Steel Industry (Nationalisation) Bill

Graham Stuart Excerpts

Committee of the whole House
Monday 8th June 2026 Commons Chamber

[Richard Tice]

Actually, the consequence of the Conservative party’s amendments would be to delay the vision and investment that is required, and therefore to increase the losses. That is why they should be ignored. If you are going to do a job, then for heaven’s sake, do it properly and get on with it. That is the difference here.

We need the blast furnaces to be refurbished and relined, and we need a plate mill. We need proper, committed investment. We need the Minister to have a pro-British steel procurement strategy at all levels of the public sector, from warships and the railways to even the planning conditions for a new Chinese embassy—let’s make it with British steel from Lincolnshire, not cheap Chinese steel from far away.

[Graham Stuart (Beverley and Holderness) (Con)]

I am trying to understand how constraining Government powers in the three areas of concern would in any way lead to a delay. I do not think that any constraints imposed would stand in the way of this undertaking. In what way would there be a delay? I may not have sufficiently understood the linkage between such constraints on Government powers in other undertakings and how on earth those would impact this particular one.

[Richard Tice]

It is my judgment that the Conservative party’s amendment would prevent the Government from getting on and setting out the vision, placing the investment that is required, and giving the confidence to everybody that there will be a steel-making capability for primary steel. Once we get that investment in the core asset in Scunthorpe—with a refurbished, renewed blast furnace that is ready for the next 50 years—then, with brilliant management from the private sector, we will start to attract private sector capital, which we all want to bring in. This is a moment that requires the proper seed investment, the commitment and the courage from this Government to get on with it, which was so lacking in the previous Administration.

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[Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)]

I am pleased to speak in support of the Bill and comment on a number of the amendments. I do so as a Member of this House who represents a proud manufacturing constituency, which includes a number of industries that rely on steel in a variety of ways, from the rail industry and advanced manufacturing to the cluster of innovative defence and space-related companies at NETPark—North East Technology Park—in Sedgefield. Steel is not only used by some of those companies, but extensively used in their supply chain. It underpins manufacturing not just in my seat, but across the north-east and many other constituencies in the country, as we have heard. I have also campaigned successfully to protect sovereign supply of key materials in my constituency and the wider economy. Given the importance of steel to our national security and national critical infrastructure, it is crucial that we get our approach to steel right.

So what does this mean? First, as hon. Members across the House have said, we need to ensure that the Government can act quickly and with agility. That is why I have concerns about several amendments, which, as other colleagues have raised, could slow down the Government’s ability to act decisively. That appears in a number of amendments but, for example, amendments 2, 3, 18 and 19 and new clause 2 seek to impose additional requirements on Ministers before they can act using the provisions of the Bill. Others have gone into some of the specifics, but my concern is that when considered in the round, these proposed changes would have the cumulative effect of hampering the Government’s ability to act and to act swiftly. It is critical that Ministers can act because that is the key purpose of the Bill; that is why we are here debating it today.

Why is it important that Ministers can act quickly, and why might some of the amendments be a challenge? Because, as we are discussing, when a steel plant faces significant challenges and the Government are minded to intervene, Ministers need to achieve three things. First, they need to be able to provide certainty about the future of the business, which helps sustain the workforce and gives certainty to its supply chain and reassurance to its contractors. We have heard Members talk from their private sector experience—I myself worked in regeneration and housing previously—that when there is doubt about the future of an industry or a particular business, or there is a particular commercial concern, we know that when business confidence starts to fall, if action is not taken quickly, the lack of confidence in the supply chain and the contractor chain can do serious damage.

The second priority for Ministers must be to minimise risk. We know not just in this process, but in other similar processes undertaken by the public and commercial sectors that the longer the process, the higher the commercial and legal risk and the more likely it is that we will not get the outcome we desire. It was that desire to act swiftly and show significant national leadership that, as hon. Members mentioned, is why we were all recalled last year on a Saturday, to intervene quickly in the steel sector.

Thirdly, and crucially, the reason that speed is important is if this is agreed, it is important that Ministers have the powers they need to enact the will of Parliament quickly. Quicker intervention in circumstances like this, given the factors we have discussed, is likely to be more successful, particularly in complex cases as we see at British Steel in Scunthorpe.

