Starmer moves to fully nationalise British Steel after Jingye sale fails, citing national-security need for virgin steel

Prime Minister Sir Keir Starmer told MPs and an audience he addressed in defence of his leadership on Monday that the government would bring forward legislation this week to take "full ownership of British Steel," subject to a public-interest test. "Public ownership is in the public interest," Starmer said, framing the announcement against a backdrop of Labour's poor recent election results and acknowledging that for many voters "change cannot come quickly enough." He said he would prove his "doubters" wrong.

The move is the formal end of the search for a private buyer that began after the government seized operational control of British Steel's Scunthorpe steelworks in April 2025 from Chinese owner Jingye, intervening to stop the blast furnaces from being shut down and to protect 2,700 jobs on site and thousands more in the supply chain. Jingye had claimed Scunthorpe was losing £700,000 a day; the BBC reported the government has since been spending around £1 million a day to keep the loss-making operation running. "Negotiations with Jingye had shown a commercial sale was not possible at this time," Starmer said, because any deal would not deliver acceptable value for money for taxpayers.

The plant supplies rail, construction and automotive customers and is the United Kingdom's only remaining producer of virgin steel — steel made from primary iron rather than recycled scrap — used in large infrastructure projects. Had the furnaces been allowed to go out, restarting them would have been extremely difficult and costly, removing primary steelmaking from the British industrial base. "Steel is strategically important to our economy and our national resilience," Starmer said, with the legislated public-interest test designed around national security, maintaining critical national infrastructure, and supporting the economy.

Business minister Peter Kyle did not rule out private capital re-entering the picture in future. "The government recognises that securing the long-term future of the U.K.'s steel sector relies on both public and private investment for modernization," he said in a statement.

The fiscal exposure is significant. The National Audit Office reported in March that the existing supervision regime had already cost £377 million in operations, wages and raw materials, and warned that if expenditure continued at the same rate it could exceed £1.5 billion by 2028. The spending watchdog now expects total support to reach £615 million ($836 million) by June. The exact cost of full nationalisation has not been disclosed; the legislation is expected to be followed by an independent valuation to determine what, if any, compensation is due to Jingye. The state has owned the company before — the Insolvency Service ran British Steel for nine months at a cost of £600 million after its 2019 collapse — and the firm was last privatised under Margaret Thatcher in 1988.

The industry and the unions welcomed the announcement. Gareth Stace, director-general of UK Steel, said the decision provided "vital certainty" for the workforce and customers and that "maintaining domestic production capability for British Steel's products is essential not only for economic growth but also for our national security and resilience," while warning that nationalisation should be "the beginning of a clear and credible long-term plan for British Steel" rather than an "end goal." Community general secretary Roy Rickhuss and Unite general secretary Sharon Graham, in a joint statement, said they "fully support" the move and called on the government to require UK steel in all government-funded projects. GMB national secretary Charlotte Brumpton-Childs said it was "right the government does everything in its power to secure its long-term future."