British Steel is set to return to public ownership after Sir Keir Starmer confirmed the government will introduce legislation this week to take “full ownership” of the company.
The move follows months of uncertainty around the future of the Scunthorpe steelworks, after the government seized control of operations from Chinese owner Jingye, in April last year to prevent the closure of its blast furnaces.
Speaking, as he tried to reset his reputation following the disasterous local elections, the Prime Minister said:
Legislation will be brought forward this week to give the Government powers, subject to that public interest test, to take full national ownership of British Steel.
“Public ownership in the public interest. Urgent government on the side of working people, making Britain stronger with the hope of industrial renewal.”
The intervention marks a dramatic shift for one of Britain’s most strategically important industrial assets and effectively ends hopes of finding a private sector rescue package for the site.
The Scunthorpe works is the UK’s last remaining producer of so-called virgin steel — made directly from iron ore using blast furnaces.
Had the furnaces been shut down the UK would have lost the ability to produce virgin steel domestically because restarting the furnaces would have been hugely expensive and technically difficult.
Jingye had claimed the plant was losing around £700,000 a day and was no longer financially viable.
Government control of the site has already reportedly cost more than £200 million.
The steel industry welcomed the move.
Gareth Stace, Director-General of UK Steel, said the announcement brought “vital certainty” for the company’s 2,700 workers and customers but warned nationalisation “must be the beginning of a clear and credible long-term plan”.
Unions also backed the decision, Charlotte Brumpton-Childs, GMB National Secretary, said: “Unions have long known Jingye will not negotiate in good faith.
“British Steel is a nationally strategic asset. It is right the Government does everything in its power to secure its long term future.
“GMB welcomes this decisive and timely intervention by the Government which will protect one of the UK’s most important industries.”
It is not the first time British Steel has fallen into state hands. The Insolvency Service ran the company for nine months after its collapse in 2019 at a reported cost of £600 million.
Copyright © 2026 Energy Live News LtdELN