House of Commons
Steel Industry (Special Measures) Bill: Business of the House
(4 days, 21 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Leader of the House of Commons (Lucy Powell)
I beg to move,
That:
(a) at this day’s sitting any member of the Panel of Chairs may take the Chair as Deputy Speaker when requested to do so by the Speaker, without any formal communication to the House;
(b) at its rising this day this House do adjourn until Tuesday 22 April; and
(c) the following provisions shall apply to the proceedings on the Steel Industry (Special Measures) Bill:
Timetable
(1)(a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at this day’s sitting in accordance with this Order.
(b) Notices of Amendments, new Clauses or new Schedules to be moved in Committee of the whole House may be accepted by the Clerks at the Table before the Bill has been read a second time.
(c) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be brought to a conclusion, if not previously concluded, at 2 pm at this day’s sitting.
Timing of proceedings and Questions to be put
(2) As soon as the proceedings on the Motion for this Order have been concluded, the Order for the Second Reading of the Bill shall be read.
(3) When the Bill has been read a second time:
(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with Standing Order No. 52(1) (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;
(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(4) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(5) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:
(a) any Question already proposed from the chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a Minister of the Crown;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.
(6) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(7) If two or more Questions would fall to be put under paragraph (5)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(8) If two or more Questions would fall to be put under paragraph (5)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Consideration of Lords Amendments
(9) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on consideration of Lords Amendments shall be brought to a conclusion (so far as not previously concluded) one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(10) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (9) of this Order.
Subsequent stages
(11) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(12) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (11) of this Order.
Reasons Committee
(13) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.
Miscellaneous
(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(16) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(17) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.
(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(19) At today’s sitting the Speaker shall not adjourn the House until:
(a) any message from the Lords on the Bill has been received and any Committee to draw up Reasons which has been appointed at that sitting has reported;
(b) the Speaker has notified the Royal Assent to any Act agreed upon by both Houses.
(20) At the conclusion of proceedings the Speaker shall adjourn the House without putting any Question.
I do not intend to detain the House for long, as we have an important debate to follow, but may I put on record my thanks to you, Mr Speaker, for agreeing to recall Parliament today? As ever, you have been incredibly accommodating and understanding. You recognise the scale and urgency of what we need to do today, and I know that these are very important matters to you personally, and to the House as a whole. May I also thank the House staff, who have responded quickly and professionally to facilitate this extraordinary meeting of the House, and all those colleagues who are here at such short notice?
We meet in these special circumstances because the Government need to act decisively, at pace and with urgency to ensure that the steelworks blast furnaces of British Steel are maintained and kept going, saving thousands of jobs and securing our domestic production of virgin steel. The Secretary of State for Business and Trade will shortly set out the powers that he needs to do this, through the Steel Industry (Special Measures) Bill, published online this morning.
If the House agrees to this business of the House motion, the arrangements today provide for Second Reading, Committee, Report and Third Reading to be considered by the House until 2 pm. The House will then wait to consider any message from the Lords today, before adjourning again until Tuesday 22 April. I also send our thanks to Members and staff in the House of Lords for returning today. Members may be aware that the Lords sit from 12 pm for a “take note” debate on the Government’s proposals, before being expected to consider all stages of the Bill today.
I hope all Members can work together constructively today on the passage of the Bill, and I am grateful to you, Mr Speaker, for facilitating this important request. I hope all Members will agree to this motion, and I commend it to the House.
Alex Burghart (Brentwood and Ongar) (Con)
I associate this side of the House with the remarks that the right hon. Lady has made about staff coming in today. We are incredibly grateful to them.
I am sure we are going to hear a lot today about urgency, moving at pace and the rest of it, but the truth is that the Government have made a total pig’s breakfast of this whole arrangement. The fact is that anyone who has been paying any attention to this story over the past few months has known that this was coming down the track. The House was sitting—[Interruption.]
Mr Speaker
Order. We have come back on a Saturday; that does not mean it is “Crackerjack” day. We are going to listen.
Alex Burghart
The House was sitting on Monday and on Tuesday, and on those days my hon. Friend the Member for Brigg and Immingham (Martin Vickers) raised these issues. The fact is that the Government make bad deals for Britain when negotiating, and, as ever, they are making a bad deal. It is a huge discourtesy to the House that we saw this Bill only 90 minutes before the start of the sitting. Far-reaching powers are being given to the Government—powers not seen in legislation, really, in the past 40 years. I very much hope that the Government will apologise for the way that they have done things, for having taken their eye off the ball yet again, and for having negotiated badly for the British people.
Question put and agreed to.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(4 days, 21 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Mr Speaker
I remind Members that, under the Order of the House of today, notice of amendments and new clauses to be moved in Committee of the whole House may be—[Interruption.] This is very serious. They may be accepted in person by the Clerks at the Table in the Chamber before the Bill has been read a Second time. The deadline for amendments tabled in this way is 12 noon. Any amendments tabled to the Bill will be treated as manuscript amendments, meaning that only those tabled before 12 noon and selected by the Chairman for debate at Committee stage will be distributed and published.
The Secretary of State for Business and Trade (Jonathan Reynolds)
I beg to move, That the Bill be now read a Second time.
We meet in exceptional circumstances to take exceptional action in what are exceptional times. Our request to recall Parliament was not one we made lightly. I am genuinely grateful to hon. Members in all parts of the House for their co-operation, and for being here today as we seek to pass emergency legislation that is unequivocally in our national interest. I thank in particular the staff in Parliament for facilitating today’s sitting, and the Prime Minister, the Chancellor and the Home Secretary for their support. Indeed, we can take this action today only because of the restoration of economic stability and the dedicated resources for steel in the last Budget. I acknowledge my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), the hon. Member for Brigg and Immingham (Martin Vickers) and all my hon. Friends from Teesside for their advocacy and engagement on this matter, throughout, on behalf of their constituents.
As hon, Members will know, since taking office, the Government have been negotiating in good faith with British Steel’s owner, Jingye. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common-sense conditions to protect the workforce, protect taxpayers’ money, and create a commercially viable company for the future. Despite our offer to Jingye being substantial, it wanted much more—an excessive amount, frankly. However, we remained committed to negotiation, but over the past few days, it has become clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running. In fact, its intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel.
I want to make it absolutely clear that, separately from any conversation about a possible deal to co-invest in new infrastructure, the British Government offered to purchase the raw materials in a way that would have ensured no losses whatsoever for Jingye in maintaining the blast furnaces for a period of time. A counter-offer was instead made by Jingye: that we transfer hundreds of millions of pounds to it, without any conditions to prevent that money, and potentially other assets, being immediately transferred to China. Jingye also refused the condition of keeping the blast furnaces maintained and in good working order.
Even if I had agreed to those terms, I could not guarantee that further requests for money would not then be made. In that situation, with the clock being run down, doing nothing was not an option. We could not, will not and never will stand idly by while the heat seeps from the UK’s remaining blast furnaces, without any planning, due process or respect for the consequences. That is why I needed colleagues here today.
David Davis (Goole and Pocklington) (Con)
From what the Secretary of State has described, it is beginning to sound as though Jingye is trying to manoeuvre the Government into a recompensed nationalisation. Will he make it plain that if it tries to manoeuvre us into nationalisation, we will pay not more than a penny for the business?
Jonathan Reynolds
To be clear, where there is a transfer of ownership to the state, we would always pay the fair market value for the assets. In this case, the market value is effectively zero, so I take the right hon. Gentleman’s point entirely. I would say that the intention of Jingye has not been to engineer that situation; its intention has been to keep the downstream mills, which colleagues will know are fundamental to our construction and steel industries, and supply them from China, rather than from Scunthorpe; that is the situation.
Graham Stuart (Beverley and Holderness) (Con)
Is it now the view of the Government that primary steel production in the United Kingdom is an overriding national security issue?
Jonathan Reynolds
As the right hon. Gentleman will know—we have had this exchange at the Dispatch Box before—I believe that the capacity for primary steel production is important. The steel strategy looks at new ways of ensuring that, and at not just protecting the past, but at what the future may bring. Direct reduced iron technology is of significant potential interest to us for the future. However, this situation—involving the last remaining blast furnaces, and the proposition put to us—is exceptional and unique, and I need all colleagues to recognise that.
The legislation ahead of us today is therefore a proportionate and necessary step. It allows us to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. The Bill does not transfer ownership to the Government. We will have to deal with that matter at a later date. I took the decision that given the exceptional nature of a recall, it would be better to limit the powers in the Bill, which are still significant, rather than introduce more complex matters of property rights and public ownership at this time.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Secretary of State is taking extremely extensive powers for the Government, and they apply to what he describes in the Bill as “specified assets”. As far as I can see, they are not limited to blast furnaces or assets required for making virgin steel. Does he accept that he is leaving two hands on the tiller, when it comes to the operation of all the steelmaking companies to which the Bill may apply? In other words, he is saying that the Government can direct a company in relation to specified assets, but that company can do other things of its own initiative. Does he recognise that he is creating considerable legal complexity in the operation of those companies going forward? Why is that the right approach?
Jonathan Reynolds
I am extremely grateful to the right hon. and learned Gentleman for his thoughtful question. The fundamental purpose of the Bill is to allow me, as Secretary of State, and this Government to take control of this situation. The reason why this is the Steel Industry (Special Measures) Bill, and not a Bill specific to British Steel, is, as he will know, that the latter would be a hybrid Bill, and introducing that would be a far more complex procedure. With the clock being run down, that was not an available option.
The Bill broadly replicates the situation that would apply if the Civil Contingencies Act 2004 had been triggered, but rather than seeking to meet the threshold to trigger that Act, I am seeking parliamentary permission—the consent of this House and the other place—to take control, which I think is a better way forward. I want to make it clear to the right hon. and learned Gentleman and to the House that I want this to be a temporary position—I do not want these powers a minute longer than is necessary—but I need the powers to rectify and save the situation.
Richard Tice (Boston and Skegness) (Reform)
Given that the Secretary of State has inferred that the owner, Jingye, is not and has not acted in good faith, surely the right thing to do is to seize this great opportunity now, this weekend, and nationalise British Steel?
Jonathan Reynolds
A transfer of ownership to the state remains on the table. It may well, at this stage, given the behaviour of the company, be the likely option. However, our aspirations for British Steel remain a co-investment agreement with a private sector partner to secure a long-term transformation. The action I seek to take today is not a magic wand or a panacea. The state cannot fund the long-term transformation of British Steel, nor would it want to, but a failure to act today would prevent any more desirable outcome from even being considered, and that, again, is why we must act today.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I applaud my right hon. Friend for his decisive action in this matter. I have only had a chance to read the Bill for 10 minutes—[Interruption.] That is not a criticism; it is the natural procedure of this House. The Bill could not be laid until First Reading. The Bill talks about compensation. He has made the point that he is not planning to take over and run British Steel, which is not the desirable option, but has he done some sort of impact assessment on the potential range of costs to the taxpayer in these circumstances?
Jonathan Reynolds
I think my hon. Friend refers to clause 7, which deals with compensation. Again, let me be clear: this is a clause that we would put in any Bill. We are not Russia, and we do not sequester assets. The language in the clause—the legal definition—is something that we would use in most standard procedures. Going back to the question from the right hon. Member for Goole and Pocklington (David Davis), the effective market value of Jingye is zero, so there is no inconsistency between those two points.
Samantha Niblett (South Derbyshire) (Lab)
What is happening today is something that mining communities like Swadlincote, in my constituency of South Derbyshire, will be feeling deeply in their souls. It is something that they could have only dreamed of back in the 1980s, when they wanted a Government who had their backs and prioritised the national interest. Instead, they had a Conservative Government who sold them down the river. Does the Secretary of State agree that this is a pivotal moment in our history, because we have a Labour Government prioritising our people and the national interest?
Jonathan Reynolds
This is a significant moment. How a country handles economic transitions is not about nostalgia for the past—we have to embrace the future—but how we help our people, our industry and our nation get to that point is key. My hon. Friend and I come from similar places, and we have not managed these transitions particularly well in the past. We are meeting this weekend to discuss the potential loss of thousands of jobs, which is what was on the line. The fact that we do not accept that, and that we will do things differently, is a welcome change.
Ed Davey (Kingston and Surbiton) (LD)
We will scrutinise this Bill today, but we want to do so in a constructive fashion. Given the huge damage that President Trump’s tariffs have done to the British steel industry, accelerating this crisis, does the Secretary of State agree that any Member of this House who actively campaigned for President Trump’s election and cheered him on has behaved shamefully unpatriotically and should apologise to British steelworkers?
Jonathan Reynolds
I am extremely grateful to the right hon. Member and his party for their presence today. He will not draw me on the other principal issue that we have been dealing with at the Department for Business and Trade over the last few days, but to be clear, the issues around British Steel are about more than the imposition of tariffs. The tariffs are not welcome, and I do not think there is justification for them to be put in place. I believe that it is in our interests, but also in the US’s interests, to agree a position that removes those tariffs in the interests of steelworkers.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I fully understand the nature of what the right hon. Gentleman is bringing forward. I also understand some of the requirements for speed in this case, and we can argue about whether this should have been done before. Having quickly looked through the Bill, I do not see a sunset clause. I ask about that not because I want the Government to set a particular date, but because such a clause would bring them back here to debate whether the process should be extended. It would therefore put a reasonable limit on Government activity without debate. Can he explain why there is no sunset clause in the Bill?
Jonathan Reynolds
I absolutely understand and welcome the right hon. Gentleman’s question. I do not want these powers for a minute more than is necessary. I cannot say at the minute, having drafted the Bill, the timeframe for which they will be required, but I will endeavour—and I commit at the Dispatch Box—to keep the House updated. Perhaps I will ask the Business and Trade Committee for its involvement, in order to make it clear how long we believe it will be. To be absolutely specific, where we make an order in relation to control of a steel undertaking, we can revoke the regulations once that control has been established and is no longer required.
Several hon. Members rose—
Jonathan Reynolds
I know there is huge interest, but I will make a little more progress and that might deal with some of the matters Members want to raise.
This is what it means to be a Government unashamedly on the side of working people—one that will never hesitate to take action to protect this nation’s assets and economic security. I understand that some have asked about precedent or referred to other troubled industrial situations. To be clear again, this is an exceptional and unique situation. The question for all Members is whether we as a country want to continue to possess a steel industry. Do we want to make the construction steel and rail we need here in the UK, or do we want to be dependent on overseas imports? As a Government, we are not passive in any way about the future of British industry.
