Steel Industry (Nationalisation) Bill

Sarah Olney Excerpts

Committee of the whole House
Tuesday 9th June 2026 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I beg to move amendment 7, page 34, line 15, at end insert—

“(5A) Compensation scheme regulations must include provision which specifies that payment of compensation may be made until any written estimate under section 54 (4A) is laid before Parliament.”

This amendment works with Amendments 8 and 9 so as to require regulations to specify that payment of compensation cannot be made until the Secretary of State has published a written estimate of the environmental liabilities of the steel undertaking, provided to them by the independent valuer.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Clauses 52 and 53 stand part.

Amendment 8, clause 54, page 35, line 25, leave out “may—

(a) require or permit”

and insert—

“must—

(a) require”.

See explanatory statement for Amendment 7.

Amendment 9, page 35, line 34, at end insert—

“(4A) The regulations must—

(a) provide that the independent valuer prepares and submits to the Secretary of State a written estimate of the environmental liabilities of that undertaking, including but not limited to—

(i) contamination of land, water or air attributable to the undertaking’s operations;

(ii) compliance with environmental obligations imposed by or under any enactment; and

(iii) remediation or restoration costs that are contingent or prospective;

(b) provide that the Secretary of State must publish and lay any written estimate provided under this subsection before Parliament.”

See explanatory statement for Amendment 7.

Amendment 6, page 35, line 40, at end insert—

“(c) the anticipated effects of—

(i) external tariffs on UK industry; and

(ii) the Carbon Border Adjustment Mechanism, as set out by Part 5 of the Finance Act 2026 on the value of a steel undertaking.”

This amendment would require consideration of external tariffs and the implementation of the Carbon Border Adjustment Mechanism, when conducting a valuation of the Steel undertaking.

Clauses 54 to 57 stand part.

Amendment 20, clause 58, page 39, line 7, at end insert—

“(1A) The Secretary of State may only provide financial assistance under this section if they are satisfied that financial assistance will secure value for money.”

This amendment would only allow the Secretary of State to provide financial assistance if the NAO had concluded that it would secure value for money for taxpayers.

Amendment 22, page 39, line 8, at end insert—

“(1A) The Secretary of State may not in any five-year period provide financial assistance under this section of an amount that exceeds £1 million per employee of the steel undertaking.

(1B) The number of employees of a steel undertaking for the purpose of subsection (1A) is the number of persons employed on the date the financial assistance was first provided.

(1C) ‘employee’ has the meaning given by section 230 (Employees, workers etc.) of the Employment Rights Act 1996.”

This amendment would cap the amount of financial assistance that could be provided to a steel undertaking to £1 million per worker over 5 years.

Amendment 24, page 39, line 24, at end insert—

“(4A) Financial assistance under this section may not include funding provided by the National Wealth Fund.”

This amendment prevents money from the National Wealth Fund being used to provide financial assistance under this Act.

Clause 58 stand part.

Amendment 4, clause 59, page 39, line 29, insert at end “and,

(b) compensation paid under any compensation scheme regulations made under section 52.”

This amendment requires the Government to report on the compensation paid under any compensation scheme regulations made under section 52.

Amendment 10, page 39, line 31, leave out “12” and insert “3”

This amendment together with Amendment 14 would increase the frequency with which the Secretary of State must make reports about financial assistance to every three months.

Amendment 11, page 39, line 33, leave out “12” and insert “3”

See explanatory note for Amendment 13.

Clauses 59 and 60 stand part.

New clause 6—Parliamentary scrutiny of Financial Assistance—

“(1) Before providing any assistance under section 58, the Secretary of State must lay a proposal for providing the financial assistance (‘the proposal’) before Parliament.

(2) No financial assistance may be provided under section 58 unless the proposal has been laid before Parliament.

(3) If, within the period of 90 days after the proposal has been laid, a select committee of the House of Commons makes any recommendations with regard to the proposal, the Secretary of State must lay before Parliament a statement setting out the Secretary of State’s response to the recommendations before providing any financial assistance.

(4) The proposal must include—

(a) details of the nature and amount of the financial assistance,

(b) the intended beneficiary or beneficiaries of the financial assistance,

(c) the expected purpose and effect of the financial assistance,

(d) any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and

(e) any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal, subject to the restrictions in subsection (3).

