The government’s new steel strategy appears to be in direct contradiction with the very policy that led to its intervention in the first place. Business Secretary Peter Kyle’s backing for electric arc furnaces (EAFs) at Scunthorpe directly undermines the 2024 “repeated” pledge to “preserve ‘primary steelmaking’.”
Here is the contradiction: The government “recalled parliament in April to take control of British Steel” specifically to save its “primary steelmaking” ability (making steel from iron ore). This process relies on the plant’s blast furnaces.
Now, Peter Kyle, the new Business Secretary, is “keen to see that transition happen” to EAFs. These new furnaces are greener, but they melt scrap steel and would replace the blast furnaces, thereby eliminating the very capability the government stepped in to save.
This policy reversal has put the government in a bind. The Community union, representing the workers, has seized on this, demanding that “primary steelmaking capacity” be “maintained” as part of any deal.
The only way to resolve this contradiction is a costly, complex, and “financially dubious” hydrogen-based (DRI) plant. The government’s December strategy must now explain how it will either fund this expensive fix (with a depleted fund) or justify breaking its original promise.