Stephen Flynn (Aberdeen South) (SNP)
The Secretary of State has said this is “unique” and “exceptional” and made reference to energy transitions and thousands of jobs. In the Scottish context, many minds right now will be focused on the situation in Grangemouth, where we know that hundreds of jobs will be lost directly, as well as thousands in the supply chain. Were I, or perhaps even the local Member, the hon. Member for Alloa and Grangemouth (Brian Leishman), to bring forward a similar Bill to save Scotland’s only oil refinery and give the Secretary of State the executive power to do as he pleases—as he is doing with British Steel—would the Labour party back it as it is backing this Bill today?
Jonathan Reynolds
I am pleased for the chance to address this issue. The importance of Grangemouth is why this Labour Government have pledged £200 million to secure its long-term future. It is an important asset, but it is not the only remaining refinery; it is one of three crackers in the United Kingdom—that is important. Specifically, it is not a comparable situation, and the behaviour of the company is not comparable to the case of British Steel.
I also say to the right hon. Member, and indeed to all Members, that this is why we fought and fought again to secure the future of British shipbuilding by saving all four of the Harland and Wolff sites in England, Scotland and Northern Ireland. The right hon. Member will know that the commercial interest was not in the Scottish yards, but we held them together precisely because of our commitment to Scotland and the Union. It is also why within weeks of taking office we secured a better deal for the workers at Port Talbot. We have repeatedly acted, and we will continue to act no matter how hard the circumstances.
Alan Gemmell (Central Ayrshire) (Lab)
Does my right hon. Friend agree that the failure of the Tories and the SNP to develop an industrial strategy for Scotland meant that they had no plan for Grangemouth? They knew for over a decade about the problems at the refinery and did nothing. Does he agree that as soon as Labour came into power, we got to work and delivered support for the site, the workforce and the local community?
Jonathan Reynolds
I endorse my hon. Friend’s comments entirely. I do not believe there is a history of the SNP calling for the nationalisation of Grangemouth. It was, as ever, on the bandwagon. I think we all recognise that the SNP does not campaign on its record in running Scotland; it campaigns on grievance. My hon. Friend is absolutely right that the contrast is with a Labour Government in this place who are on the side of working people everywhere.
Jessica Morden (Newport East) (Lab)
The Secretary of State mentioned Port Talbot. I appreciate the unprecedented circumstances we find ourselves in today, when the Government have rightly moved quickly to safeguard primary steelmaking, and the Secretary of State will be very mindful of the extraordinarily difficult circumstances that the steel industry in south Wales has faced. I recognise the £80 million fund available, but can he make sure that south Wales and Llanwern benefit from their share of the £2.5 billion clean steel fund? Can that also be at the forefront of his mind?
Jonathan Reynolds
I am incredibly pleased to have the chance to answer the point my hon. Friend raises. The Port Talbot deal was originally negotiated by the previous Government. I did try to reopen it; I went to see Chandra in Davos and flew to Mumbai to talk to him about it. To be frank, I kept Port Talbot open on polling day, because it would have closed due to the industrial action that almost took place. The previous Government were nowhere to be seen, even before the result of the election was in. We were not able to reopen the deal, but we did negotiate a better deal. As a result, Port Talbot is in a stronger position than British Steel, because it has a long-term future in place. [Interruption.] This is because we improved on the deal that the Leader of the Opposition botched at the time. To be clear, the £2.5 billion green steel fund the Chancellor has put in place is in addition to the £500 million already going to Port Talbot. That is an incredibly important point.
Sarah Owen (Luton North) (Lab)
I thank the Secretary of State for giving way and for acting in the national interest—the complete opposite of the hon. Member for Clacton (Nigel Farage), who said he was against intervening to save British Steel two years ago. Does the Secretary of State think the hon. Gentleman said that in the British interest or in the foreign interests the Reform party seeks to serve?
Jonathan Reynolds
I believe that that is on the record. I hope to convince all colleagues today to support this action, which is in the national interest.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
When the blast furnaces in Port Talbot closed down last September, this Government could have taken exactly the same legislative action as they have chosen to take today. We will endeavour to amend the Bill to include Wales, because there is still the opportunity for this Government to make a real difference to the community of Port Talbot and the 2,800 jobs that have been lost there.
Jonathan Reynolds
I do not want to embarrass the right hon. Lady, but the blast furnaces have already closed at Port Talbot. They are not available to be saved —that situation has moved on. Let me stress again: Port Talbot is in a stronger position because it has that long-term future in place and the potential additional investments through the green steel fund.
Several hon. Members rose—
Jonathan Reynolds
I think I must progress, Mr Speaker. I can see your indication to do so.
Dawn Butler
I thank my right hon. Friend for giving way and for the considered way in which he is looking after the national interest. The steel unions—the GMB, Community and Unite—would like clarification that any board that is set up will have at its heart the steelworkers who have kept the steelworks going through thick and thin.
Jonathan Reynolds
We remain in close engagement with all the unions, which have been monitoring the situation closely. Again, I reiterate that the Bill is not in itself about a change of ownership; it is about a change of control to rectify the situation. However, I will certainly have regard to the comments my hon. Friend has made and, of course, the role of the workforce at all stages.
We will never accept the argument that steelmaking is a sunset industry. Steel is vital to every bit of the modern economy. Domestic demand for steel is set only to go up, not down. In the past few weeks alone, we have seen Heathrow airport announce multibillion-pound expansion plans requiring 400,000 tonnes of new steel, and Universal Studios confirm it will be building Europe’s biggest theme park and, where possible, will use UK-made steel to do so. This Government are backing the builders, not the blockers. With the action we take today, we have the chance to feed that boom with steel made in Britain.
The legislation we are setting out today will help to end the uncertainty that has been hanging over British Steel’s Scunthorpe site for too long. I welcome the Opposition’s support today for this recall, but this issue should have been resolved years ago. I believe they may now view it as a mistake to have given this essential national asset to this company.
I have to address the statement made by the Leader of the Opposition yesterday, which I do as a matter of genuine regret. She claimed that while she did my job, she negotiated a modernisation plan with British Steel to build an electric arc furnace at Teesside, followed by one at Scunthorpe. I wish to make it unequivocally clear to the House that the new Government inherited no such deal. We could not renege on that deal because it did not exist. On day one, I was told that there had been a lack of progress on this matter to date.
Jonathan Reynolds
If such a deal was negotiated, somehow in secret, I ask the Leader of the Opposition to say how much money she agreed to give Jingye for this deal and what conditions were placed on it. To state the obvious, building two electric arc furnaces in two different locations would be more expensive than building one in one location, and, given that Jingye’s request to build two furnaces in Scunthorpe was for £1.2 billion in taxpayers’ support, what—
Mrs Badenoch
On a point of order, Mr Speaker. I would like advice on how to counter the points the Secretary of State is making, given that they are factually incorrect and a complete misrepresentation of the situation that he inherited.
Mr Speaker
It has just been clarified by your good self. I cannot make the Secretary of State give way when you want to come to the Dispatch Box, but I am sure that if he notices you doing so again, he may wish to.
Jonathan Reynolds
This is an excellent chance to clarify that. If the Leader of the Opposition agreed a deal with Jingye to cause massive job losses in Scunthorpe and transfer the jobs to a completely different place, and at higher cost than the request the company made to us, I think she should be able to tell us. I am more than happy to give way.
Mrs Badenoch
Labour cannot negotiate. We were negotiating a modernisation deal that would have had limited job losses, just as we had in Port Talbot. The Labour Government inherited a functioning commercial deal in Port Talbot, and the same would have happened with British Steel had we not had a snap election. What the Secretary of State is doing now is the union-pushed deal. They brought that deal to me—I said no; he said yes.
Jonathan Reynolds
This is genuinely revelatory. I say again: if Jingye’s request was for £1.2 billion to build at lesser cost in one place, what was the sum of money agreed by the Leader of the Opposition when she was Business Secretary to build in two places? It certainly was not in the accounts that the Chancellor had. I will give way. How much money was agreed to Jingye to close the jobs in Scunthorpe? I ask her.
Mrs Badenoch
When you are negotiating, you do not have—[Interruption.] Labour Members are cheering and laughing because they love this; they think that the public taking on billions of pounds in liabilities is fantastic. We had not finished the negotiation so there was no amount, but it would have succeeded better than the terrible plan that the Secretary of State has now.
Jonathan Reynolds
Our friends in the press will follow that up and find out exactly how much money the Leader of the Opposition secretly promised to Jingye to transfer those jobs out of Scunthorpe. I think it might be wise, on all counts, for that statement to be withdrawn.
The situation we inherited across the board on assuming office is one where most of our foundation industries were in some substantial difficulty. Since 2010, UK crude steel production has almost halved, and we know that rebuilding our steel industry after years of neglect will be a challenge, but it is one that this Government have grasped.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
My right hon. Friend and I were in this House in 2015 when the Conservative party sat on its hands and kissed goodbye to the Redcar blast furnace and, with it, the state-of-the-art coke ovens that could have resolved this situation today. Before he sits down, will he say something about the Jingye activities at Lackenby and Skinningrove and how they will be impacted by today’s announcement?
Jonathan Reynolds
I am really grateful that my hon. Friend has been able to put that point on the record for his community, to avoid the kind of situation we have seen in lots of industrial communities, to be frank, over the years. This is why we take this action today in the national interest: to provide that bridge and that possibility to the future.
Specifically in relation to the downstream mills, even if we were willing to accept a situation in which they were supplied from a foreign country, as in this case, the confidence of consumers and businesses would surely be put at risk and it would bring into question the entirety of British Steel’s workforce and business and a huge part of our strategic assets. That, again, is why this decisive action today is necessary.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The right hon. Gentleman said that steel production is strategically important, and I agree. He said that we should be avoiding having to be reliant on imports, and I agree. However, his Government blocked production of the raw material metallurgical coalmine in the north-west. Will he now go back to his colleagues in Government and the company to encourage them to reapply so we can have security not just of steelmaking, but of the raw materials that are needed to make it?
Jonathan Reynolds
The hon. Lady will know that the company brought into question whether that coal was the right grade for blast furnace supplies. I remember several debates in this place about that. I should also make it clear—I think hon. Members understand this—that we are talking about two blast furnaces that date from the 1930s and 1950s. We must also be looking to the future, to new technology and new investments. Crucially, having the dedicated resources that this Government have put into steel is why we have the chance to look to the future with optimism. The UK steel industry is an outlier, in the sense that it is a much smaller proportion of our overall economy than in any major comparable economy, so of course there is potential, and we should look to the future. I would be more than willing to work with the hon. Lady as a local MP to do so.
Mr Joshua Reynolds
I thank the Secretary of State for giving way. Once he has the powers in this Bill, I urge him to use them decisively and swiftly, but then, as he has said, we need to look to the future. Once we have secured Scunthorpe’s future, we need to discuss what happens next, which is clean energy, and investing in the global clean energy that the UK really could succeed in. Does he agree that the people of Scunthorpe have upheld their end of the bargain for decades, and now it is time that we in this House make sure we uphold our end too?
Jonathan Reynolds
The hon. Member puts it extremely well, if I may say so. The people who have upheld steel as the backbone of construction in the UK for decades deserve better treatment than they would have had if Parliament had not been recalled today to take this action, and we should all bear that in mind.
Whether it is at Port Talbot, via our upcoming steel strategy, via our work to improve public procurement, or in the introduction of our industrial strategy to tackle the most thorny issues of industrial competitiveness, where others have shied away, this Government have stepped up.
Let me conclude by saying that steel is fundamental to Britain’s industrial strength, our security and our identity as a primary global power. Today’s legislation will help ensure that we can retain that steelmaking capability here in the UK both now and for years to come. For British workers’ security, for British industries’ future and—without hesitation—in our national interest, and for the workers of British Steel and their families, this action is essential, and I commend this Bill to the House.
Andrew Griffith (Arundel and South Downs) (Con)
I thank the Secretary of State for taking the time to brief me last night ahead of today’s sitting, and for advance sight of his speech.
To fail to prepare is to prepare to fail. What a way to proceed: recalling Parliament for only the sixth occasion since the end of the second world war to debate a Bill published only 90 minutes ago. This would be conduct unbecoming of a parish council. Our country, our economy and this Parliament all deserve better. That is why the amendment in my name would at least put a sunset on the Bill, and I hope the Government will accept it.
Today is not a failure by the steelworkers of Scunthorpe and elsewhere, their families or the community. They have toiled for generations to ensure that we have the primary steel we need for our structures, our safety and our security. This is a failure on the Government’s watch. Let us be crystal clear what today means: we are entering a tunnel with only one exit. This is a botched nationalisation plan, revealing that the Government have no plan.
In government, we acted to secure Port Talbot and we were negotiating a plan, including British Steel’s preferred option of an electric arc furnace on Teesside, which would have limited job losses and kept Scunthorpe running in transition. Once again, when Labour negotiates, Britain loses—the Chagos islands, US tariffs, the train drivers and now this latest crisis. A bad toolmaker blames his tools, but this time the Government have only themselves to blame.
Matt Western (Warwick and Leamington) (Lab)
Does the hon. Gentleman not accept that, in the years between 2010 and 2023, steel production in this country fell by 50% —40% to 50%—and does that not underline the lack of strategy under the previous Government?
Andrew Griffith
I will talk about the difficulties facing steel around the world, but let us just be clear what is happening today: the British people must not have lost their winter fuel allowance and their disability benefits in order that China can walk away from its liabilities, leaving British taxpayers to pick up the bills.
Steel needs energy, and energy needs steel. No one denies that steelmaking has been difficult for some time, but Scunthorpe is the victim of a dishonesty that pretends it is better for the environment to ship coke halfway around the planet than from down the road, and of an energy policy that has driven costs higher than in any competing nation. No one is more responsible for this than the Energy Secretary and the Prime Minister who appointed him.
Mr Speaker
Order. I remind Members that those who keep intervening will go down the list, so that everybody gets a fair chance.
Graham Stuart
I assume that applies after the warning, Mr Speaker.
We have a Government who, I believe, are shipping coking coal just off the Lincolnshire coast today from Japan, when it was perfectly possible to have the world’s greenest production of coking coal in Cumbria, with thousands of jobs. Is it not a disgrace that this Government turned their back on jobs in Cumbria and, indeed, in the North sea because they put ideology ahead of practicality and even ahead of the environment?
Andrew Griffith
My right hon. Friend is absolutely right. It is sad to say that Scunthorpe is the victim of exactly that policy: putting ideology before British interests.
Several hon. Members rose—
Andrew Griffith
I will make some progress.
Millions of other businesses are also struggling with their energy bills, which is why the Chancellor’s tax choices have been so devastating. Steel may be the first domino to topple, but glass, chemicals, cars and concrete are other industries at risk. Does the Prime Minister envisage a whole series of Saturday sittings, or will he change course today and cut energy costs now, and not in 10 years’ time when it is too late?
