Steel Industry (Nationalisation) Bill

Jeremy Wright Excerpts

2nd reading
Thursday 21st May 2026 Commons Chamber

[Peter Kyle]

The right hon. Gentleman raises a really important point. This Government are determined to make, produce and use more steel from the British sector in lots of different areas of the economy, and we want to ensure that we are using Government spending and procurement in driving up steel production in the UK.

I had the privilege to visit the Agratas gigafactory in Somerset. It is in a different sector, but it is using 231 tonnes of British steel in its production. That is using an amount of Government investment as well, so it has Government investment and private sector investment and is using British steel. That shows that when we align our priorities, we can drive up demand for British steel.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I want to ask the Secretary of State about the breadth of the Bill. Clause 1 makes it clear that a “steel undertaking” includes those businesses that have the “manufacture or processing” of iron or steel as part of their operations. Is there any lower threshold to that? Is a business that has only 1% of its operations in iron or steel liable to nationalisation under the Bill?

Under clause 2, the Secretary of State is entitled to determine the public interest and can nationalise if it would support

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

I have the same question: is there any lower threshold? Would the interests of one town where a steel facility is located be sufficient to justify the nationalisation of an entire company?

[Peter Kyle]

The public value test is a high test, and I think the right hon. and learned Gentleman will agree that that is the case on seeing and reading the legislation, as he has done.

I have set the bar high enough that this power would be triggered only in extraordinary circumstances. These are things that we can test in Committee in the coming days—I believe that will be next week. [Interruption.] It will be in the next sitting week, when we return from recess. Do not worry; we are not recalling Parliament again. I will address this matter a bit more in my speech. This power will not be used routinely; it is a specific power, and the test for it will be high.

[Sir Jeremy Wright]

Will the Secretary of State give way?

[Peter Kyle]

I will make some progress.

To that end, we began negotiations in good faith with Jingye, the owner of British Steel, to see if a commercial sale was viable, but that did not prove to be possible. We could not agree terms that would have safeguarded simultaneously the integrity of the business and the interests of the taxpayer. That is why the Prime Minister announced the Government’s intention to bring British Steel into public ownership, subject to the public interest test being met at the time of that decision. That is why we need to pass the Steel Industry (Nationalisation) Bill now, to give us the power to make that possible.

Let me be clear to the House. In answer to the question from the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright), the powers given to the Government by the legislation cannot be exercised without due caution and proper care. These powers are bold, but they are not boundless. They can be used only where there is a clear public interest and where they will be needed to safeguard British steelmaking capability. The Bill does not nationalise British Steel in and of itself, but it grants the Government powers to do so if considered necessary. That is the scope of the legislation we are debating today.

[Sir Jeremy Wright]

The Secretary of State is being generous. I take him at his word as I do not think that he intends to use this legislation otherwise than appropriately. However, there is an important point to be made about the language in the Bill as it stands. As he knows, the public interest test is defined in certain ways in clause 2, which states that the test “is not limited to” the grounds listed, so there could be other grounds on which the public interest might be met. I have already pointed out one aspect in which the public interest test is relatively broad. I invite the Secretary of State to look again at the public interest test to make sure that we do not just rely on his word, which I do, but that we are confident that succeeding Secretaries of State cannot misuse this power to nationalise too broadly.

[Peter Kyle]

I am grateful for the right hon. and learned Gentleman’s intervention. I knew when I was bringing these powers in and working through the legislation that they would be an important part of the Bill and rightly the subject of scrutiny. There will be significant time in Committee of the whole House for Members to scrutinise the legislation. We are modelling this Bill on the Banking Act 2009, which has worked effectively. In that circumstance, the powers were used during the financial crisis in extremis, and those powers, on which we are modelling this Bill, have not been used irresponsibly since. I have been clear about my expected use of these powers, and the bar set in the legislation meets my expectations, including limiting my ability to use these powers in ways that would cause concern for Members.

For too long, the steel sector in this country has been left to fend for itself, abandoned by Government, demoralised, starved of resources and the victim of international market distortions. Crude steel production has declined by more than 50% in the past decade. Capabilities have been reduced, and communities have been let down. Previous Governments have been too reactive and not proactive. This Government will not repeat the errors of the past. We are building the future for British Steel. While the industry faces challenges today, we will do everything we can to help it modernise and grow. This legislation allows us to apply that policy to this industry. We recognise that securing the long-term future of the UK steel sector relies on public and private investment for modernisation, so that the UK can become a global leader in clean green steel, electric arc furnaces and decarbonised steel production.

We recognise that blast furnace production will need to continue in the immediate future and that a managed transition is vital to maintaining supply. We need this legislation to raise resilience, to protect businesses up and down the country that depend on Britain’s steel, to defend the workforce at British Steel and to safeguard the communities built on British steel. The significance of steel is not simply a matter of history; it is a matter of our national future. In an uncertain world, the ability to make steel remains a strategic national asset. Steel is essential for our transport networks, our energy security, our housing and our transition to a greener economy. That is why supporting the British steel industry is about more than protecting jobs, important though they are. Supporting British Steel—

Steel Industry (Nationalisation) Bill

Jeremy Wright Excerpts

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

[Sarah Champion (Rotherham) (Lab)]

As you know, Madam Chair, I have been urging successive Governments for over a decade to back the British steel industry, so it is genuinely a pleasure to be here today as the Government do just that. I support this historic Bill.

