What’s next for British Steel? – Politics Weekly UK
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This is The Guardian. The Labour government has taken control of a steelmaking plant in Scunthorpe, with full nationalisation on the cards. I want to be clear that a transfer of ownership to the state remains on the table. And it may well, at this stage, given the behaviour of the company, be the likely option.

No, it's not 1951 or 1967 for that matter. It's 2025. And after an extraordinary week for British politics and for the town of Scunthorpe, Britain's last virgin steelmaking plant has been saved. For now. The best way to describe it is euphoric. We haven't for a long time had intervention that's come before the disaster. It's a monumental shift. So what happens next? For the people of Scunthorpe and for British Steel?

And what does it mean for our national security? I'm Kieran Stacey, in for John Harris, and you're listening to Politics Weekly UK for The Guardian. It's hard to convey just how significant the collapse of a big industry can be for an area. As well as being the main employer in the region, these places are often rooted in the town's very DNA, with people's parents and even grandparents all having worked there.

At Scunthorpe, the previous owner, which was a Chinese company called Jingye, was preparing to make up to 2,700 people redundant, out of a total workforce of 3,500. And that's before you take into account the wider impact on supply chains as well as the broader local economy. What happens to a town whose major employer suddenly axes most of its staff?

Well, to answer those questions and more, we're joined by Charlotte Brumpton-Childs. She's a national officer for the GMB union in Scunthorpe, and she used to work as an electrician at the plant before she became a full-time union rep. Charlotte, thanks for joining us. No problem. Thank you. So Charlotte, you used to work at the Scunthorpe Steel Plant. Tell us a bit about how

you managed to get into that job and what your family background there is too. I've lived in Scunthorpe most of my life and went to the local comprehensive school. When we were deciding what we were doing after school, my uncle saw an advert in the Scunthorpe Telegraph advertising for apprentices on the steelworks.

I really hadn't figured out what I wanted to do post-school. I always did okay academically, but going to university just wasn't financially something that my family would ever be able to support. I've always been interested in how things work. There's a longstanding joke in my family about how my uncle told me to go and do an apprenticeship so I could learn to put together the things that I'd taken apart as a child and broken as a result of that.

I think there are about 150 applicants for 12 electrical apprenticeship jobs, which sort of gives you an idea of the scale of competition there and what sort of the town thought at the time about those jobs.

because the steelworks at that time had been there for over 100 years. And my great grandparents have worked in the steel industry. My grandparents have worked in the steel industry. And it really was a no brainer for me in terms of being able to go and earn some money, but also like work somewhere that I was going to get some decent qualifications. And just give us a sense of what it's like to work as an electrician at that site. I mean, it's quite obviously it's massive, but it's quite kind of

Victorian in a way, like this is old big metal machinery, right? This is not some kind of high tech digital industry you're working. What was that like? There's lots of like really interesting technology and certainly the way that we make steel has moved on since the Victorian times, but it is like

huge in scale and in sort of operations. It's noisy, it's often dirty, it's really dangerous a lot of the time. We work safely and there's safe systems in place, but you have to forget sometimes that you've got hundreds of tons of molten steel flying around over your head, although you probably won't be able to get into the plant most days.

Yeah, I was the only girl on my course and it's a really male dominated industry. So I worked there for 11 years. So I did a decent stint. I'd urge your listeners to look at Scunthorpe on Google Maps because the big brown piece of land to the sort of northeast is the steelworks. It's about a third the size of the town. It's genuinely massive. Yeah. You're still involved, obviously, with the steelworks because you are now a national officer with GMB. And I know we've spoken a few times about you working

have been fighting very hard there to try and keep that plant going and try and keep as many jobs as possible running. What did it feel like on Friday and Saturday when it became clear that the government was going to step in and take over control of this plant and potentially save thousands of jobs? So when we started to hear sort of titters of information Friday morning that maybe something was going to happen, by Friday afternoon, there was just a huge...