Wera Hobhouse (Bath) (LD)
We are hearing about the previous Government’s efforts to save British Steel, and we have heard a somewhat confusing account of the deal that the now Leader of the Opposition negotiated. If such a deal existed, can we see a record of it?
Andrew Griffith
My right hon. Friend the Leader of the Opposition has made it extremely clear that the deal was being negotiated, and the point about it being negotiated is that it would have been concluded after the election.
Several hon. Members rose—
Andrew Griffith
I will make some progress.
It did not need to be this way. My hon. Friend the Member for Brigg and Immingham (Martin Vickers) has been warning of a growing threat since last September. The Mayor of Tees Valley has been asking the Government to present their plan for steel for months. Rob Waltham, the leader of North Lincolnshire council, has done all he can to support steelmaking in Scunthorpe. And, on 4 April, Ed Conway of Sky News showed the world that we were just days away from the risk of the furnaces shutting down. But the Government did not listen and they did not act.
It has been almost 10 days since Parliament last debated substantive Government business. Rather than this rushed, one minute to midnight Bill, we could have used that time for proper debate, proper process and proper scrutiny. This is indefensible incompetence. Despite years to prepare, it is clear that the Government came into office with no plan. There is no steel strategy, there is no industrial strategy, there is no export strategy, and now we have this botched nationalisation.
The Secretary of State says that his preference is to find a commercial partner, but let us be serious. Do the Government think that is likely, after attacking business with a £25 billion jobs tax and his Bill to create the most hostile environment for employers since the 1970s? On the Chancellor’s watch, in case she has not noticed, all the flow is of investors leaving this country.
Dawn Butler
I am still a little confused about the deal negotiated by the last Government. As the Leader of the Opposition did not answer, could the hon. Gentleman please clarify the situation for the House?
Andrew Griffith
I am not surprised that the hon. Lady is a little confused; as I said, the Government have failed to lay out their plan and to afford this House the opportunity to debate it. Everything that we have heard this morning says that the Government have not really thought this through. Steelmaking is complex, intense and highly operational. Iron ore has to reach thousands of degrees to become molten iron. It is a dangerous process that poses a serious risk to health. In Birmingham, Labour struggle to collect the bins—
Several hon. Members rose—
Andrew Griffith
Sit down. From midnight, the Chancellor will be standing behind the payroll, settling every bill with every supplier, even if they are in arrears. If these decisions no longer sit with the plant owner, where does the buck stop? Old Admiralty Building? The Treasury? No. 10? How can other steel providers have any confidence in the impartiality of the Government’s steel strategy if the umpire is now on the pitch? What assessment have the Government made of the impact of the Bill on public finances? There is no impact assessment.
The Government have been talking to British Steel for nine months. They have put at least £500 million of taxpayers’ money on the table. Surely by now, the Business Secretary and his officials have a comprehensive understanding of the cost of the actions that he is asking us to vote for. What disrespect it shows to this House for the Government to come along today, having recalled Parliament, after nine months of failing to land a deal, and ask us for a blank cheque. That is no way to run a corner shop, let alone the country. Has anyone in Government asked the Office for National Statistics—
Several hon. Members rose—
Mr Speaker
You will sit down, actually. It is the hon. Gentleman’s choice whether he gives way, so Members should stop hanging around.
Andrew Griffith
I will take an intervention if someone wants to answer this question: has anyone in Government asked the ONS whether, as a result of the powers that are being taken in this Bill, from today British Steel will be classified as publicly owned, whether it has been formally nationalised or not? No answers.
Bill Esterson
That is a relevant question, given that the hon. Gentleman was Boris Johnson’s business adviser when the Jingye deal was being negotiated. What advice did he give Boris Johnson about whether to accept that deal?
Andrew Griffith
Disappointingly, there was no answer to my important question about the ONS and whether this asset will sit on the Government’s balance sheet. Perhaps when the Minister winds up, he will provide an answer to that important question that affects the nation’s finances.
The markets know, the world knows and we know that the Chancellor’s headroom was inadequate from the very moment that she sat down after her last emergency Budget. Only this week, the Bank of England took the unprecedented step of cancelling the planned sale of Government bonds. Today’s botched nationalisation will further unsettle international markets. When will the Chancellor be presenting her next emergency Budget, and what are her plans to update the markets?
There we are: a disrespect of this House; the Government treating Parliament with disdain; nine months of dither and delay; and a botched nationalisation of steelmaking, with the British taxpayer on the hook. It is crystal clear that when Labour negotiates, Britain loses. This is not a serious Government. It is a Government shaped by events, not in control of them. It is government by sulky teenager—not sharing their plans, not answering the question, and when it goes wrong, it is everyone’s fault but theirs.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Mr Speaker, I wonder whether you will forgive me for returning the debate to the Bill, which is about saving British Steel. That is what the debate should be focused on, and I commend the Secretary of State for bringing forward the powers to achieve that goal. He has acted with decisiveness, speed and certainty, and I thank him for the Bill he has presented today. He has acted in the national interest, and he has acted to safeguard our economic security. I am delighted that he has also acted in line with the Select Committee’s advice, which was tabled with him 10 days ago—as we know, that does not always happen. We urged him to maximise pressure on British Steel’s owners, not to do what was easy, but to do what was right. Today he has returned to the House with a Bill asking for the powers to do exactly that.
This legislation matters not simply because it protects 3,700 jobs in Scunthorpe, not simply because it protects 37,000 jobs in the steel supply chain across our nation and not simply because it safeguards nearly £2 billion of economic output; it matters because it defends our economy, our security and, therefore, our future. At the heart of this debate is a very simple question: can we entrust a critical national asset to a company we do not trust? I say no, we cannot, we must not and we dare not. We are presented with a very simple challenge in British Steel’s owners: we have a company in possession of an asset that we need, yet it is a partner that we do not trust. In a world where threats to our economic security multiply each day, we cannot allow that risk to fester at the heart of our industrial core.
Christine Jardine (Edinburgh West) (LD)
Does the right hon. Member agree that there is a wider issue at stake: our energy security and national security? We have seen what can go wrong with a Chinese company that we do not trust, and we see Chinese influence increasing in other vital sectors, particularly our energy industry. Should that not underline our concern and act as a warning that we do not want the Chinese to have control of our energy supply?
Liam Byrne
We are here in the House to answer a very basic question: if we cannot trust a company, can we entrust to it a capability that we need, when that capability is so vital to our strength? That is one reason why the Select Committee has set up a new Sub-Committee on Economic Security, Arms and Export Controls. We will be reporting back to the House on the state of economic security in our country before the summer recess, and I look forward to the hon. Lady’s comments on that report.
The general point I want to land is this: what we value most cannot be entrusted to those we distrust most. The timing of the Bill is critical; we live in an age of intensifying insecurity. President Putin’s violence is unabated, China’s military build-up is unabated and now President Trump threatens to upend the free trading system. In such a world, to surrender our ability to make primary steel would not be a misfortune—it would be negligence.
Rosie Wrighting (Kettering) (Lab)
My right hon. Friend will know that the Select Committee has spoken to defence companies about how necessary it is not to rely on imports at a time such as this. Does he agree that national resilience and defence rely on industrial security?
Liam Byrne
My hon. Friend is absolutely right. In this debate, we need to remember that 95% of our rail infrastructure is made by British Steel. British Steel also supplies three quarters of every major construction project in this country. Thanks to the Chancellor, we are about to invest £10 billion in the rearmament of this country; much of what we need to put in place will be made by British Steel. How can we afford to let British Steel go out of business today? How can we vote against the Bill? British Steel is not simply a pillar of British industry: it is a cornerstone of our economic security.
George Freeman (Mid Norfolk) (Con)
Does the right hon. Gentleman agree with me, as a card-carrying advocate of industrial strategy, that this argument applies to some of our other key high-growth sectors, such as fusion, quantum and space? We have to accept that the days of easy globalisation are over and be a bit more strategic about how we support our emerging industries.
Liam Byrne
Mr Speaker, you know that I could answer that question all day, but you would rule me out of order, so I will confine my remarks to the Bill. However, I agree with the hon. Gentleman. He is absolutely right, and that is why we have to work harder across the House to build a consensus about the big calls that we need to get right for our future.
British Steel faces significant headwinds, not just from Chinese steelmakers flooding the market, but from the new 25% tariff from the United States, and we have to rise to the challenge of decarbonisation, yet we in this House must keep our eyes on the prize ahead of us. The Chancellor has just committed £100 billion-worth of capital investment, we are building affordable homes at a pace not seen in decades and we are investing £10 billion in defence. There is a market to seize, but only if we have the means to supply it. British Steel cannot profit from Britain’s future if Chinese firms are allowed to kill it today.
Jeremy Corbyn (Islington North) (Ind)
I agree with the right hon. Member that we need a steel industry in Britain and that we need to invest in it. Does he not think that we could be going a bit further today and, instead of this temporary measure, taking the whole steel industry into public ownership so it can be what it has always been—the bedrock of manufacturing industry in Britain—and give us security for the future, free from market forces?
Liam Byrne
The right hon. Gentleman may well be right, but this is the second key point that I want to land: the truth is that Jingye is a mess. It has failed to publish accounts since 2021. Two auditors have resigned; one cited material concerns about the company’s ability to remain a going concern. Inventories cannot be verified. Cash-flow statements are missing. The company is not acting in good faith, and that is why the Secretary of State is right to take the powers that he is asking for today.
It is clear that the escalating trade war between China and the United States created the imperative to act today. It is clear that Jingye was about to move primary steelmaking capability from Scunthorpe back to China and merely use the downstream mills in Scunthorpe. That may have been good for China’s economic security, but it is not good for Britain’s national security, and that is why we need to give the Secretary of State the powers that he is asking for.
The options on the table are very simple. The Secretary of State could do nothing and watch the furnaces close; he could hope, but hope is not a strategy; or he could act, as he has done today. He has acted with strength and made a decision in the long-term interests of our country, and the House should give him its full and unabated support.
Daisy Cooper (St Albans) (LD)
Recalling Parliament today was absolutely the right thing to do, but to be frank, it is extraordinary that we find ourselves in a situation in which our sovereign steel industry is in such peril as a result of the Conservatives’ failings and the Labour Government are now trying to give themselves unprecedented powers.
It is astounding that, even after British Steel was sold for £1, even after it entered insolvency and even after the Government’s Insolvency Service temporarily ran it, the Conservatives pressed ahead to erect more trade barriers through their botched Brexit deal, scrapped the Industrial Strategy Council and allowed the sale of the steel plant to a Chinese firm that, according to Ministers, is now refusing to negotiate in good faith at least to keep the plant going. The Conservatives were asleep at the wheel. They failed to tackle energy costs and business rates, and now Trump’s tariffs and contagious protectionism are the straw that has broken the camel’s back.
Chris Vince (Harlow) (Lab/Co-op)
Does the hon. Lady agree that the Conservatives were also in government in 2015, when the steelworks at Redcar closed and thousands of people lost their jobs?
Daisy Cooper
As the hon. Member knows, the three things that I have just outlined—British Steel being sold for a pound, British Steel entering insolvency and the Government’s Insolvency Service being left temporarily running the firm—all happened in 2019.
With Putin’s barbaric war in Europe and Donald Trump’s disastrous tariffs causing economic turmoil around the world, we must secure the future of steel production here at home. We Liberal Democrats welcome the sense of seriousness and urgency shown by the Government in recalling Parliament. We must work together to rescue our steel sector and the tens of thousands of jobs that directly and indirectly rely on it. But under the terms of the Bill, the Secretary of State is giving himself huge and unconstrained powers that could set a very dangerous precedent. I urge him to make a commitment, in the strongest possible terms, to repeal the powers that he is giving himself as soon as possible—within six months at the latest—and to come back to this House for another vote to extend those powers if they are still required after that.
Jonathan Reynolds
As I tried to articulate in my opening speech on Second Reading, I understand the gravity of the situation, which gives puts some context to the demands for further powers to be included in the Bill. The limitation, as wide as it is, is the right measure, and I can give the hon. Member my absolute assurance that I shall seek to do exactly as she says.
Daisy Cooper
I am incredibly grateful to the Secretary of State for giving that assurance, which is important in the context of what the powers in the Bill actually are.
Clause 3(4)(a) gives the Secretary of State the power to break into anywhere to seize assets. Clause 3(4)(c) gives the Secretary of State the power to take whatever steps he considers appropriate—not what a court or a reasonable person might consider to be appropriate—to seize or secure assets. Clause 4(3), on offences, makes it a crime for anyone not to follow the instructions of the Secretary of State, or to refuse to assist the Secretary of State in taking those steps without a “reasonable excuse”. However, a “reasonable excuse” is not defined in the Bill, no examples are given, and, quite frankly, it is hard to work out what defence of a “reasonable excuse” might be accepted given that, under clause 3(4)(c), it is whatever the Secretary of State himself considers to be okay.
Clause 6(1), on indemnities appears to give the Secretary of State and potentially any other person who is with him—a police officer, a civil servant, or a Border Force official—immunity from prosecution for using any of these wide-ranging powers. These powers are unprecedented and they are unconstrained. I am grateful to the Secretary of State for saying that that is precisely why he intends to repeal them as soon as possible.
More broadly, the Government must now also bring forward plans to guarantee the future of this vital sector. We know the steel industry is surrounded by crippling uncertainty. After decades of underinvestment and shocking indifference to our sovereign economic security, the previous Conservative Government have left our sovereign national capacity on steel diminished and endangered. Yet there is no chance that UK demand for steel will disappear. How absurd and irresponsible is it that we have a sustainable and enduring long-term market for British steel, but that our supply could keel over in a matter of days because of the failures of the failed Conservative party?
So looking ahead, let us remember that saving Scunthorpe is necessary, but not sufficient on its own. There have been significant discussions about the future ownership structure of this company. Given the precarious fiscal position in which the Government find themselves, it is important that all options on ownership are put on the table, so that this House can take an informed decision about what they mean for the public finances. I hope the Government will make a commitment that, in the coming weeks, they will bring forward a report that sets out options for future ownership of the plant.
Looking ahead, many big questions remain unanswered. Will the Government immediately designate UK-made steel a nationally strategic asset? Will they be using direct reduced iron, and, if so, will that form part of the UK’s plans alongside protecting the production of virgin steel at Scunthorpe? When will the Government bring forward a comprehensive plan to ensure that more British steel is used in vital infrastructure projects, from defence to renewable energy? Will Ministers work shoulder to shoulder with our European and Commonwealth partners to tear down trade barriers, including by negotiating a customs union by 2030? Will they develop initiatives to retrain and upskill workers across the country as we transition to greener methods of steel production? How do the Government intend to respond to calls from UK Steel for the Government to achieve the lowest electricity prices in Europe, parity with competitors on network charges, and wholesale electricity market reform?
