British Steel is set to return to public ownership as Sir Keir Starmer announced new laws he said will give the Government “options” to protect the industry and Scunthorpe workers.
New powers could be used to nationalise British Steel, 38 years since the firm was first sold off.
It comes a year after the Government used emergency powers to take control of the firm and continue production at the site in Scunthorpe after its owner, Chinese firm Jingye, proposed to close the two blast furnaces.
It has since been in discussions with Jingye but said it could not agree a commercial sale, and that it did not think a deal could be reached that would deliver sufficient value to taxpayers.
The Government said it believes introducing legislation to provide a route to public ownership was the right next step and will enable it to make decisions about the steelmaker’s future.
The legislation, which will be brought forward this week, will be subject to a public interest test, which considers factors including national security, maintaining critical national infrastructure and supporting the economy.
The Prime Minister said: “Strong domestic steel production is vital for our economy, and this legislation would allow us to ensure stability for British Steel’s workers, suppliers and customers and avoid damaging disruption to crucial supply chains, while we consider options for the site’s future.
“The Government recognises that securing the long-term future of the UK’s steel sector relies on both public and private investment for modernisation.”
A steel union welcomed the move to nationalise British Steel which it said will “protect it from foreign owners”.
Charlotte Brumpton-Childs, GMB national secretary, said: “This legislation will cover the whole steel industry – it isn’t specifically for British Steel but it is what will protect it from foreign owners.
“British Steel is a nationally strategic asset, it is right that the government does everything in its power to secure its long-term future.”
Gareth Stace, director-general for trade association UK Steel, welcomed the decision that he said “provides vital certainty for the workforce, the company’s customers and the wider supply chain at a critical moment”.
But he stressed: “Nationalisation is not an end goal.
“This must now be the beginning of a clear and credible long-term plan for British Steel.”
