British Steel is set to return to public ownership after Sir Keir Starmer announced plans for new legislation giving the Government powers to take full control of the company.
The Prime Minister said the move would be subject to a public interest test, which will consider issues such as national security, critical infrastructure and economic support.
The decision follows the Government’s intervention at British Steel’s Scunthorpe steelworks in April last year, when it took control from Chinese owner Jingye to prevent the possible closure of the site’s blast furnaces.
Sir Keir said ministers had held talks with Jingye, but a commercial sale had not been possible. He said public ownership was now “in the public interest”.
The announcement was welcomed by the steel industry. Gareth Stace, director-general of UK Steel, said it gave “vital certainty” to British Steel’s 2,700 workers and its customers. He added that retaining domestic production was important for economic growth, national security and resilience.
However, Stace warned that nationalisation should not be treated as the final answer. He said it must mark the start of a clear long-term plan for British Steel, backed by an investment strategy.
The future of Scunthorpe has been closely watched because its blast furnaces are central to the UK’s ability to produce virgin steel. If the furnaces were switched off, restarting them would be difficult and expensive.
The National Audit Office said in March that Government supervision of British Steel had already cost around £377 million. If spending continues at the same rate, it could exceed £1.5 billion by 2028.
No final cost for full nationalisation has been confirmed. An independent valuation is expected to decide whether compensation is owed to Jingye.
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