UK Expected to Fully Nationalise British Steel in King's Speech

The Nationalisation Plan

The full nationalisation of British Steel is expected to be announced in the King’s speech this week, a year after the government took over the daily running of the loss-making business from its Chinese owner.

The Background of British Steel

The steelmaker, which employs 3,500 people at its plant in Scunthorpe, came under government control last April amid fears that its owner, Jingye, was planning to shut down the site.

British Steel operates the last two remaining blast furnaces in the UK, but its economic control remains with the Chinese company, which bought it out of insolvency in early 2020.

The Financial Implications

By the end of January this year, the cost of keeping British Steel running had risen to £377m, and could exceed £1.5bn by 2028 if it continues at its current rate, according to estimates from the National Audit Office.

The Impact on the Steel Industry

The company has attracted interest from potential buyers, with the Miami-based retail investor Michael Flacks having declared himself “very” interested in buying it in February.

Earlier this month, Sev.en Global Investments, the owner of the UK’s largest electric steelworks, suggested the government should find a single buyer for British Steel and Speciality Steel UK, a move that would create the country’s biggest steelmaker.

The Future Outlook

Although the sector is much smaller than its peak in the 1970s, British Steel is still an important employer in Scunthorpe and supports tens of thousands of jobs in the extended steel supply chain. Network Rail sources about 95% of its track from the plant.