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.
Loading
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.
Loading
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.
