British Steel nationalisation is now complete, with the government formally bringing the Scunthorpe steelworks into public ownership after Parliament passed legislation clearing the path for the move. The question of whether it was the right decision is almost secondary at this point. The question that matters now is how much it will cost, and who will end up paying.
The bill is already running well past £377 million
The National Audit Office has put the cost of keeping the Scunthorpe site operational at £377 million over nine months, covering the period from 12 April 2025 to 31 January 2026. Of that, £359 million went directly to British Steel for raw materials, payroll, and other operating costs. A further £15 million was spent on advisers.
Spending is projected to reach £615 million by June 2026. No budget was set at the 2025 Spending Review. No end date has been announced for the intervention. That is not a funding plan; that is an open cheque.
For context, the site was already costing the government roughly £1.3 million a day when the NAO reported on it in March, per its earlier findings. Jingye, the Chinese firm that owned British Steel until today, had previously put the losses at £700,000 a day. The gap between those figures is not trivial, and it illustrates just how opaque the economics of this intervention have been from the start.
Prime Minister Sir Keir Starmer framed the decision in blunt terms. ‘Today’s decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability,’ he said. Business Secretary Peter Kyle added: ‘British Steel now belongs to the British people, and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.’
The roughly 2,700 workers at Scunthorpe will be relieved. The question of whether public ownership is the right long-term vehicle for achieving those goals is a harder one to answer, and the government has not really tried to answer it yet.
Jingye’s compensation claim and the diplomatic headache
Jingye is not walking away quietly. The company is pursuing compensation through the UK-China bilateral investment treaty, and the numbers in play are large. In June 2025, the Guardian reported that Jingye revealed plans to try to recover as much as £711 million in debts owed by British Steel, though people in the industry told the paper the company is seeking more than £1 billion in total.
The government’s position, as stated, is that it may limit or refuse compensation. That posture is legally defensible but diplomatically combustible. Reuters reported that Beijing urged the British government to ‘make decisions prudently’ and to ‘respect the wishes of firms and market principles, and avoid the abuse of administrative coercive measures.’ That is measured language with an unmistakeable edge.
What makes the compensation dispute particularly awkward is what preceded it. The NAO’s investigation report found that the government offered Jingye £500 million on 24 March 2025 to support a conversion of the Scunthorpe blast furnaces to electric arc technology. Jingye declined. Within weeks, the government had seized the site under emergency legislation.
That sequence matters. If Jingye had accepted the offer, there would be no nationalisation and, probably, no diplomatic row. Having rejected it, Jingye now finds itself seeking compensation that may exceed what the government offered in the first place. It is not an obviously winning hand.
The legal basis for the whole intervention rests on the Steel Industry (Special Measures) Act 2025, fast-tracked through both Houses of Parliament on 12 April 2025, the same day the government seized the plant. The House of Lords Library records the debate on the Act, which gives ministers power to direct the use of British Steel assets and to take full control if those directions are not followed, specifically where steel manufacturing capacity would otherwise cease and the government judges continued use to be in the public interest.
Parliament passed further legislation this week extending those powers to full nationalisation. The government had the votes and it used them. Whether it has a credible plan for what comes next, at a projected cost that has already blown past half a billion pounds with no ceiling in sight, is the test that begins now.
