British Steel: more questions than answers on the future | Nils Pratley

"Taking control meant the Chinese owner, Jingye, could not turn off the two blast furnaces but meant the government was on the hook for operational losses, which will be 615m and counting by next month according to the National Audit Office (NAO). Full nationalisation is now on the cards, which will end the limbo-land state of ownership and give some comfort for 4,000 workers. But it is also the point at which the government will have to choose between its barely described potential future options for British Steel."

"But it is also the point at which the government will have to choose between its barely described potential future options for British Steel. What's the actual plan here? How much is it going to cost? And, by the end, will much be left from the 2.5bn promised in the election manifesto for the revitalisation of the whole of UK steelmaking? Half an answer to the first question might appear later this week if ministers confirm that nationalisation is not an end in itself but a way to enable a sale, or partial sale, to a better owner than Jingye."

"The big idea, presumably, is for the Scunthorpe site to convert over time to using an electric arc furnace, the lower carbon alternative to blast furnaces. But, since the technology takes about three years to build, one obvious question is whether the old-style furnaces will be kept running in the meantime. One assumes they will be because, if not, there would be a big hole in the UK's freshly minted steel strategy and a major bust-up with the unions"

Parliament was recalled to take control of British Steel at Scunthorpe, described as an emergency measure to prevent collapse rather than a full recovery plan. Control prevented the Chinese owner from shutting down blast furnaces, leaving the government responsible for operational losses expected to reach 615m by next month. Full nationalisation is now being considered to end uncertain ownership and provide reassurance for 4,000 workers. Nationalisation raises questions about the actual strategy, total cost, and whether the 2.5bn promised for UK steel revitalisation will be preserved. Ministers may frame nationalisation as a route to enable a sale to a better owner than Jingye, with potential suitors including Sev.en Global Investments. Any sale terms will be critical, especially regarding a transition to electric arc furnace production, which takes about three years to build, and whether blast furnaces remain running during the transition.

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