Why did the UK Government Take Control of British Steel?
The UK government has seized temporary control of British Steel’s plant in Scunthorpe, Lincolnshire, to prevent its imminent closure. The emergency move, fast-tracked through Parliament on a Saturday during MPs' Easter recess, gives ministers sweeping powers over the site’s operations while ownership remains with Chinese firm Jingye.
What Is British Steel and Why Is It Important?
British Steel’s Scunthorpe plant employs 2,700 workers—three-quarters of the company’s UK workforce—and is the last facility in Britain capable of producing virgin steel. This form of steel, made using blast furnaces, is crucial for infrastructure projects such as buildings, bridges, and railways due to its superior quality compared to recycled steel.
LATEST: Trump Exempts Smartphones and Laptops from Tariffs in Sudden Tech Reprieve.
Losing the plant would have left the UK as the only G7 nation unable to manufacture virgin steel, a scenario the government deemed a threat to national economic security.
Ownership and the Nationalisation Debate
British Steel was founded in 2016 after Tata Steel sold its struggling long products division to private equity firm Greybull Capital for a token £1. It later entered insolvency in 2019, and was acquired in 2020 by China’s Jingye Group.
In March 2025, Jingye announced the plant was losing around £700,000 a day and began consulting on its closure. When negotiations with the government stalled, ministers acted swiftly to prevent shutdown.
RELATED: Trump Tariff Pause Triggers Historic Surge in US Stocks.
Despite taking control, the government has not officially nationalised the plant, since ownership remains with Jingye. However, Business Secretary Jonathan Reynolds admitted public ownership is “the likely option” if no private investors are found.
Why the Government Stepped In
Time was critical. Supplies of essential raw materials—coking coal and iron pellets—were nearly exhausted, risking permanent closure of the blast furnaces. Restarting them after shutdown would be prohibitively expensive and technically challenging.
Trade unions called the situation a “cliff-edge,” and the Community Union labelled it an “extreme emergency.”
Earlier in the week, the government offered to fund new raw materials, but Jingye refused.
“The company would therefore have irrevocably and unilaterally closed down primary steel making at British Steel,” said Reynolds in Parliament.
LATEST: Who Won the 2025 Masters & How Much Do They Get?
He added that Jingye had demanded “an excessive amount” of public money and cancelled existing material orders, making it clear they did not intend to continue operations.
The new law gives the government authority to order supplies and direct the company’s board and workforce to keep the plant running. It also ensures any UK employees sacked by the owners can be reinstated.
Why Is the Plant Losing Money?
Jingye cited unsustainable losses due to “highly challenging” market conditions, tariffs, and rising costs linked to transitioning toward low-carbon steel production. A recent 25% U.S. tariff on imported steel further worsened financial pressures.
Global overcapacity has driven steel prices down, while UK producers also contend with higher energy costs than many international competitors.
The Bigger Picture: UK Steel Industry in Decline
British steel production has been declining for decades. In 2023, the UK contributed just 0.3% of the world’s crude steel output. In contrast, China produced 54%, and the EU accounted for 7%. The UK ranked eighth among EU steel producers, behind Germany, Italy, and France.
There are about 1,160 steel-related businesses in the UK, supporting around 40,000 jobs. Other producers include Liberty Steel—also with a plant in Scunthorpe at risk—Celsa, Marcegaglia, and Outokumpu.
RELATED: Did We Just See Insider Trading? Trump’s Tariff Flip-Flop Raises Big Questions.
In Wales, Tata Steel’s Port Talbot plant recently shut down its blast furnace after accumulating losses of £1.7 million a day. The government committed £500 million to help the company transition to greener production methods.
Conclusion - Strong Government Action
The government's swift action to take control of British Steel’s Scunthorpe plant was bold, necessary, and in the national interest. In stepping in to preserve the UK’s last virgin steel production facility, ministers have safeguarded thousands of jobs, maintained economic sovereignty, and protected a critical industry from collapse. While long-term solutions are still needed, this decisive intervention demonstrates leadership and commitment to Britain’s industrial future. It’s a rare example of government responding with urgency and clarity—proving that, when it matters most, it is willing to act to preserve vital national capabilities.
