The government confirmed on Thursday that British Steel has been taken into public ownership, ending months of uncertainty over the future of the Scunthorpe works and its roughly 2,700 employees.
Keir Starmer called it a move that “secures the future of steelmaking in the UK,” but the decision has reopened a sharper argument about the price, and the wisdom, of state ownership.
Badenoch: “This Bill Is Not Right”
Conservative leader Kemi Badenoch has been the most consistent critic of the move, and her objections set the terms of the opposition case. Speaking ahead of the bill’s passage, she argued that Labour’s nationalisation amounted to a repeat of failures from the 1970s, when state control of British Steel produced enormous losses. She has pointed out that the government’s own record so far, since taking direction of the Scunthorpe plant last year, already runs to hundreds of millions of pounds in support, a cost she says will only grow under full public ownership.
Badenoch’s central complaint is not that steel doesn’t matter, but that nationalisation is the wrong tool. Her preferred alternative, she has said, is a negotiated private sector deal of the kind the Conservatives struck with Tata Steel at Port Talbot in 2023, when the previous government provided financial support to keep the plant running rather than take it over outright.
She has also broadened the critique beyond steel, casting Starmer, Reform’s Nigel Farage, Andy Burnham, and Green leader Zack Polanski as united by an instinct for nationalisation that she argues will leave taxpayers, not politicians, carrying the risk. Her broader argument is that the state is “too big” and “too slow” already, and that growth comes from private enterprise being left alone rather than propped up or absorbed by government.
What the Government Says
Ministers have defended the move on national security and industrial capacity grounds rather than purely commercial ones. Business Secretary Peter Kyle has argued the alternative was letting the business collapse entirely, which would leave the UK unable to produce virgin steel and dependent on foreign supply chains. The government has framed the decision as protecting a “foundation industry” tied to defence, infrastructure and the wider economy, and says an independent assessor will determine what compensation, if any, is owed to British Steel’s outgoing Chinese owner, Jingye Group.
Other Parties: A Mixed Picture
The reaction elsewhere in Westminster doesn’t split along a simple left-right line.
Reform UK has actually welcomed the steel decision specifically. Reform’s business spokesman Richard Tice called it the right call and said the party had pushed for it for years, while urging ministers to go further and rebuild the blast furnaces properly. Reform has, however, been inconsistent on nationalisation more broadly, having dropped an earlier pledge to bring water and energy firms into public ownership.
The Green Party has been the most enthusiastic about public ownership as a principle, with leader Zack Polanski pointing to Thames Water’s mounting debt as evidence that privatisation, not nationalisation, has been the real experiment gone wrong.
The Wider Pattern: Rail as a Test Case
Steel is not Labour’s only nationalisation project. The government is also renationalising the railways, bringing train operating companies into public ownership as their contracts expire, with the full Great British Railways structure due by 2027. Early results are mixed rather than clearly vindicating either side of the argument. Regulated fares have been frozen for the first time in three decades, but analysts have cautioned that ticket prices overall are not expected to fall, and some fare simplification pilots have actually raised costs on certain routes. Badenoch has cited the rail programme as part of the same pattern she opposes on steel.
It is also worth noting that state intervention in steel is not a purely Labour habit. The previous Conservative government nationalised the loss-making Sheffield Forgemasters in 2021 on national security grounds, and gave Tata Steel a £500 million bailout at Port Talbot in 2023, though it stopped short of full nationalisation in that case.
The Bigger Question
Whether nationalisation “works” is not something that can be settled by pointing to a single case, and reasonable people disagree sharply on it. Supporters point to frozen rail fares and the removal of a Chinese-owned firm accused of running down the Scunthorpe plant. Critics, led by Badenoch, point to the historical record of state-run steel under Attlee in 1949 and Wilson in 1967, both of which ended in heavy losses and political interference, and argue taxpayers are being asked to underwrite a business model that private ownership has already tried and struggled with.
What is clear is that British Steel now joins the railways as a live test of Labour’s appetite for public ownership, and both Badenoch and her critics will be watching closely.
