The government is presiding over the collapse of the steel industry. It is one of many casualties of its high energy prices and carbon taxes. The traditional two last blast furnaces at Scunthorpe struggle with dear fossil fuels and with high carbon taxes. The more modern electric arc furnaces elsewhere which the government prefers suffer from dear electricity. Are the government misleading the employees about the future of all their jobs given the absence of a realistic plan to run the blast furnaces as a long term proposition?
The government in a dramatic move legislated one Saturday a year ago to take management control of Chinese owned Scunthorpe, giving taxpayers the task of paying the bills for the heavy losses to keep the plant operating. It was a bad unilateral decision made against the wishes of the owner, Jingye. The Chinese had concluded there was no viable way of running the old blast furnaces and wanted to close them. Understandably the government wanted to save the jobs. Stupidly they gave up negotiating a solution with the owners and took it over without buying the plant and without agreement on terms. They now face compensation claims for a near bankrupt works and two very old furnaces which they operate but do not own.
Civil service advice was more cautious pointing out the risks of taking it on. The Secretary of State had to issue a direction to accept these liabilities. The Treasury was apprehensive about the possible scale of the financial commitment so they refused special funding . They told the Business department to pay for it by cancelling other programmes or finding other savings in its budget. The government promised early resolution of the dispute with the owners and a business plan for the plant. No agreement and no realistic plan has been forthcoming, one year on.
The cruel irony of the attempt to save blast furnace jobs is the government had been offering the Chinese a big grant to replace the blast furnaces with a new electric arc plant with far fewer jobs. This may still be their plan, as blast furnaces burning coal do not conform with government net zero targets. Electric arc technology is for steel recycling, so if we come to rely just on that the UK will have no capacity to make virgin steel. This will all have to be imported from countries less queasy about using coal.
The National Audit Office has recently set out what a financial disaster this has been to date. The losses are a staggering £1.3 m a day with an estimated total of £642 m by this June. If the government goes on like this at £500 m a year or more it will gobble up most of what remains of the £2.5 bn set aside for steel restructuring and modernisation over the next three years. It could charge nationalised British Rail more for the track it buys from the steel company, but that still sends the bill to taxpayers and would be resisted by the Department of Transport paying the huge rail losses.
The subsidies to Scunthorpe buy no new plant and no improved Business Plan. Meanwhile Ministers will face more investigations about value for money. The Scunthorpe workforce will be concerned that many could still lose their jobs if government firms up its old plans to replace these furnaces with electric arc recycling capacity.
The proposed Bill in the King’s speech will be difficult to draft and agree. Jingye want payment for their assets. The UK must argue these were ageing and heavily loss making. They came with a workforce the owners wanted to make redundant at considerable cost. The past debts built up by the owners should not fall on taxpayers. Will the UK sustain this case? Will the Chinese come to accept it, or could they pursue a successful court action? This government seems to specialise in giving money to foreigners to try to buy their goodwill.
The current funding of the company by the UK Treasury is technically a loan, but the company has no money to pay interest on it let alone repay it. Ideally the government late in the day negotiates terms with the owner for the state takeover. If no sensible terms are available the government could legislate to emforce nationalisation on its terms. That sends a bad message to other foreign investors in the UK and to those thinking of coming here. The Chinese state could raise legal and political objections to such conduct and could threaten retaliation against UK investments in China.
Ministers should have thought of these dangerous financial and political consequences before they blundered into paying bills at a business they do not own. Their officials are protected by not signing off the action and warning of the risks.
Labour is rarely happy these days but it has cheered the idea of full nationalisation. Will they go on cheering as the bills mount, pre-empting other spending? Will they cheer compensation to China for a near bankrupt business? Will they cheer if the next plan requires closure after all and replacement with electric arc? What will Ministers do if more officials and auditors say the spending did not offer value for money?
The government has already used a Brexit freedom to impose a savage 50% tariff or tax on much more imported steel. This is a blow to steel using businesses and construction in this country. It may force more of those to close. Hanging over all of this is dear energy, shutting down far too much UK industry.
Labour wants us to believe nationalisation is a superior way of running a business. This Scunthorpe scandal shows just how much taxpayers money you can lose and put at risk by not agreeing public control with prior owners, and not having a realistic business plan. If the UK ends up sacking most of the workforce with or without putting in another heavily subsidised electric arc furnace what was it all for? If there is a plan to run on with our own blast furnaces, where is the plan to modernise and re line them? When will we get good value fuel and taxes the industry can afford to give it more of a chance of commercial success? Meanwhile how much damage will the high tariffs do to steel users also struggling to make a living? This is no way to save a crucial industry. A state without its own primary steel making has weakened its own national security.
