British Steel has been brought under state ownership after the steelmaker's nationalisation passed a public interest test. The Prime Minister declared the move "secured the future of British steelmaking", following the introduction of new legislation that made it simpler for ministers to forcibly nationalise steel companies.
New Leadership and Job Protection
The Scunthorpe-based steelmaker has appointed a revamped leadership team tasked with "stabilising the business and developing a commercially sustainable" future, the business department confirmed on Thursday. It added that bringing the plant into public ownership would safeguard thousands of jobs both at the steelmaker and throughout its supply chain, as well as preserving one of the UK's last remaining virgin steel plants.
"British Steel is one of the nation's biggest steel producers, and I've made the decision to nationalise the business to secure steelmaking capability and maintain production in the national interest," said Business Secretary Peter Kyle, as reported by City AM.
Background to Nationalisation
The move comes after a turbulent year for the UK's largest steel producer. Negotiations over a funding package between ministers and former owner Jingye collapsed last year, prompting the Chinese firm to effectively abandon the plant. In an extraordinary Saturday sitting, MPs voted to bring the plant into public control, a move they argued would prevent the closure of Britain's last two arc furnaces while helping to protect thousands of livelihoods.
The government said that despite "extensive discussions" during the intervening period, no agreement had been reached with Jingye regarding the plant's future, enabling it to utilise its new powers to bring the facility under state control unilaterally.
Compensation and Future Plans
Under the fresh legislation, ministers have the authority to nationalise a steelworks deemed essential to the nation's future, provided it satisfies a public interest test. The business department confirmed on Thursday that this test had been satisfied, and that an independent valuer would now be appointed to assess whether Jingye is entitled to any compensation.
British Steel interim chief executive Allan Bell described the firm's nationalisation as a "momentous day" for the company. "Much more than that, it is an historic day for Britain and UK manufacturing," he added, "one which safeguards our future and strengthens the national security and infrastructure."
Jingye has been approached for comment.
