The Chinese company Jingye Group, owner of the UK's last two blast furnaces producing virgin steel, announced plans to close them down in March 2025, threatening 3,000 jobs and leaving the UK unable to produce virgin steel domestically. The UK government intervened, passing emergency legislation in April 2025 to take control of the steel plant, marking only the second time a Saturday emergency debate has occurred since WWII.
The government's intervention was prompted by concerns over national security and the potential loss of steel production capacity. While the global steel market isn't experiencing a shortage, the government argued that maintaining domestic production capacity is crucial for national resilience. The government's negotiation with Jingye Group, which included a proposed £500 million subsidy rejected by Jingye Group, broke down due to lack of cooperation from the Chinese company.
The incident highlighted anxieties about Chinese investment in sensitive industries. Business Secretary Jonathan Reynolds expressed concerns about China's potential influence and stated that future investments in vital sectors will require a significantly higher trust threshold. Other officials emphasized reviewing Chinese investments in nuclear energy, telecommunications and transport, with a priority on security. This debate is juxtaposed against the UK's ongoing efforts to attract foreign investment, including from China, creating tension between economic goals and national security concerns.
Debate exists about the importance of virgin steel, which is produced using blast furnaces with high carbon emissions. Many other companies have switched to electric arc furnaces (EAFs), which are more environmentally friendly and cost-effective. The government's emphasis on net-zero emissions is also questioned, as the use of blast furnaces conflicts with environmental goals.
Jingye Group cited financial losses as the reason for the closure, claiming daily losses of £700,000, but this figure hasn’t been independently verified. The British Steel plant had experienced substantial losses and debt for years, even before Jingye's acquisition in 2019. The government argued that the costs associated with job losses, land reuse etc., would outweigh the financial benefits of the plant’s closure.