Sent from Outlook for iOS
May 21, 2026
We will be the only country in the G7 incapable of making primary steel but never mind. As Lady Nugee said during the debate in destroying the North Sea production, we’re British, we need to show the way in these things.
Now we intend financing Putins war by buying products refined from sanctioned oil the stupidity ofvthese people is off the scale.
May 21, 2026
I’ve been watching the electricity supply over-the-last month and on a rough averages we import 3gw an hour as exports are negligible. The price averages £110 per Mwh or £110,000 per Gigawatt.
This means we import approximately £8 million daily for something we could produce for £3.5 million or even less when we had coal fires stations.
This is just one component in the stupidity of net zero costing the UK £3 billion annually
May 21, 2026
Indeed so is Ed Miliband totally mad or is he just an enemy for Britain?
So Streeting think they might lose to Farage and Nationalism what is wrong with nationalism? Scottish Nationalists and Welsh ones are rather daft & dangerous I suppose! Streeting has proposed not different policies to those of Starmer really other than he wants to increase they number of rich leaving (1/6 of the Sunday Times rich list in 12 months) by having a £12 bn a year wealth tax. When will these Labour morons understand Lafer curves and why doom loop economics will not even raise more taxes.
Reeves on about British Good manners to a working man when he points out reality to her. She and the Starmer government have been mugging workers, landlords, employers, motorists, private school users, veterans… at every turn and vandalising the economy in a doom loop agenda too.
Is this good manners or even good economics Reeves? It is surely good manners (and the right thing to do) to point out when a Chancellor or minister is being totally moronic and 180 degrees out!
May 21, 2026
An article in The Spectator suggests things are about to get much worse – whatever happens in the Strait of Hormuz. The headline is about the effect of this on Burnham and Labour, but the approaching scenario itself is of much more interest.
Even if the Strait reopens soon shipping companies will be in no hurry to venture through in case of a further breakout of hostilities. USA has minimal ownership of shipping. Trump is in no position to force foreign companies to return to the route.
Supermarket price controls and using Russian oil will not solve the issues either.
May 21, 2026
Listening to the appalling Sarah Montague on the BBC one o’clock news. At least Robinson and Kuennsberg in the morning are skilled at their job.
The big news is ‘migration is down’.
Turns out this means numbers going out minus numbers coming in. Labour seize on this number to suggest success in one of their promises.
Small boat numbers are not detailed or discussed.
Another Labour voice comes on to say people see more non whites around, but they are doing valuable work in the care sector – and noticing colour is racist.
At least it is sunny outside now.
May 21, 2026
Good weather even for a bank holiday. So loads more boat people to arrive over this weekend no doubt!
May 21, 2026
@Ian Wragg – you can’t break the UK by being sensible. World emissions increased by the stupidity of the UK Parliament after-all have no effect on ‘Global Warming’.
May 21, 2026
@Ian Wragg – the only country in the G7 were the means to earn fund a tomorrow has been ejected.
May 21, 2026
The old saying they couldn’t run a booze (sic) up in a brewery would be an appropriate comment, but it now looks like this government is also presiding over closure of our brewing industry too, so even that saying will become obsolete. In years to come people will ask, what is a brewery?
Other core industries this government are determined to close are.
Oil Refineries, Glass industry, The Ceramics industry, The Motor industry, The Oil Industry, The Gas Industry, The Farming industry, The Mining Industry, The Off Shore Fishing Industry, The Defence Industry. The White Goods Industry. Most remarkable of all is the decline in the construction Industry despite claims by government to be building record new homes. Despite State hype the industry continues to decline with building completions collapsing. No pun intended.
With that list in mind, we won’t need to worry about putting off foreign investment by actions surrounding Scunthorpe Steel. What have any investors got left to consider investing in?
May 21, 2026
Private schools being strangled too. Many universities and degrees will have close also (which would not be a bad thing in most cases. This as the government will not be able to afford the loans which are so often not being repaid as few jobs over the repayment thresholds.
May 21, 2026
Plus all the foreign students who never repay their student loan. This debt is in the billions now. I can’t understand why our government gives loans to foreign students. It must be to keep our universities in business. This is set to get worse again when Starmer re-joins the EU Erasmus scheme. It was improving under the Turing scheme.
