Steel Town

"The story of the decline of British steel has been decades in the making"

I know Scunthorpe. It forms part of a trinity of post-industrial northern towns often mocked by the elitist London metropolitan crowd. Hull and Grimsby complete this trio.  

During a school trip, I visited the Scunthorpe steel plant on a geography field day. This site has been a cornerstone of Britain’s industrial economy for over 150 years. 

The location was selected based on geographic, economic, and historical factors. The Frodingham ironstone bed, part of the North Lincolnshire iron field, was discovered in the 1850s, yielding high-quality iron ore just beneath the town. 

Nearby coal fields in South Yorkshire and Nottinghamshire provided coking coal for blast furnaces, while limestone originated from Derbyshire and the Peak District. Thus, Scunthorpe is located in the "Iron Triangle," where iron ore, coal, and limestone are all within a 50-mile radius.

Furthermore, the nearby Humber ports, rail connections, canals, and rivers facilitated transportation. The first steelworks emerged in 1864, and two enormous blast furnaces now stand on the site.

Suddenly, Scunthorpe is in the news because the blast furnaces that produce virgin steel are about to shut down, which would end steel production in the UK. The plant's owners, a Chinese company, warned the British government 18 months ago that the plant was no longer viable. 

Just days before the proposed closure, the British government enacted legislation that required the plant's owners to maintain operations in a frantic effort to prevent closure. With no coking coal in reserve, there is an urgency to deliver enough coal to the plant to keep the fires burning. 

Blast furnaces operate continuously because shutting them down risks structural damage incurs massive costs, and leads to prolonged downtime. While modern electric arc furnaces provide greater flexibility, traditional blast furnaces are still referred to as "always-on beasts." 

So why was the British government's sudden intervention necessary? The bottom line is that primary steel concerns not just metal but also power, survival, and economic dominance. Nations that lose control of it risk becoming vulnerable in crises.  With Trump’s U.S. appearing less like a stable partner, post-Brexit Britain suddenly seemed exposed in a rapidly changing world.

Steel is essential for military equipment, such as ships, tanks, and aircraft, as well as for infrastructure like bunkers and bases, as well as ammunition.  Dependence on foreign steel imports can weaken a nation's defence readiness during conflicts or trade wars. Additionally, steel is the backbone of key industries, including construction, automotive, machinery, and energy, encompassing pipelines and wind turbines.  

Losing primary steelmaking capacity leads to reliance on unstable global supply chains. Currently, China produces 55% of the world's steel. Recognising the importance of steel production, the EU and India subsidise domestic steel to avoid over-reliance on other nations. Britain lacked such foresight. 

The story of the decline of British steel has been decades in the making. Under-investment, a lack of priorities, and the relentless drive for net zero are all factors at play. The sector relies heavily on coal-based blast furnaces, contributing 2% of the UK's total CO₂ emissions.

Transitioning from coal-based production to hydrogen-based direct reduced iron (DRI) or electric arc furnaces (EAFs) requires £4–6 billion in investments.  In truth, without government support, UK steelmakers cannot compete against cheaper imports from China, India, and Turkey.  Currently, the UK imports 60% of its steel.

The other elephant in the room is the UK’s electricity costs, which are 50% higher than those in European nations, making the modern EAF option unviable. If UK steel production becomes too expensive, manufacturers, such as those in the automotive and aerospace industries, may source cheaper foreign steel, further undermining the domestic sector.

A few opportunistic politicians claim that the Chinese deliberately sabotaged the last remaining British steel plant to force the UK to rely on cheap imports. However, as political commentator Andrew Neil noted, "The British are perfectly capable of destroying steel production without help from anyone else. The industry has been under-supported for decades." Indeed, the mantra of net zero has provided cover for this destruction. 

Furthermore, Neil and other commentators note that Britain lacks long-term strategic plans to safeguard key industrial infrastructure. For decades, successive governments have avoided making tough decisions by allowing foreign interests to take precedence. 

From employing over 300,000 in 1971 to less than 3,000 in 2025, the problem of British Steel didn’t begin with the Chinese owners. It’s just business for them, as it was for the Indian owners before the Chinese. The Indian conglorate Tata ran the plant before a series of ownership changes with the Jingye Group taking over in 2020 after an approach by British officials. The Jingy Group then invested £330 millionin upgrading the site.

Perhaps, the real risk sits elsewhere. In his book Vassal State, author Angus Hanton documents the extent to which U.S. commercial interests control the British economy. While China is taking flak in this saga, the influence of U.S. companies is much broader. Hanton argues that Britain exited Europe with Brexit while quietly placing itself at the mercy of U.S. private equity funds and big tech. 

The concept of an open door has led to the sale of many of Britain’s most productive and innovative businesses. The U.S. accounts for roughly 30% of all foreign investment in the UK, while China comprises 2%. Consequently, the U.K. appears to function as an appendage of the U.S., even though it is performing worse than America’s poorest state, Mississippi. 

As recent events have shown, the U.S. significantly influences global trade, tax, and investment to serve its own interests. Consequently, the U.K. now finds itself between a rock and economic failure. As reality sets in, the shift from balancing the pursuit of net zero to maintaining strategic industries has resulted in the latter taking precedence. 

For the workers of Scunthorpe, there is some short-term relief. However, the question remains, does Britain have the backbone to safeguard its national interests in this new disruptive Trump era?