All would have been lost without emergency legislation being passed – business secretary
Business secretary Jonathan Reynolds is being questioned by the BBC’s Laura Kuenssberg on her Sunday politics programme.
He said the intervention yesterday was “dramatic” but was needed to secure Britain’s “economic security” . He said if nothing was done the blast furnaces and steel production in the UK “would have gone”. His officials are on site right now, the business secretary added.
Kuenssberg pressed the minister, asking him if he was sure if he would have the supplies he needed to keep the furnaces at the plant burning. Reynolds refused to be drawn on the commercial specifics.
“Without the decisive action by the government yesterday all was lost,” Reynolds insisted.
Key events
The GMB trade union general secretary, Gary Smith, confirmed workers had acted to stop officials from the Chinese company Jingye, which bought British Steel in 2019, from entering the site in Scunthorpe.
“We were worried about industrial vandalism and there was a worry about sabotage on the site, quite frankly,” he told the BBC earlier today. “And yesterday, workers did prevent executives from the Chinese owners from going on site.”
“I’m sure that people are still very worried about that, but these people performed heroics yesterday to ensure that we’ve got a fighting chance for the steel industry in this country… They were legitimately concerned about industrial sabotage at the plant,” Smith added.
Jasper Jolly, a financial reporter at the Guardian, has written some analysis on the multiple crises British Steel faces as the supplies needed to keep the blast furnaces operating at the Scunthorpe plant are running low. Here is an extract from his piece:
Union leaders representing steelworkers said they were relieved that the government appeared to be moving towards public ownership. Charlotte Brumpton-Childs, a former Scunthorpe steelworker and national officer for the GMB union, said nationalisation was “the only way to save the UK steel industry”, and that the ability to direct the company’s actions was “the first step in that process”.
Yet even nationalisation will not deliver Scunthorpe’s workers from the bigger questions over its long-term future. Jingye had rejected a £500m offer of support to switch to electric arc furnaces – to match aid given to Tata Steel at Port Talbot, south Wales – but Scunthorpe will need to make the switch if it is to have a future in a world of net zero carbon emissions.
Where do opposition parties stand on British Steel nationalisation?
As we have been reporting, the Conservatives and Reform have voiced broad support for the government’s move to take control of British Steel. But what have other opposition parties said?
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The Green party says it supports nationalisation of the steel industry as it could prove to be a “key driver of a green industrial revolution”. The party’s co-leader, Adrian Ramsay, told Sky News’ Trevor Phillips this morning: “Steel is essential for the transition to a green economy. The Greens have been arguing for decades that we need to have the ability to produce more of the manufactured goods… within our country. And with what we’re seeing now with the international political climate and the bullying behaviour of President Trump, it only underlines our point that we need to be able to produce these things more locally.”
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Plaid Cymru has accused the UK government for acting to save the Scunthorpe plant but not taking the same action when the Tata Steel works in Port Talbot were threatened with closure. Tata ended primary steelmaking at Port Talbot last September with the closure of its last blast furnace, a decision that was projected to lead to 2,500 job losses. As part of a deal the government committed £500m to help the company move to greener forms of steelmaking. Addressing the Commons at the emergency session yesterday, Liz Saville-Roberts, Plaid’s Westminster leader, said yesterday: “Scunthorpe gets security, Port Talbot gets a pittance.”
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The Lib Dems’ deputy leader Daisy Cooper said recalling parliament yesterday was “absolutely the right thing to do” but the party has also criticised the UK government for not intervening to protect the Port Talbot steelworks in the same way.
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The SNP’s Stephen Flynn questioned why the legislation only applies to England. He said yesterday: “Why is this not being extended to Scotland? Why is Grangemouth (refinery in Scotland) not being included? Why is the smelter up at Lochaber not being included? Why the DL steelworks not being included? The answer why they are not being included is because westminster is only interested in westminster.”
The shadow business secretary, Andrew Griffith, was the chief business secretary to the then prime minister Boris Johnson during the months in 2019 when British Steel went into administration.
He has defended the move to sell British Steel to Jingye, claiming it was “the only deal at the time”.
Griffith told Sunday Morning With Trevor Phillips on Sky News:
From my recollection, those conversations had been ongoing for some time. It was led by the secretary of state.
You have got to remember that Jingye was the only bidder at the time. It was a deal that was welcomed by the GMB union, by the community union, and by UK steel. ..
Many people, including the British Steel workers, the unions on the ground, local MPs, all wanted that deal to happen, and it did indeed go on and get investment into Scunthorpe and keep the business going so that there’s clearly been a breakdown.
The Reform UK leader Nigel Farage backs the nationalisation of the plant. Here are some of the main takeaways of what he said to Laura Kuenssberg this morning:
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He believes nationalisation of the Scunthorpe plant is the right move because he claims the plant’s Chinese owner, Jingye, is a “bad actor”.
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Farage accused the Chinese Communist Party (CCP) of deliberately sabotaging British Steel, but provided no evidence for his claim. “This is a big strategic decision by the CCP,” he said. Asked for his evidence to support that claim, Farage said: “You can call it intuition if you like.”
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Farage said, again without evidence, that he was “100% certain they bought British Steel to close British Steel”.
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Farage says it is hard to estimate how much it would cost the taxpayer to nationalise British Steel “because we can’t trust Jingye’s figures” and that the company “artificially inflated” its losses and has not opened its accounts up to proper auditing.
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Farage said we are living through an “industrial massacre” and a “complete rethink” about British industry is necessary to protect domestic production and interests.
Government expects to lose money running British Steel – business secretary
Reynolds has also been speaking to Sky News’ Sunday Morning programme with Trevor Phillips. He has been asked how much it may cost the taxpayer if the government takes ownership and control of British Steel.