This case should also raise concerns about the role of Chinese corporate interests in the UK’s national critical infrastructure. The decision by British Steel’s Chinese owners to turn down the Government’s offer of £500 million to support the future of the Scunthorpe plant has directly precipitated this crisis. We must now be clear-eyed about the risks posed by Chinese involvement in our country’s vital infrastructure. To that end, will the Minister tell the House when the Government’s promised UK-China audit will be released, and how the Government plan to strengthen protections for critical infrastructure? Can he assure the House that the Government have assessed whether there is any risk that Jingye, on behalf of the Chinese Government, has deliberately run down the plant to jeopardise the UK’s capacity to produce steel?
We are in a precarious position, and it is not as if there were no warnings. In 2022, the Royal United Services Institute think-tank said:
“Domestically produced steel is used in defence applications, and offshoring the supply chain may have security implications—for example, in a scenario where multiple allied countries rearm simultaneously at a time of global supply disruption, such as during a major geopolitical confrontation.”
The fact that Jingye has now closed down the supply of raw materials is further evidence that the plant should not have been sold to it in the first place. Quite frankly, the fact that some Conservative MPs are calling for nationalisation shows how far through the looking glass we really are.
Is not the Conservatives’ attitude abundantly clear? On national security, they cut troop numbers by 10,000; on food security, they undermined our farmers with unforgiveably bad trade deals; and on economic security, they left our country with almost no sovereign steel capacity. On security, the Conservatives left our island nation severely vulnerable, like flotsam in the sea, passively bobbing up and down or being bashed around by the tides of international events.
As for hon. Members from the private limited company Reform Ltd, they have a bit of cheek to claim to support UK steelworkers while cheering on their pal President Trump, whose punishing trade war is putting those steelworkers’ jobs at risk. Perhaps the company’s directors who sit in this House will come clean about whose side they are really on.
Time and again, we have seen the failures of an ad hoc, piecemeal approach to industry across all sectors, from the failure of our water companies to the shocking state of our housing nationally and the dismal situation of our health service. For too long, there has been no stability for these industries, which are constantly fixed on a short-term basis only, to the point where they are practically held together by string and tape and the dedicated workers who remain. We Liberal Democrats stand ready to help constructively to bring about an outcome that delivers real change.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Today, some of us have been surprised to hear the Opposition talk about a failure to prepare. The workers of Scunthorpe might say that they had 14 years to prepare, and failed.
British Steel’s products are essential to industry, to this country’s security, and to the delivery of major infrastructure programmes across the country, including in London. British Steel supplies Transport for London with the power rail used on its transport network, which is not manufactured anywhere else in the country. For railways, including the underground, power rail from British Steel is essential to the everyday operation of the service, which supports up to 4 million customer journeys each day. The closure of British Steel would have a very serious adverse effect on Transport for London’s services, as it would on projects up and down the country—so, above all, Transport for London believes in the importance of a UK-based supply chain for steel.
Finally, everyone in this House understands that the Bill is not about bringing steel into public ownership—whatever the Opposition assert—but some of us hope that moving on to nationalisation will not be ruled out. All of us on the Government Benches believe in what works, but privatisation certainly does not always work. The water industry comes to mind. Since privatisation, not a single reservoir has been built. Instead, billions have been poured into the pockets of shareholders. Now raw sewage floats in our waterways and rivers, and it is the consumer who will have to pay exorbitant charges for investment that should have been made all along.
This House supports the Government in moving to save British Steel and the jobs of thousands and thousands of workers. It also supports the Government in moving so quickly and with such certainty to protect the country’s interests, including in relation to security, and in working to save the community in Scunthorpe, because one of the issues with deindustrialisation is the long-term effect on many communities up and down the country. We all support what the Government are doing.
Sir Edward Leigh (Gainsborough) (Con)
I have just come off the phone to Tom Smith, the trade union convenor at the blast furnaces, on behalf of my many constituents who work next door in Scunthorpe. My primary concern today is with the nearly 3,000 people who work in this plant. Let us be clear: we have been making the best quality steel in the world for 135 years in Lincolnshire, and we intend to go on doing it. We are not going to allow cheap, inferior Chinese steel to kill off our industry. The workers of Scunthorpe are breathing a sigh of relief.
We can be party political. I have to say that I thought the Chairman of the Business and Trade Committee made an excellent speech—he was positive and talked in strategic terms—but I do not know what the Liberal Democrat spokesman, the hon. Member for St Albans (Daisy Cooper), achieved by constantly attacking the Conservative party on what is a very complex issue. Of course we can be criticised because we sold this company to Jingye—yes, I agree—but how many voices on the Liberal Democrat Benches were speaking up at the time? Were they speaking up when Greg Clark, our then Business Secretary, paid the wages of the Scunthorpe steelworkers for many months? Were they speaking up when we saved Sheffield Forgemasters? This is a highly complex issue and we should be working together, so I support the Bill.
I know that we can be critical of the Government. Perhaps we should have acted sooner—my hon. Friend the Member for Brigg and Immingham (Martin Vickers) has been raising this point; I was sitting beside him at the end of March when he raised it and called for nationalisation of the industry—but we have now got to work together to save our steelmaking capacity.
We know, though, that this Bill is a bit of a sticking plaster. It is quite dangerous. Quite extensive powers are being taken by the Government, so there has to be a sunset clause. We are giving unprecedented powers to the Government. We can criticise them for not acting sooner, but this is a sticking plaster on a gaping wound.
Let us be honest: steelmaking in this country is under extreme stress. And why is that? Why are we loading the most expensive energy costs on to our own steel production? Why is Scunthorpe paying almost twice as much in energy costs as those in South Korea or in America? High energy prices make UK steel expensive to produce and uncompetitive versus that produced by our European counterparts. In 2024-25, the average price paid by UK steelmakers was £60 a kWh, compared with the German price of £50 and the French price of £43. We are making our own steel industry uncompetitive. We have to stop these green energy costs. We have to be realistic. The Secretary of State for Energy Security and Net Zero has now left, but we need to get real. We can take steel into public ownership now, but if we go on loading costs on our industry, we will have to come back month after month and year after year.
We will support the Bill, although we want a sunset clause. But we have to get real about China, too. Was it not obvious for weeks and, indeed, for months? This is a so-called private company, but there is no such thing as a private company in China. They are all under the cosh of the Government, under an autocratic regime. What do they care about the steelworkers in Scunthorpe? What do they care about our national interest? Never again, colleagues, must we allow such a strategic industry to fall into the hands of the Chinese, the Russians or anybody else.
Ms Polly Billington (East Thanet) (Lab)
Will the right hon. Gentleman clarify whether he was aware that the Chinese company that is now in possession of British Steel was sold it by a Conservative Government of which he was part?
Sir Edward Leigh
Of course I am, because I just said that. I have just admitted that it was a mistake, but I ask everybody what they were saying at the time. Of course, there is silence. It is easy to be wise after the event, but I am worried about my steelworkers—I am worried about their future.
Sir Iain Duncan Smith
I want to make sure that my right hon. Friend puts the record straight: some of us on the Opposition Benches warned the then Government that it was wrong.
Sir Edward Leigh
There we are: some of us apparently warned the Government. I do not know how many.
We now know the true nature of our Chinese friends. We support the Bill. Let us make our steel industry really competitive again and let us make Great Britain great again.
Several hon. Members rose—
Mr Speaker
Order. Can I make an appeal to everybody? A lot of people want to speak and there is going to be some disappointment. I think those whose constituents are actually going to be affected should be allowed to speak, but let us see how we go for time. We need to be brief to get more Members in. Let us have a good example from Melanie Onn.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I am delighted to follow the right hon. Member for Gainsborough (Sir Edward Leigh). Given his Damascene conversion to socialism today, he could be termed the new “Red Ed”.
I welcome the Government’s decisive action to bring security for workers at Scunthorpe. They are grasping the nettle after the can has been kicked down the road for far too long. British Steel at Scunthorpe is not just of interest to that town; its importance emanates across northern Lincolnshire to my constituents in Great Grimsby and Cleethorpes. Whether directly or indirectly, the employment and training opportunities that come from that single site are so important to our local economy, and the product is, of course, nationally important. When I consider the businesses that operate across the Humber and northern Lincolnshire, I think the industries that are relevant to securing the future of steel seem strong. From the Siemens factory in Goole to the boatyards of Hull and the turbines off the Cleethorpes coast, the products that Scunthorpe could have a role in producing are plain for us all to see.
The Government must turn their attention to the next steps, because the measures we are taking today are not without risk. Unless we set a course for steel in the UK that closely aligns with our industrial strategy, this will be only another sticking plaster for a site that has already been put through the wringer too many times over the years. The powers that the Government seek today will protect the workers at British Steel from any retaliatory measures that Jingye may have sought to take. That is welcomed by those workers, who have often felt at the mercy of the company’s owners and unseen by the Government.
Luke Akehurst (North Durham) (Lab)
Does my hon. Friend agree that one major way in which we could secure markets for British steel is through the “British first” strategy that the Ministry of Defence has set out for the building of future warships?
Mr Speaker
Order. Mr Roca, has somebody texted a photograph outside this place of what is going on here this morning?
Mr Speaker
Okay, can people please not take or text photographs? I do not know if that is the case here, but your name has just been associated with it.
Melanie Onn
I agree with my hon. Friend the Member for North Durham (Luke Akehurst); it is imperative that we tie up all the initiatives that this Government are bringing forward, whether in defence or other critical areas of industry, to make sure we can secure the long-term future of steel.
To ensure the best chance of successfully securing a private partner or long-term commercial solution, the Government must take all actions available within their powers and do all they can to make British Steel viable. I wonder whether now is perhaps the time for the Government to look again at the carbon border adjustment mechanism. The EU has already brought in the adjustment mechanism to protect against international steel dumping. By doing all we can—whether by keeping down energy costs, as I know the Minister has sought to do, investing through the national wealth fund or, indeed, bringing in the CBAM—this is our chance to secure a genuine, long-term solution for the preservation of British Steel.
Martin Vickers (Brigg and Immingham) (Con)
It is a pleasure to follow the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), my Member of Parliament; on this matter we are in complete harmony. Before I talk about the local situation, which is what I want to focus on, may I thank the Secretary of State for giving me a call yesterday evening and outlining the proposals he would be bringing forward this morning? I did say to him that I would not be entirely uncritical, so I am sure he will not mind a few jabs here and there.
The local situation is extremely critical, as has been pointed out. The impact, not only on the workforce but on the wider economy of northern Lincolnshire, would be extensive. I have been a resident in the Grimsby-Cleethorpes area all my life, and I have seen the impact when a town loses its core industry. In the case of Grimsby, of course, that was the deep-sea fishing industry. When that decline happens—it has happened to so many towns up and down the country as a result of the decline in mining, shipbuilding and other heavy industries—it takes a generation or perhaps more for the town to fully recover.
That is the last thing I want to see happen in my neighbouring constituency of Scunthorpe, or to the hundreds of my constituents who work there. Those Members who were here for the Easter Adjournment debate—there were a handful—might have heard me say this only four days ago, but the site extends way beyond the bounds of Scunthorpe, into my Brigg and Immingham constituency. The site is the equivalent of 1,133 Wembley football pitches, which gives an idea of its size and of the amount of work that would be needed were the steelworks to close. There would be demands for vast Government investment over decades, in order to remediate the site and to provide new employment.
I said that I would not be entirely uncritical of the Secretary of State, so I refer him to my first urgent question on this matter, on 5 September last year. I said on that occasion:
“There have been widespread media reports suggesting that coke will stop being imported from October, which would mean production would stop in Scunthorpe by Christmas. There are rumours concerning the fact that employees will be given notice very soon. That is obviously creating great anxiety among those directly employed by British Steel and those in the supply chain, which in northern Lincolnshire extends to many thousands of people and many businesses.”—[Official Report, 5 September 2024; Vol. 753, c. 424.]
Thankfully, we have had a six-month reprieve from those threats in October, but I have to say, the Government have been a little dilatory on this. I appreciate that negotiations have been taking place and Ministers cannot give away their negotiating position, but I made this point as long ago as September, as well as when you granted me an urgent question on 27 March, Mr Speaker—only a couple of weeks ago—and surely the Government were beginning to realise at that point that the negotiations with Jingye were going nowhere.
Jonathan Reynolds
I am extremely grateful to the hon. Gentleman for putting that point on the record. It is precisely because of those concerns that we were able to have ready a legal route to intervene to directly offer support to purchase raw materials. What we could not have anticipated or expected was for a company to act in an irrational economic manner when such a clear, distinctive and generous offer was made.
Martin Vickers
I thank the right hon. Gentleman for his intervention. I would say merely that he has been party to the negotiations, and he must surely have realised that the company was not negotiating in good faith and expected his officials to prepare legislation, if required, to deal with the situation that we are now in. As others have said, this is crucial not just for thousands of my constituents who work at the site, but for the defence of the nation. I assume and hope that Defence Ministers have been lobbying the Secretary of State to make their concerns clear.
Locally, there is continuing concern. Like the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), I will support the proposals. I floated the nationalisation issue on 27 March, and I see this as a stepping-stone to that situation. To those who will perhaps demand nationalisation today, I would say that this is a very complex issue, and what matters more than anything else is the future of the workforce and the ability to produce virgin steel. Nationalisation legislation would not, I sincerely hope, be passed in three hours; it would involve a great deal of work.
Having got themselves into this situation, the Government are now taking the right action. There has been disappointment locally—to put it mildly—that the Prime Minister did not, following my question to him only 10 days ago, take up the option to meet a cross-party delegation of MPs to discuss the situation, but now that we are where we are, I fully support the Government, and I hope that they accept the sunset clause amendment, which would be prudent. I can assure them of my full support today, which they will continue to have when they act in the best interests of my constituents.
Several hon. Members rose—
Mr Speaker
Order. Can we try to help each other by not speaking for too long? I hope we do not have reams of paper for the next speech. Bill Esterson will be a good example of a shorter speech.
Bill Esterson (Sefton Central) (Lab)
Well, thank you, Mr Speaker—no pressure. [Interruption.] I will put some of my papers down.
May I start by praising the Business Secretary and his team for the way in which they have introduced the legislation? I add to that my praise for trade unions, local management and Members of Parliament of both main parties—not least my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who, being a Minister, is not speaking in the debate. I joined him on a 2023 visit to Scunthorpe, where the very concerns about Jingye that we have heard today were shared with us by local management and trade unions alike. It is no surprise that those concerns have come to pass.
