British Steel brought under public ownership after parliament vote

Scunthorpe steelworks cost government £1.3m a day to operate

British Steel has been brought under public ownership, the government announced Thursday, after parliament passed legislation this week granting ministers the power to transfer the Scunthorpe-based steelmaker’s shares and property into state hands.

The nationalisation covers about 2,700 workers at the Scunthorpe site, which had been under government operational control since April last year after it emerged that its Chinese owner Jingye Group was preparing to close its two blast furnaces. The government said the move was necessary to protect “the future of steel production” in the UK, and to safeguard supply chains for major infrastructure projects and national security.

Prime Minister Keir Starmer said in a statement that “British Steel is part of the fabric of our nation and a cornerstone of Britain’s industrial strength.” He said the decision secures “skilled jobs” and “a vital national capability,” adding: “This government will always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on can thrive long into the future.”

Parliament passed the new law on Wednesday, which allows ministers to transfer steel businesses’ shares or property into public ownership if it meets a public interest test. The government said the nationalisation is expected to “protect thousands of jobs, support industry that relies on UK made steel and helps to safeguard supply chains, major infrastructure projects and national security.”

Jingye warned last June it would seek compensation and said it planned to try to recover as much as £711 million in debts owed by British Steel. The government said it will appoint an “independent valuer” to assess whether any compensation is payable, with regulations for the compensation scheme expected in autumn.

Business Secretary Peter Kyle said the steelmaker now belongs to “the British people,” adding that the government’s focus is on “stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.”

British Steel’s interim chief executive, Allan Bell, described the day as “historic for Britain and UK manufacturing,” thanking the government for “the decisive action it has taken, and the support it has given our business – and our people – during such a challenging period.”

The National Audit Office found in March that operating the Scunthorpe steelworks was costing the government about £1.3 million per day.

In separate data released Thursday, the Office for National Statistics reported the UK economy grew 0.1% in May.