UK steps in to save British Steel as nationalisation looms | Business and Economy News

Intervention follows a breakdown in talks between the UK government and British Steel’s Chinese owner, Jingye Group.

The UK government has taken effective control of British Steel in order to keep its blast furnaces running, after lawmakers approved an emergency rescue.

With 3,500 jobs hanging in the balance, British ministers rushed to push through legislation on Saturday to allow the state to temporarily assume operational control.

The intervention follows a breakdown in talks between the UK government and British Steel’s Chinese owner, Jingye Group, over plans to transition the firm to greener production methods.

After the vote, British Prime Minister Keir Starmer travelled to the site, warning that the blast furnaces – losing $915,600 (700,000 pounds) a day – were on the brink of closure.

“You and your colleagues for years have been the backbone of British Steel, and it’s really important that we recognize that,” Starmer said. “It’s your jobs, your lives, your communities, your families.”

Lawmakers had been recalled from their Easter recess for the emergency Saturday sitting.

Business Secretary Jonathan Reynolds told MPs that the new law would give the government power to manage operations, ensure workers are paid, and secure vital raw materials to keep the furnaces going.

Reynolds said a full state takeover was “increasingly likely” given the conduct of the firm’s current owners. “A failure to act today would prevent any more desirable outcome from even being considered,” he said.

The bill passed the House of Commons unopposed.

If nationalised, British Steel would become the UK’s largest state rescue since the 2008 banking crisis.

The collapse of its Scunthorpe operations would leave the UK as the only G7 nation unable to produce virgin steel – made directly from raw materials like iron ore and coke.

Already under pressure from a global supply glut and soaring energy prices, the company was further hit by new US tariffs of 25 percent, affecting 5 percent of its annual steel exports worth approximately $520m.

Reynolds stressed that reliance on foreign steel would grow if the furnaces shutdown, and pledged to fight for their future while also pushing to lift US trade restrictions.

The government has already pledged $3.2bn to support the steel sector and aims to unveil a long-term strategy in the coming months.