Latest news with #Scunthorpe-based
Yahoo
14-04-2025
- Business
- Yahoo
Race to save British Steel amid fears of Chinese owners' 'sabotage'
The government's emergency takeover of British Steel could lead to the UK re-examining China's relationship with Britain's critical industries. Parliament passed an extraordinary bill on Saturday that gave the government the power to force owners of steel companies in the country to keep their sites working. The government feared that the Chinese owner of the Scunthorpe-based British Steel workers were deliberately trying to cause it to break down. In an interview with the BBC, business minister Jonathan Reynolds accused Jingye of not buying the raw materials necessary to keep the blast furnaces working, and in some cases even selling off excess. If the blast furnaces ever turn off they can never be turned back on. The government is currently racing to find the materials required. Sir Christopher Chope, a Tory MP, told Times Radio that shutting down British Steel was Jingye's plan and said they wanted to "sabotage" the UK's ability to produce virgin steel so they it would be forced to rely on Chinese imports. Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, told the Times that Beijing tried to undermine the industrial base of other countries all over the world. But he added: "Yet we keep handing Beijing the tools of our own demise. British Steel must be the canary in the coalmine for all Chinese investment in UK critical infrastructure." Read more about the British Steel crisis below. Click the headlines to skip ahead > Race to keep British Steel furnaces running > Network Rail stockpiles year's worth of rails > Why the UK is saving British Steel - but didn't save Port Talbot > What happened with British Steel's Chinese owners? Last-minute efforts to keep British Steel operating are to be carried out today, as the plant races to secure a supply of raw materials. The Department for Business and Trade said officials are working to secure supplies of materials, including coking coal, to keep British Steel operational, as well as to ensure all staff will be paid. Companies including Tata - which ran the now-closed Port Talbot steelworks - and Rainham Steel have offered managerial support and materials to keep the Lincolnshire site running. Read the full story from Sky News Network Rail has built up a stockpile of rails to last as long as a year in case of disruption in the supply from British Steel's Scunthorpe works. The company, which manages Britain's railway tracks, has been stockpiling rails over the past 12 months as British Steel started to contemplate the closure of its two blast furnaces. The rails are stored at depots around the country. Read the full story from the Guardian While Westminster has stepped in to save the blast furnaces and primary steelmaking at British Steel in Scunthorpe with emergency legislation, a deal was done with the owners of the Port Talbot plant which allowed the blast furnaces to be closed and the site to switch to electric arc recycling of existing steel. The Government has said there was no deal on the table with the Chinese owners of British Steel in Scunthorpe so it had to take emergency action to maintain a steelmaking capacity in the UK, but the Indian owners of Tata in Port Talbot were prepared to negotiate and had a plan for the site. Read the full story from Wales Online The UK government has moved to take control of British Steel following fears that the blast furnaces at its Chinese-owned site in Scunthorpe could be at risk of shutting down. Parliament approved the plans to seize control of the site after Sir Keir Starmer called for the Commons to hold its first Saturday sitting since the Falklands War in 1982. Read the full explainer from the Independent
The Guardian
12-04-2025
- Business
- The Guardian
The Observer view on British Steel: saved for now, but for how long?
