Steel Industry (Nationalisation) Bill
Thursday 21st May 2026
(2 weeks, 6 days ago)
Commons ChamberRead Full debate Steel Industry (Nationalisation) Bill 2026-27 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:59 - The House divided: - Ayes: 68 / Noes: 242 - Question accordingly negatived.
Madam Deputy Speaker (Judith Cummins)
The reasoned amendment in the name of the Leader of the Opposition has been selected.
The Secretary of State for Business and Trade (Peter Kyle)
I beg to move, That the Bill be now read a Second time.
For generations, the steel industry has stood at the very heart of our national story. From the furnaces of Sheffield to the docks of Port Talbot, from Scunthorpe to Redcar, steel forged not only the railways, ships, bridges and factories that powered the industrial revolution, it built communities, livelihoods and a sense of pride in Britain. Steel made in Britain built our Navy, helped to defend our freedoms in times of war and laid the foundations for modern infrastructure right around the world. When people speak of the United Kingdom becoming a great industrial nation, they speak of the skill, resilience and determination of the steelworkers who helped to shape that destiny by the fruits of their labour.
The decline of the steel industry destroyed jobs, diminished skills and damaged communities, but it never, ever diluted the pride, resilience and determination of those working people. Today, this Steel Industry (Nationalisation) Bill repays, in part, the debt that we owe Britain’s steel communities. Steel is integral to the key growth-driving sectors of our industrial strategy: to advanced manufacturing and the car industry; to clean energy, in our wind turbines and our grid infrastructure; and to security and defence, in fighter jets, battleships and submarines. It is essential to this Government’s growth mission to create a strong, resilient economy delivering for working people. That is why Britain’s steel sector accounts for thousands of jobs, right across the country.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
For the reasons that the Secretary of State has mentioned, the nationalisation of the steel industry is a noble endeavour, with which many of us from across the House will agree, but there are people in Wales pointing to the fact that, despite there being legislation, Port Talbot has lost thousands of jobs. Does he recognise the feelings that remain in Wales because the option of nationalisation by this Government was not on the table at the time?
Peter Kyle
As the right hon. Lady knows, I have been to Port Talbot and I have launched a steel strategy since this Government came into office. The vast majority of the decline that she describes happened under the previous Administration. We are cleaning up the mess on a whole bunch of fronts and in different areas of our public life. This Government have invested £500 million into that plant, and we have launched a steel strategy that I believe will give it a fruitful and prosperous future. We are doing what it takes to be the partner needed in these times.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
The nationalisation of the steel industry explicitly links our domestic and international policies. It demonstrates the need for us to go out and champion our steel sector by filling its order books, as we have been able to do because of the wonderful trade deal created with Nigeria, which is expanding its ports and railways, that has been achieved by this Government. That is the type of work that I am doing in southern Africa, and it is the type of work that we should all be going out to do on behalf of our country and our growth agenda.
Peter Kyle
The work that my hon. Friend is doing is incredibly important to fulfilling the mission, and the possibility that the British steel sector has in the 2020s and going forward. That is the purpose of having a strategy where we invest and modernise, and then at times we need to protect as well. These are the things that we are doing to deliver a long-term, sustainable and global future for Britain’s steel industry.
Kit Malthouse (North West Hampshire) (Con)
I have two quick questions for the Secretary of State. First, if the Bill passes, how are the global competitors to British forged steel likely to react? Secondly, if our steel becomes more expensive than the global market norm, what choice will manufacturers in the UK be faced with about where to base their manufacturing?
Peter Kyle
I am not sure why the right hon. Gentleman would think that British steel would be more expensive as a result, but let us take one step back: if we did not protect, there would be no steel sector to export in the first place. That is why I took the decision to invest, to modernise and to protect where needed. If this Government had continued on the same trajectory that we inherited from the previous Government, I would fear for any steelworks at all being capable to export, let alone producing domestic supply as well. This is the future that we are now creating.
Dr Andrew Murrison (South West Wiltshire) (Con)
On that point, will the Secretary of State give way?
Peter Kyle
I am going to make some progress because the debate has been cut short. I have taken a few interventions and I am sure I will find time for the right hon. Gentleman to intervene later in my opening remarks, but first let me make a bit of progress.
I have pledged to ensure that Britain retains its capacity and capability to manufacture steel. It is a commitment that I have made to hon. Members in this House and it is my commitment to the steel communities of this country. This House acted last year to support British Steel, which is one of the country’s most vital steel firms. We recalled Parliament to pass the Steel Industry (Special Measures) Act 2025 so that the company’s blast furnaces could remain lit and its workforce could remain protected. I am grateful to my predecessor, my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), for his leadership during that time, and I am grateful to the House for supporting that vital piece of legislation.
When we intervened then, we were certain that there was a future for British Steel. Our determination now is that the future may best be served by full public ownership in the national interest, not because of ideology, but because of practical pragmatism. Public ownership would allow us to explore future opportunities for the company and to retain its vital resource as a critical piece of our national infrastructure—one that is essential to our economic resilience. I want British Steel to play its part in driving up our domestic steel production to ensure that 50% of the steel used in this country is made in this country.
Dr Murrison
In keeping open the options that the Secretary of State hints at, has he had any discussions with his colleagues in the Ministry of Defence? At least for the foreseeable future, there will always be a need for virgin steel for certain defence applications.
Peter Kyle
The right hon. Gentleman raises a really important point. This Government are determined to make, produce and use more steel from the British sector in lots of different areas of the economy, and we want to ensure that we are using Government spending and procurement in driving up steel production in the UK.
I had the privilege to visit the Agratas gigafactory in Somerset. It is in a different sector, but it is using 231 tonnes of British steel in its production. That is using an amount of Government investment as well, so it has Government investment and private sector investment and is using British steel. That shows that when we align our priorities, we can drive up demand for British steel.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I want to ask the Secretary of State about the breadth of the Bill. Clause 1 makes it clear that a “steel undertaking” includes those businesses that have the “manufacture or processing” of iron or steel as part of their operations. Is there any lower threshold to that? Is a business that has only 1% of its operations in iron or steel liable to nationalisation under the Bill?
Under clause 2, the Secretary of State is entitled to determine the public interest and can nationalise if it would support
“the economy of the United Kingdom or any part of the United Kingdom.”
I have the same question: is there any lower threshold? Would the interests of one town where a steel facility is located be sufficient to justify the nationalisation of an entire company?
Peter Kyle
The public value test is a high test, and I think the right hon. and learned Gentleman will agree that that is the case on seeing and reading the legislation, as he has done.
I have set the bar high enough that this power would be triggered only in extraordinary circumstances. These are things that we can test in Committee in the coming days—I believe that will be next week. [Interruption.] It will be in the next sitting week, when we return from recess. Do not worry; we are not recalling Parliament again. I will address this matter a bit more in my speech. This power will not be used routinely; it is a specific power, and the test for it will be high.
Peter Kyle
I will make some progress.
To that end, we began negotiations in good faith with Jingye, the owner of British Steel, to see if a commercial sale was viable, but that did not prove to be possible. We could not agree terms that would have safeguarded simultaneously the integrity of the business and the interests of the taxpayer. That is why the Prime Minister announced the Government’s intention to bring British Steel into public ownership, subject to the public interest test being met at the time of that decision. That is why we need to pass the Steel Industry (Nationalisation) Bill now, to give us the power to make that possible.
Let me be clear to the House. In answer to the question from the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright), the powers given to the Government by the legislation cannot be exercised without due caution and proper care. These powers are bold, but they are not boundless. They can be used only where there is a clear public interest and where they will be needed to safeguard British steelmaking capability. The Bill does not nationalise British Steel in and of itself, but it grants the Government powers to do so if considered necessary. That is the scope of the legislation we are debating today.
Sir Jeremy Wright
The Secretary of State is being generous. I take him at his word as I do not think that he intends to use this legislation otherwise than appropriately. However, there is an important point to be made about the language in the Bill as it stands. As he knows, the public interest test is defined in certain ways in clause 2, which states that the test “is not limited to” the grounds listed, so there could be other grounds on which the public interest might be met. I have already pointed out one aspect in which the public interest test is relatively broad. I invite the Secretary of State to look again at the public interest test to make sure that we do not just rely on his word, which I do, but that we are confident that succeeding Secretaries of State cannot misuse this power to nationalise too broadly.
Peter Kyle
I am grateful for the right hon. and learned Gentleman’s intervention. I knew when I was bringing these powers in and working through the legislation that they would be an important part of the Bill and rightly the subject of scrutiny. There will be significant time in Committee of the whole House for Members to scrutinise the legislation. We are modelling this Bill on the Banking Act 2009, which has worked effectively. In that circumstance, the powers were used during the financial crisis in extremis, and those powers, on which we are modelling this Bill, have not been used irresponsibly since. I have been clear about my expected use of these powers, and the bar set in the legislation meets my expectations, including limiting my ability to use these powers in ways that would cause concern for Members.
For too long, the steel sector in this country has been left to fend for itself, abandoned by Government, demoralised, starved of resources and the victim of international market distortions. Crude steel production has declined by more than 50% in the past decade. Capabilities have been reduced, and communities have been let down. Previous Governments have been too reactive and not proactive. This Government will not repeat the errors of the past. We are building the future for British Steel. While the industry faces challenges today, we will do everything we can to help it modernise and grow. This legislation allows us to apply that policy to this industry. We recognise that securing the long-term future of the UK steel sector relies on public and private investment for modernisation, so that the UK can become a global leader in clean green steel, electric arc furnaces and decarbonised steel production.
We recognise that blast furnace production will need to continue in the immediate future and that a managed transition is vital to maintaining supply. We need this legislation to raise resilience, to protect businesses up and down the country that depend on Britain’s steel, to defend the workforce at British Steel and to safeguard the communities built on British steel. The significance of steel is not simply a matter of history; it is a matter of our national future. In an uncertain world, the ability to make steel remains a strategic national asset. Steel is essential for our transport networks, our energy security, our housing and our transition to a greener economy. That is why supporting the British steel industry is about more than protecting jobs, important though they are. Supporting British Steel—
Warinder Juss (Wolverhampton West) (Lab)
Will the Secretary of State give way?
Peter Kyle
I will give way in just a moment. Supporting British Steel is about more than national pride, although we are proud of the steelworkers who help build it. Nationalising British Steel is about hope and faith in the future.
Warinder Juss
I did not mean to interrupt my right hon. Friend, but I thought this was an appropriate time to intervene. As a member of the GMB trade union executive council, I was pleased to see my union welcome the Government’s move to nationalise British Steel, which it described as a
“decisive and timely intervention by the Government which will protect one of the UK’s most important industries.”
That sentiment has been echoed throughout the trade union movement. Does my right hon. Friend agree that we must engage with the trade unions throughout this process and utilise their expertise in this area to secure the long-term future of British Steel?
Peter Kyle
My hon. Friend raises a really important point. Workers in steel production facilities have played a really important role in shaping our policies, helping us constructively to find a way through. Members on both sides of the House were prodding me to release the steel strategy more swiftly, but there were so many moving parts at the time of developing it. There were global forces at work, different ownership models and different production facilities, with different challenges, in different parts of the steel community. I will say this again: the unions played a highly constructive role. I pay tribute to GMB, Community and others for helping us to design our policies and find a way through some really challenging strategic issues.
Together with our measures on automotives, digital technology, the life sciences, the defence industry, clean energy, ceramics and chemicals—on which we made announcements today—and advanced manufacturing, taking the power to make possible the nationalisation of British Steel heralds the new dawn of an age of British industrialisation.
Greg Smith (Mid Buckinghamshire) (Con)
Given that no UK steel producers produce the specialist grades of steel used by precision engineers such as Gibbs Gears in Stoke Mandeville, in my constituency, which supplies components for the aerospace and defence sectors, what is in this Bill for them? All they can see are incoming tariffs on the steel that they necessarily have to import because nobody makes it here.
Peter Kyle
The hon. Gentleman will know that when I took the difficult decision to introduce measures, I did so for products that compete directly with the products that we are capable of making domestically. Speciality Steel UK is going through an administration process at the moment, but when that is complete and the company is up and running properly, I need to make sure that its products and services are protected and viable domestically. Given the world in which we are living, where national resilience is so important to our nation and the economy in a way that it simply has not been for decades, the decisions that I am making to ensure that British steel production is viable and sustainable are of paramount importance.
Saqib Bhatti (Meriden and Solihull East) (Con)
Will the Secretary of State give way on that point?
Peter Kyle
I am going to make a bit more progress.
While the Government are working alongside businesses to invest in, modernise and protect Britain’s manufacturing base, the amendment would deny the Bill its Second Reading. The very people who did so much to damage the steel industry in government are now trying to do so again in opposition—then as tragedy, and now as farce. As such, the House should reject the amendment. Britain’s steel industry needs an activist, interventionist Government, and it needs determination, decisiveness and delivery. It does not need a Government who have their hands tied, their room for manoeuvre blocked and their ability to act denied. Britain must have a strong domestic steel industry—now and into the future.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. A lot of Members with a direct constituency interest rightly want to put their remarks on the record. There will be an immediate six-minute time limit for Back-Bench speeches, but we will very swiftly move to three minutes to enable as many Members as possible to speak on this important topic. I call the shadow Minister.
Andrew Griffith (Arundel and South Downs) (Con)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House declines to give a Second Reading to the Steel Industry (Nationalisation) Bill because it believes that politicians should not be running businesses; because expropriating businesses sets a precedent that will deter inward investment into other UK businesses; because the Bill exposes taxpayers to unlimited liabilities; because the powers that the Bill confers on Ministers are far wider in scope than would be required for its stated purpose; and because it fails to contain any measures that would address the issues which are currently making domestic production of steel unprofitable such as higher employment costs and policies in pursuit of net zero, such as carbon taxes and associated regulations and levies.”
Conservatives will never be neutral about the deindustrialisation of our country, but we do not believe that politicians or Whitehall bureaucrats should run businesses. Instead, we need a Government who do fewer things better, such as defending our nation, securing energy supplies and restoring the nation’s finances. We believe in British steelmaking and the importance of sovereign capabilities—not just steelworks, but the steel supply chain, critical minerals and many defence- related technologies—but that is not what this Bill does. This Bill is the Government’s attempt to break out of a mess we warned one year ago they were getting themselves into, and it fails even in the Government’s own terms. It does not keep the blast furnaces open and it does not guarantee that military needs can be met domestically.
Let us be clear what we are doing today. We are being asked to nationalise British Steel, and put the British taxpayer permanently on the hook for a business that this Government had every chance to keep in private hands, but chose not to. They ignored plans to open electric arc furnaces on Teesside, and chose to let the situation deteriorate until the only option left was the one that suited their ideology. The Prime Minister went kowtowing to China, gave it an embassy spy base and, instead of a deal on Jingye, came back with a box of fortune cookies with only a bill for the taxpayer to be found inside.
Mr Jonathan Brash (Hartlepool) (Lab)
I just wish to seek some clarity from the hon. Gentleman. Is the Conservatives’ position that they would prefer British Steel in the hands of the Chinese than the British?
Andrew Griffith
That was a waste of an intervention. If the hon. Member lets me continue, I will explain exactly what the Conservative plan is for British Steel, and it is a better plan and a more sustainable plan than we have heard from the Secretary of State today. This Government did not inherit—
Richard Tice (Boston and Skegness) (Reform)
As the shadow Minister was unable to respond to the previous intervention, would he like to explain why the Conservative Government sold British Steel to the Chinese in 2019 against my specific advice?
Andrew Griffith
When it suits the hon. Gentleman, he claims to be a fan of the late Margaret Thatcher, but he seems to have forgotten that most of her time in office was spent untangling the mess of Labour’s past nationalisations. Unlike him, she did not bend with the wind or find herself in the same Lobby as a Government who have hiked taxes to record highs, driven wealth offshore and drowned business in red tape.
Members would like to know what our plan is, and our plan is to address the cause, not the symptoms. [Interruption.] Labour Members would do well to listen to this, and we might have more of a steel industry left if they do. We cannot have an industrial policy for steel without an energy policy for industry. Britain has the highest industrial electricity prices in the world, and every choice the Government are making has pushed those prices further up. This week, they voted against new licences in the North sea, choosing to import from Norway gas that could be drilled here, at a cost of 200,000 jobs and £12 billion in tax revenue.
The Secretary of State knows this and his Back Benchers know this, but the Prime Minister is too weak to stand up to his windmill-fetishist Energy Secretary. We have offered an alternative. Our cheap plan would slash energy prices and improve energy security. Why would the Government not want that? If they were genuinely interested in securing the future of steelmaking, as well as those of many other industries, they could have come here today and adopted that plan. Instead, this Bill is an indictment—
Andrew Griffith
I will happily give way, as long as the hon. Member is going to talk about our cheap energy plan.
Andrew Griffith
The only way we are going to have a sustainable steelmaking industry in this country, and the same applies to the manufacturing sector and our defence supply chain, is lower energy costs. That is the only sustainable way.
Andrew Griffith
We have a plan for sustainable steelmaking. The Government do not have a plan for sustainable steelmaking. Ministers themselves have admitted that the blast furnaces in Scunthorpe will close. They are reverting to a plan that already exists.
The Bill is an indictment of this Government’s modus operandi—a spray and pray Government who write blank cheques from the taxpayer and call that a strategy. We are doomed to relearn the hard lessons of the 1970s: if it moves, tax the hell out of it; when it stops moving, subsidise it. It was socialist idol Tony Benn who wanted to nationalise everything that moved, and one result that the Government may care to look at was the state-owned Kirkby Manufacturing and Engineering company, which simultaneously made car radiators and orange juice. When the Government last ran British Steel in the late 1970s, the company’s losses hit £1.3 billion a year. Since Labour’s botched nationalisation of just a year ago, it has already spent £500 million of taxpayers’ money—£1.3 million a day.
Where is the Government’s published, costed and scrutinised plan for what nationalised British Steel will look like in five years’ time, or even in one year’s time? I have read the Bill and there is not one. There is no provision for a proper impact assessment before the sweeping powers are used. There is no acknowledgment of the monumental decommissioning liabilities—in the billions—that will sit on the Treasury’s balance sheet. There is a sunset clause, but it can be extended indefinitely by Ministers—a sunset where the sun never sets.
The House deserves better than this. We deserve a Bill with a proper thought-through plan. The Government have turned a negotiation into a crisis, a crisis into an emergency and an emergency into this nationalisation. We know that Ministers, however well-meaning, will be unable to resist using their power to tilt the playing field in favour of steel businesses that they themselves own: no longer the referee, they will be on the pitch wearing one of the teams’ shirts. There is no better example of that than their plans on steel tariffs.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
What does the shadow Minister make of tilting the balance in favour of communities in Redcar and across Teesside, when his Government sat on their hands and saw the blast furnace go to the wall? Is that his definition of sustainability—to let those businesses and communities collapse?
Andrew Griffith
The hon. Member would be better addressing that question to his own Ministers, who, notwithstanding the nationalisation, acknowledged that the blast furnaces will cease—they will go dark and close on this Government’s watch. The Bill does not protect blast furnaces and he should invite the Minister, when he winds up, to talk about the future there. There was a plan to invest in British Steel in Redcar to secure those jobs, but the Government pulled the chain—
Andrew Griffith
There was absolutely a plan before the election to open arc furnaces in Redcar—that was absolutely case—and to move Scunthorpe operations to Redcar.
I asked the Secretary of State to address the issue of tariffs. There is no better example of the folly of these plans—
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
Will the shadow Minister give way?
Andrew Griffith
No, I am going to make some progress on tariffs. A number of hon. Members have raised this very important issue, shedding light on the way that the Government are tilting the playing field on tariffs. Under this Government, we have already seen a flurry of Trump-style tariffs—doubling steel tariffs and halving quotas—that elevate the interests of one firm over the automotive, aerospace, advanced manufacturing and defence sectors. Firms involved in the supply chains of AUKUS and Tempest are now looking at shifting tooling and jobs to other countries, instead of manufacturing components here.
Saqib Bhatti
I thank the shadow Minister for giving way; he is making an excellent speech. Specifically on tariffs, does he agree that the approach is illogical? Reducing quotas will decrease the supply, and increasing the tariffs will increase the cost. I listened to the Secretary of State very closely. He talked about getting domestic production here, but by the time that happens, most of the businesses will have gone to the wall. Does my hon. Friend agree that the approach is illogical?
Andrew Griffith
My hon. Friend makes exactly the right point, and that point has been made by other hon. Members and across the manufacturing industry. We are at risk of losing critical parts of our defence, aerospace and automotive supply chains.
Kit Malthouse
Does my hon. Friend agree that although the Bill appears to be an attempt at providing a simple solution for one industry, we need to be careful what we wish for? A huge amount of steel is used in the car industry—I do not know if Members have seen the number of Chinese cars appearing on our streets. If we have elevated and protected steel markets in the UK, at a time when we have a massive global oversupply of steel, we will not stand a chance of competing with the finished goods that use all that cheap oversupply. We will end up subsidising the car industry like we did back in the 1970s. That would have a particular impact in my constituency, where firms such as Stannah Stairlifts use steel in advanced manufacturing, and face having no choice but to consider offshoring their production.
Andrew Griffith
My right hon. Friend and my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) have made exactly the right point: we need a more thoughtful approach.
I have written to the Secretary of State, as have many of my colleagues, asking that the tariffs are delayed for six months while the Department does more work; that the Government investigate more specialist grades of steel; that within the broader tariff buckets, they look again at the steel alloys used in the defence, aerospace and automotive sectors that are simply not made here today, because there are perhaps unintended consequences of the tariffs; that they be more forensic in their approach; and that they bring forward the measures the Conservatives have talked about on industrial energy costs, which are damaging not just the steel industry but many other industries’ and our basis on which to compete.
There is no point securing what the Secretary of State thinks is in the national interest for one steel manufacturer in a particular location if the foreseeable consequence, unintended or otherwise, is to ship offshore large parts of our high-end automotive manufacturing, engineering and defence industries, so that they are lost forever and conducted in other countries. I have raised that serious point with the Minister, and I ask him to address it.
Luke Myer
I am afraid that I want to give the hon. Member another chance to answer the question from my constituency neighbour, my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald), which was not about the prospect of a future EAF on Teesside—a prospect that I support but that the Leader of the Opposition confirmed from the Dispatch Box was not as advanced as the hon. Member claims. My hon. Friend’s question was about the crash closure of the blast furnace at Redcar in 2015, which ripped 3,000 jobs out of our region. What message does the hon. Member have for the people of Redcar, whose Government he was in when that happened?
Andrew Griffith
I am afraid that the hon. Member ought to look again at the calendar, because I was not only not in Government but not in this House—I was getting on in business trying to help grow the British economy. When the same issue arose in Port Talbot, it was the previous Government—indeed, my right hon. Friend who is now the Leader of the Opposition—who took action and were willing to back the private sector owner to secure the future of steelmaking in Wales. That was what we did in Government.
We are talking about the issue of tariffs because it is intrinsically related to the Government and the taxpayer taking ownership of one participant in a complex industry supply chain. I know that on the Government Benches, some of the truths that we share today may not be immediately popular, but past Governments failed because they were happy to do what was popular in the moment, without looking at the long-term consequences. The truth is that we should not be nationalising British Steel, and certainly not with the Bill in this form—my hon. Friend the Member for Meriden and Solihull East made the point about the sweeping nature of the clauses, whatever we think about the Secretary of State’s intentions.
We have demonstrated in the past, and we will again, that there are other options, such as partnering with the private sector and negotiating a better deal. The Conservatives would fix the cause, not the symptoms; we would save steelmaking in this country not through state quick fixes, but by fixing the state itself. We would not pit industries against each other, as Labour is now doing, and we would not sit idly by for a rerun of the 1970s horror show that Labour made Britain sit through the last time around.
Madam Deputy Speaker (Judith Cummins)
With a six-minute time limit, I call the Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I will be very quick, because I know that colleagues are keen to get in. I am going to speak against the amendment and in support of the Bill for the simple reason that a speech such as the one we have just heard from the shadow Minister may have just about cut the mustard five or six years ago, but it certainly does not work today in a world of weaponised interdependence. It does not work in a world where President Trump is back in the White House or where President Xi is prosecuting the sixth five-year plan, as he is. The critical point in this debate, which the Secretary of State made very well, is that we must have a sovereign capability to make steel. In today’s world, we cannot afford to have a critical steelmaker like British Steel in the hands of a Chinese firm; we cannot, as Ronald Reagan once said, be innocents abroad in a world that is frankly no longer innocent.
Regardless of those remarks, there are a couple of areas where I think the shadow Minister made some important points. I want to stress that although the Secretary of State is proposing some perhaps welcome statism, he must not forget the statecraft that is needed to make a success of this Bill. There are six areas I would like him to respond to very briefly, and I hope we will be able to strike a cross-party consensus around them.
First, it is important that the Secretary of State wills the means and not simply the ends. We have, as the shadow Minister said, already spent a lot of money on this. The transition to electric arc furnaces that the Secretary of State is proposing is not cheap—it is extremely expensive. I think we are hoping that a lot of that money will come from the National Wealth Fund, but he does not control the National Wealth Fund or the allocations that it makes. The National Wealth Fund has not said anything about guaranteeing money for the kinds of ends that the Secretary of State has in mind, and the Government have declined to explain what will happen if steel projects are not funded by the National Wealth Fund. We therefore need a bit more clarity about where the investment resources for the Secretary of State’s plans are going to come from.
Sir Ashley Fox (Bridgwater) (Con)
Does the right hon. Gentleman agree that it is unlikely that the National Wealth Fund, or indeed anyone else, would wish to invest in British steelmaking while our electricity prices are so very high? Does he agree that there is no point in this Bill until we fix the electricity market in this country?
Liam Byrne
The hon. Gentleman makes an excellent point that I am about to come on to. My point, I suppose, is that there is a case for this Bill. I think it is actually quite important, and the powers that it confers are also important, but if we are to get value for money from it, there have to be five other components, which I will come on to now.
The second area is lower energy costs. The British industrial competitiveness scheme is welcome, but it does not come online until 2027. Steelmakers, like much of our manufacturing industry, are saying very clearly to the Business and Trade Committee that there is a widening gap between UK wholesale electricity prices and the prices of our peers in the wake of the Iran crisis. My question to the Minister is: what further targeted support will be available to energy-intensive industries before 2027? As the hon. Member for Bridgwater (Sir Ashley Fox) rightly points out, that is an essential component of the package.
The third area that the shadow Minister was right to highlight is the issue of tariffs. This is now an urgent issue. The Committee heard evidence this afternoon at our own roundtable about the need to refine the tariff structures that have been put in place. The key thing is that we get a better deal with the European Union, to which we export 80% of our steel. It is about to cut tariff-free quotas by 47%, double tariffs from 25% to 50%, and impose melt and pour requirements. Unless we can get a deal in place with the European Union before the end of July, I am afraid that many of the good intentions behind this Bill will be confounded.
