Keir Starmer has announced government plans to nationalise British Steel.

The necessary legislation will be introduced this week, the prime minister said in a speech on Monday where he defended his leadership following Labour's huge losses in the May elections.

Emergency legislation was brought in last year to stop one of Britain's last major steelmaking plants, in Scunthorpe, from collapsing, bringing it under effective government control and saving thousands of jobs.

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But while the state was controlling the company, rather than its Chinese owner, Jingye, it is not currently state-owned.

Now Sir Keir has said a public interest test to justify full nationalisation "could be met".

"So I can announce that legislation will be brought forward this week to give the government powers, subject to that public interest test, to take full national ownership of British Steel," the prime minister said.

"Public ownership in the public interest, urgent government on the side of working people, making Britain stronger with the hope of industrial renewal."

The test will consider factors including national security, maintaining critical national infrastructure and supporting the economy.

The aim of nationalisation would be to safeguard UK steelmaking capacity and avoid a possible halt of production at Scunthorpe, while the government "considers options" for British Steel, the Department for Business and Trade (DBT) said.

Sir Keir said his government's previous intervention in the Scunthorpe plant was one its "proudest" moments.

A buyer had been sought for British Steel, though politicians in April 2025 admitted it was "likely" to be nationalised.

A government official denied to Sky News in late April this year that legislation to pave the way for the nationalisation of British Steel would be included in the King's Speech.

But on Monday the DBT said: "It has not been possible to agree a commercial sale with the current owner, and government does not believe an agreement could be reached which would deliver acceptable value for money for taxpayers."

If nationalisation efforts are successful, it will be the first time British Steel has been under government control since 1988.

A welcome announcement

The announcement was welcomed unions and trade bodies alike.

Community general secretary Roy Rickhuss and Unite general secretary Sharon Graham said, "nationalising the business at this stage is absolutely vital".

"We fully support this decisive step. British Steel has a bright future, with a world-class, highly skilled workforce making strategically important steels for the UK's rail and infrastructure. The business also has the potential to expand and become a vital part of the supply chain for other UK steel sites."

Trade body UK Steel said, "The decision brings much-needed certainty for British Steel's skilled workforce and customers, while safeguarding a critical foundation of the UK's industrial base at a time of increasing global instability and competitive pressures."

Jingye has been approached for comment.

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