The UK government has announced plans to fully nationalise British Steel to prevent China from controlling the country's ability to produce virgin steel, a critical component for national defence and security. The company, which operates the UK's last two blast furnaces in Scunthorpe, North Lincolnshire, was taken under state control via emergency legislation in April last year.
Discussions with Jingye, the Chinese owner of British Steel, failed to reach a commercial agreement. A new bill introduced in Parliament this week would give the government the option to nationalise the company, subject to a public interest test considering national security, critical infrastructure, and economic support.
However, details on the timeline, compensation for Jingye, or the future of the Scunthorpe blast furnaces—the sole supplier to the UK rail network—remain undisclosed. The government aims to transition to green steelmaking in the long term, but decommissioning costs are yet to be addressed.
The announcement comes as losses at Scunthorpe nearly doubled to £1.3 million per day under public ownership. The Conservative Party criticised Labour for lacking a credible plan, urging China to bear some decommissioning costs. Prime Minister Sir Keir Starmer stated, 'Steel is strategically important to our economy and national resilience.'
Trade body UK Steel welcomed the move, calling it a decisive step to secure a vital part of the supply chain. Director General Gareth Stace emphasised the need for a clear long-term plan, investment in low-carbon steelmaking, and action on energy prices. The legislation will be detailed in the King's speech on Wednesday, marking the first full public ownership of British Steel since its privatisation in 1988.
GMB National Secretary Charlotte Brumpton-Childs said, 'Unions have long known Jingye will not negotiate in good faith. British Steel is a nationally-strategic asset; it is right the government does everything in its power to secure its long-term future.'
The National Audit Office reported that £377 million was spent subsidising the plant from April last year to January, with costs expected to reach £615 million by June and potentially £1.5 billion by 2028. The government's £2.5 billion Steel Strategy aims to shift to electric arc furnaces for cleaner production.