The fourth area is procurement. We must ensure that there is a proper demand curve from the UK state for the things that British Steel makes. In the British economy, British state procurement makes up £1 in every £6. Right now, despite the excellent changes in the Procurement Act 2023, we do not have a sufficiently clear forward pipeline. That has to change, not least because when we talk to defence companies—which are, of course, patiently awaiting the defence investment plan—and defence contractors, they still tell us that the kind of steel that they need to make the things that keep this country safe are not made in this country. Ensuring that there are advanced market commitments alongside the defence equipment plan, along with the range of other big, long-term ambitions that I know the Secretary of State has, is very important.
The penultimate area I want to touch on is scrap supply. The Secretary of State has ultimately come to the conclusion—wisely, I suspect—that we should shift to electric arc furnaces, but that kind of industry model will work only if there is a healthy supply of scrap. I think that Ministers are being just a tiny bit too complacent about whether we have the plans in place to source all that scrap. I know that there is a roundtable proposed for later this month, but as part and parcel of ensuring that the steel strategy actually works, can we have, at the very least, a read-out for Parliament about what scrap supplies will be kept in our country, rather than exported?
The final point I wanted to flag is about consolidation. One of the virtues of this Bill is that it bestows on the Secretary of State the power to ensure that there is consolidation in the UK steel industry for the future needs of the economy. In particular, it should allow us to take assets that have gone to firms that are currently out of business, and to rationalise the industry in a way that makes sense. I would like to hear more about what the Secretary of State is proposing when it comes to consolidating the industry.
Ultimately, in the world that we are in, when there are so many visible hands in the global economy interfering with the free market in steel, we will have to have a stronger visible hand. That is what the Secretary of State is proposing through this Bill. There will be a lot more work to do in the Bill’s subsequent stages to satisfy the House that he has got right the statecraft package behind this measure of statism. I look forward to hearing some reassuring noises on that point when the Minister winds up.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
Steelmaking is of vital strategic importance to the UK. We rely on steel for essential parts of our national infrastructure, including in defence, transport, clean energy generation, and advanced manufacturing. Steelmaking creates tens of thousands of highly skilled jobs across the country, helping to power our economy and boost our local communities.
However, for too long, our steel industry has been neglected. The last Conservative Government oversaw a string of near collapses and last-minute rescues. They scrapped the industrial strategy, which is so vital to our manufacturers, and erected new trade barriers, making it harder for our steel producers to do business with their biggest export market across the channel.
We have a duty to stand by this vital sector, especially as it navigates unprecedented challenges, including President Trump’s unfair steel tariffs, China’s anti-competitive state aid practices, and the transition to environmentally sustainable production methods. If we are going to foster a thriving steel industry, we cannot allow more producers to collapse and more jobs to be lost, and we cannot risk our last blast furnaces going cold.
The Liberal Democrats broadly welcome this legislation as a temporary, emergency and targeted step, aimed specifically at turning around British steel, before returning it to the private sector. It is in that spirit that British steel producers also support this measure. The Liberal Democrats are clear that our country needs a vibrant, privately run steel industry. In the long term, only private enterprise—not Government Ministers—can ensure that the sector powers forward. We will be closely scrutinising these measures, and indeed the Government’s broader steel strategy, to ensure that they move us in that direction. We need to move on from a patchwork of last-minute rescues to a long-term plan that will set the industry on a truly sustainable footing. Right from the get-go, we would have liked to see plans to find private co-investors who can help modernise the sites and create more jobs.
Putin’s barbaric war in Europe threatens our national security; Donald Trump’s reckless tariffs are undermining our economy; and the continuing conflict in the middle east threatens business supply chains. All those factors make the future of reliable domestic steel production more important than ever for whole swathes of our economy. That is why the Government should ensure that industries that rely on steel, such as defence, are represented and involved in decision making relating to this legislation. We need stronger action from the Government on improving trade with the EU, so that our steel exporters can benefit from easier access to their biggest market, and so that our manufacturers get easier and cheaper access to the materials they need. A new UK-EU customs union would be hugely beneficial in that respect.
Last but not least, we need more ambition on the use of UK-made steel in our domestic market. We welcome the Government’s target of boosting domestic production from 30% to 50% of UK steel demand, although there is no clear timeline for that, and we cannot help but note that the equivalent target in the EU is 75%. While we understand the difference between the two markets, we hope that the Government will keep the target under review in the light of uncertain supply chains, and will consider further incentives for the use of UK-made steel in private sector projects.
The Liberal Democrats know that nationalising steel producers is not the answer in the long term; I ask the Minister to confirm that the Government also view this as an interim rescue measure. What specific steps do Ministers plan to take to ensure that British Steel becomes investable for the private sector, should the legislation be triggered? As the Bill progresses through the House, the Liberal Democrats will be carefully scrutinising the use of secondary legislation, with the aim of maximising accountability. Many of the Bill’s measures will be implemented through secondary legislation subject to negative resolution procedures. I hope the Minister agrees that the affirmative procedure would offer more meaningful parliamentary engagement.
I urge the Government to ensure that there is proper transparency for Parliament about costs associated with the legislation. Clauses 53 and 54 set out the process for the valuation of relevant businesses and the calculation of any compensation that might be paid to previous owners. While we understand that valuations will depend on factors specific to each business, the Government should publish detailed information about the criteria taken into account, and must ensure that Parliament is given the opportunity to scrutinise proposed valuations and compensation amounts. Have the Government considered granting powers to the Business and Trade Committee to scrutinise spending on these measures? Lastly, will the Minister update the House on whether and to what extent the Bill will affect employee pension schemes? What conversations have been had with the Pensions Regulator to that effect?
Looking at the broader state of the steel sector, from 1 July the Government’s new UK steel and trade measure will impose tariffs on imported steel. While we understand the need to bring in such protections temporarily, due to the disruption caused by US steel tariffs and cheap, subsidised Chinese exports, the measure will have a significant impact on manufacturers who depend on steel as a key business input. In Business and Trade questions this morning, my hon. Friend the Member for Harpenden and Berkhamsted (Victoria Collins) mentioned Dynamic Metals, a firm in her constituency that is facing about a £3 million bill to import the specialist steel grades it requires for its services. While I welcome the Government’s aim of encouraging domestic production and the purchase of steel from UK steel companies, some specific grades of steel are not domestically produced, so the Government are harming the purchasing power of UK businesses. Will the Government commit to re-examining the application of tariffs on certain grades of steel to ensure that they do not inadvertently damage domestic buyers?
The Bill’s measures are subject to a public interest test, but there are limited details about what that test will involve. Will the Government allow Parliament to scrutinise the criteria for the test, and publish a detailed report setting out why they believe they have been met? How will the Minister ensure that the aim of protecting the vital infrastructure and manufacturing sectors is balanced with sustainable energy commitments? Will he confirm that when compensation is calculated, Jingye will be financially responsible for any environmental damage caused? What consideration will be given to the affected workforce, and to ensuring that jobs and skills are protected?
The Government are right to take action to protect British steel, but nationalisation must be a temporary step, taken in order to rescue businesses before they are returned to the private sector. We are supportive of the Government’s pace and urgency of action to assist the steel industry, but we need more details on the longer-term vision. I would be grateful if the Minister gave, in his response, the reassurances that I have asked for. How will the Government ensure that the steel industry becomes investable for the private sector, following nationalisation? How will Parliament have oversight, once the powers in the Bill are triggered? How will Parliament be provided with transparency regarding the costs associated with nationalisation?
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
With a five-minute time limit, I call Jessica Morden.
Jessica Morden (Newport East) (Lab)
I very much welcome the Bill, which gives the Government new powers to intervene in the steel industry when doing so is in the public interest. I do so because I, alongside many other steel MPs over many years, have relentlessly made the point that the steel industry is of the utmost strategic importance to the country’s economy and security, and that we must do all that we can to protect and cherish it. While the focus of the legislation is the future of British Steel—I very much pay tribute to the efforts and fantastic advocacy of my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin)—the Bill also sends a clear signal about the Government’s commitment to the industry and workers more widely.
As Ministers know, steel is important to my constituency, both at Tata’s Llanwern works and at 7 Steel. I know that the steel Minister—the Under-Secretary of State for Business and Trade, the hon. Member for Stockton North (Chris McDonald)—met representatives from Llanwern this week. I also pay tribute to the steel unions —in particular, Community and GMB, which I am a member of—and Reg Gutteridge, the newly elected national chair of Community union, who I know will be an excellent advocate.
I completely understand that significant funding was necessary to help keep British Steel in Scunthorpe open, but it is really important that producers and steelworkers in Wales, at sites such as Llanwern, get their share of the Government’s billions of pounds of investment through the National Wealth Fund. It is also important that Ministers urge Tata to follow through on the future investments that it has talked about previously, including in Llanwern.
I really welcome the steel strategy; it is the first time we have had one. The Conservative party had 14 years to set one up and did not. We had a revolving door of steel Ministers, and I am afraid that the Conservatives’ woeful approach continues with their reasoned amendment today. Our approach is a real road map for the future. I welcome the new import quota and tariff levels to cut the amount of foreign-made steel that comes in, and to protect us from global oversupply. However, as others have mentioned, there are concerns at downstream plants that the import quotas for galvanised steel and hollow sections allow too much leniency for highly subsidised products from non-EU countries to come into the UK market and undercut manufacturers at sites such as Llanwern. Will the Minister look at that?
Ministers will be aware of the industry’s concern about the timing and design of the UK carbon border adjustment mechanism. I am keen to hear more about that. As my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) said, we are doing great work on procurement, and it is a big part of the steel strategy, but I am aware from 7 Steel, which has proved over and over again that it can supply high-quality products for High Speed 2, that some contracts are still being made for foreign-made steel. Will the Minister please check that and raise it with HS2? Energy is always an issue, and our underlying costs are still far greater than those of our European rivals, so I join others in asking the Minister to look further at more targeted support.
Those are a few of my asks, but I very much welcome the Bill and the Government’s clear direction of travel on steel. I will end by acknowledging the deep industry expertise and knowledge that the steel Minister brings to the job. It is recognised in our plants, and it is hugely refreshing after the last Government.
Stuart Anderson (South Shropshire) (Con)
I do not support this Bill, and I believe that the reasoned amendment is the right way forward. I will set out clearly the devastating impact that the Bill is about to have, in real time, in my constituency.
We have a great local business called Amodil. It is a British family-run business that started with a couple of people in 1976 in Cleobury Mortimer, South Shropshire. I recently went to Cleobury to meet Paul, Chris, Ben and the team, as well as Rob Cooper from the British Stainless Steel Association. The business was founded by Paul Slingsby, who at 75 still works in it today. It is the UK’s largest privately owned supplier and stockholder of stainless steel long products, with more than 1,200 customers—about 20% of the UK market.
The people who run Amodil know what they are on about, and they were completely blindsided by the announcement on tariffs. They had not been told, and none of their customers or suppliers, or the people they were involved with, knew anything about it, so they came straight to me. I have written to the Minister multiple times and had one response. He needs to sit down with the largest British business in this industry and have a serious conversation.
The big issue that Amodil faces is the tariffs on the stainless steel products it brings in that cannot be made in the UK in the required quantity or type. The Government want to protect the steel industry as an industry of vital strategic importance—I get that—and they want to protect jobs, but for the almost 1,000 jobs they will save, many thousands more will be lost, and I will say exactly where.
The UK cannot meet domestic market demand, and a huge gap will be created. Businesses such as Amodil will be forced to import, and tariffs will drive up costs by 50%. There is not the cash across the industry to absorb those extra costs without mass redundancies. The costs will be passed on, meaning that manufacturers’ costs will go up. What will happen then? The customer will buy the finished product from manufacturers overseas at a lower price, and those products are not subject to tariffs. That does not level the playing field for us.
The UK does not produce enough stainless steel of the right type or quality to meet demand. Amodil currently has 5,000 tonnes of stainless steel in stock, 2,000 tonnes of which cannot be, and is not, made in the UK. It could take up to 15 years to get some of the skills right. Large-diameter bars of a certain grade are not made in the UK and those bars are vital to key industries, such as aerospace, defence, pharmaceuticals, oil, automative, general engineering and many more. If the tariffs are put on these businesses—Amodil is the largest British business in the field in the UK and there are many others—they will be priced out of the industry. I really hope the Secretary of State can see the importance of this matter.
Peter Kyle
I will save the hon. Gentleman from driving home the point even more, because I understand the passion with which he speaks. With regard to Amodil, I will look into that company personally. The intention with the measures that I have brought in is to protect domestic production and the possibility of domestic production. It is not to prevent goods that we do not make here, and do not intend to have the capacity to make here, from suffering. If there is a specific issue, I will look into that, because I do not want negative impacts downstream when we do not have the capacity to produce here. The Trade Minister said earlier today that he would look into that as well. We, as a team, will look into these issues.
Stuart Anderson
I thank the Secretary of State for saying that. I will follow up personally with him and with Amodil to see if we can talk about a way forward. I said to Amodil, “I believe that this is an unintended consequence of what the Government are trying to do, and once I point this out clearly, there will be a way forward to look at it.” The long and the short of it— I will put my speech to one side—is that there is a certain size of rod that only the UK can make. I watched it at Amodil’s facility a few weeks ago. When it gets past that size, it is not made in this country, but it is needed by so many of those critical industries.
Looking at steel as a whole, this matter is just one part of the stainless steel industry. If the Secretary of State, or one of the Ministers, will sit with me and the team at Amodil, they will be able to see, within a matter of minutes, where the gap is and how to plug it. It is along the blanket grading for all the bars. I request a pause for, say, just six months—or if we can talk with Amodil in a matter of days—so we can sit down and look at this, because there is a massive knock-on impact that will seriously hurt the stainless steel industry, and one of the largest employers in my constituency will be massively hurt too.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I am setting a three-minute time limit, which will allow most Members to get in, but not all.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
I warmly welcome the Bill and the action that the Government are taking to protect Britain’s steel industry. I congratulate the Minister for Industry on his sterling work to bring this legislation before the House. Steel manufacturing is a strategic national asset; it underpins our infrastructure, transport system, energy, security, defence capability and industrial future. It is too important to be left entirely to the private sector.
For many of us who represent industrial communities, this debate is deeply personal. On Teesside, iron and steel built towns, livelihoods and identities from the early 19th century onwards. Generations of skilled workers helped forge modern Britain with Teesside steel, and as Chris Rea said:
“The ships and bridges they were all delivered
From Sydney harbour to the Cisco bay”.
Over the decades, however, those industries were systematically weakened. The deindustrialisation of the 1980s and 1990s hollowed out communities across the north and across Britain. Then, in 2015, the Conservative Government allowed the Redcar steelworks to close, with devastating consequences for 3,000 workers, families and a further 6,000 in the wider Teesside economy. Whereas with ILVA’s Taranto plant the Italians intervened to save that, and the French did the same for Florange, the previous UK Government sat on their hands. The truth is that a different choice could have been made in Redcar, just as a different choice is being made now. The Government could have intervened back then to preserve strategy industrial capability.
The Bill signals something important: a Government once again willing to play an active role in shaping industry and growing the economy, and doing so pragmatically. It will create a framework for the state to step in when markets fail to protect industries of strategic national importance. It will allow intervention, including public ownership where necessary, when the loss of industrial capacity would damage the national interest. It is common sense: people understand that there are sectors in which the public interest must come before narrow private gain. We have already seen this Government adopt new models of public intervention elsewhere.
We need a serious strategy for reindustrialisation and growth. That means backing British business through a strong public procurement strategy and delivering a long-term pipeline of orders. If public money is funding railways, schools, hospitals and so on, then wherever possible the steel for those projects should be made here, in Britain, by British workers.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
I start this contribution on a positive note for the steel industry. Last week I visited Kiernan Steel’s fabrication workshop in Llandrindod, Wales. Kiernan Steel is a tremendously successful Irish company that has brought much-needed jobs to Radnorshire, and its success shows how the rural economy can prosper if our businesses are encouraged and enabled to locate there. One thing there is no shortage of in mid-Wales is land, and if we make that land available to businesses that need it, they will create the jobs that our region and economy need.
The steel industry is critical to our wider economy—it is virtually impossible to build anything without steel. However, the steel industry requires a skilled workforce. I was encouraged by some of the Secretary of State’s comments about the skills shortages, because we have serious skills shortages. There are thousands of vacancies for welders alone, and their pay is shooting up as a result. Skills shortages throughout the steel industry are pushing up the price of building anything, particularly infrastructure. That is why the health of our steel industry matters. If we do not look after it, the costs for projects such as HS2 and the cost of delivering all the housing we need will continue to mount.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I was interested in the hon. Gentleman’s comment about the shortage of welders. Does he agree that the Government’s plan for construction colleges of excellence, including the one in Bury St Edmunds, will be crucial for the provision of welders?
David Chadwick
There are at least 6,000 vacancies for welders, so we absolutely need a lot more of them.
The skills shortages present opportunities to get future generations into well-paid and secure trades. Artificial intelligence cannot do welding yet, because it does not have any arms—yet. Our education system is not producing the skills that our economy needs, and our economy is suffering from that failure. Steel is strategic. It is part of our sovereign capability and part of British power. That is why steel matters.
As has been mentioned, the steel industry is affected by the geopolitical tensions that are so rampant across the world. Our steel industry has been hammered by the Chinese, who have flooded the international market with cheap Chinese steel and have run one of our biggest companies into the ground. China has wiped out our steel industry intentionally, yet today the Conservatives seem to be saying that they do not think the Government should do anything about it. Just yesterday they were complaining about our lack of defence readiness. Well, what do they think tanks and ships are made from?
Today, this Government ask Parliament to move heaven and earth to save steel in Scunthorpe. It is right to act—of course the Government should have the proposed powers—but people in Wales are asking one simple question today: where was this Bill in July 2024, when the blast furnaces at Port Talbot were switched off for the last time? When Welsh communities were crying out for help, Westminster shrugged its shoulders. That was despite Welsh Labour MPs and candidates, in the months prior to the general election, lining up in front of giant election posters that read, “Save our steel.” They said they had a £2.5 billion fund to spend on steel. Given that the Government have admitted to spending £1.3 million a day to keep the Scunthorpe plant going, how much of that fund is left to spend in Wales?
If protecting primary steel production is so important, why did they allow the biggest steelworks in Britain to be turned off? Welsh workers were told that nothing could be done. People in my constituency have lost their jobs because of this. When 2,800 jobs were wiped out in Port Talbot, there was no emergency Saturday sitting, no recall of Parliament, no emergency legislation and no sudden declaration that steel was a vital national—
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I pay tribute to my northern Lincolnshire neighbour, my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who is a long-time champion and campaigner for protecting and securing the future of Scunthorpe steelworks, which is essential to the fabric of the town and a critical part of its identity.
The Government are right to take the steps needed to bring British Steel back into public ownership. Having our own sovereign steelmaking capacity is crucial to ensuring the UK’s defence and infrastructure security. Jingye has failed as custodians of British Steel in Scunthorpe. It has the opportunity to do the decent thing and come to an agreement before the Government are forced to use the powers in this Bill, and we will wait to see whether it does that.
I know that the Minister for Industry, my hon. Friend the Member for Stockton North (Chris McDonald), has a deep understanding of iron and steelmaking. I am sure he will agree that resolving the ownership issue for British Steel will allow an ambitious future for the business to be realised and a plan to be brought forward that will attract investment.
The UK management and workforce at British Steel have been working in an impossible situation while the Government have been negotiating with the current owners. I hope the current leadership will be empowered by the Government to make the necessary decisions to deliver the positive future for the business that the town deserves.
The trade unions Community, Unite and GMB have worked consistently hard to keep steelmaking in the UK. Could the Minister confirm that the action the Government are taking will enable both management and trade unions to deliver the positive future that everybody wants to see for steelmaking in the UK?
Scunthorpe is home to one of the last very large pieces of industrial land in the UK. The proper development of that land could benefit not just Scunthorpe and my constituency, but the whole of the UK. Can the Minister set out what plans he has to work with North Lincolnshire local authority and other partners to make the most of these opportunities? We do not want to see a first come, first served situation where the best users and custodians of that land are not given the opportunity to take it on. It has to be the right company, which will ensure that the proud history of manufacturing in northern Lincolnshire continues long into the future. Will the Minister confirm that that will be his approach?
Richard Tice (Boston and Skegness) (Reform)
It is exactly seven years since I started calling for British Steel at Scunthorpe to be taken into public ownership. The Conservatives rejected my splendid advice, and the chaos we have seen is a result of that. In opposing this Bill, they show that they do not care about the sovereign nature and importance of steelmaking, they do not care about the thousands of highly-skilled jobs, and they do not care about the communities and families around them—they have no understanding of its importance.
I congratulate the Secretary of State and the Minister for Industry on bringing forward this Bill—the first from the King’s Speech to be debated on Second Reading. I told the Secretary of State’s predecessor that he should show some cojones and get on with it, and I think that is what we are now seeing. Alongside this support from the Secretary of State, we now need to see the vision and the plan for the long term. I am concerned that there is an attitude of, “We’ll quietly let the blast furnaces go cold and disappear, and then replace them with electric arc furnaces.” We need a big, bold vision to renew, reline and rebuild at least one blast furnace.
Around the world, 50% of all new steelmaking capacity in the last five years has come from blast furnaces. It is the strongest, most robust primary steel. I know that the Minister of State is a great fan of direct reduced iron, and he has a point there; nevertheless, we should not expose ourselves by putting all our bets on electric arc furnaces, when we know that the price of electricity is at a crisis high. We need diversity in this, rather like when my late grandmother would look at the desserts available for Sunday lunch and say, “Grandson, have a little bit of each.” When it comes to steelmaking, let us have a little bit of each. Let us have a bit of primary steel and a little bit of electric arc furnace steel, to ensure that we always retain those skills and recognise the importance of our sovereign steelmaking capability.
I hope that the Minister and the Secretary of State will produce that vision and plan over the coming weeks, so that we can have confidence in those jobs and so that the communities can have confidence that steelmaking will be retained and invested in for the long term.
Sureena Brackenridge (Wolverhampton North East) (Lab)
I represent a constituency built around steel and manufacturing that is now home to Tata Steel’s processing and distribution centre, the largest in the UK. In Wolverhampton and Willenhall, steel is our history and our identity. With the actions taken by this Government, I sincerely believe it will continue to be our future, too.
The Steel Industry (Nationalisation) Bill marks a serious and necessary step towards safeguarding the long-term future of the UK steel industry. It gives the Government the power to bring steel companies, including British Steel, into public ownership where it is in the public interest to do so. This is safeguarding Britain’s steel capability and capacity, which is firmly in the national interest, protecting jobs and our communities. That matters profoundly to places like mine. I am calling for British procurement as well, so that British-made steel is used to build our railways, infrastructure and wind turbines, so that national renewal runs through communities such as Wolverhampton North East, through the skills of our workers, the strength of our industries and a future based on good, secure jobs and apprenticeships.
I also sincerely believe that this decisive action would not have been taken under the previous Conservative Government. Since 2010, we have seen a litany of missed chances and, in my opinion, moral failures. That is why it is welcome that the Bill reflects the seriousness with which we should treat domestic steel production and the communities that depend on it. That certainty is being recognised by the industry. As UK Steel has said, it provides a vital reassurance for workers, customers and supply chains at a critical moment, recognising steel as a strategic national asset that is essential to economic growth, national security and resilience.
I also support the Government’s ambition to boost domestic production from 30% to 50%. However, I would ask the Minister to look at tariffs on imported steel, using evidence based on specific codes, and to engage with downstream firms that are concerned about the measures. In Wolverhampton and Willenhall, and across the Black Country, we understand what steel represents. We understand the value of secure, well-paid, skilled work. For our workers, our apprentices and our supply chains, and for the long-term strength of the United Kingdom, I support the Bill and commend it to the House.
Sarah Bool (South Northamptonshire) (Con)
In March, the Government released their steel strategy, which talked about taking bold steps to help to grow the industry. The bold steps that we have before us include granting powers to nationalise the industry and introducing a 50% tariff in six weeks’ time on the import of steel products that can also be made in the UK—I come back to this because it is a really important point. Protecting British Steel does sound admirable, and I completely understand it, but the decision has been made without consultation with the industry.
If the Government had consulted with the industry, I would not have had to meet with my constituent Alex Bailey last week, who felt absolute desperation about the future prospects of his business, which employs 70 people and has a £35 million turnover. He owns Dynamic Metals, one of the UK’s largest independent stockists of aerospace high-grade metals, which are specialist steels tested to high standards to be suitable for use in aircraft. The issue that he faces deals with three product types—12A, 14 and 27—but I will spare hon. Members with further details.
The Vice-Chamberlain of His Majesty's Household (Sir Nicholas Dakin)
I would like to know more.
Sarah Bool
I will be sure to write to the Minister with more details.
First, none of this steel can realistically be made in the UK. The Government have provided a list of potential suppliers, but the majority, including British Steel, only make commercial not aerospace-grade steel, and the only company that might, Speciality Steel UK, is currently in liquidation.
Secondly, as Alex explained to me, the drafting of the legislation is such that there is no way customs will be able to differentiate between a generic steel and a specialist steel as they use the same harmonised system codes upon import. That needs to be revisited.
Thirdly, the quota has been set far too low. Product 12A is subject to a 31% reduction in the quota allowance and now a tiny quota will be introduced for products 14 and 27, where there was no quota before. All in all, to be able to meet his order book requirements, Alex has no option but to incur the tariffs. The additional burden that he will have to pick up on 1 July amounts to £3.2 million. He will be bankrupt within six months if this measure goes ahead. As we have heard, he is not alone, because hundreds of businesses are in the same position. As Alex said:
“This is a classic example of legislation that has been written with noble intentions—to save the UK steel industry—but due to a lack of consultation with industry, lack of industry knowledge by the authors and a total misunderstanding of the knock-on effects, this single piece of legislation will kill stockholding and manufacturing in the UK.”
When the Secretary of State is looking into the case raised by my hon. Friend the Member for South Shropshire (Stuart Anderson), will he also meet with Dynamic Metals? Without prompt action now, the Government will run into much more significant issues down the line come 1 July.
Mr Jonathan Brash (Hartlepool) (Lab)
I warmly welcome the Government’s decision to move towards the nationalisation of British Steel. It is the right decision for our economy, our industrial communities and Britain’s national security. I say that as somebody who believes in the value of enterprise, competition and a strong private sector, but there are clear cases where privatisation has failed the national interest and where Government have not only the right to intervene but the duty to do so, particularly where foundational industries are now foreign-owned. I was stunned that when the shadow Minister was asked a straight question about whether the Conservatives would prefer British steel to be in the hands of the Chinese or the British, he could not simply answer “the British”. He avoided the question. That shows a staggering disregard for our country’s national security.
