Business Secretary Jonathan Reynolds has announced plans to nationalise Speciality Steel UK, marking the second major steel nationalisation by the Labour government in a matter of weeks.
Reynolds confirmed on Monday that ministers would use recently ratified legislation to take SSUK into public ownership, following a similar move to nationalise British Steel’s Scunthorpe operations in July.
SSUK, the UK’s third-largest steelworks, employs nearly 1,500 people across four sites in South Yorkshire, including facilities in Rotherham and Stocksbridge.
The company was previously owned by metal magnate Sanjeev Gupta before the government took control around a year ago, after creditors issued Gupta a winding-up order to recoup hundreds of millions of pounds they were owed.
Since the government’s receiver assumed control last August, taxpayers have been funding the wages of nearly 1,500 workers at a cost of 3.5 million pounds a month, in addition to covering the running costs of the plants.
Months of negotiations with potential private buyers failed to produce a viable deal, with talks most advanced with Blastr, a small Norwegian firm that at one stage entered exclusive negotiations with Whitehall officials.
Those talks ground to a halt in June after the two parties failed to reach an agreement, with officials judging the proposal would not “provide the long-term stability, certainty and value for money.”
Reynolds defended the decision to intervene, saying: “We do not intervene in private companies lightly. But nor can we simply stand aside and allow the future of this company and over 1,300 jobs to be decided by default.”
However, a Blastr Green Steel spokeswoman pushed back strongly against the announcement, saying the company had a fully-funded proposal ready to complete within 12 weeks at no cost to the British taxpayer.
“We are disappointed by the government’s decision today concerning Speciality Steel UK, and we were not informed in advance,” the spokeswoman said, adding that Blastr representatives were on site in South Yorkshire with investors when the announcement was made.
The nationalisation is the latest in a series of interventions designed to shore up Britain’s domestic steel industry, despite all major producers operating at significant losses.
In July, the government also erected steep new tariffs on foreign-made steel, hiking duties on imported steel to some 50 per cent and slashing tariff-free quotas by more than half as part of the same package.
Industry figures have broadly welcomed the measures, arguing they are vital if Britain is to reduce its reliance on steel imports, though some chiefs have warned the tariffs will push up costs for the UK’s already struggling manufacturing sector.
Gareth Stace, director general of UK Steel, expressed support for the move, saying: “SSUK is already well on its way to returning to full operations and retaking its place at the heart of critical UK supply chains.”
Stace added that “it is crucial that the custodian of this key strategic asset is the right owner and investor, with the expertise and long-term ambition that the dedicated workforce deserve.”