British Steel is poised to return to public ownership as Prime Minister Sir Keir Starmer unveiled new legislation granting the government “options” to safeguard the industry and workers in Scunthorpe. The move comes 38 years after the firm was first privatised.
Government Takes Control
New powers could be employed to nationalise British Steel, following a year in which the government used emergency measures to assume control of the company and maintain production at the Scunthorpe site. This action was taken after Jingye, the Chinese owner, proposed shutting down the two blast furnaces.
Since then, the government has engaged in discussions with Jingye but concluded that a commercial sale could not be agreed upon, and that a deal delivering sufficient value to taxpayers was unlikely. The government believes that introducing legislation to create a pathway to public ownership is the appropriate next step, enabling decisions about the steelmaker’s future.
Legislation and Public Interest Test
The legislation, to be introduced this week, will be subject to a public interest test considering factors such as national security, maintenance of critical national infrastructure, and support for the economy.
The Prime Minister stated: “Strong domestic steel production is vital for our economy, and this legislation would allow us to ensure stability for British Steel’s workers, suppliers and customers and avoid damaging disruption to crucial supply chains, while we consider options for the site’s future. The Government recognises that securing the long-term future of the UK’s steel sector relies on both public and private investment for modernisation.”
Union and Industry Reaction
A steel union welcomed the nationalisation move, asserting it will “protect it from foreign owners”. Charlotte Brumpton-Childs, GMB national secretary, commented: “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 for trade association UK Steel, welcomed the decision, saying it “provides vital certainty for the workforce, the company’s customers and the wider supply chain at a critical moment”. However, he stressed: “Nationalisation is not an end goal. This must now be the beginning of a clear and credible long-term plan for British Steel.”
