The Modification of the Law (British Steel Limited Property Transfer) Regulations 2026

Blair McDougall Excerpts

Monday 12th October 2026 General Committees

[The Parliamentary Under-Secretary of State for Business, Innovation, Science and Trade (Blair McDougall)]

I beg to move,

That the Committee has considered the Modification of the Law (British Steel Limited Property Transfer) Regulations 2026.

The regulations were laid before the House on 16 July 2026 under the affirmative procedure. Steel is foundational to our economy and national resilience, and to the critical infrastructure on which communities and businesses across the country rely. The House will be well aware that British Steel is one of the UK’s largest steel producers. The steel that it forges is used by our clean energy sector, in construction, in our bridges and on our railways. In other words, Britain needs British Steel.

The decision to bring British Steel into public ownership was not taken lightly. The Secretary of State at the time of the transfer, my right hon. Friend the Member for Hove and Portslade (Peter Kyle), considered the public interest test carefully prior to making a decision, before deeming it necessary to nationalise British Steel based on the relevant factors and the likely costs. Given the financial challenges that the company is facing and has faced for some time, the Government’s assessment was that without taking British Steel into public ownership, there was a significant risk that it would fail and that this essential steelmaking capability would be lost.

We could not sit by and do nothing—the company’s collapse would have led to serious and difficult-to-reverse consequences for steelmaking capacity, supply chain resilience, workers and the communities that have supported the business for generations—so the British Steel Limited Property Transfer Regulations 2026 transferred certain property, rights and liabilities of British Steel to a new publicly owned company, wholly owned by the Secretary of State immediately on 16 July.

The regulations before the Committee are a necessary, targeted and technical part of the transfer. They were made to ensure the effectiveness of the transfer and the operations of the new public company. This statutory instrument is needed to protect the continuity of operations and give legal certainty to employees, customers, suppliers and other parties affected by the transfer.

The statutory instrument addresses five technical areas of the law that require modification to ensure the effectiveness of the transfer of British Steel, reflecting the fairly unique nature of that transfer—a legislative nationalisation at pace—which was not envisaged when the relevant laws were first drafted. First, the instrument puts beyond doubt that the Transfer of Undertakings (Protection of Employment) Regulations 2006—known as TUPE—apply with regard to employees moving from the old company to the new company. This provides British Steel employees with certainty about the continuity of their jobs and terms and conditions after the transfer.

Secondly, due to the unusual situation and pace of the legislative transfer of British Steel’s business, the instrument disapplied the TUPE requirement for the current employer to inform and, where appropriate, consult elected or trade union employee representatives, in the context of this specific transfer only.

Thirdly, the instrument provides that British Steel does not count as a “public authority” subject to the Freedom of Information Act 2000 and the Procurement Act 2023, reflecting the fact that it operates and competes in the private sector rather than as a traditional public body.

Fourthly, the instrument rules out the possibility that Ministers and civil servants count as “shadow directors” of the company, and fifthly, it disapplied rules around the reuse of a company name by a new company when the original company goes into insolvent liquidation.

Taken together, the modifications have enabled, and will continue to enable, the new publicly owned company to function properly while the Government stabilise the business and consider its long-term future. Due to the need for the transfer to come into effect immediately, it was necessary to make this instrument simultaneously with the transfer regulations, and it came into force immediately on 16 July as a made affirmative instrument. The House will rightly expect scrutiny of the decision to make the law modifications in the regulations, and I welcome that today. We have brought the instrument before the Committee so that Members can consider and approve the legal modifications needed to give full and effective operation to the transfer.

In summary, the instrument is limited in its scope of modifications, restricted as they are to British Steel’s specific case, and necessary to make the nationalisation effective. It provides legal certainty, supports employee protections and helps to secure the continuity of British Steel following its transfer into public ownership. I therefore commend the regulations to the Committee.

--- Later in debate ---

[Blair McDougall]

I appreciate the constructive tone of the Opposition spokesperson’s comments. Let me get into the specifics he raised. The steel strategy that we set out takes specific action with regard to the profitability challenge that he rightly mentioned. It includes targeted measures on global overcapacity, energy prices, issues around procurement and the availability of scrap.

On energy prices, I direct the hon. Gentleman to the changes we have made with the supercharger scheme. For the steel industry more widely, applications have opened in the last few days for the British industrial competitiveness scheme, which will have a significant impact for many manufacturers.

The changes in the regulations in respect of the Procurement Act 2023 and the Freedom of Information Act 2000 are a recognition that yes, British Steel is ultimately owned by the taxpayer, but it has to operate as a commercial company. We do not want it to have disadvantages or advantages compared with other operators in the field.

The hon. Gentleman is right to say that we have a responsibility to make sure that the company is run as efficiently and effectively as possible. That is exactly the work we are currently doing, including through the appointment of the new chair, Alan Lovell, who will work with UK Government Investments and the DBIST representative on the company board.

On SSUK and, indeed, the whole ecosystem, the hon. Gentleman is exactly right to point out that we need to take an entire-steel-sector view of the future of British Steel. One of the unique things about our steel ecosystem is that there is not a great deal of like-for-like competition, and we do need companies to work together. That will be a key part of the work to produce the plan for the company’s future.

We fully recognise the significance of the decision to bring British Steel into public ownership. It was a serious step taken in exceptional circumstances, and only after careful consideration of the public interest. The regulations do not revisit the whole question of nationalisation, and they certainly do not intend to take us back to the 1970s—although I would argue that pop music was better in that decade. Their purpose is narrower, but it is important to ensure that British Steel’s specified property, rights and liabilities operate effectively in law, and that the necessary legal clarity and certainty is in place following the transfer. That certainty matters. It matters for employees, whose rights and protections must be clear; for customers and suppliers, who need confidence that the business can continue to operate; and for the wider economy, which relies so much on steel.

I reassure the Committee that the Government understand the need for proper scrutiny. The regulations were made using powers passed by Parliament in the Steel Industry (Nationalisation) Act 2026 and are subject to approval by both Houses. This debate has been an important part of the process. The statutory instrument is technical, targeted and proportionate. It supports the effective operation of the transfer, protects continuity and gives confidence to those affected by the transition into public ownership. For those reasons, I commend the regulations to the Committee.

Question put and agreed to.