The UK government has announced it has taken British Steel into public ownership, a decision Prime Minister Sir Keir Starmer stated would "protect UK steelmaking" and safeguard a "vital national capability." The move aims to secure the future of the steelworks in Scunthorpe, which employs approximately 2,700 people and supports numerous other industries across north Lincolnshire, an area long plagued by uncertainty regarding the company's future.
Sir Keir emphasized the strategic importance of the industry, stating, "British Steel is part of the fabric of our nation and a cornerstone of Britain's industrial strength." He added that the government would "always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on can thrive long into the future."
The nationalisation follows a period where the UK government had already taken control of British Steel operations in Scunthorpe last year, despite the company remaining under the ownership of Chinese firm Jingye Group. Jingye, which acquired British Steel in 2020 after its previous owner, private equity group Greybull Capital, placed it into compulsory liquidation, has initiated the process of seeking compensation for the nationalisation. The Chinese firm previously claimed the business was incurring losses of £700,000 daily. However, the UK government has indicated it may limit or refuse any compensation payout. Jingye Group did not provide a response to Thursday's announcement.
The financial strain on the steelworks has been significant, with a National Audit Office report in March revealing that the Scunthorpe plant was costing the government approximately £1.3 million a day. Business Secretary Peter Kyle confirmed that the government would need to cover the running costs "for the immediate future" and that an independent assessor would determine Jingye's compensation based on the company's value.
Mr. Kyle underscored the necessity of the intervention, warning, "If that business disappears, we will lose the ability for primary steel production in our country, we will become entirely dependent on global supply." He highlighted that the government's focus is now on "stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead."
The legislative groundwork for this action was laid on Wednesday when Parliament passed legislation, known as the Steel Act, enabling the government to bring the steel industry into public ownership under circumstances meeting a public interest test. A spokesperson for the Department for Business and Trade had confirmed the government was "strongly minded" to use these new powers, stating the Act provides authority 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."
The government's direct intervention at the Scunthorpe plant occurred in April 2025, following Jingye's flagging of the potential closure of the last two remaining blast furnaces. Officials feared that if these furnaces were starved of fuel and ceased operation, the UK would lose its capability to produce "virgin steel"—a process involving the extraction and purification of iron from its original source for use in major construction projects like buildings and railways. Restarting these furnaces would be exceptionally difficult and costly, and without this capability, the UK would become the only G7 nation unable to produce virgin steel, posing a significant risk to the nation's economic security.
The government's broader objective for the nationalisation is to foster a strong domestic steel industry, which it deems "critical" to its plans for reindustrialising Britain and reducing reliance on overseas supply chains for strategically important materials.
Simon Boyd, managing director of Reid Steel, a structural steel manufacturer in Dorset, said the nationalisation "had to be done".
He said the government would need to invest heavily in British Steel and would not see a return for 10-20 years.
