British Steel saved, thanks to emergency weekend negotiations

The Prime Minister requested the recall of Parliament on Friday 11 April to vote on emergency legislation to prevent the blast furnaces from being shut down.

The move will maximise the chances of securing domestic steel production – a crucial national capability which was at risk of collapse under the site’s current ownership. This is a very specific intervention taken in exceptional circumstances.

Founded in 2016, British Steel has struggled to keep up with global competitors such as China. British Steel’s owners Jingye, which bought the company confirmed their intention to close the blast furnaces at Scunthorpe immediately, despite months of negotiations and an offer of co-investment from the UK government of £500 million. 

The legislation will give the Government the power
to direct the company’s board and workforce, ensure they get paid, and order the raw materials to keep the blast furnace running.

In the meantime, the Government has instructed the company’s UK management to continue the running of the plant to ensure the furnaces keep burning. This legislation means that anyone employed at the plant who takes steps to keep it running, against the orders of the Chinese ownership, can be reinstated if sacked for doing so.

Given global economic instability, steel is vital for both the UK’s national security and manufacturing, the Government says. It will play a key role in the mission to build 1.5 million new homes in the UK, with construction projects requiring millions of tonnes of steel. 

On
Tuesday 15 April, the Business Secretary pushed ahead with efforts to safeguard British Steel, overseeing the unloading of raw materials in Immingham after the Government successfully settled payment for them.

The materials – which have arrived from the US – are enough to keep the blast furnaces running for the coming weeks, with officials continuing to work at pace to get a steady pipeline of materials to keep the fire burning.

A separate ship, which contains yet more coking coal is on the way to the UK from Australia. This cargo was the subject of a legal dispute between British Steel and Jingye that has now been resolved. The materials have been paid for using existing DBT budgets.

New legislation passed after negotiations
on 12-13 April gives the Government the power to direct the company’s board and workforce, ensure they get paid, and order the raw materials to keep the blast furnaces running. It also permits the Government to do these things itself if needed. 

The Government acted to protect 37,000 jobs in supply chains and ensure it can build the infrastructure needed to deliver growth.

On Monday 14 April, the appointments of Allan Bell as interim Chief Executive Officer, and Lisa Coulson as interim Chief Commercial Officer were confirmed, both with immediate effect – ensuring the right expertise is in place to keep the site running smoothly.

After intensive work over the weekend, the Government has secured coke and iron ore pellets for the blast
furnaces and is confident there will be enough materials to keep the furnaces burning.

Business and Trade Secretary Jonathan Reynolds said: “We will always act in the interest of working people and UK industry. Thanks to the work of those at British Steel, and in my department, we have moved decisively to secure the raw materials we need to help save British Steel.

“Our industries depend on UK steel and – thanks to our Plan for Change – demand is set to shoot up: helping build the 1.5 million homes, railways, schools and hospitals we need to usher in a decade of national renewal.”

Following the announcement, several MPs across the political spectrum have called for the nationalisation of all steelmaking in the UK, including former Labour leader (now an Independent MP) Jeremy Corbyn and Green MP Ellie Chowns.