UK parliament votes to save British Steel's last production plant

MPs hold emergency session and back keeping loss-making Scunthorpe furnaces open, with renationalisation a possibility

Closing British Steel's plant in Scunthorpe would put thousands of jobs at risk. Getty Images

The UK Parliament on Saturday approved a bill to prevent Britain’s last steelworks in Scunthorpe from shutting down, in a rescue act many have linked to possible renationalisation.

Prime Minister Keir Starmer summoned MPs to an emergency session in the House of Commons where they voted in favour of saving the plant in North Lincolnshire, on England's north-east coast. While the bill must still be approved by the House of Lords, it is expected to sail through and give the UK government the powers it seeks.

UK Business Secretary Jonathan Reynolds said the legislation does not transfer ownership of the British Steel plant to the state, but conceded that was a potential discussion for a future date. PA

The British Steel plant’s Chinese owners, Jingye Group, planned to close the two large blast furnaces at the plant – the last that remain active in the UK – which are key in the steelmaking process.

The bill will give ministers control over the plant. UK Business Secretary Jonathan Reynolds will have significant powers to direct the company’s board and workforce, ensure its 2,700 workers continue to be paid and to order the raw materials necessary to keep the furnaces running.

Jingye recently cancelled orders for the iron pellets used in the blast furnaces, citing huge financial losses in the operation of the plant.

All other G7 nations have domestic capacity to make their own steel from scratch rather than from scrap, so the swift action by the UK government is seen in part as a matter of national security.

“In this situation, with the clock being run down, doing nothing was not an option,” Mr Reynolds told the House of Commons. “We could not, will not and never will stand idly by while heat seeps from the UK’s remaining blast furnaces without any planning, any due process or any respect for the consequences, and that is why I needed colleagues here today.”

He said the legislation does not transfer ownership of the plant to the state, but conceded that was a potential discussion for a future date and possibly the “likely” option. He also confirmed that given the steelwork's financial difficulties, its current market value was effectively zero.

It remains unclear what role Jingye, owner of British Steel since 2020, will have in the day-to-day running of the steelworks. But should it fail to abide by the new laws, the company and its executives would face legal action.

Jingye, which has said the Scunthorpe plant is financially unsustainable due to “challenging market conditions” and increased environmental costs, has for months sought a government rescue but discussions have failed to reach a successful outcome. Last month's decision by US President Donald Trump to impose a 25 per cent tariffs on imported steel was another blow.

After the Second World War, the UK was a global leader in steelmaking, which employed more than 300,000 people, before cheaper offerings from China and other countries hit production. Now about 40,000 people work in the industry, which accounts for just 0.1 per cent of the UK economy.