British Steel has officially been taken into public ownership, drawing a line under years of uncertainty surrounding the future of the company. The government said the move would protect thousands of jobs at the firm's plant in Scunthorpe and across the wider supply chain, as well as safeguard the vital role that steel plays in the wider UK economy. The decision hands the state direct control of a business that had been widely seen as being on the brink.
Around 2,700 people work at the Scunthorpe works, which is the last plant in the country still able to make steel from scratch. Its Chinese owner, which had held the company since 2020, had drawn up plans to close the last two blast furnaces at the site. According to some estimates the plant had been losing in the region of 700,000 pounds a day, with high energy costs in the United Kingdom leaving it struggling to compete against cheaper foreign rivals.
The business secretary, Peter Kyle, set out why ministers had chosen to act. He said the intervention would protect supply and allow the government to begin stabilising the business and getting it facing the future, describing a very uncertain world in which primary steelmaking capacity had become too important to lose. Standing at the Scunthorpe site, he framed the takeover as a step needed to keep the plant running rather than watch it close.
Mr Kyle warned of the consequences of inaction. If the country were to lose the two blast furnaces and the ability to produce primary steel, he said, Britain would become wholly dependent on supplies from other countries. He argued that such a loss would leave the United Kingdom reliant on China and other producers around the world for a material that underpins construction, defence and much of the wider economy.
Analysts pointed out that this is far from the first time the state has stepped in. According to one assessment, it is the third time British Steel has been nationalised in the past 75 years, with the company having been privatised a couple of times in between. That pattern, observers said, reflects the deep and intensifying challenges facing the steel industry, driven above all by intense competition from China and, increasingly, India.
The company was effectively seized by the government under legislation introduced last year. Its owner, Jingye, says it lost around 350 million pounds cumulatively while trying to turn a profit from the blast furnaces at Scunthorpe. With the two sides unable to reach an agreement, the Chinese group was offered 100 million pounds, a figure it is understood to have rejected, and the business was then taken out of its hands and moved into public ownership.
Officials said an independent assessment would now be carried out to determine whether any compensation is due to the Chinese manufacturer for the loss of the company. The government presented the takeover as a rescue bid and a last-ditch measure, insisting that it had been left with little choice once it became clear that a commercial deal to keep the plant open under private ownership could not be struck.
Supporters of the move stressed the strategic importance of the Scunthorpe works, describing it as the last place that makes virgin steel in Britain from scratch and the source of some of the highest quality steel used in defence and other high-technology applications. Ministers said the priority now would be to stabilise the business and bring down costs over time, in the hope of eventually making the plant add up in an industry battered by global headwinds.
The takeover moved to Parliament, where a minister told the House of Commons that the legislation was now law and that British Steel was, in his words, now owned by the people. He said the government would appoint non-executive directors and a board to take forward the transformation of the company so that it becomes productive, profitable and resilient, adding that this was part of the wider objectives of the country's steel strategy, including securing the availability of specialist grades of steel. The Liberal Democrats welcomed the measure as a temporary, emergency and targeted step aimed at turning British Steel around before its last blast furnaces could go cold.
The question of what the takeover will cost the taxpayer, and the Chinese owner, was left open. The minister said the company's owner had indicated it had started the process of seeking compensation for the nationalisation, and that while ministers had wanted a commercial solution, they did not believe they would get value for the taxpayer from a business that had been running at a loss for some time. He said the government would, through regulations in the autumn, appoint an independent valuer to make a judgment on any compensation that is due, a figure he cautioned could turn out to be nil.