Minister: No options off the table to secure steelmaking in Scunthorpe

The Government has said “no options are off the table” to secure the future of steelmaking in Scunthorpe in response to a call for temporary nationalisation.

Business minister Sarah Jones added early blast furnace closures at the north Lincolnshire site are “far from a done deal” and further talks are planned this week with British Steel’s Chinese owner Jingye.

The company has launched a consultation on the proposed closure of blast furnaces at the Scunthorpe plant, raising fears of thousands of job losses.

The company has reportedly rejected a £500 million Government offer to help its transition to a greener form of steel production with a new electric arc furnace.

Conservative MP Martin Vickers (Brigg and Immingham) led calls for the Government to intervene as he raised concerns that orders are not being made to secure the raw materials “essential” to keep the furnaces going.

Closure would mean the end of steelmaking in Scunthorpe after 160 years of production.

Responding to an urgent question, Ms Jones told the House of Commons: “I can assure this House that early blast furnace closures at Scunthorpe are far from a done deal.

“We have been clear that the best way forward is for British Steel to continue as a commercially run business with private investment and Government acting in support, which is why we made the company a generous offer of public funding on March 24.

“As members are aware, British Steel’s owner did not accept our offer or the necessary conditions attached to it, which were designed to protect workers, safeguard taxpayers’ money and deliver a sustainable company core to the future of British steelmaking. But that is not the end of the matter.”

Ms Jones outlined plans to meet again this week, adding: “The Government remains resolute in our desire to secure a long-term future for the Scunthorpe steelworks, retaining steel production and putting an end to the years of uncertainty.

“I can assure the House that no options are off the table in order to achieve that.”

Mr Vickers said Jingye were “not involved in meaningful negotiations”, adding: “It’s very obvious now that they’ve cancelled the raw material orders that are essential to keep the furnaces going, which were due in mid-May, and when I was at the steelworks on Friday I was told that unless they could place another order for iron ore pellets this week then it’ll be too late.

“With that in mind, can I ask the minister – she was somewhat reluctant to go down the route of nationalisation when I raised the matter a couple of weeks ago, but the majority opinion in the area now and by leading politicians in the area is that nationalisation on a temporary basis is the only solution to keep the furnaces burning come the middle of next month.

“Can the minister confirm that that is something the Government is actively considering?

“It’d give an opportunity to rebuild the industry, hopefully secure new private sector involvement, it would convince the customers – most notably Network Rail, who get 95% of their rail track from the Scunthorpe works – that there will be a continuation of supply.

“So, my view has come round to the view that nationalisation in this instance on a temporary basis is the only way.”

Ms Jones said Jingye are “very much talking to us”, adding: “We have been clear in our belief that the best way forward is for Scunthorpe and British Steel to continue as a commercially run business, as (Mr Vickers) knows, with private investment and government acting in support.

“But I can tell him that no options are off the table.”

Reform UK deputy leader Richard Tice (Boston and Skegness) raised concerns about a lack of iron ore supply and said blast furnaces in Scunthorpe could go “cold” within a fortnight if the Government did not order more.

He added: “When she says no options are off the table, will she confirm that they will make those decisions, come to a conclusion about the options, within this very short time frame to ensure blast furnaces stay open and that actually the right solution, the long-term solution is to take British Steel into public ownership, invest in it for British industry, and for British Steel and for the workers in Lincolnshire.”

Ms Jones, in her reply, said: “As I said about 10 days ago, it’s economics and it’s jobs, not ideology, that is going to drive the decisions that we make.”

She added: “It is our preference that there is a commercial solution with the Government providing support. As I’ve said, all options remain on the table, and I can assure him we are working at pace.”

Conservative MP Sir Julian Lewis (New Forest East) said the minister “shouldn’t waste the opportunity of a lifetime to have the parties of the right urging a party of the left to nationalise a British industry”.

He added: “Seize the opportunity, keep the blast furnaces, and, if necessary nationalise them for good.”

Ms Jones replied: “I have not failed to notice the slightly odd position that we find ourselves in today and I would just repeat that we are looking at all options.”