but what's the benefit of the state owning it, compared to the state auctioning off subsidies to one company (or multiple) to deliver the desired activitiy at lowest cost? Seems more efficient to me (as long as there are still enough companies competing, which might be debatable for steel in UK)
You could argue for either model, the benefit of direct ownership is that you get an upside if you do manage to turn a profit
Also (arguably anyway) subsidies more easily create perverse behaviour in response to the perverse incentives they inherently have when the state doesn't own the industry directly.