‘Likely’ British Steel will be nationalised, says business secretary Jonathan Reynolds
Business Secretary Jonathan Reynolds has said it is “likely” that British Steel will be nationalised.
However he also stressed the importance of finding a private sector partner for the business because the scale of capital required for steel transformation was “very significant, even with government support”.
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It comes after he appeared to row back on his claim that he would not bring a Chinese company into the steel sector again after ministers had to urgently step in to save the British Steel plant in Scunthorpe.
Mr Reynolds, speaking to reporters in the Lincolnshire town after raw materials arrived to keep the site running, said that nationalisation was the “likely option at this stage”.
He added: “What we are now going to do, having secured both control of the site and the supply of raw materials, so the blast furnaces won’t close in a matter of days, is work on the future.
“We’ve got the ownership question, which is pressing.
“I was clear when I gave the speech in parliament – we know there is a limited lifespan of the blast furnaces, and we know that what we need for the future is a private sector partner to come in and work with us on that transformation and co-fund that transformation.”
The government passed emergency legislation on Saturday to take over British Steel’s Scunthorpe plant, the last in the UK capable of producing virgin steel, after talks with its Chinese owners, Jingye, broke down.
The company recently cancelled orders for supplies of the raw materials needed to keep the blast furnaces running, sparking a race against time to keep it operational.
While those materials have been secured, questions remain about the long-term future of British Steel and whether it will be fully nationalised or the private sector will get involved.
Reynolds rows back
Mr Reynolds earlier said he would look at Chinese firms “in a different way” following the row but did not rule out their involvement completely.
He previously told Sky News’ Sunday Morning With Trevor Phillips, that he would not “personally bring a Chinese company into our steel sector” again, describing steel as a “sensitive area” in the UK.
However, industry minister Sarah Jones took a different position on Tuesday morning, telling Sky News she is “not ruling out” the possibility of another Chinese partner.
She said having a pragmatic relationship with Beijing, the world’s second-biggest economy, is still important and stringent tests would apply “to a Chinese company as they would to any other company”.
Asked for clarity on his position during a visit to the port of Immingham, where materials from two ships were being unloaded and transported to the plant, Mr Reynolds said: “I think we’ve got to recognise that steel is a sensitive sector.
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“A lot of the issues in the global economy with steel come from production and dumping of steel products… so I think you would look at a Chinese firm in a different way.
“But I’m really keen to stress the action we’ve taken here was to step in because it was one specific company that I thought wasn’t acting in the UK’s national interest, and we had to take the action we did.”
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China relationship ‘really important’
The materials that arrived on Tuesday, including coking coal and iron, are enough to keep the furnaces running for weeks, the Department for Business and Trade said.
They are needed because if the furnaces cool down too much, the molten iron solidifies and blocks the furnaces, making it extremely difficult and expensive to restart them.
‘Chinese ownership truly dreadful’
Opposition politicians have accused China of sabotage to increase reliance on its steel products, and want the country to be prevented from future dealings not only with steel but any UK national infrastructure.
Veteran Tory MP Sir Iain Duncan Smith said the government needs to define which industries are “strategic” – and prevent China from being allowed to invest in such sectors.
Liberal Democrats foreign affairs spokesperson Calum Miller said reverting to Chinese ownership would be like finding “your house ransacked and then leaving your doors unlocked”.
Raw materials for the Scunthorpe steel plant
Coking coal is unloaded at Immingham Port. Pic: Reuters
Reform UK leader Nigel Farage took the same position, saying the thought the government “could even contemplate another Chinese owner of British steel is truly dreadful”, and that he would not have China “in our nuclear program, anywhere near our telecoms or anything else”.
“They are not our friends,” he added.
Number 10 said on Monday that it was not aware of any “sabotage” at the plant and there is no block on Chinese companies.
The Chinese embassy has urged the British government not to “politicise” the situation by “linking it to security issues”, saying it is “an objective fact that British steel companies have generally encountered difficulties in recent years”.
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Jingye reported losses of around £700k a day at Scunthorpe, which will now come at a cost to the taxpayer.
During Tuesday morning’s interview round, Ms Jones said the government had offered Jingye money in return for investment and “we think that there is a model there that we could replicate with another private sector company”.
But she said there “isn’t another private sector company there waiting in the wings” currently, and that it may be a “national solution” that is needed.
She said “all of the options” were expensive but that it would have cost more to the taxpayer to allow the site to shut.
