Speciality Steel UK

Debate between Jonathan Reynolds and Sarah Champion

Monday 14th September 2026 Commons Chamber

[Jonathan Reynolds]

I thank the shadow Minister for his response. I particularly appreciate his words for the Prime Minister, which I know he will appreciate, as will his family.

The shadow Minister began with a long list of neglect regarding the policy, operations and ownership of this particular set of steel businesses. The obvious question is why the Conservatives did not do anything about it when they were in power—it certainly was not for want of requests to act from Labour Members. He has asked for reassurances about the workforce, and I am happy to give those to him. The cost of funding the official receiver, both to date and ongoing, is essentially the wages of the staff. They are in a position where they will be paid, which is paramount.

The shadow Minister talked about the business environment. I say politely to all Conservative colleagues that they left us with the highest industrial energy prices in the developed world. That was the legacy—it is not due to any policy changes made by Labour. What do our industrial subsidies mean? For a sector such as steel, where an electric arc furnace is obviously incredibly energy intensive, the supercharger package—not the BICS package, because the supercharger package applies in this case—will bring down average electricity prices from approximately £168 per megawatt-hour to £86 per megawatt-hour. It is not just about being competitive with peers; that is a genuinely competitive position with our rivals. We introduced those subsidies because we were aware that the business environment we inherited from the Conservative party was not satisfactory. We had to act, which is why we have done so.

Turning to wider measures, yes, we have activated a substantial trade defence policy. That is not just about maintaining domestic production; it is about being a country where the rules of the game apply. If we want people to be based here in the UK, they have to be able to take advantage of effective trade remedies when they are facing unfair competition. I know that that is an issue for the downstream users, but it is the position that I think the country has to take. What the shadow Minister has said about carbon border adjustment mechanisms is, I think, a new policy since I was last Secretary of State—the Conservatives are perhaps disowning the policies they had at the end of the last Government, because they were certainly committed to CBAMs then. Of course, CBAMs are fundamentally about trying to maintain fair competition between carbon-intensive sectors in developed countries such as ours and the rest of the world, so there is a little bit of incoherence there, to say the least.

On the issue of working capital, the opportunity presented to us by Speciality Steel UK is that previously, the business only produced when the customer effectively supplied working capital—a highly irregular position, but one reflective of the opaque and byzantine financing arrangements under the previous owners. I believe the opportunity exists to operate a successful business in this space. There is nothing ideological about this; my ideal is for the business to be run in the private sector. The shadow Minister has asked why we could not take forward the preferred bidder. I will not go into the details, but when I come to this Dispatch Box I have to be satisfied that any public support given meets the reasonable conditions we would expect, such as that taxpayer money will be protected and will not be spent without delivering the outcome for which it has been granted. If I cannot do that, I cannot grant that subsidy, which I think is the position any Secretary of State would have to take.

What is the barrier to a private sector solution? Effectively, it is risk—the fact that this was left so long without activity from the Conservative Government and the workforce have not been making steel. The customers are therefore in a position where that is a big, substantial challenge for any private sector entity to take on. If we do end up with a public ownership position, I think the state will be better able to take on that challenge, but it is the legacy of neglect that has been the barrier. That is exactly what this Government are determined to resolve.

[Sarah Champion (Rotherham) (Lab)]

Today is a really good day. I have been in this Chamber for more than a decade, watching my industry being allowed to wither on the vine. Secretary of State, a huge thank you to you for understanding the potential in the Rotherham, Brinsworth, and Stocksbridge sites, which work hand in hand. It is not just about the sites themselves, but the infrastructure around them. We have a whole supply chain that needs these sites back and running again. Of course, this is green steel, or recycled steel, so it fits exactly with the Government’s industrial strategy—it is the linchpin.

Secretary of State, thank you for continuing the pay so far and thank you for committing to continue it for the next six months. Can he also speak a little about the training that the staff will get? While they are grateful to be furloughed, they want to be working, and that means that they need to be fit the day that he says we can open the doors. They want to be ready to go. Can he also say a little about product accreditation? Literally every week, I have people from around the country calling in, trying to purchase steel. However, to purchase it, accreditation needs to be in place. Finally, can he speak a little about any anticipated restart costs? I know the workers are doing all they can to maintain the sites, but there are likely to be costs. Today is a good day, and I thank the Secretary of State.