The UK government has brought British Steel under public ownership, enacting new powers that allow for nationalization in cases deemed vital to public interest. The decision aims to secure the future of steelmaking in the United Kingdom and safeguard roughly 2,700 jobs at the Scunthorpe steelworks, which is a significant employer in north Lincolnshire.
Prime Minister Sir Keir Starmer stated that the move protects skilled jobs and a vital national capability. While the government took control of operations last year, the company had remained under the ownership of China's Jingye Group. Jingye has indicated it will seek compensation for the nationalization, while the UK government has suggested it might limit or refuse such claims. Previously, the government had explored options for private investors to take over the manufacturer, opting against full nationalization.
Legislation passed this week by Parliament empowers the government to nationalize steel companies if they meet a public interest test. A spokesperson for the Department for Business and Trade confirmed on Wednesday that the government was strongly inclined to use these new powers for British Steel. The Steel Act provides the authority to nationalize steel companies when necessary to protect a foundational industry that supports critical national infrastructure, the economy, and defense.
In March, a National Audit Office report highlighted that the Scunthorpe steelworks was incurring costs of approximately £1.3 million per day for the government. The future of the Scunthorpe facility had faced years of uncertainty.
