In an unprecedented move, British lawmakers were summoned for an emergency parliamentary session on Saturday to deliberate new legislation aimed at preserving the operations of British Steel’s Scunthorpe blast furnaces.
The government has indicated that the British Steel nationalisation is now a probable outcome, as the UK’s last producer of virgin steel faces potential collapse.
British Steel, currently owned by China’s Jingye Group, employs approximately 3,500 workers at its flagship plant in Scunthorpe.
The future of the facility has been under intense scrutiny following a breakdown in negotiations between the government and the firm over financial support for transitioning to environmentally sustainable steelmaking processes.
Parliament was recalled from its Easter recess to push forward emergency legislation granting ministers the authority to intervene directly in British Steel’s management.
These powers would enable the government to instruct the company’s board, ensure workers continue receiving wages, and secure essential raw materials to keep the blast furnaces operational. This marks the first emergency Saturday sitting during a recess since the Falklands War in 1982.
According to government sources, the furnaces are currently incurring daily losses of £700,000. Officials argue that swift action is vital to prevent an immediate shutdown, thereby allowing room for further negotiations concerning British Steel’s long-term viability.
“A transfer of ownership to the state remains on the table, and it may well at this stage, given the behaviour of the company, be the likely option. A failure to act today would prevent any more desirable outcome from even being considered,” said Business Minister Jonathan Reynolds.
Should the blast furnaces close, the UK would become the only G7 nation without the capacity to produce virgin steel—steel made directly from raw iron ore and coke.
British Steel has long struggled against global market oversupply, a situation worsened in recent years by soaring energy costs. The imposition of a 25% tariff on all UK steel imports into the United States—effective from March—has further aggravated the company’s position.
The US currently accounts for around 5% of British steel exports, equating to roughly £400 million annually, according to UK Steel.
Although Reynolds acknowledged the detrimental impact of US tariffs, he stressed that the challenges facing British Steel were more complex and structural. He also committed to working on efforts to have the tariffs lifted.
The government has earmarked £2.5 billion for the wider steel sector and intends to unveil a long-term strategy for the industry in spring 2025. Any short-term financial aid required to keep the Scunthorpe plant running will be drawn from existing government budgets.
Reynolds warned that without British Steel’s production capacity, the UK would become increasingly reliant on foreign steel imports—a vulnerability in times of global supply chain instability. UK Steel has expressed support for the proposed emergency legislation.
If the nationalisation proceeds, it would mark the most significant government intervention in a British company since the banking crisis of 2008.
Meanwhile, Tata Steel’s site in Port Talbot is undergoing a transformation, with plans to build electric arc furnaces—facilities that produce new steel using recycled scrap metal.
The government has contributed £500 million towards this project. However, Port Talbot’s existing blast furnaces ceased operations in 2024, and the new electric facility is not expected to be operational until late 2027 or early 2028.
