Government expects to lose money running British Steel – business secretary
Reynolds has also been speaking to Sky News’ Sunday Morning programme with Trevor Phillips. He has been asked how much it may cost the taxpayer if the government takes ownership and control of British Steel.
Reynolds said the government expects to lose money running British Steel, but allowing it to collapse would have cost £1bn. There still has been no confirmation of plans to nationalise the plant in Scunthorpe but public ownership is looking increasingly likely.
Speaking to Sky News, Reynolds said:
The losses, the annual losses, net losses, in the last set of accounts were £233m. Actually, that can be improved upon, but I am accepting your point that we would expect to lose money on this.
I would ask the public to compare that to the option of spending a lot more money to reach a deal that would have seen a lot of job losses and Jingye remain as a partner.
Or the cost of the complete collapse of British Steel, easily over £1bn in terms of the need to respond from government, to remediate the land, to look after the workforce.
The business secretary said that, as money had already been set aside for the steel industry at the budget, the government would not need to borrow more as a result of the takeover.
He added: “To be absolutely frank, I think supporting British Steel at this time, in that way, is better than spending a greater deal of money on the complete loss of the business or in a transition deal.”
Jingye still owns the site in Scunthorpe, but the steel industry bill published on Saturday gives the government the power to instruct steel companies in England to keep facilities open, with criminal penalties for executives if they fail to comply.
Key events
Laura Kuenssberg asks Jonathan Reynolds why the government was so slow in passing the emergency laws to save British Steel (when weeks ago – on 25 March – British Steel said it might have to close the furnaces).
Q:“Why did you let it get to this Thursday when the coal is about to run out that you actually made this decision?”
A:
Because I don’t think in any job, in any role in government, you take emergency powers of the scale that happened yesterday until you have that emergency situation.
We have been negotiating in good faith. We have been expecting, as I think is reasonable, an economically rational partner on the other side.
When that became evident that that was not possible that required the kind of significant, dramatic emergency action which was taken yesterday.