It felt like history was being made and my members and me being able to be a small part of what's made that difference. It's quite mind boggling actually. Then Saturday, when we started to see the debate, I was sat at home

in the living room with my wife and my son watching this really important moment unfold in front of us. And then we planned a match in Scunthorpe at the football actually to try and increase the pressure on the government and decision makers to step in and support our industry. But that turned into a huge celebration. And I think I've been talking to the reps today and the best way to describe it is euphoric.

We haven't for a long time had intervention that's come before the disaster rather than after. I think it's a monumental shift for us and for our members. That's really interesting. What can you tell us about this extraordinary standoff that seems to have occurred at some point over the last few days where we're told the workers were stopping the Jing Ye officers coming into the plant? Do you know anything about what happened there?

Yeah, I mean, there are a number of G&A employees that have been working at the plant for some for a couple of years now. And I think first and foremost, the majority of them are workers that are not decision makers. They are here as part of their wider organisation. And we've got to remember that they

deserve to be treated with dignity and respect and actually this is probably a really difficult time for them in terms of. Understanding what's going to happen next with them and their employment, but I think a couple of executives tried to turn up on site on Saturday. They were restricted access, I think that those that had the capacity and ability to do that did that on the basis that they were worried that.

Jing Ye would try and make irreversible decisions before the legislation had royal assent and the Secretary of State was sat in the chair. So I don't know that that was the intention of the workers, but I think that the guys at British Steel recognised that we've come so far and we've pushed so hard that they weren't going to let anything jeopardise the opportunity and the hope that that legislation has brought to the site. That sounds like an absolutely extraordinary kind of

physical manifestation of the row that's been going on around the cabinet table and in boardrooms for several years. Tell us what you think the situation is now. How optimistic are you? Because of course, we could still see the closure of the two blast furnaces. How optimistic are you that can be avoided? And what would it mean if they do close?

I spoke to British Steel this morning and they are confident that they've got the raw materials in place now and a sort of continuity of supply that they need. I think that they will be making a decision on whether they need to temporarily bring one of the blast furnaces off or not, but they were quietly confident that we're going to be able to maintain a two blast furnace operation and that is what they've been focused on.

If the blast furnaces came off, especially in an uncontrolled way as we were quickly hurtling towards last week, then they wouldn't be able to be recovered and we would stop steel making in Scunthorpe. There's a variety of plans that have been tabled in terms of electric arc furnaces for the site in the future.

But any of those plans are sort of three, four years away. So I think for the next half a decade, we would be absolutely decimated. And then by the time they were building out furnaces, there'd maybe be a couple of hundred jobs that had been created out of the production of that steel, but nothing to replace the scale of what we would have lost. There's a customer base for British Steel that they really need to maintain. So British Steel primarily makes construction steel. It supplies all of the rail or nearly all of the rail to network rail

at the minute. If the blast furnaces were off, then that customer base would look elsewhere. And it'd be really difficult, especially given how difficult it is to be competitive in the UK for steel anyway, to ever bring that customer base back to them. So that's what it would mean for steelmaking. Give us a sense of what it would mean for Scunthorpe. I mean, you were talking about how this was the big employer in the town. You had generations of your own family working there. What would it mean for Scunthorpe to have a plant that size shut down?

It's immeasurable the damage that it would do. And if you look

in Scunthorpe at the other jobs and other sort of manufacturing facilities even where jobs might be available. We've got a bacon factory, we've got a chicken factory, we've got sort of steel stockists, but a lot of the jobs available in the town are low pay jobs that wouldn't afford any of our members the same level of lifestyle or security that they've enjoyed. Like I said, like it's a difficult environment to work in. It's

technically difficult work that they do and there aren't any comparable jobs and because

When Jing Ye took over in 2020, they did that on the basis of the business being insolvent. Anyone's length of service that works for British Steel starts from March 2020. So they've got a maximum of five years in. They would leave with a month's pay. That doesn't give anyone enough space to think about what they're going to do next. That's really fascinating. Charlotte, thank you so much for joining us. I know how busy you are right now. Best of luck with everything. Thank you very much. Okay, let's pause here for a minute.

