Unlock the Editorโs Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The UK government is considering nationalising British Steel, as Sir Keir Starmer on Tuesday vowed to do โeverything we can to ensure thereโs a bright futureโ for the Chinese-owned steelmakerโs main site.
The heavily lossmaking company, which employs 3,500 people across three sites in the UK, is at risk after owner Jingye Group and the UK government failed to agree a package of financial support.
A shortage of raw materials required to keep the UKโs last two blast furnaces active at British Steelโs main site in Scunthorpe, Lincolnshire, needs to be resolved within 48 hours, according to people familiar with the matter.
UK officials are examining options to purchase the coking coal and iron materials needed to keep the furnaces working in the short term because British Steel had not as yet ordered them, the people said.
Restarting the blast furnaces would be difficult and take time if they are deactivated and the metal inside them is allowed to cool. The closure of the Scunthorpe facility, which supplies 95 per cent of the UKโs rail tracks, would put 2,700 jobs at risk and leave the UK without the ability to make steel from scratch.
Starmer said discussions with Jingye were โongoingโ and reiterated his position that โall options are on the tableโ. Business secretary Jonathan Reynolds is due to meet with executives from the company on Wednesday.
โWe are doing everything we can to ensure thereโs a bright future for Scunthorpe,โ Starmer said.
He added that: โIโm absolutely committed to steel production in this countryโ, and highlighted the โimpactโ that any โloss of capacityโ at the steelworks plant would have on the workforce, community and country.
Chancellor Rachel Reeves told trade union chiefs in calls over the weekend that she is open to the option of bringing British steel into public ownership, according to people familiar with the conversations.
However, industry minister Sarah Jones stressed earlier this week that โthe best way forward is for British Steel to continue as a commercially run business, with private investment, and government acting in supportโ, rather than as a nationalised asset.
The discussions come after both sides hit an impasse over a ยฃ2bn deal to switch to less polluting steelmaking. The government offered ยฃ500mn of state aid to British Steelโs Chinese owner, far less than the ยฃ1bn it had requested.
Ministers are not considering making a more generous offer of UK government support to Jingye, a government figure said.
British Steel declined to comment.