Steel is not just another commodity—it is fundamental to our national sovereignty. It underpins our defence industry, infrastructure, energy sector and manufacturing base. A nation that cannot produce its own steel leaves itself vulnerable, dependent on the decisions, priorities and interests of others. We have moved into a different era, although if we listened to some of the contributions from Opposition Members, we could believe that we are still in the 1990s. Globalisation is dead and, to be honest, I welcome its death, because all it ever did was leave working-class communities such as mine behind, ripping out the heart of industrial communities like Hartlepool.
The tragedy is that in this country we still import 68% of our steel needs. We must fix that tragedy. If British taxpayer money is to be spent, then British industry must benefit. If we are building British warships, British steel should be used. If Britain is building offshore wind farms, then British steel should be used. If we are building new nuclear reactors, as we are in Hartlepool thanks to the deal that we struck last September, then British steel should be used. My biggest plea to my right hon. and hon. Friends on the Front Bench is that we radically reform procurement policy in this country.
I welcome the steel tariffs being put in place and the assurances given by the Secretary of State that he will look carefully at the individual cases that have been mentioned, but we must put our country first. This Bill is critical to doing that and to protecting the working-class communities I represent.
Saqib Bhatti (Meriden and Solihull East) (Con)
It probably will not come as a surprise to Labour Members, but I fundamentally disagree with the last speaker, although I appreciated his passion. [Interruption.] The Secretary of State is getting a bit excited; I will come to him in a minute on the issue of tariffs. I am proud that we are the only party in this House objecting to the Bill, and for the right reasons.
The Secretary of State repeatedly talks about making this country stronger, but I do not think this Bill does that by nationalising. I just do not think that Governments can run businesses. I certainly mean no disrespect to Ministers on the Front Bench, but they will create inefficiencies and push up prices, and the taxpayer will end up stomaching the cost. That does not make us stronger; it makes us weaker.
The hon. Member for Hartlepool (Mr Brash), who spoke before me, said that we are still in the 1990s, but I think this Government are taking us back to the 1970s by pushing up costs and lumbering the taxpayer. A future Conservative Government will have to unwind some of the real harm that will come to fruition. No Labour Members can tell us where the nationalisation will stop. Will it be ceramics tomorrow? What will happen? Which industries will the Government pick and choose?
In the limited time that I have, let me come on to the issue of tariffs. Like my hon. Friend the Member for South Northamptonshire (Sarah Bool) and all my hon. Friends who have raised this point, I have been visited by a constituent. His name was Peter Watson, of Davicon. I have written to the Secretary of State about this issue, although that was only last week; I respect the fact that he may not have had time to come back to me, but I hope he does.
Davicon is the UK’s leading mezzanine manufacturer. The briefing that Peter put in front of me was a result of the tariffs and the quota reduction. There is a reduction of almost 97% on merchant bars and an increase in quotas of 50%. For all the Secretary of State’s best intentions and whatever he wants to achieve, the reality is that industry and markets do not work to the whims of Government. They will not move quickly enough to do that, which will push up prices. In the briefing I saw, that would mean a doubling of the quota for per-tonnage steel by 1 July. That cost will have to be borne by industry and taxpayers. If we are talking about nuclear power plant creation or HS2, we know that those taxpayer-funded projects will have to bear those costs.
I was listening to the Prime Minister yesterday during Prime Minister’s questions, and it is clear the Government recognise that an issue is coming down the tracks. I argue that that should have been anticipated before the tariffs came into place, but we are where we are. I have written to the Secretary of State, and I would really welcome some serious action on this issue. My hon. Friend the Member for South Shropshire (Stuart Anderson) made a really eloquent argument about a delay in the introduction. If that is not going to happen—
Saqib Bhatti
The Secretary of State is shaking his head. If that is not going to happen, let us look at the HS codes. He needs to recognise that there will be a serious impact on the steel industry and the peripheral industries that rely on steel manufacturing in this country.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Steel is to the UK what Yorkshire tea and Yorkshire puds are to God’s own county, what the hotpot is to Lancashire and what black cabs are to London. It is to the UK what the St Leger is to Doncaster and what the hood is to Haxey. It is about us. It is about what makes us and drives us. It is about pride.
British Steel is at the heart of the UK’s industrial heritage. It was the backbone of the industrial revolution, driving global infrastructure and enabling military pre-eminence. It was key to our rail, maritime, defence and major capital infrastructure. Someone said to me this week, “There is history that has been made, but, more importantly, there is history that we can still make.” We need to make it right here, right now, with British Steel.
The future of British Steel matters not only to my neighbouring area of Scunthorpe, but to communities across north Lincolnshire, South Yorkshire and beyond, including people in my own constituency, some of whom work at Scunthorpe and all of whom are deeply affected by the fortunes of a major local industry. The steelworkers at Scunthorpe are doing work that is essential to this country. It is highly skilled, technical and sometimes dangerous work. They deserve respect for what they do, and they deserve certainty about the future of the industry that they have helped to sustain. That is why the Bill before the House is so important.
While my interest is local, the issue is absolutely national. By nationalising steel, we can ensure that the UK does not become the only G7 country incapable of producing its own primary steel, and stop reliance on foreign imports. This is not about nostalgia for the past or keeping an industry going just for sentimental reasons; it is about recognising that steel is a strategic national asset.
If Britain is to build the homes, railways, energy infrastructure and defence capability that we need, Britain needs steel. If we are serious about industrial resilience, national security and economic growth, we cannot be indifferent about whether we retain the capacity to make steel here at home. The steelworks at Scunthorpe are not just another private asset on a balance sheet; they are a vital part of our industrial base. Once that capacity is lost, it is not easily rebuilt. Once those skills are gone, they are not easily recovered.
The Government are right to bring forward legislation that gives the Secretary of State the powers needed to act where the public interest requires it.
Public ownership should never be treated lightly, but nor should it be ruled out when a vital national industry is at risk. The test here is straightforward: does Britain need steel? Yes. Does Britain need the skills and capacity represented at Scunthorpe? Yes. Would it be in the national interest to allow that capacity to disappear? No. That is why intervention is justified. For the workers at Scunthorpe, for the communities in my constituency that depend on those jobs and for the future strength and resilience of our country, the Bill deserves the support of this House.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Bench contributions. I call the shadow Minister.
Dame Harriett Baldwin (West Worcestershire) (Con)
This has been an interesting debate, because it has brought out the strategic love of nationalisation for the sake of nationalisation among Government Members. With our reasoned amendment we have tried to put out a different approach. We also heard clearly from Reform that it is in favour of nationalisation for the sake of nationalisation. This Bill will satisfy neither our camp nor their camp. With this Bill, we have a chaotic, unplanned, non-strategic journey that will end up burning through taxpayers’ money at every stage. We can see that the decisions that the Government have taken since they came to power have delivered the worst of all possible worlds for this crucial industry.
Dame Harriett Baldwin
I promised Madam Deputy Speaker that, in the interests of time, I would not take any interventions. This Bill is an emergency intervention with mounting public costs that have no clear limits for the taxpayer. This legislation will certainly not put things on a secure footing.
We were told this time last year, when we were brought in on a Saturday for the first time since the Falklands war, that nationalisation was not the plan. The Prime Minister went to China with the Secretary of State and failed to secure a deal for British Steel, so we have this Bill. It does not resolve any underlying issues. Instead, it just opens the door to an indefinite and infinite bill for the taxpayer, and that is not all. It has a sunset clause that, would the House believe it, can be extended indefinitely.
There are far too many unchecked powers in this Bill. It does not address, as the Chair of the Business and Trade Committee mentioned, that Britain has the highest energy prices in the developed world. We cannot have an industrial policy for steel unless there is an energy policy for industry. In addition to the Chair of the Select Committee, we had an interesting speech from the Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney). She spoke about how we could turn this Bill into temporary, emergency legislation and about the path to returning British Steel to the private sector.
We also had powerful interventions from Opposition Members, including from my hon. Friends the Members for South Shropshire (Stuart Anderson), for South Northamptonshire (Sarah Bool) and for Meriden and Solihull East (Saqib Bhatti). They spoke up for the businesses in their constituencies that will be so badly affected by the inflationary 50% tariff on imported steel as of 1 June.
This afternoon is a chance for the Minister to answer some questions. Why were the Government unable to strike a deal with the Chinese owners? When exactly did the Government decide that nationalisation was the right path? Did they decide that before the Steel Industry (Special Measures) Act 2025 was introduced? If so, why was the House not told that at the time? Why should the taxpayer be the one who foots this bill? How is this value for money for the taxpayer? Do we even know what the total cost to the taxpayer will be from these ongoing losses, the capital investment and the enormous liabilities? This Bill commits the taxpayer to ownership of an asset that loses hundreds of millions of pounds each year. What assessment has the Minister made of the chilling impact that the measures in this Bill will have on other inward investors into the United Kingdom, and what is his exit strategy, if he has one?
If the Government propose to nationalise a steel company on the basis that it meets the public interest test, can the Minister explain how the same asset could ever be returned to private ownership without contradicting their own public interest assessment that it is in the national interest? Or is the reality that once the threshold is crossed, the British taxpayer is locked into permanently underwriting a loss-making asset, with no timetable for it to return?
Why is there no requirement in this Bill for a proper impact or value-for-money assessment before the Secretary of State exercises the powers? Why have the Government not taken us up on our cheap power plan, which addresses one of the root causes of this sector’s difficulties? Can the Minister—I think I heard him say it from a sedentary position, but I would like to hear him say it again—urgently commit to look at the impact of the 50% steel tariffs on our steel manufacturing sector?
This House should not be required to sign a blank cheque. We cannot and will not support legislation that appears to be nationalisation in search of a rationale. I urge all colleagues to support our reasoned amendment.
The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
As I was preparing for today’s debate, it struck me that 60 years ago this summer, this House was debating steel nationalisation and the England team went on to win the world cup. We are back here discussing steel nationalisation again, so I have high hopes for the summer.
Sometimes it is informative to learn from the past. Going back to the steel nationalisation of 1966, the Minister of Power opened the debate and said that
“there is no manufacturing industry of such basic importance to the British economy.”—[Official Report, 25 July 1966; Vol. 732, c. 1224.]
Of course, he was right then, and it is true now. However, the steel industry is so good that we have not nationalised it twice; we have nationalised it thrice, because the steel industry was also partly nationalised in 1948. The Minister of Supply said:
“Without steel the life of Britain would collapse.”—[Official Report, 15 November 1948; Vol. 458, c. 53.]
That is absolutely true, as we have heard from Members of the House today.
As the Minister for Industry, part of my mission is to increase the productive capacity of our industry. What we have seen in the steel industry, particularly during 14 years of the Tories, is productive decline. They presided over the loss of great steel plants and a reduction in the productive capacity of those steel plants. The thing is, the decline in market share—from 80% to 30%—was not inevitable. It was a choice born out of inaction and out of a lack of industrial policy.
The reason that this Bill is so important is exactly the same as the reason it was important in 1966: there has been a great technological shift in the industry. Back then, it was continuous casting; now, it is electric arc furnaces. The industry has been de-capitalised by years of under-investment, and it needs to be re-capitalised. Productivity fell off a cliff under the previous Government. It fell repeatedly following the closure of the Redcar blast furnace, and productivity must be improved. These are not the words of someone who is wedded to a socialist principle of nationalisation. They are the words of someone who has spent his life in the steel industry, who ran a business in the steel industry, and who is dedicated to improving productivity in our industry.
I heard the words of the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), when he opened the debate, and I was quite disappointed. He and I met earlier this week, and my colleagues sitting behind me might be surprised to learn that he was thoughtful and probing in the questions that he asked me. He made some really interesting points, and we had a good discussion. I thought about his points afterwards, and I found it really interesting that he had thought about the things that we will have to bear in mind when we pass this legislation. But what has he done? He has fallen into the Conservatives’ usual trap of presenting this as an ideological debate, instead of a debate about the function of an industry that is vital to this country. That is how they have prosecuted this debate.
I learned something when I was working in the industry. Two years ago, I was running a business in the steel industry. Twenty years ago, I was working at the Scunthorpe steelworks. More than 30 years ago—the House will not believe it—I left school and got a job in the steel industry. There were a lot of changes over that time. Sometimes I stayed in the same job, but the company and the badge on my hard hat changed. When it changed from British Steel to Corus, that was a big blow to how people felt about it, but I will tell the House one thing that I recognised: ownership matters, and it makes a difference. Strategy matters, and it matters where the head office of a business is. People care about the area where they work, and those things are important. The workers care, communities care and we care, but the Conservatives do not care—that is quite clear to me.
Andrew Griffith
I will be very brief. I thank the Minister for his remarks. One ideological difference he has not mentioned once is the huge gulf between those on our side and his party on energy, and the Government are not going to have a sustainable steel industry due to energy.
Chris McDonald
Yes, the hon. Member is right. There is a gulf there: the Conservatives were in favour of some of the highest industrial energy prices in the world. We have delivered an increase in the supercharger benefit from 60% to 90% and introduced the British industrial competitiveness scheme. Through our investments in chemicals, ceramics and, of course, steel, we are supporting British industry with its operating costs on energy and its capital costs to improve its productivity as well.
In steel communities, they are proud people. They are people who can stand on their own two feet, and they want to; they do not want subsidies. They have pride and they have dignity in their work, and when I went to the Corby steelworks recently, I saw the sacrifice of individuals and communities with their hard and dangerous labour.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
The Minister knows the sacrifices that have been made by my constituents at Dalzell plate mill in Motherwell. Will he confirm that this plate mill remains at the heart of the UK steel strategy, and that the Bill we have debated today provides a potential safety net for the future of Dalzell?
Chris McDonald
While the Government are minded to nationalise British Steel, we do not have any other nationalisations in mind. However, we do recognise the importance of the Dalzell plate mill, and I am concerned to ensure that it gets back up and running, and delivers its steel ship plate orders. I thank my hon. Friend for the work that she has been doing in championing that.
I thank my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball)—she is sitting behind me—who has supported me throughout the preparation of this Bill, but cannot speak because of her position in the House. Likewise, I thank my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who is also supporting the passage of this Bill, but again cannot speak because of his position. I also thank the Chief Whip, who of course did so much work in advance of this Bill coming forward.
Let me give at least one or two minutes to the amendment. Fundamentally, there is a contradiction in the Opposition’s position in that, if we do not pass this Bill, British Steel is trapped in the Steel Industry (Special Measures) Act. The Conservatives supported that legislation, so they do not want to allow British Steel to break out of that. However, I would point out to Conservative Members—and certainly those who feel that the Bill gives too many powers to the Secretary of State—that this Bill has been modelled on the Banking Act. At the time the Banking Act was being passed, a fellow sitting on the Opposition Front Bench called George Osborne—I understand he is popular in Tory circles—said, “I will do everything I can to help this Bill on to the statute book.” I think what we are hearing is that that is good enough for the bankers, but it is not good enough for the steelworkers.
To move on, I am as concerned as the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), and the spokesperson for the Liberal Democrats, the hon. Member for Richmond Park (Sarah Olney), to get in private sector investment. We have carried out a very careful balance with this Bill to ensure that the steel industry is fully informed, understands our intentions and is supportive—and it is supportive. Just in the last couple of weeks, 7 Steel has announced a £100 million private sector investment in the steel industry in the UK, so there is no chilling effect from this. In fact, this will be a spur to, or a boost for, private sector investment.
Let me mention some of the speeches. The Chair of the Business and Trade Committee mentioned a number of things, but I think he was the only person to raise scrap. We have launched a scrap working group, which will be dealing with that issue.
My hon. Friend the Member for Newport East (Jessica Morden) rightly raised the importance of the Llanwern steel plant, and she mentioned import penetration in relation to rebar. My near constituency neighbours, my hon. Friends the Members for Middlesbrough and Thornaby East (Andy McDonald), for Hartlepool (Mr Brash) and for Middlesbrough South and East Cleveland (Luke Myer), could not have been clearer about how the Tories abandoned the steel communities in Teesside and the difference that this Labour Government are making.
A number of Opposition Members mentioned tariffs. There are no tariffs in this Bill. However, as we heard from the Trade Minister at the Dispatch Box this morning and from the Secretary of State this afternoon, there is an open door for companies to come in and discuss those issues.
Finally, the hon. Member for Boston and Skegness (Richard Tice) and I have had many exchanges about steel. Sometimes we agree and sometimes we do not agree, but we always have a good discussion. He raised the importance of DRI blast furnaces as well as electric arc furnaces, and he and I will certainly have the opportunity to discuss that much further.
I think it is quite clear that the British Government are not and should not be neutral when it comes to British business, and we are on the side of business. We are unashamedly on the side of British business, and we are unashamedly on the side of the steel industry and steel communities. That is the difference between us and the Opposition, and I commend this Bill to the House.
Question put, That the amendment be made.
Proceedings | Time for conclusion of proceedings |
|---|---|
First day | |
Clauses 1 to 51; new Clauses relating to Part 1; new Schedules relating to Part 1. | The moment of interruption on the first day. |
Second day | |
Clauses 52 to 57; new Clauses relating to Part 2; new Schedules relating to Part 2; Clauses 58 to 60; new Clauses relating to Part 3; new Schedules relating to Part 3; Clauses 61 to 64; new Clauses relating to Part 4; new Schedules relating to Part 4; remaining proceedings in Committee on the Bill. | One hour before the moment of interruption on the second day. |
Steel Industry (Nationalisation) Bill
Monday 8th June 2026
(2 days, 14 hours ago)
Commons ChamberRead Full debate Steel Industry (Nationalisation) Bill 2026-27 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 8 June 2026 - (8 Jun 2026)
20:11 - The Committee divided: - Ayes: 81 / Noes: 266 - Question accordingly negatived.
00:00 - The Committee divided: - Ayes: 65 / Noes: 257 - Question accordingly negatived.
20:40 - divided: - Ayes: 145 / Noes: 251 - Question accordingly negatived.
Dame Harriett Baldwin (West Worcestershire) (Con)
I beg to move amendment 21, page 1, line 6, leave out “of or including” and insert “predominantly of”.
This amendment would narrow the definition of a steel undertaking so that it had to be a business consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 14, in clause 2, page 1, line 14, leave out
“includes (but is not limited to)”
and insert “means”.
This amendment would limit the public interest test to the areas set out in subsections (a) to (c).
Amendment 23, page 1, line 20, at end insert—
“(d) preventing the closure of, or the loss of jobs at, a steel undertaking in Wales.”
This amendment includes the public interest in preventing the loss of jobs in Wales and the prevention of the closure of a steel undertaking in Wales in the meaning of public interest for the purposes of the Act.
Amendment 1, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power unless they have laid a statement before both Houses of Parliament explaining their reasons for concluding that it is necessary to exercise the power in the public interest.”
This amendment would require the Secretary of State to lay a statement before Parliament explaining their reasons for concluding that it is necessary to exercise a principal transfer power in the national interest, before exercising that power.
Amendment 15, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power unless he has commissioned an independent assessment of whether the exercise of the power is in the public interest, and that assessment has demonstrated that it is in the public interest.
(2B) The Secretary of State may appoint such independent person as he thinks fit to carry out an independent assessment under subsection (2A) above, and may pay remuneration and allowances to that person.”
This amendment would require an independent assessment of whether the public interest test had been met before the Secretary of State could exercise the principal transfer powers.
Amendment 16, page 2, line 20, at end insert—
“(2A) The exercise of a principal transfer power may only be considered to be in the public interest under subsection (1) if the Secretary of State has is satisfied that the exercise of the power would provide value for money for the taxpayer.”
This amendment would require the NAO to have concluded that the exercise of the principal transfer power was good value for money before the Secretary of State could consider it to be in the public interest.
Amendment 17, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power under subsection (1) unless they have laid a report before Parliament containing full details of the criteria used to assess whether the exercise of power would be in the public interest.”
This amendment would require the Secretary of State to publish full details of the criteria used to assess the public interest test before exercising the principal transfer power.
Clause 2 stand part.
Amendment 12, in clause 3, page 2, line 10, leave out subsections (3) to (5).
This amendment would prevent the Secretary of State extending the sunset of the principal transfer powers.
Clause 3 stand part.
Amendment 2, in clause 4, page 2, line 30, leave out “negative” and insert “affirmative”.
This amendment changes the procedure for share transfer regulations from the negative procedure to the affirmative procedure.
Clauses 4 to 14 stand part.
Amendment 3, in clause 15, page 8, line 21, leave out “negative” and insert “affirmative”.
This amendment changes the procedure for property transfer regulations from the negative procedure to the affirmative procedure.
Clauses 15 to 38 stand part.
Amendment 18, in clause 39, page 25, line 32, leave out “negative” and insert “affirmative”.
This amendment would require regulations relating to continuity obligations to be subject to the affirmative procedure.
Clauses 39 to 44 stand part.
Amendment 19, in clause 45, page 28, line 37, leave out “negative” and insert “affirmative”.
This amendment would require regulations related to enforcement to be subject to the affirmative procedure.
Clauses 45 to 51 stand part.
New clause 2—Stakeholder Advisory Committee—
“(1) The Secretary of State must establish a Stakeholder Advisory Committee to provide advice on the exercise of principal transfer powers under this Act (“the Committee”).
(2) The Secretary of State must ensure that the membership of the Committee includes representation from stakeholders, including but not limited to—
(a) industries that rely on the supply of steel, including the defence sector and critical national infrastructure,
(b) representatives of the workforce of the steel undertaking, and
(c) local authorities for the areas in which the steel undertaking operates.
(3) The Secretary of State must consult, and have regard to the advice of, the Committee before making a determination that the exercise of a principal transfer power is necessary in the public interest under section 2.”
This new clause requires the Secretary of State to establish a stakeholder advisory committee. The Secretary of State would be required to seek the committee's advice before making a determination that the exercise of a principal transfer power under the Act was in the public interest.
New clause 3—Jobs and industrial transition strategy—
“(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State must prepare and publish a jobs and industrial transition strategy.
(2) A strategy under subsection (1) must explicitly set out how the Government's investment and transition plans for the specified steel undertaking will—
(a) protect skilled employment,
(b) provide and support reskilling and redeployment opportunities for the workforce, and
(c) deliver tangible economic renewal and support economic resilience in the local communities dependent on the steel undertaking.
(3) The strategy must be laid before Parliament within six months of the day on which the regulations exercising the principal transfer power take effect.”
This new clause requires that the Secretary of State publishes a report on jobs and industrial transition strategy where it exercises a principal transfer power.
New clause 5—Duty to report: 10-year strategy for nationalised steel undertakings—
“(1) Within three months of exercising a principal transfer power in relation to a steel undertaking under this Act, the Secretary of State must publish and lay before both Houses of Parliament a report containing a 10-year strategy for the steel undertaking.
(2) Any report published under subsection (1) must include—
(a) a strategy for the operation of any blast furnaces which form part of the steel undertaking,
(b) an investment plan for the steel undertaking,
(c) a vision for the future of the site of the steel undertaking, and
(d) consideration of the need for a steel procurement strategy which prioritises British steel to support the steel undertaking,
for the following 10 years.”
This new clause would require the Secretary of State to publish a 10-year strategy for any steel undertaking nationalised under this Act.
New clause 8—Contingent liabilities—
“(1) The Secretary of State may not exercise a principal transfer power in relation to a steel undertaking unless they have made a statement to Parliament on the value of contingent liabilities associated with the use of the power.
(2) The statement made under subsection (1) must include—
(a) the value of any contingent liabilities to be acquired; and,
(b) the steps the Secretary of State will take to seek to minimise taxpayer exposure to any contingent liabilities so acquired.”
This new clause would require the Secretary of State to make a statement to Parliament on contingent liabilities acquired before they exercise a principal transfer power under this Act.
Dame Harriett Baldwin
If I may, I would also like to speak to the other amendments in my name and those of my hon. Friends, and, before I do that, approach the Bill with the serious concern it deserves. Today’s amendments reflect some of the points the Opposition made on Second Reading: that the Bill is a chaotic, unplanned intervention that risks landing taxpayers with an open-ended and potentially unlimited bill. Without addressing those issues as we make this legislation, we need to really focus on the things that are currently making the domestic production of steel unprofitable, such as higher employment costs and policies in pursuit of net zero, such as carbon taxes and associated regulations and levies.
Before I turn to the amendments in detail, I put on record how much I respect the Under-Secretary of State for Business and Trade, the hon. Member for Stockton North (Chris McDonald), and his real-life expertise in the steel business. He is truly a rare example on the Government Benches of someone who has deep private-sector experience and really knows his subject—I salute that. My own private-sector expertise is as an investor, so most of the amendments in my name and those of my hon. Friends are trying to protect the taxpayer from some of the financial risks the Bill lands them with.
The fact is that nobody wanted to nationalise British Steel. The Government told us last year, when they brought in emergency legislation—and brought Members back on a Saturday for the first time since the Falklands war—that they did not want to nationalise British Steel. They may now claim to their Back Benchers and union backers that this is something to celebrate as true socialism, but the reality is that it is an outcome that the Government wanted to avoid.
The Government failed to negotiate a good outcome with the Chinese owners of British Steel. The Prime Minister and the Business Secretary went all the way to China and failed to get a deal. Whenever this Government negotiate, the taxpayer loses out. The Conservatives do not think that the Government should nationalise British Steel, because we do not think politicians should be running businesses. Since the Government intervened last year, it has cost taxpayers over £1.3 million every day.
The Bill is deeply flawed, and it is in a spirit of goodwill that I offer the Government the chance to adopt the Opposition’s amendments. I am sure that they will want to agree to them, as they are all sensible.
Richard Tice (Boston and Skegness) (Reform)
To correct the record, I have been calling for British Steel to be nationalised for seven years. I urged the previous Conservative Government not to sell British Steel to the Chinese, and if they had followed my excellent advice, we would not be in the pickle we are now in.
Mark Pritchard (The Wrekin) (Con)
It is interesting that the hon. Member for Boston and Skegness (Richard Tice) once again outflanks Labour on socialism, but there we are. As a fellow west midlands MP, I am sure my right hon. Friend will be as concerned about the Bill as I am. My constituent, Mr Peter Hughes of EverEdge, which is a west midlands steel manufacturing company, has suggested that:
“While these measures are positioned as protecting primary steel production (such as TATA Steel), they are inadvertently undermining the much larger UK steel-processing sector.”
Does my right hon. Friend share his concern, in particular, the fact that:
“While raw material costs are rising, there are no equivalent restrictions on imported finished products”?
That could be seen—inadvertently, I accept—as a tax on manufacturing. It will certainly damage UK, Shropshire, and west midlands steel manufacturing.
