Title: The Future of British Steel Amidst Demands from Chinese Owners
The Business Secretary, Jonathan Reynolds, is set to have essential talks with Jingye, the Chinese owners of British Steel. This move follows as the long-term continuation of Scunthorpe steelworks remains uncertain. Jingye’s request for vast sums of public funds, in the range of hundreds of millions, to ease the transfer of the company has been addressed by the government. In April, the government had taken control of British Steel. This was driven by concerns that if Jingye were to shut down the remaining blast furnaces in the UK, it would pose a risk to thousands of jobs in Scunthorpe and in the wider region of Lincolnshire.
The government has not yet fully taken ownership of the struggling firm. However, the discussions to resolve the stalemate are currently in progress, with Reynolds slated to enter into talks this September. Information from a government source hinted that public funds might be put forward, but the focus on protecting the taxpayers’ vested interests remained clear. A representative from the business department also expressed that collaboration was in progress with Jingye to secure a sustainable future for the site.
Earlier this year, an extraordinary session of Parliament during Easter break resulted in legislation being passed that allowed the government to assume control of British Steel. The initial hopes were for Jingye to relinquish ownership for a nominal fee, and despite the anticipation of full nationalisation, the company’s valuation by Jingye at a substantially inflated figure compared to the government’s assessment made this unlikely.
The government has utilised a £2.5 billion steel fund to finance the operational expenses of the plant since April while searching for a new business associate. The extravagant demands from Jingye have lead to an impasse in this process. Despite this, government sources maintain an optimistic view regarding securing a more realistic assessment from Jingye. Nevertheless, some suggest that ensuring the future of the Scunthorpe site may require full nationalisation. A request for a statement has been sent to Jingye.
This story has been adapted for The Lincoln Post from the original report by www.bbc.com.