The UK's last two remaining blast furnaces have hovered on the brink of shutting down over the past week. It has emerged that Jingye, the Chinese owner of Scunthorpe-based British Steel, was poised to refuse to buy further supplies of the coke and iron ore required to keep them running, at which point it would not have been possible to restart them; effectively, a unilateral decision to put an end to Britain's capacity to produce primary steel. In these circumstances, the government had no choice but to recall parliament for an emergency sitting to pass legislation to give business secretary Jonathan Reynolds the power to direct British Steel. The UK is starting from a low steel-producing base: it produced just 7.2m tonnes in 2021, compared with 13.9m tonnes in France, 24.4m tonnes in Italy and 40.1m tonnes in Germany. If British Steel were to shut its furnaces, this would leave the UK as the only G7 nation without primary steel-making capacity, with significant economic and security consequences. A range of industries rely on steel: construction, defence, transport, green energy. Without British-produced steel, global giant ArcelorMittal would attain what the defence thinktank Rusi has described as a 'virtual monopoly' in the production of structural steel building frames for the UK market. Network Rail sources about 95% of its track from Scunthorpe. Parts of the defence industry are heavily reliant on British-produced steel; 90% of the steel used in Queen Elizabeth-class aircraft carriers was produced by Tata Steel at Port Talbot, for example. There would be significant risks if UK industry were to become wholly reliant on steel imports, in a world characterised by increasing instability and the trade protectionism of Donald Trump's White House. Europe may be considered a reliable trading partner, but the steel tariffs imposed by the US, combined with pressures for increased defence capability as the US goes cold on Nato, means the UK may not be able to count on sufficient supply from our European allies. So the government had to intervene in this way: to let the furnaces in Scunthorpe go out would have been not only to lose thousands of jobs, affecting the community, but to put Britain's security at risk. The power to direct British Steel does not amount to nationalisation, but this seems an all-but-certain outcome, given the situation with Jingye. It could end up costing the British taxpayer dear, but the risks of not maintaining domestic primary steel production would be even more costly. Sign up to Observed Analysis and opinion on the week's news and culture brought to you by the best Observer writers after newsletter promotion It is far from ideal that ministers have found themselves in this situation, and for that governments of both colours over decades bear responsibility. The history of British steel-making has been lurching from crisis to crisis: the Scunthorpe furnaces were sold by Tata Steel to the private equity fund Greybull Capital in 2016, which left just three years later. The only buyer on the market was Jingye, which Boris Johnson, the then prime minister, saw as a more palatable option than closure or nationalisation. No government has set out a long-term strategy for maintaining British primary steel-making capacity, including realistic plans for decarbonisation, given it is a huge polluter. While steel producers in France and Germany have been relatively protected from high wholesale energy costs through government intervention, UK producers have been paying up to 50% more for electricity, a huge input cost into steel-making, than their competitors from these countries; Conservative business secretaries never addressed this asymmetry. The last government could also have done more to increase the market for low-carbon steel through regulation. It is an all-too-common aspect of British industrial policy: a complete lack of long-term strategy for nurturing competitive British companies and removing barriers to their growth. There is a risk that, without a broader strategy for British Steel, the government nationalises the Scunthorpe furnaces in a way that will drain billions of taxpayer funds but is not part of a sustainable strategy for the future of primary steel-making in the UK. That needs to be the priority once the immediate crisis is averted. But the business secretary needs to learn the broader lessons of this sorry saga for industrial policy across the board. The UK is in a precarious position economically: long-term structural issues including low productivity growth and business investment and stagnant living standards have been compounded by the pandemic, by the energy crisis and by the global instability created by Trump's tariffs policy. Britain's long-term growth potential has been harmed irrevocably through Brexit and the erection of significant trading barriers with our largest and closest trading bloc. We are living in a world in which Britain has declining economic and diplomatic agency. It is more important than ever to limit our dependence on other countries, including China, for the production of materials of strategic importance. The government deserves praise for taking swift action to prevent its primary steel-making capacity from being shut down. But that's the easy bit: the much more difficult question is whether it's possible to improve the competitiveness of British Steel in the medium term, while decarbonising, in a way that ensures the future of steel-making in the UK without it being forever reliant on huge subsidies from the taxpayer.
The Independent
11-04-2025
- Business
- The Independent
Parliament to be recalled to debate nationalising beleaguered British Steel
MPs will be recalled to the House of Commons to discuss the future of British Steel on Saturday, including potentially nationalising the beleaguered firm. Talks have been ongoing in a bid to secure the future of British Steel and prevent heavy job losses. The Chinese owner of the Scunthorpe-based business plans to close the blast furnaces and switch to a greener form of production. Parliament closed for the Easter recess on Tuesday, but MPs will be recalled on Saturday to discuss plans for the company. Ministers have said all options are on the table for its future, including nationalisation, over concerns its closure would leave the UK without any domestic virgin steel makers. It is the first recall of parliament on a Saturday since 1982.
Yahoo
09-04-2025
- Business
- Yahoo
Talks continue to secure future of British Steel in Scunthorpe
Talks are continuing in a bid to secure the future of British Steel and prevent heavy job losses. The Chinese owner of the Scunthorpe-based business plans to close the blast furnaces and switch to a greener form of production. Business and Trade Secretary Jonathan Reynolds and officials met with the chief executives of Jingye and British Steel on Wednesday for discussions on steelmaking in Scunthorpe. A statement said: 'Both sides welcomed continued cooperation in talks to find a way forward. 'The UK Government thanked Jingye for their respect for the workforce during this process, and work continues at pace to find a resolution.'
