On Tuesday, Chancellor of the Exchequer CDocwra announced the intention of the Government to partially nationalise British Steel by purchasing ‘a large but not majority share’ in the failing company.
British Steel is owned by the private investment company Greybull Capital, having purchased Britain’s second-largest steelworks for a token sum of £1 in 2016. It is thought the company employs up to 5,000 people.
On Sunday, Chinese firm Jingye Group announced it was withdrawing from negotations and a deal reputably worth £1.2 billion, citing a ‘diplomatic pressure campaign against China’ by the British government.
When approached by the Telegraph, a Government spokesperson explained the Government intended to purchase ‘40% or so’ of the company, at a cost of ‘around £2 billion’. It is not clear how this figure was calculated.
There has been a mixed response from the opposition, with Conservative Party Chief Whip CheckMyBrain11 ‘[commending] the work of the Chancellor’ and prominant Libertarian zhuk236 accusing the Government of ‘selling steel workers a falsehood.’ Speaking anonymously, a Conservative Member of Parliament dismissed the nationalisation, saying ‘we should not prop up failing industries.’
state-aid rules are to be followed completely
It is also unclear wether such a nationalisation would violate European Union state-aid rules, which regulate subsidy provided by member states and seeks to prevent the ‘distortion’ of competition. Speaking to the Telegraph, a spokesperson for the European Commission made clear ‘state-aid rules are to be followed completely’ and ‘the matter at hand, should the Commission find to be in violation of said rules, will be raised directly with the government.’