(5) The proposal may not include information which, if it were made public, may damage—

(a) national security;

(b) fiduciary duties; or

(c) commercially sensitive interests.”

This new clause prevents financial assistance being provided until 90 days after information about the package of financial assistance being made available to a Select Committee of the House of Commons for its consideration.

New clause 12—Financial assistance: limit—

“Financial assistance of a total value of no more than £2.5 billion may be provided under section 58 of this Act before 15 August 2029.”

This new clause would limit the financial assistance that can be provided under the Act.

New clause 13—Financial assistance: England and Wales—

“Where financial assistance is provided to steel undertakings in England under section 58 of this Act, an equivalent to the total amount of financial assistance provided to steel undertakings in England must be made available to steel undertakings in Wales.”

This new clause requires equivalent funding to be provided to steel undertakings in Wales compared to those in England.

Clauses 61 to 64 stand part.

New clause 7—Impact assessments—

“Before exercising any power under this Act, the Secretary of State must publish an impact assessment on the proposed exercise of that power.”

This new clause would require an impact assessment to be published before the Secretary of State exercised any of the powers under the Act.

New clause 4—Limit on expenditure on financial assistance and compensation—

“(1) The total amount of compensation paid by the Secretary of State under Part 2 and financial assistance paid under section 58 is limited to—

(a) £500m, or

(b) an amount so authorised by resolution of the House of Commons, whichever is higher.”

This new clause prevents the Secretary of State from paying more than £500m in financial assistance and compensation under the Act, unless the House of Commons passes a resolution authorising them to do so.

New clause 9—Duty to try to find a private sector purchaser for any nationalised steel undertaking—

“Where a steel undertaking has been subject to the principal transfer power under this Act, the Secretary of State must—

(a) make all practicable efforts to find a private sector purchaser for the steel undertaking; and

(b) lay a report before Parliament every six months which sets out progress made towards finding a private sector purchaser for the steel undertaking.”

This new clause would put a duty on the Secretary of State to seek a private sector buyer for any steel company that has been nationalised, and report to Parliament on progress made every six months.

New clause 10—Report on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom—

“Within six months of the passing of this Act and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”

This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.

New clause 11—State aids—

“The Secretary of State must not exercise the powers in this Act so as to grant any advantage through state resources on a selective basis to any organisations that could potentially distort competition and trade, including any advantage that might be granted to steel undertakings subject to a transfer power over comparable privately-owned steel undertakings in the United Kingdom.”

This new clause would require the Secretary of State to maintain a level playing-field between nationally owned and privately owned steel businesses.

[Sarah Olney]

We heard throughout yesterday’s debate from Members across the Committee about the importance of steelmaking as a vital strategic sector in the UK, and no doubt we will hear about it again today. We rely on the sector for essential parts of our national infrastructure, for transport and for advanced manufacturing. Steelmaking and the industry more broadly create thousands of good jobs across the country, helping to power our economy and boost our local communities, and in increasingly uncertain times, it is essential to support our defence industry.

We on the Liberal Democrat Benches therefore broadly welcome this legislation as a temporary, emergency and targeted step aimed specifically at turning around British Steel before it can be returned to the private sector, and we note that it is in that spirit that British steel producers also support these measures. We need to see more ambition and clarity in the delivery of the steel strategy—for example, when it comes to boosting domestic production to meet 50% of domestic steel demand, further incentivising the use of British-made steel in the private sector and managing the transition to electric arc furnaces.

I wish to speak in favour of amendments 7, 8 and 9. These would strengthen the treatment of environmental liabilities in relation to the steel undertaking and ensure that they were explicitly identified and accounted for before compensation payments were made. They highlight the principle that the true financial position of an undertaking cannot be properly understood without a clear and transparent assessment of its environmental liabilities. By accepting the amendments, the legislation could work as a package to ensure that environmental liabilities were not only considered but formally assessed, published and laid before Parliament.

In particular, the amendments would require an independent valuer to prepare a written estimate of the environmental liabilities associated with the undertaking, including contamination of land, water or air; compliance with environmental obligations; and current and future remediation or restoration costs. That would ensure that the full environmental cost of the undertaking’s operation was properly captured, including liabilities that might not yet have crystallised but were none the less foreseeable. Crucially, the amendments would link the process to the timing of compensation payments, specifying that compensation could not be paid until the environmental liabilities estimate had been produced and presented, and ensuring that taxpayers were not left to pick up the bill for any environmental damage caused by the company’s previous owners.