Dame Harriett Baldwin
As a west midlands MP, I absolutely recognise that. In fact, I was with a constituent in Worcester on Friday, Mr Michael Outwin of Industrial & Tractor Ltd, who is going to have to pay a 50% tariff. I tried to table some amendments on the tariff regime, but unfortunately, they were not orderly, so I will limit myself to agreeing with my right hon. Friend. There are many types of steel that will be affected by the tariffs that do not seem to be made in the UK. I would like the Minister to clarify how he expects people to continue manufacturing from the steel that they have been importing for some time, once the tariffs are in place.
On the Opposition amendments, I am sure that everyone in the Committee agrees that the Bill as it stands exposes the taxpayer to unlimited liability for an unlimited length of time. The Bill expropriates businesses, and that will deter inward investment into our country. You do not have to take my word for it, Dame Caroline, as it is also in the Government’s impact assessment that one of the Bill’s potential impacts is that it chills the investment environment in this sector. That is why we have tabled the amendments the Committee is considering today.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Before I call the Minister, I will set the record straight: sadly, it is just plain old Ms Nokes in Committee of the whole House.
The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
I thank the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), for her incredibly generous remarks at the start of the debate. I think we all try our best here with whatever expertise we have; of course, I recognise her expertise in finance, and will aim to address some of the serious issues she raised.
At the heart of the Bill and this debate is the future of our steel industry. The difference in opinion between the Government and the Opposition over the use of nationalisation as a tool of industrial strategy may be irreconcilable, but it is a useful tool—although not one to be used lightly. It is important that it is used in situations of market failure or some other private sector issue, which is certainly the case today. It was also the case when the previous Conservative Government briefly nationalised one of our steel companies, before that led to a failed private sector ownership.
Sir Edward Leigh (Gainsborough) (Con)
Yes, the Minister is right: Greg Clark nationalised it. As far as my constituents who work at Scunthorpe are concerned—and, I am sure, those of my hon. Friend the Member for Brigg and Immingham (Martin Vickers)—all we want is a viable Scunthorpe. We do not take an ideological line on nationalisation in this case. Given the problems we are now reading about in respect of electric arc technology in Port Talbot, can the Minister commit that the Government are fully committed to the blast furnaces in Scunthorpe?
Chris McDonald
Perhaps I can even give a slightly fuller answer than that. The particular issue with that previous nationalisation by the then Secretary of State was that it was effected merely to create a change of ownership, without actually improving the quality of the business or attracting additional investment into the business at the time. It is important to take this Bill in the full context of our steel trade measures and our steel strategy, which lays out a forward plan for the steel industry. Nationalisation is one of the tools that we can use.
The Government have been clear in our steel strategy that we see a transition to electric arc furnaces over time—there are good reasons for that, not least because they are the most productive and efficient technology available and are reliable and tried and tested—but our intervention in the Steel Industry (Special Measures) Act 2025 and our ongoing support of the British Steel business has been to ensure that we have blast furnace-produced primary steel available as part of that transition. The furnaces in Scunthorpe are the only two working blast furnaces in the UK, and they are currently our only source of primary steel.
The right hon. Member for Gainsborough (Sir Edward Leigh) also raised reports in the press about delays to the project in south Wales. Delays on such a large project are not unusual, but the specific issue in that case was around the groundworks—I would certainly be happy to expand on that more if it becomes part of the debate. I am, of course, in close contact with Tata Steel about that. In my experience of such projects, it is always difficult to understand what the duration of the project will be until it gets out of the ground, and ultimately there are issues with the groundworks there.
Let me move on to address amendment 21 and the issues raised by the shadow Minister. In terms of its structure, the Bill is very much modelled on the Banking Act 2009, which received incredibly broad support. The clauses in part 1 are vital to the operation of the Bill, and I urge the Committee to reject attempts to remove them.
While I understand the consideration that has gone into the preparation of the amendments, narrowing the scope of the definition of a steel undertaking would, in the Government’s view, introduce ambiguity rather than clarity. In practice, there are unlikely to be many undertakings operating at scale in both steelmaking and an unrelated business practice; if there were, the Government would look to exercise powers in a way that focused on what was necessary to operate the steelmaking business. The drafting of the Bill follows on from the text of the Steel Industry (Special Measures) Act. The Government are therefore of the view that amendment 21 is not necessary.
Jacob Collier (Burton and Uttoxeter) (Lab)
I fully support the need to buy British, but does the Minister recognise that JCB, based in my constituency, cannot source the grade and size of steel required for its machines entirely from the UK, and that a significant proportion of its steel comes from the EU? The proposed tariffs will apply to imported steel even when no UK alternative exists, so they are due to cost JCB millions. Will the Minister look into the matter urgently and meet me and JCB to discuss it?
Chris McDonald
My hon. Friend raises a specific point about JCB. I am reasonably familiar with its business, and I think its particular concern may be around the sourcing of plate steel. The steel trade measures—the tariffs and quotas that we announced—are designed to ensure that the UK is not subject to subsidised steel, which would damage our upstream industry, and will certainly help to support the upstream sector. Of course, we need a strong upstream sector in order to have a strong downstream sector. The issue with plate steel is that the Dalzell plate mill in Scotland, which is capable of making many of these steels, has not been operating for some time. I would be happy to meet my hon. Friend and JCB to discuss that in more detail.
Chris McDonald
I was just going to address the point the right hon. Gentleman made about the business in his constituency. I am not familiar with that business, but the general approach we have taken is to ensure that the groupings of steel under the trade measures are subject to the tariffs where those steels are or can be made in the UK, accepting that some of them are not but could be made in the UK, including at operations such as Dalzell. It is not always possible to separate all those steels out based on the groupings, so that is the purpose of the quota.
I am always interested to hear of specific examples. I had a meeting with a business last week for which this appeared to be a concern, but once we discussed the issue in detail we found that it was not an issue for the business, because of some of the arrangements that were in place. If the right hon. Gentleman would like to share further details about that case, I am keen to hear them.
Mark Pritchard
For clarity—perhaps I was not clear— a constituent of mine runs the company but the company itself is actually in another constituency, and it employs people throughout the west midlands. Could I write to the Minister about that particular case in order to seek more clarity?
Mark Pritchard
I am grateful for that. I want to make two brief points on tariffs, which the Minister mentioned. First, the Shropshire chamber of commerce has said:
“There is growing concern that tariffs may be applied to certain materials and products that are not currently available from UK manufacturers”.
I would be interested to hear the Minister’s view on that. Secondly, concerns have been raised about fabricated steel products that appear to fall outside the tariff regime. In practice, that could create an unintended incentive for steel-processing fabrication work to move overseas to avoid tariff costs. Will the Minister comment on that?
Chris McDonald
I am aware of that issue as well, and if the right hon. Gentleman would like to include all those issues in the letter, I will be happy to provide him with a response.
Gideon Amos (Taunton and Wellington) (LD)
I have been contacted by Coker Engineering in my constituency, which supplies Rolls-Royce, Leonardo and other defence companies. It can only use steels from certified electric arc mills of certain types and is worried about facing 50% tariffs after 1 July, once tariff-free goods have been used up. Will the Minister similarly look at its concerns and consider exemptions for steels that cannot be sourced in the UK?
Chris McDonald
The hon. Member might wish to let the business know that we have committed to a 12-month review of these tariffs, which, as I said, apply to steels that are made or could be made in the UK. I am aware that Speciality Steel UK is currently not operational as it is going through an administration process. Although the sort of high-quality aerospace steels that he mentioned may not be made there, I think it is probably the most likely location where they will be made, subject to those certifications, which are held by that business. The official receiver is currently in exclusive discussions with the business and a potential owner, so it is possible that the company he refers to may see a UK supplier soon, but if he shares the details with me, I will certainly be able to give him a fuller response.
Alex Ballinger (Halesowen) (Lab)
Interestingly, there is also a Coker facility in my constituency, and I have had several other businesses write to me on this subject. Only last week I visited the London Screw Company in Halesowen, which is really concerned that the 50% tariffs will increase the price of its products and make it uncompetitive. Although I am pleased that there will be a 12-month review, I wonder if that will come soon enough for such businesses in my constituency. Can the Minister provide any relief in the interim for those that may be on the verge of something more serious?
Chris McDonald
I thank my hon. Friend for raising the issue of the London Screw Company, and also for the discussion he had with me about that very company last week. It looks to me to produce an extraordinarily high-quality range of products, and certainly better than I normally find for my DIY projects, so it is my intention to patronise that company in future—we should all have more high-quality ironmongery, I believe. In a similar vein, if my hon. Friend writes to me with further details, I will ensure that my officials look at that matter, but in the first instance we would look to see whether those steels are made or could be made in the UK.
Unless there are any further questions about downstream steel producing, I will move on to address more of the shadow Minister’s comments. She talked about the public interest test in clause 2. Some of the amendments would limit the test exclusively to consideration of the three factors in clause 2, whereas amendment 23 seeks to expand them to include the prevention of closure or job losses in Wales. The inclusion of the three factors in the Bill offers some additional weight, and of course any assessment of an intervention will need to be considered against them. However, there may be a good rationale for an intervention that moved beyond that and did not sit squarely under those factors, so in our view it would be sensible not to bind the hands of the Government in that way.
The Chairman of Ways and Means (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
Steel provides vital materials for our national infrastructure, from defence to renewable energy, and creates thousands of jobs across the UK. The Liberal Democrats therefore welcome the action that the Government are taking to protect British Steel and ensure that the blast furnaces in Scunthorpe do not go cold, but we are clear that the nationalisation of British Steel must be a temporary step to rescue the business before it can be returned to the private sector. We believe in a thriving, privately run steel industry, supported and empowered by the Government through an effective steel strategy.
Although the Liberal Democrats support this step, the Government must provide more detail on the plan, including how they will find private co-investors who can help to modernise the sites and put the money in to help to create more jobs. They must also ensure that the key stakeholders, including industries that rely on steel such as defence, are properly engaged in and represented through the process. We cannot afford another collapse of British Steel in a few years’ time, and we must move on from interim short-term measures to create a robust long-term plan for the future of the plant and sustainable domestic steel production, with an emphasis on national security.
I wish to speak first in favour of amendment 1, which stands in my name. Fundamentally, it is about parliamentary accountability. If the Secretary of State is to exercise a significant transfer power, Parliament should, at the very least, be told why that action is necessary and in the public interest. The amendment would not prevent the Government from acting; it would simply require Ministers to explain their reasoning before exercising the power, providing far greater accountability and transparency. Requiring a statement to both Houses would help to ensure that the use of the powers is proportionate, justified and open to democratic oversight. The Government already argue that the powers will be used only where necessary. If that is the case, there should be no objection to setting out those reasons clearly before Parliament. Amendment 1 proposes a modest and reasonable safeguard. It does not create a veto or impose an onerous process; it merely asks Ministers to account for their decisions.
I wish to speak in favour of amendments 2 and 3, which seek to ensure that regulations relating to property transfers and share transfers are made subject to the affirmative procedure rather than the negative procedure. The transfer of property or shares by ministerial regulation is not a minor or purely technical matter. These provisions are the heart of the Bill and give the Government significant powers with substantial financial, operational and public consequences. Given the importance of such decisions, does the Minister not agree that it is entirely appropriate that Parliament should approve such regulations, rather than having to rely on the limited scrutiny afforded by the negative procedure? The affirmative procedure would guarantee a debate and a vote in both Houses, ensuring proper democratic oversight before the powers were exercised. At their core, amendments 2 and 3 are about reinforcing accountability, transparency and parliamentary sovereignty in the exercise of delegated powers, and I urge Members to support them.
New clause 2, which also stands in my name, would establish a stakeholder advisory committee to ensure that decisions made under the powers in the Bill included input from the relevant groups and those most affected. The exercise of principal transfer powers could have major implications not only for the steel undertaking itself, but for workers, local communities, supply chains and strategically important industries across the country. The proposed committee would bring together voices from industry, the workforce and local authorities, ensuring that decisions were grounded in practical expertise and real-world consequences. The inclusion of sectors such as defence and critical national infrastructure is particularly important, given the strategic significance of the steel supply to national resilience and economic security. A structured advisory mechanism would improve transparency, strengthen confidence in decision making and help to ensure that interventions are sustainable and effective. New clause 2 is about ensuring that the public interest is determined not behind closed doors, but with the benefit of broad expertise and stakeholder input.
I wish to speak in favour of new clause 3, which recognises that intervention in a steel undertaking cannot simply be about ownership or transfer powers in isolation. It must be about people, jobs and the long-term future of industrial communities. If the Government exercise these significant powers, they should be required to set out a clear strategy for protecting workers and supporting economic transition. Not only is the steel industry strategically important to the national economy; it is often central to the identity and prosperity of the local communities within which it is situated. Workers in these industries possess highly valuable and specialised skills. Any transition strategy should therefore prioritise the protection of skilled employment wherever possible. Where change is unavoidable, there must be a serious commitment to retraining, reskilling and redeployment opportunities so that workers are not left behind. New clause 3 would help to ensure that Government intervention was accompanied by a coherent industrial strategy, rather than being another short-term fix and crisis management.
Steelmaking is of vital strategic importance to the UK. It creates thousands of jobs across the country and is central to many communities, and we rely on it for essential parts of our national infrastructure, from defence and transport to clean energy generation and advanced manufacturing. Although the Liberal Democrats are supportive of the pace and urgency of the Government’s action to protect British Steel, nationalisation must be a temporary step, and the Government must ensure adequate transparency and accountability throughout the process. I therefore urge the Minister to support these amendments, to ensure that the legislation can deliver the necessary support to the steel industry, while balancing the needs of local communities and workers and ensuring that the necessary steps are taken to ensure thorough parliamentary accountability.
Sarah Champion (Rotherham) (Lab)
As you know, Madam Chair, I have been urging successive Governments for over a decade to back the British steel industry, so it is genuinely a pleasure to be here today as the Government do just that. I support this historic Bill.
Steel is essential for the UK’s economy. It supports thousands of well-paid, skilled jobs and plays a crucial role in ensuring Britain’s security, particularly in an ever more volatile and uncertain world. Yet for years the industry has been allowed to wither. Production has fallen and plants have been lost—and with them jobs, capability and capacity. We simply cannot afford to allow this precipitous decline to go on any longer.
Rotherham is a steel town. It has seen the consequences of past Governments’ neglect up close. Speciality Steel, which is based in Rotherham—and Stocksbridge—should be a crown jewel in our economy, but it has been allowed to lurch from crisis to crisis, choked of investment and left at the mercy of unscrupulous ownership, unfair competition and a lack of vision. The plants currently stand still, shuttered amid the fallout of Liberty’s collapse. The workers are furloughed and uncertain about what their futures hold. I would be grateful if the Minister could update the Committee on the current state of the sale, which is now in its final stages.
My concern is not limited to Speciality Steel. Steel in Rotherham is at the centre of our local economy, and the crisis has had a substantial impact up and down the supply chain. The Minister’s ambition for steel’s renaissance could also be a rebirth for local businesses and local communities, but that requires investment, foresight and commitment. The Government’s steel strategy sets out a strategic vision for the industry and, crucially, delivers real and profound change for the sector as a whole. With £2.5 billion of investment in the sector and an ambitious but achievable target of 50% of the steel used in Britain to be produced here, the strategy is a blueprint for a revitalised domestic steel industry; it is one that has been roundly welcomed by the sector.
Perhaps most importantly, the strategy sets out a new approach to steel imports. Time and again, I and other steel MPs in particular have warned that a failure to tackle cheap, often state-subsidised and heavily polluting imports would destroy any attempt to increase domestic production. Without a level playing field, British steel cannot hope to compete. It is therefore welcome that the Government have acted to protect UK steel producers from unfair competition through a range of new trade measures, quotas and tariffs. While that is good news for steel producers, we do need to get the details right. I thank hon. Members on both sides of the Committee for raising specific examples of that.
Alongside steel producers, Rotherham hosts a large number of steel stockholders and downstream businesses. I have raised with the Government a number of instances in which trade measures have been introduced on products not currently produced in the UK, or where UK production and capacity is far below demand. I urge Ministers to act to ensure that those businesses are not impacted unfairly and that trade measures conform to the realities of the UK market; to do otherwise risks inadvertently harming the very industries and communities that the Government seek to defend.
While the Bill will not have a direct impact on steel production in Rotherham, it does send an important signal. I am proud that the Government are taking resolute action to ensure that they have the necessary tools at their disposal to safeguard the future of British Steel in Scunthorpe. I hope that this will set a precedent as the situation with Speciality Steel develops and that they will take similarly decisive action there, should it prove necessary.
With the right support, British steel can—and should—play an ever greater role in our economy, in infrastructure projects and, crucially, in our national security. I know that steelworkers in Rotherham will be relieved to have a Government who are so clearly on their side—on the side of good jobs and a dynamic economy—and, most importantly, a Government who back British steel.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I will focus my remarks on clauses 1 to 3 of the Bill and the breadth of the powers that they give to the Secretary of State. I start with the meaning of a “steel undertaking” in clause 1, which is one
“that carries on a business consisting of or including…the manufacture or processing of steel, or…iron”.
As the Minister will know, I raised in an intervention on the Secretary of State on Second Reading—indeed my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin), who speaks from the Front Bench, also mentioned this earlier—that that wording could appear to include undertakings that have as little as 1% of their business in iron or steel.
Richard Tice
The very reason that the Government need the ability to extend the sunset clause is that if they listened to the amendments from the Conservative party, the delays from various items would be so great that they could go beyond the two years. Of course the Government need the ability to extend the sunset clause.
Sir Jeremy Wright
I recognise that the hon. Gentleman does not normally engage in the detail of legislation, but if he did, he would know that this is the Committee stage, where we look at the detail.
What the Government could perfectly properly do is pass the legislation, as amended by my hon. Friend the Member for West Worcestershire, and if they felt at the end of the sunset clause period that they needed further powers, they could come back to this House with further primary legislation and seek our consent to do that. The difficulty with what we have before us is that the Secretary of State has the power to extend the sunset clause indefinitely, by regulations, over and over again. That is what the wording of the Bill says, and that seems to me to be something we should not accept here. What we should do is reinstate the natural, ordinary meaning of a sunset clause, which is set out in clause (3)(1), by removing the rest of that clause. If, as the hon. Member for Boston and Skegness (Richard Tice) suggests, the Secretary of State wants to extend those powers, he should seek the authority to do so in primary, not secondary, legislation.
These deficiencies in the Bill are cumulative: the power to indefinitely extend the Secretary of State’s proposed powers is more pernicious because the powers are so broad, and the huge latitude that he would have to define the public interest matters more because the Bill may apply to many more companies than might have been thought when hearing the Government’s original intentions for the Bill. Plus, of course, the Secretary of State’s consequent powers, which are set out in the rest of the Bill—having decided to nationalise and make that initial transfer decision—are mostly constrained only by the scrutiny of secondary legislation, so the initial transfer decision is all the more important. It is my view that the Secretary of State’s powers, as defined in clauses 1, 2 and 3, are simply too wide and need to be constrained.
The Government make two substantive arguments in response to that view, and I want to address those arguments. The first, which the Minister put forward earlier, is that the Government are doing only what a previous Government did in the Banking Act 2009, and that the powers they seek to take here are no wider than those taken in that Act. I do not agree, for three reasons.
The first reason is that the powers in the Banking Act were premised on the existence of a special resolution regime, where the bank in question was already in financial trouble. As far as I can tell, this Bill does not require the relevant steel undertaking to be in any trouble at all for nationalisation to be an option. The second reason is that the Act provides for a temporary transfer to public ownership. This Bill does not use the word “temporary”, and again, I can find nothing in the Bill that prevents a nationalisation being permanent. The third reason is that the Banking Act requires the Treasury to consult before using its powers under that Act. There is no requirement in this Bill for the Secretary of State to consult anyone, so I am afraid it is just not like the Banking Act.
The Government’s second argument, which I discovered lurking in the memorandum from the Department for Business and Trade to the Delegated Powers and Regulatory Reform Committee—I am sure we have all read it— is that broad powers such as the right to define the public interest are
“buttressed by administrative law, including the need for interferences with property rights to be proportionate”.
Of course, that is so: the courts may intervene if the Secretary of State tries to use his powers irrationally or unreasonably, but Parliament should not be subcontracting our work to the courts.
If the legislative powers as drafted are too broad, it is up to the legislature—us—first and foremost to constrain them. The Secretary of State has consistently maintained, as has the Minister, that he wants only the powers needed to act where Government action is unavoidable, and only for the period needed, but the powers that he has in the Bill go well beyond that, and they could and should be restricted.
Lee Barron (Corby and East Northamptonshire) (Lab)
I want to start off by saying that I find it absolutely incredible when people turn around and say that our Government should not be intervening and running services, when they are happy to allow other countries’ Governments to run our services and utilities. To be honest, I get a bit tired of it, because it is essential that we do this if we are going to save industries, save sectors and save jobs. That is why we are right in doing this.
I want to speak on amendment 21, new clause 8 and new clause 5. It was a privilege to be recalled here on a Saturday last year to pass the emergency Steel Industry (Special Measures) Act 2025 to save the Scunthorpe works, and I am just as happy to be here today to see this Bill go through its first day of Committee. Since last year, it has become clear that public ownership is in the national interest. Corby is a town built on steel—steel that built this country. At one time, the Corby steelworks was the largest combined steelworks in Europe. I recognise that the Bill does not nationalise the steelworks in Corby, but it will make sure that the sector does well, and where that happens, that will ensure that the other aspects of steel do well.
In 1967, it was the Labour party that nationalised the steelworks and put British Steel in charge. It did so because it knew that home-made steel was essential for our national security, for our economy and for thousands of jobs. In 1980, a Government who failed to see those opportunities closed the steelworks, and with that, tens of thousands of jobs went and almost a third of people in my constituency became unemployed. That is why it is so important that British Steel should be allowed to continue.
This Bill marks a reversal in direction. It shows what can happen when we have a vision for our economy and the dedication to see that vision through. How could the last Government shape our economy and create jobs when they failed to even create an industrial strategy? This Government have a strategy. Their decade-long industrial strategy, and the steel strategy announced in March, show that.
The steel strategy provides £2.5 billion through the National Wealth Fund to help rebuild our steel sector so that we can move towards 50% of all British demand for steel being made in this country, ensuring our security in an unstable world with the capacity for our own virgin steel supply. That is what this Bill leads to, and that is what is going to happen as a result of it.
British steelworking powered the first industrial revolution, and it can do so again, building the renewables and technology for the future. We still have a steelworks in Corby, and we want to make sure that Corby and the towns like it across our country have a new and secure future. I believe that the passing of this Bill will ensure that that happens.
Richard Tice
It is a pleasure to stand up and support the Government and this Bill, because we all know that the ability to make primary steel is absolutely in the public interest, and it therefore automatically meets the public interest test. We cannot be the only G7 nation without the ability to make primary steel using a blast furnace, but that will be the consequence if this legislation does not go ahead.
The Conservatives’ line of thinking is to just rely on the private sector. Well, they tried that for some 14 years, but the reality is that the state of the blast furnaces means that they need investment for relining, renewing and rebuilding. The private sector has said that it is not there yet, but it could be, so we need a period of time when the industry has the commitment of the public sector to ensure that a thriving primary steelmaking capability can exist.
Sir Jeremy Wright
I understand the logic of the hon. Gentleman’s argument. He has referred several times to the series of proposals being made in Committee by the Conservative party, as outlined by my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin). They come to this: that no Government should be able to create for themselves a very wide definition of what a steel undertaking should be, that they should not be able to define for themselves without restriction what the public interest may be, and that they should not be able to extend indefinitely, without parliamentary authority, the effect of the Bill. Will the hon. Gentleman tell us what he objects to in those proposals?
Richard Tice
I will indeed. My objection is that the consequence of the Conservative party’s amendments would be to delay the investment that is required to get on with this. People have expressed concern about the current losses. The last thing we should do is create bureaucratic delays that prevent the investment that would turn the cash flow around from negative to positive.
Martin Vickers (Brigg and Immingham) (Con)
I have already made clear to my constituents that I do not oppose the Bill, but I support the Opposition Front Benchers in trying to constrain its cost. Will the hon. Gentleman give a specific figure, or is the Reform policy just to spend, spend, spend?
Richard Tice
Actually, the consequence of the Conservative party’s amendments would be to delay the vision and investment that is required, and therefore to increase the losses. That is why they should be ignored. If you are going to do a job, then for heaven’s sake, do it properly and get on with it. That is the difference here.
We need the blast furnaces to be refurbished and relined, and we need a plate mill. We need proper, committed investment. We need the Minister to have a pro-British steel procurement strategy at all levels of the public sector, from warships and the railways to even the planning conditions for a new Chinese embassy—let’s make it with British steel from Lincolnshire, not cheap Chinese steel from far away.
Graham Stuart (Beverley and Holderness) (Con)
I am trying to understand how constraining Government powers in the three areas of concern would in any way lead to a delay. I do not think that any constraints imposed would stand in the way of this undertaking. In what way would there be a delay? I may not have sufficiently understood the linkage between such constraints on Government powers in other undertakings and how on earth those would impact this particular one.
Richard Tice
It is my judgment that the Conservative party’s amendment would prevent the Government from getting on and setting out the vision, placing the investment that is required, and giving the confidence to everybody that there will be a steel-making capability for primary steel. Once we get that investment in the core asset in Scunthorpe—with a refurbished, renewed blast furnace that is ready for the next 50 years—then, with brilliant management from the private sector, we will start to attract private sector capital, which we all want to bring in. This is a moment that requires the proper seed investment, the commitment and the courage from this Government to get on with it, which was so lacking in the previous Administration.
Sir Edward Leigh
I agree with a lot of what the hon. Gentleman says. We can surely agree on this point: what is really killing Scunthorpe are the insane green energy policies and the fact that we have the highest energy costs in Europe. If we had a sane energy policy, we could start to make a profit at Scunthorpe.
Richard Tice
The Father of the House is absolutely spot on. The net-stupid-zero policies have been catastrophic across the piece, and I fear that those very policies are the reason why people are concerned about the possibility of opening an electric arc furnace. That puts even greater pressure on the need to have a renewed, brilliant, wonderful blast furnace capability for the next 50 years. If we achieve those things, we can bring in private sector capability with a pro-British procurement strategy. That will give confidence to all.
It has been mentioned that the Bill would somehow prevent other investment from the private sector. The discussions that I have had with overseas pension funds and overseas sovereign wealth funds suggest exactly the opposite. They suggest that, with this sense of commitment—what I like to call a joint venture with the core asset, under public ownership—we will attract more international investment, because people will know that there is a long-term commitment as opposed to the wibbly-wobbly, flip-flop approach of previous regimes. That is the reason that we need to get on with this. We need to ignore any delaying amendments.
