King's Speech 2026: Steel Industry (Nationalisation) Bill

Steel Industry (Nationalisation) Bill

• The UK steel industry is key to this country's economic growth. It supports around 37,000 direct jobs and over 60,000 in supply chains. But challenges of global overcapacity compounded by high operating costs have made it harder for UK-based steel companies to compete.

• Safeguarding the long-term future of Britain's steel capability and capacity is in our national interest. That requires us to take this urgent and extraordinary action to introduce the Steel Industry (Nationalisation) Bill now. This legislation provides a route for the Government to nationalise steel companies or their operations, such as British Steel, provided the public interest test in the legislation is met.

What does the Bill do?

• The Government has set out a Steel Strategy - a long-term plan to fight to revitalise the UK steel sector, restore domestic production to sustainable levels and secure the industry's role in supporting critical sectors such as national infrastructure, defence, clean energy and supporting the economy of the UK.

• The Government intervened in April 2025 by introducing the Steel Industry (Special Measures) Act 2025 to avoid a sudden and disorderly halt of steel making at British Steel Ltd. (BSL), following actions by BSL's owner which put steelmaking at the company in serious jeopardy. This would have been unacceptable given the importance of this plant for the UK economy and critical national infrastructure.

• The Government wants to see BSL play a major role in a revitalised steel sector, but this will not be possible under its current ownership. Bringing BSL under national ownership would allow the Government to explore what future opportunities there may be for BSL, including a transition to decarbonised steelmaking and to provide stability for BSL's workers, suppliers and customers.

• The Government has engaged in negotiations with the current owner of BSL on a commercial sale, but it has not been possible to agree acceptable terms which would represent a responsible use of public money. As a result, the Government believes it is in the public interest to bring forward primary

legislation which will give the Government the powers to nationalise BSL. This is a measure of last resort. Any nationalisation of BSL would be subject to the public interest test being met before using the powers under the Bill.

• The Bill will:

Safeguard the future of the UK steel industry by providing the Secretary of State powers to transfer ownership of steel undertakings (either by a share    or    property    transfer)    to    public    ownership.

Establish a public interest test that must be met for the Government to exercise transfer powers in respect of a steel undertaking.

Introduce compensation provisions for steel undertakings in respect of which SoS's transfer powers have been used.

Territorial extent and application

• The Bill will extend and apply to the whole of the UK.

Key facts

• Global competition, high costs and underinvestment in the steel sector have led to plant closures and job losses – the UK steel industry supports 37,000 direct jobs and a further 60,000 in the supply chain, however employment in the industry was at 323,000 in 1971, a decline of nearly 90 per cent.

• Steel output has fallen sharply in recent years. UK production has dropped below  4  million  tonnes  in  2024  –  the  lowest  in  decades.

• The UK now produces less than 0.3 per cent of global steel. It is a net importer,  with  imports  covering  about  60  per  cent  of  demand.

• The steel sector underpins other critical sectors such as construction, defence, and clean energy – the UK steel industry contributed £1.7 billion to the economy in 2024.

• Excess steel from subsidies produced in world markets drives down prices and makes it harder for UK firms to compete and invest.

• The sector is transitioning to greener production. The Government has committed up to £2.5 billion to support modernisation and decarbonisation.

• Director General of UK Steel, Gareth Stace, said “We strongly welcome the prime minister's announcement to legislate for the nationalisation of British Steel. This provides vital certainty for the workforce, the company's customers and the wider supply chain at a critical moment. Steel is a foundation industry and a recognised strategic national asset. Maintaining domestic production capability for British Steel's products is essential not only for economic growth but also for our national security and resilience.”