UK to take full ownership of British Steel

The UK is to take full ownership of British Steel, Prime Minister Sir Keir Starmer said on Monday as he set out why the Labour Party should back him as leader as pressure rises for him to quit. The government last year used emergency legislation to take control of the steelworks amid fears that Chinese owner Jingye was running down its site in Scunthorpe after halting coke imports. Starmer said the government and Jingye had not been able to agree a commercial sale. "So I can announce that legislation will be brought forward this week to give the government powers, subject to that public interest test, to take full national ownership of British Steel." Jingye has continued to have economic control of British Steel, meaning the government has been legally unable to sell all or part of British Steel or make decisions about its strategy. Jingye had initially demanded more than £1bn in compensation from the UK government and rejected a £100mn offer in February. The government said it now "does not believe an agreement could be reached which would deliver acceptable value for money for taxpayers". The nationalisation will be included in the King's Speech on Wednesday alongside new laws to bolster Britain's relationship with the EU and impose an organisational shake-up in the NHS. Starmer made the pledge on Monday as part of efforts to save his ailing premiership after Labour's worst local election results in history last week. The FT reported in March that the government was considering how to use legislation to take legal control of British Steel. Starmer said on Monday: "Steel is strategically important to our economy and our national resilience. That's why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we're now bringing forward legislation to give us options to protect Britain's steelmaking capability. "This is what an activist state looks like, taking decisions in the national interest." Unions have welcomed a nationalisation of British Steel for giving clarity to workers who have been in limbo for more than one year. Charlotte Brumpton-Childs, GMB national secretary, said: "Unions have long known Jingye will not negotiate in good faith. "This legislation will cover the whole steel industry -- it isn't specifically for British Steel but it is what will protect it from foreign owners. British Steel is a nationally strategic asset, it is right the government does everything in its power to secure its long-term future." Heavily lossmaking British Steel is costing the government about £1.3mn a day to run, according to the National Audit Office. It has already cost £377mn between last April and the end of January to keep the business operating. However, the site is seen as important to UK supply chains as it is home to Britain's last two operating blast furnaces and produces 95 per cent of the steel used on UK rail tracks. By nationalising British Steel, the government will now be able to take control of company strategy and press ahead with a shift from using blast furnaces to a greener electric arc furnace. Business secretary Peter Kyle said: "Revitalising our steel sector is a top priority for this government, and bringing forward this legislation would allow us to explore potential future options for British Steel. The government recognises that securing the long-term future of the UK's steel sector relies on both public and private investment for modernisation."