Government seeks control of British Steel in potential move to nationalisation

British Steel will be taken under Government control to keep the company’s Scunthorpe plant running in a move that paves the way for nationalisation if emergency legislation is passed on Saturday.

Sir Keir Starmer said Parliament would be recalled for a rare weekend sitting to vote on the Bill aimed at blocking the firm’s Chinese owners, Jingye, from closing blast furnaces at the Lincolnshire site.

MPs and peers will debate the legislation as part of plans that would see taxpayer money used to provide materials to the steelworks, after the Prime Minister warned the future of the company “hangs in the balance”.

The Steel Industry (Special Measures) Bill stops short of full nationalisation, but a later change of ownership is seen by ministers as the likely future outcome, it is understood.

The legislation will give the Government “the power to direct steel companies in England, which we will use to protect the Scunthorpe site”, Downing Street said.

Ministers hope to secure a private partner to open up co-investment options for a transition, but urgent temporary action was seen as necessary to keep the plant running until longer-term plans are agreed.

This moment could have happened at any time, but it has happened now, and I will not stand by. There is no time to waste

Speaking from Downing Street on Friday, Sir Keir said: “As Prime Minister, I will always act in the national interest to protect British jobs and British workers.

“This afternoon, the future of British Steel hangs in the balance.

“Jobs, investment, growth, our economic and national security are all on the line.”

He said that while the UK is facing a “new era of global instability”, concerns about the plant and talks to protect it have been going on “for years”.

“This moment could have happened at any time, but it has happened now, and I will not stand by. There is no time to waste,” he said.

“So we are recalling Parliament tomorrow for a Saturday sitting. We will pass emergency legislation in one day to give the Business Secretary the powers to do everything possible to stop the closure of these blast furnaces.

“And as I have said, we will keep all options on the table.”

The Commons sitting will begin at 11am and the House of Lords from midday, in the first parliamentary recall on a Saturday since 1982, when MPs returned after the start of the Falklands War.

Other significant recalls during recent years included a midweek sitting during the summer recess in August 2021 to debate the evacuation from Afghanistan.

In a letter to MPs shared with the PA news agency, Sir Lindsay said he was satisfied the “public interest” requires the recall.

Jingye, which bought British Steel in 2020, has said it invested more than £1.2 billion to maintain operations amid ongoing production instability and “significant” financial losses of around £700,000 a day.

The Government says the new law would allow it to order raw materials for Scunthorpe’s blast furnaces amid fears supplies are on the brink of running out.

Ministers would be able to direct the company’s board and workforce, and ensure anyone at the plant “who takes steps to keep it running, against the orders of the Chinese ownership” can be reinstated if they are sacked.

The proposals to close Scunthorpe’s furnaces had sparked fears of job losses at the plant, which employs thousands of people.

We made a generous offer of support to the company and I am deeply disappointed that we have been forced to take these measures, but Jingye have not been forthright throughout this process, and left us no choice but to act

Jonathan Reynolds said Jingye had confirmed the plans despite months of talks and a £500 million co-investment offer from Government, leaving ministers “no choice” but to act.

The Business Secretary said in a statement: “We are doing what previous governments have failed to, acting in the national interest to help secure UK steelmaking for the future.

“We negotiated with British Steel’s owners in good faith ever since coming to office.

“We made a generous offer of support to the company and I am deeply disappointed that we have been forced to take these measures, but Jingye have not been forthright throughout this process, and left us no choice but to act.

“We’re in a new and changing world where it’s never been more important to support our security and build our resilience, so that we can have strength abroad and renewal at home, and that’s what this Government has done.”

Tory leader Kemi Badenoch said the problem should have been resolved months ago and warned that a large cost to taxpayers was “inevitable”.

“The Labour government have landed themselves in a steel crisis entirely of their own making. They’ve made poor decisions and let the unions dictate their actions,” she said.

“The union-led Labour government have bungled the negotiations, insisting on a Scunthorpe-only deal that the company has deemed unviable.

“Keir Starmer should have seen this coming. But instead of addressing it earlier in the week when Parliament was sitting, their incompetence has led to a last-minute recall of Parliament.”

Leaders of Westminster’s other opposition parties broadly welcomed the recall, along with unions.

Sir Ed Davey called for “a serious plan for the sustainable future of domestic steel production”.

“With Putin’s barbaric war in Europe and Donald Trump’s disastrous tariffs causing economic turmoil, the future of steel production in this country is of real importance and nothing should be off the table in this matter of national security,” the Liberal Democrat leader said.

“Tomorrow must be seen as an opportunity to come forward with a serious plan for the sustainable future of domestic steel production. The public rightly deserves better than political opportunism and grandstanding.”

Nigel Farage, the leader of Reform UK, reiterated his backing for the move towards nationalisation and called on the Government to retain and refurbish two blast furnaces and acquire Liberty Steel Rotherham for its two electric arc furnaces.

“China has no interest in keeping the steelworks open. Reform have been clear from the start that the only option we have to save this vital strategic asset – and thousands of jobs in the process – is to nationalise British Steel,” he said.

Roy Rickhuss, general secretary of steelworkers’ union Community, said finding a solution to secure British Steel’s future was in the “national interest,” describing the company as a “vital strategic business.”

“We can’t allow Britain to become the only G7 country without primary steelmaking capacity,” he said.

Charlotte Brumpton-Childs, GMB union national officer, said: “GMB has long called for nationalisation as the only way to save the UK steel industry. Tomorrow looks like the first step in that process.

“The Business Secretary must be given huge praise for acting decisively to safeguard this vital industry and the thousands of jobs that rely on it.”