Britain Moves To Nationalize Steel Industry

Earlier state ownership, China, Miliband’s net-zero zeal nearly killed it already

Ed Miliband, energy secretary in Britain’s Labour Government, is more responsible than any other politician for Britain’s “net zero” greenhouse gas emissions pledge.

Britain’s Parliament rushed back from Easter recess on Saturday to pass emergency legislation for the state to take control of the UK’s last remaining steel-making blast furnace. It was only the sixth occasion since World War II that the House of Commons has met on a weekend. That is a measure of how urgent Keir Starmer’s Labour government feels action is.

Starmer was fearful that the Chinese owners of the facility in Scunthorpe, about 150 miles north of London, were about to close it. That would put an end to the UK’s ability to make virgin steel — as opposed to recycled steel. The Scunthorpe plant is apparently losing around £700,000 ($915,000) every day. The only other remaining British blast furnace, in Port Talbot in Wales, closed in September 2024. Once such a furnace has gone cold, it is difficult and costly to reignite.

The government’s move amounts to a de facto nationalization of British Steel. Formal state ownership will almost certainly follow. The Labour Government elected last year has already legislated to nationalize the railways and set up a new state-owned renewable energy firm. Now steel will follow.

The 1945 Labour government nationalized steel along with myriad other industries. Steel was one of the very few to be returned to the private sector by the Tories in the 1950s. It was then taken back into state control by Labour in 1967, before being privatized by Mrs. Thatcher in 1988. Now the yoyo continues, but this particular move is not primarily motivated by socialist ideology.

It is rather about strategic interests. Virgin steel is essential for the defense industry, so there is cross-party agreement that action needs to be taken to keep the furnace going and for Britain to continue to have its own supply.

What makes the wrangle over Scunthorpe particularly piquant is that British Steel has been owned since 2020 by Jingye, a Chinese company, after going into insolvency the previous year. Many now question the wisdom of Boris Johnson’s Tory government allowing a mainland Chinese entity to control a plant so crucial to British defense.

Nigel Farage, the UK’s premier Trump fan and leader of the populist Reform UK party, is suggesting the Chinese only bought British Steel to close it down and make the country dependent on the People’s Republic. China produces around a billion tons of steel per year, while its nearest competitor, India, produces only about 150 million tons. The United States lags behind at 80 million, Germany is at slightly under 40 million, with the UK being a positive minnow at 4 million tons.

Britain was once a steel-making powerhouse. Its empire was literally built on steel. What is behind its decline?