British Steel’s financial difficulties have been made worse by 25% tariffs imposed by Donald Trump on steel and aluminium sales to the US (the UK was hit with 10 percent US tariffs across the board on 2 April, on top of the 25 percent duties on aluminum and steel).

Though Keir Starmer has expressed disappointment at the tariffs, he has not retaliated and is seeking to negotiate them away.

In 2024, the steel industry contributed £1.7bn to the UK economy in terms of gross value added (GVA), which is equivalent to 0.1% of total UK economic output and 0.8% of manufacturing output, according to research published by the House of Commons library.

There are 1,145 businesses in the UK steel industry, supporting 37,000 jobs, but it is under increasing pressure due to a global over-production of steel pushing steel prices down, while British manufacturers face higher costs, particularly on electricity, than many other countries.

The sector has been demanding help from the government on spiralling energy costs and wants the domestic market to be better protected from imported steel from countries with lower environmental production standards. The government said in September it would introduce a new steel strategy this spring, as it aims “to ramp up investment, strengthen our supply chains and create more well-paid jobs in the places where they’re most needed”.

Britain’s remaining steelmakers are under pressure to reduce carbon emissions amid the impacts of global warming. Most have shifted to electric arc furnaces that make steel from recycled material. That has left Scunthorpe as the only factory with blast furnaces capable of turning iron ore into virgin steel.

The UK’s prime minister, Keir Starmer, said yesterday that his government had stepped into “save” British Steel through passing emergency legislation to prevent Jingye shutting down its two blast furnaces in Scunthorpe.

Here is a Starmer’s full statement released by Downing Steet on Saturday:

Today, my government has stepped in to save British Steel. We are acting to protect the jobs of thousands of workers, and all options are on the table to secure the future of the industry. Delivering security and renewal for working people is at the heart of my plan for change.

This government is turning the page on a decade of decline, where our manufacturing heartlands were hollowed out by the previous government.

In recent weeks alone, we have announced the expansion of Heathrow airport and the building of the biggest theme park in Europe in Bedford. We are reforming our planning rules to build 1.5 million homes, and the infrastructure the nation desperately needs. New roads, railways, schools, hospitals, grids and reservoirs. British steel will be the backbone as we get Britain building once more.

This is a government of industry. That’s why we’ve secured a better deal for the workers of Port Talbot. It’s why we fought to secure the future of Harland & Wolff. It’s why we’ve pledged £200 million to Grangemouth. Our industry is the pride of our history – and I want it to be our future too.

A secure future. A Britain rebuilt with British steel, in the national interest.

The GMB trade union general secretary, Gary Smith, confirmed workers had acted to stop officials from the Chinese company Jingye, which bought British Steel in 2019, from entering the site in Scunthorpe.

“We were worried about industrial vandalism and there was a worry about sabotage on the site, quite frankly,” he told the BBC earlier today. “And yesterday, workers did prevent executives from the Chinese owners from going on site.”

“I’m sure that people are still very worried about that, but these people performed heroics yesterday to ensure that we’ve got a fighting chance for the steel industry in this country... They were legitimately concerned about industrial sabotage at the plant,” Smith added.

Jasper Jolly, a financial reporter at the Guardian, has written some analysis on the multiple crises British Steel faces as the supplies needed to keep the blast furnaces operating at the Scunthorpe plant are running low. Here is an extract from his piece:

Union leaders representing steelworkers said they were relieved that the government appeared to be moving towards public ownership. Charlotte Brumpton-Childs, a former Scunthorpe steelworker and national officer for the GMB union, said nationalisation was “the only way to save the UK steel industry”, and that the ability to direct the company’s actions was “the first step in that process”.

Yet even nationalisation will not deliver Scunthorpe’s workers from the bigger questions over its long-term future. Jingye had rejected a £500m offer of support to switch to electric arc furnaces – to match aid given to Tata Steel at Port Talbot, south Wales – but Scunthorpe will need to make the switch if it is to have a future in a world of net zero carbon emissions.

The shadow business secretary, Andrew Griffith, was the chief business secretary to the then prime minister Boris Johnson during the months in 2019 when British Steel went into administration.

He has defended the move to sell British Steel to Jingye, claiming it was “the only deal at the time”.

Griffith told Sunday Morning With Trevor Phillips on Sky News:

From my recollection, those conversations had been ongoing for some time. It was led by the secretary of state.

You have got to remember that Jingye was the only bidder at the time. It was a deal that was welcomed by the GMB union, by the community union, and by UK steel. ..

Many people, including the British Steel workers, the unions on the ground, local MPs, all wanted that deal to happen, and it did indeed go on and get investment into Scunthorpe and keep the business going so that there’s clearly been a breakdown.

The Reform UK leader Nigel Farage backs the nationalisation of the plant. Here are some of the main takeaways of what he said to Laura Kuenssberg this morning:

• He believes nationalisation of the Scunthorpe plant is the right move because he claims the plant’s Chinese owner, Jingye, is a “bad actor”.

• Farage accused the Chinese Communist Party (CCP) of deliberately sabotaging British Steel, but provided no evidence for his claim. “This is a big strategic decision by the CCP,” he said. Asked for his evidence to support that claim, Farage said: “You can call it intuition if you like.”

• Farage said, again without evidence, that he was “100% certain they bought British Steel to close British Steel”.

• Farage says it is hard to estimate how much it would cost the taxpayer to nationalise British Steel “because we can’t trust Jingye’s figures” and that the company “artificially inflated” its losses and has not opened its accounts up to proper auditing.

• Farage said we are living through an “industrial massacre” and a “complete rethink” about British industry is necessary to protect domestic production and interests.

Laura Kuenssberg asks Jonathan Reynolds why the government was so slow in passing the emergency laws to save British Steel (when weeks ago – on 25 March – British Steel said it might have to close the furnaces).

Q:“Why did you let it get to this Thursday when the coal is about to run out that you actually made this decision?”

A:

Because I don’t think in any job, in any role in government, you take emergency powers of the scale that happened yesterday until you have that emergency situation.

We have been negotiating in good faith. We have been expecting, as I think is reasonable, an economically rational partner on the other side.

When that became evident that that was not possible that required the kind of significant, dramatic emergency action which was taken yesterday.

For some context: Reynolds has accused British Steel’s Chinese owners, Jingye, of failing to negotiate “in good faith” after it decided to stop buying enough raw materials to keep the blast furnaces at Scunthorpe going.

Opening Saturday’s debate, Reynolds said Labour had been engaged in negotiations with Jingye since the party came to power last July, and had offered “substantial” support.

The government recently said it offered to buy the necessary raw materials for the blast furnaces but this had been met with a counter-offer from Jingye demanding “an excessive amount” of support.

Reynolds said yesterday:

Over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw material to keep the blast furnaces running – in fact, their intention was to cancel and refuse to pay for existing orders.

The company would therefore have irrevocably and unilaterally closed down primary steel-making at British Steel.