Furthermore, I wish to speak in favour of amendment 6. This amendment would require that when carrying out a valuation of the steel undertaking, consideration was explicitly given to the impact of external tariffs and the carbon border adjustment mechanism. It reflects the reality that the value of a steel business is not determined solely by its internal operations and that it is also significantly influenced by international trade conditions and environmental policy frameworks.

The previous Conservative Government oversaw a string of near collapses and interim last-minute packages. They scrapped the industrial strategy, which is so vital to our manufacturers, and they erected new trade barriers, making it harder for our steel producers to do business with their biggest export market across the channel. This legislation should be much more ambitious on an improved agreement with the EU for steel exports. Given the international nature of the steel market and the growing importance of carbon-related border adjustments, it is reasonable that these factors should be explicitly included in valuation methodologies. Amendment 6 would help to ensure that any valuation was not artificially insulated from key external drivers of cost and competitiveness. It would also provide a more accurate basis for decision making.

[Mr Toby Perkins (Chesterfield) (Lab)]

I am interested in what the hon. Member has had to say on amendment 6. She spoke specifically with regard to steel making. Has she also had representations about the impact of these tariffs on UK manufacturers who make things out of steel, as well as on steel stockholders? Is it her intention through the amendment to get further information on that, or is that not its purpose?

[Sarah Olney]

That is not the specific purpose of the amendment, but I am glad that the hon. Member has raised that point. I know that the Minister has heard about this issue on a number of occasions, throughout the debates on this Bill and during the urgent question last week in the Chamber. I would like to take this opportunity to reinforce the point that has been made on multiple occasions across this House about the tariff regime and the changes that are coming in. I have spoken to a number of manufacturers about the very real concerns right across the sector about the changes in tariffs. I know that the Minister is focused on that, but I am grateful to the hon. Member for giving us another opportunity to raise concerns with the Minister, which I know he has heard.

Amendment 5 would extend the Government’s reporting obligations to include progress on negotiations with the European Union—

[The First Deputy Chairman]

Order. I remind the hon. Lady that amendment 5 has not been selected and so would be out of scope for this debate.

--- Later in debate ---

[Sarah Olney]

Thank you for your guidance, Madam Chair. I will reframe my remarks slightly, because they relate to the intervention that I took.

Steel producers in the UK are heavily integrated into international supply chains, and continued access to frictionless or improved export arrangements is vital for sustaining jobs and production. From 1 July, the Government will limit tariff-free steel imports. Although in many ways that will support business, there is a lack of certainty about costs and the impact on downstream manufacturers is still opaque.

[Mr Calvin Bailey (Leyton and Wanstead) (Lab)]

Perhaps I can give the hon. Lady a moment to gauge where she is in her notes while I take her back momentarily to amendment 7. She spoke about the importance of steel to our defence industry, which is therefore central to European security and to deterring the threat of Russian rearmament, but amendment 7 would produce significant procedural barriers and slow down our ability to use the Bill. Does she agree that such amendments risk causing serious impediments to supply-chain security, particularly for our defence industry?

[Sarah Olney]

I am grateful to the hon. Gentleman, not least for underlining the real importance of the steel industry to our defence industry and the heightened importance of sustaining our defence industry, and all the companies and the jobs associated with it, in this time of heightened global instability. Liberal Democrat Members certainly believe that support for our defence industry is paramount at this time, but it is important that Parliament gets the opportunity to scrutinise all the costs associated with the proposed undertaking should the Government choose to exercise the powers in the Bill. That is the purpose of amendment 7.

Clause 52 will give the Secretary of State broad powers to establish compensation arrangements linked to the exercise of transfer powers, including transfers of shares, property rights and liabilities. Amendment 4 would require the Government to report not only on the existence of compensation schemes under the clause, but on the compensation actually paid under those schemes.

My new clause 6 would strengthen parliamentary scrutiny of any future financial assistance. It would require, before any assistance is provided, the Secretary of State to lay a detailed proposal before Parliament, setting out the nature and amount of assistance and the intended beneficiaries, the purpose and expected effect, and any associated conditions, including repayment terms, guarantees, indemnities or other liabilities.

