London (AFP) – The British government said Thursday it had taken British Steel into full public ownership to “protect the future of steel production in the UK,” after taking control from Chinese firm Jingye. The country’s last factory that can make steel from scratch faced imminent closure last year after Jingye said the plant in Scunthorpe, northern England, was no longer financially viable. The announcement prompted the government to step in and take control of the company in April 2025.
In May this year, it said it would introduce legislation to nationalise it. “Today’s decision secures the future of steelmaking in the UK, protects skilled jobs, and safeguards a vital national capability,” Prime Minister Keir Starmer said in a statement after the legislation became law Wednesday. Nationalisation brings British Steel back into government ownership for the first time since 1988. London had seen the possible closure of the Scunthorpe site, bought by Jingye in 2020, as a threat to Britain’s long-term economic security, given the decline of the country’s once-robust steel industry.
Business Minister Peter Kyle said British Steel had become “vulnerable” against a background of uncertainty around critical supplies. It had been vital that the government keep the blast furnaces running to protect production, supply chains, and jobs, he said. “If this were to disappear, we would become at the mercy of international markets and supply from other countries for the kind of production that goes into our railways and our construction,” he told Times Radio. “We will now set about making this a resilient business into the future,” he added.
British Steel interim chief executive Allan Bell called the nationalisation “a momentous day for British Steel, and everyone connected with our business.” “Much more than that, it is an historic day for Britain and UK manufacturing — one which safeguards our future and strengthens national security and infrastructure,” he added.
Union leaders welcomed the announcement, crediting ministers with saving the UK steel industry. “But the hard work to keep it alive starts here, beginning with a commitment to public infrastructure projects to buy British,” said Charlotte Brumpton-Childs, national secretary of the GMB union.
It was unclear if Jingye would receive compensation. The firm last month demanded that it be compensated for the losses from investments made before London took over operating the plant. But Kyle suggested Jingye may not receive any recompense. “The legislation that went through parliament …has a mechanism by which an independent assessor will now judge if or if not any compensation is due,” he said, adding there was a “possibility” nothing would be paid at all.
The company said last month it was “demanding that the British government …provide timely, full and effective compensation for Jingye’s investment losses in British Steel.” It said it would “use all legal means” to protect its “legitimate rights.”
© 2024 AFP