May 21, 2026
@Rod Evans – they are not done yet – the Service Industry.
They needed to be reminded of what Mustafa Suleyman, CEO of Microsoft AI, has recently said, he predicts that artificial intelligence will reach human-level performance in nearly all professional tasks within 12 to 18 months, and he should know he is a founding father of AI and still working at it. He is effectively working on automating the bulk of white-collar work. That is ‘accountancy’, ‘law’, ‘finance’ etc gone in 12-18months, or at the very least the reason other countries have the UK involved – every country can bring that industry in house.
Another Industry chucked out by the UK Parliament. Who does this Parliament work for, it is certainly not for those that empower and pay them – the electorate
May 21, 2026
RE,
‘The old saying they couldn’t run a booze (sic) up in a brewery would be an appropriate comment, …’
You can say it. One of Lifelogic’s favourite phrases used to feature your bowdlerised word going down drains.
He does not use it now, as it has been replaced by doom loop and COVID/ post lock down observations.
May 21, 2026
My personal belief is that this nation was earmarked for managed decline a very long time ago.
Everything that has been done here from education and industry, right down to the social and moral aspect seems to have sent us further into decline.
Posturing on the world stage, ensuring other nations and their people are of paramount importance, so with every treaty, agreement and whatever else, we seem to come off worse.
I’m only surprised all the native workers at the steel plants weren’t sacked to be replaced by Chinese workers, such is the desire by successive governments to turn us into a grovelling, appeasing and pleasing doormat of a people.
All that said, have you ever seen such a contemptible set of people as those in power now?
Not just contemptible, but clearly out of their depth in just about every aspect of governance and we are suffering for it.
Their contempt for us as a distinct nation and a distinct people is so obvious it just beggars belief that some still can’t or won’t see it.
This government will not do what is necessary to save the industry if their ideology does not favour it, and their abilities are so hideously lacking I fear any attempts will be bungled and half baked. All of course done around what suits everyone else first.
May 21, 2026
Michelle
I do not think they are that clever, but they seem to be experts at incompetence.
May 21, 2026
Absolutely nothing from this blog about the government’s announcement late last year of a 90% reduction in electricity network charges for high-consumption industries, including steel, glass and cement. Around 500 of the UK’s most energy-intensive businesses are set to save up to £420 million per year on their electricity bills from April 2026
Some of the companies which will benefit from the change include Tata Steel at Port Talbot and INEOS in the Scottish town of Grangemouth. Even greater energy savings can be made if businesses could shift more production to summer weekends, where many energy companies now offer absolutely free solar electricity during the day. Some energy companies will actually pay firms to take electricity during these periods
Labour’s decision on energy costs has been completely ignored by the net stupid anti-swans Reform limited company and the Conservatives. Farage and Badenoch are still sticking to the discredited claim that our high electricity costs are “caused by net zero” and non-existent “subsidies” for our huge renewables sector.
Let’s hear the truth about the falling costs of electricity, which is good for Britain and less of the fossil fuel lobby propaganda
May 21, 2026
My bills for energy are still rising, even though my house is well insulated, with sensible modern electronic controls on its gas central heating.
I do not have a heat source pump, as I was quoted £25,000 for an air source, and £35,000 for a ground source installation, without any internal modifications.
May 21, 2026
According to Professor Gordon Hughes of the Renewable Energy Foundation the UK taxpayer has already funded £220bn in renewable subsidies (£8000/household) since 2002 (2024 prices) and is currently funding £26bn/year. NESO say their Clean Power 2030 project will cost “over £40bn annually”. This is in addition to all the disruption and expense of the forced transition to evs and heat pumps. It is time we had a referendum on whether or not to continue along this Net Zero path which NESO has costed at £9 tn if the carbon taxes are added.
May 21, 2026
So – having deliberately driven up energy costs and in the process destroyed whole swathes of our manufacturing base, we’re supposed to celebrate that they’ve taken a small step backwards?
Meanwhile, household energy costs are going through the roof.
