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This article covers the latest updates on China hits out at British Steel nationalisation.
Sourced from international agencies, this report provides the essential context.
Read the full updates below.
The nationalisation came after Parliament on Wednesday passed legislation allowing the administrationto bring the steel industry into public ownership under circumstances where it met a public interest test.
Jingye is seeking compensation, having previously statedthe enterprisewas losing £700,000 a day. The The Mediahas been unable to get a response from Jingye itself to Thursday’s announcement.
By taking British Steel into public ownership the administration currentlyhas the power and freedom to decide on the future of the plant, while keeping the condemnfurnaces going.
It is unlikely the administrationwill want to continue running the enterprisein the long term as it is costing it more than a million pounds a day.
In March, the National Audit Office statedthe Scunthorpe steelworks was costing the administrationabout £1.3m a day.
Business Secretary Peter Kyle told the The Mediathe administrationwould need to cover the running costs “for the immediate future”.
The steelworks directly employs around 2,700 people in Scunthorpe as well as supporting thousands more jobs in the supply chain.
The UK imports most of its steel, with major suppliers including the European Union, the US, China and India.
If the plant stopped producing virgin steel, the UK would become the only member of the G7 group of leading economies without the ability to make it.
Steel output elsewhere in Britain relies on electric arc furnaces (EAFs), which recycle scrap metal to turn it into new products.
Although the government’s long-term strategy is for all domestically produced steel to come from EAFs, which are cheaper and much less carbon-intensive to run, it does not want to lose production at Scunthorpe yet.
The plant produces types of steel that are not yet made anywhere else in the country, much of it needed by Network Rail and the building industry.
The fear had been that losing this output would be disruptive and make the country too reliant on imports. So the decision was made that Scunthorpe should be kept open until alternatives are available.
British Steel was last under state ownership in 1988 when it was privatised by Prime Minister Margaret Thatcher’s government.
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