UK Parliament Passes Emergency Bill to Save British Steel’s Scunthorpe Plant and Rescue Domestic Industry

In a critical move to secure Britain’s steel-making capacity, the UK government has successfully passed an emergency bill, The Steel Industry (Special Measures) Act, to prevent the closure of British Steel’s Scunthorpe plant. The bill, passed by Parliament and granted Royal Assent in just about six and a half hours, empowers the government to take control of the plant and direct the company’s board and staff to keep the blast furnaces running.

According to BBC reports, the Act grants Business Secretary Jonathan Reynolds the authority to oversee the operations of British Steel, which has been struggling with significant financial losses. The company, owned by Chinese conglomerate Jingye Group, has been losing approximately £700,000 (approx. $915,700) a day, forcing the plant’s immediate closure. The decision to act came after months of failed negotiations over a viable financial plan for the company, which has been further strained by rising energy costs and global trade tensions. The situation worsened when the U.S. imposed a 25% tariff on all steel imports, effective from March.

Prime Minister Keir Starmer emphasized the importance of the legislation, stating, “Today, my government has stepped in to save British Steel.” Starmer, who had called for Parliament to pass emergency laws to prevent the closure, also noted that the plant's future was critical to Britain’s national security and economic stability. The Scunthorpe plant, which employs 3,500 people directly and supports thousands more in the supply chain, is the last remaining virgin steel producer in Britain, supplying vital materials for industries such as rail, construction, and automotive. If this plant were to shut down, the country would be forced to rely on imported steel—a precarious dependency in the face of escalating trade disputes and global geopolitical instability.

The passage of the bill marks a significant step in the government’s efforts to protect jobs and maintain steel production in the UK. While the immediate priority is to keep the Scunthorpe plant operational, the government is also looking at longer-term solutions, including a potential partnership with the private sector to ensure the plant’s viability in the future, sources said.

Shortly after the hearing in the House of Commons, Starmer met steelworkers in Lincolnshire, where he praised their role as the “backbone of British Steel.” BBC’s Oli Constable, reporting from Scunthorpe, described the mood in the town as celebratory after the bill was passed.

Reuters reports that if British Steel were nationalized, it would be the most significant government rescue since several banks were taken into government hands in 2008. The UK government has already set aside £2.5 billion (approx. $3.27 billion) for the steel sector and will unveil a broader strategy for the industry in spring 2025, which could help the sector transition to greener production methods.

The legislation temporarily halts closure plans, though long-term solutions remain unclear. BBC says that as for what’s next, the government will begin the process of taking control of British Steel in a bid to keep the furnaces burning in Scunthorpe.

Source: BBC News