Business secretary says Jingye wanted ‘excessive amount’ from the government
Jonathan Reynolds said the government had been negotiating with Jingye in good faith, but said the Chinese company wanted an “excessive amount” from the government.
The PA news agency reports that the business secretary said:
As honourable members will know, since taking office this government has been negotiating in good faith with British Steel’s owners Jingye.
We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common sense conditions to protect the workforce, to protect taxpayers’ money and create a commercially viable company for the future.
Despite our offer to Jingye being substantial, they wanted much more. Frankly, an excessive amount. We did however remain committed to negotiation.
But 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.”
Business and trade secretary Jonathan Reynolds. Photograph: House of Commons/PA
Earlier Reynolds opened the second reading of the steel industry (special measures) bill, by saying:
We meet under exceptional circumstances, to take exceptional action, in what are exceptional times.
Our request to recall parliament was not one we have made lightly, and I am grateful, genuinely grateful to honourable members on all sides of this house for their cooperation and for being here today as we seek to pass emergency legislation that is unequivocally in our national interest.”
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Updated at 06.41 EDT
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Westminster “is only interested in Westminster”, SNP Westminster leader Stephen Flynn has alleged as he asked why the steel industry (special measures) bill only applies in England.
Referring to a Scottish oil refinery, Flynn told the Commons:
Whilst the government mobilises every effort to save British Steel, it allows Grangemouth to fall on the backburner.
He asked:
Why is this not being extended to Scotland? Why is Grangemouth not being included? Why is the smelter up at Lochaber not being included? Why the DL steelworks not being included? The answer why they are not being included is because Westminster is only interested in Westminster.
It is not interested in Scotland. And I will not be shouted down by the members opposite, because they need to hear the truth.
Liberal Democrat Wales spokesperson David Chadwick said:
When Welsh steel communities were crying out for support, when Tata Steel announced over 2,800 job losses in Port Talbot last year, the largest steelworks in the country, a key strategic asset, the manufacturing heart of south Wales, there was no recall of parliament, no Saturday sitting, no emergency legislation, and no rapid mobilisation of government to save the day, this despite every warning sign being there.
Chadwick said his grandfather worked in the blast furnaces at Port Talbot, adding:
It gave him the opportunity to set up his own business, in his case, a waste management company, and that’s what’s really at risk now, and that’s what’s really withering away in south Wales.
It’s not just the jobs on the steelworks floor, but that entire network of small businesses, tradespeople and suppliers that rely on the steel industry’s presence in our communities.
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Opposition parties have tabled eight amendments to the government’s steel industry (special measures) bill.
They include three from the SNP and Plaid Cymru extending the bill’s scope to other parts of the UK beyond England, two from the Conservatives and one from the Liberal Democrats imposing time limits for using the powers in the bill, and one from the UK calling for the immediate nationalisation of affected steelworks.
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Updated at 09.38 EDT
Minister refuses to comment on report Chinese owners blocked from entering plant
Conservative MP Graham Stuart asked in the Commons:
It is reported that Jingye management have been turned away by workers, and indeed the Humberside police, so can the minister tell the house whether or not that is the policy of the government – to bar Jingye management from going on to the premises?
Sarah Jones, business minister, replied:
I am not going to comment from the dispatch box on reports that have been made during this debate.
Stuart could be referring to a report by the Times today that said steelworkers at Scunthorpe had blocked a group of Chinese executives who were trying to access critical parts of the plant on Saturday morning.
Citing company insiders, the Times reported that representatives from Jingye came to the site at about 8am, but were met with a “heroic” effort by workers to block their path to offices. It added that Humberside police are understood to have been called to the scene with the Chinese delegation forced to leave.
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China buying and then closing British Steel’s Scunthorpe plant may be in Beijing’s interest “in a competitive world”, a Labour former defence secretary has suggested.
Backing the government’s intervention to safeguard UK steel production, Lord Reid of Cardowan hit out at Tory criticism and argued it was the previous Conservative government that had “sold this industry to the Chinese”.
He said:
We are constantly told not least by the party opposite that there is no firewall between the Chinese government and Chinese industry.
Did it never occur to anyone in the last government that it maybe, in a competitive world, in the interest of the Chinese government to purchase and then close down the British steel industry?
And if that wasn’t considered then there was a gross omission of responsibility, I am afraid, by the previous government.”
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Updated at 09.28 EDT
UK Steel – steel industry bill right move to keep blast furnaces alight at Scunthorpe
In a statement, UK Steel director general, Gareth Stace, said:
UK Steel welcomes the steel industry (special measures) bill, which will allow the British Steel site at Scunthorpe to maintain operations while government negotiations with the company continue.
In particular, we appreciate the decisive action of the business secretary, Jonathan Reynolds, who has recognised the urgency of protecting our industry with this unprecedented recall of parliament.
A blast furnace is a dynamic piece of machinery. If the fires go out, it is nigh on impossible for it to be brought back to life – so a solution to keep them running is time-critical. It is, therefore, vital that the blast furnaces remain operational during negotiations, providing some security and breathing space in the short term, and this legislation will ensure this can happen.