Let us have the vision. New clause 5 would require the Government within three months to set out that 10-year vision and 10-year commitment to the blast furnaces and others in the steel undertaking, to ensure that we have a vibrant and, ultimately, viable primary steel-making capability in the United Kingdom.
Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)
I am pleased to speak in support of the Bill and comment on a number of the amendments. I do so as a Member of this House who represents a proud manufacturing constituency, which includes a number of industries that rely on steel in a variety of ways, from the rail industry and advanced manufacturing to the cluster of innovative defence and space-related companies at NETPark—North East Technology Park—in Sedgefield. Steel is not only used by some of those companies, but extensively used in their supply chain. It underpins manufacturing not just in my seat, but across the north-east and many other constituencies in the country, as we have heard. I have also campaigned successfully to protect sovereign supply of key materials in my constituency and the wider economy. Given the importance of steel to our national security and national critical infrastructure, it is crucial that we get our approach to steel right.
So what does this mean? First, as hon. Members across the House have said, we need to ensure that the Government can act quickly and with agility. That is why I have concerns about several amendments, which, as other colleagues have raised, could slow down the Government’s ability to act decisively. That appears in a number of amendments but, for example, amendments 2, 3, 18 and 19 and new clause 2 seek to impose additional requirements on Ministers before they can act using the provisions of the Bill. Others have gone into some of the specifics, but my concern is that when considered in the round, these proposed changes would have the cumulative effect of hampering the Government’s ability to act and to act swiftly. It is critical that Ministers can act because that is the key purpose of the Bill; that is why we are here debating it today.
Why is it important that Ministers can act quickly, and why might some of the amendments be a challenge? Because, as we are discussing, when a steel plant faces significant challenges and the Government are minded to intervene, Ministers need to achieve three things. First, they need to be able to provide certainty about the future of the business, which helps sustain the workforce and gives certainty to its supply chain and reassurance to its contractors. We have heard Members talk from their private sector experience—I myself worked in regeneration and housing previously—that when there is doubt about the future of an industry or a particular business, or there is a particular commercial concern, we know that when business confidence starts to fall, if action is not taken quickly, the lack of confidence in the supply chain and the contractor chain can do serious damage.
The second priority for Ministers must be to minimise risk. We know not just in this process, but in other similar processes undertaken by the public and commercial sectors that the longer the process, the higher the commercial and legal risk and the more likely it is that we will not get the outcome we desire. It was that desire to act swiftly and show significant national leadership that, as hon. Members mentioned, is why we were all recalled last year on a Saturday, to intervene quickly in the steel sector.
Thirdly, and crucially, the reason that speed is important is if this is agreed, it is important that Ministers have the powers they need to enact the will of Parliament quickly. Quicker intervention in circumstances like this, given the factors we have discussed, is likely to be more successful, particularly in complex cases as we see at British Steel in Scunthorpe.
Graham Stuart
The hon. Gentleman makes the point about the need for speed in these circumstances, but perhaps he could explain to the House why the endless resetting of a sunset clause, contradicting the whole purpose of a sunset clause, plays into the need for urgent action right now? Or does he agree that it is something that should be looked at again and does not need to delay any of the effective action for which he is calling?
Alan Strickland
Ministers will speak for themselves, but I think they are seeking the flexibility to act in the national interest and to do so appropriately. My concern is more with some of the clauses that add lots of prerequisites to what needs to happen before Ministers can act. My view is that in the limited, and hopefully rare, circumstances where Ministers do feel the need to exercise these significant powers, they need to be able to act quickly, and that is what we are discussing today.
Several of the amendments relate to concerns around value for money, which of course is an incredibly important consideration. It is important for all of us to remember that one of the key reasons we are here today is precisely because Ministers have said that they want to do more to ensure value for money for taxpayers delivered in the Government’s potential intervention in British Steel Scunthorpe. That is why my hon. Friend the Minister for Industry was clear in May that the Government intended to bring this legislation forward precisely because Ministers were unable to agree suitable terms with the current owner of British Steel that represented a
“responsible use of public money,”
so value for money has been a key driver of ministerial action on this matter and the reason we are debating it in the Chamber today.
I turn to new clause 5, which the hon. Member for Boston and Skegness (Richard Tice) was just describing. I am sort of slightly astonished that Reform, a party with no plan for steel, has put an amendment demanding a plan for steel. I am pleased to tell Reform Members who are here that we already have one. The Labour Government, as the Minister mentioned, published the UK steel strategy in March. It clearly addresses a number of the important points that the hon. Member rightly mentioned earlier, including specifically the need for the public sector to buy more steel. A year ago in June 2025, the Cabinet Office published guidance—procurement policy note 22—that required public bodies nationally and locally, and their executive agencies, to ensure that UK-produced steel is routinely considered in public procurement and that this is done at an early stage in the process, so the mention of public procurement around steel in that amendment is redundant. Ministers have already issued clear guidance on that some time ago.
Ann Davies (Caerfyrddin) (PC)
I rise to speak to amendment 23, tabled in my name, which seeks to strengthen the public interest test that decides when Governments may nationalise steel sites under the Bill. Specifically, it would ensure that nationalisation can and should be used to prevent the loss of jobs in Wales and to prevent the closure of 16 sites in Wales.
Why is this change needed? Currently, the public interest test notes three specific factors for when nationalisation powers may be used, two of which are
“the construction, maintenance and operation of critical infrastructure in the United Kingdom”
and to support
“the economy of the United Kingdom or any part of the United Kingdom.”
While those provisions could allow the Government to intervene to protect Welsh steel sites, they offer no guarantee that they will.
Welsh steel communities know all too well what happens when Governments choose not to act. We have experienced this before. Port Talbot stands as the most painful example, where the blast furnaces were allowed to close in 2024, resulting in thousands of job losses and devastating a community that had a proud history of making steel for over 100 years. Before the closures Wales had the largest steel workforce in the UK, with 9,300 people employed in the sector. The Labour party had several years in opposition prior to entering government; the Government could have developed a plan to nationalise Port Talbot to safeguard jobs, as they have done for British Steel in Scunthorpe. They could have acted, but chose not to. Port Talbot deserved equal treatment. Wales deserves equal treatment. The Welsh economy cannot afford a repeat of the calamity of Port Talbot.
The need for certainty is not theoretical. Only recently, last Thursday night, a major fire at Port Talbot caused significant disruption. We are so grateful to the emergency services for acting so quickly, evacuating the area so there were no casualties, but significant damage was caused to the steelworks. We have also learned that the installation of a new electric arc furnace at Port Talbot may be delayed for months because of an electrical connection issue. I believe that is a planning issue with the local authority. These events have not helped the precarious situation at Port Talbot. To safeguard the site and jobs, the Government should make it clear that they will step in to prevent closure or job losses, as a measure of last resort—a position Plaid Cymru has consistently called for.
Steel jobs in Wales are not just jobs: they are strategic assets. They are essential for the future of our economy, for major infrastructure projects and for the development of offshore wind in the Celtic sea. They are also the backbone of our communities from one end of Wales to the other. Alongside Port Talbot, Wales is home to the Trostre works in Carmarthenshire, 7 Steel in Cardiff, Tata in Llanwern and the steelworks at Shotton in the north-east of Wales. Each of these sites deserves the same level of protection that is being offered to sites in England. All deserve equality.
Graham Stuart
Does the hon. Lady share my concern that the funds put in place by Government—£2.5 billion for the steel plan—are completely inadequate to match the enthusiasm of Members across the House for nationalisations? The National Audit Office suggests there would be £1.5 billion in losses from running the Scunthorpe plant alone, without any investment and without any compensation for Jingye, so the £2.5 billion would be rapidly gone. The truth is that this House and this Government are unable to put in place the sums of money that would allow Scunthorpe sensibly to be supported and invested in, let alone the long string of 16 sites in Wales that the hon. Lady so bravely speaks up for today.
Ann Davies
I thank the right hon. Gentleman for his intervention. Some £500 million has been ringfenced for Port Talbot; that money is rapidly gone, with no benefit to the local community, but that is another issue that I will not talk about now.
We want an end to the double standard. Welsh steel must be given the same guarantees as English or Scottish steel. What we want is equality for all the sites across the UK; we want the same security and the same commitment to preventing closures and safeguarding jobs.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I am delighted to welcome the Bill, and will speak to a couple of the new clauses and amendments. I declare my role as chair of the all-party parliamentary group on steel and metals-related industries, through which it is a pleasure to work cross-party in the interests of the industry.
Just outside Middlesbrough, wedged between the gas pipes and the railway, is an old path. Someone walking there 200 years ago would have found sailors trudging through salt marsh hamlets, and 100 years ago they would have found steelworkers—hundreds of them—walking home on the tired commute. The cinders underfoot gave the path its name: “the black path.”
If someone walks that path today, they will see the remnants of a bygone age for Teesside iron and steel. They will see a former railway station, now disused, which was used for industry. They will see a lost ironworkers’ village and the red wild flowers that thrive on former slag pile soil. And, of course, they will arrive at one of the largest brownfield sites in Europe: the former Redcar steelworks, which once stood as a great shadow on our skyline, the heart of the region, pumping out steel across the world.
The phrase on Teesside goes, “We built the world.” Everything from the Sydney harbour bridge to the Churchill War Rooms were made with Teesside steel. It can never be forgotten that, in 2015, the then Conservative Government’s laissez-faire approach to Chinese steel dumping denied us the intervention that we needed on Teesside. The closure of Redcar steelworks tore a hole through our region and cost thousands of jobs. I pay tribute to my constituency neighbour, my right hon. Friend the Member for Redcar (Anna Turley), who at that point was a newly elected MP and fought tirelessly for the workers of Teesside, but we can never allow a situation like that to happen again.
We cannot change the past, but steel is not our past, as the workers at British Steel Special Profiles at Skinningrove in my constituency will tell us, or the workers at Teesside beam mill at Lackenby, along with the many supply chain SMEs on Teesside. Having run a Teesside steel company for many years, the Minister for Industry knows that landscape well. I commend the decisions that the Government have taken, particularly on British Steel, that have protected and safeguarded jobs in my constituency and my region.
Graham Stuart
The hon. Gentleman is giving a powerful speech and showing great expertise. Is he confident, as so many critics of the steel plan were not, that the £2.5 billion that has been found by the Treasury is sufficient to allow the interventions that he so enthusiastically supports? If it is not, is there not a danger that we will not invest in things, but just bleed out public cash on facilities that continue to be uncompetitive and do not get renewed? If we do not put the right resource in, as France and other countries have arguably done, we will be losing out and not winning.
Luke Myer
As a Back Bencher, I will always fight for more funding to modernise our steel industry. What I do know is that the current owners of British Steel are not responsible owners. We saw last year the crisis that was created when they failed to provide sufficient supply to keep the blast furnaces running. We cannot allow the current situation to continue if we are to protect our domestic industry. This Bill is about having the powers to nationalise and ensure that the national interest is served. Whether there is sufficient funding is a question on which I will continue to push the Government.
We are not focusing today on clause 58, but the freedom to make the necessary fiscal decisions to support operational stability and competitiveness is fundamental to the sunset clause we are discussing, as well as the potential for ongoing considerations on other critical assets that the Bill might be used for. It would be helpful to hear more about the Government’s intentions on issues like energy and procurement, as my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) said. We had a positive intervention from the Cabinet Office last year and the ambition to increase domestic steel market share back towards 50% is right, but the test will be in the delivery.
For too long, we have had industrial strategies while approving publicly backed projects that import vast quantities of overseas steel. Taxpayers rightly expect public investment to strengthen British industry and British jobs. Mechanisms like contracts for difference and other subsidy schemes must align much more closely with procurement objectives, so that public money genuinely supports UK supply chains. The forthcoming defence investment plan is a major opportunity to ensure that we are using UK steel across the country in industrial communities to support national security. At the end of the day, economic security is national security. Britain cannot become dangerously dependent on overseas steel for critical infrastructure or defence capability.
While I support the shift to electric arc furnaces and the increased focus on how we use domestic scrap, which is welcome, Britain should seek to retain some primary iron capability. Other countries are investing heavily in technologies like direct reduced iron. We need only look at Luleå in northern Sweden, for example, where an operational hydrogen-powered DRI facility is already producing steel. That has not held the region back in any way. Economically, it has had the opposite effect of attracting inward investment in new industries, from data centres to clean power. I would like to hear a little from the Minister about DRI and whether we will be looking seriously at that, but I do not wish to stray too far out of the scope of the Bill.
The legislation was brought forward in the context of British Steel, but we should not pretend that British Steel is the only critical asset that may ever require Government action. There may be other sites, capabilities and parts of the supply chain where future intervention is needed to protect jobs, sovereign capability and the national interest, so my concern with amendment 12 is that it would make these powers too easy to lose. A future Government may not share the same commitment to active industrial strategy and may not be as willing to renew the tools needed to protect the sector, so we should not remove the extension mechanism now because we may leave workers and industry more exposed later on.
Opposition Members made the point that politicians should not run businesses, although of course the Minister for Industry did run a steel business for many years and did so very effectively. They may mean that politicians from this country should not run businesses. The Bill is before us because of the approach that Jingye has taken. The Chinese steel industry has long benefited from huge state subsidies, and cheap state-directed finance, energy support and overcapacity policies. Beijing did not leave it to the market; it used state power aggressively to expand industrial capacity, which is worth bearing in mind.
I will finish on this point. While the Government cannot say which assets they wish to use these powers for, it is evident that British Steel cannot remain in Chinese hands. I do not know what the long-term ownership structure will look like—perhaps it will be modernised and sold to a new buyer, or perhaps it will be taken into public hands and remain there, with steelworkers having some stake in the company that they built—but I do know this. When a Labour Government intervened to create the nationalised British Steel Corporation in 1967, Teesside enjoyed such high employment and high wages that it was classified as one of the best places to live anywhere in the UK. It brought stability to tens of thousands of families and built the second largest blast furnace in Europe.
In 1979, a very different Government took office with a very different theory of Britain—a small state and a blind faith in the global free market. In just five years, our region had the highest registered unemployment rate anywhere in Great Britain. By the end of Thatcher’s premiership, almost 250,000 jobs in our region had gone. They took a British industrial economy and turned it into a globalised service sector economy.
Today the Thatcherites are back, with a new logo and a new face. They will talk a big game on steel, but we have been here before. It is my belief that only a social democratic Government can truly protect our steel communities and equip them to face the future, because a social democratic Government recognise something that a foreign private owner cannot: the value of protecting sovereign industry, even when the going gets tough.
This issue is about our jobs, but it is also about our security. Will we be left exposed in a volatile world, or will we build for the future again? I hope that this Labour Government have the courage and ambition to do so.
The Chairman of Ways and Means (Ms Nusrat Ghani)
Minister McDonald, I believe you wish to contribute again.
Chris McDonald
There is so much so say, and so little time until the rise of the House. Members who are standing may wish to take a seat, because we might be here for a little while.
Chris McDonald
Indeed, Madam Chair—I was banking on 10 o’clock.
I thank all Members, including the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin); the Liberal Democrat Front-Bench spokesman, the hon. Member for Richmond Park (Sarah Olney); and the former leader of Reform, the hon. Member for Boston and Skegness (Richard Tice), for the extremely constructive and civil way in which this debate has been conducted. I know that that comes from a real enthusiasm among all Members in the Committee for having a successful steel industry.
In fact, there were many points of agreement in the debate. In debating the amendments to the first part of the Bill, the importance of the steel industry came through extremely strongly, as did the importance and reliability of the use of public money. We all share that view across this Committee, and we also want there to be extreme care in the use of the powers in the Bill. I know that Members who moved amendments in that regard are concerned about that, and the Government are too. I will address some of those points, and I will endeavour to address some of the points raised by Members during the debate. I will start by addressing a recurring theme in the debate: what nationalisation is.
Jim Shannon (Strangford) (DUP)
I am thrilled that the Minister has until 10 o’clock to speak—if you are agreeable, Madam Chair, we will have lots of interventions. The issue is not whether people agree with the nationalisation of the steel sector, so we can set that aside; the issue is whether we will have a steel manufacturing sector that can produce steel for all the United Kingdom of Great Britain and Northern Ireland. We in Northern Ireland need the steel from here, and we need it for our defence sector, which is really important. Just before Christmas, my pastor in my church told me, “There are 69 wars in the world.” We have to be prepared for the world wars we are going to have to fight. We need a steel sector to do that, and what the Minister has put forward is a justification for it.
Chris McDonald
The hon. Gentleman is quite right. The steel sector is vital for our national security and our infrastructure and construction industries throughout the whole of the United Kingdom, including in Northern Ireland. He speaks very well about that.
Nationalisation or national ownership is not an objective in and of itself; it is simply a pragmatic tool of industrial strategy that can be deployed with care in order to achieve legitimate aims of Government. If we think about some of the nationalisations of the past, it may be that some of those were driven by the pragmatic use of industrial strategy, and it may be that some were driven by ideology. In general, the way that the nationalisation of a business works is that the Government intervene when a business is in distress or is no longer viable but is important. Those businesses are returned to the private sector only once they are successful.
Contrary to the narrative that is often peddled about public ownership, the purpose of public ownership is to pick up businesses when there is a market failure or where a private sector operator is unable to continue. We have seen that in other instances, such as in the railway industry. I see nationalisation simply as a useful and pragmatic tool of industrial strategy.
Sarah Champion
Does the Minister share my concern and confusion about the comments made by the right hon. Member for Beverley and Holderness (Graham Stuart)? I was not sure if he was supporting the nationalisation of British Steel but thought that there was not enough money or that there was too much money. However, he seemed to support the fact that in Europe, the Government subsidise electricity, and I felt that he wanted that to happen here. For all the reasons that Members have said, I just want a really strong and secure steel industry in this country.
Chris McDonald
I think the right hon. Member for Beverley and Holderness (Graham Stuart) also wants a strong steel industry, but he has been quite clear that he does not see nationalisation as a tool for delivering that—I think that is fair. He is also concerned about the use of public money, which I think is fair as well. I shall address both of those points as I continue.
I am very pleased that my hon. Friend the Member for Rotherham (Sarah Champion) raised those issues. This is an opportune time to mention that in her earlier comments, she asked for an update on the current status of the Speciality Steel UK business, which I know affects her constituency and that of my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball). That business shows the power of a productive Government intervention, working carefully with industry, because the Government have underwritten the costs of the official receiver to allow a proper sale of the business. The official receiver is in exclusive discussions with a potential buyer, and there was a high level of interest in the business from the market.
As we look forward to the potential sale of the business, we can see the vital role that the Government have played in recognising that steel undertakings are complex, that it can be difficult and can take time to assess them, and that they require high levels of working capital. That contrasts significantly with Governments in the past, who allowed steel companies to close simply by not allowing that process to continue.
Chris McDonald
I will take an intervention from the right hon. Member for Beverley and Holderness. Given that he was referenced, it would be helpful to give him the right to reply.
Graham Stuart
To help the hon. Member for Rotherham (Sarah Champion), I do not think I said anything about subsidising. What I am looking for, and what I think all of us across this Committee would like to see, is the continuation of steel, especially in a dangerous world. I was questioning whether we have a coherent strategy and sufficient funding to take the steel industry—the specific site in Scunthorpe and others—on the journey that the Minister set out, which requires intervention to take it back to being a thriving industry. I worry that there is not such a pathway or sufficient resource, so we could be in the worst of all possible worlds, where we just bleed public money without it leading to the restitution of a healthy steel industry in this country. That is what I am looking for an answer to.
Chris McDonald
Let me address that point. It is helpful for us to think about the potential options. There is agreement across the Committee that we want a successful and thriving steel industry, and the Government have made some serious financial commitments. We have committed £500 million to support the transformation of the plant in Port Talbot, which has attracted another £500 million of private sector investment. We have committed £2.5 billion through our steel strategy and an additional £400 million to support the Forgemasters operation, which is successfully under public ownership.
We have to think about the potential options. Given that the Government have put that money on the table and are seeking private sector partners to work with for all our steel plants, the alternative would be the closure and the loss of those facilities. This comes down to a judgment as to whether we think the UK is capable of having a successful, profitable and investable private sector industry.
It is the Government’s view that it is possible for the UK to have that, not least when we compare ourselves with similar advanced economies in Europe—we are not necessarily comparing ourselves with low-cost economies around the world—but it is a matter of ensuring that we have the right business environment to enable that to happen, and it is clearly incumbent on Government to arrange policy in that way. I think our steel strategy, in particular, and our trade measures provide that response, which is what gives us confidence that we have the resources to do that.
Chris McDonald
If the hon. Gentleman does not mind, I will take the second intervention from my hon. Friend the Member for Rotherham, and then I will give way to him.
Sarah Champion
The Minister is being very generous with his time. I want to take him back to the issue of Speciality Steel, because this is not just about the business itself—it is also about the supply chain. For example, the steel that is made in my constituency goes into Formula 1 cars and almost every plane in the sky. I think many hon. Members need to understand the consequential impact of saving not only British Steel, but all of our steel industry, on our whole economy and on global industries.
Chris McDonald
The supply chain is incredibly important. My hon. Friend is right about the jobs and the economic value in the supply chain; my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) also referenced the supply chain, and particularly how its needs relate to the measures in the Bill.
A number of the proposed amendments to the Bill would ultimately slow down the ability of the Secretary of State to make decisions—that point was also made by the hon. Member for Boston and Skegness. If the Secretary of State cannot act swiftly, there is a risk of greater uncertainty among employees and commercial partners in the supply chain, as my hon. Friend the Member for Newton Aycliffe and Spennymoor rightly said. That can have real-world consequences for businesses that rely on trade finance or other forms of working capital support, as a lack of confidence can rapidly turn into business closures. While some of those amendments are well-meaning—I am speaking particularly about amendments 2, 3, 18 and 19—they would fundamentally interfere with the speed and operational ability of the Secretary of State under the legislation and reduce legal certainty.
Sir Ashley Fox
Does the Minister believe that the Government’s current energy strategy is consistent with a successful British steel industry, or does he envisage that energy strategy having to change in order to lower industrial electricity prices?
Chris McDonald
I am pleased that the hon. Gentleman has raised that question, because it was mentioned by a number of Members during the debate. To go back to the point about having a business environment that creates a profitable and investable steel industry, energy is clearly part of that. Some of the changes that the Government have already made—increasing the rebate on the supercharger from 60% to 90%, or the British industrial competitiveness scheme, which will support some of the downstream industry—will be particularly helpful in supporting not only the steel industry but other parts of heavy industry between now and 2030, which is when the Government’s clean power mission will come fully online. We anticipate that at that point, we will have not only clean energy, but secure and lower-cost energy.
If we consider the timescale of some of the investments in steel companies that we are talking about—not only multiple-year investments in order to commission, but multiple-decade investments beyond that—we can see that we have a pathway on energy that will enable us to get from now to 2030 and beyond. The Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), who is not currently in his place, was concerned about this issue as well. He was also concerned that the UK has the highest energy prices in Europe, but we do not currently, and it is certainly our plan to ensure that our energy prices for industry are competitive with Europe in future.
Returning to the amendments that have been tabled, there was quite a lot of discussion about the sunset clause in the Bill. There were a number of objections to it, but the case for its continuation was made extremely well by my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer). As it stands today, the Government have no intention of extending the sunset period, but we recognise that we are living through particularly volatile times. There is geopolitical and economic uncertainty, which is likely to have a bearing on the steel sector in ways that it is difficult for us to see at the moment. As such, our view is that it is simply pragmatic to include this level of flexibility in the Bill, and of course, regulations made under that clause would be subject to the affirmative procedure.
It is important that I address some of the concerns of the hon. Member for Caerfyrddin (Ann Davies), who spoke with great passion and commitment about the importance of the steel industry throughout the whole of Wales. There is often considerable discussion of Port Talbot in this House, but as she rightly set out, there are also steelworks in Llanwern, Cardiff, Newport, Trostre and Shotton—I hope I have remembered all of them—that deserve recognition and investment.
I could not disagree more, however, that this Government have treated the Welsh steel industry unfairly, or not in an equitable way, compared with the steel industry elsewhere in the UK. The steel industry in Wales is the only part of the industry that has a ringfenced fund—£500 million for Port Talbot. The hon. Lady said that that has been spent with no benefit to the local community, but I frankly cannot agree with that. That £500 million has enabled Port Talbot to invest an additional £500 million in a transformation of that steelworks that will secure steel production at that site and the future of the south Wales steel industry for decades to come. It is a significant investment in the local community.
I know that the hon. Lady, like me, would have preferred for that transition in south Wales to have happened without the hard stop between the closure of the blast furnaces and the restart of the electric arc furnace, and I support Tata Steel’s view on the installation of its electric arc furnace. However, the decision to close was taken before the general election, and my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds)—the former Secretary of State, who is now Chief Whip—was able to intervene at that point and get a much better deal for the workers at Port Talbot and the community there than the previous Government did. I share the hon. Lady’s frustration and concern, but we need to be clear about where the indifference to the blast furnace closures in Port Talbot was. It was not with this Government; it was with the then Conservative Government.
Richard Tice
As we are talking about the new electric arc furnace in Port Talbot, can the Minister guarantee with certainty his confidence that, when built, it will open?
Chris McDonald
I am really glad that the hon. Gentleman has asked me that question—I know he has great experience in the property industry, and certainly with construction projects. As I mentioned earlier in the debate and as he will know very well, in any construction project you only really have certainty on the timeline when you have got out of the ground, and this project is still very much in the ground.
The hon. Gentleman’s question gives me the opportunity to clear up some issues. I know that the delay as reported by Tata Steel—this is Tata Steel’s project, not the Government’s—related to an electrical connection, and specifically the soil condition as it relates to building a substation. At the outset, quite rightly, assumptions were made about the soil condition based on engineering assessments. Right hon. and hon. Members must be aware, though, that there have been steelmaking activities on that site in Port Talbot for well over 100 years. Not all of those operations had been fully documented, and the ground conditions were considerably worse than had been anticipated. That is now being dealt with, and as soon as the project gets out of the ground, we will have great certainty about when the electric arc furnace can turn on. Until that happens, as a project manager, I would hesitate to give a cast-iron guarantee, because you need to get out of the ground first.
What I am looking forward to, though, is the delivery of the electric arc furnace in Port Talbot, because that is the point when the project will feel real—when the workforce will be able to see the furnace itself. I have been around the shop and seen the space that has been created for the installation of the furnace, but once it arrives on the dock of Port Talbot, we will all feel a greater degree of certainty about that. That will be a big boost to the workforce when it does happen. I am absolutely confident that it will happen, but to say when—to pin it down to an individual week or month—is more difficult.
There was one more point I wanted to make about the contribution of the hon. Member for Caerfyrddin. She essentially called for public ownership of Port Talbot, and I am really sorry, but that is another point on which we disagree.
