(July 16): British Steel was taken into public ownership, a move that could be a harbinger of further nationalisations under incoming Prime Minister Andy Burnham’s more interventionist industrial policy.
Keir Starmer’s replacement, the former Manchester mayor, has spoken about bringing more industries back into state ownership, potentially including utilities and trains.
Loss-making British Steel’s move to public ownership is the culmination of a process that began last year, when the government took effective control of the company to prevent its two furnaces grinding to a halt. Legislation allowing full nationalisation to proceed was not passed until May 2026.
Another key upcoming test for Burnham will be heavily indebted Thames Water. The company, which supplies 16 million customers in London and the surrounding areas, is in talks with creditors and the regulator over a rescue deal, and could face a form of temporary nationalisation if that process fails.
Outgoing Prime Minister Starmer said on Thursday that the British Steel “decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability”.
The company said public ownership is “necessary to protect the UK’s national interest”.
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Allowing the British Steel plant in Scunthorpe to shut would have left the UK as the only nation in the Group of Seven without the ability to make steel from scratch, fully dependent on imports.
“We need that virgin steel production because if this were to disappear, we would become at the mercy of international markets and supply from other countries,” Business and Trade Secretary Peter Kyle said in an interview with Times Radio.
A wave of state protectionism is rolling over the steel sector worldwide, with governments scrambling to protect the industry from cheap exports from China’s one billion ton-a-year sector. The European Union, US and India have all hiked trade barriers in recent years, with the UK recently following suit.
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Still, the takeover of British Steel marks a major milestone in its broader shift away from the laissez-faire approach that shaped decades of UK industrial policy.
The government now faces the task of running the unprofitable steelmaker, which has significant exposure to volatile raw-material costs, ageing assets and high energy prices. The state spent more than £1 million (US$1.4 million or $1.7 million) a day on the plant in the months after taking it over in April 2025, the National Audit Office said in a report.
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