When we come back, we'll be talking to our political correspondent, Eleni Correa, about the politics behind all of this. ♪

Welcome back. I'm now joined by The Guardian's political correspondent, Eleni Correa. Eleni, hi. Hey. I'm going to start this section of the podcast with a bit of self-promotion. We first broke the story at the beginning of the year that nationalization of the Scunthorpe plant was on the table, despite the denials of people close to Jonathan Reynolds, I should say, but that's a battle I will fight another time. But even so, I don't think any of us expected all this to happen quite so quickly.

Can you take us back to last Thursday, which I think is essentially when the decision got made, if I'm right. What was the initial trigger for this extraordinary series of events?

That was a great story, just to say from the outset, I remember it. And yes, I mean, it's testament to the fact that these talks have been going on for a while, but things really came to the head last week. There was really actually quite an extraordinary breakdown in relations between Jingyi's executives and government ministers. What happened essentially is Jingyi rejected an offer of £500 million of government investment, I think around late last month.

And last week, last Thursday, the government essentially decided that it was time to step in and take the power to be able to nationalize the plant. Because to them, it became clear that in their assessment that there was just no offer that Jingye was going to accept. And it became clear that became clear because they found out that Jingye was trying to sell off.

the raw supplies that were meant for the blast furnaces, right? Yes, not ordering more. I think sending some back potentially as well. But yes, that was a big part of the decision as well. It was pretty clear that they were intent on shutting it down. And so that was on the Thursday. Then on the Friday, we had the cabinet meeting where they discussed this. And tell me if I'm wrong here, but as far as I could tell, there was no dissent around the cabinet table. This seems to have been decided quite quickly and easily. Yep.

It doesn't seem to have been. And there was also a decision taken to hold an emergency sitting of Parliament on the Saturday so as to get through the bill that the government needed in order to take control of British steel. Which was another incredible thing, right? Because I think the last time that Parliament sat during a recess on a Saturday was during the Falklands War. So this is quite an extraordinary thing to do to bring all the MPs back and have this debate.

They then managed to pass it through both houses of parliament in a single day, right? So we've now got Thursday they decide to do this. 48 hours later, parliament has actually passed the law to do it. And then on the Sunday, Jonathan Reynolds goes and tries to explain the reasoning behind all this, right? Yes, and he was pretty bullish. He didn't rule out the prospect of there having been intentional sabotage here by the company involved to try and shut down the plant.

It's a real political statement from him and the government that they are determined to keep this plant running and for the UK to keep making version of steel. So that was Sunday morning when he's making those statements.

By Monday, I guess the government was kind of in control, right? I mean, the law that they passed, I think, on the Saturday allowed them to intervene in decision making around the plot and also protected any worker who defied the Chinese management. In fact, one of the most extraordinary parts of this story, I think, was what we found out on the Sunday had happened on the...

day or the two days previously. It was a standoff at the plant. Yeah, right. So talk to us about that. What do we know about what happened at the plant? The police had to get, well, arrive because the executives of Jinyo had kind of shown up at the plant and were not allowed entry. And GMB's general secretary, Gary Smith, said that he was worried about these executives coming in and sabotaging, uh,

the plant that the government was taking control of. So yes, it's a really extraordinary standoff there between Jingye's bosses and the workers and with the police getting involved as well. And the workers won. You know, they kind of stood there and stopped the Jingye bosses getting in. So then by Monday, I think ministers have essentially taken control and you've got these two ships

which are sitting there at Immingham docks. I was talking to Downing Street on Monday and they were saying, we're pretty confident that we've secured those two ships and another one that I think was at the time off the...

coast of West Africa, and that'll keep the plant going for an unspecified period of time. I think Jonathan Reynolds got his moment of glory on Tuesday when he went and supervised in high-vis and a hard hat, supervised the unloading of those ships. But that was the first decision that needed to be made.

Meanwhile, I think we're getting a slightly different message right now that the weekend's over and the civil services started back up again. Ministers are saying slightly different things about what we think went on and what the Chinese were up to here. Yes, it seems like the media urgency has passed in the sense that the plan can keep running and people taking a step back.