May 21, 2026
As I write (12:00pm 21/05/2026) the wholesale price of electricity is £90/MWhr and since the price is set by gas, as gas is the last generating source to be used as renewables are given priority and gas is used for grid balancing, around £17-£23/MWhr will be carbon taxes. The current CfD weighted average by installed capacity of offshore wind is £149/MWhr. This page on the LCCC (Low Carbon Contracts Company) website charts the CfD subsidies paid from 2018 to current date. Only 3 quarters during the invasion of Ukraine were subsidies not paid.
https://www.lowcarboncontracts.uk/resources/scheme-dashboards/cfd-historical-data-dashboard/
May 21, 2026
Wow what a disaster
May 21, 2026
So what you’re saying Sir JR, is Labour ain’t got a clue. Who’d a thought it ….
May 21, 2026
Carbon offsets – what a very good idea negotiated by a Labour deputy Prime Minister.
The UK is in thrall to letting other countries produce more carbon for us.
Fools.
May 21, 2026
Wouldn’t it be cheaper and a better use of government funds to make all public procurement schemes use the more expensive British (virgin) Steel from Scunthorpe negotiating at cost plus prices so that we don’t get fleeced?
British Steel can remain in private hands but have guaranteed customers.
EU rules can go hang as we are not in the EU.
May 21, 2026
…as a result of pursuing net-0.
We need to fully understand that none of this would be happening without this foul invention.
Inevitably we will lose our steel industry and all industries related to it. For a time we will be able to recycle old steel with electric arc technology but eventually that will become impossible to sustain. New steel will have to come from abroad, but at what cost!
Ultimately, of course, we won’t need steel as industries will crash, the trains will stop running and we become a third world recycling power, adept at keeping basic technology functioning but without even the energy or other resources to do more.
Will we then become the dumping ground for the rest of the world, to recycle their garbage and nuclear waste, because we won’t be up to doing much more than that!
May 21, 2026
@Steve Bullion – ‘…as a result of pursuing net-0.’ There you have it every move by the UK Parliament has caused a major and greater rise in World emissions. The UK Parliament is feeding Word emission, while ensuring the UK’s own decline. You couldn’t make it up, what sort of education have these numpties received?
May 21, 2026
@Ian B +99
Ignorance beyond measure.
May 21, 2026
Fingers in their ears is the only antidote that the UK Parliament understands. We have to be clear it is the UK Parliament with its chosen government that has set out to destroy the UK, some of it under the disguise of NutZero, but mainly ideology.
Parliament has to ask its self, were does the steel come for their railway lines, the much needed submarines and warships? Buying in the UK’s safety and security at extra cost, is now at the whim of political powers elsewhere. All the while the UK Parliament is punishing the World with additional environmental pollution, everything that is the opposite of the ‘cloak’ they hide behind.
May 21, 2026
Aren’t the British steel industry problems just symptomatic of the high cost, high tax government policies? The measures to save British steel are the same as those needed to save the rest of industry. Stop taxing till the pips squeak and reduce housing costs by reducing demand.
May 21, 2026
@Dave Andrews – then again it doesn’t help that Parliament closed down the industry and ejected it from the UK. We still need their output, we still use their output, but we now buy in from France, Germany, Sweden and elsewhere. While it is banned it cant be saved, Parliaments high costs that cripple the rest of Industry dont even figure – steel, the type of steel we need has been banned by Parliament
May 21, 2026
The whole way pollution quota trading works, and the way such quotas get traded needs fixing. As Indian owners have often bought UK production plants simply to get their quotas and move them to India.
The price of power, safety regs, anti pollution regs, paying properly for intellectual property like software licenses, makes production here uncompetitive compared to countries where none of those apply. That’s without the silly extra taxes on jobs imposed by the government.
But dont worry our glorious leaders are going to cap the price of bread and milk, which will no doubt end up causing shortages and queues.
May 21, 2026
Labour’s plans for British Steel are a repeat of past mistakes
As Kemi Badenoch said at PMQs this week, it’s like the socialists won. If Britain is doomed to relearn the lessons of the 1970s, then Conservatives will not make the same mistakes. That is why we cannot support Labour’s nationalisation, and we will vote against the Government’s blank cheque bill.
https://www.telegraph.co.uk/business/2026/05/21/labours-plans-for-british-steel-are-repeat-of-past-mistakes/
May 21, 2026
The government acts as if it has Analysis Paralysis or some form of ADHD and then flips a coin at every forced choice in the belief of being right 50% overall. Such a method completely ignores logic, research, and probability. One wonders how else they could be so wrong, about so much, so often and for so long. Maybe 67% of them are opposed to the well-being of the UK and the other 84% just can’t figure things out!
