LONDON, April 12 — British lawmakers were recalled for an emergency session on Saturday to vote on laws to keep British Steel's blast furnaces open, as the government said a full nationalisation of the United Kingdom's (UK) last maker of virgin steel was becoming increasingly likely.
The company, owned by China's Jingye Group, employs 3,500 people at its Scunthorpe plant. The facility's future had been in question after the government and the company failed to agree to a funding deal to switch to greener steel production.
The government recalled lawmakers, who had been on Easter recess, to pass a law giving them the power to direct the company's board and workforce, ensure their pay, and order the raw materials to keep the blast furnace running.
The recall of parliament for a Saturday sitting during a recess is the first since the Falklands War in 1982.
The government said it needed to act with urgency to avert the imminent closure of the blast furnaces, which are operating at a loss of £700,000 (RM4.04 million) a day, and give more time to negotiate a permanent future for British Steel.
"A transfer of ownership to the state remains on the table, and it may well at this stage, given the behaviour of the company, be the likely option," business minister Jonathan Reynolds told lawmakers, saying he still hoped to partner with the private sector to secure its long-term future.
"A failure to act today would prevent any more desirable outcome from even being considered," he added.
The closure of the furnaces would leave the UK as the only G7 country unable to produce so-called virgin steel from iron ore, coke, and other inputs.
British Steel was already struggling in an oversupplied global market before the rise in energy costs of recent years. United States (US) tariffs of 25 per cent on all steel imports, taking effect in March, delivered another blow.
The US receives about five per cent of British steel exports, worth £400 million (RM2.31 billion) a year, according to industry body UK Steel.
Reynolds said the issues impacting British Steel went beyond those tariffs, though he would seek to negotiate to remove them.
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A general view of the Houses of Parliament in London, the United Kingdom, on April 12, 2025. — Picture by REUTERS[/caption]
Strategy pending
The government had already earmarked £2.5 billion (RM14.4 billion) for the steel industry, saying it would publish a strategy for the sector in spring 2025. Funding to keep the plant running would come from existing budgets, the government said.
Reynolds said the UK would be dependent on foreign imports if British Steel's Scunthorpe furnaces were to close. UK Steel said it welcomed the proposed law.
If British Steel were nationalised, it would be the biggest state rescue since a number of banks were taken into government hands in 2008.
Less carbon-intensive electric arc furnaces, which make new steel from scrap, are being built at Tata Steel's Port Talbot site, following a government support package worth £500 million (RM2.88 billion).
The two blast furnaces at Port Talbot closed last year, and the new electric furnace will not start producing steel until late 2027 or early 2028.
— Reuters
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A general view of Union Jack flags and the Houses of Parliament in London, the United Kingdom, on April 12, 2025. — Picture by REUTERS[/caption]