In a similar vein, new clause 4, in my name, would introduce parliamentary oversight, and compel the Government to bring forward a resolution for any expenditure by the Secretary of State under part 2 that exceeds £500 million, which is roughly equivalent to the annual cost of keeping the Scunthorpe plant running, based on the publicly available figures. The clause reflects the principle that, where significant public funds are being committed, there should be clear parliamentary control and oversight of the overall financial exposure. By setting a defined limit, it would ensure that expenditure does not escalate beyond what has been explicitly agreed by Parliament without further democratic approval. The measure is designed to ensure a balance between enabling necessary intervention and maintaining proper oversight of the total level of public expenditure involved. I urge hon. Members to vote in favour of the new clause.

Steel is a valuable sector with far-reaching benefits across the UK for critical infrastructure projects, defence and the future of renewable energy. The steel industry is vital to so many of the UK’s national strategic priorities. The Liberal Democrats support the Government’s pace and urgency in taking action to assist the steel industry, but there is a significant need for greater transparency and accountability relating to how these measures will be exercised. There is potential in the Bill to improve training opportunities for steel exports, and I urge Ministers to consider our proposals on that matter.

[Several hon. Members rose—]

--- Later in debate ---

[Pamela Nash]

I completely agree with my hon. Friend. That is certainly the experience we have had in Motherwell in my constituency, where a questionable buyer for Dalzell has caused many problems. I will go into that later in my speech.

I am disappointed, and surprised, that the Liberal Democrats are seeking an even more restrictive limit on potential support. For us, Motherwell became the unwilling emblem of the Tories letting the steel industry down in the 1980s, with the closure of Ravenscraig and the subsequent loss of thousands of jobs across the area. It has taken decades even to begin to repair the damage that was done at that time.

In recent years, the Tory Government failed to prevent cheap imports and to bring in the investment and strategy that were needed to protect what was left of our steel industry. I therefore feel that Members on the Opposition Benches have an absolute brass neck in trying to put limitations on this Labour Government’s ability to breathe life back into it.

[Sarah Olney]

The hon. Lady referred specifically to our new clause. Does she not accept that we are merely asking for a further parliamentary vote if the proposed consideration for transfer exceeds a certain level, and that that is a sensible and workable way forward? Not only do we need to be open to the possibility of enabling the Government to take steel into national hands, but taxpayers’ interests need to be protected, and Parliament needs to have oversight of any decision of that nature.

[Pamela Nash]

If we brought the Government to Parliament every time we wanted them to intervene when there was an emergency, we would not be able to react effectively, so I do not accept that that is necessary.

[Sarah Olney]

It would take just hours to do that. All we are asking for is a safeguard. Without any kind of safeguard, what does the hon. Lady think would be an acceptable amount for the Government to offer in exchange for taking on a steel undertaking? Does she think that no limit at all would be acceptable? We are merely proposing that a motion should be laid before Parliament to be voted on, and that does not take much time.

[Pamela Nash]

This legislation is designed for extraordinary situations, so we are going to have to agree to disagree on that point.

Motherwell remains the home of steel in Scotland. While the immediate and particular focus of the Bill is, understandably, on the manufacturer British Steel, I want to take the opportunity to highlight the plight of what is currently our only Scottish steelworks: the Dalzell plate mill.

The Bill suggests three potential factors that can be considered in the assessment of whether it is in the public interest to nationalise a steel company or facility. Is the plant part of the supply chain for our defence industry, thus contributing to our national security? Is it necessary for the building and/or the maintenance of parts of our national infrastructure? Does it support the local or national economy? I would argue that the Dalzell plate mill is essential to all three of those elements of our country’s progress and security, and that we would be demonstrably better off if it was supported back to full operation.

When Sanjeev Gupta took over the plant almost a decade ago, he presented a vision of a bright future for Dalzell in a “green steel” era, but that has not come to pass. Like others, the plant has suffered as a result of the onslaught of cheap imports and the global events that our wider economy has faced, but Liberty has largely been unable to provide the funds or leadership needed to make Dalzell a success during its time at the helm, with repeated failures to deliver the raw steel that is required for the plant to fulfil orders and with staff left without work. There have been regular promises of materials and work being on the way, but more often than not they have been stalled or unfulfilled.

The current situation for the team of dedicated and highly skilled staff at Dalzell is difficult to imagine. The majority of them have spent most of the last two years at home on furlough, receiving less than their full pay. A skeleton workforce of about 20 is keeping the mill ticking over, ensuring that it is clean and maintained and that necessary paperwork is completed. They want to be ready to go as soon as an order comes in.

