The government has introduced legislation to bring British Steel into public ownership, after negotiations with the company’s current owner failed to produce terms that ministers considered a responsible use of public money.
The Steel Industry (Nationalisation) Bill had its First Reading on 14 May, with its Second Reading expected in the near future when MPs will have their first opportunity to debate it. The Bill provides the government with powers to nationalise steel companies where a public interest test is met, with provisions for independently assessed compensation where those powers are used.
Parliamentary Under-Secretary of State for Business and Trade Chris McDonald said the speed of the Bill’s introduction demonstrated the government’s seriousness. “Revitalising our steel sector is a top priority for this country, and this is an important first step to safeguard our steelmaking capability which would allow us to secure the future of British Steel and explore possible options to modernise the industry. The fact this is one of the first of all the Bills announced yesterday to start its passage through Parliament shows this government is serious about securing Britain’s domestic steel production, and we’re putting it right at the top of our agenda.”
To date, the government has provided approximately £484 million in working capital for British Steel, covering raw materials and salaries, drawn from existing departmental budgets. Government officials continue to provide on-site support in Scunthorpe to maintain safe operation of the blast furnaces and monitor the use of taxpayer funds.
Gareth Stace, Director General of UK Steel, welcomed the move. “We strongly welcome the Prime Minister’s announcement to legislate for the nationalisation of British Steel. This provides vital certainty for the workforce, the company’s customers and the wider supply chain at a critical moment. Steel is a foundation industry and a recognised strategic national asset. Maintaining domestic production capability for British Steel’s products is essential not only for economic growth but also for our national security and resilience.”
The legislation builds on the government’s Steel Strategy, launched in March, which sets out a long-term plan to sustain 40 to 50 percent of domestic steel demand being met by domestic production, supporting key sectors including defence, construction, and clean energy. Steel supports around 37,000 direct jobs and more than 60,000 jobs across supply chains, though years of global overcapacity, unfair competition, and high operating costs have made it harder for UK-based producers to compete and invest.
British Steel’s Scunthorpe plant is one of the last remaining sites in the UK capable of producing virgin steel from iron ore using blast furnaces, as opposed to electric arc furnaces which recycle scrap metal. That distinction matters for certain defence and infrastructure applications where the specific properties of primary steel are required. The plant’s continued operation has been a source of political and industrial concern for several years, with its Chinese owner Jingye having previously indicated it could not sustain the losses being incurred at the site.
We have sky high energy costs compared to rivals ,hence it’s expensive to make and govt policies will continue that. If you can nationalise steel, why not an oil or gas field and use that supply for lower industrial rates Vs int market?
The prob is , these plants will need a over a billion a year in support, union demands on pay will be met when Govt folds and smoke and mirrors will see such subsidy taken from the future “3.5% budget” which will include other non defence stuff.
Unless there is clear budget dividing lines this will be used for cover other gaps.
You should go and troll somewhere else
If the UK wants to be capable of producing high grade steels for guns/armour/nuclear pressure vessels etc then we need an independent supply of steel, independent of commercial markets as much as possible. If that means public ownership for defence critical materials, then so be it. A commercial profit isn’t necessary when defence critical
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