A recent poll conducted by the Made in Group concerning the future of British Steel has revealed some fascinating insights. With 128 companies taking part in the poll, 83% of respondents favoured renationalisation as the best solution for the steel giant, with 6% in favour of Chinese ownership, and 11% in favour of no intervention.
It is clear that the public and industry alike value British Steel as a critical part of the national economy, and as such, the question of government investment and ownership is a pertinent one. After all, the UK is a major producer of steel, accounting for over 10% of steel production in Europe.
Jason Pitt said, “As we have seen from the Russia-Ukraine conflict, the targeting of steel capacity was of high strategic importance. Russia, according to S & P, is set to dominate Black Sea Steel Market. Our government has a foreign policy that feels at odds with the its approach to industry, and if the UK intends to put some substance behind the words then we should be seeing a ramping up of industrial capacity.”
"Having spoken to senior people at both British Steel and British Volt there is a pattern and frustration at the indecision when talking about critical sectors. British Volt were dealt a similar blow before possible rescue package by an Australian Company. In the case of British Volt government were committed to 100m which was a tiny percentage of the 3b that was funded elsewhere. When the government pulled out they completely spooked private investment and the financial collapse of the proect was the consequence. We also have announcements that JLR are calling for a £500m investment and we must get that decision right. JLR make a significant controbition to the supplychain and society.
Jason added, “If this is not a clear opportunity to create a ‘British Sovereign Investment Fund’ then I'm not sure what it is.
“We need to impliment an industrial strategy or appoint a minister for manufacturing with appropriate experience. Any nation with a foreign policy like ours must have this in order."
British Steel was purchased for a mere £24m which included assets of more than £400m and the Government having already put £120+million into the business.
Jason added, "The UK is uniquely for sale in the world but it appears some of those investments are actually paid for by the UK. This is why there needs to be a vehicle to protect national interests, especially when it comes to infrastructure and critical sectors such as industry. If the government puts in another £500m then we have to return to the original sale of £24m and see this as evidence to support a ‘Sovereign Investment’ vehicle that can look out for the UK’s interests."
The case for government investment and ownership is strong, and it is easy to see why so many respondents to the poll have called for it. Firstly, the potential for job losses if British Steel collapses would be catastrophic, with over 4,000 direct jobs and a further 20,000 jobs supported by the company across the UK. Secondly, in order to remain competitive, British Steel needs significant capital investment, and government funding could provide the necessary resources to ensure that this is achieved. However, there are some risks associated with government intervention and ownership. Firstly, there is a risk of government overreach and interference, which could lead to a decrease in competitiveness and innovation. Secondly, there is a risk that the government could become too heavily involved in the running of the company, which could lead to a decline in efficiency. Finally, there is the risk that the government could be reluctant to act in the best interests of the company, instead of focusing on short-term political objectives.
Ultimately, the decision of whether or not to invest in and own British Steel is a complex one, and one which will require careful consideration of all of the potential risks and rewards. Nevertheless, the results of the Made in Group’s poll clearly demonstrate the importance of British Steel to the UK economy, and the support for government ownership and investment from industry. As such, it is essential that the government takes steps to ensure that the future of British Steel is secured, and that the nation’s steel production remains competitive and innovative for generations to come.