The last Government were warned, and they chose not to take the action needed. Ministers in the last Government told me that steel needed by the Navy and by those across our economy could not be made at Scunthorpe, or at other steel plants. Interestingly, the local management and the trade unions told me that they could make whatever their customers asked them to make by adjusting production. Again, it is a pity that the last Government did not listen, or we might be in a rather different place now. During the last Parliament, we were the only country in the G20 where production of primary steel, and steel overall, was falling. If the blast furnaces were allowed to close, we would be the only country in the G20 without any primary steelmaking capacity, which underlines why today’s legislation is so important.
The steel at Scunthorpe is of strategic national importance. Some 95% of our rail tracks are made at Scunthorpe, and the steelworks there carry out automotive, construction and defence production, all of which are critically important to this country. In addition to what is made now, there are opportunities in energy transition and defence. Some 25 million tonnes of steel will be required over the next 25 years in the offshore wind sector alone, so there are great opportunities if we can secure the future of Scunthorpe.
At the Liaison Committee last Tuesday, the Prime Minister mentioned that the grid connection plan for the Scunthorpe site is only due in 2034. Our electricity prices are 46% above the average for International Energy Agency states. The Government have to address the challenges of slow grid connections and uncompetitive industrial energy prices if they are to enable the modernisation of industry as a whole, and steel in particular.
Sarah Edwards (Tamworth) (Lab)
The Business and Trade Committee, of which I am a member, has heard evidence about the importance of the steel industry, and about the need for primary steelmaking to be retained as a key pillar of UK industrial sovereignty. We have heard that blast furnaces still play a critical role in strategic and high-grade steel production. Does my hon. Friend agree that our economic security is intrinsically linked with our onshore industrial capabilities, and that our Government’s focus on both construction and defence in these uncertain times means that this Bill is very welcome news?
Bill Esterson
My hon. Friend makes extremely well the point that our economic security and our national security are two sides of the same coin. I am pleased to hear about the work being done by the Business and Trade Committee; in his excellent speech, the Committee’s Chair, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), mentioned the Sub-Committee that has been set up.
I want to talk about Port Talbot, because the Energy Security and Net Zero Committee visited it two weeks ago. There will be a delay of several years between the closure last year of the blast furnaces there, and the opening of the new electric arc furnace, which is a massive cause for concern in south Wales and beyond. The excellent financial support provided by this Government, and Tata’s willingness to engage, are a good example of industry and Government being partners, and an indication that the industrial strategy that the Government plan to bring forward is already being effective.
The Bill gives the Government the opportunity to secure steelmaking in this country. I congratulate the Secretary of State and his colleagues on their decisive action. Workers and the nation as a whole are grateful for the work of this Government, who are doing absolutely the right thing.
Richard Tice (Boston and Skegness) (Reform)
My hon. Friend the Member for Clacton (Nigel Farage) and I have been calling for British Steel to be a strategic national corporation for some six years. We said to the previous Administration that the last thing they should do is sell it to the Chinese, but they ignored our splendid advice. The industry requires long-term investment. The problem, as we all know, is that it has been beset by short-termism and short-term thinking, as well as by the vast electricity costs in this country, partly caused by net stupid zero and the carbon tariff.
There is now a great opportunity for the House to unify. As the Secretary of State confirmed, we have the opportunity to take British Steel into public ownership—this weekend, we would urge, for the sum of £1. We could do a great deal for the taxpayer. We should invest in refurbishing and relining these blast furnaces, in the same way that the French are doing in Dunkirk. They are spending a quarter of a billion euros in Dunkirk, and we should do the same. We should bring in excellent global expertise to help British Steel. There will be opportunities if we do those things and have long-term procurement contracts for raw materials, including the opportunity to use British coal from Cumbria. That is an opportunity that the Government declined, but it would create more jobs and save on transport costs. There is also the opportunity for long-term procurement contracts for British Steel products. Those are opportunities to make British Steel a long-term, viable business for the taxpayer. We can bring in long-term patient capital. If we do those things, we can get everything that we want. Primary steelmaking is a vital strategic asset, and Scunthorpe can be its epicentre.
We will support the Government’s Bill today, but there is an opportunity to go further, to be bold and to be courageous. The Secretary of State should show his cajones and show some mettle. This weekend, he and the Government have the opportunity to remove the uncertainty for 3,000 families in Scunthorpe. Let us go for it. Let us nationalise British Steel this weekend and make British steel great again.
Carolyn Harris (Neath and Swansea East) (Lab)
Today I represent not only my constituents in Neath and Swansea East, but those of my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock). After years of under-investment and neglect by the previous Government, this Government’s commitment to steel is truly welcome. However, it is vital that the £2.5 million steel renewal fund already announced by the Government is used to support the industry across the UK, and Wales needs to get its fair share. Some 2,800 steelworkers lost their jobs in the region, but they recognise that the circumstances in Port Talbot were different from those in Scunthorpe.
In Port Talbot, half the steel production had already been shut down when the Labour Government came into power, despite Plaid Cymru’s desperate attempts to electioneer this as an issue. It was impossible to reverse the deal that had already been struck between the previous Tory Government and Tata. Although steelworkers understand the urgency of the current situation and support the Government’s action to prevent further closures and job losses, they need commitments for Wales that will attract investment and create much-needed employment opportunities, like those being offered by the floating offshore wind industry. It was too late to save the furnaces in Port Talbot and the jobs are long gone, but investment in the area will bring new jobs—and, most importantly, new hope to all our constituents.
David Davis (Goole and Pocklington) (Con)
You will not need reminding, Mr Deputy Speaker, but I will remind the House of quite how unusual a day this is, for a variety of reasons. The last time we met on a Saturday was at a time of war, and the last time we put a Bill through in one day was at the beginning of the pandemic. That is how serious the disastrous circumstances in which we find ourselves are. I assume that this House will accept the Bill, so I will address my comments directly to the Secretary of State.
At one level, this is a “nationalisation in all but name” Bill, because of the powers it gives the Government. Indeed, it actually gives them more powers than a nationalisation Bill would. It will allow the Government to do things that they could not do under a nationalisation Bill. Frankly, I would have voted for one. I am not a fan of nationalisation, as the Secretary of State will know, but I would have voted for nationalisation. I will vote for this Bill, for a simple reason: it buys us time. People have to understand that this is a reprieve, not a rescue.
I do not agree with the hon. Member for Boston and Skegness (Richard Tice) on his strategic nationalisation argument. Nationalisation under these circumstances buys the Secretary of State time and leverage, and he needs to be able to use his judgment on how to use that time and leverage. We have had just a hint of a view of how complex a game Jingye is playing. In fact, if I were to recommend any amendment to the Bill, it would be an amendment to limit to one penny the amount of money that the Government could pay to Jingye, because then no court could challenge that amount, and Jingye would know full well that it was not in line to make money out of the British taxpayer. We have to look at this in strategic and tactical terms.
David Davis
If the hon. Lady will forgive me, I will not, because lots of people want to speak. I will refer to something she said in a minute, so if she really needs to intervene, I will let her come in then. We are trying to manage a disaster—a disaster for Scunthorpe, which is local to me, as members of my community work at Scunthorpe. The knock-on economic effects will be felt much more widely than in one town; this will affect thousands and thousands of people all round.
This is also a disaster for our last primary steelmaker, and steelmaking has suddenly become more important. It was always an important part of national strategy, but Mr Trump has made it a vital, unavoidable piece of national strategy. We have to create a circumstance that allows the Secretary of State and the Government to manoeuvre us through that. As Members have said, that means having an energy policy that makes the plant viable—not just viable when it is owned by the state, but commercially viable. It means having an energy policy under which we do not have the highest energy costs of our competitors, which we do now. It also means that we have to think very hard about carbon supply. At the moment, the technology does not exist that allows us to make primary steel without carbon supply, so we have to think about that. Primary steel is a strategic supply, so we cannot rely on another country for it.
I want to see this Bill used in a way that gives the Secretary of State the time to deliver those things, but it must also give this House the right to see what he is doing and how the strategies are turning out. Nobody has got this right. If those on the Government Benches want me to, I can go back to 1997 and park blame, but I do not want to do that today. I want to make this viable. We have to get our energy, environmental and industrial policies all in line to make this work.
To put this in context, last year British Steel lost about £408 million—that was the September number. This year it is about £250 million. Neither of those are small amounts of money. The Treasury would shut down an operation if we just left something like that running inside the Government for very long. We need a new strategy that cuts our carbon emissions without exporting our industry to the rest of the world. I am afraid that most of our successes in carbon reduction over the last decade or two—or three—have been by dint of exporting industries to other countries, often with much worse records than us. In this case it would be China. China has 50% of the world market already. It has massive excess in steel capacity, and its steel capacity is the most carbon inefficient there is, so we would actually be worsening the circumstances.
Liam Byrne
The Business and Trade Committee has taken clear evidence that we need a carbon border adjustment mechanism, so that carbon-rich steel, such as that from China, is taxed much more heavily. Crucially, what is needed on the table are the steel safeguards from the Trade Remedies Authority to guard our markets from a flood tide of Chinese steel right now.
David Davis
I am afraid the right hon. Member is right. The difficulty is that we are in a new world. The terrible thing is—the House will only ever hear me say this once—that Trump has a small point in some respects, and we have to deal with the world as it is.
Moving on to the sunset clause, I can imagine that the instinct is not to put a sunset clause in the Bill, because we are dealing with a difficult negotiator, and putting in a sunset clause would be putting in a backstop. When we put a backstop on ourselves, we give the other side a negotiating advantage. In his speech, the Secretary of State mentioned that the Civil Contingencies Act 2004 would be a route. For those who have not read that legislation, we spent a year putting it in place under the Blair Government, and it has recourse to Parliament at every turn: Ministers are properly controlled, it must be transparent, and so on. I suggest to him that at some point he might organise a transition to that, so that the House has greater control. The Coronavirus Act 2020 did not have that—it missed all those defences—and look what happened to the policy as a result.
This is what I would like to see: recourse to Parliament over the actions the Secretary of State takes to manage the survival of Scunthorpe and the policies to ensure its viability and, in the post-Putin and Trump era, the security of supply. We want to see all those things, and we can organise legislation to permit them. I ask the Secretary of State to take the House into his confidence and do this properly.
Chris McDonald (Stockton North) (Lab)
In 1976, a group of steelworkers emerged from the Templeborough steelworks following a night shift. At the time, Temple-borough was the largest electric arc steelmaking plant in the world. Those steelworkers had just done something rather spectacular: they had broken a shift record. They were surprised to find a letter from the Prime Minister, Jim Callaghan, congratulating them on their contribution to the national effort. After 48 years, it is marvellous that we finally have a Prime Minister who is prioritising the steel industry once again.
I know what it is like to emerge bleary-eyed from a night shift on a steelworks. As much as we are emotionally attached to our steelworks, the past analogies are not entirely helpful here. There is too much of a narrative in this country that steel is a sunset industry, when in fact it is not only essential, but advanced. Perhaps this is the time for me to direct Members to my entry in the Register of Members’ Financial Interests, as the former chief executive of the UK’s national steel innovation centre.
A lot of that innovation is embedded in our facility in Scunthorpe, from advanced high-speed rail from the rail mill to rods that are drawn down to wire the thickness of a human hair, produced to pharmaceutical levels of precision. The beam mill in Teesside is one of a handful of plants capable of producing large-scale beams that have been used to build buildings from Hong Kong through to the west coast of the USA. The Skinningrove works produces the tines for yellow goods for Caterpillar, which move directly into that factory. I am sure that all Members agree on how vital those plants and facilities are, but they may be unaware that two thirds of the steels we produce today did not exist 15 years ago, such is the level of continuous innovation in the steel industry.
Everything that we have is made either from or with steel. Our steel industry has declined so significantly over the past 14 years that just last week, when I went to the constituency adjacent to mine to visit the Hartlepool pipe mill, which makes the pipes for the carbon capture and storage network in which this Government have invested £4 billion, I saw that stamped on the plates of steel was the word “Voestalpine”. An Austrian steel producer that sits in the foothills of the Alps is able to produce plate steel more competitively than those in the UK, while we have a plate mill in Scotland that is practically idle—the slabs for that plate mill would have been produced in the Scunthorpe steelworks.
I welcome the legislation today as an opportunity for us to take back control of our steel industry and deal with the chaotic fragmentation of the industry that occurred over the past 14 years. I believe that the UK can be just as competitive as steel companies in Austria, Germany, France, Spain or the Netherlands, which are, in fact, the biggest importers of steel to the UK.
Chris McDonald
I am sorry; given the shortage of time, I will not.
I also believe that we can be at least as good as the steel industry in Belgium, which is now larger than the steel industry in the UK. Clearly, there was a lack of ambition on the part of the previous Government. They did not believe that our steel industry could be as competitive as Belgium’s.
Julia Lopez (Hornchurch and Upminster) (Con)
Will the hon. Gentleman give way?
Chris McDonald
I am sorry, but I am not going to give way, simply because of the lack of time.
It is important to correct the record on a number of earlier comments. The hon. Member for Boston and Skegness (Richard Tice) and others referred to the coal from the west Cumbria mine, but I must inform the House that the management of British Steel has ruled that coal out on the grounds of quality. The sulphur levels are too high.
Chris McDonald
I would be quite happy to talk to the hon. Gentleman about steel desulphurisation in the Tea Room later, if he would care to join me. I also completely refute his comment about bringing in global expertise—we have the expertise in the UK to run steel companies effectively. Again, I would be happy to introduce him to people who could do that, if he wishes to know.
It is important to remember that the steel market globally is not a free market, which is why Governments work together. The US Government use tariffs and blocked a merger between Nippon Steel and U.S. Steel. The French Government traditionally use procurement; the German Government subside their steel industry with energy prices; the Chinese Government give cash. It is really important to recognise that steel companies do not compete in a free market, and that if we ask our steel companies to do that, we are asking them to compete with national Governments overseas and letting those national Governments set our steel and industrial policies, and, fundamentally, our defence policy. I think that is unacceptable. We need to recognise that the corporate interest of a company is not the same as the national interest of the UK. The Secretary of State has recognised that and shown real leadership.
I want to reserve my last remarks for the steelworkers in Scunthorpe. I worked in Scunthorpe for a time, both at the ironworks and at the steelworks. To the steelworkers in Scunthorpe, I say: I know exactly the pain that you are going through. I am sure that they will be relieved by the words of the Secretary of State.