[Graham Stuart]

The hon. Gentleman makes the point about the need for speed in these circumstances, but perhaps he could explain to the House why the endless resetting of a sunset clause, contradicting the whole purpose of a sunset clause, plays into the need for urgent action right now? Or does he agree that it is something that should be looked at again and does not need to delay any of the effective action for which he is calling?

[Alan Strickland]

Ministers will speak for themselves, but I think they are seeking the flexibility to act in the national interest and to do so appropriately. My concern is more with some of the clauses that add lots of prerequisites to what needs to happen before Ministers can act. My view is that in the limited, and hopefully rare, circumstances where Ministers do feel the need to exercise these significant powers, they need to be able to act quickly, and that is what we are discussing today.

Several of the amendments relate to concerns around value for money, which of course is an incredibly important consideration. It is important for all of us to remember that one of the key reasons we are here today is precisely because Ministers have said that they want to do more to ensure value for money for taxpayers delivered in the Government’s potential intervention in British Steel Scunthorpe. That is why my hon. Friend the Minister for Industry was clear in May that the Government intended to bring this legislation forward precisely because Ministers were unable to agree suitable terms with the current owner of British Steel that represented a

“responsible use of public money,”

so value for money has been a key driver of ministerial action on this matter and the reason we are debating it in the Chamber today.

I turn to new clause 5, which the hon. Member for Boston and Skegness (Richard Tice) was just describing. I am sort of slightly astonished that Reform, a party with no plan for steel, has put an amendment demanding a plan for steel. I am pleased to tell Reform Members who are here that we already have one. The Labour Government, as the Minister mentioned, published the UK steel strategy in March. It clearly addresses a number of the important points that the hon. Member rightly mentioned earlier, including specifically the need for the public sector to buy more steel. A year ago in June 2025, the Cabinet Office published guidance—procurement policy note 22—that required public bodies nationally and locally, and their executive agencies, to ensure that UK-produced steel is routinely considered in public procurement and that this is done at an early stage in the process, so the mention of public procurement around steel in that amendment is redundant. Ministers have already issued clear guidance on that some time ago.

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[Ann Davies (Caerfyrddin) (PC)]

I rise to speak to amendment 23, tabled in my name, which seeks to strengthen the public interest test that decides when Governments may nationalise steel sites under the Bill. Specifically, it would ensure that nationalisation can and should be used to prevent the loss of jobs in Wales and to prevent the closure of 16 sites in Wales.

Why is this change needed? Currently, the public interest test notes three specific factors for when nationalisation powers may be used, two of which are

“the construction, maintenance and operation of critical infrastructure in the United Kingdom”

and to support

“the economy of the United Kingdom or any part of the United Kingdom.”

While those provisions could allow the Government to intervene to protect Welsh steel sites, they offer no guarantee that they will.

Welsh steel communities know all too well what happens when Governments choose not to act. We have experienced this before. Port Talbot stands as the most painful example, where the blast furnaces were allowed to close in 2024, resulting in thousands of job losses and devastating a community that had a proud history of making steel for over 100 years. Before the closures Wales had the largest steel workforce in the UK, with 9,300 people employed in the sector. The Labour party had several years in opposition prior to entering government; the Government could have developed a plan to nationalise Port Talbot to safeguard jobs, as they have done for British Steel in Scunthorpe. They could have acted, but chose not to. Port Talbot deserved equal treatment. Wales deserves equal treatment. The Welsh economy cannot afford a repeat of the calamity of Port Talbot.

The need for certainty is not theoretical. Only recently, last Thursday night, a major fire at Port Talbot caused significant disruption. We are so grateful to the emergency services for acting so quickly, evacuating the area so there were no casualties, but significant damage was caused to the steelworks. We have also learned that the installation of a new electric arc furnace at Port Talbot may be delayed for months because of an electrical connection issue. I believe that is a planning issue with the local authority. These events have not helped the precarious situation at Port Talbot. To safeguard the site and jobs, the Government should make it clear that they will step in to prevent closure or job losses, as a measure of last resort—a position Plaid Cymru has consistently called for.