And there has definitely been a softening in the government's messaging on this. So on Sunday, when he was being interviewed in broadcast studios, Jonathan Reynolds said that he personally wouldn't have a Chinese company involved in the steel industry because it was too sensitive. He said previous governments had been naive in allowing Chinese investment in certain industries and that essentially that steel was one of them.

By Monday, that had changed and the government had sort of rolled back on that somewhat. So Sarah Jones, the industry minister, wouldn't rule out having another Chinese company getting involved with British Steel. And when Jonathan Reynolds was asked about it again, he said that he'd looked differently at a Chinese company after this whole saga, but didn't quite repeat what he had said over the weekend. And also that line that he was saying on

on Sunday where he wasn't ruling out the idea that this was sabotage. And I think on the Friday, government officials were saying pretty much that quite explicitly to journalists. There was definitely a suspicion within some quarters of government that this might have been what was going on. The theory being that this was somehow the Chinese government that had decided they wanted to undermine...

steelmaking capacity, rather than just being a commercial decision. This was geopolitics playing out. Well, yes. I mean, Jonathan Reynolds was saying over the weekend, you know, China is in a capitalist system as we might understand it. You know, it's not quite, it's not like the US, it's not like many European countries. Big Chinese companies do have kind of a level of oversight from the Chinese government. They don't operate completely as sort of private enterprises. And then by Monday, the message is really different.

It really is. And they were emphasizing much more that they thought that this was a commercial decision by Jingye and that it was a loss-making plant. And as a result, Jingye had sort of decided that it didn't want to carry on. But yes, it had absolutely changed what they were saying. Well, the Chinese foreign ministry over in Beijing has responded that...

Lin Jian, the Foreign Ministry spokesperson, said this, that the UK should avoid politicising trade cooperation or linking it to security issues so as not to impact the confidence of Chinese enterprises in going to the UK. He also said when it comes to the operational difficulties currently faced by British Steel, the two sides should negotiate a solution on the basis of mutual benefits. So the message there is clear. This has nothing to do with us. This is a commercial issue between Jingye, a private company, and the British government.

Another interesting element here is what the Treasury makes of all of this, right? Because, I mean, Rachel Reeves used to make a virtue of embracing big government and an active state, but then changed her tone quite markedly after she came into office.

Do you think this is her socialist, you know, real self kicking in here? Or is it just the reality of the commercial dilemma that ministers were faced with? I don't think it's Rachel Reeves' socialist instincts. I don't think she would want that to be the interpretation that anybody takes away. I think

the context here is very much around national security and defence, and that will have played a really significant part in the government's decision. They're ramping up spending on defence. There's this pressure from the US for the UK and Europe to look after themselves, boost their military spending and their defence industries. Steel is going to be a really critical part of that. And this is the UK's last plant that makes virgin steel. So I think for Rachel Reeves, you know, all of those considerations... It's the national security stuff, right?

Yeah, I suspect you're right. I mean, I think probably workers in Scunthorpe in a way have been lucky that they were the last people standing. Saving those jobs will have been an important consideration. Yeah, but the government didn't save them in Port Talbot. And we can talk about that, but that's going to be the contrast I think that will be drawn by political parties campaigning in Wales next year. But just back to the Treasury question.

I mean, Treasury says that they can pay for this without breaking their fiscal rules. Is it supposed to cost us anything here? That will depend on whether they manage to find another commercial partner to step in and invest and take over the plant. And that's going to be the...

the thing that really determines how much and whether this is going to cost the taxpayer money. Right, because last time I think it got nationalised back in 2019, the government spent £600 million over that 10-month period just keeping the plant running. So, you know, that's not insignificant. The clock is ticking. The clock is ticking. And what officials have been telling us is that

they want to find a, quote, private partner to co-invest with. So I think the assumption is the government will have to stump up some cash here to build the electric arc furnace in the end, but they can't pay for the whole thing because that's when you get into the territory of having to borrow to do so. And that's why, presumably, they're now not ruling out another Chinese company coming in because there aren't many companies who want to do this. Well, I want to talk more broadly about what happens next for Scunthorpe because Scunthorpe

Okay, we are told that the government, obviously the government now has control and we're told that in the short term full nationalization is likely, but they're still looking for an investment partner, right? You know, what happens now? Do we have any sense of what's going to happen to this planted six months time, a year's time, two years time?

