The Government has brought British Steel into public ownership under the newly enacted Steel Industry (Nationalisation) Act 2026, a move Prime Minister Sir Keir Starmer said secures the future of UK steelmaking. The company, which had been losing £700,000 per day, was previously owned by Chinese firm Jingye, which had planned to close its blast furnaces in Scunthorpe, Lincolnshire.
Government Assumes Control to Prevent Closure
Ministers seized control of the Scunthorpe plant in April last year after Jingye indicated it would shut down the last two blast furnaces, which would have ended the UK's ability to produce virgin steel. Virgin steel contains fewer impurities than recycled steel and is critical for high-grade manufacturing. The plant employs approximately 2,700 people.
Prime Minister Sir Keir Starmer said: "Today's decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability."
Compensation Process Underway
Jingye has reportedly begun the process to seek compensation for the nationalisation, although the Government has indicated it could limit or refuse payment. The company had stated the business was losing £700,000 daily. The Government had previously attempted to negotiate a commercial sale but failed to reach an agreement.
Steel Industry (Nationalisation) Act 2026
The Steel Industry (Nationalisation) Act 2026 received royal assent on Wednesday, July 15, and became law the same day. The legislation empowers ministers to transfer steel businesses' shares or property into public ownership where deemed necessary in the public interest.
A Department for Business and Trade spokesperson said on Wednesday that the Act provides powers to nationalise steel companies "where it's necessary in the public interest" and will protect a foundation industry supporting Britain's critical national infrastructure, economy, and defence. The spokesperson added: "We've been clear that we're strongly minded to use these powers in relation to British Steel."
Union Leaders Welcome Nationalisation
Union leaders praised the move. Paul McKenna, national secretary for steel at the Community Trade Union, said: "The importance of this legislation cannot be overstated." Charlotte Brumpton-Childs, national secretary at the GMB Union, commented: "It's no exaggeration to say ministers have saved the UK steel industry. But the hard work to keep it alive starts here, beginning with a commitment to public infrastructure projects to buy British."
Impact on UK Steelmaking
The nationalisation ensures the continued production of virgin steel in the UK, preserving a strategic capability for defence, infrastructure, and manufacturing. Without intervention, the closure of blast furnaces would have left the UK reliant on imported or recycled steel, potentially compromising quality and supply chain security.
