UK nationalises British Steel to secure output

The UK government has brought British Steel into public ownership with effect from 16 July 2026. The move follows the passage of new legislation that allows ministers to nationalise steel companies where this is judged to be in the public interest. Ministers say the objective is to secure the country’s steelmaking capability, protect skilled employment and safeguard critical supply chains.

The decision affects the Scunthorpe steelworks, which had already been under government operational control since April 2025. That earlier intervention was taken to keep the site’s blast furnaces running after its owner signalled plans to close them. By transferring ownership, the government has moved from temporary oversight to full control of the business.

Nationalisation was enabled by the Steel Industry (Nationalisation) Act, which received Royal Assent on 15 July 2026. The Act gives powers to bring steel companies into public ownership where this is considered necessary in the public interest. Ministers have framed British Steel as meeting this test because of its role in supplying a foundation industry that supports national infrastructure, the wider economy and defence.

Business Secretary Peter Kyle said he decided to nationalise British Steel to secure steelmaking capability and maintain production in the national interest. The government has indicated it will cover the running costs of the business for the immediate future while longer term plans are developed. Public statements from ministers have linked the intervention to aims of protecting jobs and ensuring reliable domestic steel supply.

The Scunthorpe site employs about 2,700 people and is described as the UK’s last remaining virgin steel producer. Its output is used in industries that rely on UK-made steel and in major infrastructure projects. The government has highlighted the plant’s importance for national security and for maintaining domestic industrial capability.

Public ownership is intended to safeguard thousands of jobs directly and in supply chains linked to the plant. Ministers have presented the nationalisation as a step to stabilise operations after an extended period of uncertainty over the future of the blast furnaces.

The financial position of British Steel has been challenging. Jingye, the former owner, had previously said the business was losing about £700,000 a day. During the period of government intervention at Scunthorpe, the National Audit Office reported that operating the works cost the public sector about £1.3m a day.

Following nationalisation, the government will appoint an independent valuer to assess whether Jingye is entitled to compensation and, if so, at what level. A formal compensation scheme is to be created through regulations expected in autumn 2026. Jingye has begun the process of seeking compensation in relation to the takeover.

Ministers have presented public ownership as a platform to secure the future of steelmaking at Scunthorpe. They have linked the decision to the need to protect a vital supply of steel for the UK economy and critical projects. The government has also stated that maintaining this capacity reduces reliance on international markets for core steel products.

With legal powers in place, operational control established and ownership transferred, the focus now shifts to stabilising production and defining a long term plan for the business. The outcome of the independent valuation and compensation process will be a key next step in resolving the legacy of private ownership.