The British government plans to nationalize British Steel

British Prime Minister Keir Starmer announced the government’s intention to pave the way for the possible nationalization of British Steel. He described steel production as the state’s “supreme sovereign capacity,” according to Bloomberg.

The government plans to introduce a bill in Parliament that would grant it the right to take the company under state control, subject to a public interest test. The new powers will be enshrined in legislation set out in the King’s Speech this week and could return British Steel to state ownership for the first time since 1988.

According to Starmer, the government had been negotiating with the company’s current owner regarding its commercial sale, but an agreement could not be reached. The government also concluded that further negotiations would not provide taxpayers with an acceptable value for money.

In April 2025, the British government had already intervened in British Steel’s operations under the Steel Industry (Special Measures) Act to prevent the shutdown of blast furnaces in Scunthorpe. The closure of the plant could have disrupted critical supply chains and jeopardized thousands of jobs. Following this, the state effectively took control of the company.

The government states that the new legislation is intended to provide stability for British Steel’s employees, suppliers, and customers, as well as help preserve the country’s strategic steelmaking capacity. The public interest test will take into account issues of national security, the maintenance of critical infrastructure, and economic resilience.

British Steel remains the last company in the UK capable of producing primary steel using iron ore. Such products are vital for the defense industry and a number of other economic sectors.

The industry association UK Steel supported the government’s initiative, calling the steel industry a strategic national asset.

Starmer emphasized that the government aims not only to preserve production but also to modernize the industry as part of the new Steel Industry Strategy. The document, presented in March, envisions a long-term revival of the sector and meeting up to 50% of the UK’s domestic steel demand through domestic production.

The problems facing the British steel industry have intensified in recent years due to high energy prices and increased tariff pressure following the imposition of U.S. tariffs on steel products.

As reported by GMK Center, in April of last year, the government took control of British Steel to prevent the closure of the last two blast furnaces in the UK. Over nine months (from April 12, 2025, to January 31, 2026), the British government spent £377 million ($499 million) to keep the British Steel plant in Scunthorpe operational. The National Audit Office (NAO) reported that the company’s current operations cost the Department for Business and Trade approximately £1.3 million per day.