Steel is essential for the UK’s economy. It supports thousands of well-paid, skilled jobs and plays a crucial role in ensuring Britain’s security, particularly in an ever more volatile and uncertain world. Yet for years the industry has been allowed to wither. Production has fallen and plants have been lost—and with them jobs, capability and capacity. We simply cannot afford to allow this precipitous decline to go on any longer.

Rotherham is a steel town. It has seen the consequences of past Governments’ neglect up close. Speciality Steel, which is based in Rotherham—and Stocksbridge—should be a crown jewel in our economy, but it has been allowed to lurch from crisis to crisis, choked of investment and left at the mercy of unscrupulous ownership, unfair competition and a lack of vision. The plants currently stand still, shuttered amid the fallout of Liberty’s collapse. The workers are furloughed and uncertain about what their futures hold. I would be grateful if the Minister could update the Committee on the current state of the sale, which is now in its final stages.

My concern is not limited to Speciality Steel. Steel in Rotherham is at the centre of our local economy, and the crisis has had a substantial impact up and down the supply chain. The Minister’s ambition for steel’s renaissance could also be a rebirth for local businesses and local communities, but that requires investment, foresight and commitment. The Government’s steel strategy sets out a strategic vision for the industry and, crucially, delivers real and profound change for the sector as a whole. With £2.5 billion of investment in the sector and an ambitious but achievable target of 50% of the steel used in Britain to be produced here, the strategy is a blueprint for a revitalised domestic steel industry; it is one that has been roundly welcomed by the sector.

Perhaps most importantly, the strategy sets out a new approach to steel imports. Time and again, I and other steel MPs in particular have warned that a failure to tackle cheap, often state-subsidised and heavily polluting imports would destroy any attempt to increase domestic production. Without a level playing field, British steel cannot hope to compete. It is therefore welcome that the Government have acted to protect UK steel producers from unfair competition through a range of new trade measures, quotas and tariffs. While that is good news for steel producers, we do need to get the details right. I thank hon. Members on both sides of the Committee for raising specific examples of that.

Alongside steel producers, Rotherham hosts a large number of steel stockholders and downstream businesses. I have raised with the Government a number of instances in which trade measures have been introduced on products not currently produced in the UK, or where UK production and capacity is far below demand. I urge Ministers to act to ensure that those businesses are not impacted unfairly and that trade measures conform to the realities of the UK market; to do otherwise risks inadvertently harming the very industries and communities that the Government seek to defend.

While the Bill will not have a direct impact on steel production in Rotherham, it does send an important signal. I am proud that the Government are taking resolute action to ensure that they have the necessary tools at their disposal to safeguard the future of British Steel in Scunthorpe. I hope that this will set a precedent as the situation with Speciality Steel develops and that they will take similarly decisive action there, should it prove necessary.

With the right support, British steel can—and should—play an ever greater role in our economy, in infrastructure projects and, crucially, in our national security. I know that steelworkers in Rotherham will be relieved to have a Government who are so clearly on their side—on the side of good jobs and a dynamic economy—and, most importantly, a Government who back British steel.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I will focus my remarks on clauses 1 to 3 of the Bill and the breadth of the powers that they give to the Secretary of State. I start with the meaning of a “steel undertaking” in clause 1, which is one

“that carries on a business consisting of or including…the manufacture or processing of steel, or…iron”.

As the Minister will know, I raised in an intervention on the Secretary of State on Second Reading—indeed my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin), who speaks from the Front Bench, also mentioned this earlier—that that wording could appear to include undertakings that have as little as 1% of their business in iron or steel.

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[Sir Jeremy Wright]

I recognise that the hon. Gentleman does not normally engage in the detail of legislation, but if he did, he would know that this is the Committee stage, where we look at the detail.

What the Government could perfectly properly do is pass the legislation, as amended by my hon. Friend the Member for West Worcestershire, and if they felt at the end of the sunset clause period that they needed further powers, they could come back to this House with further primary legislation and seek our consent to do that. The difficulty with what we have before us is that the Secretary of State has the power to extend the sunset clause indefinitely, by regulations, over and over again. That is what the wording of the Bill says, and that seems to me to be something we should not accept here. What we should do is reinstate the natural, ordinary meaning of a sunset clause, which is set out in clause (3)(1), by removing the rest of that clause. If, as the hon. Member for Boston and Skegness (Richard Tice) suggests, the Secretary of State wants to extend those powers, he should seek the authority to do so in primary, not secondary, legislation.

