A new bill aimed at securing the future of British Steel’s Scunthorpe plant has passed its first stage in Parliament and is now heading to the House of Lords for further debate.

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On Saturday, MPs returned from Easter recess to debate the Steel Industry (Special Measures) Bill. The legislation would give Business Secretary Jonathan Reynolds the authority to keep the vital steelworks operating while the government searches for a partner to help invest in the site.

UK’s only source of virgin steel?

The Scunthorpe plant is home to Britain’s last remaining blast furnaces capable of producing virgin steel, an essential material used in major infrastructure projects such as buildings and railway lines. Around 2,700 people work at the site, making up about 75% of British Steel’s entire workforce.

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Watch: UK Government aims to take control of British Steel with emergency law

This urgent move follows a standoff with the plant’s Chinese owner, Jingye, who threatened to shut down operations. The company argued that keeping the furnaces open was costing hundreds of thousands of pounds a day and was no longer “financially sustainable”.

They also resisted a government proposal to supply the plant with the raw materials needed to continue production, putting jobs and national infrastructure at risk.

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Political pressure and the Trump factor

The intervention comes at a time when ministers are already facing growing calls to protect the UK steel industry, especially after US President Donald Trump imposed a 25% tariff on imported steel.

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Prime Minister Keir Starmer criticised Trump’s trade policies, calling them the “end of the globalisation era”, and has vowed to show the benefits of “active government”. Taking control of the Scunthorpe site is expected to be seen as a step in that direction.

Given that the plant is owned by a Chinese company, the decision to step in may also win favour with the White House. Trump's America First policy has warned against close economic ties with China, especially in sensitive sectors.

“There’s no doubt that taking British Steel back into British hands from Chinese ownership will be received favorably by the Trump administration,” said Sophia Gaston, UK Foreign Policy Lead at the Australian Strategic Policy Institute. “Not least of all because the UK makes several steel components for the US defence industry.”

British Steel's connection with India

British Steel was created in 2016 when Tata Steel sold its struggling long products division in Scunthorpe to private equity firm Greybull Capital for just £1. The business was renamed and later fell into financial trouble, leading the government’s insolvency service to step in during 2019.

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It was then acquired by Chinese steelmaker Jingye in 2020, which has operated the site ever since.

The Scunthorpe facility remains a key part of the UK’s industrial base, with its virgin steel considered more reliable and of higher quality than recycled steel, which is produced elsewhere in the country.

The next steps for the bill will be closely watched as the future of thousands of workers hangs in the balance.

(With inputs from agencies)