A YouGov poll shows the majority of the public (61%) support the government’s decision to nationalise British Steel.
Business
JPMorgan Chase unveils plans to build new £10bn ‘landmark tower’ in London – double the size of The Shard
Plans have been announced for a new “landmark tower” in London with double the floor space of Britain’s tallest building, The Shard.
JPMorgan Chase unveiled details of the proposed office block after banks escaped having their taxes raised in the budget earlier this week.
The US multinational bank said the new building in Canary Wharf, in the east of the capital, would have a floor space of three million square feet. The Shard, in London Bridge, covers 1.3 million square feet.
However, the final design of the tower, including its height, is still being finalised.
A spokesperson for the firm told Sky News that they hoped to have clarity “soon” on how tall the building would be and the number of storeys. But it is expected to be one of the biggest office blocks in Europe.
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JPMorgan Chase boss Jamie Dimon reportedly signed off on the plans late last week.
It came after Sir Keir Starmer’s business envoy Varun Chandra flew out to New York to personally “offer assurances about the government’s business-friendly policies,” the Financial Times reported on Friday.
The Shard is the tallest building in western Europe. Pic: Reuters
The company also warned in a press release that its plans were “subject to a continuing positive business environment in the UK”, as well as planning permission from local authorities.
JPMorgan Chase said the project could contribute up to £9.9bn to the UK economy over six years, including by generating 7,800 jobs, many of them in the construction industry.
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The tower would house up to 12,000 people and serve as JPMorgan Chase’s main UK headquarters and its most significant presence in Europe, the Middle East and Africa.
The firm, which employs 23,000 people in the UK, said the tower would be “one of the largest and most sophisticated in Europe”.
The building is being designed by British architects Foster and Partners, known for landmarks projects including the new Wembley Stadium and London’s Millennium Bridge.
Mr Dimon said: “London has been a trading and financial hub for more than a thousand years, and maintaining it as a vibrant place for finance and business is critical to the health of the UK economy.
“This building will represent our lasting commitment to the city, the UK, our clients and our people.”
Mr Dimon added: “The UK government’s priority of economic growth has been a critical factor in helping us make this decision.”
Chancellor Rachel Reeves said she was “thrilled” about the announcement, while Mayor of London Sir Sadiq Khan said it represented a “huge vote of confidence in the capital’s future”.
Business
‘Sticking to Labour manifesto pledge costs millions of workers’, Resolution Foundation says
Sticking to Labour’s manifesto pledge and freezing income tax thresholds rather than raising income tax has hurt low- and middle-income earners, an influential thinktank has said.
Millions of these workers “would have been better off with their tax rates rising than their thresholds being frozen”, according to the Resolution Foundation’s chief executive, Ruth Curtice.
“Ironically, sticking to her manifesto tax pledge has cost millions of low-to-middle earners”, she said.
Chancellor Rachel Reeves announced in her budget speech that the point at which people start paying higher rates of tax has been held. It means earners are set to be dragged into higher tax bands as they get pay rises.
The chancellor felt unable to raise income tax as the Labour Party pledged not to raise taxes on working people in its election manifesto.
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Budget: What does the public think?
But many are saying that pledge was broken regardless, as the tax burden has increased by £26bn in this budget.
When asked by Sky News whether Ms Reeves would accept she broke the manifesto pledge, she said:
“I do recognise that yesterday I have asked working people to contribute a bit more by freezing those thresholds for a further three years from 2028.”
“I do recognise that that will mean that working people pay a bit more, but I’ve kept that contribution to an absolute minimum”.
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The Resolution Foundation thinktank, which aims to raise living standards, welcomed measures designed to support people with the cost of living, such as the removal of the two-child benefit cap, which limited the number of children families could claim benefits for.
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The announced reduction in energy bills through the removal of as yet unspecified levies was similarly welcomed.
The chancellor said bills would become £150 cheaper a year, but the foundation said typical energy bills will fall by around £130 annually for the next three years, “though support then fades away”.
More to come
This budget won’t be the last of it, Ms Curtice said, as economic growth forecasts have been downgraded by independent forecasters the Office for Budget Responsibility (OBR), and growth is a “hurdle that remains to be cleared”.
“Until that challenge is taken on, we can expect plenty more bracing budgets,” she added.
It comes despite Ms Reeves saying as far back as last year, there would be no more tax increases.
Ultimately, though, the foundation said, “The great drumbeat of doom that preceded the chancellor’s big day turned out to be over the top: the forecasts came in better than many had feared.”
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