The UK government is preparing to fully nationalize British Steel, nearly a year after introducing emergency legislation that enabled it to take operational control of the company, according to a report by the Financial Times.
The initial intervention aimed to safeguard jobs amid concerns over reduced activity at the company’s facilities under its Chinese owner Jingye Group, particularly following the suspension of coke imports.
Mounting losses increase pressure
British Steel continues to generate significant financial losses, with government support reaching £377 million between April 2025 and the end of January.
According to estimates by the National Audit Office, this figure could rise to £615 million by June and potentially reach £1.5 billion by 2028 if current support levels are maintained.
Ownership constraints complicate restructuring
Despite government intervention, Jingye retains economic ownership of British Steel, limiting the authorities’ ability to sell assets or implement long-term strategic decisions.
Sources indicate that full nationalization is now seen as a necessary step to secure the company’s future. The government is currently assessing legislative options to obtain full control, with steel recently designated as a “strategic national asset,” potentially enabling action under national security provisions.
Negotiations between the UK government and Jingye remain ongoing within a limited timeframe. Jingye has reportedly rejected a £100 million offer for the business and previously sought more than £1 billion in compensation. While discussions continue, no agreement has yet been reached and British Steel has not commented.
Industry support and strategic importance
Industry representatives have expressed support for nationalization. UK Steel director-general Gareth Stace stated that such a move would provide greater certainty for employees, customers and the supply chain during a critical period.
British Steel’s Scunthorpe plant operates the UK’s last two blast furnaces and produces around 95 percent of the steel used in domestic rail infrastructure, underlining its strategic importance.
At the same time, interest in acquiring British Steel has emerged. Investor Michael Flacks is reportedly exploring options to integrate the company with other European steel assets, though any transaction remains uncertain given current legal constraints.