Starmer fights for future as he moves to nationalise British Steel

With pressure mounting from Labour MPs and senior ministers over his leadership, Sir Keir Starmer has unveiled plans to nationalise British Steel and keep Scunthorpe’s steelmaking capacity alive

British Steel will be brought back into public ownership nearly four decades after the company was privatised, Sir Keir Starmer announced yesterday.

The Prime Minister said legislation would be brought forward this week that would allow ministers to nationalise the company if a public interest test is met.

He said the move would protect steelmaking at British Steel’s Scunthorpe base and safeguard against sudden halts in production.

British Steel has been operating under government intervention since April 2025, when ministers took over the daily running of the business from its Chinese owner Jingye.

Ministers passed an emergency law to take control amid concerns Jingye planned to close Scunthorpe’s blast furnaces.

Jingye bosses reportedly said the site, which employs 3,500 people, was losing £700,000 day and was no longer financially viable.

Since then, the Government has been in talks with Jingye in an attempt to find what it described as a “pragmatic and realistic solution” for the business.

But ministers said they had been unable to agree a commercial sale with the current owner and did not believe a deal could be reached that offered acceptable value for money for taxpayers.

Sir Keir, who faces an explosive Cabinet meeting this morning after he was reportedly told by ministers to set out a timetable for his resignation, said: “Steel is strategically important to our economy and our national resilience. 

“That’s why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we’re now bringing forward legislation to give us options to protect Britain’s steelmaking capability.

“This is what an activist state looks like – taking decisions in the national interest. This Bill would allow us to take action if we need to, while we continue rebuilding our steel sector.”

The move comes after the launch of the Government’s Steel Strategy in March, which set out plans to revitalise the sector and meet up to 50 per cent of UK steel demand domestically.

The Bill is due to be formally introduced to Parliament this week. Any decision to take British Steel into public ownership would come only after Royal Assent and only if the public interest test were met.

The test would cover issues including national security, critical national infrastructure and support for the wider economy.

Business Secretary Peter Kyle said: “Strong domestic steel production is vital for our 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 we consider options for the site’s future.

“Revitalising our steel sector is a top priority for this government, and bringing forward this legislation would allow us to explore potential future options for British Steel. 

“The government recognises that securing the long-term future of the UK’s steel sector relies on both public and private investment for modernisation.”

READ MORE: Europe Day warning to China as EU says ties must be ‘rebalanced’. In a Europe Day speech in Beijing, EU ambassador Jorge Toledo said Brussels remained committed to working with China on climate and other shared interests, but warned the economic relationship had become “deeply and increasingly unbalanced”.

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