It's all very unclear at this stage, but yes, as you say, the government is looking for another company to step in and take over so that they don't have to nationalize it in the longer term. The other element to this is that the two blast furnaces that the government has expended so much political capital to keep going, they've got a limited sort of life left and thought to have maybe a couple of years.

So there are questions about the future of the plant and whether it would keep making virgin steel after those blast furnaces reach the end of their life. Right. So the original plan that Jingye had in 2020, and this is what's happening down in Port Talbot, was that Jingye would invest in a new electric arc furnace, which is a much cleaner, more efficient form of steelmaking. By the way, it takes far fewer employees to run as well.

But the problem is that costs over a billion pounds. So Jingye originally promised in 2020 to invest 1.2 billion pounds on that process, but then at some point decided that they weren't going to do that. And then after that made the decision to shut down the blast furnaces. I think what the government really wants to be able to do is run the blast furnaces as long as possible. What they wanted to do at Port Talbot was...

to build the electric arc furnaces while the blast furnaces were still running. Logistically, that was pretty much impossible, which was why Tata decided not to do that. And GMB point out that the average age, I think, of people working on the Scunthorpe plant is over 50. So...

If they can keep it running for another two years, you're going to have a lot of people reach natural retirement. And that's a very different thing than having to suddenly lay people off in their prime. The issue when it comes to the sort of strategic importance of making steel is that electric arc furnaces don't make virgin steel. They recycle steel and...

purify it, as I understand it. Once these blast furnaces stop operating, there is a question of whether the UK will make the decision to stop producing its own virgin steel. So this, I think, is going to become a much bigger question in the coming years, especially with the UK feeling that there is a national security imperative in this need to produce its own steel. Right. I mean, a lot of this is to do with national security, especially because we're investing so much more money into defence and a lot of the new...

whatever they are, ships, weapons systems, are going to require that steel for national security reasons. We might want to produce that ourselves. So that opens up this broader question of Chinese investment in British infrastructure. And we've been through various...

of this. We had the golden era during Osborne and Cameron, where they were very keen to get the Chinese investing in British infrastructure. Then we ended up with Huawei making all of our telecoms and decided maybe that hadn't been such a good idea. So there was a reversal of a lot of that under Theresa May. This government seems keen to have some kind of rapprochement with Beijing and again attract Chinese investment in.

Do you think that the government's changed its mind at all on whether it's a good idea to have China investing quite so heavily in British infrastructure as a result of what's happened over the last week?

It's a really good question. I mean, from the conversations I've been having over the last few days, I think there isn't really a change here in the government's approach towards China. The government's approach is we welcome Chinese investment. We want to work more closely with China, with Chinese businesses. We want to improve trade and cooperation when it comes to the economy. But the

while safeguarding and sort of locking Chinese investment out of some of our most sensitive industries and sort of technologies. And actually, to be honest, that is the same approach that the past couple of conservative prime ministers have also wanted to pursue perhaps less successfully. And absolutely, the government is still...

full steam ahead, pursuing that normalization, as they call it, of relations with China. And we reported that Jonathan Reynolds is due to travel out there in the coming months to restore a kind of high level trade dialogue that hasn't taken place since 2018. We're expecting Keir Starmer to travel there at some point later this year. So all of that is still very much going on. Yes, that was your scoop that Jonathan Reynolds was about to go to China, which was

Incredible timing for you to find that out just as he was. And I wonder whether that, maybe that's part of the reason that he suddenly decided to soften his tone. I wonder whether he or the government have been told by Chinese officials that some of this is under threat if you keep talking about Chinese industrial sabotage of the UK.

