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The UK government has decided to seize control of British Steel before assessing the costs to taxpayers and raise questions about the ultimate price of saving the country’s last two explosive furnaces.
Business Secretary Jonathan Reynolds issued “Minister’s Instructions” to override concerns from his own civil servants in order to maintain the business of a hard-working steelmaker on the main site in Scunthorpe, Lincolnshire. letter It is featured on government website shows.
Ministers intervened in early April by passing the emergency law, seizing control of British steel, which employs around 3,500 people in the UK.
Reynolds responded to Gareth Davis, the permanent secretary of business and trade, after a civil servant warned the minister on April 12 that the money he spent on iron rescue could not guarantee that the money he spent on business and trade was met.
Davis said the government needs to act at such a speed that it doesn’t have time to gather “necessary evidence” to ensure there is spending along the four government tests.
The government spending test confirms that the cost of the intervention is compared with an alternative proposal or that it is “doing nothing” to represent the “value of money.”
The test also requires that there is sufficient legal basis for action, meet high standards of public conduct and be viable, so this move can be implemented “on an accurate, sustainable, intended timetable.”
A rare ministerial direction in British politics is a formal instruction to tell the department to proceed to the department to advance its spending proposal despite objections from the Ministry’s most senior civil servant, the permanent secretary.
This is the first such direction of the year, two in 2023 and two in 2024, two throughout Whitehall.
British Steel was subject to ministerial directions that the company collapsed into bankruptcy in 2019, and then Business Secretary Greg Clark was sought. Continue taxpayer spending To keep it under state control while looking for a private buyer. The company was then purchased in March 2020 by the Chinese company Jingye.
The government passed emergency law this month after it was revealed that Jingi was scheduled to close two British Steel blast furnaces. The closure would have left the UK as the only G7 country that has no ability to make steel from raw materials.
Reynolds then oversaw the delivery of raw materials to the Scunthorpe site in British Steel to ensure continued operation of the two furnaces.
The business secretary said that while authorities and other industry experts have prepared “investment cases” to attract third-party buyers of British steel, nationalisation is a “possible option.” The hope is that another private company can take on the company, but authorities have accepted that this only happens with some form of government support.
Between the government and Jingie over a taxpayer support package, the Chinese company helped invest in green technology, which was established earlier this month after the Chinese company rejected a £500 million offer from Reynolds.
Jingye had sought support up to £1 billion towards the £2 billion project to close two blast furnaces and build two electric furnaces instead.