The Government’s view is that where a steel undertaking is running adequately under private ownership, that ultimately should be allowed to continue, because the Government believe in private involvement in the steel sector. It goes back to the point about investment that I think the shadow Minister made earlier. She described her concern about a potential chilling effect on investment.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I am grateful to the Minister for putting on the record this Labour Government’s record on Welsh steel, because it contrasts with the 14 years of ruin under the Tory Government. Their failure to have an industrial strategy caused decisions to be taken in Port Talbot before this Government came into power. The Tories do not like to be reminded of that, but we will remind them about it every time. It is something that Plaid Cymru—I have great respect for the hon. Member for Caerfyrddin (Ann Davies)—and Reform would do well to remember when they turn up for their photo op outside Port Talbot.
I want to touch on something that my constituents are grateful for, which is this Government’s steel strategy. As the Minister rightly says, that resulted in a £100 million investment by Sev.en in 7 Steel in Cardiff. Does he agree that that is not only a sign of the importance of the steel strategy, but will mean that at least half of future UK steelmaking will be Welsh steel? All Members in the House should welcome that.
Chris McDonald
I thank my hon. Friend for making that point. He is right that we should welcome that 50% of UK steel will be made in Wales. We talk about Port Talbot specifically, but 7 Steel’s plant has operated incredibly well for so long, making the rebar steels that are essential for our construction industry in the United Kingdom, as well as in Ireland, which 7 Steel supplies, too. Long may that continue. I am sure that the investment will help with that.
The right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright) raised a number of concerns, such as the operation of the Bill, its powers, public money and so on. He made a comparison with the Banking Act 2009, and he is right that I have made great play about the similarity between this Bill and that Act. I reassure Members that, having passed the Banking Act to great acclaim, this Bill is following its path, and we made a positive decision to do that.
The right hon. and learned Gentleman mentioned the requirement in the Banking Act for the Chancellor of the Exchequer, I believe, to consult with the Prudential Regulatory Authority, the Financial Conduct Authority and the Bank of England, and how a consultation requirement is not in the Bill. He is right to point that out, but these are different industries. The banking industry is highly regulated, and there are statutory bodies that require consultation. There is no opportunity to replicate that in the steel sector, because there are no such statutory bodies. He rightly made the point that it is important that we engage on the detail in Committee, and I thank him for raising that point and giving me the opportunity to respond.
Jim Shannon
The Minister quickly and helpfully responded to my earlier intervention, and he will be well aware of the economic position of Northern Ireland due to the Windsor framework. Should the Bill go forward, the Government must provide a cast-iron guarantee that the nationalisation and supply chain structures outlined in this Bill will operate seamlessly. Can he give us a guarantee that that will happen and that Northern Ireland will not be disadvantaged by any new tariffs or tariffs that are already in place?
Chris McDonald
From the Government’s perspective, there is certainly no intention to disadvantage Northern Ireland. The unique position that Northern Ireland holds is enabling it to attract additional investment above and beyond. In fact, the economic growth rate in Northern Ireland is incredibly impressive, and I look forward to seeing that when I visit in two or three weeks’ time.
Having addressed the amendments, I will move on to some of the new clauses. First, I acknowledge the incredibly constructive dialogue I have had with the hon. Member for Richmond Park (Sarah Olney) in preparing for the Bill and the tabling of her amendments. New clause 2 would place a requirement on the Secretary of State to consult an advisory committee as part of his decision-making process. The Government agree with the sentiment—we have had wide consultation with stakeholders—but there is a practical reality and in particular a commercial consideration for the exercise of the Bill’s powers. It is therefore not possible for us to accept that new clause.
New clause 3 relates to the detail of a jobs and industrial transition strategy, which my hon. Friend the Member for Newton Aycliffe and Spennymoor asked a specific question about. I reassure Parliament that from a skills perspective, the Government will assess any impacts of a transfer on jobs, skills and local communities. In fact, that is an incredibly important part of why we would seek to intervene at all. Following an acquisition, the company’s objectives will be published as part of the shareholder framework document.
Finally, I will move on to new clause 5. Again, this issue was mentioned by my hon. Friend the Member for Newton Aycliffe and Spennymoor, and it also comes back to where I started the discussion about the nature of a nationalisation. While the Government in this situation would own a steel undertaking, and as the main shareholder in the business would have the opportunity to set the direction and appropriate strategic objectives, it is not the Government’s aim that the steel companies would then become an extension of the civil service, as amazing as my civil servants are. Instead, steel undertakings should be run by those who are knowledgeable and skilled in the industry, as we have seen at Sheffield Forgemasters and, as we heard, at the semiconductor factory at Octric.
Having covered the amendments and the new clauses, and perhaps tried the patience of the Committee to a great extent, it would be wise to conclude. I point out to hon. and right hon. Members that there is an additional day of debate on the Floor of the House on this Bill tomorrow. Rather than me standing here and talking to myself for six hours, they would be most welcome to come back then. If I have addressed their points sufficiently, perhaps some of those who have tabled amendments may see fit not to press them to Divisions, but otherwise, I feel I have addressed the points sufficiently for now.
The Chairman of Ways and Means (Ms Nusrat Ghani)
I call the shadow Minister.
Dame Harriett Baldwin
It is wonderful to see so many people interested in following this debate until 10 pm, which when our scrutiny of the Bill ends today. I will make just a few remarks, if I may. Despite the fact that we still have another day tomorrow, there were a few things in today’s debate that I have not heard sufficiently answered.
First, I pay tribute to the wise remarks from my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright). I encourage the Minister to take on board his points about the wide scope of the powers the Minister is taking in this legislation. My right hon. and learned Friend is a former Attorney General, so his remarks should be heeded with a great deal of seriousness. I reiterate the questions from my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) and my hon. Friend the Member for Brigg and Immingham (Martin Vickers), who sought assurances that the blast furnaces will continue. I am not sure we heard that on the record. When the Minister next gets to the Dispatch Box in these days of debate, will he clarify his intentions as far as that is concerned?
Will the Minister provide clarity on the public interest test? Sensible remarks were made about the Regulatory Reform Committee and how the public interest test is too broadly defined. How can it ever be reversed once it has been invoked? I did not hear anything about limiting the contingent liabilities or the sunset clause, or the possible impact—mentioned in the impact report itself—on investor confidence in this country.
The Minister mentioned that he was willing to meet Members who have concerns about the steel tariffs, which are a separate issue. May I urge him, over the next 24 hours, to try to find some time in his diary so that they can raise specific examples with him?
Charlie Maynard (Witney) (LD)
On 21 May, the Business and Trade Committee met representatives of more than 20 steel fabrication companies who were deeply worried about the potential loss of hundreds, or thousands, of jobs. I second that, in respect of the urgency, because 1 July is around the corner, and this represents a major risk to the sector.
Dame Harriett Baldwin
Indeed; and, as we have heard, one of the suppliers is still in administration. I think that the Minister needs to rethink that deadline, and I hope he will find time in his diary, perhaps as early as tomorrow, to meet Members on both sides of the House to discuss the issue.
With no more ado, Ms Ghani, I will now attempt to press as many of the amendments as you will allow, and we will test the view of the Committee. However, I beg to ask leave to withdraw amendment 21.
Amendment, by leave, withdrawn.
Clauses 1 and 2 ordered to stand part of the Bill.
Clause 3
Sunset for exercise of principal transfer powers
Amendment proposed: 12, in clause 3, page 2, line 10, leave out subsections (3) to (5).—(Dame Harriett Baldwin.)
This amendment would prevent the Secretary of State extending the sunset of the principal transfer powers.
Question put, That the amendment be made.
The First Deputy Chairman of Ways and Means (Judith Cummins)
It has been drawn to my attention by the Tellers that the numbers were incorrectly reported for the Division on the Question that amendment 12 be made. The correct numbers were 81 for the Ayes and 266 for the Noes. I will direct that the numbers be corrected in the Journal.
The occupant of the Chair left the Chair (Programme Order, 21 May).
The Deputy Speaker resumed the Chair.
Progress reported; Committee to sit again tomorrow.
Steel Industry (Nationalisation) Bill
Tuesday 9th June 2026
(1 day, 14 hours ago)
Commons ChamberRead Full debate Steel Industry (Nationalisation) Bill 2026-27 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 9 June 2026 - (9 Jun 2026)
00:00 - The Committee divided: - Ayes: 90 / Noes: 290 - Question accordingly negatived.
16:45 - The Committee divided: - Ayes: 94 / Noes: 297 - Question accordingly negatived.
16:58 - The Committee divided: - Ayes: 157 / Noes: 287 - Question accordingly negatived.
The First Deputy Chairman of Ways and Means (Judith Cummins)
Under the Order of the House of 21 May, we shall now move to the Committee of the whole House. I remind Members that in Committee they should not address the Chair as “Deputy Speaker”. Please use our names when addressing the Chair. “Madam Chair, “Chair” and “Madam Chairman” are also acceptable.
Clause 52
Compensation scheme regulations
Sarah Olney (Richmond Park) (LD)
I beg to move amendment 7, page 34, line 15, at end insert—
“(5A) Compensation scheme regulations must include provision which specifies that payment of compensation may be made until any written estimate under section 54 (4A) is laid before Parliament.”
This amendment works with Amendments 8 and 9 so as to require regulations to specify that payment of compensation cannot be made until the Secretary of State has published a written estimate of the environmental liabilities of the steel undertaking, provided to them by the independent valuer.
The First Deputy Chairman
With this it will be convenient to discuss the following:
Clauses 52 and 53 stand part.
Amendment 8, clause 54, page 35, line 25, leave out “may—
(a) require or permit”
and insert—
“must—
(a) require”.
See explanatory statement for Amendment 7.
Amendment 9, page 35, line 34, at end insert—
“(4A) The regulations must—
(a) provide that the independent valuer prepares and submits to the Secretary of State a written estimate of the environmental liabilities of that undertaking, including but not limited to—
(i) contamination of land, water or air attributable to the undertaking’s operations;
(ii) compliance with environmental obligations imposed by or under any enactment; and
(iii) remediation or restoration costs that are contingent or prospective;
(b) provide that the Secretary of State must publish and lay any written estimate provided under this subsection before Parliament.”
See explanatory statement for Amendment 7.
Amendment 6, page 35, line 40, at end insert—
“(c) the anticipated effects of—
(i) external tariffs on UK industry; and
(ii) the Carbon Border Adjustment Mechanism, as set out by Part 5 of the Finance Act 2026 on the value of a steel undertaking.”
This amendment would require consideration of external tariffs and the implementation of the Carbon Border Adjustment Mechanism, when conducting a valuation of the Steel undertaking.
Clauses 54 to 57 stand part.
Amendment 20, clause 58, page 39, line 7, at end insert—
“(1A) The Secretary of State may only provide financial assistance under this section if they are satisfied that financial assistance will secure value for money.”
This amendment would only allow the Secretary of State to provide financial assistance if the NAO had concluded that it would secure value for money for taxpayers.
Amendment 22, page 39, line 8, at end insert—
“(1A) The Secretary of State may not in any five-year period provide financial assistance under this section of an amount that exceeds £1 million per employee of the steel undertaking.
(1B) The number of employees of a steel undertaking for the purpose of subsection (1A) is the number of persons employed on the date the financial assistance was first provided.
(1C) ‘employee’ has the meaning given by section 230 (Employees, workers etc.) of the Employment Rights Act 1996.”
This amendment would cap the amount of financial assistance that could be provided to a steel undertaking to £1 million per worker over 5 years.
Amendment 24, page 39, line 24, at end insert—
“(4A) Financial assistance under this section may not include funding provided by the National Wealth Fund.”
This amendment prevents money from the National Wealth Fund being used to provide financial assistance under this Act.
Clause 58 stand part.
Amendment 4, clause 59, page 39, line 29, insert at end “and,
(b) compensation paid under any compensation scheme regulations made under section 52.”
This amendment requires the Government to report on the compensation paid under any compensation scheme regulations made under section 52.
Amendment 10, page 39, line 31, leave out “12” and insert “3”
This amendment together with Amendment 14 would increase the frequency with which the Secretary of State must make reports about financial assistance to every three months.
Amendment 11, page 39, line 33, leave out “12” and insert “3”
See explanatory note for Amendment 13.
Clauses 59 and 60 stand part.
New clause 6—Parliamentary scrutiny of Financial Assistance—
“(1) Before providing any assistance under section 58, the Secretary of State must lay a proposal for providing the financial assistance (‘the proposal’) before Parliament.
(2) No financial assistance may be provided under section 58 unless the proposal has been laid before Parliament.
(3) If, within the period of 90 days after the proposal has been laid, a select committee of the House of Commons makes any recommendations with regard to the proposal, the Secretary of State must lay before Parliament a statement setting out the Secretary of State’s response to the recommendations before providing any financial assistance.
(4) The proposal must include—
(a) details of the nature and amount of the financial assistance,
(b) the intended beneficiary or beneficiaries of the financial assistance,
(c) the expected purpose and effect of the financial assistance,
(d) any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and
(e) any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal, subject to the restrictions in subsection (3).
(5) The proposal may not include information which, if it were made public, may damage—
(a) national security;
(b) fiduciary duties; or
(c) commercially sensitive interests.”
This new clause prevents financial assistance being provided until 90 days after information about the package of financial assistance being made available to a Select Committee of the House of Commons for its consideration.
New clause 12—Financial assistance: limit—
“Financial assistance of a total value of no more than £2.5 billion may be provided under section 58 of this Act before 15 August 2029.”
This new clause would limit the financial assistance that can be provided under the Act.
New clause 13—Financial assistance: England and Wales—
“Where financial assistance is provided to steel undertakings in England under section 58 of this Act, an equivalent to the total amount of financial assistance provided to steel undertakings in England must be made available to steel undertakings in Wales.”
This new clause requires equivalent funding to be provided to steel undertakings in Wales compared to those in England.
Clauses 61 to 64 stand part.
New clause 7—Impact assessments—
“Before exercising any power under this Act, the Secretary of State must publish an impact assessment on the proposed exercise of that power.”
This new clause would require an impact assessment to be published before the Secretary of State exercised any of the powers under the Act.
New clause 4—Limit on expenditure on financial assistance and compensation—
“(1) The total amount of compensation paid by the Secretary of State under Part 2 and financial assistance paid under section 58 is limited to—
(a) £500m, or
(b) an amount so authorised by resolution of the House of Commons, whichever is higher.”
This new clause prevents the Secretary of State from paying more than £500m in financial assistance and compensation under the Act, unless the House of Commons passes a resolution authorising them to do so.
New clause 9—Duty to try to find a private sector purchaser for any nationalised steel undertaking—
“Where a steel undertaking has been subject to the principal transfer power under this Act, the Secretary of State must—
(a) make all practicable efforts to find a private sector purchaser for the steel undertaking; and
(b) lay a report before Parliament every six months which sets out progress made towards finding a private sector purchaser for the steel undertaking.”
This new clause would put a duty on the Secretary of State to seek a private sector buyer for any steel company that has been nationalised, and report to Parliament on progress made every six months.
New clause 10—Report on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom—
“Within six months of the passing of this Act and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”
This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.
New clause 11—State aids—
“The Secretary of State must not exercise the powers in this Act so as to grant any advantage through state resources on a selective basis to any organisations that could potentially distort competition and trade, including any advantage that might be granted to steel undertakings subject to a transfer power over comparable privately-owned steel undertakings in the United Kingdom.”
This new clause would require the Secretary of State to maintain a level playing-field between nationally owned and privately owned steel businesses.
Sarah Olney
We heard throughout yesterday’s debate from Members across the Committee about the importance of steelmaking as a vital strategic sector in the UK, and no doubt we will hear about it again today. We rely on the sector for essential parts of our national infrastructure, for transport and for advanced manufacturing. Steelmaking and the industry more broadly create thousands of good jobs across the country, helping to power our economy and boost our local communities, and in increasingly uncertain times, it is essential to support our defence industry.
We on the Liberal Democrat Benches therefore broadly welcome this legislation as a temporary, emergency and targeted step aimed specifically at turning around British Steel before it can be returned to the private sector, and we note that it is in that spirit that British steel producers also support these measures. We need to see more ambition and clarity in the delivery of the steel strategy—for example, when it comes to boosting domestic production to meet 50% of domestic steel demand, further incentivising the use of British-made steel in the private sector and managing the transition to electric arc furnaces.
I wish to speak in favour of amendments 7, 8 and 9. These would strengthen the treatment of environmental liabilities in relation to the steel undertaking and ensure that they were explicitly identified and accounted for before compensation payments were made. They highlight the principle that the true financial position of an undertaking cannot be properly understood without a clear and transparent assessment of its environmental liabilities. By accepting the amendments, the legislation could work as a package to ensure that environmental liabilities were not only considered but formally assessed, published and laid before Parliament.
In particular, the amendments would require an independent valuer to prepare a written estimate of the environmental liabilities associated with the undertaking, including contamination of land, water or air; compliance with environmental obligations; and current and future remediation or restoration costs. That would ensure that the full environmental cost of the undertaking’s operation was properly captured, including liabilities that might not yet have crystallised but were none the less foreseeable. Crucially, the amendments would link the process to the timing of compensation payments, specifying that compensation could not be paid until the environmental liabilities estimate had been produced and presented, and ensuring that taxpayers were not left to pick up the bill for any environmental damage caused by the company’s previous owners.
Furthermore, I wish to speak in favour of amendment 6. This amendment would require that when carrying out a valuation of the steel undertaking, consideration was explicitly given to the impact of external tariffs and the carbon border adjustment mechanism. It reflects the reality that the value of a steel business is not determined solely by its internal operations and that it is also significantly influenced by international trade conditions and environmental policy frameworks.
The previous Conservative Government oversaw a string of near collapses and interim last-minute packages. They scrapped the industrial strategy, which is so vital to our manufacturers, and they erected new trade barriers, making it harder for our steel producers to do business with their biggest export market across the channel. This legislation should be much more ambitious on an improved agreement with the EU for steel exports. Given the international nature of the steel market and the growing importance of carbon-related border adjustments, it is reasonable that these factors should be explicitly included in valuation methodologies. Amendment 6 would help to ensure that any valuation was not artificially insulated from key external drivers of cost and competitiveness. It would also provide a more accurate basis for decision making.
Mr Toby Perkins (Chesterfield) (Lab)
I am interested in what the hon. Member has had to say on amendment 6. She spoke specifically with regard to steel making. Has she also had representations about the impact of these tariffs on UK manufacturers who make things out of steel, as well as on steel stockholders? Is it her intention through the amendment to get further information on that, or is that not its purpose?
Sarah Olney
That is not the specific purpose of the amendment, but I am glad that the hon. Member has raised that point. I know that the Minister has heard about this issue on a number of occasions, throughout the debates on this Bill and during the urgent question last week in the Chamber. I would like to take this opportunity to reinforce the point that has been made on multiple occasions across this House about the tariff regime and the changes that are coming in. I have spoken to a number of manufacturers about the very real concerns right across the sector about the changes in tariffs. I know that the Minister is focused on that, but I am grateful to the hon. Member for giving us another opportunity to raise concerns with the Minister, which I know he has heard.
Amendment 5 would extend the Government’s reporting obligations to include progress on negotiations with the European Union—
The First Deputy Chairman
Order. I remind the hon. Lady that amendment 5 has not been selected and so would be out of scope for this debate.
Sarah Olney
Thank you for your guidance, Madam Chair. I will reframe my remarks slightly, because they relate to the intervention that I took.
Steel producers in the UK are heavily integrated into international supply chains, and continued access to frictionless or improved export arrangements is vital for sustaining jobs and production. From 1 July, the Government will limit tariff-free steel imports. Although in many ways that will support business, there is a lack of certainty about costs and the impact on downstream manufacturers is still opaque.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
Perhaps I can give the hon. Lady a moment to gauge where she is in her notes while I take her back momentarily to amendment 7. She spoke about the importance of steel to our defence industry, which is therefore central to European security and to deterring the threat of Russian rearmament, but amendment 7 would produce significant procedural barriers and slow down our ability to use the Bill. Does she agree that such amendments risk causing serious impediments to supply-chain security, particularly for our defence industry?
Sarah Olney
I am grateful to the hon. Gentleman, not least for underlining the real importance of the steel industry to our defence industry and the heightened importance of sustaining our defence industry, and all the companies and the jobs associated with it, in this time of heightened global instability. Liberal Democrat Members certainly believe that support for our defence industry is paramount at this time, but it is important that Parliament gets the opportunity to scrutinise all the costs associated with the proposed undertaking should the Government choose to exercise the powers in the Bill. That is the purpose of amendment 7.
Clause 52 will give the Secretary of State broad powers to establish compensation arrangements linked to the exercise of transfer powers, including transfers of shares, property rights and liabilities. Amendment 4 would require the Government to report not only on the existence of compensation schemes under the clause, but on the compensation actually paid under those schemes.
My new clause 6 would strengthen parliamentary scrutiny of any future financial assistance. It would require, before any assistance is provided, the Secretary of State to lay a detailed proposal before Parliament, setting out the nature and amount of assistance and the intended beneficiaries, the purpose and expected effect, and any associated conditions, including repayment terms, guarantees, indemnities or other liabilities.
In a similar vein, new clause 4, in my name, would introduce parliamentary oversight, and compel the Government to bring forward a resolution for any expenditure by the Secretary of State under part 2 that exceeds £500 million, which is roughly equivalent to the annual cost of keeping the Scunthorpe plant running, based on the publicly available figures. The clause reflects the principle that, where significant public funds are being committed, there should be clear parliamentary control and oversight of the overall financial exposure. By setting a defined limit, it would ensure that expenditure does not escalate beyond what has been explicitly agreed by Parliament without further democratic approval. The measure is designed to ensure a balance between enabling necessary intervention and maintaining proper oversight of the total level of public expenditure involved. I urge hon. Members to vote in favour of the new clause.
Steel is a valuable sector with far-reaching benefits across the UK for critical infrastructure projects, defence and the future of renewable energy. The steel industry is vital to so many of the UK’s national strategic priorities. The Liberal Democrats support the Government’s pace and urgency in taking action to assist the steel industry, but there is a significant need for greater transparency and accountability relating to how these measures will be exercised. There is potential in the Bill to improve training opportunities for steel exports, and I urge Ministers to consider our proposals on that matter.
Several hon. Members rose—
Mr Perkins
Thank you very much, Madam Chair—that was a pleasant surprise.
I do not intend to detain the Committee for long, but I will take this opportunity to welcome the Government’s steps in the Bill, which build on the steps that we took with the emergency legislation that ensured a future for Scunthorpe. We all recognise that steelmaking is part of our national security. Without steel capability, we are simply unable to be truly independent in military terms or in many other terms. The commitment of the Minister, the Secretary of State and the Prime Minister to ensuring a future for British Steel is not only sensible and ambitious, but a welcome change from the policies that were pursued by previous Prime Ministers over too many years to mention.
At a time when there has been such huge pressure on the public finances, it is tremendously welcome that the Government are stepping forward with £2.5 billion to boost the steel industry, along with the important measures relating to those with expertise in the industry, which is a complicated sector. It is therefore very welcome that the Government’s efforts in these areas are being led by those with such expertise in the sector.
Richard Tice (Boston and Skegness) (Reform)
The hon. Gentleman talks about the opportunities from an electric arc furnace, but does he recognise the vital importance of keeping blast furnace primary steelmaking capability, which can only take place in Scunthorpe?
Mr Perkins
Yes, I do. I should say to the hon. Gentleman that I had the opportunity last night to predict that he would be the leader of Reform by the time we went into the general election, and I stand by that. We would normally expect to see a party leader in the House of Commons. We never see the Reform leader, the hon. Member for Clacton (Nigel Farage), in the House of Commons, which is why I predicted that it would be the hon. Member for Boston and Skegness (Richard Tice)—but I am getting distracted and will return to his question.
I am absolutely committed to doing everything we can to decarbonise, but in certain sectors doing so would be to deindustrialise. There is no sense in allowing blast furnaces only for imported products and not looking after that ourselves. I welcome the Government’s drive and direction, but I absolutely want to see that future for Scunthorpe. We should look at ways that we can use greener gases rather than pursue anything against that.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Nuclear is going to play a role in cheaper energy for households, and I welcome the Government’s announcement there will be an array of small modular reactors that will have to be made out of British steel. Equally, I regret the fact that offshore wind turbines are being built not in this country; they should be built here, out of British steel.
When I worked in the oil fabrication industry, we had thousands of trained welders. Today, we do not have so many people who could actually work with British steel. Does the hon. Member agree that, in parallel with doing the good work in the Bill, we should be thinking about keeping these skills, which are crucial to the future? If we do not have them, we will not use British steel.
Mr Perkins
I agree 100% about the importance of protecting skills, which has been a huge priority of mine throughout my time in this House. The hon. Gentleman is absolutely right that skills have been lost from the sector, as we tragically and foolishly allowed the steel industry to be stripped away, as he rightly pointed out, by the Conservative party. That has been tremendously damaging to our national security, our economy, our industry and, as he rightly says, the skills base in this country.
I am very supportive of what the Government are doing in this Bill. I would like to take the opportunity to speak, as I did a moment ago, to a question raised with me that is somewhat parallel to the narrow terms of the Bill, but is relevant to amendment 6 and to amendment 5, which has not been selected. We are—absolutely sensibly—taking measures on the tariffs to prevent the dominance of the Chinese steel industry, which sells steel at ludicrously cheap prices and is attempting to get all other countries to lose their steel industries so that we will then all be dependent on China. However, we have to be careful that we do not cause unintended consequences for British manufacturers that use steel and for our international competitiveness. We do not want to end up in the position of, for example, rolled bar, where we do not have reliable and strong provision of that here in the UK. We need to tread carefully with this. I know the Minister is on this, but I take this opportunity to come back to that point.
I have already written to the Secretary of State about a manufacturer in my constituency that makes transport ramps out of steel, and three other companies in the constituency are more directly involved in steel stockholding and have products manufactured out of steel, and they are all deeply concerned about where we currently are on this.
I know we have the current plan for 1 July—that is not far away at all. If we do not get this right, the consequences could be extraordinarily serious. I know that is on the Minister’s list and that it is prominent in his mind, but I add my call to all those others who say that we need to tread extremely carefully. With that, it remains only to say well done to the Minister and the Government for their continued backing of steel, and I look forward to seeing this—
Mr Perkins
I was just about to finish, but if my hon. Friend thinks that it cannot wait, I will happily bring him in.
