The business secretary has refused to confirm if the government can get the sufficient raw material supplies in time to keep the blast furnaces at British Steel running, after it took control of the Chinese-owned plant. Emergency legislation was rushed through Parliament on Saturday to prevent owners Jingye shutting down its two blast furnaces in Scunthorpe.
Asked if he could guarantee the furnaces would remain open, Jonathan Reynolds said he would not comment on the commercial aspect of supply but the takeover gave the “opportunity” to obtain the coal needed.
The government said Jingye had been selling off raw materials, as well as not ordering more, before officials took control.
Asked several times by Laura Kuenssberg on whether he was sure he would be able to get the supply of coal before current stocks run out, Reynolds insisted “I’m not going to get into that” but the takeover “was essential to maintaining steel production in the UK”.
The government intervened after “it became clear” that Jingye was intent on closing down the blast furnaces, no matter what financial support it received from the government.
The company rejected an offer of support in the region of £500 million, the government said, instead demanding more than twice that figure with few guarantees the blast furnaces would stay open.
Jingye had put the UK’s ability to produce virgin steel at risk, Reynolds told the programme – adding “it might not be sabotage, it might be neglect”.
The government is looking for a buyer to take over British Steel. Earlier on Sunday, Reynolds told Sky News he would not sell it to another Chinese company.
He said: “I think we have got to be clear about what is the sort of sector where, actually, we can promote and co-operate, and ones frankly where we can’t. I wouldn’t personally bring a Chinese company into our steel sector.”
Reynolds told the BBC he could not say what the British Steel takeover will cost taxpayers while a buyer is found.
He argued the market value of the company is “effectively zero” and the taxpayer will have to “stand behind” the company’s losses of around £700,000 a day.
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