UK Takes British Steel into Public Ownership to Safeguard Steel Production

British Steel is now under public ownership as part of the government’s strategy to safeguard the nation’s steel production.

The Scunthorpe plant, employing around 2,700 workers and underpinning numerous industries across northern Lincolnshire, has faced persistent uncertainty in recent years.

‘This decision secures the future of steelmaking in the United Kingdom, protects skilled employment and preserves a critical national capability,’ Prime Minister Sir Keir Starmer stated.

The UK government assumed control of British Steel’s Scunthorpe operations last year, although the company continues to be owned by Chinese conglomerate Jingye Group.

Jingye has indicated that it is initiating compensation claims for the nationalisation, having previously reported daily losses of £700,000. Nevertheless, the UK government reserves the right to limit or deny such compensation.

The BBC has been unable to obtain a response from Jingye regarding Thursday’s announcement.

Starmer added: “British Steel is integral to the nation’s fabric and a cornerstone of Britain’s industrial strength.”

“This government will always act in the national interest to support British industry, strengthen our economy and ensure the sectors we depend on can thrive for years to come.”

Previously, the government had sought private investors to take over the steelmaker, initially opting against full nationalisation.

‘British Steel now belongs to the British people, and our focus is on the future: stabilising the business, supporting the communities that depend on it and building a sustainable, competitive, decarbonised steel sector for the years ahead,’ Business Secretary Peter Kyle said.

On Wednesday, Parliament enacted legislation enabling the government to place the steel industry under public ownership when it satisfies a public interest test.

A spokesperson for the Department for Business and Trade confirmed on Wednesday that the government is ‘strongly minded’ to employ the new powers in the case of British Steel.

‘The Steel Act provides the powers to nationalise steel companies when necessary in the public interest, to protect a foundational industry that underpins our critical national infrastructure, economy and defence,’ the department stated.

In March, the National Audit Office released a report indicating that the Scunthorpe plant was costing the government approximately £1.3 million per day.

Business Secretary Peter Kyle told the BBC that the government will need to fund the running costs ‘for the immediate future’.

He added that an independent assessor will assess whether Jingye should receive compensation for the nationalisation, based on the company’s valuation.

‘But let me be really clear, the alternative is to let this business fail,’ he said.

‘If that business disappears, we will lose the capacity for primary steel production in our country and become fully dependent on global supply,’ he warned.

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