©Shutterstock / bringing British Steel back into public ownership could safeguard Scunthorpe’s future
The UK is to set out new legislation for bringing British Steel back into public ownership.
Prime Minister Keir Starmer said a commercial sale with Chinese owners Jingye has not been possible and now a public test could be met.
The public interest test considers factors including national security, maintaining critical national infrastructure and supporting the economy. A new bill will be formally introduced to Parliament this week.
British Steel said it would boost national security while giving stability to workers at Scunthorpe, its suppliers and customers.
The government intervened at British Steel in April 2025 under the Steel Industry (Special Measures) Act to ensure uninterrupted steel production and to avoid the sudden closure of the blast furnaces, which would have disrupted supply chains and risked thousands of jobs.
Since then, the government has been in discussions with Jingye to find a pragmatic and realistic solution for the business.
A steel strategy unveiled in March aims to revitalise the UK steel sector and bolster economic resilience by meeting up to 50% of UK steel demand domestically.
Business Secretary Peter Kyle said strong domestic steel production is vital for the UK economy, and this legislation would allow us to ensure stability for British Steel’s workers, suppliers and customers and avoid damaging disruption to crucial supply chains, while it considers options for the site’s future.
The UK steel sector faces existential risks driven by high energy costs, global overcapacity, and the urgent need to decarbonise infrastructure, with production hitting 1930s lows. Key challenges include competing with cheaper, high-emission imports and significant investment needs for greener electric arc furnaces (EAFs).
EAFs consume less energy than traditional methods and can be adjusted to produce various grades of steel and alloy compositions but command high initial investments.
