The Prime Minister took urgent action yesterday, recalling Parliament to vote on emergency legislation aimed at preventing the closure of the Scunthorpe blast furnaces. The move is designed to safeguard domestic steel production, which was at risk under the current ownership of the site.
The legislation, passed by MPs, ensures that production at the Scunthorpe site continues, avoiding the dangers and costs associated with shutting down operations. Funding for the site will come from the Government’s £2.5 billion steel fund, which is part of a broader effort to rebuild the UK steel industry over the next five years.
This emergency intervention is unprecedented, marking the first time Parliament has been recalled for a Saturday session since the Falklands War. The goal is to prevent the closure of Britain’s last primary steelworks in Scunthorpe, a move that could threaten the UK’s ability to produce its own steel.
Steel Production at Risk
British Steel’s owners, Jingye, had previously announced plans to shut down the blast furnaces at Scunthorpe immediately, despite months of negotiations and a generous £500 million co-investment offer from the UK Government. If the furnaces were switched off, it would have severely endangered the future of steelmaking at the site.
The new legislation gives the Government the power to intervene in the company’s operations. It ensures the company’s board and workers are paid and that the raw materials needed to keep the furnaces operational are supplied.
The Government has instructed the UK management team of Jingye to keep the plant running and maintain the furnaces. The legislation also guarantees that any worker who defies the Chinese owners’ orders to keep the plant operational will be reinstated if fired.
Steel Vital for National Security and Economy
Steel is a key material for the UK’s national security and manufacturing sectors. It is also essential to the Government’s plans to build 1.5 million new homes, as construction projects rely on vast quantities of steel.
Business Secretary Jonathan Reynolds emphasized the importance of the intervention, saying: “We will always do what is necessary to keep Britain secure and strong. We are acting in the national interest to secure UK steelmaking for the future. We’ve been negotiating in good faith with British Steel’s owners, but they have not been forthcoming, leaving us no choice but to act.”
Reynolds added that, in a rapidly changing world, it’s crucial to support the UK’s resilience and security, ensuring the country is strong both at home and abroad.
Industry Response
Gareth Stace, director general of UK Steel, welcomed the legislation, saying it would ensure the Scunthorpe site remains operational while the Government continues negotiations with British Steel. He praised Business Secretary Jonathan Reynolds for his decisive action and the recall of Parliament.
“A blast furnace is a complex piece of machinery. Once the fires go out, it’s nearly impossible to restart them. This legislation is time-critical to keeping the furnaces running while a long-term solution is worked out,” Stace explained.
He also stressed the importance of finding a permanent solution for the Scunthorpe site, which is crucial for supporting thousands of jobs, ensuring the UK’s steel supply, and maintaining the wider economy and supply chain.
In conclusion, the Government’s intervention aims to provide short-term stability for the steel industry while continuing discussions for a long-term solution to secure the future of the Scunthorpe steelworks.
