Reynolds survives first test – but the fight for British steel has just begun ...Middle East

Parliament’s already grumpy mood took a turn for the worse on Saturday. Jonathan Reynolds, the current Business Secretary, blamed Kemi Badenoch, his Conservative predecessor, for the absence of any plans to rescue the Scunthorpe steel plant, the last of its kind in the UK.

Conservative leader Badenoch released a statement on Friday saying she had put plans in place to introduce a new electric arc furnace at first Teesside and then later Scunthorpe. But when the Teeside deal failed, the entire plan collapsed.

“We could not renege on that deal, because it did not exist,” Reynolds said. “On day one, I was told there had been a lack of progress on this matter to date. So, if such a deal was negotiated, it was negotiated somehow in secret.”

Sitting opposite him in Parliament, Badenoch was furious. The Tories suspect Labour didn’t pass the Teeside deal because it would have handed a win to the regional Conservative Mayor, Ben Houchen.

The pair weren’t the only two with fraying tempers in Westminster. Saturday sessions are typically only held during wartime or a pandemic. Yawning MPs, some with children, complained about the early hours needed to travel back from distant constituencies. Badenoch’s de facto Tory deputy Alex Burghart called the emergency recall during the Easter recess a “pig’s breakfast.”

MPs and peers were back called back from their break to debate a bill to give control to ministers over Chinese-owned British Steel, the country’s last virgin steelmaker. The bill passed by acclamation in just over four hours, without a vote count, and was later due to clear the House of Lords.

It turns out nationalisation brings all the boys to the yard. Reform UK MP Richard Tice and socialist independent MP Jeremy Corbyn both called for it. Even Tory veteran Sir Edward Leigh was in favour, alongside the Greens.

Jingye, however, was portrayed as the true villain. According to Reynolds, the government’s tireless negotiations, including a generous offer to maintain plant operations, were rejected by the company’s “irrational” demand for an excessive amount. The company declined to comment.

Funding to keep Scunthorpe running will come from an existing government pot for the steel industry totalling £2.5bn but nationalisation “may well at this stage, given the behaviour of the company, be the likely option,” Reynolds added. Rachel Reeves has also been involved in the discussions and a source said the Chancellor couldn’t “in good conscience for the taxpayer” keep shelling out.

Reynolds confirmed the UK won’t make a substantial financial commitment to nationalizing British Steel should it become necessary.

“We would in a situation where the state transfers a change of ownership to it, pay the fair market value for those assets. Now, in this case, the market value is effectively zero,” he said.

However, the story doesn’t end here. The UK steel industry has 1,160 businesses, which directly support 40,000 other companies nationwide. Parliament was subject to considerable lobbying.

Welsh MPs described the Scunthorpe bailout as a bitter blow following Tata Steel’s Port Talbot collapse last September, after incurring daily losses of £1.7m.

Scottish MPs inquired about the possibility of a Grangemouth oil refinery bailout. The single refinery in Scotland is a large industrial site with a long history. It’s also part-owned by a Chinese company and making big losses. The similarities are undeniable.

The bill’s most contentious aspect was the absence of a sunset clause defining the expiration of Reynolds’s expanded authority. He pledge to revisit the issue in with a vote in six months and provide regular updates to Parliament’s Business Committe. He had argued any time limit could bind his hands in negotiations with the company.

The powers were designed for emergencies; Reynolds can seize assets and it is now a crime not to follow his orders. When it came to it, the Commons ran out of time to debate opposition attempts to impose a time limit.

Reynolds may well need to use those powers pretty quickly. British Steel workers saw off a delegation of Chinese executives attempting to access critical parts of the Scunthorpe steelworks on Saturday morning amid fears they were trying to force the closure of the plant, and the police were called.

Reynolds may have to use his powers very soon including deciding whether Chinese executives can be trusted to remain in post. It now seems highly unlikely. In the Commons Minister Sarah Jones said the incident showed just how urgent Saturday’s bill was.

When I visited the Scunthorpe steel works in February, I found a small but determined band of highly skilled workers committed to the plant which serves as the lifeblood of the town.

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UK facing 'countdown clock' to get fuel to British Steel plant before furnaces close

The massive site hints at the aftermath of an apocalypse with disused furnaces and piles of scrap metal lying around. It also has out-of-season funfair vibes, with rollercoaster trucks waiting to take the finished steel away. The furnaces are quaintly named after four English queens: Bessie, Vickie, Mary and Annie, only one of which is still in use.

Inside, the 2,700 workers wear protective wool clothing that means if they’re splashed by the liquid iron running at 1,500 degrees Celsius from the blast furnace, it will glance off them as glass droplets.

Viewed only from the outside, the steelworks symbolize Britain’s diminished strategic might. Inside the plant’s offices, though, I saw many doors with Asian nameplates and a profusion of red Chinese New Year decorations. The Chinese influences seem unlikely to last much longer now.

Despite the rapid Saturday passage of the bill, the plant’s future remains uncertain; Reynolds faces challenges: selling the money-losing facility, managing the company, and countering Badenoch’s potential opposition. She’s unlikely to take his accusations about her record lying down.

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