Analysis: The one extraordinary feature from today’s debates we shouldn’t overlook
Keir Starmer was flying the flag for domestic steel production today as his government passed emergency legislation to give itself extraordinary powers to intervene in the running of the steel works in Scunthorpe and elsewhere.
He wants voters to notice his intervention-friendly government has stepped in to save virgin steel production, which was days away from dying out for good because of what ministers call the bad faith behaviour of Chinese owners.
The politics and optics of today’s intervention seem relatively simple. What happens next, however, is not.
Even before the emergency bill had made its way through, government officials had turned up at British Steel in Scunthorpe.
There’s a nervousness about what happens next. As one person close to the talks told me, keeping the blast furnaces alive is far from a foregone conclusion, and there are difficult times to come.
“We’re in for a very hard few days and weeks whilst government and UK management secure and ensure the vital loads of raw materials needed,” they said.
“You can’t just do next day delivery on Amazon. Until this is in the blast furnaces, keeping them going, this won’t be a job done.”
This isn’t a ‘magic wand’
It stands to reason the government will pull out all the stops and the furnace, for now, will be kept alive, whatever the cost, because the political cost of failure at this point is too high.
But the medium-term prospects for virgin British steel are far from secure.
The blast furnaces being saved today only have a few years of life at best – but it remains unclear who will fund a transition to the new-style electric blast furnaces.
Jonathan Reynolds, the business secretary, said: “The action I seek to take today is not a magic wand or a panacea.
“The state cannot fund the long-term transformation of British Steel itself, nor would it want to do so.”
Nor would he say that steel production is an overriding national security issue, effectively guaranteeing future production. The wiggle room will be noted in Scunthorpe and beyond.
The government has provided a sticking plaster, not a solution.
A tough assault on Chinese entity
But this is about so much more than what’s going on in Lincolnshire, this is about Britain’s place in the world and its resilience.
Can our domestic steel industry survive if Donald Trump continues to impose 25% tariffs on steel going from the UK to the US? Can we make our own weapons for years to come – as part of Keir Starmer’s newfound commitment to spend 3% of GDP on defence – without British Steel? Is the eventual dependence on Chinese steel an inevitability?
Yet one of the fascinating features of today’s debate was the most strident attack on a Chinese entity by a minister – the toughest assault since Starmer’s government entered office.
Reynolds said: “Over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running.
“In fact, their intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel.
“Their intention has been to keep the downstream mills, which colleagues will know are fundamental to our construction steel industry, and supply them from China rather than from Scunthorpe.”
Uncertain future
This attack came at a time when ministers (most recently Ed Miliband) have been heading to Beijing to repair relations.
However, the accusation that a Chinese entity has been acting in bad faith in order to effectively scupper domestic steel production is a serious charge.
It also comes before we find out whether Trump is going to make it harder for allies to trade with China.
Today, the government succeeded in protecting the domestic manufacturer of virgin steel for the short-term.
But what happens in the long-term, and where we might get it from, remains as murky today as it did before.
