The public interest test

The Steel Industry (Nationalisation) Act 2026 grants powers to allow the Secretary of State to bring a steel company into public ownership where it is necessary in the public interest. Ministers must carefully consider the public interest test and the likely costs prior to exercising the powers. In the case of British Steel Limited, it has important capability in the production of several essential steel products, which are integral to the construction and maintenance of our critical national infrastructure.

Given the financial challenges the company is facing and has faced for some time, the Government's assessment is that, without taking it into public ownership, where a plan could be developed for a sustainable future, there is a significant risk it would fail and this capability would be lost. Such an outcome would directly disrupt the national rail network, and increase supply chain risk for industry, including major infrastructure projects. It would reduce UK steelmaking capacity to around half of the requirements anticipated by 2035, leaving the UK vulnerable to volatility in international markets and international supply chains. All of these outcomes would be significant and difficult to reverse.

The Government's assessment, based on the relevant factors including cost considerations, is that it is necessary in the public interest to nationalise British Steel Limited. We have not taken this decision lightly but we consider that it is the only viable route forward in these circumstances.

Nationalisation

The Government has nationalised British Steel Limited. Its transfer to public ownership took place this morning, using powers granted by the Steel Industry (Nationalisation) Act 2026.

Steel underpins the growth driving sectors of the Government's Industrial Strategy, and British Steel is among the largest steel producers in the UK. The decisive action taken today secures its immediate future, secures steelmaking in support of our steel strategy, and supports the jobs and steelmaking communities that have underpinned the business for decades.

Nationalisation brings to an end the temporary special measures that were applied under the Steel Industry (Special Measures) Act 2025, which secured the continued operations of Scunthorpe's blast furnaces. The Government would like to place on record its appreciation for the continued dedication and professionalism of the company's workers and management throughout this period of uncertainty.

Nationalisation brings stability to the firm and its workforce, and allows it to look forward, making steel in the national interest owned by the people of this country. All business, jobs, customers and suppliers continue as normal through the transfer into public ownership.

Company governance

British Steel is now a government owned company and public non-financial corporation, with the Secretary of State as its sole shareholder. The Government is putting in place a new Board of Directors who will bring extensive commercial and industrial expertise to support the company and management in stabilising operations and moving the firm on from its current poor commercial position. The Board will prioritise the health and safety of the firm's workforce. The Board will be set clear objectives by Ministers, and will include representatives from UK Government Investments and the Department for Business and Trade to support the Government’s shareholder interests.

The Board will be responsible for developing a plan to transform British Steel into a commercially and environmentally sustainable, steelmaking enterprise, and exploring possible options for private sector investment. The Board will also be tasked with ensuring that the voice of workers is at the heart of the company, working with management, employees and trade unions including worker representation on the board.

Compensation

The Government recognises that this is a significant intervention. The Government has and will always respect and adhere to its legal obligations under domestic and international law.

The former owner of British Steel Limited was Jingye Group. The Government held commercial negotiations with the Group over the potential acquisition by Government of British Steel, but unfortunately it was not possible to reach an agreement that represented value to the taxpayer. The Government's view is that the commercial value today of the business, given its history of loss making and its current poor financial position, is nil.

Following nationalisation, the Steel Industry (Nationalisation) Act 2026 requires the Government to introduce a compensation scheme through regulations. These will be laid and debated by Parliament in the autumn. The regulations will provide for the appointment of an independent third party valuer, who will assess what compensation, if any, is owed to the company. We will abide by the final outcome of this process and pay any compensation accordingly.

The compensation scheme regulations will include a right to appeal the determinations of the independent valuer to the Upper Tribunal. We expect the independent valuer will invite submissions from the affected parties. The Government will publish the final determinations of the independent valuer and lay those before Parliament.

Throughout the negotiations mentioned above, the Government has engaged in good faith.

Financial assistance

The Government understands the interest from Parliamentarians in the public funding offered to British Steel and the plan for its future.

All financial assistance offered to British Steel under the provisions in the Steel Industry (Nationalisation) Act 2026 will be reported in the ordinary way. In addition, the Government will publish on a quarterly basis for at least one year, Written Ministerial Statements to give contemporary information on financial assistance offered. These will replace the Written Ministerial Statements offered pursuant to the Steel Industry (Special Measures) Act 2025, since the special measures applied under that Act have now been superseded by nationalisation.

The Government anticipates that the relevant committees in Parliament will take an interest in the company's annual report and strategic plans, and will be pleased to support its scrutiny of these.

The Government is ambitious for the future of British Steel and committed to working collectively with the workforce to achieve the best possible outcome for the business.

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