May 21, 2026
Starmer reminds me of the so called East German Democratic Republic
Erich Honecker (the classic example of non-entity “Men in grey suits” ) puppets heading up a faceless committee of bureaucrats making decisions based on shaky thinking of legal niceties, Justice is the Mission to right our historic wrongs and pleasing some larger organisation to whom they owe their entitled existence and wealth.
European Convention on Human Rights and why he favours the EU so much regardless of reason, costs and consequences unfolding daily like nonsensical Nationalisation, importing our enemies oil instead of drilling our own black gold , (remember giving away our Gold) , giving away our EU Rebate Chagos , and a litany too long to ignore.
Steel needs the coal under Drax in Yorkshire where there is 200 years reserves but we import it from Japan. Solar and wind are vulnerable instead but we bet the farm in it costing us dearly. No plan, except the hidden agenda of reunion with Europe EU.
What happened to the Mandelson files being published?
May 21, 2026
The incompetence shown by your article is breathtaking! We have a Government that lacks any intelligence, common sense, or the ability to analyse simple problems, let alone complex ones. It is frightening to think these people are our Government at a time when clear thinking and vision are required.
Obviously, the problem is not Keir Starmer, as bad as he is, but the entire Labour approach to Government.
They have learnt nothing from the recent elections and just blunder on blindly. How stupid do you have to be with the current world situation regarding all kinds of fuel, to bluntly refuse to use our own resources?
Then to say we can buy refined products made with Russian oil, while at the same time funding Ukraine’s war.
The only solution is that Labour will bankrupt the UK, and we will have a forced General Election.
May 21, 2026
the white van driver who heckled the Chancellor deserves a medal, if the honours system worked properly they would get one.
May 21, 2026
Who sold the Scunthorpe steelworks, a strategic national asset, to China, a state described by our security services as “hostile”? China could only have bought it for any potential steel making techniques or patents they have not already stolen. No other reason makes any sense. The closure of these steelworks is simply part of the plan to destroy our industry, economy and national security using the false claim that there is a climate crisis and its unaffordable and impossible solution is to net zero the UK’s CO2 emissions in order to “save the planet”. Socialism depends upon making and keeping people poor. Making us the “Saudi Arabia of Wind” will make us the Cuba of the Caribbean. Mind you, Emily Thornberry, aka Lady Nugee, a senior Labour MP, holds Cuba in high regard.
Premeditated Industrial Destruction ?
How the UK destroyed its industry and the path to reverse this.
https://gbbc.uk/wp-content/uploads/2026/04/Premeditated-Industrial-Destruction-Final-6th-April-2026-with-added-security-issue-v2.pdf
May 21, 2026
@Original Richard – Foreign companies get to buy UK Industries like this by being rewarded with taxpayer funding basically forever. It would have been more serious and secure if the taxpayer money that is available to these foreign companies essentially to prop them up and pay tax in their home market, was instead used to help a management/worker buy-out.
It is not privatisation when the purchaser needs taxpayer funding, that is still a taxpayer funded industry. Nationalised but it is ‘not’ Instead of money being poured down the drain it is money, taxpayer money, being booted out of the Country. That’s malicious destruction and maximum self-harm.
Governments try to deliberately confuse, there is no such thing as ‘Government Funding’, there is only taxpayer funding.
May 21, 2026
It got worse on radio 4. Evan Davies is now on about how ‘lucky’ the post war generations are.
Nonsense about ‘golden plated’ pensions and capital gains on housing.
They don’t see that it was Gordon Brown fault proper pensions disappeared and it was politicians that allowed our major employers to be sold off and closed down.
I used to enjoy the poster on here who blamed everything on pensioners but I dont think he was stealing a living on the BBC payroll.
When Davies came on I was reminded of the famous heckler at the Glasgow Empire when Mike and Bernie Winters eventually appeared together on stage –
‘Oh No! There’s two of them !’
May 21, 2026
Headline ‘Migration Falls’ the lowest since 2021. Then hidden away, those that usual formally apply to enter the UK have been blocked, yet those that enter illegally therefore the criminal element have risen. The criminals are stealing places from the legitimate, these criminals get to stay.
May 21, 2026
Just been catching up on the days events in Parliament.
I am off down to the Dog & Duck to celebrate the fantastic news that Rachel has given a huge boost to the economy. She is making a trip to the Zoo cheaper by reducing the VAT on entry price to 5%.
Now no one saw that coming did they?
The whooping and the howling in the shires at that good news will be off the scale….