Steel jobs in Wales are not just jobs: they are strategic assets. They are essential for the future of our economy, for major infrastructure projects and for the development of offshore wind in the Celtic sea. They are also the backbone of our communities from one end of Wales to the other. Alongside Port Talbot, Wales is home to the Trostre works in Carmarthenshire, 7 Steel in Cardiff, Tata in Llanwern and the steelworks at Shotton in the north-east of Wales. Each of these sites deserves the same level of protection that is being offered to sites in England. All deserve equality.

[Graham Stuart]

Does the hon. Lady share my concern that the funds put in place by Government—£2.5 billion for the steel plan—are completely inadequate to match the enthusiasm of Members across the House for nationalisations? The National Audit Office suggests there would be £1.5 billion in losses from running the Scunthorpe plant alone, without any investment and without any compensation for Jingye, so the £2.5 billion would be rapidly gone. The truth is that this House and this Government are unable to put in place the sums of money that would allow Scunthorpe sensibly to be supported and invested in, let alone the long string of 16 sites in Wales that the hon. Lady so bravely speaks up for today.

[Ann Davies]

I thank the right hon. Gentleman for his intervention. Some £500 million has been ringfenced for Port Talbot; that money is rapidly gone, with no benefit to the local community, but that is another issue that I will not talk about now.

We want an end to the double standard. Welsh steel must be given the same guarantees as English or Scottish steel. What we want is equality for all the sites across the UK; we want the same security and the same commitment to preventing closures and safeguarding jobs.

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I worry that if we pass Opposition amendment 12, we will bake in instability and loss of control, and we will not allow some of the long-term issues to be addressed when Government intervention is needed to ensure long-term resilience in the national interest.

[Graham Stuart]

The hon. Gentleman is giving a powerful speech and showing great expertise. Is he confident, as so many critics of the steel plan were not, that the £2.5 billion that has been found by the Treasury is sufficient to allow the interventions that he so enthusiastically supports? If it is not, is there not a danger that we will not invest in things, but just bleed out public cash on facilities that continue to be uncompetitive and do not get renewed? If we do not put the right resource in, as France and other countries have arguably done, we will be losing out and not winning.

[Luke Myer]

As a Back Bencher, I will always fight for more funding to modernise our steel industry. What I do know is that the current owners of British Steel are not responsible owners. We saw last year the crisis that was created when they failed to provide sufficient supply to keep the blast furnaces running. We cannot allow the current situation to continue if we are to protect our domestic industry. This Bill is about having the powers to nationalise and ensure that the national interest is served. Whether there is sufficient funding is a question on which I will continue to push the Government.

We are not focusing today on clause 58, but the freedom to make the necessary fiscal decisions to support operational stability and competitiveness is fundamental to the sunset clause we are discussing, as well as the potential for ongoing considerations on other critical assets that the Bill might be used for. It would be helpful to hear more about the Government’s intentions on issues like energy and procurement, as my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) said. We had a positive intervention from the Cabinet Office last year and the ambition to increase domestic steel market share back towards 50% is right, but the test will be in the delivery.

For too long, we have had industrial strategies while approving publicly backed projects that import vast quantities of overseas steel. Taxpayers rightly expect public investment to strengthen British industry and British jobs. Mechanisms like contracts for difference and other subsidy schemes must align much more closely with procurement objectives, so that public money genuinely supports UK supply chains. The forthcoming defence investment plan is a major opportunity to ensure that we are using UK steel across the country in industrial communities to support national security. At the end of the day, economic security is national security. Britain cannot become dangerously dependent on overseas steel for critical infrastructure or defence capability.

While I support the shift to electric arc furnaces and the increased focus on how we use domestic scrap, which is welcome, Britain should seek to retain some primary iron capability. Other countries are investing heavily in technologies like direct reduced iron. We need only look at Luleå in northern Sweden, for example, where an operational hydrogen-powered DRI facility is already producing steel. That has not held the region back in any way. Economically, it has had the opposite effect of attracting inward investment in new industries, from data centres to clean power. I would like to hear a little from the Minister about DRI and whether we will be looking seriously at that, but I do not wish to stray too far out of the scope of the Bill.