--- Later in debate ---

[Chris McDonald]

I agree that procurement has an important role to play here. I am sure that my hon. Friend will have welcomed recent changes in guidance by the Cabinet Office to ensure that British steel producers are well placed to win these orders, as well as in the areas of renewable energy, where the Government are awarding significant contracts, and nuclear power, where we are again endeavouring to ensure that British companies are well placed to win those contracts.

I turn to amendment 22 and new clauses 4 and 12, which would impose statutory caps on compensation and financial assistance. I have already addressed compensation, and financial assistance is somewhat similar in that applying a cap on the basis of the number of employees, or indeed a fixed cap of any kind, would ultimately restrain the Government’s ability to respond effectively to circumstances as they evolve.

I believe that could fundamentally undermine the purpose of the Bill, which is for the Government, with the will of Parliament, to be ready to respond to circumstances such that we are not required to fly back from wherever we are in the world at incredibly short notice, and prolong uncertainty among the workforce and suppliers. We do not want to create any legal uncertainty, uncertainty in the supply chain or commercial uncertainty. That is why it is important to have this level of flexibility.

The Bill has proportionate and robust transparency and accountability mechanisms for the provision of financial assistance. For instance, clause 59 requires the Secretary of State to report to Parliament at 12-monthly intervals, and funding will be subject to the established framework for managing public money, including through Treasury approval processes.

New clause 6 would place on the Secretary of State a requirement to put forward a proposal to Parliament about providing financial assistance if a Select Committee were to make recommendations on that. Again, that is not realistic. Given that financial support would be required immediately following a transfer, there would not be time for that level of parliamentary scrutiny. Important though scrutiny is—I certainly welcome the investigation into steel currently being carried out by the Public Accounts Committee—we have to be realistic about the point at which it is possible to apply scrutiny.

New clause 7 would require impact assessments to be published before exercising the Bill’s provisions. Again, the issue is essentially about pace among other things. We believe that impact assessments are crucial to show the impact of Government intervention, and the Government are committed to operating in line with our better regulation framework requirements. We do not want to introduce any further legal uncertainty, so we reject the new clause.

A number of colleagues mentioned new clause 9, so it is important to address some of the issues raised around that. Fundamentally, the new clause would not be at all helpful; I will give an example as to why. There is an assumption in the new clause that if the Government were to nationalise a business under the Bill, the best approach would be to treat it like a hot potato and immediately throw it away. We have seen the impact of that.

We heard yesterday about the nationalisation—briefly—of British Steel by the previous Conservative Government: they spent £750,000, made no investment in the business and immediately sold it on to a company called Greybull Capital, whose track record was failure at Monarch airlines, failure at Comet electrical stores and failure at Rileys snooker halls. If you cannot run a snooker hall, you definitely cannot run a steel company.

This is where the hon. Member for Boston and Skegness (Richard Tice) and I have some points of agreement: there is more than one way to bring investment into a business other than selling it to an overseas investor. We could have debt and equity finance, and the Conservative party used to be keen on mass public ownership via a listing on the London Stock Exchange. There are many different ways in which we can bring private sector investment into a business and resolve issues around ownership.

Of course, it is intolerable to work in a business that is constantly up for sale—I have been in that position myself—as businesses do not perform in that position. A decision to sell a business is a decision made at a point in time, not an ongoing process. The Government therefore reject that new clause.

Given that I have detained the Committee considerably over the last couple of days, I have no wish to do so any further. I hope that, having responded as fully as I can to the amendments and new clauses, the Members who tabled them might feel sufficiently reassured not to press them and therefore save the House their consideration. I fully and sincerely thank everyone for their incredible participation in the debate, for the marvellous speeches that we have heard today, and for their strong interest in the steel industry that I have worked in and which I continue to champion in this House.

[Sarah Olney]

I beg to ask leave to withdraw amendment 7.

Amendment, by leave, withdrawn.

Clauses 52 to 57 ordered to stand part of the Bill.

Clause 58

Financial assistance

Amendment proposed: 20, page 39, line 7, at end insert—

“(1A) The Secretary of State may only provide financial assistance under this section if they are satisfied that financial assistance will secure value for money.”—(Dame Harriett Baldwin.)

Question put, That the amendment be made.