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Minister ‘confident’ that materials will arrive to keep Scunthorpe blast furnaces running
James Murray, Exchequer Secretary to the Treasury, has assured that government officials are actively working to secure raw materials for the Scunthorpe steelworks, stating that the necessary supplies are already in the UK and he is “confident” they will be delivered.
In an interview on Times Radio, Murray explained that government personnel have been present at the facility, emphasizing their commitment to ensuring the timely arrival of raw materials to maintain furnace operations.
“The raw materials have arrived and are local. Our focus now is on facilitating their entry into the blast furnaces,” he remarked.
During a segment on the Today programme, he reiterated, “I believe in our efforts. We are doing everything we can to ensure the ongoing operation of the blast furnaces.”
Murray highlighted the importance of maintaining operations for the future of steel production in the UK: “Our goal is to attract a new private partner that can contribute to a sustainable future for steelmaking in this country.”
When pressed by Nick Robinson regarding the status of raw materials, Murray was cautious, noting, “While we are clear about our intent to secure materials, I must respect the confidentiality of the ongoing commercial negotiations.”
Robinson raised concerns that the government may fear supplier price increases if the precarious state of the plant becomes public knowledge.
‘Our First Edition’ newsletter today also has its focus on the crisis at British Steel. Here is my colleague Nimo Omer outlining where we are:
The Business Secretary, Jonathan Reynolds, now possesses emergency powers allowing him to compel British Steel to procure the necessary raw materials, with the government covering the estimated daily operating losses of £700,000.
Shortages of crucial raw materials, specifically coal and iron, are threatening the plant’s operations. Failure to secure these supplies could lead to shutdowns and increase the likelihood of closure. However, Reynolds has not confirmed whether British Steel will receive the necessary supplies in a timely manner.
The accumulating operational costs are expected to significantly impact the government’s £2.5 billion steel fund. Reynolds estimated that halting operations could cost the economy over £1 billion, which he claims would surpass the financial implications of nationalizing the facility.
While the Business Secretary did not accuse Jingye, the current owners, of intentional misconduct, he suggested that their actions could be perceived as “a form of neglect.” He noted that the government does not expect renewed negotiations with Jingye and emphasized that recent events have heightened skepticism towards Chinese investments in critical UK industries.
The fluctuating global market conditions, particularly due to the Trump administration’s trade policies, have increased pressure on the UK government to sustain its steel industry.
For further insights from Nimo Omer, see: Monday briefing – is nationalization the answer to the British Steel crisis?
In related commentary, Roy Rickhuss, General Secretary of the Community Union, expressed concerns regarding Jingye’s management of British Steel. He alleged that the company’s actions indicate a strategy to pivot away from domestic steel production.
Rickhuss stated, “It appears that Jingye has not only failed to place orders for necessary raw materials, but they have also declined to pay for those they did consider acceptable, opting to reroute them instead.”
He conjectured that Jingye may have intended to close the Scunthorpe operation and instead import steel from China, reducing the facility to a mere re-rolling operation.
Scunthorpe’s British Steel plant employs around 2,700 individuals and is the last remaining site in the UK capable of producing the high-quality steel requisite for large construction projects.
Charlotte Brumpton-Childs, the national officer for the GMB union, has conveyed her assurance regarding the imminent arrival of raw materials at the Scunthorpe blast furnaces.
While appearing on the BBC Breakfast programme, she relayed an optimistic update from British Steel, confirming that the required coke at Immingham Bulk Terminal will be financed and unloaded shortly, as efforts to procure remaining materials are underway.
In response to criticisms regarding government bailout strategies, James Murray defended the allocation of taxpayer funds to support the Scunthorpe site rather than diverting it elsewhere.
In a discussion on the BBC Radio 4 Today programme, he articulated the importance of steel for national development, stating, “To build hospitals, construct 1.5 million homes, and expand Heathrow, we require steel.”
Murray underscored steel’s critical role in the UK’s infrastructure ambitions and reiterated the need for long-term sustainability in the steel industry while also aiming to reduce operational energy costs.
Furthermore, a government minister has criticized the behavior of British Steel’s owners as “irresponsible” while clarifying that this situation does not extend to Chinese companies broadly involved in critical UK infrastructure.
James Murray reiterated this sentiment on the BBC Radio 4 Today programme, commenting on Jingye’s actions: “Their recent behavior, particularly regarding the accelerated shutdown of operations, has necessitated our swift legislative actions.”
However, he cautioned against generalizations, stating, “One company’s actions do not represent all Chinese firms. We remain open to global investments.”
Earlier, on Times Radio, Murray emphasized the UK’s commitment to foreign investment, ensuring that while it encourages international trade, there would be stringent oversight for foreign participation in essential infrastructure projects.
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www.theguardian.com