Prime Minister Keir Starmer announced that the UK government will push through emergency legislation on Saturday to stop the shutdown of British Steel’s blast furnaces. This will protect thousands of jobs and the nation’s ability to produce steel.
British Steel, which China’s Jingye Group owns, currently employs around 3,500 people at its Scunthorpe plant and supports many more through its supply chain. The company had planned to close the furnaces immediately due to daily losses of £700,000.
Starmer warned that the situation is critical: “This is about jobs, investment, growth — and our national security. We cannot afford to lose this capability.”
To intervene, Parliament will return from recess for a one-day session to pass legislation giving the government emergency powers. These powers would allow officials to keep the plant operational, including the ability to override company decisions, pay workers, and secure essential raw materials.
When asked whether nationalization is on the table, Starmer said all practical options remain open. “We’re taking control now because the situation demands it,” he said.
As the UK’s last producer of virgin steel — used in railways, construction, and automotive manufacturing — British Steel plays a crucial role. Without it, the UK would depend on imports amid global trade tensions.
The Scunthorpe plant has been struggling for years due to rising energy costs and global oversupply. A recent 25% U.S. tariff on steel imports has added further pressure. Despite months of discussions and a £500 million investment offer from the UK government, no agreement was reached with Jingye.
Under the emergency law, the state could temporarily direct company operations and protect employees from being penalized for defying shutdown orders from the parent company.
Though this is a short-term intervention, the government still hopes to bring in private partners in the long run. For now, the priority is keeping the blast furnaces operational.
Shift to Greener Steel
Uncertainty around the plant’s future follows stalled negotiations over transitioning to more environmentally friendly steel production. The UK government has allocated £2.5 billion to support the industry and plans to publish a full strategy in 2025. The funding needed to keep Scunthorpe running would come from this budget.
Once a global steel powerhouse, the UK’s industry has declined due to global competition and high costs. Recent tariffs from the U.S. have further hit exports, which are valued at over £400 million annually.
If the government assumes full control of British Steel, it would be the largest public rescue effort since the financial crisis of 2008.
Elsewhere, the UK is investing in greener alternatives. At Port Talbot, Tata Steel is building electric arc furnaces with government support. However, those won’t be operational until at least 2027, leaving a gap in domestic steel production if Scunthorpe closes.