The legislation was brought forward in the context of British Steel, but we should not pretend that British Steel is the only critical asset that may ever require Government action. There may be other sites, capabilities and parts of the supply chain where future intervention is needed to protect jobs, sovereign capability and the national interest, so my concern with amendment 12 is that it would make these powers too easy to lose. A future Government may not share the same commitment to active industrial strategy and may not be as willing to renew the tools needed to protect the sector, so we should not remove the extension mechanism now because we may leave workers and industry more exposed later on.

Opposition Members made the point that politicians should not run businesses, although of course the Minister for Industry did run a steel business for many years and did so very effectively. They may mean that politicians from this country should not run businesses. The Bill is before us because of the approach that Jingye has taken. The Chinese steel industry has long benefited from huge state subsidies, and cheap state-directed finance, energy support and overcapacity policies. Beijing did not leave it to the market; it used state power aggressively to expand industrial capacity, which is worth bearing in mind.

I will finish on this point. While the Government cannot say which assets they wish to use these powers for, it is evident that British Steel cannot remain in Chinese hands. I do not know what the long-term ownership structure will look like—perhaps it will be modernised and sold to a new buyer, or perhaps it will be taken into public hands and remain there, with steelworkers having some stake in the company that they built—but I do know this. When a Labour Government intervened to create the nationalised British Steel Corporation in 1967, Teesside enjoyed such high employment and high wages that it was classified as one of the best places to live anywhere in the UK. It brought stability to tens of thousands of families and built the second largest blast furnace in Europe.

In 1979, a very different Government took office with a very different theory of Britain—a small state and a blind faith in the global free market. In just five years, our region had the highest registered unemployment rate anywhere in Great Britain. By the end of Thatcher’s premiership, almost 250,000 jobs in our region had gone. They took a British industrial economy and turned it into a globalised service sector economy.

Today the Thatcherites are back, with a new logo and a new face. They will talk a big game on steel, but we have been here before. It is my belief that only a social democratic Government can truly protect our steel communities and equip them to face the future, because a social democratic Government recognise something that a foreign private owner cannot: the value of protecting sovereign industry, even when the going gets tough.

This issue is about our jobs, but it is also about our security. Will we be left exposed in a volatile world, or will we build for the future again? I hope that this Labour Government have the courage and ambition to do so.

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[Sarah Champion]

Will the Minister give way?

[Graham Stuart]

Will the Minister give way?

[Chris McDonald]

I will take an intervention from the right hon. Member for Beverley and Holderness. Given that he was referenced, it would be helpful to give him the right to reply.

[Graham Stuart]

To help the hon. Member for Rotherham (Sarah Champion), I do not think I said anything about subsidising. What I am looking for, and what I think all of us across this Committee would like to see, is the continuation of steel, especially in a dangerous world. I was questioning whether we have a coherent strategy and sufficient funding to take the steel industry—the specific site in Scunthorpe and others—on the journey that the Minister set out, which requires intervention to take it back to being a thriving industry. I worry that there is not such a pathway or sufficient resource, so we could be in the worst of all possible worlds, where we just bleed public money without it leading to the restitution of a healthy steel industry in this country. That is what I am looking for an answer to.

[Chris McDonald]

Let me address that point. It is helpful for us to think about the potential options. There is agreement across the Committee that we want a successful and thriving steel industry, and the Government have made some serious financial commitments. We have committed £500 million to support the transformation of the plant in Port Talbot, which has attracted another £500 million of private sector investment. We have committed £2.5 billion through our steel strategy and an additional £400 million to support the Forgemasters operation, which is successfully under public ownership.

We have to think about the potential options. Given that the Government have put that money on the table and are seeking private sector partners to work with for all our steel plants, the alternative would be the closure and the loss of those facilities. This comes down to a judgment as to whether we think the UK is capable of having a successful, profitable and investable private sector industry.

It is the Government’s view that it is possible for the UK to have that, not least when we compare ourselves with similar advanced economies in Europe—we are not necessarily comparing ourselves with low-cost economies around the world—but it is a matter of ensuring that we have the right business environment to enable that to happen, and it is clearly incumbent on Government to arrange policy in that way. I think our steel strategy, in particular, and our trade measures provide that response, which is what gives us confidence that we have the resources to do that.