British Steel on Verge of Full Nationalisation as Government Deadline Looms
The UK government is on the verge of fully nationalising British Steel, with full economic control expected to transfer from its Chinese owner, Jingye, within weeks, as negotiations over the future of the country's last remaining blast furnaces reach a critical juncture.
The move would complete a process that began in April 2025, when the government used emergency legislation — the Steel Industry (Special Measures) Act 2025 — to take over the daily running of the loss-making steelmaker and prevent the closure of its Scunthorpe plant.
Background
Jingye, the Chinese company that acquired British Steel out of insolvency in early 2020, has retained economic ownership even as the UK government has managed day-to-day operations. The government reportedly offered £100 million to Jingye for the business, but this was rejected; Jingye had originally demanded over £1 billion. Ministers are now considering setting a formal deadline for a deal to be reached.
Between April 2025 and January 2026, the government provided approximately £377 million in working capital, classified as a loan, to keep the business running. By June 2026, this spending is projected to reach £615 million, with the National Audit Office warning that costs could exceed £1.5 billion by 2028 if current rates continue.
Key Developments
Ministers have recently designated the steel industry as vital to national security, which could provide a legal basis for full nationalisation. The government has also announced plans to double tariffs on imported steel and cut import quotas, particularly targeting cheap Chinese imports, to protect the domestic industry.
UK Steel, the trade body, strongly supports nationalisation, emphasising the importance of maintaining domestic steel production for economic growth, national security, and resilience. The government aims to increase the proportion of steel used in the UK that is domestically produced from 30% to 50%.
Why It Matters
The Scunthorpe plant operates the UK's last two blast furnaces, making it the only facility capable of producing virgin steel from raw materials in Britain. Its closure would end primary steelmaking in the UK, with significant implications for national security, manufacturing supply chains, and thousands of jobs in the region.
A full nationalisation would enable the government to sell the company to another private investor — a step currently hindered by Jingye's ownership. Any new owner would need to invest hundreds of millions of pounds to replace the polluting blast furnaces with electric arc furnaces as part of a transition to low-carbon steelmaking.
What's Next
The government is expected to set a deadline for Jingye to reach a deal in the coming days. Several potential buyers have expressed early interest in acquiring the business.
Full details at The Guardian.
