Labour confident it can keep British Steel furnaces burning after taking control

Labour has expressed confidence that enough raw materials can be secured to keep British Steel’s blast furnaces running after the government seized operational control from its Chinese owners.

Ministers said British Steel's owners, China's Jingye Group, had wanted to shut the furnaces at the Scunthorpe plant after they rejected a government funding proposal, which would have forced Britain to import steel instead.

The government recalled parliament at the weekend – the first Saturday recall since the 1982 Falklands War – to give it powers to direct the company's board and workforce and order raw materials.

Jingye has not commented, but China called for fair treatment of its companies and resolution through consultation.

Experts say the dispute has risked straining ties between London and Beijing, which Prime Minister Keir Starmer's Labour government had sought to improve. The talks also come at a time when nations around the world are trying to deepen trading cooperation after the US tariff shock.

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Treasury department minister James Murray said on Monday that sufficient raw materials were in the country, calling steel production a national security matter.

“The facts on the ground are very clear that if we hadn't taken the action that we did on Saturday, then the blast furnaces would be closing,” he said.

The furnaces in the northeastern city of Scunthorpe need to be constantly fuelled and are losing £700,000 ($922,000) a day.

Their output is used in the rail network, construction and automotive industry. Without the plant, Britain would be reliant on imports at a time of trade wars and geopolitical instability.

The intervention at a site which employs 3,500 people and more in the supply chain prompted Britain's business minister, Jonathan Reynolds, to say on Sunday that China was no longer welcome in Britain's steel sector.

The GMB union has said it is “hopeful” that materials needed to keep furnaces at the Scunthorpe steel plant burning will be delivered in the next 48 hours.

GMB’s national secretary Andy Prendergast said: “Where we are at the moment is that we’re confident that the deal being done with the raw materials, and the steps being taken will get there on time, and ultimately that has the potential to preserve the future for the plant.

“There still needs to be… a deal to be done for the future. Whether that’s our preference – which is nationalisation of what is a key national asset – or whether that’s a genuine private investor who’s willing to come in and put the money.

“I think for us the key thing is that we keep this plant going and keep virgin steel-making capacity in the UK.”

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British Steel was already struggling in an over-supplied global market before the rise in energy costs of recent years. U.S. tariffs of 25 per cent on all steel imports, taking effect in March, delivered another blow.

The Community union representing workers at the plant welcomed the government intervention, as did industry trade body UK Steel.

Closure of the furnaces would leave Britain as the only G7 wealthy nation unable to produce so-called virgin steel from iron ore, coking coal and other inputs. The government says nationalisation of the plant is now a likely option.

China's foreign ministry urged Britain on Monday to treat its firms fairly without politicising trade matters so as to protect the confidence of Chinese investors.

"Both sides should discuss and solve the difficulties encountered by the current operation of British Steel on the basis of the principle of mutual benefit," ministry spokesperson Lin Jian said.