British Steel exposes the madness of net zero

Parliament has sat on only six occasions on a Saturday since the Second World War and was last recalled from recess for a weekend sitting 43 years ago in April 1982 after the invasion of the Falklands. This illustrates the gravity of what is facing British industry with Saturday’s recall to discuss the nationalisation of British Steel. The move is an unfortunate necessity. This newspaper has almost always opposed taking businesses of any kind into public ownership. The state is an industrial custodian of last resort, peculiarly unsuited to the commercial sphere. But there are rare exceptions and steel is one of them.

Negotiations between ministers and Jingye Group, the Chinese company that bought British Steel five years ago, have failed to reach a deal to keep the two blast furnaces at Scunthorpe in operation. The imminent closure of the plant has forced the Government’s hand, because the loss of Britain’s last steel manufacturer would leave us exposed in a dangerous world.

The most important justification for a state bailout of British Steel is, of course, defence. Britain needs the ability to produce armaments in wartime when supply lines may be disrupted. Without an iron and steel industry, our island story might have been very different. Russian warships in British waters may be a taste of things to come. As in times past, the surrounding threats must be met with cold steel.

The already bleak climate for British Steel has just worsened due to the blanket 25 per cent tariff on imports of the metal to the United States announced by President Trump. Without its American customers, the firm isn’t viable except with large subsidies. Scunthorpe is the only British plant left that can convert iron ore into steel, employing some 3,000 people in North Lincolnshire.

How did we get into this nightmarish predicament? In 2020, when Jingye bought British Steel, some knowledgeable voices warned against allowing Chinese ownership of this strategic industry – notably Sir Iain Duncan Smith, the former Conservative leader – but there were no alternative buyers available at the time.

What seems to have sunk the fortunes of British Steel were the sky-high energy costs imposed by successive governments in the name of net zero. With UK energy prices among the highest in the world, an energy-intensive industry such as steel has been fighting a losing battle.

Interrupted in their Easter recess, Labour MPs are reportedly in a mutinous mood. The Government had plenty of warning. It is unclear whether there is a proper rescue plan on the table, or how much the Treasury is prepared to invest in a loss-making plant. The Conservatives are right that a commercial alternative would be preferable to nationalisation, but other potential buyers have yet to come forward. In this dire situation, public ownership may be a lesser evil than allowing a strategic industry to vanish. It should, however, be a temporary solution.

After British Steel was privatised in 1988 by Margaret Thatcher, it flourished. Only the madness of net zero has wrecked its competitiveness. The sooner steel returns to the private sector, the better for its employees and the taxpayer.