Mr Bailey
My hon. Friend has been speaking about the steel strategy in the round. I wish to echo his remarks about the lower part of our defence sector, but there are also our small and medium-sized enterprises that make things that are not necessarily identifiable as tangible defence things. We need to ensure that we understand the types of steel that they require and the consequences of the tariffs on them. It is also important that we understand the steelmaking strategy as a whole, so from ore all the way through to direct reduced iron. We need to ensure that in gaining our sovereignty, we can create more reliable partners and separate some of the places that produce ore from the production that has traditionally been done in China. Does he agree that is something we must ensure is encompassed in this? That is why I am concerned about some of the amendments that have been tabled.
Mr Perkins
I absolutely agree with my hon. Friend, who clearly speaks with great knowledge on these subjects. He makes an important point, once again raising the importance of this whole area of legislation to the defence industry and to sovereign capability. The reality is that our defence industry is crucial economically, for jobs and for our national protection, but also for exports. We should absolutely welcome those British manufacturers making things here and selling them across the world. If we inadvertently cause them to be less competitive, we will rue the day, so we need to tread carefully. But his point about ore and those amendments is well made.
I will sit down now, but I tell the Government that they have my absolute support on this approach to the nationalisation of British Steel, and I ask the Minister to respond to the points I have made.
Dame Harriett Baldwin (West Worcestershire) (Con)
Yesterday we discussed amendments in which we sought to rein in some of the unfettered powers that the Secretary of State is taking for himself in this legislation. Today’s amendments are about trying to rein in the unfettered liability and financial risk that this legislation puts on the taxpayer.
For example, amendment 20 would allow the Secretary of State to provide financial assistance if the National Audit Office has concluded that it would secure value for money for taxpayers. The amendment is obviously about making it clear that these powers are not a blank cheque, that they must be constrained, justified and used only when strictly necessary. We cannot have industrial improvisation when the British taxpayer is being asked to pick up the bill. It is not fair that hard-working taxpayers should be forced to pay for a potential failure of Ministers who think they are able to defy the realities of this market.
Amendment 22 would cap the amount of financial assistance that could be provided to a steel undertaking to £1 million per worker over a five-year period. It would also fix the employee count at the point that support begins, with “employee” being defined by section 230 of the Employment Rights Act 1996. The amendment would ensure that financial assistance is targeted, proportionate and provides value for money. If the Government believe in this intervention, as they clearly do, they should be willing to set limits on it, because without such a cap we are simply asking taxpayers to sign up to an unlimited liability.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
Would the shadow Minister consider that putting a limit on this, when the financial support would only be provided in an emergency, when absolutely necessary, might be unwise and might lead us to having to recall Parliament yet again to take the necessary action?
Dame Harriett Baldwin
I take issue with where the hon. Member is coming from on that, because by putting a sensible and finite limit on the amount per employee—and I will speak later to another amendment where we propose an overall limit—we are talking about the amount that has been set by the Chancellor through the spending review envelope. I do not think she really wants to say to the Committee that there should be completely unlimited budgets for this intervention. She herself would know that in any intervention we ought to go in with a wise idea about what is a reasonable spending limit.
Amendments 10 and 11 would increase the frequency with which Parliament is told about the amount that has been spent. Currently, as it is framed in the legislation, the Secretary of State must make a report to Parliament only every 12 months. We are suggesting in these amendments that reports about financial assistance should come every three months. We are talking about substantial and significant sums of public money, so we do not think that annual reporting would be sufficient. Quarterly reporting would ensure that Parliament can properly scrutinise how much money is being spent and how much is being done in closer to real time. It is essential that financial exposure is monitored closely and transparently. We do not want costs to escalate without people being able to notice them, and we want Ministers to remain accountable for public spending.
Edward Argar (Melton and Syston) (Con)
My hon. Friend and I have both been Ministers; we know that a written ministerial statement is not a complicated thing to do every three or four months or whatever it is. I struggle to see what reason there could be not to give Parliament that transparency, for the simple sake of a piece of paper tabled once every three months, to ensure that taxpayers’ interests are protected.
Dame Harriett Baldwin
My right hon. Friend is absolutely right, and I know the Minister to be an extremely reasonable man, so I am sure he will agree with our amendment.
New clause 12 would place a firm cap on the total financial assistance that can be provided under the Bill, limiting it to £2.5 billion. As I am sure the hon. Member for Motherwell, Wishaw and Carluke (Pamela Nash) and other Members know, that is the limit that has been set for the steel strategy, so to reach that limit would mean that this intervention used up the entire amount allocated to the overall steel strategy. The new clause would set the limit up to a specific date in 2029.
As our explanatory statement makes clear, the purpose is simple: to limit the total financial exposure under the Bill. At the moment, the way the Bill is phrased means that it is a completely open-ended financial commitment. We think that a cap of this nature, which would ensure that Ministers had to prioritise their spending decisions rather than continue to inject funds without clear limits or outcomes, is a very sensible thing to do, and I urge everyone to support it.
Mr Perkins
The hon. Lady is making a very important and interesting point. In the steel industry over recent years, we have seen foreign companies buying British firms, then closing them down and leaving us without this capability. Would anything in new clause 9 prevent that from happening again? Having forced the Government to seek this buyer, is there anything in it to stop that buyer coming in and just closing the business down, meaning we lose that sovereign capability?
Dame Harriett Baldwin
We are looking at a Bill that the Government’s own impact assessment says might have a bit of a “chilling effect” on inward investment into the sector. We should all want to have inward investment into our economy. If someone who we regard as an excellent owner of this business should come in and make an offer that is attractive to the Government, I absolutely think the Government should be prepared to take that seriously. We do not want this to be a permanent state of affairs; we want it to be a journey to a thriving steel sector, which may well involve investors coming in from overseas.
Mr Perkins
I think the hon. Lady is in the same place as the Government, in that they want to see an excellent private sector partner at the earliest opportunity. The point I was trying to make is that she would be compelling the Government, in new clause 9, to seek this provider, and we have seen what has sometimes happened previously. Is she saying that, ultimately, we must do whatever the market decides, or is she basically supporting the Government’s position that this sovereign capability must remain in the UK and that we will work with other partners, but they will not be able to shut down British steelmaking as they have done in the past? Will there be any provisos in the new clause?
Dame Harriett Baldwin
The hon. Gentleman seems to be conflating two issues. Last year, when the emergency legislation was introduced and Parliament was recalled on a Saturday for the first time since the Falklands war, we did not stand in its way, but what we are asking for in the new clause is for Parliament to be kept informed. Let us agree that we all want to be kept informed about how the discussions are going and to find out what the Government are thinking about their exit plan. I made the point yesterday about the public interest test that it is very unclear whether, once the Secretary of State determines that it is in the public interest for this particular site to be owned by the taxpayer, there will ever be the potential for it to change to different state.
Richard Tice
The shadow Minister seems to be implying that, essentially, the business should be up for sale at any moment, almost at any price. It is incredibly destabilising for any business and its employees to suffer that uncertainty. What is required is a period of stability and investment, with a strong vision. She previously made comments about relying on auditors at the National Audit Office to make a strategic judgment about what is in the sovereign national interest. With the greatest of respect to auditors, it is experienced businesspeople—including the Minister—who understand the industry and who can make a much stronger judgment about what is required to retain primary steelmaking in this country, with that sovereign capability, than a bunch of auditors.
Dame Harriett Baldwin
I actually think the hon. Gentleman is also agreeing with me on this point. I yield to no one in my admiration for the Minister and his expertise in this industry, but I heard the hon. Gentleman say that he too thinks that it will take business nous and investment into this business to bring it back to a state where it is making money. I also heard him say that he would therefore not object to hearing a report to Parliament every six months about the progress being made, so I look forward to him supporting this amendment in the Lobby later. We want our Ministers to actively work towards returning the business to private ownership, so we want to hear in Parliament about that ongoing progress and to be able to hold Ministers accountable and ask them questions on exactly that from time to time.
New clause 10 would require the Secretary of State to report to Parliament every six months on the impact that nationalising steel undertakings has had on inward investment into the UK. I mentioned earlier that the Government’s own impact assessment worries about the potential for a “chilling effect” where Government are taking assets into public ownership in the way that this Bill allows. During its history, the UK has very much relied on being seen as a stable and predictable environment for inward investment. Expropriating and nationalising private businesses sets a precedent that could deter future investors, not just in the steel sector but across the wider economy. The new clause would ensure that Parliament received a regular, transparent analysis of how these interventions were affecting investor confidence and capital flows into the UK economy. We all hope that they would not be adversely affected, but we would want Parliament to know, and this new clause would ensure that any damage to our reputation was identified, understood and addressed early.
New clause 11 would prevent the Secretary of State from using the powers in the Bill to grant any selective advantages through state resources that could distort competition. It would ensure that nationalised steel undertakings were not unfairly advantaged over privately owned ones. Without this safeguard, there is a real risk that nationalised entities could receive preferential treatment, whether through subsidies, contracts or regulatory advantage, undermining fair competition within the domestic steel sector. If private firms believe they will be placed at a disadvantage compared with state-owned competitors, that risks deterring further investment in UK steel and related supply chains.
To conclude, these amendments are about bringing discipline, transparency and balance to a Bill that, as drafted, risks being too broad, too costly and too unconstrained. They would ensure that any intervention was properly assessed, carefully limited and consistently scrutinised, while protecting taxpayers, competition and investor confidence. If the Government are serious about supporting the steel industry, they should also be serious about accountability, value for money and a credible long-term plan, and these amendments are designed to deliver exactly that.
Cat Eccles (Stourbridge) (Lab)
It is a huge pleasure to speak in a debate on a Bill to nationalise British Steel, reversing one of the many mistakes of the Thatcher Government in the 1980s. I will speak against new clause 9, in the name of the hon. Member for West Worcestershire (Dame Harriett Baldwin), which would seek a private buyer for the nationalised British Steel company.
It is absolutely right that the Government are taking action to nationalise British Steel and set out a clear strategy to strengthen domestic production. While the strategy will safeguard our steelmaking capability, we must recognise the realities facing the downstream steel sector, which has been impacted by having to compete with the unfair terms of international markets and by being consistently starved of investment. Many such businesses, including those in my constituency, depend on imported grades and products that the UK simply does not produce and that are regularly used in our defence force, the automotive industry and construction.
I also oppose new clause 11, which would require the Government to create a level playing field between nationally owned and private sector businesses. While I support in principle the use of quotas and tariffs to back British Steel, we must avoid unintended consequences for the downstream industry. Sudden or poorly calibrated changes risk undermining downstream firms. These businesses are vital in constituencies such as mine, and supporting domestic production must not come at the expense of the wider steel ecosystem. I have discussed these matters extensively with the Minister on several occasions, and I look forward to welcoming him to Stourbridge in the coming weeks to meet a local steel company.
Downstream companies have expressed legitimate concerns about the present proposals. I sincerely thank the Minister for engaging with me and them on these issues, but can he confirm whether, in cases where particular steel grades are not currently produced domestically, including zero-carbon grades, the Government intend to allow exemptions from the proposed tariff and quota regime? The most recent stance is that tariffs and quotas will be reviewed in 12 months’ time, but I really fear that that will be too late for some businesses. Will he consider transitional arrangements at the very least to offer some stability to the downstream industry?
I will also speak against new clause 12, which would limit the financial assistance that can be provided under the Bill. While supporting British Steel, we cannot ignore the climate crisis. Our steel industry must be driven towards green, decarbonised production. On that point, the steel strategy states an ambition to transition to carbon-neutral steel production with electric arc furnaces when market conditions allow. It is worth noting that SSAB in my constituency, which is part-owned by the Swedish Government, imports zero-carbon steel from Sweden, where such steel—its only by-product is water—has been produced using electric arc furnaces since the 1980s.
Following the Government’s introduction of an investment debt rule in 2024, I encourage the Minister to consider what further flexibility there could be to use a similar investment method to enable the transition away from coal-based steel production. I hope that he will reflect on those points and continue to engage well with the industry. With the right decisions, I believe that we can secure a competitive, resilient and low-carbon steel sector for the future.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
There is those three lions on my shirt, our NHS, the joy of holding a brolly over a barbie on another washed-out bank holiday Monday, that sweet smell of fish and chips on a Friday, a Mr Whippy on the beach, strawberries and cream at Wimbledon, His Majesty the King, the pageantry of trooping the colour, nil points at Eurovision, Fifa Ultimate Team, “Strictly” at Christmas, a “Gavin and Stacey” special, Monty Python, that Geri Halliwell dress, Phil Mitchell, James Bond, KSI, corgis, Larry the cat, Ant and Dec, accents, having that main character energy—and steel. Steel is to the UK what Yorkshire tea and Yorkshire puds are to God’s own county, what hotpot is to Lancashire and what black cabs are to London. It is about us. It is about what makes us and drives us. It is about pride.
Before I turn to new clauses 12 and 4 and amendments 20 and 7, which I am against, I want to begin with Martin Welch. Today marks 48 years since Martin began working at Scunthorpe steelworks, and he is now its longest-serving employee. That is 48 years of skill, graft, and loyalty to an industry that has helped to build this country. Martin has also been a champion of safety for his coworkers, standing up for people who are doing difficult, skilled and sometimes dangerous work. When we debate steel, we are debating people like Martin, families like his, and communities whose working lives, pride and futures are bound up with the future of British steel.
David Smith (North Northumberland) (Lab)
My hon. Friend is making an excellent speech. He has just made the point that I wanted to make, which is that we surely cannot make an ideological decision that it is always right to put national assets of sovereign capacity back into the private sector when, over generations, private industry has singularly failed to make the steel industry flourish. Does my hon. Friend agree?
Lee Pitcher
I absolutely agree. This is not about heritage or the sentimental value of steel, although those things are of course important. Steel means something to people in their hearts, but, with a business brain, this is just about doing the right thing for the industry and for our country, our people and our communities.
Steel is part of who we are. It is in the homes we need to build, the railways we need to renew, the energy infrastructure we need to deliver and the defence capability we need to protect our country, and it is in the skilled work, pride and industrial strength of communities that have already given more than enough to Britain. This debate is not only about a steelworks; it is about whether Britain is prepared to act like a serious industrial nation again. For too long, we have been too casual about losing the things that make us strong: factories, skills, supply chains, ownership and industrial capacity. We have allowed strategic British assets to pass out of British hands and then pretended that ownership does not matter. It absolutely does.
In Dunscroft, Hatfield, Rossington, Thorne and Moorends, people know what happens when a major industry is allowed to collapse. They do not need a lecture in industrial policy; they and their families have lived through it, and their towns still live with the consequences. The loss of coalmining was not just an economic event but a social rupture. It damaged local economies because it damaged confidence. It damaged pride and the sense that the country valued the people and the places that powered it. That damage is still visible 40 years later.
When people say that the Government intervention is too bold, too risky or too ambitious, I say that they need to look at the cost of not acting. Doing nothing is not free. It has costs for jobs, skills, supply chain resilience, industrial communities and national capabilities. It leaves Britain less able to build, less able to defend itself and less able to stand on its own two feet. That is not prudence; that is managed decline, and I did not come into this place and into politics to manage decline.
This Bill says that when a foundational industry is at risk, when thousands of skilled jobs are at stake, and when national resilience is on the line, the Government do not have to stand aside and hope the market sorts it out. The market has not sorted this out. Decades of decline, under-investment and foreign ownership have brought us to this point. The choice before us is not between some perfect private sector solution and public ownership. The real choice is between responsible public action now or allowing a vital national capability to disappear. We cannot allow that.
Some of the amendments before us seem to start from the idea that Government intervention is dangerous. I disagree: the danger is delay and timidity. The danger is pretending that rigid caps, lengthy processes and automatic routes back to private sale are the same thing as responsibility. Managed risk is not recklessness; managed risk is leadership. If we keep doing the same safe things, we will keep getting the same results. Those results are the decline that people keep voting for us to change—the change that I come to this House to be part of.
This is a time to be bold and to step up. This is a time to take well-managed risks in the public interest. There are times to seize the bloody obvious and deliver for the country, and this is one of them. For the workers at Scunthorpe, for the families across my constituency who depend on those jobs, for the industrial communities that know exactly what happens when the Government walk away, and for the future strength of this country, I support this Bill. Britain needs steel, Britain needs British assets in British hands, and Britain needs a Government with the confidence to act in the national interest.
This Bill is a welcome step in the right direction. It turns the tide on 40 years of ideological self-sabotage. That is why amendments that would delay, dilute, cap arbitrarily or force a route back to failed models should be resisted. This Bill deserves the support of the Committee today.
Pamela Nash
It is an absolute pleasure to follow my hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher). What a passionate speech—I hope I can do half as well as him.
At the outset, I should state that I am a long-term and proud member of Community trade union. I thoroughly welcome the Bill, which takes additional steps forward from the legislation we passed last year. I am especially happy that the Bill is UK-wide and covers Scotland, too.
I want to touch on my concerns regarding new clauses 4 and 12, which seek to limit the level of financial support that the Government can provide. Given that the provisions in the Bill are designed to be used only in emergency and necessary situations, such amendments seem unwise. Over decades, we have seen Conservative Governments let down the steel sector time and time again by failing to support and invest. I am disappointed, but not surprised, that the Conservatives are seeking to bring into the Bill unnecessary and debilitating restrictions that are based on politics rather than the needs of the steel sector.
Mr Perkins
When I asked the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), about this point, it was instructive that we heard her resort to saying, “It is just about being kept in touch.” The new clauses say that the private sector is always the way to go, but we know from our long history with the steel industry that that idea has often led to private companies coming in, mismanaging or indeed closing British steelmaking companies, and us seeing sovereign capability disappear overseas. Does my hon. Friend agree that we need to ensure that the Government can always act in the national interest by rejecting the new clauses?
Pamela Nash
I completely agree with my hon. Friend. That is certainly the experience we have had in Motherwell in my constituency, where a questionable buyer for Dalzell has caused many problems. I will go into that later in my speech.
I am disappointed, and surprised, that the Liberal Democrats are seeking an even more restrictive limit on potential support. For us, Motherwell became the unwilling emblem of the Tories letting the steel industry down in the 1980s, with the closure of Ravenscraig and the subsequent loss of thousands of jobs across the area. It has taken decades even to begin to repair the damage that was done at that time.
In recent years, the Tory Government failed to prevent cheap imports and to bring in the investment and strategy that were needed to protect what was left of our steel industry. I therefore feel that Members on the Opposition Benches have an absolute brass neck in trying to put limitations on this Labour Government’s ability to breathe life back into it.
Sarah Olney
The hon. Lady referred specifically to our new clause. Does she not accept that we are merely asking for a further parliamentary vote if the proposed consideration for transfer exceeds a certain level, and that that is a sensible and workable way forward? Not only do we need to be open to the possibility of enabling the Government to take steel into national hands, but taxpayers’ interests need to be protected, and Parliament needs to have oversight of any decision of that nature.
Pamela Nash
If we brought the Government to Parliament every time we wanted them to intervene when there was an emergency, we would not be able to react effectively, so I do not accept that that is necessary.
Sarah Olney
It would take just hours to do that. All we are asking for is a safeguard. Without any kind of safeguard, what does the hon. Lady think would be an acceptable amount for the Government to offer in exchange for taking on a steel undertaking? Does she think that no limit at all would be acceptable? We are merely proposing that a motion should be laid before Parliament to be voted on, and that does not take much time.
Pamela Nash
This legislation is designed for extraordinary situations, so we are going to have to agree to disagree on that point.
Motherwell remains the home of steel in Scotland. While the immediate and particular focus of the Bill is, understandably, on the manufacturer British Steel, I want to take the opportunity to highlight the plight of what is currently our only Scottish steelworks: the Dalzell plate mill.
The Bill suggests three potential factors that can be considered in the assessment of whether it is in the public interest to nationalise a steel company or facility. Is the plant part of the supply chain for our defence industry, thus contributing to our national security? Is it necessary for the building and/or the maintenance of parts of our national infrastructure? Does it support the local or national economy? I would argue that the Dalzell plate mill is essential to all three of those elements of our country’s progress and security, and that we would be demonstrably better off if it was supported back to full operation.
When Sanjeev Gupta took over the plant almost a decade ago, he presented a vision of a bright future for Dalzell in a “green steel” era, but that has not come to pass. Like others, the plant has suffered as a result of the onslaught of cheap imports and the global events that our wider economy has faced, but Liberty has largely been unable to provide the funds or leadership needed to make Dalzell a success during its time at the helm, with repeated failures to deliver the raw steel that is required for the plant to fulfil orders and with staff left without work. There have been regular promises of materials and work being on the way, but more often than not they have been stalled or unfulfilled.
The current situation for the team of dedicated and highly skilled staff at Dalzell is difficult to imagine. The majority of them have spent most of the last two years at home on furlough, receiving less than their full pay. A skeleton workforce of about 20 is keeping the mill ticking over, ensuring that it is clean and maintained and that necessary paperwork is completed. They want to be ready to go as soon as an order comes in.
Lee Pitcher
It is really sad that we have got to that point. Does my hon. Friend agree that the whole point of making bold decisions and taking a bit of risk is that it gives people aspiration for the future? It is about getting the next generation of children to set their minds on having jobs and careers in steel and manufacturing, working on the shop floor and having camaraderie. They need to envisage a future in which people have a regular, great income and support their local community and economy.
Pamela Nash
I share the vision of my hon. Friend, and that is exactly what I for Dalzell in Motherwell. At the moment we have staff who are worried each month about whether they are going to get paid, as they see troubling headlines and hear rumours about their parent company. I am becoming increasingly concerned about the mental health and wellbeing of the team, who have been left in an impossible limbo. Most of them want to be back in the workplace, in a job that they are proud of, and to be contributing to our country’s economy, security and infrastructure.
The workforce in Dalzell has now dwindled to 100—about a third of the full capacity. Predictably, key skilled team members are eventually leaving. These are people who are irreplaceable, because they have a unique combination of skills, qualifications and years of experience. Despite the team’s best efforts, the mill has not been used properly for a period of time, so the equipment and technology used in Dalzell is at risk of being dated and damaged out of value.
Jamie Stone
The hon. Member speaks with passion and cares about her constituents. It seems that what she is saying is in parallel with my earlier intervention about the risk of losing the skills of working with steel—welding and suchlike. Does she share my disappointment, but perhaps not surprise, that there is no member of the Scottish National party with us today? We know that the Scottish Government set their face against all new nuclear in Scotland, but we would welcome an SMR at Dounreay in Caithness.
The hon. Member might agree that the Scottish Government are not helpful on defence either. She talks about leadership and shouldering the responsibility, but we have a gap—
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Order. Mr Stone, we are here to debate the steel industry, not new nuclear or the pros and cons of the Scottish Government. Perhaps it is better if we stay within the confines of this Bill.
Pamela Nash
When it comes to Dalzell, the SNP Government have not been helpful. They previously stepped in when the steelworks went into administration, and then they sold it to the current owner, who has been less than helpful.
Richard Tice
The hon. Lady is making a very powerful case for the importance of the heavy plate mill in her constituency, and of having the right owners of critical steelmaking capability and the functions around it. What we have seen with the failed ownership of Jingye, and with the failed ownership and fibs of companies such as Liberty, is that if we rely on an unaligned basis, without any care for the strategic importance of steelmaking, we end up in the pickle that we are in. That is why I think the hon. Lady makes a powerful case for the importance of the plate mill in the UK’s overall steel strategy going forward.
Pamela Nash
I thank the hon. Gentleman for his very helpful intervention.
For the reasons I have set out, we are getting to the point where we are losing experienced staff and equipment is in danger of going out of date. Time is running out very quickly for Dalzell. If it is left to close up shop, we will not be able simply to go back later and restart it. I have no intention of being the Member of Parliament who sees the closure of the last steelworks in Scotland, and I know the Minister has no intention of allowing that to happen on his watch.
Steel is Motherwell’s heritage and is also a key part of its progress. It is our threads in the fabric of the future of our country. I want my constituents once again to look at planes, wind turbines and bridges and be excited to know that the steel encasing them came from Motherwell.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I have seen in our all-party parliamentary group on steel and metals-related industries how my hon. Friend is such a tenacious and tireless champion for her part of the world and the steelworkers in it. She mentioned defence earlier in her speech. Does she agree with me that we really need the Government to bring forward the defence investment plan, that its focus really needs to be on making sure that steel jobs benefit across the UK, including in Scotland and in Teesside, and that small and medium-sized enterprises and the entire supply chain benefit as well?
Pamela Nash
I appreciate my hon. Friend’s enthusiasm for the publication of the defence investment plan, but I do not think it is within the scope of this Bill and it is definitely above my pay grade as a Parliamentary Private Secretary to Defence Ministers.
Finally, I want to see Dalzell again supporting a vibrant workforce, providing safe, well-paid, high-quality jobs to local people and being able to develop apprentices for the next generation of steel processing in Scotland. I want to see income investment in Motherwell from the reinvigoration of this plant, allowing surrounding businesses to benefit from its success. I reject the attempts of Opposition Members to limit the Bill’s ability to support our industry when it needs it most.
In his closing speech, will the Minister reassure the workers at Dalzell that this Government will support them, possibly with the safety net of this Bill or otherwise, whenever it is necessary? Will he also confirm to the people of Motherwell that Dalzell remains at the heart of this Government’s plans for the UK steel industry?
The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
Just like yesterday, this second day of debate has been incredibly considered and collaborative. I very much thank everyone for contributing, just as they did yesterday.
Having listened very carefully to the debate, I think many of the proposed amendments and new clauses fall into categories to do with the good use of public money in relation to valuations and liabilities, and to the role of this Parliament in scrutiny and reporting. I say at the outset, and I think this was put quite well by my hon. Friends the Members for Doncaster East and the Isle of Axholme (Lee Pitcher) and for Motherwell, Wishaw and Carluke (Pamela Nash)—she did so in an intervention I had slightly forgotten about—that the Government are trying to strike a balance. We must strike a balance between the essential nature of government, with our public accountability and also the obvious bureaucracy, and the commercial demands of business. I think we have found the balance in the right place, and as I address some of the amendments, I hope to convince hon. Members that we have given due consideration to that.
Many Members, quite understandably, have highlighted specific cases in the steel industry that they believe the Government should consider. We have heard very powerfully about the plate mill at Dalzell and we have also heard about British Steel. However, this Bill is not targeted at any particular steel company; it provides powers to the Secretary of State to act in the national interest.
Lincoln Jopp (Spelthorne) (Con)
This is not my specialist subject, so I ask the Minister to bear with me. Thames Covers in Shepperton in my Spelthorne constituency, which is a boat fitter, has been told that the cost of stainless steel tubing will go up by 50% from 1 July because of a new tariff kicking in. As I understand it, the tariff is to encourage people to buy British Steel, but the trouble is that British Steel does not make stainless steel tubing, so it will add a huge cost. The Minister says the Bill is not about individual businesses, but about overall governance. However, the Government may be causing unintended consequences, and perhaps the impact assessments we are calling for in new clause 7 would be a good idea.