We encourage the government and British Steel to work at pace on a long-term solution for the Scunthorpe site, which is critical in supporting thousands of jobs, national security of supply, the wider UK economy and many more people and communities in the supply chain.”
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Updated at 09.30 EDT
We have a statement from Alasdair McDiarmid, assistant general secretary of Community Union, the steelworkers union.
He said:
Community Union welcomes and wholeheartedly backs the Labour government’s decisive action to take control of British Steel.
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.
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.
Today’s intervention by the UK Labour government is a first step towards securing a sustainable future for British Steel and steel communities like Scunthorpe.
We will continue to work with the government to deliver this future and build a thriving UK steel industry which supports thousands of good jobs and the economic security of our country.”
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Updated at 09.33 EDT
Everyone should worry about the cost to the taxpayer of the emergency legislation being debated in parliament, shadow environment secretary Victoria Atkins warned.
Speaking outside parliament, she said legislation does not contain the detail needed to “safeguard jobs and to protect the steel industry”.
Atkins said:
I think we should all worry about the cost on the taxpayer and this is why we have been asking how much is this going to cost, and at the moment we don’t have an answer from the government.
How on earth can they put a piece of legislation of this importance before parliament rushing it through in less than there hours in order to safeguard jobs and livelihood?
How can they do that without telling us, the taxpayer, what it will cost, what our future liabilities will be, what are the prospects of the private sector becoming involved again given how badly the Government has handled the economy since the disastrous budget at the end of last year.”
She added:
They have not provided us with the detail we need in order to ensure that their plans will hold water and will actually do what we all want the legislation to do, which is to safeguard jobs and to protect the steel industry.”
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Updated at 09.33 EDT
The government must urgently review its net zero policies to ensure “they support not strangle British industry”, the Tories have warned.
Shadow business minister David Hunt said:
I believe it is essential that we consider the effect and the impact of green targets which have placed immense strain on our industries.
The policies driving us towards net zero by 2050 have hit our industries hard, especially energy intensive sectors like steel. Energy costs in the UK are now the highest in Europe and four times that in the United States. And the current trajectory of green regulation is making it harder not easier for our industries to compete internationally.
We just need to ensure that our environmental goals do not come at the cost of our industrial base. The government must urgently review its net zero policies to ensure that they support not strangle British industry.
If we don’t strike the right balance we will continue to see industries like steel driven offshore taking not only jobs and investment with them but also the very emission targets we champion we cannot allow this to happen.”
Lord Hunt also sought assurance that powers contained in legislation to prevent the closure of blast furnaces in Scunthorpe would not be abused. He said:
Where is the sunset clause in this bill? How can we be assured that these extraordinary powers will not be abused or extended indefinitely? The government has to make clear then precise time-frame for these powers and more importantly they must demonstrate how they intend to ensure that public and parliament are not left in the dark once this emergency has passed.”
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Updated at 09.33 EDT
Greenpeace UK’s director of policy, Doug Parr, discussing the emergency legislation being debated in parliament, said:
Parliament has acted in the nick of time to save British Steel and the thousands of jobs it supports.
But much depends on what the government chooses to do with these powers. Ensuring the steel industry has a future will depend on converting the Scunthorpe plant to produce virgin green steel made with hydrogen technology. This will ensure the UK remains a contender in the global race to produce clean steel.
It is also critical that lessons are learned from Port Talbot and that workers have a voice in future decisions about their jobs.
The clean energy transition is an opportunity to lower bills, reduce pollution and provide decent jobs long into the future. Today’s vote is an important milestone on that road.”
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Updated at 09.31 EDT
Conservative former minister David Davis said MPs were debating a “nationalisation in all but name” bill, adding:
I would have voted for nationalisation, I will vote for this bill for a simple reason, this buys us time.
It’s a reprieve not a rescue, I think that’s what people have to understand.”
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Updated at 09.29 EDT
Reform UK deputy leader Richard Tice urged the government to “show your cojones” and nationalise British Steel.
He said his party would support the steel industry (special measures) bill, telling the Commons:
I think there’s an opportunity, secretary of state, to go further, to be bold, be courageous, show your cojones, show some mettle Mr secretary of state, this weekend you have the opportunity to go for it, to reduce and remove the uncertainty of 3,000-plus families in Scunthorpe.
Let’s go for it, let’s nationalise British Steel this weekend and make British steel great again.”
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Updated at 09.29 EDT
Martin Vickers, Conservative MP for Brigg and Immingham, who has campaigned to save the British Steel plant at Scunthorpe accused the government of being slow to act on the issue.
He said he had first raised the issue in September last year, with another urgent question in March:
Now thankfully we’ve had a six-month reprieve from those threats which were coming forward in October, but I have to say the government have been a little dilatory on this.
I know that negotiations have been taking place on this, and I appreciate that ministers cannot give away their negotiating position, but having made that point as long ago as September surely the government were beginning to realise that the negotiations with Jingye were going nowhere.”
He said he supported the bill, but also the Conservative amendment that would introduce a “sunset clause” on its powers.
