Reynolds issues guidance to British Steel after MPs back emergency law
The business secretary Jonathan Reynolds has issued instructions to British Steel, using the emergency powers approved by Parliament on Saturday to save the Scunthorpe blast furnaces.
A government source confirmed that Reynolds had given directions to the company following the extraordinary sitting of Parliament.
But they declined to give details of those instructions, saying they would not provide a running commentary on them.
Earlier on Saturday, MPs and peers had approved emergency legislation without opposition, giving Reynolds the power to require British Steel to keep the Scunthorpe plant going after talks with its Chinese owner, Jingye, broke down.
In a highly unusual step, the government had recalled Parliament from its Easter recess at short notice, fearing that the blast furnaces could be irrevocably closed within days without urgent action.
Prime Minister Sir Keir Starmer said the government had “stepped in to save British Steel”, adding: “We are acting to protect the jobs of thousands of workers, and all options are on the table to secure the future of the industry.”
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 purchase 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 currently no companies offering to take it on and Reynolds conceded to MPs that public ownership was “the likely option”.
Reynolds said the emergency legislation was a “proportionate and necessary step”, adding he wanted it to be a “temporary position” with the powers not lasting “any minute longer than is necessary”.
The government has been in negotiation with Jingye on the future of the Scunthorpe plant since it came to power last year, taking on the long-running talks between the company and the previous government.
But, opening the debate in Parliament on Saturday, Reynolds said ministers had decided to act after Jingye had failed to act “in good faith” by deciding to stop buying raw materials for the blast furnaces.
He said the company had also rejected an offer from the government to purchase raw materials without causing any loss to Jingye, instead demanding a “frankly excessive” amount of money with few guarantees the plant would remain open.
He told MPs: “We could not, will not and never will stand idly by while heat seeps from the UK’s remaining blast furnaces without any planning, any due process or any respect for the consequences.”
Burghart: Ministers making ‘total pig’s breakfast’ of situation
But the Conservatives said the government should have acted sooner, with shadow leader of the House Alex Burghart accusing ministers of making “a total pig’s breakfast of this whole arrangement”.
Shadow business secretary Andrew Griffith said the government was seeking a “blank cheque”, while Tory leader Kemi Badenoch claimed Labour had “botched” a deal she had negotiated with British Steel while business secretary.
However, she was unable to provide details of the deal, saying negotiations were still ongoing when last year’s election was called, but adding it “would have succeeded better” than Reynolds’s plan.
Writing in The Sunday Times, Reynolds said the government “refused to be extorted by a company that repeatedly refused to act rationally”.
“The seeds of this decision were sown long before the United States opted to impose tariffs on steel,” he said.
“Previous governments have been too willing to stand idly by while heat seeped out of blast furnaces, but to lose this capability now, in this manner, would have weakened our industrial base irrevocably. Inaction was never an option.”
Businesses and trade unions welcomed the government’s decision to take control of the Scunthorpe plant.
John Foster, chief policy and campaigns officer at the CBI, said it was “a necessary outcome of last resort” to protect the UK’s primary steelmaking industry, while TUC general secretary Paul Nowak said it was “the right thing to do” and “in the national interest”.
Foster added: “In a period of global instability, it is increasingly important for our resilience that we have the capability within the UK to provide the steel that we need and that isn’t subject to the volatile backdrop provided by tariffs.”
By Christopher McKeon, Richard Wheeler, Will Durrant, Harry Taylor and Nick Lester, PA Political Staff