The ongoing saga of British Steel highlights strategic mismanagement and a failure on a national level. The company, notably distinct from the once-state-owned giants, is on the verge of closing its Scunthorpe steelworks, a facility that boasts over 160 years of history. With the blast furnaces facing closure imminently, the situation has arisen due to the Chinese owner, Jingye, not reaching an agreement with the government for necessary modernization. The shutdown would be devastating for the local community, risking 3,000 jobs in an already struggling area of England, and it would pose a significant threat to national interests during a pivotal geopolitical time.

Established in 2016, British Steel has experienced significant turmoil, as various private entities have fought to keep it operational. The Scunthorpe plant, which was privatized alongside the entirety of the UK’s steel sector in 1988, has gone through numerous changes in ownership, culminating in a critical situation in 2019 when Greybull Capital, its then-owners, attempted to sell the struggling company amid a lack of interested buyers. Boris Johnson, in his attempts to avoid nationalizing British Steel, made the decision to allow it to be taken over by Chinese interests.

The issues plaguing the Scunthorpe facility, the last of the UK’s primary steelmaking sites, are not recent developments. Like much of Britain’s heavy industry, it lagged in modernization throughout the 20th century.

The remnants of steel production face a harmful mix of tariffs—exemplified by President Trump’s 25 percent steel tariff—increased operational costs, environmental regulations, and competitive pressures from China, which aims to weaken Western capabilities.

Jingye’s recent announcement of a new £20 million steel plant in China, potentially encouraging workers from Scunthorpe, underscores its intentions.

Similar to the situation at the Port Talbot steelworks, which was rescued through a £1.25 billion government initiative aimed at transitioning to low-carbon electric arc furnaces, the government has engaged in discussions with Scunthorpe, yet no agreement has been reached.

Should a deal not materialize in the upcoming days, the blast furnaces face imminent shutdown due to unfulfilled critical orders. While some, including Reform UK, have suggested that immediate nationalization of British Steel is the solution, this approach may be misguided. While state ownership might temporarily safeguard jobs, it lacks the potential for a viable long-term solution. Despite the strategic national significance of steel production, taxpayers should not bear the burden indefinitely.

If Jingye chooses not to continue operations and no viable private sector alternative emerges, a temporary nationalization could be considered as a last resort, provided it is established that this would be a limited-time measure.

In this context, the government should revamp its energy policies to reduce costs to competitive levels. Energy expert Professor Dieter Helm has suggested that energy-intensive industries should receive priority access to cheaper energy on the grid. Additionally, outside the EU’s regulations, the UK has greater flexibility in establishing its industrial energy frameworks, which should be capitalized on.

The government is urged to invest in modernizing the Scunthorpe plant and to commit to identifying a new buyer once it achieves competitiveness.

In these times of uncertainty, British Steel’s survival is crucial. With globalization trending backward and escalating threats to national security, Britain cannot afford to be the only G7 nation devoid of primary steelmaking capabilities.

If the Starmer government is earnest about enhancing Britain’s infrastructure through significant projects, such as the Sizewell C nuclear power station that is finally moving forward, it must take decisive action to protect British Steel. If necessary, intervening may be an unpleasant yet crucial choice.