I think it's, I mean, it's all playing out quite publicly in that the government will want to be making its messaging clearer on this. You know, it's not saying that we don't welcome Chinese investment in many areas, but we're, you know, as they've been saying since the start, which is they don't want to involve China in sensitive industries. And it's not just geopolitics that's playing out here, right? It's very local politics. And the other thing to keep in mind when talking about how much is being spent to keep Scunthorpe alive is,

is that it's not just the industry itself but all of the communities around them too.

In fact, I was chatting to a government advisor earlier this week, and this person was kind of openly musing that ministers might not have taken this decision had they not been in the middle of a local election fight with reform right now. And Scunthorpe, that's exactly the kind of place that reform has begun to target, that Labour won from the Conservatives at the last election and is now worried about. This story of industrial decline seems to be one that Nigel Farage is keen to play up, right? He launched his local election campaign this week with exactly that message.

Absolutely. Nigel Farage has seized on this message of re-industrialising Britain. That's what he's pushing and talking about. And he's very much targeting so-called red wall areas as former industrial areas in the north of England that voted for Boris Johnson in 2019, Labour won back in 2024, and that are a really sort of key political battleground for all parties going forward.

This particular issue as well, he's been calling for the government to nationalise British steel for a little while. So this is definitely a worry for Labour and something that they're keeping a very close eye on. And in a couple of weeks time, we've got the local elections in some of these parts of the country, which will give us a bit of a sense of whether reform really is becoming increasingly popular there. But do you think that by taking control of Scunthorpe, at least in the short term, Labour's now won itself some political space? Is this going to play well for the government?

I think, yes, definitely in Scunthorpe and more broadly in those areas, this decision will be seen favorably by people there. The government is showing that it does want to step in and save those jobs, that it does care about the steel industry.

absolutely politically this does make sense for them as a decision. Union reps tell me that Jonathan Reynolds got a round of applause when he turned up at the plant on Tuesday. He'll be delighted about that. I'm sorry. I don't suppose the business secretary gets many of those. But the flip side of all this is how this is playing out in Wales, right? Because workers in Port Talbot there are absolutely furious that their plant has been treated differently because both of the blast furnaces there are being allowed to close while Tata, the private sector company that runs it, is building a new electric one.

And that obviously involves a lot of job losses. Do you think that's going to be an issue? Because, of course, the Welsh Senate is having their elections next year. Is that going to play out there? I think Nigel Farage will definitely be making this an issue there. And reform is absolutely targeting Wales's

very strongly. It's a kind of top priority for them that those Senate elections are going to be really important in that respect. And yes, I think this issue is going to be really key, actually, and that Nigel Farage will be making this argument that people in Wales have been failed by the government, which did not step in in quite the same way. You can imagine the argument, can't you? They saved the English plant, but not the Welsh one. And

and Pied will probably be making the same point. Yes, I mean, I think the people in government here would argue they only came into power in July, so it's nothing to do with them. I mean, they could have come in and nationalised that plan. Yeah, and I guess also, as we've been discussing, the context now is very different. This is the UK's last plant that makes virgin steel. It's at a time where the government is really ramping up its spending on defence and wants much more action from the defence industry. So that's the context in which this decision has

been taken. Well, Eleni, that's been absolutely fascinating. Thanks so much for joining us. Thank you for having me. Well, thanks for listening. I hope you enjoyed today's episode. If you did, make sure you subscribe to Politics Weekly UK wherever you're listening. And even better, leave us a review. And why not check out today's episode of the Guardian's Today in Focus podcast, which is about the way that Donald Trump's trade war is playing out in China.

Politics Weekly Westminster is off again next Monday for Easter, but John will be back next Thursday. In the meantime, if you have questions for us, please do carry on writing to our email address, which is politicsweeklyuk at theguardian.com. That's politicsweeklyuk at theguardian.com. This episode was produced by Frankie Tobey, music by Axel Kukutie, and the executive producer is Zoe Hitch.

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