The U.K. could fully nationalize struggling steelmaker British Steel under new plans announced by Prime Minister Keir Starmer, who said Monday it had not been possible to sell the Chinese-owned business the government saved from closure last year.
Starmer said his government would bring in new legislation to allow it to take ownership of the steelworks based at Scunthorpe, northern England, ensuring the country does not lose its last remaining primary steelmaking capability.
Any decision will be based on a public interest test being met, which would consider national security, maintaining critical national infrastructure and supporting the economy.
The steelworks supply the rail, construction, and automotive industries, but have in recent years struggled with high energy costs in Britain and a glut of steel in the global market.
"Steel is strategically important to our economy and our national resilience," said Starmer, who was making a speech defending his leadership.
In April 2025, the government seized operational control of British Steel from its Chinese owners, Jingye, to stop the furnaces from being shut and to protect 2,700 jobs at the plant and thousands of related jobs in the supply chain.
In the months since, it has been looking for a private sector partner to secure the future of British Steel, which was privatized under Prime Minister Margaret Thatcher in 1988.
Starmer said negotiations with Jingye had shown a commercial sale was not possible at this time, as any agreement would not deliver acceptable value for money for taxpayers.
Business minister Peter Kyle did not rule out private sector involvement in the future.
"The government recognizes that securing the long-term future of the U.K.’s steel sector relies on both public and private investment for modernization," he said in a statement.
The cost of supporting British Steel is set to reach 615 million pounds ($836 million) by June, according to the country's spending watchdog.
