The Prime Minister yesterday recalled Parliament to vote on emergency legislation to prevent the Scunthorpe blast furnaces being shut down and 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.
A Bill was voted on by MPs to ensure continuity of production at the Scunthorpe site – avoiding the danger and cost of allowing it to stop. Funding for the site will come from the Government’s £2.5 billion steel fund, to help rebuild the industry over the next five years.
This is a very specific intervention taken in exceptional circumstances and is the first time MPs have been recalled for a Saturday sitting since the Falklands War to prevent the imminent closure of Britain’s last remaining primary steelworks in Scunthorpe and with it the UK’s ability to make its own steel.
Steelmaking at severe riskBritish Steel’s owners Jingye had confirmed their intention to close the blast furnaces at Scunthorpe immediately, despite months of negotiations in good faith and a generous offer of co-investment from the UK Government of £500 million. If the blast furnaces were to be immediately switched off, this would have put at severe risk the future of steelmaking at the site. The legislation passed yesterday 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 furnaces alight.
In the meantime, the Government has instructed Jingye’s UK management to continue the running of the plant to ensure the furnaces remain operational. This legislation means that anyone employed at the plant who takes steps to keep it running, against the orders of the Chinese owners, can be reinstated if sacked for doing so.
Steel is considered vital for both the UK’s national security and manufacturing, and crucial for the Government’s mission to build 1.5 million new homes in the UK, with construction projects requiring millions of tonnes of steel.
Business Secretary Jonathan Reynolds said: “We will always do what is necessary to keep Britain secure at home and strong abroad. We are doing what previous UK Governments have failed to, acting in the national interest to help secure UK steelmaking for the future. We negotiated with British Steel’s owners in good faith ever since coming to office. We made a generous offer of support to the company and I am deeply disappointed that we have been forced to take these measures, but Jingye have not been forthright throughout this process, and left us no choice but to act.
“We are in a new and changing world where it has never been more important to support our security and build our resilience, so that we can have strength abroad and renewal at home, and that is what this government has done.”
Decisive actionGareth Stace, director general of
UK Steel, the voice of the UK’s steel producers, said: “UK Steel welcomes the Steel Industry (Special Measures) Bill, which will allow the British Steel site at Scunthorpe to maintain operations while Government negotiations with the company continue. In particular, we appreciate the decisive action of the Business Secretary, Jonathan Reynolds, who has recognised the urgency of protecting our industry with this unprecedented recall of Parliament.
“A blast furnace is a dynamic piece of machinery. If the fires go out, it is nigh on impossible for it to be brought back to life – so a solution to keep them running is time-critical. It is, therefore, vital that the blast furnaces remain operational during negotiations, providing some security and breathing space in the short term, and this legislation will ensure this can happen.
“We encourage the Government and British Steel to work at pace on a long-term solution for the Scunthorpe site, which is critical in supporting thousands of jobs, national security of supply, the wider UK economy and many more people and communities in the supply chain.”