UK government nationalises British Steel, securing 2,700 jobs at Scunthorpe plant

Background

British Steel, based in Scunthorpe, north Lincolnshire, employs roughly 2,700 people and supports many other industries in the region. The company was privatised in 1988 and acquired by China's Jingye Group in 2020. In April 2025, after Jingye announced plans to close the two blast furnaces, the last coal-fired ones operating in the UK, the government used emergency powers to take operational control and keep them running, though ownership remained with Jingye.

The nationalisation decision

On 16 July 2026, the government announced the immediate transfer of British Steel into public ownership. The move came a day after the Steel Industry (Nationalisation) Bill received royal assent, having passed both Houses of Parliament. The law permits nationalisation of steel companies when it is "necessary in the public interest, to protect a foundation industry that supports our critical national infrastructure, economy and defence," according to the Department for Business and Trade. Prime Minister Keir Starmer, who will hand over to Andy Burnham on Monday, said the decision "secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability." He described British Steel as "part of the fabric of our nation and a cornerstone of Britain's industrial strength." A new leadership team has been appointed to stabilise operations, manage health and safety, and work with unions and staff to make the company "commercially viable and low-carbon."

Compensation dispute

Jingye has begun the process of seeking compensation for the nationalisation, having previously claimed the business was losing £700,000 a day. The government, however, pointed to a March report by the National Audit Office which found the Scunthorpe works were costing the taxpayer about £1.3m a day. An independent assessor will now determine whether any compensation is owed, and the government has said it could limit or refuse payment. The nationalisation follows months of unsuccessful negotiations with Jingye, which had demanded full compensation for investments made before the state took control.

Broader steel strategy

The nationalisation is part of a wider industrial policy. In March, the government launched its "Steel Strategy", which included 50% tariffs on steel imports and a 51% reduction in tariff-free import quotas. The strategy aims for up to 50% of steel used in the UK to be produced domestically, citing the metal's essential role in construction, transport, energy infrastructure and defence. The government also granted £500m to Tata Steel to support the green transformation of its Port Talbot plant in Wales.

Political reactions

Energy minister Chris McDonald told the Commons the government was "acting decisively and with a purpose in the national interest." Shadow business secretary Andrew Griffith argued that "nationalisation is a bad idea" and blamed the steel industry's problems on Energy Secretary Ed Miliband's "addiction to ruinously high energy prices." The nationalisation is the first major state intervention of the incoming Burnham administration, which takes office on Monday.