Chris McDonald
I am grateful to the hon. Member for taking the trouble to make that intervention. A number of Members have talked about downstream steel, so although it is not precisely within the scope of this Bill—and, in fact, I do not think those impact assessments would address that point—perhaps I could address their comments.
Members have mentioned several different companies. This morning, I had a very constructive discussion with the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), about specific instances, but she also pressed me on the concerns of many Members across the whole House. There are concerns about the introduction of the new trade measures from 1 July. I have, with the co-operation of Members from across the House, been able to gather specific examples from a number of different companies around the country that are concerned.
I am engaging with my officials and it is a matter of detail for each company. Some are finding that they will still be able to access the steels, because the measures are targeted at steels that are either currently produced or could be produced in the UK. Some have a concern because the steels that could be produced are produced primarily as speciality steels, or perhaps at Dalzell plate mill, as we have heard—certainly, the measures should incentivise some production there. Owing to the nature of the trade measures—they are grouped under eight broad categories, rather than extremely specific grade codes—some grades that are not made in the UK, such as seamless tubes, could be drawn into that. That is where quotas are important, so it is really an assessment of whether the quotas are right. Again, we have been able to provide reassurance on those instances.
However, I would never claim that the Government are infallible—I am certainly not—so that is why it has been very important to collect information and take action. In fact, I can inform the hon. Gentleman that tomorrow I am co-chairing a meeting with the Minister for Trade, my hon. Friend the Member for Rhondda and Ogmore (Chris Bryant), in whose area this matter strictly falls, to talk specifically to downstream businesses. I would like to acknowledge not only Members, but the Confederation of British Metalforming and the British Constructional Steelwork Association, which have worked with me so closely on this matter.
Paul Waugh (Rochdale) (Lab/Co-op)
On that point, will the Minister give way?
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
Will the Minister give way?
The Second Deputy Chairman
Order. I just want to make it clear that I did allow some latitude, but this is a debate on the nationalisation of the steel industry, not tariffs.
Chris McDonald
Okay. I am happy to give way and we will see what the Members have to say.
Paul Waugh
Simply to follow up, Ms Nokes, on the point the Minister was making about exemptions for individual companies, Hanson Springs in Rochdale relies heavily on imports of steel of a particular length. Will the Minister reassure us that, as with the shadow Minister, he will be engaging with many businesses to ensure that they are not hit by tariffs and that the Bill will not harm them?
The Second Deputy Chairman
I am going to allow the Minister to respond, but I am not going to allow this to turn into a debate on tariffs and how they may or may not impact individual companies around the entire country, which I fear is where we are headed.
Chris McDonald
Thank you, Ms Nokes. Perhaps it would be helpful for me to take the second intervention and respond just once.
Helena Dollimore
I recently met a local steel business to discuss this issue and how it can source more British steel in line with the principles of the Bill. It raised with me a keen desire to source as much as possible in Britain, but it is not sure if it can actually source all the products it needs in Britain. It mentioned hot rolled coil as one example. The business is called Fowle & Co. and it would be great if the Minister could commit for his officials to meet my local business and hear its experience.
Chris McDonald
I am aware of the issue with the springs company raised by my hon. Friend the Member for Rochdale (Paul Waugh). I think it is particularly an issue around 13 metre bars. My office is arranging a meeting with the company concerned. I am also aware of the issue on hot rolled coil and am addressing that, too.
Jamie Stone
I assure the Chamber that I shall not mention power of any particular sort. Will the Minister, if he has not done so, think about having a word with the Scottish Government and how they might help him in his endeavours?
Chris McDonald
I am always very happy to receive help from everywhere, but the Scottish Government could help themselves by taking a more proactive approach to nuclear, as the hon. Gentleman identified earlier. The Scottish economy could benefit from that.
Let me make some progress. I want to turn to the parts of the Bill that Members have raised in the debate, and thank the hon. Member for Richmond Park (Sarah Olney) and the shadow Minister for the amendments they have tabled. Amendment 4 was one of the amendments intended to extend reporting requirements around financial assistance and compensation under section 52. In the case of compensation, that is of course a one-off payment and so the question of regular reporting does not arise.
On the amendments tabled by the Liberal Democrats, to which the hon. Lady spoke earlier, amendment 6 is about taking into account ETS, CBAM and so on in valuations.
A number of comments were made about valuations and the role of the independent valuer, which we will also touch on when we consider the new clauses on capping compensation. It is particularly important that we draw a distinction between the role of Government and that of the independent valuer here, which goes back to some of the concerns raised by the hon. Member for West Worcestershire. It is a serious and rare intervention that the Government are making, and one that should happen only when there is a market failure or a company is in distress.
Luke Myer
The Minister is right in what he says about trade. On amendment 6, however, industry is concerned that phasing out free allowances before the new CBAM is fully tested risks exposing UK industry to carbon leakage. Does he agree that the new CBAM must be robustly designed and implemented to genuinely level the playing field for industry?
Chris McDonald
I thank my hon. Friend for his work as chair of the all-party parliamentary group for steel and metals-related industries. The Treasury is responsible for the carbon border adjustment mechanism and is consulting extremely carefully with the industry on that. I am sure that the Treasury will have heard his remarks and will take them into account.
Amendments 7 to 9 relate primarily to some of the environmental liabilities. The issue also arose in yesterday’s debate, where there were concerns about liabilities—the phrase “unlimited liabilities” might have been used. However, the liabilities are not unlimited. We have a reasonably good sense of what the liabilities are. We would expect the valuer to take those liabilities into account—that is quite right—but we have extensive experience with the remediation of similar sites elsewhere in the country.
The Committee has heard about the Ravenscraig site, but the Teesside site is a more recent example. The remediation of the Teesside site—the amount of public money spent on that—is well documented. The site in Scunthorpe is of a similar age, has had similar industrial activity, and is of a similar size. Ultimately, however, the Government are seeking to avoid the crystallisation of environmental liabilities by ensuring the continued operation of steel on the site. It is the responsibility of the valuer to take that into account when determining the valuation of the company. For that reason, the Government do not consider it necessary to support amendments 7 to 9.
Amendments 10 and 11 propose increasing the frequency of reporting on financial assistance to every three months. Again, it is the Government’s view that the current framework is proportionate in terms of the balance between transparency and delivery. We are incredibly concerned to ensure that we do not impose unnecessary administrative burdens. Inevitably, the management of a business acquired through the Bill and the civil servants in my Department would have to deal with the reasons for the business’s acquisition. Although we of course feel that reporting, transparency and accountability to this House are important, we are trying to strike a balance.
I know that amendment 20 is particularly important to the Opposition, so I will spend a bit of time on it. We are all incredibly concerned about value for money, but we have existing arrangements across Government to deal with that. It is already the case that Departments must secure value for money under the Treasury’s managing public money framework. It is also our view that the drafting of the amendment does not quite meet the requirement as described: that the National Audit Office would check the assistance prior to being approved. We think that putting this requirement in statute would unnecessarily reduce the Government’s ability to act quickly where support is needed. We have heard from many contributions today that on the presumption that the legislation will be required, the Government must be able to move quickly.
We have seen the need for acting quickly before. Harking back to a previous example of a failed steel business, I recall that we had only a matter of days within which to save the Teesside business due to a shortage of coal. Of course, we all remember that it was necessary to come back to Parliament at incredibly short notice to pass the Steel Industry (Special Measures) Act 2025, again because there was a shortage of coal, with the potential for those coal shipments to be diverted. It is therefore incredibly important that the Secretary of State is able to act quickly when required.
A couple of amendments have been proposed by Plaid Cymru Members—although they are not present, I think it is still responsible to address them. One amendment is about restricting the National Wealth Fund, with which I completely disagree. The National Wealth Fund is one of Government’s primary instruments for assessing potential investment opportunities and investing in industry. In fact, there is provision through the Government’s £2.5 billion steel fund for the National Wealth Fund to offer support to steel companies, as set out in the steel strategy. We intend to use whatever funding instruments are available to Government, not to restrict them.
Jessica Morden (Newport East) (Lab)
Although Plaid Cymru Members are not present, another Welsh Member is. With the Minister mentioning the available funding, I will take the opportunity to raise a topical matter with him, which is the catastrophic fire that took place on the pickle line last week in Port Talbot. I want to put on the record our thanks to the emergency services and the steelworkers who worked so hard to contain it, as I know from my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock). The work is now being transferred to Llanwern, but it is a worrying time for those at Port Talbot. Does the Minister agree that, alongside the Bill, we must protect the jobs in the south Wales steel industry and ensure that they are fully equipped to support the expansion of sovereign steel that we all want to see as we go forward?
Chris McDonald
I thank my hon. Friend for mentioning the incident last Wednesday at the Port Talbot site. Pickle lines are notoriously susceptible to these sorts of incidents because of the high-temperature hydrochloric acid used to treat the steels. I would imagine that once such a blaze has taken hold, the effects can be absolutely devastating. I want to echo her commendation of the emergency services and the workforce, who are, in this situation, the first responders, protecting life and valuable industrial plants. I was incredibly relieved to hear shortly after the incident that every single member of staff was accounted for. It is a credit to Tata Steel and its management processes.
I am, however, concerned about our loss of productive capacity there as a result of this incident. As my hon. Friend rightly points out, we are fortunate in having another pickle line available in Llanwern, and I understand that as of last Friday Tata Steel is looking at restarting that plant and moving the work there—perhaps it has already restarted—but the hot mill was down for a time in Port Talbot. This really emphasises where we have points of vulnerability in our industrial capacity, not only in steel but more broadly. We are determined to address those points through this Bill, our steel strategy and our wider industrial strategy. I thank her for raising that matter.
Luke Myer
I thank the Minister for giving way again; he is being very generous. He has made a couple of references to the Teesside site, both to the crash closure in 2015 and to the remediation of the land. With that land having now been remediated, immense steel structures are being built there as part of the Government’s carbon capture programme. It was great to be on site recently and to see the progress of that site. The project is using 50% UK steel; of course, Liberty Steel in Hartlepool has benefited from that. Does the Minister agree that procurement measures like contracts for difference need to be adjusted to ensure that we are using domestic steel in as much of our major infrastructure projects as possible?
Chris McDonald
I agree that procurement has an important role to play here. I am sure that my hon. Friend will have welcomed recent changes in guidance by the Cabinet Office to ensure that British steel producers are well placed to win these orders, as well as in the areas of renewable energy, where the Government are awarding significant contracts, and nuclear power, where we are again endeavouring to ensure that British companies are well placed to win those contracts.
I turn to amendment 22 and new clauses 4 and 12, which would impose statutory caps on compensation and financial assistance. I have already addressed compensation, and financial assistance is somewhat similar in that applying a cap on the basis of the number of employees, or indeed a fixed cap of any kind, would ultimately restrain the Government’s ability to respond effectively to circumstances as they evolve.
I believe that could fundamentally undermine the purpose of the Bill, which is for the Government, with the will of Parliament, to be ready to respond to circumstances such that we are not required to fly back from wherever we are in the world at incredibly short notice, and prolong uncertainty among the workforce and suppliers. We do not want to create any legal uncertainty, uncertainty in the supply chain or commercial uncertainty. That is why it is important to have this level of flexibility.
The Bill has proportionate and robust transparency and accountability mechanisms for the provision of financial assistance. For instance, clause 59 requires the Secretary of State to report to Parliament at 12-monthly intervals, and funding will be subject to the established framework for managing public money, including through Treasury approval processes.
New clause 6 would place on the Secretary of State a requirement to put forward a proposal to Parliament about providing financial assistance if a Select Committee were to make recommendations on that. Again, that is not realistic. Given that financial support would be required immediately following a transfer, there would not be time for that level of parliamentary scrutiny. Important though scrutiny is—I certainly welcome the investigation into steel currently being carried out by the Public Accounts Committee—we have to be realistic about the point at which it is possible to apply scrutiny.
New clause 7 would require impact assessments to be published before exercising the Bill’s provisions. Again, the issue is essentially about pace among other things. We believe that impact assessments are crucial to show the impact of Government intervention, and the Government are committed to operating in line with our better regulation framework requirements. We do not want to introduce any further legal uncertainty, so we reject the new clause.
A number of colleagues mentioned new clause 9, so it is important to address some of the issues raised around that. Fundamentally, the new clause would not be at all helpful; I will give an example as to why. There is an assumption in the new clause that if the Government were to nationalise a business under the Bill, the best approach would be to treat it like a hot potato and immediately throw it away. We have seen the impact of that.
We heard yesterday about the nationalisation—briefly—of British Steel by the previous Conservative Government: they spent £750,000, made no investment in the business and immediately sold it on to a company called Greybull Capital, whose track record was failure at Monarch airlines, failure at Comet electrical stores and failure at Rileys snooker halls. If you cannot run a snooker hall, you definitely cannot run a steel company.
This is where the hon. Member for Boston and Skegness (Richard Tice) and I have some points of agreement: there is more than one way to bring investment into a business other than selling it to an overseas investor. We could have debt and equity finance, and the Conservative party used to be keen on mass public ownership via a listing on the London Stock Exchange. There are many different ways in which we can bring private sector investment into a business and resolve issues around ownership.
Of course, it is intolerable to work in a business that is constantly up for sale—I have been in that position myself—as businesses do not perform in that position. A decision to sell a business is a decision made at a point in time, not an ongoing process. The Government therefore reject that new clause.
Given that I have detained the Committee considerably over the last couple of days, I have no wish to do so any further. I hope that, having responded as fully as I can to the amendments and new clauses, the Members who tabled them might feel sufficiently reassured not to press them and therefore save the House their consideration. I fully and sincerely thank everyone for their incredible participation in the debate, for the marvellous speeches that we have heard today, and for their strong interest in the steel industry that I have worked in and which I continue to champion in this House.
Sarah Olney
I beg to ask leave to withdraw amendment 7.
Amendment, by leave, withdrawn.
Clauses 52 to 57 ordered to stand part of the Bill.
Clause 58
Financial assistance
Amendment proposed: 20, page 39, line 7, at end insert—
“(1A) The Secretary of State may only provide financial assistance under this section if they are satisfied that financial assistance will secure value for money.”—(Dame Harriett Baldwin.)
Question put, That the amendment be made.
Madam Deputy Speaker (Caroline Nokes)
Before we proceed to the next business, I have a short statement to make. I have received a report from the Tellers in the No Lobby on the Division that took place in Committee of the whole House at 8.27 pm yesterday on new clause 2 to the Steel Industry (Nationalisation) Bill. The hon. Members for Bangor Aberconwy (Claire Hughes) and for Wells and Mendip Hills (Tessa Munt) have informed me that the number of no votes was erroneously reported as 257, rather than 251. I will direct the Clerk to correct the numbers in the Journal accordingly. The ayes were 65 and the noes were 251.
—[Official Report, 8 June 2026; Vol. 787, c. 111.]
Third Reading
The Secretary of State for Business and Trade (Peter Kyle)
I beg to move, That the Bill be now read the Third time.
This Government believe in Britain’s steel future. This Bill will help to transform that belief into a reality. It will ensure that the long-term vision for our UK steel sector is realised, helping to restore domestic production to sustainable levels and to support this Government’s economic growth plans. This Bill provides powers for the Government to bring steel companies into public ownership, subject to the public interest test being met.
In many ways, the progress of this Bill has shown the House at its very best, with passion, insight and determination to take action in the national interest. We had an excellent and wide-ranging debate, with Members from all parts of the House recognising the importance of passing this legislation. Let me begin by thanking Members for their time and their thoughts. I express my gratitude to those who have contributed to the passage of this Bill so far, especially those who have taken a particular interest in ensuring that we get the details of this vital piece of legislation right.
I also take a moment to recognise those working in and supporting our steelmaking communities. Every day, they make a vital contribution to our country’s economic security. During the passage of this Bill, we have heard much about the specific situation at British Steel Ltd, and in particular about its current ownership status.
Let me be frank with the House: our decision to proceed with this Bill—to take these powers now—has absolutely nothing to do with the national origin of the current owners, Jingye. We have always been and remain country-agnostic about the current ownership. We simply believe that the British public interest should be paramount in determinations about future ownership. We continue to welcome international investment into the UK, including from China. We remain committed to our legal and international obligations to overseas business and foreign investors. We are fully compliant with our treaty undertakings to protect overseas investors and businesses operating in the United Kingdom.
While this Government need to take steps to secure UK Steel’s capability, we are committed to doing so in a manner that respects the rights of businesses. When and where the Government exercise the transfer powers in the Bill, an independent valuer will be appointed to determine what compensation, if any, is payable. The Bill requires a clear public interest test and provides for a compensation scheme where that might be relevant. The Government fully respect the rights of businesses and investors subject to this Bill. We will continue at all times to act fairly, regardless of the nationality or background of those businesses.
I place on record my thanks to parliamentary counsel and officials in my Department for their hard work on drafting and guiding the passage of this Bill. I also thank the Clerks, the Doorkeepers, Hansard and all of the House and its authorities for making the passage of this legislation possible. Let me also, on a personal note, pay tribute to the Minister for Industry, my hon. Friend the Member for Stockton North (Chris McDonald). A lifetime of dedication to the steel sector has brought valuable insight, passion and creative parliamentarian work to the Bill, which has enriched the debate in this place.
The House has sent a clear message about the importance of decisive action to safeguard the future of the steel industry. Since I became Secretary of State, I have championed an activist, interventionist industrial policy—activist, because the years of standing back and watching British industry decline are over; interventionist, because we, like other Governments around the world both right and left, from the United States to France and Germany, step in to invest, modernise and protect our industries. Our policy is both activist and interventionist, because purpose without action is merely rhetoric, and acting without purpose is performative, not strategic. The Bill is action with a purpose, and the purpose is clear: to invest in, modernise and protect Britain’s steel.
I am encouraged to witness the strength of support in the Chamber for this activist, interventionist Bill. As it moves to the other place, let me reiterate my commitment to continued engagement with parliamentarians as it completes its passage and we ensure that the Government’s vision for Britain’s steel sector becomes a reality. I commend the Bill to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
I think it has been clear throughout these two days of debate that none of us in the House underestimates the importance of the steel industry to our national economy, to our industrial resilience, and to the communities whose livelihoods depend on it. We can all agree that steel matters, and that steel jobs matter. However, we also believe that the responsible stewardship of taxpayers’ money matters, and despite the eloquent way in which the Secretary of State expressed his views on the Bill, we see it much more as a chaotic and unplanned intervention. It is not the product of a clear steel industrial strategy, but the product of a failure to negotiate a better outcome. The negotiated outcome was a possibility; the Secretary of State even went to China to try to achieve it.
It is the failure to address the root causes of the industry’s difficulties that has brought us to where we are today. The Bill could also be described as the steel industry blank cheque Bill, because it fails to protect the public purse from potentially vast and open-ended liabilities. Nationalisation does not solve the underlying issue that is making domestic steel production unprofitable. The higher employment costs, higher energy costs, planning issues, carbon pricing, regulation and levies associated with the Government’s net zero policies continue to weigh heavily on the sector, and the Bill does nothing to resolve those pressures. Instead, it transfers them wholesale on to the taxpayer.
We should reflect on how we came to this point. Not long ago, the Government told the House that they did not want to nationalise British Steel—indeed, that was presented as a last resort to be avoided—and yet here we are, because the Government have failed to negotiate an alternative. We see once again that when this Government negotiate, it is the taxpayer who picks up the bill. Since the intervention began last year, on that historic Saturday, the cost has already run to more than £1.3 million every single day. That is a bill for the taxpayer that will only become larger with this legislation. The Bill exposes the public finances to further liabilities—contingent liabilities, not only substantial but, alarmingly, potentially unlimited in terms of both their scale and their duration. This is a Government getting a blank cheque forever.
Richard Tice
The root cause of why we have the Bill is that the previous Conservative Government sold this business to Jingye in 2019. Another root cause is net zero, which was introduced by the Conservative Government. Surely what the Conservative party should do is show some humility about why we are here and support the Bill.
Dame Harriett Baldwin
Surely what the hon. Member should do is welcome the fact that our party is under new and outstanding leadership. We believe that politicians should not be in the business of running commercial enterprises, but I can see that that is the political position of the Reform party. The risks of inefficiency, political interference and poor capital allocation are very well known.
Dr Scott Arthur (Edinburgh South West) (Lab)
The hon. Lady is right to say that her party is under new leadership, but what did that leadership think about the decision to sell British Steel to Jingye? What did the leadership think of the net zero policies that the hon. Lady blames for the current situation? What did the Leader of the Opposition think of them when she was in government, and what did she do to oppose them?
Dame Harriett Baldwin
It is a bit rich to be lectured on support for party leadership from someone on the Labour Benches, so I will move on swiftly.
This Bill sets a precedent. Indeed, the Government’s own impact assessment says that expropriating assets in this way risks undermining the investor confidence that we need at this precise moment, when the UK needs to attract inward investment into strategic industries.
Throughout our Committee considerations, we have sought to improve this legislation to introduce better transparency for Parliament, to limit liability and to ensure proper parliamentary oversight. I thank my team, the team of Clerks, the whipping team and you, Madam Deputy Speaker. Throughout this process, our amendments were responsible safeguards; they were designed to protect the taxpayer and to impose discipline on the Government. Their rejection only reinforces our concern that Ministers are unwilling to confront the full implications of their own policy.
As we come to Third Reading, the choice is clear. This Bill risks enormous cost, offers insufficient answers, and sends troubling signals about the UK as a place to do business. We cannot support it in its current form. We will not vote against its Third Reading today, but for the sake of the taxpayer, the health of the steel sector and the credibility of industrial policy in this country, we cannot support it either.
Lola McEvoy (Darlington) (Lab)
In my constituency of Darlington, we know the economic importance of the steel industry, and many of my constituents bear the scars of the Conservative party’s unwavering worship of the global free market. Regardless of the social, economic, community or security costs, they badly let us down. The last Government refused to step in for our highly skilled essential steel workers in Redcar, leading to the loss of thousands of jobs and the closure of a 170-year-old industry, and thousands more jobs in the supply chain were lost.
The Conservatives demanded a cap on the cost to the Treasury for this essential intervention to protect out sovereign steel capacity, which shows that they still do not get it. It shows their fundamental misunderstanding of the mistakes they made while they were in government. Despite their historic defeat, they refuse to accept that their inaction on steel has already cost the taxpayer dearly, and not only in significant employment tax contributions but in the business contributions of this critical industry’s supply chain. It is their inaction that chilled investment.
We know that thriving supply chains boost local employment and incubate home-grown entrepreneurs. They boost confidence locally, and industrial communities such as ours support and cultivate thriving, close-knit business ecosystems—something that we in Darlington still benefit from greatly, despite the closure of SSI, Cleveland Bridge and British Steel on Whessoe Road.
The vacant South Works site in Darlington, which is currently available to rent, is 131,000 square feet and comes with three cranes. If anyone is looking for a magnificent industrial steel site in the heart of the country’s most investable town, please do contact me, and I will happily negotiate and advocate for a discounted rent from the hon. Member for Boston and Skegness (Richard Tice).
The pride that our community has in a critical, century-old industry cannot be overstated. It is vital for wellbeing, but it is security that is essential for growth. People employed in critical industries, whether self-employed, businesses or workers, can afford to spend locally—they have the confidence to get the kitchen done, or take the family out for a meal. It is insecurity that chills investment and growth. By securing this critical sovereign industry, this Labour Government are demonstrating and living our values, and delivering on the change that we were sent here to make.
The difference could not be more clear: where the last Government allowed an essential, critical, highly skilled, historical British industry to be decimated by inaction and ignorance, this Labour Government promote our most qualified steel industry expert to the Front Bench to protect high-skilled jobs, stand up for our supply chains, champion our communities and nationalise steel in the national interest—and I, for one, say all power to them.
Martin Vickers (Brigg and Immingham) (Con)
As Members will be aware, part of the Scunthorpe steelworks site falls within my Brigg and Immingham constituency. As such, hundreds of my constituents work there, and hundreds more are employed in the supply chain. With that in mind, I made it known to my constituents a number of weeks ago that I would support this Bill. It could have been improved, and the Opposition tabled some perfectly sensible amendments, which I supported. However, having got to this stage, I think it is only right that we give our full support to the business and, more importantly, to the workers employed there. I thank the Minister with responsibility for steel. We have had a number of meetings in recent weeks, and he has been extremely helpful.
As I said in a previous contribution to this debate, it is not natural for me as a Conservative to support a nationalisation Bill, but the reality is that it is of course a restructuring. The existing position whereby the Chinese own the business and the Government in effect run it is clearly unsustainable, and we cannot allow that to continue, so it is a perfectly sensible move. I was reassured by what the Minister said in yesterday’s debate about the Government looking for private sector involvement, whether that be a wholesale sale or a partnership arrangement. I have met two or three groups that are interested in investing in the sector. Indeed, the hon. Member for Scunthorpe (Sir Nicholas Dakin) and I had quite an interesting evening a few weeks ago listening to what was, I think it is fair to say, quite an ambitious plan for steel, so there are organisations and businesses that are prepared to invest.
Scunthorpe without steel would not be Scunthorpe. As a resident of Grimsby, I have witnessed what can happen to a town when it loses its core industry—in the case of Grimsby, it was of course the deep-sea fishing industry—and when that happens, it takes about two generations for the local economy to be able to sustain the jobs that are necessary. On that basis, I will certainly be supporting the Bill.
The Minister was not quite 100% clear when challenged about the continuation of production in blast furnaces. I know the situation, and I recognise that a long-term move to electric arc furnaces is perhaps the only way to sustain the industry and the jobs in Scunthorpe. So I await developments with interest, but at this stage I welcome the Bill, which is a sensible way forward and has my full support.
Becky Gittins (Clwyd East) (Lab)
I welcome the contributions from both sides of the House, in particular from the hon. Member for Brigg and Immingham (Martin Vickers). Like him, I represent an industrial constituency. My constituency in north Wales sadly holds the record, in any western country, for the largest number of industrial redundancies in one day. I think it speaks to all the constituencies affected that that goes through not just generations, but families—different generations of the same family. Many of my constituents have been affected, as have I personally.
The most exciting thing about how the Government have been very decisive on working to support and encourage British-made steel is not only what it does for just the steel sector, but what it says about our ambition to have proud, decent, good-quality jobs back in the UK. I thank everyone who has contributed. It is an absolute privilege for my communities to vote the Bill through today.
Peter Kyle
With the leave of the House, I would like to thank my hon. Friend the Member for Darlington (Lola McEvoy) for her passionate speech and my hon. Friend the Member for Clwyd East (Becky Gittins) for her heartfelt speech just now. Those are the kinds of contributions that give heart and soul to what we are trying to achieve, and that give voice to the communities affected. I also pay tribute to the hon. Member for Brigg and Immingham (Martin Vickers) for his contribution. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.