Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The UK government is considering nationalising British Steel, as Sir Keir Starmer on Tuesday vowed to do “everything we can to ensure there’s a bright future” for the Chinese-owned steelmaker’s main site.
The heavily lossmaking company, which employs 3,500 people across three sites in the UK, is at risk after owner Jingye Group and the UK government failed to agree a package of financial support.
A shortage of raw materials required to keep the UK’s last two blast furnaces active at British Steel’s main site in Scunthorpe, Lincolnshire, needs to be resolved within 48 hours, according to people familiar with the matter.
UK officials are examining options to purchase the coking coal and iron materials needed to keep the furnaces working in the short term because British Steel had not as yet ordered them, the people said.
Restarting the blast furnaces would be difficult and take time if they are deactivated and the metal inside them is allowed to cool. The closure of the Scunthorpe facility, which supplies 95 per cent of the UK’s rail tracks, would put 2,700 jobs at risk and leave the UK without the ability to make steel from scratch.
Starmer said discussions with Jingye were “ongoing” and reiterated his position that “all options are on the table”. Business secretary Jonathan Reynolds is due to meet with executives from the company on Wednesday.
“We are doing everything we can to ensure there’s a bright future for Scunthorpe,” Starmer said.
He added that: “I’m absolutely committed to steel production in this country”, and highlighted the “impact” that any “loss of capacity” at the steelworks plant would have on the workforce, community and country.
Chancellor Rachel Reeves told trade union chiefs in calls over the weekend that she is open to the option of bringing British steel into public ownership, according to people familiar with the conversations.
However, industry minister Sarah Jones stressed earlier this week that “the best way forward is for British Steel to continue as a commercially run business, with private investment, and government acting in support”, rather than as a nationalised asset.
The discussions come after both sides hit an impasse over a £2bn deal to switch to less polluting steelmaking. The government offered £500mn of state aid to British Steel’s Chinese owner, far less than the £1bn it had requested.
Ministers are not considering making a more generous offer of UK government support to Jingye, a government figure said.
British Steel declined to comment.
Credit: Source link
