'Likely' British Steel will be nationalised, says business secretary Jonathan Reynolds

15 April 2025, 07:06 | Updated: 16 April 2025, 07:33

Business Secretary Jonathan Reynolds has said it is "likely" that British Steel will be nationalised.

However he also stressed the importance of finding a private sector partner for the business because the scale of capital required for steel transformation was "very significant, even with government support".

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It comes after he appeared to row back on his claim that he would not bring a Chinese company into the steel sector again after ministers had to urgently step in to save the British Steel plant in Scunthorpe.

Mr Reynolds, speaking to reporters in the Lincolnshire town after raw materials arrived to keep the site running, said that nationalisation was the "likely option at this stage".

He added: "What we are now going to do, having secured both control of the site and the supply of raw materials, so the blast furnaces won't close in a matter of days, is work on the future.

"We've got the ownership question, which is pressing.

"I was clear when I gave the speech in parliament - we know there is a limited lifespan of the blast furnaces, and we know that what we need for the future is a private sector partner to come in and work with us on that transformation and co-fund that transformation."

The government passed emergency legislation on Saturday to take over British Steel's Scunthorpe plant, the last in the UK capable of producing virgin steel, after talks with its Chinese owners, Jingye, broke down.

The company recently cancelled orders for supplies of the raw materials needed to keep the blast furnaces running, sparking a race against time to keep it operational.

While those materials have been secured, questions remain about the long-term future of British Steel and whether it will be fully nationalised or the private sector will get involved.

Reynolds rows back

Mr Reynolds earlier said he would look at Chinese firms "in a different way" following the row but did not rule out their involvement completely.

He previously told Sky News' Sunday Morning With Trevor Phillips, that he would not "personally bring a Chinese company into our steel sector" again, describing steel as a "sensitive area" in the UK.

However, industry minister Sarah Jones took a different position on Tuesday morning, telling Sky News she is "not ruling out" the possibility of another Chinese partner.

She said having a pragmatic relationship with Beijing, the world's second-biggest economy, is still important and stringent tests would apply "to a Chinese company as they would to any other company".

Asked for clarity on his position during a visit to the port of Immingham, where materials from two ships were being unloaded and transported to the plant, Mr Reynolds said: "I think we've got to recognise that steel is a sensitive sector.

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"A lot of the issues in the global economy with steel come from production and dumping of steel products... so I think you would look at a Chinese firm in a different way.

"But I'm really keen to stress the action we've taken here was to step in because it was one specific company that I thought wasn't acting in the UK's national interest, and we had to take the action we did."

The materials that arrived on Tuesday, including coking coal and iron, are enough to keep the furnaces running for weeks, the Department for Business and Trade said.

They are needed because if the furnaces cool down too much, the molten iron solidifies and blocks the furnaces, making it extremely difficult and expensive to restart them.

'Chinese ownership truly dreadful'

Opposition politicians have accused China of sabotage to increase reliance on its steel products, and want the country to be prevented from future dealings not only with steel but any UK national infrastructure.

Veteran Tory MP Sir Iain Duncan Smith said the government needs to define which industries are "strategic" - and prevent China from being allowed to invest in such sectors.

Liberal Democrats foreign affairs spokesperson Calum Miller said reverting to Chinese ownership would be like finding "your house ransacked and then leaving your doors unlocked".

Reform UK leader Nigel Farage took the same position, saying the thought the government "could even contemplate another Chinese owner of British steel is truly dreadful", and that he would not have China "in our nuclear program, anywhere near our telecoms or anything else".

"They are not our friends," he added.

Number 10 said on Monday that it was not aware of any "sabotage" at the plant and there is no block on Chinese companies.

The Chinese embassy has urged the British government not to "politicise" the situation by "linking it to security issues", saying it is "an objective fact that British steel companies have generally encountered difficulties in recent years".