He said:
I can assure them that I give them my full support today and will continue to do so when they act in the best interests of my constituents.”
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Updated at 09.27 EDT
Intervening on his Labour colleague Melanie Onn, Luke Akehurst MP for North Durham said:
Will she agree with me that one of the major ways in which we could secure markets for British Steel is by the British-first strategy that the Ministry of Defence has stated for the building of future warships?”
Onn replied:
I agree with [him], it is imperative that we tie all of the initiatives that this government is bringing forward, whether that is in defence, or in other critical areas of industry to make sure that we can secure the future of steel for the long term.”
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Updated at 09.25 EDT
Labour MP Melanie Onn said the government has “grasped the nettle after the can has been kicked down the road for far too long” but warned the measures must not be a temporary solution.
The MP for Great Grimsby and Cleethorpes said:
British Steel at Scunthorpe is not just of interest to that town, but emanates across northern Lincolnshire to my constituents … whether directly or indirectly, the employment and training opportunities that come from that single site are so important to our local economy, and the product of course is nationally important.”
She continued:
The measures today are not without risk, and unless we set a course for steel in the UK that closely aligns with our industrial strategy, this will only be another sticking plaster, for a site that has already been put through the wringer too many times over the years.
Onn called for a carbon tariff to be introduced, as is already in place in the European Union with its carbon border adjustment mechanism (CBAM), which would stop cheaper steel being dumped in the UK.
She said:
I wonder if now is the time for the government to perhaps look again at CBAM. The EU has already brought in the adjustment mechanism to protect against international steel dumping.
So, doing all we can whether it is keeping down energy costs, as I know the minister has sought to do, investment through the national wealth fund, or indeed bringing in the CBAM, this is our chance to have a genuine long-term solution for the preservation of British Steel.”
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Updated at 09.14 EDT
Edward Leigh has called on the government to “get real” over the energy costs paid to run steelworks in Scunthorpe.
The Conservative MP for Gainsborough in Lincolnshire asked:
Why are we loading the most expensive energy costs on our own steel production?”
He later added:
We have to stop these green energy costs. We have to be realistic.”
Leigh added he supported the bill and that he wanted a sunset clause to business secretary Jonathan Reynolds’ powers, and told the Commons:
We have to get real about China, too.
Was it not obvious for weeks, indeed for months, that this company, this so-called private company – there is no such thing as a private company in China, they’re under the cosh of the government under an autocratic regime – what do they care about the steelworkers in Scunthorpe?”
Labour MP Diane Abbott had earlier said “some of us hope that moving on to nationalisation will not be ruled out”.
The MP for Hackney North and Stoke Newington said:
British Steel supplies Transport for London (TfL) with the power rail London uses on the transport network, which is not currently manufactured anywhere else in the country.
For railways like the underground, power rail from British Steel is essential to the everyday operation of the service, which supports up to four million customer journeys each day.
The closure of British Steel would have a very serious adverse effect on TfL services, as it would have a serious effect on projects up and down this country.”
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UK-made steel is needed “to keep Britain secure at home and strong abroad”, a business minister has told parliament.
Margaret Jones made her comments as the House of Lords and House of Commons were recalled from the Easter recess for an extremely rare Saturday sitting to debate legislation aimed at blocking the British Steel’s Chinese owners, Jingye, from closing blast furnaces at its Scunthorpe plant.
Lady Jones told peers:
This government will never hesitate to take action to protect this nation’s assets.
We will not abandon the hard working steelmaking communities that have given so much to both our economy and our country.
Where vital industries are on the verge of collapse or where communities face devastation we will always act in the national interest.”
She added:
We do not accept the argument that steelmaking has no future in the UK.”
Pointing out British steel was needed for major developments and critical infrastructure projects, including rail and renewable schemes, she said:
We need it to keep Britain secure at home and strong abroad.”
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Liberal Democrat Treasury spokesperson Daisy Cooper has said some Conservative MPs’ calls for steel nationalisation “shows just how through the looking-glass we really are”.
She told the Commons that recalling parliament “is absolutely the right thing to do”, adding:
It is quite astounding that even after British Steel was sold for £1, even after British Steel entered insolvency, even after the government’s insolvency service temporarily ran the firm, the Conservatives pressed ahead to erect more trade barriers through their botched Brexit deal, they scrapped the industrial strategy council, and allowed the sale of the steel plant to a Chinese firm, which now, according to ministers, is refusing to negotiate in good faith to at least keep the plant going.”
Cooper later added:
Under the terms of this bill, the secretary of state [Jonathan Reynolds] is giving himself huge and unconstrained powers, which could set a very dangerous precedent.
I urge the secretary of state in the strongest possible terms to make a simple commitment today that the powers that he is giving himself will be repealed as soon as possible, within six months at the latest, and if they are still required after that, whether he will come back to this house to ask for another vote if he wants to extend them.”
The business secretary, Jonathan Reynolds, intervened and said “the limitation – wide as they are – is the right measure”, adding: “I’ll seek to do exactly that.”
Cooper later said:
The fact that it is some Conservative MPs calling for nationalisation really shows just how through the looking-glass we really are.”
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