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The UK government has taken British Steel into public ownership as part of its efforts to “protect UK steelmaking,” a move aimed at securing the future of this vital industry. The steelworks in Scunthorpe, which provides employment for around 2,700 people and supports numerous other businesses across north Lincolnshire, has faced significant uncertainty in recent years regarding its long-term viability.
Prime Minister Sir Keir Starmer emphasized the importance of this decision, stating, “Today’s decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability.” Although the government assumed operational control of British Steel in Scunthorpe last year, the company remained officially owned by China’s Jingye Group. Jingye has indicated it is seeking compensation following the nationalisation, referencing daily losses of £700,000. However, the UK government has indicated that it holds the authority to limit or reject any compensation claims.
The recent nationalisation follows parliamentary approval of legislation that grants the government powers to bring steel companies into public ownership when it is deemed necessary in the public interest. A spokesperson from the Department for Business and Trade confirmed the government’s intention to apply these new powers to British Steel. According to the department, “The Steel Act gives us powers to nationalise steel companies where it’s necessary in the public interest, to protect a foundation industry that supports our critical national infrastructure, economy and defence.” Business Secretary Peter Kyle highlighted that while the government will cover the company’s immediate running costs, an independent assessment will determine any compensation payable to Jingye. He also underscored the alternative, warning that without intervention, the steelworks could go bankrupt, threatening the UK’s ability to produce steel domestically and increasing dependence on global suppliers.
The move to nationalise British Steel was triggered by Jingye’s warning that the last two blast furnaces at Scunthorpe might be shut down. Should these furnaces have been deprived of fuel and ceased operation, restarting them would have been prohibitively difficult and expensive, effectively ending the UK’s ability to produce “virgin steel” — a fundamental process where raw iron is refined to create steel essential for infrastructure projects like buildings and railways. Simon Boyd, managing director of Reid Steel, which purchases large quantities from British Steel, supported the government’s decision, describing Jingye’s management as “sabotaging the infrastructure” and highlighting the need for substantial government investment in the steelworks, with returns expected over a 10 to 20-year period. Boyd remarked that British Steel “now belongs to the British people” and that attempts to privatise it previously mainly benefited private companies rather than the public.
Since Jingye acquired British Steel in 2020, one year after it went into compulsory liquidation under its former private equity owners Greybull Capital, concerns have grown about the steel industry’s future. The UK government has stressed that maintaining a strong domestic steel sector is critical to its plans for reindustrialising the country and reducing reliance on foreign suppliers for strategically important materials. Notably, without the ability to produce virgin steel, the UK would be the only G7 nation lacking this industrial capability, posing a risk to national economic security
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