The government has taken British Steel back into public ownership, describing the move as necessary to protect steelmaking and thousands of jobs.
UK Steel welcomed the decision, with director-general Gareth Stace saying: “British Steel produces products that are fundamental to building and maintaining the nation’s railways, infrastructure and manufacturing base. Retaining this capability in the UK is essential to strengthening our industrial resilience, supporting economic growth and reducing reliance on imports in an increasingly uncertain world.”
The transfer was announced yesterday, following the Steel Industry (Nationalisation) Act receiving Royal Assent the previous day. Ministers concluded that public ownership was the only way to secure the company’s future after discussions with former owner Jingye failed to produce an agreement that protected production and value for taxpayers.
In one of his last acts in office, outgoing Prime minister Sir Keir Starmer said: “British Steel is part of the fabric of our nation and a cornerstone of Britain’s industrial strength. [This] decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability. 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.”
Critical infrastructure
British Steel’s Scunthorpe site is regarded as essential to preserving the UK’s domestic steelmaking capability, supporting major construction projects, transport networks, energy infrastructure and defence. The government said the decision followed an assessment of the impact on the economy, critical infrastructure and national security.
Business secretary Peter Kyle said: “British Steel is one of the nation’s biggest steel producers, and I’ve made the decision to nationalise the business to secure steelmaking capability and maintain production in the national interest. British Steel now belongs to the British people, and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.”
The government had intervened at British Steel in April 2025 to keep the blast furnaces running and prevent a disorderly closure. Since then, ministers and officials have worked to find a long-term solution for the business.
Chancellor Rachel Reeves said: “Bringing British Steel into public ownership is the right thing to do so we can stabilise the business going forward, protect UK steelmaking and the communities it supports. We are backing British industry and investing in the industries that create growth – with steel vital to our security, resilience and economic strength.”
Now that royal assent has been secured and the public interest test met, the Act requires an independent valuer to assess whether compensation is payable, with a compensation scheme to be set out through regulations expected in autumn.
A new leadership team of non-executive directors has been appointed, with initial priorities including stabilising operations, managing health and safety, maintaining production and working with trade unions and staff on a commercially sustainable, low-carbon future for the business.
The move builds on wider government support for the steel sector, including the Steel Strategy published in March and backed by up to £2.5bn of investment, which set an ambition for up to 50% of steel used in the UK to be made domestically.
It also follows a new trade measure cutting tariff-free steel import quotas by 51%, £500m for Tata Steel’s Port Talbot green steel transformation, and support worth hundreds of millions of pounds a year for steel firms’ energy costs through the Supercharger and British Industrial Competitiveness Scheme.
Allan Bell, British Steel’s interim chief executive, said: “This is a momentous day for British Steel, and everyone connected with our business – our dedicated employees, our valued customers and suppliers, and the tens of thousands of people in our supply chains and local communities.
“Much more than that, it is an historic day for Britain and UK manufacturing – one which safeguards our future and strengthens national security and infrastructure. We are grateful to the UK government for the decisive action it has taken, and the support it has given our business – and our people – during such a challenging period.
“Together, we look to the future with great optimism and will work together to make the world-class steel Britain needs now and for decades to come.”
Steel supports around 33,000 direct jobs and a further 36,000 jobs across supply chains, according to government figures, though years of global overcapacity, claims of unfair competition and high operating costs have made it harder for UK-based steel companies to compete and invest.
Industry reaction
UK Steel director-general Gareth Stace had a message for the incoming government of Andy Burnham, adding: “Bringing British Steel into public ownership is the right move. As the next government takes office next week, its priority must now be to deliver a long-term plan that restores British Steel to commercial sustainability, secures investment in modern, low-carbon steelmaking and creates the competitive business environment the sector needs to thrive.
“The government has already demonstrated its commitment to the future of UK steel through its Steel Strategy and recent action on trade. We now look forward to working closely with ministers to secure a sustainable future for British Steel and ensure that the wider UK steel sector has the conditions it needs to compete, invest and grow.”
Roy Rickhuss CBE, general secretary of the Community union, said: “We at Community offer our thanks to this government for passing this important piece of legislation, which will help to secure the long-term future of the UK’s steel sector. Steel is the lifeblood of so many communities in the UK and this new law will help to safeguard thousands of jobs, ensuring greater stability in an industry which has had to weather many storms in recent years.”
Charlotte Brumpton-Childs, GMB national secretary, said: “The government has taken timely, decisive intervention on British Steel: as it has throughout this process. It’s no exaggeration to say ministers have saved the UK steel industry. But the hard work to keep it alive starts here; beginning with a commitment to public infrastructure projects to buy British.
“GMB also demands a worker voice in the new nationalised company, so those who rely on the business will be in the boardroom and it will never be solely at the whim of foreign enterprise.”
Dr David Crosthwaite, chief economist at the Building Cost Information Service (BCIS), said: “Bringing British Steel into public ownership helps maintain a domestic supply of virgin steel, strengthening the security of supply for critical construction and infrastructure projects. It also seems primarily intended to preserve the capacity to support national defence and rearmament requirements during periods of conflict.
“The move provides an immediate boost for the steel industry, but significant long-term challenges remain. UK energy costs are very high and continue to be affected by market volatility.
“British Steel’s Scunthorpe site also carries substantial operating costs, even before inflationary pressures are taken into account. As a result, the success of this move is likely to depend on how well new policies like the updated steel import tariff rules and Carbon Border Adjustment Mechanism next year can stimulate demand.
“At present, the outcome is unclear. Some in the construction industry have raised concerns that businesses could face higher costs for imported steel products that are not readily available from UK suppliers.
“It remains to be seen how additional costs will affect the market, but if they contribute to higher insolvencies or place further pressure on construction supply chains, they could present a major headache for the government.
“The government was under pressure to act and public ownership was likely to be the most practical response in the circumstances. However, it remains a significant risk and, given the costs involved, could increase pressure on the public finances ahead of this year’s Budget.”
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