We all think fondly of the four blast furnaces in Scunthorpe—the four queens: Bessie, Vicky, Mary and Annie—but ultimately, I think we all recognise that their time has come. While they will be nursed into their ultimate retirement, we look forward to regenerating the steel industry in Scunthorpe and around the UK with the most modern, most efficient and most high-productive steel plants. Just as a past Labour Government did when they nationalised the steel industry for the second time in 1967—it was so good we nationalised it twice—this time, we can hopefully work with the industry to create a world-leading steel industry for the future.
Stephen Flynn (Aberdeen South) (SNP)
It is a privilege to follow such an impressive speech from the hon. Member for Stockton North (Chris McDonald). I am sure his constituents will be incredibly impressed at his knowledge of this issue. I want to be kind not just to him but to the Secretary of State, once again. That is becoming a habit that I want to break, but certainly his sincerity today cannot be doubted. If there is one person who could be afforded the executive powers in this Bill with an element of trust, it is probably him.
There are some topics that have not been touched on in a huge amount of detail today and I will touch on them briefly now. Whether it is tariffs, competition or energy prices, we must not forget the fundamentals of why the steel industry faces such a challenging position. There is one other hugely important issue that has not been discussed at any length in the Chamber today, notwithstanding the future contribution that I imagine will be made by the hon. Member for Alloa and Grangemouth (Brian Leishman)—it will not pass the lips of any other Members—which is the situation in Grangemouth. I say “the situation in Grangemouth” with an element of despair, because we all know that there are hundreds of people who are on the brink of losing their jobs.
The similarities are astounding. We have PetroChina on the one hand and a Chinese company in Scunthorpe on the other. We have a Chinese company in Scunthorpe saying that there are losses of around £700,000 and we have a Chinese company at Grangemouth saying that there are losses of around £500,000. We have a cracker in Grangemouth that has been deemed not useful anymore and we have blast furnaces in Scunthorpe that are categorised in the same manner. We all need to be conscious of those comparisons.
I say that on the basis that while the Secretary of State is right to say that this is important for jobs in Scunthorpe, this is right for the communities in Scunthorpe and this is right for Westminster’s national, UK-wide interest, is it not the case that it is important to the workers in Grangemouth? Is it not the case that it is important to the communities in Grangemouth? And is it not the case that it is in Scotland’s national interest that Grangemouth is protected?
Stephen Flynn
I am afraid that I will not give way because we are all constrained by time, in the same way that Labour Members will not take interventions either.
The Secretary of State’s answer to me earlier was that £200 million has been put forward through the National Wealth Fund. Each and every one of us knows that that is not in the gift of the Prime Minister or the Secretary of State to dictate. It ultimately relies on the private sector coming forward with a proposal. Indeed, in evidence given to the Scottish Affairs Committee just last week by EY, which has done the Project Willow report, it was quite clear in its observations that there will be no progress until 2030 at the earliest. That is simply not good enough, because while the Government mobilise every effort to save British Steel, they allow Grangemouth to fall on the back burner.
The hon. Member for Central Ayrshire (Alan Gemmell) referred to industrial strategies. He seems to forget in that context that energy is a reserved matter for this United Kingdom Government—something the Secretary of State is all too familiar with, given our previous roles in this here House.
The final thought I will leave with Labour Members is that they should remember the fact that the Bill they are supporting extends solely to England and Wales.
Stephen Flynn
The right hon. Member from Plaid Cymru corrects me to clarify the fact that the Bill applies only to England. The important consideration is: why is this not being extended to Scotland? Why is Grangemouth not being included, why is the smelter up at Lochaber not being included and why are the Dalzell steelworks not being included? The answer to why they are not being included is that Westminster is only interested in Westminster; it is not interested in Scotland. [Interruption.] I will not be shouted down by Labour Members, because they need to hear the truth. Scotland’s interests matter, and the people of Scotland are watching.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Let me bring us back to the Bill that we are here to debate. We have heard some of the data, statistics and information, and about the finances and the associated commercial considerations. We have heard about the importance of British Steel to our defence industry and our national security, about the importance of energy and resilience, and about the infrastructure we need to build to give us the growth in this country that we can feed back and inject into the public services that so need it. Of course, the big thing here is the 3,700 jobs, and today I represent the voice of my residents in the Isle of Axholme and those living in neighbouring towns, including Scunthorpe, who are feeling it today and who are listening to every single word we say. I have to say that the risk to them and the impact—the personal impact—on them are unquantifiable. That is what I want to talk about.
Yesterday, I spoke to Richard, a fifth-generation worker at Scunthorpe who has recently finished there. He said that this is about the individual, about the families, about their colleagues and friends, and about the town. This is about their identity, and he described it in this way. He said that British Steel in Scunthorpe is the “beating heart” of the area, and over the last few years that beating heart has started to slow. As it has slowed, every time it skips a beat, as it has in the last couple of weeks, people hold their breath. They are anxious, they are scared and they are frightened. With every skip of that beating heart, people lose hope, and we cannot let people lose hope. He says to us that we need to come together and we need to pick up a community defibrillator, take it there, give it the injection of pace that it needs, and make sure that we stimulate that heart for all the generations in the future.
We have the opportunity with this Bill today to take control and to start to make that happen. We can turn British Steel—making primary or virgin steel, which is vital for all the things we have talked about—into a treasure, and not just a treasure, but a national treasure, which is exactly why we need to move this on today.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Last year, the Government said they would introduce a new steel strategy that would create more well-paid jobs in the places where they are most needed. Following last year’s closures of the blast furnaces at Port Talbot, many of my constituents have lost their jobs or seen their incomes fall. That includes the thousands of workers who were laid off at the plant itself, but also those further down the supply chain, including haulage drivers and payroll clerks providing services to the 2,000 local businesses that have been impacted by that closure.
The closure of Port Talbot’s blast furnaces started an economic contraction in south Wales that is still under way. Many highly skilled workers, particularly welders, are leaving south Wales in search of opportunities elsewhere. It is rubbing salt in the wounds for the people of Port Talbot to hear the Government now acknowledge the importance of primary steel production as a strategic national asset. Where was this urgency when Welsh steel communities were crying out for support?
Last year, when Tata Steel announced over 2,800 job losses at Port Talbot—the largest steelworks in the country, a key strategic asset, and the manufacturing heart of south Wales—there was no recall of Parliament, no Saturday sitting, no emergency legislation and no rapid mobilisation of the Government to save the day, despite every warning sign being there. The unions raised the alarm and industry experts warned of the economic shock, but the warnings were ignored. Now, faced with similar risks in England, the Government suddenly rediscover their ability to act swiftly.
The simple fact is that the Government did not recall Parliament for Port Talbot, and they did not recall Parliament for Wales. If today’s decision is in the national interest, why did the Government not offer similar protections to Port Talbot, which had more capacity and greater output? Have the Government been fenced in by closing the blast furnaces at Port Talbot too early? How much of the steel supply chain will the Government now commit to protecting?
Employment at Port Talbot fell from over 18,000 employees at its height over the past few decades to around 4,000 before last year’s closure decision, and now there are just 2,000 steelworkers employed there. Those jobs are sorely missed. Welsh steel is all around us, and Port Talbot once produced the steel used in everyday products such as Heinz baked beans tins. It is absolutely right that we are now acknowledging the importance of domestically produced steel. Communities that once powered the UK’s growth, particularly the Swansea valley, the Neath valley, Port Talbot and Maesteg, now face an economic reckoning with far too little urgency from this Government in return.
This is personal for many of us from south Wales. My grandfather worked at the blast furnaces at the Port Talbot steelworks, and it gave him the opportunity, as it did many others, to set up his own business—in his case, a waste management company. That is what is really at risk now, and that is what is really withering away in south Wales. It is not just the jobs on the steelworks floor, but the entire network of small businesses, tradespeople and suppliers that rely on the steel industry’s presence in our communities. We know that for every steelworker made redundant, up to three or four local jobs are at risk of disappearing. The message from Westminster has been clear: when crisis hits in Wales, it is tolerated; when it hits elsewhere, it becomes a national emergency.
We cannot go on like this. Steel is strategic, it is critical to our national resilience, and it matters just as much in south Wales as anywhere else. This Government’s failure to act swiftly in Wales, to consult transparently with workers and to invest in a serious and just transition has undermined confidence and left people in Port Talbot, Llanwern, Shotton and many others across Wales feeling abandoned.
Some 2,800 jobs were lost at the blast furnaces alone, and many of those workers say they have simply been left behind. We have heard the Prime Minister say over the past few days that he wants to take control of steel. Why did he not say that when Welsh jobs were on the line? Why was Port Talbot not worth fighting for in the same way?
We need a proper UK-wide industrial strategy—one that recognises the vital role of Welsh steel in our national economy and, most importantly, one that treats workers in every part of the UK with the same respect, urgency and seriousness. The steelworking communities of Wales have not forgotten the silence that met their cries for help, and they will not accept a future in which their communities are left behind.
Lee Barron (Corby and East Northamptonshire) (Lab)
Frankly, some of the contribution that we have just heard from the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) should have been made when the decisions were taking place—they should not have had to wait until today.
I commend the Secretary of State for how he has dealt with this issue and for getting us together for today’s debate. The idea that somehow we could have debated the negotiations as we were having them is for the birds, frankly, because all we would have done is tell our negotiating partners what we were going to the negotiating table for. Negotiations are not done like that, and nor should they be. And to those who have been moaning about us having been recalled on a Saturday, I say that you can recall me on any Saturday, at any time, and twice on a Sunday, if it means we can save industries and thousands of jobs. I will be here every time.
Some of us know what it is like. The town of Corby was built on steel. The people of Corby and East Northamptonshire know only too well what it is like to have the steelworks closed down and devastation befall local communities. When the Corby steelworks closed, 14,000 people lost their jobs and unemployment rose to 30%. Corby and East Northamptonshire was once home to the largest steelworks in Europe. Today, it employs just shy of 500 people, and it still manufactures 250,000 tonnes of steel tubing per year. We would not be the place that we are without the steelworks that Corby once had, and we know the devastation that the job losses would cause for the community of Scunthorpe. That is why this is the right thing to do.
We must maintain steelmaking capacity in the UK. In these increasingly uncertain times, we must maintain national security by having the ability to produce our own virgin steel. All options should be open, but the blast furnaces must not be switched off, because once that happens, they are gone. That is the problem in other parts of the country, and it should have been raised at the time. In any modern economy with a central mission for growth, production of our own steel is crucial. That will be at the heart of any future industrial strategy.
I am proud to be here today to support the Bill and to secure a future for steelmaking in the UK.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will try to be brief and stay focused on the Bill. Let me start by saying that we should all focus on the requirement to save the jobs of those 3,500 people who have this threat hanging over them. In fact, I understand from my hon. Friend the Member for Brigg and Immingham (Martin Vickers) that 2,500 people have already received a redundancy notice, and they will be very worried at the moment. Our thoughts should be with them today. Coming in on a Saturday is right if it saves their jobs. I am certainly prepared to vote for that.
The Bill does give vast powers to the right hon. Gentleman the Business Secretary and the Government. As others have said, I trust him personally—this is not an attack on him—but we in this House should never trust Government more than we have to. I have said this on both sides of the Chamber, by the way. I therefore urge him to have another look at the sunset clause, which I raised earlier. It is not saying, “We don’t trust you”; it is saying that sometimes Governments are taken down sidetracks, and before we know what has happened, the powers are beginning to be used for the wrong purpose. I urge him to introduce the sunset clause, or even to do so in the other place, to give the House real powers to come back. For everyone’s sake—even those on the Government Benches—I think that would be worth doing, because it would allow us to have a strong debate on how the powers are being used and would perhaps even enable us to influence what is taking place.
The reason for this debate is clearly the massively changed needs of this country, particularly after the event that we never thought would happen: Russia’s brutal invasion of Ukraine. As a result, weapons and arms are needed on an unprecedented scale, there is a plan to build up the armed forces, and they need the very high-quality virgin steel that is produced in this plant. Without it, we would have to import it. Frankly, China does not produce that quality of steel. The other reason is the tariff war now taking place, which has introduced 25% tariffs on the car industry, which is one of the biggest purchasers of steel. All those things make the Bill very much necessary.
We have another problem, which I hope the Government will deal with in the context of the Bill when they talk to the Department for Energy Security and Net Zero. Things have changed. The Prime Minister himself has said that the world has changed. We have been operating in what we considered to be a global free market. I have argued for some time that this is not a free market. Far too many countries such as China have abused the rules of the free market, subsidised their industries ridiculously and used slave labour to produce their products. When that happens, the free market is dead. We must recognise that we will have to deal with those whom we trust and who do not break the rules. That means a whole rethink of the Government’s China policy and of whether we need to rush to China for investment. We need to ensure that we deal with our industry at home and that we produce things again.
One problem is the energy costs our industry faces, which are really quite stark. Our industry is not just in competition with China; even the costs in Europe are far less now. I will give a short list. The costs in the UK are now the highest in the world, at $400 per megawatt-hour. Germany, which has the highest costs in the rest of Europe, is at $250 per megawatt-hour, while France and the others all have lower costs for producing energy. That energy is critical for the steel industry, and that is one of the big issues that the Secretary of State has to deal with. China, with its subsidies and broken free market rules, is at $60 per megawatt-hour. We should not attempt to compete with it; we must say that it is not competitive at all. [Interruption.] Exactly right, as my right hon. Friend the Member for Goole and Pocklington (David Davis) says.
Others are complaining about China right now. Countries in the far east, such as Vietnam and South Korea, are accusing it of dumping. What we have in China is something that will really hit us hard and make the Secretary of State’s job even worse: very simply, China is now suffering from the over-production of steel. Its housing industry has gone static, and that was one of the biggest users of the steel it produced. Where will that steel go?
By the way, it is no surprise that a Chinese company, Jingye, is involved. In pushing to shut down the blast furnaces in the UK, it knows that we will have to buy slab steel from China. That is not a coincidence; it is all part of the plan. That company is linked directly to the Chinese Communist party, and it is high time that we called that out. In his negotiations, the Secretary of State needs to remind Jingye that the reality is that it is not a private company. The previous Conservative Government should never have awarded it the contract, and I warned them about that. It is time for us to make sure that we deal with China at face value and do not accept the pretence that this company is private or in any way detached from its Government. That is a critical point.
There is much to be dealt with, and I urge the Government to listen to the House and to check all of this. Cheap Chinese steel is a desperate problem for us, and we need to work with other countries in dealing with it. We also need to get our costs down. On net zero, I hope that the Secretary of State will tell the Secretary of State for Energy Security and Net Zero that we cannot go on like this.
