British Steel nationalisation plans: Legal comment
British Steel appears set to move back into public ownership after the Prime Minister today announced new forthcoming laws.
Sir Keir Starmer said primary legislation will give the government powers the option to nationalise British Steel, subject to public interest tests, will be included in the King’s Speech on Wednesday.
He said it would boost national security while providing stability to workers at the company’s Scunthorpe factory, as well as suppliers and customers.
The government intervened at British Steel in April 2025 under the Steel Industry (Special Measures) Act to ensure uninterrupted steel production and to avoid the sudden closure of the blast furnaces. Since then, it has been unable to agree a commercial sale with the current owner.
Peter Ware, Partner and Head of Government at UK and Ireland law firm Browne Jacobson, said: “This is one of the most significant acts of state intervention in British industry in decades. From a legal perspective, it raises substantial questions that will need careful navigation.
“Full nationalisation will require primary legislation addressing compensation for the former owner, governance structures and the transfer of employees, including TUPE-equivalent protections and pension obligations.
“The compensation question is particularly complex: with the government having already committed over £400m in working capital, Jingye's scope to claim substantial compensation may be limited, but legal challenges under bilateral investment treaties or domestic property rights principles cannot be ruled out.
“Given there will be some financial exposure for the taxpayer, the governance model chosen will be critical to the venture's long-term success – whether that is a public corporation, arm's-length company or a vehicle designed to attract private co-investment.
“This is also a moment with wider implications. Businesses, investors and public sector bodies operating in strategically sensitive sectors should take note – state intervention of this kind is very much back on the table.”
Contact
Dan Robinson
PR & Communications Manager
Dan.Robinson@brownejacobson.com
+44 0330 045 1072
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