The British Steel crisis has reached a boiling point, with the government's decision to take control of the Scunthorpe plant marking a major intervention in a sector where the UK is uniquely vulnerable. The move aims to protect the 2,700 jobs at stake and preserve primary steel production capacity, which is essential for large-scale infrastructure projects such as buildings and railways. With only 10% of global steel production being produced using virgin material, the loss of this capability would leave the UK as the sole G7 nation without primary steel production – a critical concern for its economic security.
The nationalisation comes after months of government control, despite the plant still being owned by China's Jingye Group. The company acquired British Steel in 2020 following its financial collapse under previous owner Greybull Capital, which had purchased the loss-making business from Tata Steel for £1 in 2016. In late March 2025, Jingye reported that the Scunthorpe plant was losing approximately £700,000 a day due to challenging market conditions, tariffs and lower-carbon production costs.
Recent National Audit Office figures show that the steelworks has been costing the government around £1.3 million daily since March 2026. The broader challenges facing the UK steel industry – including global over-production, declining domestic production, and high operational costs – have exacerbated this situation. The US's imposition of a 25% tariff on imported steel in March 2025 further strained an already pressured market.
The government has sought to downplay concerns that it will retain control of the business indefinitely, citing its need for control during the current crisis. Business Secretary Peter Kyle stressed that nationalisation provides time and flexibility to determine the plant's future while ensuring continued operation of its blast furnaces – essential assets nearing the end of their operational lives.
China's commerce ministry has expressed strong opposition to the UK government's decision, with the question of compensation for Jingye Group set to be decided by an independent assessor. The immediate priority remains preventing the loss of primary steel production capacity in the UK, a capability that would likely have significant economic and strategic implications.
The true cost of maintaining this capability will only become clear once the government's plans are fully outlined – expected in coming weeks. However, the risks associated with losing virgin steel production capacity should not be underestimated: it could leave the UK at the mercy of international markets for large-scale infrastructure projects.