British Steel has been taken into public ownership in a move the government said would protect jobs and safeguard "a vital national capability".
The report indicates that british Steel has been taken into public ownership in a move the government stated would protect jobs and safeguard “a vital national capability”.
It further notes that the future of the steelworks, which employs roughly 2,700 people in Scunthorpe and supports many other industries in north Lincolnshire, has been dogged by uncertainty over recent years.
The UK government had taken control of British Steel’s operations in Scunthorpe last year, though it was still owned by China’s Jingye Group, limiting the government’s ability to decide on its future strategy.
Nationalisation buys the government time and gives it the power and freedom to decide on the future of the plant, while keeping the blast furnaces going.
Ultimately it is unlikely the government will want to remain in charge of a business that is costing it more than a million pounds a day.
In March, the National Audit Office released a report noting that the Scunthorpe steelworks was costing the government about £1.3m a day.
The nationalisation came after Parliament on Wednesday passed legislation allowing the government to bring the steel industry into public ownership under circumstances where it met a public interest test.
Jingye is seeking compensation for nationalisation, having previously stated the business was losing £700,000 a day. The BBC has been unable to get a response from Jingye to Thursday’s announcement.
Business Secretary Peter Kyle told the BBC the government will need to cover the running costs “for the immediate future”.
He stated an independent assessor would determine whether Jingye should be compensated for the nationalisation based on the value of the company.
“But let me be really clear, there is an alternative here – that we let this business go bust,” he said.
“If that business disappears, we will lose the ability for primary steel production in our country, we will become entirely dependent on global supply.”
Unite general secretary Sharon Graham welcomed news of the nationalisation, saying it needed to be “the first step in a journey to transform our steel industry”.
“We need serious investment on the ground across the industry to create jobs and make Britain a leading producer of green steel.”
