Britain Set to Nationalise British Steel Under Starmer’s New Legislation Plan
Government Moves Towards Nationalisation of British Steel
Background and Announcement
LONDON, May 11 (Reuters) - Britain could fully nationalise British Steel under new plans announced on Monday by Prime Minister Keir Starmer, who said it had not been possible to sell the Chinese-owned business the government saved from closure last year.
Starmer said his government would bring in new legislation to allow it to take ownership of the steelworks based at Scunthorpe, northern England, ensuring the country does not lose its last remaining primary steelmaking capability.
Public Interest Test
Any decision will be based on a public interest test being met, which would consider national security, maintaining critical national infrastructure and supporting the economy.
Importance of British Steel
The steelworks supply the rail, construction, and automotive industries, but have in recent years struggled with high energy costs in Britain and a glut of steel in the global market.
Strategic Significance
"Steel is strategically important to our economy and our national resilience," said Starmer, who was making a speech defending his leadership.
Recent Developments
Government Seizure and Job Protection
In April 2025, the government seized operational control of British Steel from its Chinese owners, Jingye, to stop the furnaces from being shut and to protect 2,700 jobs at the plant and thousands of related jobs in the supply chain.
Search for Private Sector Partners
In the months since, it has been looking for a private sector partner to secure the future of British Steel, which was privatised under Prime Minister Margaret Thatcher in 1988.
Failed Negotiations with Jingye
Starmer said negotiations with Jingye had shown a commercial sale was not possible at this time as any agreement would not deliver acceptable value for money for taxpayers.
Future Prospects and Investment
Potential for Private Sector Involvement
Business minister Peter Kyle did not rule out private sector involvement in the future.
"The government recognises that securing the long-term future of the UK’s steel sector relies on both public and private investment for modernisation," he said in a statement.
Financial Implications
The cost of supporting British Steel is set to reach 615 million pounds ($836 million) by June, according to the country's spending watchdog.
($1 = 0.7358 pounds)
(Reporting by Elizabeth Piper and Sam Tabhriti, writing by Alistair Smout, editing by William James and Keith Weir)
