A "commercial solution" for British Steel is "within reach", says the Government as it looks to nationalise the Chinese-owned business amid fears of an imminent closure. The company, owned by Jingye Group since 2020, revealed its plans to shut two blast furnaces and steelmaking operations in Scunthorpe, putting 2,700 jobs — and many more in the supply chain — at risk after saying it was “no longer financially sustainable”. In fact, the situation is so dire that Jingye warned the company will run out of raw materials within weeks.

Nationalising British Steel is absolutely the right move. Industrial heartlands are Labour’s bread and butter — and Starmer cannot afford to lose them. But let’s be honest about this: British Steel has been struggling for years. Worse still, the UK’s steel industry is facing 25% tariffs on exports to the US. So, the news of an impending deal is very welcome indeed. Labour’s commitment that steelmaking will “continue to be an important part of our economy for years to come" shouldn’t be taken for granted. But neither should it be cause for celebration. It’s time to address some hard truths.

The state has mismanaged steel production for decades. This sorry game of hot potato started when the Wilson government nationalised the industry back in 1967, before it was privatised by Thatcher in 1988. It was briefly re-nationalised in 2020 — and then privatised again when it was sold to its current Chinese owners, Jingye. Now, it may be nationalised all over again. Britain may yet set the record for the most ownership changes without fixing a single underlying problem… so perhaps it’s worth holding off any applause.

The reality is that manufacturing steel has become hopelessly uncompetitive in the UK — mainly due to high labour costs, but even more so because of sky-high energy prices. British industry faces some of the most expensive energy costs in the world, with power costing 74% more than in the US, and 34% more than in France. And we can thank net zero for that.

It’s easy to blame other countries for sabotaging us when we’ve been doing such a great job ourselves. Moreover, with the country closing coal mines, shutting down oil and gas rigs in the North Sea, and imposing green targets on steel mills at lightning speed, it’s hard to see how we could realistically bring energy prices down any time soon.

So yes, the Government may save a few thousand jobs with this latest deal — but only until the next crisis inevitably rolls around. No one seriously thinks reviving British Steel will single-handedly get the economy growing again. However, sinking even more public money into it without meaningful reform would be catastrophically stupid.

On its own, re-nationalising British Steel is a waste of time — and taxpayers' money. The only way to make it a worthwhile task is to drastically drive down our own energy costs. Key industries must stay alive for national security reasons. Not to mention, the carbon footprint of importing steel is far higher than producing it at home (so much for net zero).

Meanwhile, forecasts for the steel industry have been grim for some time. Only a week after the last conventional blast furnace closed at Port Talbot in Wales, the industry leaders warned that the outlook was about to get even worse. There are genuine fears of a flood of cheap Chinese steel once current restrictions are lifted in 2026. And with the US and EU busy imposing tariffs, much of Beijing’s excess supply will be dumped on the few remaining open markets — Britain among the biggest.

If we were to retaliate by imposing tariffs of our own, as many have suggested, it would be just as self-defeating. China is more than capable of hitting back — and not against struggling sectors, but against industries that actually turn a profit. Britain exports around £30 billion a year to China, with trade growing by 10 per cent annually, especially in financial services, intellectual property, education, and manufacturing. Is it really wise to risk thriving industries in order to prop up ones we’ve spent decades running into the ground?

No tariffs will change the damage successive governments have done to our steel industry. It might also be worth mentioning that the first Universal Studios theme park in Europe is to be built in Bedford. Wouldn’t this be a great opportunity for the Government to confirm it will be built using British steel? Starmer must take advantage of this opportunity, and fast.

Investing in steel isn’t as glamorous as throwing money at AI startups or flying taxis. But it is essential. We should be able to produce basic materials domestically — not for vanity, but for survival.

If we don't fix the fundamentals now, no amount of state ownership will stop British Steel from sinking for good. The next time a crisis hits, there may be no steel industry left to save.