British Steel is taken into public ownership to save UK supply | British Steel

British Steel has been officially taken into public ownership, 15 months after the government intervened to prevent the closure of steelworks in Scunthorpe and the loss of 4,000 jobs.

Keir Starmer said on Thursday it was in the government’s national interest to take over the factory from its Chinese owner Jingye, in one of the last major actions overseen by him as prime minister after the Steel Industry (Nationalisation) Bill received Royal Assent on Wednesday.

The Labor government moved to urgently recall parliament in April last year to prevent the closure of British Steel after Jingye threatened to leave without taking necessary steps to protect the blast furnaces in Lincolnshire. This meant the imminent closure of the UK’s last producer of primary steel derived from iron ore.

The company has since been under the management of government officials, despite Jingye’s anger, but the Chinese company remained the economic owner until Thursday’s expropriation.

The government will now appoint an independent valuer to “assess whether any compensation should be awarded”. Jingye has argued on his UK accounts and in comments on his WeChat social media account that British Steel is a valuable asset worth huge compensation, although he is prepared to let it go and let it fail.

Starmer said: “British Steel is part of the fabric of our nation and the cornerstone of Britain’s industrial strength.

“Today’s decision secures the future of steelmaking in the UK, protects skilled jobs and secures vital national talent. This government will always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on thrive long into the future.”

The government said “despite extensive discussions” a deal could not be reached with Jingye that would “secure the company’s future while providing value to taxpayers”.

Chancellor of the Exchequer Peter Kyle said the government had nationalized Britain’s “only virgin steel producer here in Scunthorpe” because “if that goes away we are at the mercy of international markets and supply from other countries for production for our railways and our works”.

Asked whether blast furnaces will continue to produce virgin steel in the long term, Kyle told Times Radio: “That will be a decision for the business going forward and the decision going forward will be made by the government.”

“But the aim of the steel strategy is to move towards green steel. That’s where the real demand is in the long term, and I want to make sure that this plant is a modern facility that produces the kind of steel that the companies and organizations that buy steel need.”

With Andy Burnham expected to take over as prime minister next week, the nationalization decision will not be the last difficult decision for the government. British Steel’s aging blast furnaces need to be replaced and the decarbonisation plan to install far less polluting electric arc furnaces is likely to cost well over a billion pounds.