The UK government is weighing the option of nationalising British Steel as fears grow that the company’s operations in Scunthorpe could collapse within days without immediate support. This comes as the company faces a critical shortage of raw materials essential for its blast furnaces.
Chancellor Rachel Reeves reassured workers at the steelworks, which employs around 2,700 people, that nationalisation is on the table if necessary to secure the plant’s future. Over the weekend, she met with trade unions to discuss the government’s stance, stressing the importance of the steel industry to the UK’s economy and national security.
British Steel, which has been owned by the Chinese company Jingye since 2020, has warned that its two blast furnaces in Scunthorpe are no longer financially sustainable. The company claims it is losing around £700,000 a day, despite having invested over £1.2 billion into maintaining operations. Without further support, the company says it will be unable to continue its production, putting thousands of jobs at risk.
US President Donald Trump’s 25% tariff on steel imports has added to the strain on British Steel, which has struggled to remain profitable. The company rejected the government’s offer of £500 million in support to transition from blast furnaces to electric arc furnaces, which could be a more sustainable and environmentally friendly option.
Prime Minister [Keir] Starmer has echoed Reeves’ commitment to the steel sector, stating that “all options remain on the table” regarding government intervention. Speaking before MPs on Tuesday, Starmer assured that efforts were being made to secure a bright future for the Scunthorpe plant, but he did not provide specific details.
Whitehall officials are concerned that the situation is reaching a critical juncture. British Steel must place an order for fresh raw materials by mid-May to keep its blast furnaces operating. If these orders are not made soon, the company could face irreversible shutdowns, further jeopardising its ability to recover.
The issue has also become a political battleground in the race for Lincolnshire’s first directly elected mayor, with Nigel Farage of Reform UK visiting the steelworks on Tuesday. Farage warned that British Steel had only days to be saved, advocating for nationalisation as the way forward.
Conservative MP for Brigg and Immingham, Martin Vickers, supported this view, suggesting that temporary nationalisation would provide an opportunity to rebuild the steel industry and secure vital contracts, including with Network Rail, which sources 95% of its rail track from Scunthorpe.
However, the Conservative Party has not fully committed to nationalisation. Party leader Kemi Badenoch has stressed that it should be a “last resort,” acknowledging the importance of maintaining steel production for national resilience.
Business Minister Sarah Jones reiterated the government’s preference for British Steel to remain a privately-run business, with financial support to ensure its survival. She called on the company to accept the government’s offer but added that no options were off the table as they work to secure a long-term future for the steelworks.
As the crisis deepens, the outcome of the upcoming mayoral election in Lincolnshire, set for May 1, could have significant implications for the political handling of the steelworks’ future. The Liberal Democrats, Green Party, and an independent candidate are also contesting the election.
