Government ministers are considering renationalizing British Steel in a final effort to protect thousands of jobs, as tensions increase amid a standoff between the government and the company’s Chinese owners over a £1 billion investment.
Jonathan Reynolds, the business secretary, is in talks with British Steel and its owner, Jingye, about how much each party should put into a rescue plan for its main Scunthorpe site.
Sources say Reynolds is open to a full acquisition, in a move that would reverse Margaret Thatcher’s privatization of the British steel industry in 1988.
A Whitehall official stated, “It is one of several options being looked at. We would have been negligent not to look at it. But it is the least attractive option. We would be talking about substantial sums of money to buy, not very much.”
A spokesperson for the business secretary declined to rule out nationalizing the company however, the officials added that the government had “no plans” to do so, commenting the following, “We’re working across government in partnership with trade unions and businesses to secure a green steel transition that’s right for the workforce, represents a good investment for taxpayers and safeguards the future of the steel industry in Britain.”
British Steel’s plant at Scunthorpe in Lincolnshire employs about 4,000 people and is now the UK’s last remaining site producing steel from iron ore, after the Indian company- Tata, shut down its blast furnaces in Port Talbot, South Wales.
It provides steel for everything from railways to heavy machinery to warships, making it the centre of the government’s infrastructure and national security plans.
Nationalization would present several complications, however, especially if the government planned to keep blast furnaces running while building electric arc furnaces, The Guardian reports.