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The UK government has announced plans to bring British Steel into full public ownership, with legislation expected to be introduced this week to enable the takeover, pending a public interest test. Prime Minister Sir Keir Starmer confirmed the move, following the government’s earlier takeover of the Scunthorpe steelworks in April of last year, when they stepped in to prevent the potential closure of the plant’s blast furnaces, previously owned by Chinese company Jingye.
Sir Keir explained that, after discussions with Jingye failed to result in a commercial sale, the government believes that public ownership is now justified in the national interest. He emphasized that this move demonstrates his commitment to change and to addressing the challenges faced by British Steel, aiming to address skepticism about his leadership amid recent electoral setbacks. “Public ownership is in the public interest,” he said, reinforcing the government’s resolve in securing the future of the steelworks.
Industry voices have largely welcomed the decision. Gareth Stace, director-general of UK Steel, highlighted the importance of maintaining domestic production capabilities both for the UK economy and for national security. However, he also cautioned that nationalisation should not be seen as a final solution but rather the start of a strategic plan for British Steel’s sustainable future, including investments to grow the business. The government has until now sought private investors, but those efforts faltered amid concerns over the company’s financial viability.
The Scunthorpe steelworks produces “virgin steel,” which involves extracting and refining iron ore and is critical for construction sectors such as infrastructure and railways. Jingye had previously reported losses of £700,000 per day at the plant, which fueled concerns leading to government intervention. According to the National Audit Office, government oversight since the intervention has cost around £377 million, covering operational expenses and raw materials. The exact cost of full nationalisation remains undisclosed. This latest public ownership follows earlier government involvement after British Steel’s collapse in 2019, when the company was temporarily managed by the Insolvency Service at a cost of £600 million. Union leaders have expressed strong support for the nationalisation, viewing it as vital to securing British Steel’s future and urging the government to ensure that domestic steel is prioritized in public projects
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