Government Takes Control of British Steel, Citing National Interest
EU Sets Target To Double Electrification Rate, Cut Oil & Gas Use Structural scarcity in high-strength aluminum… Kazakhstan’s rapidly expanding mining sector… CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… The government has brought British Steel under state ownership after the steelmaker’s nationalisation passed a public interest test.
The Prime Minister said the move “secured the future of British steelmaking”, and follows the introduction of fresh legislation that made it easier for ministers to forcefully nationalise steel companies.
Scunthorpe-based British Steel has appointed a revamped leadership team that will focus on “stabilising the business and developing a commercially sustainable” future, the business department said on Thursday.
It added that bringing the plant under public ownership will save thousands of jobs both atthe steelmakerand in its supply chain, and save the future of one of the UK’s last remaining virgin steel plants.
“British Steel is one of the nation’s biggest steel producers, and I’ve made the decision to nationalise the business to secure steelmaking capability and maintain production in the national interest,” said business secretary Peter Kyle.
The decision follows a turbulent year for what is the UK’s largest steel producer.
Talks over a funding package between ministers and former owner Jingye broke down last year, prompting the Chinese company to all but abandon the plant.
In a rare Saturday sitting, the lawmakers voted to take the plant into public control, in a move they said prevented the closure of Britain’s last two arc furnaces and helped save thousands of livelihoods.
The government said that despite “extensive discussions” in the intervening period, it had not reached an agreement with Jingye over the plant’s future, which allowed it to use its fresh powers to bring it under taxpayer ownership unilaterally.
Under the new legislation, ministers are allowed to nationalise a steelmaker that is seen as vital to the country’s future, providing it passes a public interest test.
The business department said that that test had been met on Thursday, and that an independent valuer will now be appointed to evaluate if Jingye should receive any compensation.
British Steel interim chief executive Allan Bell hailed the firm’s nationalisation as a “momentous day” for the company.
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