Race to save British Steel from permanent shutdown, as union raises fear of 'sabotage' by Chinese owners
13 April 2025, 22:32 | Updated: 13 April 2025, 22:35
British Steel is deploying emergency measures to prevent the UK's last primary steelmaking plant from shutting down permanently.
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Several businesses are thought to have offered to supply the company, control of which was taken over by the government on Saturday, with raw materials.
The materials are essential to the running of the plant, with its current Chinese owners in dispute with the Government over the fuelling of the two blast furnaces.
Allowing the blast furnaces to stop working would see steel solidify, resulting in irreversible damage to the plant.
Meanwhile union chief who represents many of the British Steel workers said that some were concerned about "sabotage".
Gary Smith said: "We were worried about industrial vandalism, and there was a worry about sabotage of the site, quite frankly … people on the site are furious at the Chinese owners, and they were legitimately concerned about industrial sabotage at the plant.”
British Steel has been contacted for comment on the claims.
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The long-term ownership of the plant remains unclear, after a bill to give the government control of the company passed through Parliament and became law on Saturday.
Business Secretary Jonathan Reynolds said on Sunday that full nationalisation was a likely outcome.
Speaking with Lewis Goodall, Mr Reynolds insisted that he hopes to remain a long-term partner with a private firm.
"I'm absolutely clear. I want a long term private sector partner," he insisted.
"The transition that's required to new technology, new facilities at British Steel is best done, funded and delivered by the government working with a private sector partner."
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"All options are on the table," he admitted, but conceded that nationalisation is becoming an increasingly likely outcome.
Emergency legislation giving the Government the power to instruct British Steel to keep the plant open passed both the Commons and Lords in a single day unopposed on Saturday, before receiving Royal assent from King Charles.
Ministers had taken the unusual step of recalling Parliament from its Easter recess to sit on Saturday after negotiations with British Steel's Chinese owners, Jingye, appeared to break down.
Renyolds' comments come amid reports the Royal Navy is "on alert" to escort vital fuel shipment's to British Steel's Scunthorpe plant should they be required, amid tensions between Chinese owners and the Government.
Saturday saw police called to the Scunthorpe plant as steel workers confronted Chinese executives from Jingye who were attempting to gain access to parts of the plant.
"I don't want to make the situation sound more dramatic than it is," the Business Secretary said in the wake of the incident.
"But... until I was in a legal position to be in control of the site, a bit of a grey area and a little bit difficult around that, so some people did turn up and the situation was amicably resolved, they were refused entry because I needed to make sure that...nothing occurred that would prevent the kind of decisions we needed to make to keep British Steel open".
However, Reynolds made it clear that companies should not be spooked by the idea of doing business with China going forward, highlighting that tarring all firms with the same brush would be "unfair".
"I think it's very important we don't take what's happened with this specific company as an example of how every Chinese company would operate.
"That would not be fair at all. But I think the particular issues around steel, particularly overproduction in global steel markets, a lot of that problem is a problem from China in terms of excess capacity and dumping that on world markets. It isn't a decision I myself would have made."
On Saturday Sir Keir Starmer claimed the UK is "turning the page on a decade of decline" after a bill to save British Steel passed into law on Saturday.
Mr Reynolds accused the company of failing to negotiate "in good faith" on Saturday after it decided to stop buying enough raw materials to keep the blast furnaces at Scunthorpe going.
He told MPs: "We could not, will not and never will stand idly by while heat seeps from the UK's remaining blast furnaces without any planning, any due process or any respect for the consequences.
Allowing the plant's closure would have killed the UK’s last domestic source of “virgin” steel - a pure variety of metal predominantly used to build rail tracks as well as used in the construction and automotive industries.
Starmer said on Saturday: "Today, my government has stepped in to save British Steel. We are acting to protect the jobs of thousands of workers, and all options are on the table to secure the future of the industry."
He said that "delivering security and renewal for working people" was at the heart of Labour's agenda, adding that he was "turning the page on a decade of decline".
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But the Conservatives said the Government should have acted sooner, with shadow leader of the House Alex Burghart accusing ministers of making "a total pig's breakfast of this whole arrangement".
Shadow business secretary Andrew Griffith said the Government was seeking a "blank cheque", while Tory leader Kemi Badenoch claimed Labour had "botched" a deal she had negotiated with British Steel while business secretary.
But she was unable to provide details of the deal, saying negotiations were still ongoing when last year's election was called, but adding it "would have succeeded better" than Mr Reynolds's plan.
Opening Saturday's debate, Mr Reynolds said Labour had been engaged in negotiations with Jingye since the party came to power last July, and had offered "substantial" support.
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Most recently, the Government had offered to purchase the necessary raw materials for the blast furnaces, the last primary steel-making facilities in the UK, but this had been met with a counter offer from Jingye demanding "an excessive amount" of support.
Mr Reynolds continued: "Over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw material to keep the blast furnaces running - in fact, their intention was to cancel and refuse to pay for existing orders.
"The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel."
While MPs debated the legislation, The Times newspaper reported that workers at the Scunthorpe plant had prevented Chinese executives from Jingye from gaining access to key areas of the steelworks.
The Steel Industry (Special Measures) Bill published on Saturday gives the Government the power to instruct steel companies in England to keep facilities open, with criminal penalties for executives if they fail to comply.
Ministers said these measures were necessary to keep the Scunthorpe blast furnaces open and protect both the UK's primary steelmaking capacity and the 3,500 jobs involved.
Mr Reynolds said the emergency legislation was a "proportionate and necessary step", adding he wanted it to be a "temporary position" with the powers not lasting "any minute longer than is necessary".
Meanwhile, Sir Keir Starmer met with steelworkers near Scunthorpe to discuss his Government's plans for the plant.
The Prime Minister told them: "You are the people who have kept this going. You and your colleagues for years have been the backbone of British Steel, and it's really important that we recognise that."
Saturday's emergency legislation stops short of full nationalisation of British Steel, and ministers remain hopeful that they can secure private investment to save the plant.
But there is currently no private company willing to invest in British Steel, and the Business Secretary acknowledged to the Commons that public ownership remained the "likely option".
During Saturday's debate, Reform UK's deputy leader Richard Tice urged the Government to "show your cojones" and go further by fully nationalising British Steel "this weekend".
Several Conservative MPs also spoke in favour of nationalisation, while Liberal Democrat Treasury spokeswoman Daisy Cooper said recalling Parliament had been "absolutely the right thing to do".
Meanwhile, the Government has been criticised for acting to save the Scunthorpe plant but not taking the same action when the Tata Steel works in Port Talbot were threatened with closure.
Liberal Democrat Wales spokesman David Chadwick said workers in South Wales "will be asking themselves how this unjust situation was ever allowed to occur".
Earlier, industry minister Sarah Jones said the different approach was due to Tata's willingness to invest in Port Talbot, and the changed global circumstances making it necessary to protect the UK's primary steelmaking capacity.
