British Steel to be nationalised – but at what cost?published at 13:18 BST
Simon Jack
Business editor
Our editors have been analysing the announcements in the King’s Speech this morning – over the next few posts we’ll bring you their expert reaction to the plans.
The King’s Speech contained emergency legislation to nationalise British Steel, which is based in Scunthorpe, employs 2,700 people and owns the UK’s last remaining blast furnaces.
They enable the UK – like other developed economies – to produce steel from scratch.
The prime minister recently described steel as “the ultimate sovereign capability” and said public ownership was in the public interest.
The government took operating control of the Scunthorpe based business in April last year, to prevent the furnaces running out of fuel. Chinese owner Jingye seemed to be reluctant to ensure their continued operations, as negotiations with the Chinese company to invest in new operations alongside government support had hit a dead end.
Attempts to find a new buyer for the plant were frustrated by Jinye’s continued ownership and removing them as owners will allow that process to proceed.
This is not the first time the government has effectively taken over British Steel. The Insolvency Service – a branch of the Department of Business and Trade – ran the company and underwrote its losses after it collapsed in 2019.
That nine-month period cost the tax payer £600m while the current government supervision regime has cost nearly £400,.
Nationalising the business was a key announcement of a recent speech by Starmer, but recent history suggests that this politically charged move could come with significant – and with no new buyer lined up – open-ended economic cost.
However, Unions and the UK Steel trade body welcomed the news as decisive action to protect a vital industry.
