British Steel: Electric, Coked, Nationalised

In 2024, Alun Davies, a Welsh union rep and Member of the Senedd, commented on the significant job losses following the closure of Port Talbot Steelworks: “It’s like your family getting ripped apart.” I remember, as a student, sitting on a secluded bench when I read the announcement of Port Talbot. I looked up, facing Swansea Bay, and guided my line of sight toward the distant town that made Wales so well-known. 

However, a historic shift has gathered pace for steelworkers in the UK. British Steel Ltd., one of the major steel manufacturers in Europe, was nationalised by Westminster in May 2026.The Steel Industry (Nationalisation) Act, which received Royal Assent since writing this article, will be a step in the right direction and a strong testament to the relationship between corporates and the British public. The Act will protect and secure 69,000 jobs across all British Steel supply chains. The industry is highly interconnected, and the loss of domestic steelmaking could create a ripple effect across secondary and tertiary sectors. Energy Minister Chris McDonald emphasises that public ownership will ensure stability in local engineering firms, construction transport, and manufacturers. Highlighting how valuable steelworkers are in the protection of businesses that rely on them. 

A major talking-point is Scunthorpe’s steelworks, Lincolnshire, which has been owned by the Chinese firm Jingye Group (敬业集团) since March 2020. Just like Port Talbot, Jingye Group aims to switch the coking coal blast furnaces to electric arc furnaces (EAFs) with the intention of producing ‘green steel’. However, by shutting the blast furnaces, it would cost Westminster £700,000 each day. An additional £200 million from Westminster would be needed to keep the blast furnaces operational until the electric alternatives arrive. The goal of aiding the UK’s net-zero carbon emissions would result in the loss of 4,000 jobs in Scunthorpe.

Closing the steelworks would not necessarily cut emissions. It just means we now importdirty, coke coal steel. The PRC accounts for 54% of the global capacity-demand gap, which is displacing other steel-producing countries and flooding international markets with surplus steel. Coupled with rising energy prices, the price of steel is continuing to decrease. The surplus allows countries to choose the alternative cheap and equally-dirty Chinese steel.Reliance on imports erodes British production by lowering profits and reducing competition within British sectors. This is evident by the falling UK steel output from 15 million tonnes in 2000 to 4 million tonnes in 2024. Prioritising market prices has economic and societal costs. 

Westminster’s nationalisation of British Steel is an important turning point in understanding the wrongs of Thatcher-esque laissez-faire policies – particularly on critical infrastructure. Since the British Steel Act of 1988, assets were divvied up among private corporates and equity firms. For British Steel, it was owned by Tata Steel, Greybull Capital, Jingye Group, and now possibly Sev.en Global Investments. The sell-off has led to taxpayers indirectly paying out shareholders and foreign holding companies. Yet, job insecurity creates questions about the integrity of these key sectors. 

This recent decision by Westminster paints a moral picture around the problems between corporate and public interests. Private corporates seem to erode the security of British economic interests by outsourcing and downsizing domestic employment without consulting Westminster. Privatisation bifurcates the relationship between society and private corporates. While nationalisation unites public interests by changing the purpose to national objectives rather than individual stakeholder interests. This type of behaviour forces Westminster to prioritise expensive steel (regionalisation) over cheap imported steel (globalisation) with the intention of protecting a strategic commodity. 

From an ethical perspective, nationalisation removes what are known as externalities. Externalities highlight how private corporates – whether foreign or not – strip assets to reduce profit losses at the cost of people who are not responsible for the decision. Since 1859, Scunthorpe and the surrounding communities has been shaped by the steel industry. But the long-term employment of Scunthorpe was threatened when private corporates decided that those communities do not matter to them. Within Westminster’s democratic framework, the decision to nationalise is essentially framed as a form of collective security. Prioritising the people of Scunthorpe over private corporations. 

How will this affect the British taxpayers? The House of Commons Library reported that Westminster have provided £484 million in working capital to British Steel since drafting its legislation in April 2025. Taxpayers will fund its modernisation, acquisition, fund losses, and possibly its decarbonisation scheme. The biggest hurdle for Westminster is Jingye Group’s compensation, which is in contention of almost £1 billion. If British Steel succeeds, the public may benefit from improved steel supply chains – such as Network Rail and building industries. However, if British Steel continues to lose a profit, taxpayers will bear all the financial risk. It is a huge gamble by Westminster. 

Not long after Westminster’s intervention, the PRC – acting on behalf of Jingye Group – responded by invoking the UK’s obligations under the China-UK Bilateral Investment Treaty. The purpose of the treaty is to protect investments made by private companies from one country to another. Westminster argues that they have a right to expropriate investment into public hands and prioritise British public interests over the protection afforded to private corporations under the treaty. 

The nationalisation of British Steel is proving to be a beneficial start for Andy Burnham’s administration. There is a strong unity among Labour backbench MPs and trade unions on the Act. Alongside Andy Burnham’s £4.7 billion defence investment, I hope this is a prominent lesson that can be extended to wider conversations about the water, gas, and railway industries.