Sky News
27-03-2025
- Business
- Sky News
Thousands of jobs at risk as British Steel consults unions over closure
Britain's second-biggest steel producer is kicking off a consultation that could lead to the closure of its two blast furnaces and more than half of its workforce losing their jobs - a move that will pile pressure on the government to improve an offer of taxpayer aid to the company. Sky News has learnt that British Steel was on Thursday morning in discussions with trade unions about a redundancy process that could result in between 2,000 and 2,500 employees being axed out of a workforce of 3,500. One trade union source said that meetings were taking place with a public announcement about plans to accelerate the closure of Scunthorpe's two blast furnaces likely later on Thursday. The launch of the redundancy consultation comes amid an impasse between Jingye Group, British Steel's Chinese owner, over a government subsidy package to aid the company's transition to greener steel production. Sky News revealed on Wednesday that Jingye had this week rejected a £500m offer from the government. Sarah Jones, the industry minister, told MPs that talks were continuing, while an urgent question is expected to be answered in the House of Commons on Thursday. The £500m proposal - aimed at facilitating the Scunthorpe-based group's transition to green steel production - follows years of talks aimed at salvaging the future of the UK's second-biggest producer. Its scale is equivalent to the sum awarded to the larger Tata Steel as part of a £1.25bn package finalised last year. Whitehall sources said that Jingye's business plan would involve a smaller number of jobs being cut if a switch to electric arc furnaces took place, with the redundancies also staggered over a longer period. However, the Chinese group has argued that that transition would only be possible with a larger sum of government funding, they added. In a statement sent to Sky News, the Community union's general secretary, Roy Rickhuss, said: "This is a dark day for our steel industry and for our country. "We urge Jingye and the UK Government to get back around the table to resume negotiations before it is too late. "Cruciallly, Jingye have not ruled out retaining the blast furnaces during a transition to low carbon steelmaking if they can secure the backing of the Government. "The closures at Scunthorpe would represent a hammer blow to communities which were built on steel, and where the industry still supports thousands of jobs directly and thousands more through extensive supply chains. "Given that we are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened. "This would be catastrophic at any time, let alone in the current era of geopolitical instability and volatility. Steel is an essential component of defensive infrastructure, just as it is to wider plans to invest in growth across the country. The rejection of the £500m offer leaves Scunthorpe's future on a knife-edge, although Whitehall sources said that all parties involved in the negotiations were hopeful that a deal could yet be struck. However, the package offered so far falls well short of the sum that Jingye has been seeking from the government during several rounds of talks since Labour won last summer's general election. The Chinese-owned group is thought to have requested £1bn or more from ministers - double the amount handed to Tata Steel, owner of the Port Talbot steelworks in South Wales, last autumn. British Steel, which was taken over by Jingye in 2020 after a spell in public ownership, employs several thousand people at its sites in Scunthorpe, Teesside and elsewhere. It has been pushing for taxpayer funding to support a transition to green steelmaking by replacing Scunthorpe's two blast furnaces with cleaner electric arc furnaces. Reports late last year suggested that nationalisation was an option being explored by ministers. The government's proposal comes at a deeply sensitive time for Britain's steel industry, with fears of swingeing US tariffs exacerbating concerns that the sector's viability will be put at risk. Last month, Mr Reynolds published the government's Plan for Steel consultation, which will include up to £2.5bn in funding for the industry, in line with a commitment in last year's Labour election manifesto. "The UK steel industry has a long-term future under this government," he said. "Britain is open for business, and this government has committed up to £2.5bn to the future of steel to protect our industrial heartlands, maintain jobs, and drive growth as part of our Plan for Change." During the same month, Mr Reynolds held further talks with Jingye Group's boss, Li Huiming, in the latest chapter of a negotiation which has been dragging on for more than two years. British Steel was bought by Jingye the year after it was placed into compulsory liquidation. The company had been owned by private investment firm Greybull Capital.