These deficiencies in the Bill are cumulative: the power to indefinitely extend the Secretary of State’s proposed powers is more pernicious because the powers are so broad, and the huge latitude that he would have to define the public interest matters more because the Bill may apply to many more companies than might have been thought when hearing the Government’s original intentions for the Bill. Plus, of course, the Secretary of State’s consequent powers, which are set out in the rest of the Bill—having decided to nationalise and make that initial transfer decision—are mostly constrained only by the scrutiny of secondary legislation, so the initial transfer decision is all the more important. It is my view that the Secretary of State’s powers, as defined in clauses 1, 2 and 3, are simply too wide and need to be constrained.

The Government make two substantive arguments in response to that view, and I want to address those arguments. The first, which the Minister put forward earlier, is that the Government are doing only what a previous Government did in the Banking Act 2009, and that the powers they seek to take here are no wider than those taken in that Act. I do not agree, for three reasons.

The first reason is that the powers in the Banking Act were premised on the existence of a special resolution regime, where the bank in question was already in financial trouble. As far as I can tell, this Bill does not require the relevant steel undertaking to be in any trouble at all for nationalisation to be an option. The second reason is that the Act provides for a temporary transfer to public ownership. This Bill does not use the word “temporary”, and again, I can find nothing in the Bill that prevents a nationalisation being permanent. The third reason is that the Banking Act requires the Treasury to consult before using its powers under that Act. There is no requirement in this Bill for the Secretary of State to consult anyone, so I am afraid it is just not like the Banking Act.

The Government’s second argument, which I discovered lurking in the memorandum from the Department for Business and Trade to the Delegated Powers and Regulatory Reform Committee—I am sure we have all read it— is that broad powers such as the right to define the public interest are

“buttressed by administrative law, including the need for interferences with property rights to be proportionate”.

Of course, that is so: the courts may intervene if the Secretary of State tries to use his powers irrationally or unreasonably, but Parliament should not be subcontracting our work to the courts.

If the legislative powers as drafted are too broad, it is up to the legislature—us—first and foremost to constrain them. The Secretary of State has consistently maintained, as has the Minister, that he wants only the powers needed to act where Government action is unavoidable, and only for the period needed, but the powers that he has in the Bill go well beyond that, and they could and should be restricted.

[Lee Barron (Corby and East Northamptonshire) (Lab)]

I want to start off by saying that I find it absolutely incredible when people turn around and say that our Government should not be intervening and running services, when they are happy to allow other countries’ Governments to run our services and utilities. To be honest, I get a bit tired of it, because it is essential that we do this if we are going to save industries, save sectors and save jobs. That is why we are right in doing this.

I want to speak on amendment 21, new clause 8 and new clause 5. It was a privilege to be recalled here on a Saturday last year to pass the emergency Steel Industry (Special Measures) Act 2025 to save the Scunthorpe works, and I am just as happy to be here today to see this Bill go through its first day of Committee. Since last year, it has become clear that public ownership is in the national interest. Corby is a town built on steel—steel that built this country. At one time, the Corby steelworks was the largest combined steelworks in Europe. I recognise that the Bill does not nationalise the steelworks in Corby, but it will make sure that the sector does well, and where that happens, that will ensure that the other aspects of steel do well.

In 1967, it was the Labour party that nationalised the steelworks and put British Steel in charge. It did so because it knew that home-made steel was essential for our national security, for our economy and for thousands of jobs. In 1980, a Government who failed to see those opportunities closed the steelworks, and with that, tens of thousands of jobs went and almost a third of people in my constituency became unemployed. That is why it is so important that British Steel should be allowed to continue.

This Bill marks a reversal in direction. It shows what can happen when we have a vision for our economy and the dedication to see that vision through. How could the last Government shape our economy and create jobs when they failed to even create an industrial strategy? This Government have a strategy. Their decade-long industrial strategy, and the steel strategy announced in March, show that.

The steel strategy provides £2.5 billion through the National Wealth Fund to help rebuild our steel sector so that we can move towards 50% of all British demand for steel being made in this country, ensuring our security in an unstable world with the capacity for our own virgin steel supply. That is what this Bill leads to, and that is what is going to happen as a result of it.

British steelworking powered the first industrial revolution, and it can do so again, building the renewables and technology for the future. We still have a steelworks in Corby, and we want to make sure that Corby and the towns like it across our country have a new and secure future. I believe that the passing of this Bill will ensure that that happens.

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[Sir Jeremy Wright]

I understand the logic of the hon. Gentleman’s argument. He has referred several times to the series of proposals being made in Committee by the Conservative party, as outlined by my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin). They come to this: that no Government should be able to create for themselves a very wide definition of what a steel undertaking should be, that they should not be able to define for themselves without restriction what the public interest may be, and that they should not be able to extend indefinitely, without parliamentary authority, the effect of the Bill. Will the hon. Gentleman tell us what he objects to in those proposals?

[Richard Tice]

I will indeed. My objection is that the consequence of the Conservative party’s amendments would be to delay the investment that is required to get on with this. People have expressed concern about the current losses. The last thing we should do is create bureaucratic delays that prevent the investment that would turn the cash flow around from negative to positive.