Jonathan Reynolds
This is such an important point, and I will be exceptionally brief, but the right hon. Gentleman knows from debates that he and I have been in that I am obsessed with the issue of industrial energy prices and by the very substantial rise from 2010 to 2024—a 50% real-terms increase. As I think he knows, the two fundamental issues are: first, our network charges and how we do those, which is different from other countries; and secondly, fundamentally, the marginal cost is set by the price of gas—the fossil fuel price—for the overall system. I am not completely rejecting everything that he is saying, but we must understand that key point: it is the gas price.
Sir Iain Duncan Smith
I am grateful for that, because it allows me to say something that I had not been planning to say: we sit on an island of gas, so why, for goodness’ sake, are we not drilling for it? We need it, and we will need it strategically. There is a need for strategic industry, and I agree with the Secretary of State on that. However, the issue does not stop there; it stops elsewhere, in the production of energy. I simply leave that point for him, and he can argue it with his right hon. Friend the Secretary of State for Energy Security and Net Zero.
I want to say one final thing. In the course of this Chinese company’s operations, I have talked to a number of people involved in the business, and its record on health and safety and on the abuse of the workers in the blast furnace area has been shocking. We should look into that much more carefully. The company has brought in cheap Chinese workers and pays them nothing like what it pays the British workers. Many of those workers have ended up burned and in great difficulty. I simply say that this is not a company we should be doing business with right now.
Mr Deputy Speaker (Mr Clive Betts)
We will go to the Front Benchers at 1.40 pm, so if Members who are called could be as brief as possible, that would be appreciated.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I thank the Secretary of State for his speech and his decisive action. This will be a meaningful day for the people of Scunthorpe. I know how important jobs in the steel industry are. Davy Roll, otherwise known as Union Electric Steel, has stood at the heart of Gateshead, in our town centre, for over 150 years. It is the only cast steel roll maker left in the country and it is at risk of closure. Steel is incredibly important for our future, and the Government are taking decisive action.
I am reminded today of a place close to my constituency. Ten years ago, the people of Redcar were let down. I pay tribute to Members, including my hon. Friend the Member for Redcar (Anna Turley), for their campaigning. At the time, Redcar had the second most efficient blast furnace in Europe, and yet it was abandoned, along with 2,300 jobs. A proud town was let down. Today, Scunthorpe and Redcar have learned the difference a Labour Government make and the difference decisiveness makes: they save jobs and change lives.
Mr Deputy Speaker
Thank you for that. If Members can keep contributions to around three minutes, that will be helpful. I call Liz Saville Roberts.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd.
Today’s legislation to safeguard the UK’s last bastion of primary steelmaking capacity is of course to be supported, but what my party cannot support is this Government’s approach to steel in the UK, which deems that steel in Scunthorpe is worth saving but steel in Wales is not. Today is a bitter day for the people of Port Talbot, where the blast furnaces have been extinguished because Labour let that happen. Job losses there will take an estimated £200 million from the local economy in lost wages. People in south Wales have been loyally voting for Labour for decades. Do this Labour Government feel proud that those votes have been paid back by Tory-style deindustrialisation in Port Talbot?
Plaid Cymru has called consistently for nationalisation, but the Labour First Minister of Wales rejected our calls and described nationalisation as “pipe dreams”. Labour in Wales was quick to mock our proposal, which we made 21 times—over and over again—in Cardiff and here in Westminster. Now it is UK Labour policy.
The Government must set out how much of the £2.5 billion steel fund will be allocated to securing Scunthorpe, and how that compares with the amount given to support laid-off workers in Wales.
Liz Saville Roberts
The right hon. Gentleman’s Government did not intervene in Wales.
Liz Saville Roberts
I will take no interventions. His Government did not intervene in Wales. Under his Government, Scunthorpe gets security; Port Talbot gets a pittance. Plaid Cymru believes that Port Talbot should and could have received equal treatment alongside Scunthorpe. That is why we have tabled an amendment to include Wales in the terms of the Bill, and to highlight that the measures we are debating today could have been used to save the blast furnaces at Tata Steel in Wales. We will not let Labour hide from the fact that it owns the decision not to intervene to save Welsh steel when it had the opportunity to do so.
Workers and communities must be at the heart of any long-term solution for the steel industry. So far, Labour in Westminster and Labour in Cardiff have worked in partnership to dispatch thousands of Welsh workers to uncertainty and hopelessness. People in Wales will not forget today. It is a day of bitter disappointment for Port Talbot.
Tom Rutland (East Worthing and Shoreham) (Lab)
Today, we are taking an extraordinary but necessary step not just to safeguard a single industry, but to defend the long-term interests of our country. On that point of interests, I refer to my entry in the Register of Members’ Financial Interests.
Let us be clear: today is about not nostalgia, but national resilience and securing Britain’s future. Retaining a sovereign, primary steelmaking capability is critical to our economy and our national security, because steel is the backbone of our infrastructure, defence, energy and transport systems. Without the capacity to make steel from raw materials here in Britain, we are at the mercy of global markets and geopolitical shocks, and we would be outsourcing not just production, but power. Although we are resolute in our commitment to a green industrial future, the transition to clean steel must be a managed and just transition, not a cliff edge. That means keeping the furnaces operating in Scunthorpe as we establish and scale up the electric arc furnaces, because if we lose our primary steelmaking capability, we will not get it back. The skills will be lost, the supply chains broken and we will become entirely dependent on other countries, many of which do not share our environmental or labour standards, or, indeed, our geopolitical outlook.
Let us not forget the people. This is about jobs—good, unionised, skilled jobs that sustain communities, generations of families and the dignity of work. The steelworkers in Scunthorpe are not just making steel; they are making Britain. We owe it to them to ensure that this industry has a future. I pay tribute in particular to the work of Community and GMB unions, which have fought for the future of British steelmaking and British Steel workers.
The Labour party was founded to give working people a voice in Parliament, and, today, as a Government, we are honouring that legacy by standing up for British industry, British workers and Britain’s future. I am proud to support this legislation and I urge all Members to do the same.
Ellie Chowns (North Herefordshire) (Green)
Steel is strategically vital for the UK and the foundation of our industry. We could and should be producing much more of it domestically. Steel is also integral to the green industrial transformation that is essential for our future. Wind turbines, trains, rail tracks and electric vehicles are key elements of the sustainable future for our economy.
The Green party believes that public ownership is the best solution in this case, because only public ownership would give us the control that we need to ensure a proper strategic, long-term plan for the renewal of the steel industry not just in Scunthorpe but nationally. None the less, we will be supporting the Bill.
We do, however, need to think long term. We have an opportunity to reprocess far more of our waste steel to feed our industry, instead of exporting it. We have an opportunity to use the skills of the communities in places such as Scunthorpe to drive that green industrial transformation. Moreover, the Government have an opportunity, a need and a duty to use not just this Bill but the other levers that are available to them to support this crucial strategic industry.
As the Secretary of State has just acknowledged, electricity prices, because they are locked to gas prices, are kept too high. We need to decouple electricity from gas. As the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) mentioned, we should be introducing the carbon border adjustment mechanism at the same time as the EU—a year earlier than currently planned—to protect our steel industry. We should be making use of anti-dumping mechanisms to prevent the dumping of steel that is sold on the global market at below cost price. We should be using industrial and innovation policies to support the development of innovations—which were referred to by the hon. Member for Stockton North (Chris McDonald), who clearly knows a great deal about the industry—that will be the future of the steel industry. We cannot just patch up our old technology. We should be looking to the future and considering what innovations we need to produce clean, green steel as the foundation for that green industrial transformation?
David Smith (North Northumberland) (Lab)
Forty years ago in this place, the Conservative Minister of Trade and Industry said:
“I believe that…privatisation will enable”—
British Steel—
“and its work force to…secure a firmly based competitive industry with a long-term future”.
In the same debate, the then Labour shadow Minister asked whether the Minister has
“not rewarded British Steel…with a plan which quite unnecessarily places its future in jeopardy?”—[Official Report, 3 December 1987; Vol. 123, c. 1107.]
Today, I think we can conclude that that privatisation did indeed place British Steel in jeopardy and that privatisation has left Britain’s steel industry dangerously exposed.
In the post-war period, railways, steel, mines and mills covered the country in a thicket of industry, but for ideological reasons the Conservatives tore those networks apart, with the result that in my North Northumberland constituency, the electricity grid is owned by Warren Buffett, the water system is overseen from Hong Kong, and the buses are ultimately run out of Miami. We have the chance to correct this with British steelmaking, and that is what we are trying to do today. This matters because national security is about much more than defence; it is about trust, mutuality and our common endeavour.
Lola McEvoy (Darlington) (Lab)
Does my hon. Friend agree that home-made steel is the fire in the belly of this country’s industrial strategy, and that without steel being made on our shores to the highest quality, we are weaker? Today’s Bill—a Labour Bill—will guarantee the future of steelmaking in our country, which is essential.
David Smith
My hon. Friend makes a good point, and I agree absolutely. I want my constituents to trust that the people pumping their water, providing their power, connecting them to the wider world and making their steel have their interests at heart. I want them to get jobs in businesses that serve the common good, not international stock markets or foreign Governments. We need to have strategic industries in-house, so that we can trust that our economy is working for us.
As we have heard today, Jingye appears to have at heart not the interests of the British people, but its own profit. Why should we accept that a decision made in a boardroom in China with links to the Chinese communist party can risk wiping out an industry that is the heart of one of our communities, and vital to our nation’s flourishing? If we were ultimately to nationalise steel, that would not necessarily be a perfect solution. A sluggish and over-subsidised steel producer would not serve Britain’s interests any more than one owned by foreign firms, but I believe we should keep nationalisation on the table. As my hon. Friend the Member for Stockton North (Chris McDonald) said, we have the expertise and certainly the passion here in this country to succeed, and recent events have proved that the safest way to safeguard strategic parts of our national infrastructure is to do it ourselves.
Privatisation has often been very bad for our country. That it takes Government intervention to secure the continuation of our last remaining plant producing virgin steel speaks volumes. My hope is that we soon move to the full nationalisation of British Steel and align that with our planned massive investment in skills through Skills England. After decades of fire sales of British industry, it is time for us to rebuild our industrial pride, our national security and our social covenant. To those ends, I urge the House to back Britain and back British Steel.
Several hon. Members rose—
Mr Deputy Speaker
Order. I remind Members that each contribution should take no more than two to three minutes.
Clive Jones (Wokingham) (LD)
A potential tragedy is unfolding for many people in the Scunthorpe area, not just those at the steelworks, but people in the wider community who work in the supply chain, their customers and workers in the local economy, and the family and friends of those working at the steelworks. Well over 35,000 families in this country could be affected—nearly a whole parliamentary constituency. Trump’s steel tariffs will hurt the UK steel industry. Trump supporters in this House in the two shades of the blue team are strangely silent on the impact of his unnecessary tariffs. Has anyone heard them condemn Trump’s tariffs? No. The Liberal Democrats believe the Government should stand strong against Trump’s 25% tariff.
The relationship between the Jingye company and the Government has clearly broken down, which is why the Secretary of State is taking wide-ranging powers for himself. As it appears that the Bill will be passed today, I have two questions for him. Can he confirm that the pension fund of employees and former employees is not in deficit, that all company contributions are up to date, and that the assets of the scheme have not been transferred to the holding company or any offshore business; and if they have been, will he commence measures to get them back? Can he also confirm that ownership of the assets of the business, such as plant, land and buildings, have not been transferred to any holding company or offshore business?
Laurence Turner (Birmingham Northfield) (Lab)
I am glad to be called in this debate. I declare an interest: the GMB—one of the steelworkers’ unions, whose parliamentary group I chair—has donated to my constituency party.
Twenty years ago, the MG Rover car plant in my constituency collapsed, with devastating consequences that are felt to this day. Today, all our thoughts are with the steelworkers and their families at Scunthorpe and Teesside, and I hope that we can do something to avoid such a future for them.
I do not want to speak for too long, but I would like to make a few points. First, today’s decisive action is welcome. I think all our constituents would rather have a Government who acted at great speed than a Government who acted too late. Secondly, I echo the point raised earlier by my hon. Friend the Member for Brent East (Dawn Butler) about the importance of steelworkers’ participation in the days ahead. If the Government could also clarify any changes in plans for the UK Steel Council, that would be appreciated. Thirdly, what role will Jingye now have in the running of British Steel on a day-to-day basis? It is clear that workers have lost confidence in the management—as shown by reports this morning that management from Jingye were refused entry to the plant—and that a change in that day-to-day management is needed.
I would like to respond to a couple of points made in the debate. The last time that this House carried legislation that had the effect of nationalising steel, that legislation was 108 pages long. Nationalisation is clearly outside the scope of the urgent emergency legislation that we are debating today. We have also heard much about costs, including energy costs. I do not wish to add to the informed comments made earlier, but the OECD has also said that the root cause of the industry’s current problems is “global excess capacity”. In other words, the UK has been left at the mercy of over-production and the dumping of artificially subsidised goods. The Manufacturing Trade Remedies Alliance has long called for our trade defences to be strengthened, and I hope that those calls will be listened to in a way that they were not under the last Government.
I would like to end on a personal note, because I have thought about one person in particular today: a family member, my aunt’s father, who began his career at the Ravenscraig steelworks in Motherwell. He rose to become a branch officer, national executive member and later a salaried official of the Iron and Steel Trades Confederation, the forerunner of today’s Community union. In the peripatetic life of a trade union official, he later worked in the west midlands, Corby and Scunthorpe. He was fierce in the defence of his members, and the gentlest and most modest of men in private. I understand that he is still remembered on the executive of Community, and if he could be here today to witness this most difficult chapter in the steel industry’s history, I am sure that he would offer valuable perspective and wise counsel. With your permission, Mr Deputy Speaker, I would like to enter his name in the record of this place: Dick Knox.
Mr Deputy Speaker
I thank all Members for their help in being brief for the last few contributions, but unfortunately we have time only for a final Back-Bench contribution. I call Sir Jeremy Wright.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I am grateful to you, Mr Deputy Speaker.
I can accept that there is broad agreement in this place that we should take action to preserve virgin steelmaking capability in the UK, but quite frankly, it is not enough for this House just to agree that we should do something. It is our responsibility to look at the detail of what the Government are proposing and to decide whether it is properly targeted and appropriate for the task. There is not going to be a Committee stage or a Report stage in this Bill; that is what the clock tells us. This is our only opportunity to look at the detail of the Bill, and I am afraid that precious little of that has been done today.
