UK government takes control of British Steel plant to prevent closure and job losses

UK seizes control of steel plant to prevent job losses.

The British government has taken emergency action to seize control of operations at the British Steel facility in Scunthorpe, the UK’s last major producer of crude steel, in what many see as an effective move toward nationalisation.

The decision, taken on Saturday, comes amid fears that the plant’s Chinese owner, Jingye Group, was preparing to shut down the blast furnaces, risking 2,700 jobs.

In an extraordinary development, Parliament was recalled from recess to approve emergency legislation that would give the government authority over the plant’s board and day-to-day management. Business and Trade Secretary Jonathan Reynolds told MPs, “Steel is fundamental to Britain’s industrial strength, to our security and to our identity as a primary global power,” as reported by The New York Times.

Though the government denies a full nationalisation, it has assumed direct control over the company’s management and finances. The UK now finds itself propping up a steel business that Jingye claims is losing £700,000 daily. “This is a botched nationalisation plan,” warned Andrew Griffith, business spokesperson for the opposition Conservative Party.

Jingye had proposed transitioning the Scunthorpe site to electric arc furnaces, a greener technology that recycles scrap metal, but requested substantial government support. Reynolds claimed the company demanded an “excessive amount” of state aid, estimated at over £2 billion. He also accused Jingye of attempting to close the blast furnaces by withholding essential raw materials like coke. “The company would, therefore, have irrevocably and unilaterally closed down primary steel making,” Reynolds told Parliament.

A spokesperson for British Steel declined to comment, though the company recently stated it had invested £1.2 billion in the plant since its 2020 acquisition, but the operation remained “financially unsustainable.”

The crisis at Scunthorpe follows last year’s closure of much of Tata Steel’s Port Talbot plant in Wales. That shutdown, too, led to large-scale job losses, prompting political backlash. Alasdair McDiarmid of the Community Union, representing steelworkers, said, “We’ve had big concerns about that and a lot of anger.”

Prime Minister Keir Starmer’s intervention appears to be motivated by a mix of industrial strategy, national security, and political pragmatism. In a statement, the government stressed the need for domestic steel capacity: “Given global economic instability, it is crucial that manufacturing is protected at home.”