The UK government is set to introduce emergency legislation in response to a deepening crisis at British Steel, following the Jingye Group’s decision to close blast furnace operations at Scunthorpe.

The move—seen as a major blow to the UK's industrial capability—would make Britain the only G7 nation unable to produce steel from scratch, relying entirely on imported semi-finished materials for domestic steelmaking.

Steel Industry (Special Measures) Act

In response, ministers have announced plans to fast-track the Steel Industry (Special Measures) Act, aimed at safeguarding critical steel infrastructure, preserving industrial jobs, and ensuring national resilience in strategic supply chains.

The proposed legislation would give the government emergency powers to intervene in UK steel operations, including:

  • Placing vital steel assets under special administration

  • Enabling public investment or temporary state control of high-risk facilities

  • Introducing export restrictions on key raw materials

  • Allowing rapid deployment of funds for clean steel transition technologies

Background

Chinese-owned Jingye Group, which acquired British Steel in 2020, announced plans earlier this year to shut down the two blast furnaces at Scunthorpe, citing high operating costs and the push for decarbonization.

While the company intends to focus on electric arc furnace production in the future, critics argue the shift comes too soon and without a national transition strategy in place.

National Security and Economic Concerns

The closure has sparked concerns across political lines, with unions, defence analysts, and economists warning of the implications for UK defence manufacturing, construction, and energy infrastructure.

Maintaining primary steelmaking is seen as essential for strategic autonomy, particularly in light of global supply chain disruptions and rising geopolitical tensions.

What’s Next?

The Steel Industry (Special Measures) Act is expected to be tabled in Parliament later this month, with cross-party support likely. The government has not ruled out financial intervention to maintain operations at Scunthorpe in the short term.

Consultations are also underway on a broader UK Steel Transition Strategy, aimed at aligning decarbonization goals with domestic industrial capacity.