Since April 2025, under the Steel Industry Act 2025, the UK government has been directly financing UK-based steelmaker British Steel to keep operations running at the company’s Scunthorpe plant. The intervention followed Chinese owner Jingye Group’s warning of heavy losses and possible closure of blast furnaces.
Parliamentary written statements confirm that the government has allocated approximately £180 million to British Steel to cover:
- Working capital
- Purchase of raw materials
- Payment of employee salaries
- Supplier and SME debts
The government argues that the £180 million intervention is a strategic necessity, ensuring supply security while the UK develops a longer-term steel strategy.
The Department for Business and Trade noted that the figure will be reflected in its 2025-26 annual accounts. Officials stressed that these costs are recoverable from British Steel as a debt obligation.
Why the spending was necessary
British Steel is the UK’s last blast furnace operator, producing “virgin” steel needed for critical infrastructure, renewable energy projects, and defense. Without intervention, 2,700 jobs were at risk, and the UK would have become the only G7 country without primary steelmaking capacity.
Next steps
A full UK Steel Strategy is expected later this year, setting out investment priorities and decarbonization plans. Meanwhile, negotiations continue with Jingye Group over the company’s long-term ownership.
At the end of March, British Steel started the consultation process for the closure of two blast furnaces at the Scunthorpe plant, following Jingye’s rejection of a £500 million support package offered by the UK government, as SteelOrbis previously reported. However, in April, the UK government took control of British Steel to prevent the closure of the two blast furnaces at its Scunthorpe plant.
