Emergency law passed to protect UK steelmaking

In a recall of parliament on April 12, 2025, the Steel Industry (Special Measures) Bill will allow the Scunthorpe site to maintain operations while government negotiations with the company continue. 

The British Steel site at Scunthorpe produces virgin steel, construction steel, rail products, and special profiles but has been described by its Chinese owners Jingye as unsustainable and losing around £700,000 a day. Consequently, the company announced on March 27, 2025, that it was to consult on the proposed closure of Scunthorpe’s blast furnaces, rod mill and steelmaking operation, putting 2,700 jobs at risk.

Speaking in parliament, business secretary Jonathan Reynolds said: “Since taking office this government has been negotiating in good faith with British Steel’s owners, Jingye.

“We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common-sense conditions to protect the workforce, to protect taxpayers’ money, and create a commercially viable company for the future.

“Despite our offer to Jingye being substantial, they wanted much more, frankly, an excessive amount.

“We did, however, remain committed to negotiation. But over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running. In fact, their intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steel making at British Steel.”

He added that an offer was made by government to purchase raw materials required to keep the site running for a period of time at no loss to Jingye.

Reynolds said: “A counter offer was instead made by Jingye for us to transfer hundreds of millions of pounds to them without any conditions to stop that money, and potentially other assets, being immediately transferred to China.

“They also refused a condition to keep the blast furnaces maintained and in good working order.

“Even if I had agreed to these terms, I could not guarantee that further requests for money would not then be made. In this situation, with the clock being run down, doing nothing was not an option.”

The new legislation gives government the power to direct the company’s board and workforce, ensure they get paid, and order the raw materials to keep the blast furnace running.

Commenting, Gareth Stace, director general of trade body UK Steel, said: “A blast furnace is a dynamic piece of machinery. If the fires go out, it is nigh on impossible for it to be brought back to life – so a solution to keep them running is time-critical. It is, therefore, vital that the blast furnaces remain operational during negotiations, providing some security and breathing space in the short term, and this legislation will ensure this can happen.”