The business secretary has refused to guarantee that the British Steel plant in Scunthorpe will get enough raw materials in time to keep its crucial blast furnaces running.
Jonathan Reynolds also said he would not sell the business to another Chinese owner as he indicated there is now a “high trust bar” for Chinese companies to meet before they will be allowed to invest in sensitive UK industries.
On Saturday the government pushed through emergency legislation to take control of British Steel, with Mr Reynolds warning MPs that once blast furnaces run out of raw materials, they can never be turned back on.
A day later he said he would not “make my situation or the nation’s situation more difficult” by commenting on specific commercial details.
He told the BBC’s Sunday with Laura Kuenssberg: “If we hadn’t acted, the blast furnaces were gone; steel production in the UK, primary steel producing, would have gone.
“So we’ve given ourselves the opportunity; we are in control of the site. My officials are on site right now to give us a chance to do that.”
He also revealed that ministers had decided to act when it emerged that the company’s Chinese owner, Jingye, was not only halting the purchase of new raw materials but had begun to sell off supplies it already had.
But Mr Reynolds declined to accuse the company of deliberately sabotaging the business at the behest of the Chinese Communist Party (CCP), saying he was “not accusing the Chinese state of being directly behind this”.
However, he did accept that there was now a “high trust bar” that would have to be surmounted before Chinese investment in “sensitive” areas like steel production would be allowed.
For his part, Reform UK leader Nigel Farage said he was “100 per cent certain” that the CCP had ordered Jingye to buy British Steel in order to close the business, but he provided no evidence, citing only “intuition”.
Mr Reynolds also conceded that the government expects to lose money on British Steel, which is losing around £233m a year. But he added that the collapse of the business would have cost “easily over £1bn”.
On Saturday, Mr Reynolds accused Jingye of planning to “irrevocably and unilaterally” shut the furnaces down by starving them of raw materials – as it emerged that police had been called after reports that the company’s executives had been blocked from entering the premises.
Later, in a surprise move, the prime minister met with steelworkers near Scunthorpe to discuss the plans.
He told them: “You are the people who have kept this going. You and your colleagues, for years, have been the backbone of British Steel, and it’s really important that we recognise that.”
Although the new law stops short of nationalisation, the government conceded it is “likely” that British Steel will have to be taken into public ownership, after Sir Keir Starmer warned that the UK’s economic and national security was “on the line”.
