing the right thing by our colleagues, customers and communities. Do that, and the profits follow.’ Bally Auluk, Usdaw national officer, said: 'This afternoon I am meeting with Employment Minister Kate Dearden, along with Poundland’s senior management team. 'We welcome the Government’s commitment to support our members and help to save jobs, including the Prime Minister’s statement today.'We are aware that Poundland’s owners are set to meet with the Business Secretary, which is welcome, but we urge Gordon Brothers to engage directly with Usdaw as the trade union for Poundland staff, which they have so far refused to do.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you