The UK government is set to introduce legislation this week that will allow it to take control of British Steel, marking a return to public ownership 38 years after the company was first privatised. The move aims to protect thousands of jobs in Scunthorpe and secure the future of the steelworks.
Legislation for Public Ownership
Prime Minister Sir Keir Starmer unveiled new powers that could be deployed to nationalise British Steel, following a year after the government used emergency powers to seize control of the firm and maintain production at the Scunthorpe site. This action came after the company's owner, Chinese firm Jingye, proposed shutting down two blast furnaces.
The government stated that negotiations with Jingye failed to reach a commercial sale that would deliver sufficient value for taxpayers. As a result, introducing legislation to provide a pathway to public ownership was deemed the appropriate next step. The legislation, to be brought before Parliament this week, will be subject to a public interest test considering national security, critical national infrastructure, and economic bolstering.
Prime Minister's Statement
Prime Minister Starmer said: "Steel is strategically important to our economy and our national resilience. That's why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we're now bringing forward legislation to give us options to protect Britain's steelmaking capability. This is what an activist state looks like – taking decisions in the national interest. This Bill would allow us to take action if we need to, while we continue rebuilding our steel sector."
Union and Industry Reactions
Steel union GMB praised the decision, with national secretary Charlotte Brumpton-Childs stating: "This legislation will cover the whole steel industry – it isn't specifically for British Steel but it is what will protect it from foreign owners. British Steel is a nationally strategic asset, it is right the Government does everything in its power to secure its long term future."
Gareth Stace, director-general of UK Steel, welcomed the move, saying it "provides vital certainty for the workforce, the company's customers and the wider supply chain at a critical moment." However, he emphasised: "Nationalisation is not an end goal. This must now be the beginning of a clear and credible long-term plan for British Steel."
Financial Implications
The government's intervention last year halted Jingye's plans and ended redundancy consultations that could have resulted in 2,000 to 2,700 job losses. It also kept the Scunthorpe blast furnaces running. Jingye had been losing £700,000 daily due to difficult market conditions, tariffs, and environmental costs. According to a National Audit Office (NAO) report, the government spent £377 million between April 2025 and January 2026 to safeguard the site. This included £15 million for advisers and £359 million for operational activities such as raw materials and payroll. The NAO noted that shutting down the blast furnaces would have caused significant job losses and impacted customers like Network Rail.
Future Valuation
Downing Street confirmed that an independent valuation will be conducted to establish the potential cost of nationalising British Steel. The Prime Minister's official spokesman said: "Where the powers in the bill are used, an independent valuer will be appointed to determine what compensation, if any, is payable, and the UK Government will, of course, abide by the valuer's conclusions."
Business Secretary Peter Kyle added: "Revitalising our steel sector is a top priority for this Government and bringing forward this legislation would allow us to explore potential future options for British Steel. The Government recognises that securing the long-term future of the UK's steel sector relies on both public and private investment for modernisation."