Let us have a look at what powers the Secretary of State is going to be given—by the end of today, as things will probably unfold. The Secretary of State will have powers that apply to all steel manufacturers in England and Wales, not just to the particular company over which he has specific concern. There will no doubt be shivers running down the spine at Tata Steel as well, because the Bill applies to that company too. The Secretary of State can act, according to this Bill, in order to instruct those companies to deal in specific ways with what are described as “specified assets”. As I mentioned to him earlier, that does not limit the measure to blast furnaces or to anything else that is specifically required to generate virgin steel. The Secretary of State can give directions to ask and require a company to do pretty much anything that company could otherwise do, and if the company refuses to do it, the Government have powers to take control of assets, including powers to enter premises by force if necessary, and criminal penalties that can lead to imprisonment. These are very serious powers indeed, and I am afraid that this House is simply not being given the opportunity to scrutinise them as they require. They also look suspiciously, by the way, like nationalisation—so perhaps it would be easier to call this thing what it really is.
Let me address one or two specifics before I finish. I hope that the Secretary of State, for whom I have huge respect, will think about—I think he has and will—some of the problems that this legislation will throw up. First, there is highly likely to be considerable controversy over whether a company in question is complying with a Government instruction. A company is likely to argue that point. As the Secretary of State pointed out, in respect of his particular concern we are dealing with a company that he does not trust and that he believes has acted in bad faith thus far. I have no reason to think, nor does the Secretary of State, that the company might not continue to do so.
Secondly, the Secretary of State is making himself responsible for claims against the company that arise from specific instructions given to it by the Government. That is what the indemnity clause means. In those circumstances, there will be a further dispute about whether the relevant problem has arisen because of what the Government have told the company to do or because of something it has control over. As I said, the Secretary of State is enabling there to be two hands on the tiller, and that will store up headaches for the Government. I urge him, despite the fact that we have not had the chance to explore the matter today, to think very carefully about how the Government will protect themselves and the taxpayer from the oncoming complexities.
Mr Deputy Speaker
I call Dame Harriett Baldwin for the official Opposition.
Dame Harriett Baldwin (West Worcestershire) (Con)
I add my thanks to everyone who has enabled us to be here this afternoon, but the fact is that this is a bungled way to do parliamentary legislation, following a bungled set of negotiations, and we are likely to end up with a bungled nationalisation. The Labour Government have landed themselves in a steel crisis entirely of their own making. They have made poor decisions and let the unions dictate their actions. The fact is that the union-led Labour Government have bungled the whole negotiation, insisting on a Scunthorpe-only deal that is not viable.
Frankly, the Government should have seen this coming. In fact, instead of addressing it 16 days ago, when British Steel announced its plans to close the site and Parliament was sitting, their incompetence has led to this last-minute emergency recall. Colleagues including my hon. Friend the Member for Brigg and Immingham (Martin Vickers), the Tees Valley Mayor Ben Houchen and Councillor Rob Waltham of North Lincolnshire Council have been warning about the issues at British Steel. But no: Labour Ministers thought they knew better. The British public can now see the Government scrambling for a solution to a problem they created and could have resolved months ago.
Graham Stuart
The Government give themselves powers in the Bill to compensate steel undertakings, yet the Minister has told us nothing about the scale of that or the estimate of it. The Secretary of State tells the House that he has no trust or abiding faith in the company, but he is giving himself powers to give whatever sums he deems appropriate to the company. Do we not need more answers before we pass this legislation?
Dame Harriett Baldwin
I wholeheartedly endorse what my right hon. Friend said. All new Government Members should be aware that the explanatory notes to the Bill, which have only just been circulated to colleagues, make it very clear—[Interruption.] I hear cries of “Shame!” from behind me. On the financial implications of the Bill, the explanatory notes say that there has been no impact assessment of the effect on the country’s finances, and nothing has been prepared for this House while we make this decision today.
The Bill is a sticking plaster for a Government who, in opposition, had years to come up with a plan, but they have dithered and delayed. Ultimately, nothing will change for UK steel until the Government understand the damage that unrealistic and impossible “net zero by 2050” targets have done to British business and industry.
We have heard a range of really excellent contributions from my hon. Friends. From the Father of the House, we heard an excellent exposition of the importance of this industry to his constituents in Lincolnshire and the impact of energy costs on the industry. We heard from the great champion of the industry, my hon. Friend the Member for Brigg and Immingham, who has regularly brought this issue to the forefront of Members’ consideration. We heard from my right hon. Friend the Member for Goole and Pocklington (David Davis), and from my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who raised incredibly important issues to do with tariffs and China. We then heard from my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), who raised some important legal questions.
If I may in the time available to me, I would like to raise a few further detailed questions for the Minister to respond to when she gets to the Dispatch Box. The Secretary of State has said that he does not want these powers indefinitely, so why will Labour Members not back our amendment to implement a sunset clause for this Bill?
We have heard from a range of voices in the debate about the confusion over the territorial extent of this legislation. It makes it very clear that the territorial extent applies to England and Wales only, yet clause 2 refers clearly just to England. There is another thing I would like the Minister to make clear at the Dispatch Box: if a new provider came into the UK and decided to set up a new steel-making enterprise in England or Wales, would that new enterprise be covered by this legislation?
Can the Minister also tell the House what the Attorney General has advised on compliance with international law, including article 1 of protocol 1 to the European convention on human rights, the World Trade Organisation subsidies agreement, and the trade and co-operation agreement, particularly with reference to state aid?
The Secretary of State was unable to tell the House this morning how much this intervention will cost. We are being asked this afternoon to sign off on a bottomless pit of money. How often will this House be given an update on how much taxpayer money is being sent into this bottomless pit? Families across the country are already being hit in the pocket every day. Can the Minister give the House a ballpark figure from the Dispatch Box? Are we talking about £100 million a year? Are we talking about a billion? Are we talking about more than a billion?
It is a fact that the Government themselves have made the situation worse for the steel industry with their determination to impose higher energy prices, higher taxes and higher business rates. Where is the steel strategy that they have had nine months to develop? What we can say with certainty about today’s legislation is that this is no way to govern the country. Whenever Labour negotiates, Britain loses. We can see for ourselves that this is a Government controlled by events; they are not in control of events. Yet, according to the Secretary of State, it is everyone else’s problem and nothing to do with them. This Government have treated Parliament with disdain. We have had nine months of dither and delay for these workers at Scunthorpe. When Labour negotiates, Britain loses. I look forward to hearing the answers to all those questions from the Minister.
The Minister for Industry (Sarah Jones)
I thank hon. Members on both sides of the House not just for participating in this debate, but for returning to this place in these exceptional circumstances. There seems to be some debate about it, but I think this is the sixth time since the second world war that we have met on a Saturday, and only the second time that the House has been recalled on a Saturday—the other being during the Falklands war.
Before I respond to Members’ comments, I echo the point made by my right hon. Friend the Secretary of State in his opening remarks: this Government will never hesitate to protect our steel industry and the thousands of steel workers in this country who built it. We always said, from the outset of our negotiations with Jingye, that we would keep every option on the table and would act in the national interest to protect jobs. UK-forged steel built our railways, bridges and buildings. It is integral to our economy’s future, just as much as it has been to our rich industrial past. That is why we need to pass this legislation today.
I will try to address as many of the points raised as I can. Members made the argument for British Steel. My right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) pointed out that 95% of Network Rail steel is from British Steel. My right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) pointed out that TfL would not get anywhere were it not for steel. My hon. Friend the Member for Stockton North (Chris McDonald), who has such expertise, pointed out that steel is the future and everything we have is made from or with steel.
I can reassure the House that our plan for steel—the £2.5 billion that we committed to in the manifesto—will work to break down the trade barriers that we have on steel, consider the all new technologies that we can introduce, and look across the whole of the UK to ensure that we protect steel everywhere.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Minister speaks about the whole of the United Kingdom. I am very pleased that the Government are acting, literally at pace for once, by stepping in to protect the workers in Scunthorpe, in precisely the opposite way to when they turned a blind eye to the plight of workers at Grangemouth, which is also critical national infrastructure labouring under energy prices. Why is there one rule for industrial production in England and another for industrial production in Scotland?
Sarah Jones
In the first 10 weeks after coming to power, this Government negotiated a better deal on Port Talbot and delivered a £200 million commitment to secure the future of Grangemouth. We acted last week on the zero emission vehicle mandate to secure our automotive industry. We are acting today to save the workers of Scunthorpe. The Government believe in direct action—in an active state securing the future of our industry across the UK.
My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) raised trade protection issues. I want to reassure her that we will ensure that the right trade protections are in place for our steel industry. Concerns were raised about future decisions about moving towards nationalisation and whether we would come back to this place. I can reassure the House that we will come back to this place if are any further matters relating to ownership or otherwise. We will keep the House updated.
Concerns were raised about the “reasonable excuse” part of the Bill, and examples were requested. The “reasonable excuse” clause could include physical inability, illness or accident, and it is reasonable and measured in this case.
Many hon. Members talked about China. We are focusing on this company today; we are not focusing on the nation of China. The Bill is about what has happened with British Steel and what this Government are going to about British Steel. I would not want this House to believe that the policy of this Government is anything other than a belief in free and fair trade, and that includes with China.
Turning to the sunset clause amendments that have been tabled and the suggestions during the debate that those measures should be included in the Bill, I reiterate what the Secretary of State explained about the risk of a hard backstop reducing our leverage, which was why we did not include a sunset clause. However, we have heard the House’s concerns. I confirm that we will repeal the legislation as quickly as we can and that we will involve the Select Committee. I also make this pledge to the House: we will update the House regularly and the Secretary of State has committed to do so every four working weeks. I hope that that will give the House reassurance.
Several hon. Members rose—
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
I welcome the Government’s actions today. I thank my hon. Friend the Minister for Industry for all the hard work that she has put in to get us to this place. Does she agree with me that our future industrial strategy must contain an extended section on Government procurement for steel, so that British-produced steel has a fair crack of the whip in the future?
Sarah Jones
My hon. Friend is right that procurement has a key role to play in our industrial strategy in steel and beyond. We are working with colleagues in the Cabinet Office to ensure that that is the case. I speak to the hon. Member for Brigg and Immingham (Martin Vickers) about these issues regularly, as does the Secretary of State—
Graham Stuart
On a point of order, Mr Speaker. It is reported that Jingye management has been turned away by workers and the Humberside police today, so will the Minister tell the House whether the Government’s policy is to bar Jingye management from going on to the premises?
Mr Speaker
As the right hon. Member knows, that is great information but not a point of order.
Sarah Jones
I will not comment from the Dispatch Box on reports that have been made during the debate. We are actively engaged, minute by minute, on activities in British Steel. If anything, those reports underwrite the need for the powers in the Bill to be introduced on this day. I hope all hon. Members will support the introduction of the legislation and vote for it today.
The hon. Member for Brigg and Immingham suggested that we could have moved faster. I reassure the House that we do not recall the House lightly. We do it because we have a choice today: do we want to deny any possibility of the future of the steelworks at Scunthorpe and do we want to see the closure of the blast furnaces, or do we want to secure a future for those workers and for primary steelmaking in this country?
Brian Leishman (Alloa and Grangemouth) (Lab)
On that point, will the Minister give way?
Sarah Jones
I hope my hon. Friend will forgive me, but there is no time for me to give way. I reassure the hon. Member for Brigg and Immingham that in no way have we moved slowly—we have been moving at pace throughout our time in government.
There were suggestions that we should move to nationalise British Steel today and that this Bill is already nationalisation. It is not nationalisation and we are not moving to nationalise British Steel today. We are taking very significant powers that we do not underestimate. That buys us time to have the leverage and the time we need to look at what must be done next, but we will act in the national interest. As the Prime Minister said yesterday, nothing is off the table. There was a suggestion that we should use the Civil Contingencies Act 2004. That is difficult to do because it is very hard to meet the criteria; there has to be a risk of death, so we did not meet that criteria.
I agree with my hon. Friend the Member for Sefton Central (Bill Esterson) that economic security and national security are two sides of the same coin. The emergency legislation we have brought forward today is essential to protect British Steel, its workforce and the national interest. This Government will never hesitate to act in the national interest to keep Britain secure at home and strong abroad, and this legislation is proof of that. Today we take back control, and I urge all Members of this House to vote for this Bill.
Steel Industry (Special Measures) Bill (Money)
Saturday 12th April 2025
(4 days, 21 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(4 days, 21 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Madam Deputy Speaker (Caroline Nokes)
It might be helpful if I begin by explaining how the Committee stage will proceed. A number of amendments have been tabled, published and selected for debate. The amendment paper and selection list are available in the Vote Office. However, because it is now after 2 pm, there is no time available for debate. Amendments that are not debated are not subsequently selected for separate decision.
Alex Burghart (Brentwood and Ongar) (Con)
On a point of order, Madam Deputy Speaker. It is obviously deeply regrettable that the Government were not prepared for the eventualities that they have faced. We know they were not prepared because the Bill was not ready until 9.30 this morning. An obvious omission from the Bill is a sunset clause, and many Members here today have spoken in favour of such a clause. Indeed, Ministers have suggested that they want this legislation to be time-limited. Consequently, it is deeply regrettable that it sounds as though the House will not have an opportunity to vote on a sunset clause. Can you advise the House on whether there is anything that can be done at this stage to ensure that we get a vote on amendment 1 and/or new clause 2?
Madam Deputy Speaker
I thank the hon. Member for his point of order. He will know that it is long-standing practice that the Chair does not select for separate decision any proposition that has not been debated. It is therefore not possible for any of the amendments or new clauses to be called at this stage.
The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Order, this day).
Clauses 1 to 10 ordered to stand part of the Bill.
The Speaker resumed the Chair.
Bill reported, without amendment.
Question put forthwith (Order, this day), That the Bill be now read the Third time.
Bill read the Third time and passed.
Mr Speaker
Under today’s order of the House, I may not adjourn the House until any messages from the Lords have been received and I have reported the Royal Assent of any Act agreed by both Houses. The House is accordingly suspended until we have received a message from the House of Lords about the amendments to the Bill and I am able to signify Royal Assent. I will arrange for the Division Bells to ring, and for a message to appear on the annunciators, a few minutes before the sitting is resumed.
Mr Speaker
I inform the House that a message has been received from the Lords, as follows:
“The Lords agree to the Steel Industry (Special Measures) Bill, without amendment.”
Royal Assent
Mr Speaker
I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Act:
Steel Industry (Special Measures) Act 2025.
Adjournment
Mr Speaker
Before I adjourn the House, I once again pass on my thanks to all the staff of the House, who have worked extremely hard at very short notice to make this sitting happen. The House stands adjourned —I have had apologies from Jim Shannon, by the way. [Laughter.] Have a good Easter, everyone.