The UK government is exploring the renationalisation of British Steel in a bid to safeguard thousands of jobs at its Scunthorpe site, amid stalled negotiations with its Chinese owner, Jingye, over a £1 billion investment plan.
Business Secretary Jonathan Reynolds is leading discussions with Jingye to determine a funding agreement for the company’s transition to greener steel production. However, with little progress made, sources suggest the government is open to taking over the company, reversing Margaret Thatcher’s 1988 privatisation of the steel industry.
A Whitehall insider noted that nationalisation is a “last resort” due to the substantial financial commitment it would entail. However, unions and industry advocates are urging the government to act decisively to protect the Scunthorpe plant, which employs 4,000 people and remains the UK’s sole producer of steel from iron ore.
British Steel’s blast furnaces at Scunthorpe, which accounted for 0.8% of the UK’s carbon emissions in 2023, are at the heart of the debate. Plans to replace them with an electric arc furnace — crucial to meeting the UK’s net-zero targets by 2050 — have been delayed as Jingye resists committing the necessary investment, leaving the government potentially liable for the full cost.
Renationalisation would not be without challenges. Experts warn that allowing the blast furnaces to cool without proper shutdown measures could render them unusable, while managing operations during a transition to electric furnaces could cost tens of millions.
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