UK Government Intervenes to Prevent Closure of British Steel's Scunthorpe Plant

The UK Parliament has enacted emergency legislation to assume control of British Steel's Scunthorpe facility, aiming to avert its shutdown and safeguard approximately 2,700 jobs.

Photo: Reuters

This decisive action follows the rejection by the plant's Chinese owner, Jingye Group, of a £500 million government aid package, with the company reportedly seeking £1 billion to maintain operations.

The newly passed Steel Industry (Special Measures) Act 2025 grants the Secretary of State for Business and Trade authority to direct the operations of steel manufacturers to ensure the continued use of critical assets. This move was prompted by Jingye's announcement of plans to close the Scunthorpe blast furnaces, which are the last of their kind in the UK.

Keir Starmer in a post on X wrote:

"today, my Government has stepped in to save British Steel. We are acting to protect the jobs of thousands of workers, and all options are on the table to secure the future of the industry".

The Scunthorpe plant is vital for producing virgin steel, essential for national infrastructure and defense projects. The government's intervention is seen as a measure to maintain domestic steel production capabilities and reduce reliance on imports.

According to the BBC, in response to the government's takeover, tensions escalated when workers reportedly prevented Jingye executives from accessing parts of the plant, fearing potential sabotage. Police were called to the scene, but no arrests were made.

The government's swift action underscores the strategic importance of the steel industry to the UK's economy and national security.

While the intervention has been met with support from unions and local communities, it also raises questions about the future of foreign investment in critical industries.