Reynolds said the government expects to lose money running British Steel, but allowing it to collapse would have cost £1bn. There still has been no confirmation of plans to nationalise the plant in Scunthorpe but public ownership is looking increasingly likely.
Speaking to Sky News, Reynolds said:
The losses, the annual losses, net losses, in the last set of accounts were £233m. Actually, that can be improved upon, but I am accepting your point that we would expect to lose money on this.
I would ask the public to compare that to the option of spending a lot more money to reach a deal that would have seen a lot of job losses and Jingye remain as a partner.
Or the cost of the complete collapse of British Steel, easily over £1bn in terms of the need to respond from government, to remediate the land, to look after the workforce.
The business secretary said that, as money had already been set aside for the steel industry at the budget, the government would not need to borrow more as a result of the takeover.
He added: “To be absolutely frank, I think supporting British Steel at this time, in that way, is better than spending a greater deal of money on the complete loss of the business or in a transition deal.”
Jingye still owns the site in Scunthorpe, but the steel industry bill published on Saturday gives the government the power to instruct steel companies in England to keep facilities open, with criminal penalties for executives if they fail to comply.
Laura Kuenssberg asks Jonathan Reynolds why the government was so slow in passing the emergency laws to save British Steel (when weeks ago – on 25 March – British Steel said it might have to close the furnaces).
Q:“Why did you let it get to this Thursday when the coal is about to run out that you actually made this decision?”
A:
Because I don’t think in any job, in any role in government, you take emergency powers of the scale that happened yesterday until you have that emergency situation.
We have been negotiating in good faith. We have been expecting, as I think is reasonable, an economically rational partner on the other side.
When that became evident that that was not possible that required the kind of significant, dramatic emergency action which was taken yesterday.
For some context: Reynolds has accused British Steel’s Chinese owners, Jingye, of failing to negotiate “in good faith” after it decided to stop buying enough raw materials to keep the blast furnaces at Scunthorpe going.
Opening Saturday’s debate, Reynolds said Labour had been engaged in negotiations with Jingye since the party came to power last July, and had offered “substantial” support.
The government recently said it offered to buy the necessary raw materials for the blast furnaces but this had been met with a counter-offer from Jingye demanding “an excessive amount” of support.
Reynolds said yesterday:
Over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw material to keep the blast furnaces running – in fact, their intention was to cancel and refuse to pay for existing orders.
The company would therefore have irrevocably and unilaterally closed down primary steel-making at British Steel.
All would have been lost without emergency legislation being passed – business secretary
Business secretary Jonathan Reynolds is being questioned by the BBC’s Laura Kuenssberg on her Sunday politics programme.
He said the intervention yesterday was “dramatic” but was needed to secure Britain’s “economic security” . He said if nothing was done the blast furnaces and steel production in the UK “would have gone”. His officials are on site right now, the business secretary added.
Kuenssberg pressed the minister, asking him if he was sure if he would have the supplies he needed to keep the furnaces at the plant burning. Reynolds refused to be drawn on the commercial specifics.
“Without the decisive action by the government yesterday all was lost,” Reynolds insisted.
Why does British Steel need to be rescued by the government?
My colleague Philip Inman has written a useful explainer on why British Steel – a major supplier to construction firms and Network Rail – needed to be rescued by the government and explores what the next steps may be, with nationalisation looking increasingly likely. Here is an extract from his piece:
Ministers wanted to develop an industrial strategy – that includes domestically produced steel – before allocating any cash to individual sectors. But the crisis at British Steel’s Scunthorpe plant brought forward a decision about what kind of steel industry the UK needs.
The plant, which is the last remaining maker of mass-produced virgin steel in England and makes a range of products, from girders for the building sector to train tracks, needs raw materials within the next fortnight, including iron pellets and coking coal, or else it faces the prospect of the furnaces cooling to a point where it is neither easy nor cost-effective to bring them back.
The new legislation, approved by parliament on Saturday, will prevent mass redundancies and manage a transition from blast-furnace-produced steel to electric arc furnaces, which can run on renewable energy.
Business secretary gives instructions to British Steel after emergency law is passed to keep it operating
Good morning and welcome back to our rolling coverage of UK politics.
An emergency bill aimed at saving British Steel’s Scunthorpe plant became law yesterday after MPs and peers were recalled from recess to participate in a Saturday sitting for the first time in decades.
They had approved the emergency legislation without opposition, giving the business secretary, Jonathan Reynolds, the power to require British Steel to keep the Scunthorpe plant going after talks with its Chinese owner, Jingye, broke down.
It has, for now, prevented the imminent collapse of the steelworks and the loss of thousands of jobs.
A government source confirmed to the PA agency that Reynolds had given directions to Jingye after the sitting yesterday, but did not specify what those directions were.
Jingye had said the plant was “no longer financially sustainable” and was losing about £700,000 a day.
While there is general cross party consensus over the government’s move to take control of British Steel, the Conservatives said ministers should have acted sooner, with the shadow leader of the house Alex Burghart accusing the government of making “a total pig’s breakfast of this whole arrangement”.
Saturday’s legislation stopped short of fully nationalising British Steel, instead allowing Reynolds to instruct the company to maintain the blast furnaces, keep staff employed and continue to buy the raw materials needed to make steel, with criminal penalties for executives if they refuse.
Although ministers still hope to secure private sector investment to save the plant, there are no companies offering to take it on and the business secretary conceded to MPs that public ownership was “the likely option”.
It is Yohannes Lowe here with you today. Please do email me on [email protected] if you spot any typos or omissions.
