Why did the government take over British Steel – and was it a good idea?

The government has stepped in to take control, but not ownership, of the floundering British Steel company, citing national security and other factors. Does the decision make sense?

Britain's Chancellor of the Exchequer Rachel Reeves during her visit to the British Steel site in Scunthorpe
(Image credit:  DANNY LAWSON/POOL/AFP via Getty Images)

Has British Steel been nationalised?

Not quite. Earlier this month, the government passed an emergency law to take operational control of the company, but it doesn’t actually own it. That’s an uneasy, temporary solution to a chronic problem, and it’s not yet clear whether the state will find a willing buyer – or at least someone who’ll pay a nominal sum to take on the bulk of British Steel’s debt pile and operating losses – or whether full state ownership beckons. The government stepped in to save 3,500 jobs in Scunthorpe, and because the Chinese-owned British Steel plant there is the last remaining manufacturer of “virgin” steel in the UK (meaning steel made from scratch from raw materials, as opposed to steel made from recycled scrap). According to Jonathan Reynolds, the business secretary, “it’s never been more important” to build domestic resilience in supply chains, adding that it was “in the national interest to help secure UK steel-making for the future”. Eventual full nationalisation is the “likely option”, says Reynolds.

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.