What is the cost of the nationalisation of British Steel ? A spoiler alert- no one knows.

 

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🏗️ British Steel: Impact of Government Ownership & Cost Analysis

📌 Background

  • British Steel was acquired by China’s Jingye Group in 2020 for £70 million after falling into insolvency.
  • In April 2025, the UK government passed the Steel Industry (Special Measures) Act, taking operational control of British Steel’s Scunthorpe plant — the last UK site producing virgin steel.
  • Full nationalisation is not yet confirmed, but is considered a “likely option” by ministers.

💸 Cost Before and After Government Intervention

Phase Ownership Annual Losses Daily Losses Government Spend (to date)
Pre-2025 Jingye Group (China) £231–£408 million/year ~£700,000/day £0
Post-April 2025 (Control) UK Government Still loss-making ~£700,000/day continues £100 million (by June 2025)
Future (Nationalisation) TBD TBD TBD Potentially hundreds of millions

🔍 Impact of Government Ownership

1. Industrial Continuity

  • Prevented irreversible closure of blast furnaces — once cooled, they can't be restarted easily.
  • Maintained UK’s ability to produce virgin steel, critical for defence and infrastructure.

2. Strategic Autonomy

  • Avoided becoming the only G7 country without domestic virgin steel production.
  • Reinforced supply chain resilience amid global instability and tariffs.

3. Economic & Social Stability

  • Protected 3,500 jobs in Scunthorpe and surrounding areas.
  • Supported secondary steel manufacturers and military suppliers like Sheffield Forgemasters.

4. Political & Fiscal Debate

  • Labour government framed it as a national interest move.
  • Critics argue it's a costly rescue of a sector contributing just 0.1% to GDP.

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