‘National security on the line’: Starmer pulls off extraordinary move to save British steel

London: Britain’s Labour government has taken control of operations at the country’s last remaining large crude steel-producing facility, after taking extraordinary measures to recall parliament and stop the facility’s Chinese owner shutting down its blast furnaces.

Facing the potential closure of British Steel’s Scunthorpe plant, which would have resulted in the loss of thousands of regional jobs, MPs and peers were recalled to Westminster on a Saturday for just the fifth time since World War II, to vote on emergency legislation aimed at averting disaster. Parliament passed the bill in less than 24 hours.

British Prime Minister Keir Starmer holds a press conference on nationalising British Steel.Credit: Getty Images

The decision comes amid rising global instability, with US President Donald Trump’s 25 per cent global tariff on American steel imports adding further pressure to an already strained industry.

Before the legislation passed, Prime Minister Keir Starmer said it would allow ministers to “take control” of the Lincolnshire site and stop its Chinese owner, Jingye Group, from closing its blast furnaces. He stressed that the closure of British Steel’s Scunthorpe plant would have far-reaching consequences for Britain’s ability to produce steel and its role in the global market.

“This moment could have happened at any time, but it has happened now, and I will not stand by,” he said. “The future of British Steel hangs in the balance. Jobs, investment, growth, and our national security are all on the line.”

If the British Steel plant in Scunthorpe closes, the UK risks being the only G7 country unable to produce steel from scratch.Credit: Bloomberg

The ownership of the company by a Chinese shareholder, Jingye Group, since 2020 is understood to have been raised by both the Trump and Biden administrations. Britain produces about 6 million tonnes of crude steel a year, about 70 per cent of the nation’s annual demand of 8.9 million tonnes.

The move allows the government to buy raw materials to keep the blast furnaces going. UK Business Secretary Jonathan Reynolds told MPs the government’s next step would likely be to nationalise the Scunthorpe plant. He will now be able to direct staff to keep the furnaces operating and ensure materials are used at the site. It is understood government officials are already at the factory, ready to take over, the BBC reported.

‘The future of British Steel hangs in the balance. Jobs, investment, growth, and our national security are all on the line.’

British Prime Minister Keir Starmer

Blast furnaces, which are essential to steelmaking, require a continuous supply of raw materials to operate. Once the molten iron and slag inside the furnaces cool and harden, they become irreparable. As a result, the imminent closure of the site threatened to end primary steelmaking in Britain, which would have left the country as the only G7 nation unable to produce steel from scratch.

The issue of nationalisation will be dealt with separately and is not certain to happen, but officials said it was the likely outcome and the government would look at potential private-sector partners for a transfer of ownership and co-investment.

Jingye Group has claimed to have invested more than £1.2 billion ($2.5 billion) in maintaining the business. But the company warned that its two blast furnaces were no longer financially sustainable, with losses of about £700,000 a day. Despite rejecting a £500 million bailout plan proposed by the British government last month, Jingye continued to negotiate with ministers, but talks broke down in recent days.

The government had offered to cover the costs of raw materials, an essential element for the continuation of operations, but the Chinese owners refused.

Parliament was last recalled in August 2021 to debate the situation in Afghanistan. It has been recalled only 34 times since 1948. Downing Street said MPs would sit for as long as necessary to pass the laws.

Nigel Farage, leader of the right-wing populist Reform UK, who recently visited Scunthorpe, has called for the nationalisation of British Steel, arguing that China has no vested interest in keeping the steelworks open.

Unions representing workers at the Scunthorpe plant also threw their weight behind the government’s intervention.

Roy Rickhuss, general secretary of the Community Union, praised the government’s decision to call parliament into an emergency session, calling the steelworks a “vital strategic business” and that the collapse of British Steel would leave the UK without primary steelmaking capacity, a dangerous position for a modern economy.

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