In an emergency Saturday sitting, British MPs were brought back from Easter recess in a hurry to enact emergency laws that will ensure the blast furnaces of British Steel remain operational, as nationalisation of Britain’s sole maker of virgin steel grows more likely.
China’s Jingye Group-owned Scunthorpe plant, with 3,500 workers, risks closure after negotiations on how to fund a shift to more environmentally friendly steel production broke down. With furnaces said to be losing £700,000 daily, the government indicated drastic action was necessary to avoid them shutting down shortly and to buy more time to broker a sustainable future for the firm.
The legislation, passed on Saturday, gives ministers powers to control British Steel’s operations, ensure staff pay, and command the raw materials required to maintain production. The previous time Parliament sat on a Saturday during a recess was in 1982 during the Falklands War.
Business Minister Jonathan Reynolds informed MPs that state control was now an eventual prospect, but the government would still want to collaborate with the private sector. “Delaying today would make any other preferable option unconsiderable,” Reynolds stated.
Closing of the Scunthorpe furnaces would make the UK the sole G7 country incapable of manufacturing virgin steel from raw materials. British Steel has been in trouble amidst a worldwide surplus of steel, high energy prices, and recently imposed 25% tariffs on exports of steel to the US a market valued at £400 million a year.
The government of the UK has set aside £2.5 billion for the steel industry, with a national plan to come out next spring in 2025. Meanwhile, Tata Steel’s Port Talbot works are switching to electric arc furnaces, but new production won’t start until 2027 or beyond.
Nationalising British Steel would be the biggest state action since the 2008 bank bailouts.
