The British government will nationalise steelmaker British Steel.
“I can announce that legislation will be tabled this week which will give the government the power to take British Steel into full national ownership if it is in the public interest,“ Prime Minister Keir Starmer said in a speech in London broadcast by Sky News.
British Steel, owned by China's Jingye Group since 2020, has been insolvent since April 2025 due to the threat of closure. The parties had previously failed to reach an agreement on the cost of replacing the company's ageing blast furnaces with electric arc furnaces. According to the Financial Times (FT), the project is valued at 2 billion British pounds (approximately 2.64 billion dollars), of which the government was prepared to contribute 500 million British pounds (approximately 660 million dollars). This is half of Jingye's demands.
According to the FT, the two parties have been negotiating the sale of British Steel for months, but have failed to agree terms. Jingye, which initially demanded compensation of 1 billion British pounds ($1.32 billion), rejected London's offer of 100 million British pounds ($132 million) in February.
„The government is in talks with the owner of British Steel to find a pragmatic and realistic solution for the business on acceptable terms. It has failed to reach an agreement on a commercial sale with the current owner. The government believes that "it will be impossible to reach an agreement that delivers value for money for the taxpayer," Starmer's office said in a statement.
British Steel's Scunthorpe plant in eastern England employs 2,700 people and produces around 95% of the rails for Britain's railways. In total, British Steel, which was state-owned until privatisation in 1988, employs 3,500 people across three plants in the UK.