Prime Minister Keir Starmer said that Britain is to pass emergency laws on Saturday to keep the blast furnaces from British Steel open to save the country’s steel-making capability and thousands of jobs. British Steel employs 3,500 people at its Scunthorpe plant and supports more in the supply chain. The government said that the company intended to immediately close the blast furnaces due to the losses incurred, such as losing 700,000 pounds ($914,760) a day.
“The future of British Steel hangs in the balance,” Starmer said on Friday. “Jobs, investment, growth, our economic and national security are all on the line. Parliament will be recalled to pass emergency legislation in one day to give the government the powers to do everything possible to stop the closure of these blast furnaces”, he said.
Britain’s last remaining virgin steel producer supplies steel for the rail network, construction, and automotive sectors. If this plant were to close, the country would have to depend on imported steel—a risky reliance amid rising trade wars and global geopolitical uncertainties.
British Steel, owned by Jingye Group, had been facing challenges in a saturated global market even before the increasing energy costs added to its struggles in recent years. The situation worsened when the U.S. imposed a 25% tariff on all steel imports, which came into force in March.
Jingye’s intention to close the blast furnaces immediately happened despite months of negotiations with positive intentions and a generous offer of co-investment from the UK government of 500 million pounds in a statement by the government emphasized. This would ensure the involvement of the government to ensure timely pay for the labourers as well as the timely purchasing of raw materials to keep the blast furnace for its running.
Managers were instructed to ensure the furnaces kept burning, and in case they were dismissed for doing so, against the orders of the Chinese owners, measures would be taken to get them reinstated.
Starmer said that while the industry was facing a new era of global instability, the government’s concerns about the plant and negotiations to protect it had been running for years.
Even though the report states that the priority is to maintain the operations of the plant, the government still wanted to find a private sector partner in the longer term, sources said.
Concerns about the Scunthorpe plant’s future have intensified after the government and British Steel failed to agree on a funding deal to switch to a greener type of steel production. With £2.5 billion already set aside for the steel sector, the government has confirmed it will unveil its strategy for the industry in spring 2025.
Funding to keep the plant running would come from this budget, the government said.
The recent U.S. tariffs have sent shockwaves through the sector. According to UK Steel, Britain exports over £400 million worth of steel to the U.S. annually, accounting for roughly 5% of its total steel exports. Reuters report that if British Steel were nationalised it would be the biggest government rescue since several banks were taken into government hands in 2008.