Ministers have been forced to act because 'by Monday morning it would be too late', a source said
The UK is facing a ‘countdown clock’ to get fuel to the British Steel plant in Scunthorpe before its furnaces burn out, The i Paper has been told.
MPs were recalled for an emergency debate on legislation on Saturday to enable the company to be nationalised following the collapse of talks to keep the steelworks going.
The bill passed both houses to give the Government control of the plant allowing Business Secretary, Jonathan Reynolds, to issue direct orders to British Steel workers to keep the plant operational.
The i Paper understands this will allow ministers to make arrangements to get raw materials – coking coal and iron ore – to the blast furnaces in time to make sure they stay open.
Industry minister Sarah Jones confirmed in broadcast interviews on Saturday morning that Chinese owners Jingye have had not allowed raw materials into the plant – if the furnaces run out of fuel, they will no longer be able to be reopened.
Business secretary Jonathan Reynolds told MPs ahead of the vote: “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 steel making at British Steel.”
The government has now made orders for raw materials but some of it comes on boats from as far away as Africa and must then be transported via freight trains, it is understood.
Ministers face a race against time to make sure it arrives at the plant in time.
“Yesterday was the last time you could make an order, so the government has essentially gone and made orders now, but they need the steelworks staff to make arrangements to move the stuff,” a source said.
“We got to the point where the Chinese would have stopped you from making those arrangements – by Monday morning it would be too late.”
The Sunday Times reported that ministers could send the Royal Navy to escort fuel shipments to Scunthorpe.
Negotiations over the future of the British Steel plant have been ongoing for several years with Jingye reportedly asking for at least £500m in government subsidies to invest in new electric arc furnaces to make the plant viable.
But a deal could not be reached and the government has now accused Jingye of failing to act “in good faith”.
Reynolds added Jingye wanted the Government to give them “hundreds of millions of pounds” which could have been transferred to China along with British Steel assets.
Sources claim Jingye have been using cheaper, poorer quality coking coal for some time at Scunthorpe which reduced its efficiency and made its financial losses appear worse than they would have been otherwise.
Jingye has claimed the plant is losing as much as £700,000 a day.
‘We lose steel, we lose the town’
Tony Gosling has been a proud steelworker at the British Steel plant in Scunthorpe since 1981.
Mr Gosling is one of around 2,700 workers at the plant operated by the Chinese owners ofBritish Steel, Jingye, which announced that it was starting consultations on redundancies amid plans to close two blast furnaces and steelmaking operations.
Mr Gosling, a Community trade union representative at Scunthorpe’s blast furnaces, said that it has been “a very worrying time” since the news broke.
“My wife also works in the steel industry in the Rail Service Centre, so it’s both of our jobs that are under threat,” the 59-year-old toldThe i Paper.
“I’m in a more mature stage of my working life, but it’s devastating for young people who are setting out in life, with their mortgages, their young families, or plans to have young families.”
There are roughly 4,500 jobs that are directly related to the steel industry, the companies that supply the steelworks and the local businesses that support the workers.
“There are a lot of small businesses that rely on the money and the income that you generate from the steel industry to support them – the cafes, the restaurants, the pubs, the shopping centre,” Gosling explains. “There’s a lot of fear within the community, a lot of worry, because nobody knows what the future holds.”
The proposals to close Scunthorpe’s furnaces had sparked fears of thousands of job losses at the plant and for those in its supply chain.
Lynne Atkinson, a care worker from Scunthorpe, set up a Facebook group to rally support for the steelworks.
“It’s like watching a fuse burn down and waiting for the explosion – I’m just desperate for an update,” she told The i Paper.
“We need them to get the coal and get on with it.
“People are scared, not just people in Scunthorpe that will lose their jobs, there’s going to be a big knock-on effect. The surrounding areas all benefit from the steelworks too.
“It’s terrible, I’ve been watching some of the workers interviews, they are still going in and doing their jobs and you can’t imagine what they are going through.
“They’re still getting up and doing their shifts, their jobs aren’t easy, they are really hard and really dangerous – I really hope they do something.
“I think it’s much bigger than pride – it will be absolutely devastating for Scunthorpe but it’s really bad for Britain.”
Alasdair McDiarmid, Assistant General Secretary of Community Union, said his organsiation “wholeheartedly” backs the Government’s actions.
“The government has sought to negotiate constructively and even offered to buy raw materials to stop the blast furnaces closing, but Jingye have shut down every avenue to keep the furnaces running and avoid imminent job losses,” he said.
“Moreover, Jingye has not consulted in good faith with the unions, and they now need to get out of the road to give space to all those who want to see British Steel succeed.”
Ministers hope to secure private investment to save the plant in the longer term, but Jones admitted on Saturday that there were currently no companies willing to make an offer.
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Saturday’s legislation is intended to provide an urgent temporary solution in the face of the threat to close the blast furnaces at Scunthorpe until a longer-term plan is agreed, and full nationalisation remains an option.
Henri Murison, chief executive of lobby group Northern Powerhouse Partnership, told The i Paper: “The countdown clock on keeping the blast furnaces going is linked to how quickly raw materials ordered, whether it be iron ore or coking coal, can be delivered, and the clock was going to have to run down by this coming Monday morning.
“The government will now be able to have raw materials delivered and accepted at the steel works, and make sure workers are paid for coming weeks and months.
“That will give breathing space to work out how we secure long-term virgin steel making sustainably, environmentally and financially, or make a move to electric arc furnaces. “
