The government has seized British Steel in a dramatic nationalisation that saves the UK’s last blast furnace – a creaking giant that has poured molten iron since 1938.
The Scunthorpe steelworks, which employs roughly 2,700 people, was taken into public ownership on Thursday, hours after the Steel Industry (Nationalisation) Act received royal assent. Keir Starmer, in one of his final acts as prime minister, said the move was in the national interest to secure “a vital national capability”.
“British Steel nationalised to save last virgin steel furnace in Scunthorpe, protecting 2,700 jobs.”
Nationalisation buys the government time and gives it the power to decide the plant’s future while keeping the blast furnaces running. The two remaining furnaces – Queen Anne, opened in 1954, and Queen Bess, which began producing steel in 1938 – are approaching the end of their operational lives. Letting them cool would cause serious damage and require tens of millions of pounds to restart.
The government stepped in last April after Jingye, the Chinese owner, threatened to walk away without preserving the furnaces. A day earlier, Parliament passed legislation allowing public ownership where it meets a public interest test. Jingye is now seeking compensation; an independent valuer will assess whether any is payable. The Chinese company had said the business was losing £700,000 a day, while a National Audit Office report found the Scunthorpe plant was costing the government about £1.3m a day.
Business Secretary Peter Kyle said the government will cover running costs “for the immediate future”. He told the BBC: “If that business disappears, we will lose the ability for primary steel production in our country, we will become entirely dependent on global supply.” The UK would become the only G7 member without the ability to make virgin steel from iron ore.
Unions welcomed the move. Alasdair McDiarmid, assistant general secretary for Community, said the union was “incredibly grateful” for nationalisation, which would “safeguard thousands of jobs and ensure the UK retains the capability to produce the steel our economy and national security depends upon”.
The government said it could not reach a deal with Jingye that would “secure the future of the company while delivering value for taxpayers”. Starmer called British Steel “part of the fabric of our nation” and said the decision “secures the future of steelmaking in the UK”. But with furnaces that have run for decades and no clear plan beyond immediate survival, the question of what comes next remains unanswered.