The UK’s parliament is set to reconvene on Saturday to deliberate over emergency legislation aimed at salvaging the British Steel site in Scunthorpe. This move comes as ministers rush to prevent the collapse of the company and the potential loss of 3,500 jobs.
Ministers are pursuing emergency powers to mandate that the Chinese owners of the site maintain the operation of Scunthorpe’s blast furnaces, the last two remaining in the UK. This step is perceived by some within Whitehall as a preliminary measure toward potentially nationalizing the company.
Sir Lindsay Hoyle, Speaker of the House of Commons, announced on Friday that he had approved a request to recall MPs on Saturday to discuss a bill intended to “ensure the continued operation of British Steel blast furnaces.”
According to Downing Street, the proposed emergency legislation would enable the government to “direct steel companies in England”; however, the bill stops short of fully nationalizing British Steel.
A spokesperson for Prime Minister Sir Keir Starmer stated, “The bill provides the government with the power to direct steel companies in England, which we will use to protect the Scunthorpe site. It enables the UK government to preserve capability and ensure public safety. It also ensures all options remain viable for the future of the plant and the livelihoods it supports.”
Officials from Downing Street indicated that the emergency powers bill is viewed as the quickest method to keep the Scunthorpe site operational, with nationalization being a potential subsequent step. One official remarked, “One of the considerations was how quickly you can pass legislation on nationalization. This was a quick way of acting.”
A government official also mentioned that the new powers would facilitate the procurement of new raw materials, funded by taxpayers, to maintain site operations.
Closure of the furnaces at British Steel’s Scunthorpe plant would result in the UK being the only G7 nation unable to produce steel from raw materials. An informed industry figure anticipated that the emergency debate would result in the “government taking control of the business and indemnifying management to act on the instruction to purchase and use raw materials.”
A full nationalization bill is expected to be introduced following the House of Commons’ return from its Easter recess in late April.
British Steel did not issue a comment on the matter.
Negotiations have been ongoing throughout the week between ministers and Jingye Group, the Chinese owner of British Steel. MPs are scheduled to convene at 11 am in an unusual Saturday session to discuss the emergency legislation.
Last month, Jingye Group cautioned that the company’s remaining two blast furnaces were not financially sustainable and began consultations on potential job losses. The Chinese group claimed to have invested over £1.2 billion into the company since acquiring it in 2020, yet is reportedly losing £700,000 daily, partly due to high environmental costs.
British Steel’s latest accounts revealed that its operations have been primarily funded through debt facilities provided by its parent company, with £736 million of debt outstanding at the end of December 2023.
Jingye previously declined a £500 million taxpayer support package aimed at transitioning to greener steel production methods.
Preserving the UK’s steelmaking capabilities has become a critical strategic objective for the government, which has allocated £2.5 billion to support the sector. The Starmer government is formulating an industrial strategy to bolster key sectors, with particular focus on threats to the steel industry, such as Donald Trump’s 25 percent global tariff on US steel and aluminum imports.
Roy Rickhuss, general secretary of the Community steel union, which represents the majority of Scunthorpe’s workers, endorsed the emergency Commons session. He emphasized, “It is in the national interest that a solution is found to secure a future for British Steel as a vital strategic business. We can’t allow Britain to become the only G7 country without primary steelmaking capacity.”
