What chaos. The UK government wants to pose as the saviour of traditional steelmaking in the UK. It will discover that using large sums of taxpayer money to buy imported coal and iron ore is the easy bit. The compliant media will tire of celebrating the arrival of foreign coal ships as if this was some superhuman achievement. The real issues are who will own the works? Who will run it well? Who will pay for all the losses? How much longer can the two old blast furnaces operate without rebuilding the linings or other deep maintenance?
The last government was negotiating to replace the two blast furnaces with an electric arc furnace. So was this government in accordance with its net zero zealotry, pledged to eliminate the burning of coal from our country to cut out home produced CO 2. Up to this point their policy has been to welcome every closure of fossil fuel burning industrial activity and its replacement by imports. Under the crazy accounting for CO 2 this cuts the UK amount and loads it all onto the country making the things we no longer make which they sell back to us as imports.
Seeing the Chinese owners of the Scunthorpe plant moving to closure as part of the plan before agreement on a new electric are plant to follow a few years later the government decided to switch policy on the closure of the blast furnaces. I welcome that, as like many people I think we should not de industrialise and sack our current industrial workforce to rely on imports. I suspect the May 1 elections in Lincolnshire loomed large in Ministers minds. Let us hope this dramatic policy flip is not just a pre-election stunt.
The government’s hatred of coal and love of electricity is killing UK industry – Sir John Redwood
GB News/Getty Images
It would have been best for Ministers to agree terms with the current owners to keep the blast furnaces running. Failing that they should have taken control of the business and agreed terms which could have entailed buying the assets for say £1 and removing the Chinese from liability to closure costs which they would otherwise incur. Freed of past debts and redundancy costs the business transferred would still be a financial and business problem for taxpayers. The high carbon and energy taxes and prices of government design makes the UK uncompetitive. Selling the steel output is difficult against cheaper and subsidised foreign competition.
Instead, the government has set itself up for endless disputes and problems. Taxpayers are buying coal and iron ore for the works owned by a private company. The new Steel Act say taxpayers will be owed such money by the Chinese company though they have made clear they cannot afford it. Has the government a business plan ? How much will taxpayers in practice be paying to continue the blast furnaces and the workforce?
What is the government view of how long the blast furnaces can be kept running? These are very old assets which may need substantial refurbishment soon. Has the government carried out a safety review? Now it is intervening it needs to take responsibility. When I chaired an industrial group including a steel rolling mill safety came first as handling hot metal is a dangerous task.
The government must urgently sort out the ownership and management of British Steel.
Getty Images
The works needs a flow of orders for its output. What is the government policy on prices to win business and acceptable loss levels on orders? Is Mr Reynolds going to become top salesman for the company with his access to public sector construction and nationalised railways who are big steel users?
To prove this is more than a media stunt the government needs to spell out what its budget is for this key part of our steel industry. It needs urgently to sort out ownership and management. It should be actively seeking new managers and controllers who can get costs down and sales up.
Above all it needs urgently to change its own anti-industry policies. A hatred of coal, the pursuit of dear electricity and the normal preference for imports are killing UK industry. For this event to make a difference there needs to be big changes to energy policy . The government needs to recognise that current net zero imperatives are not only bankrupting UK industry, but they are increasing world CO 2.
