British Steel

(Urgent Question): To ask the Secretary of State for Business and Trade if he will make a statement on the nationalisation of British Steel.

I express regret and apologies, Mr Speaker, not only for the issue you just raised, but that we were not able to lay the regulations before Parliament before they came into force. After very careful consideration informed by the significant commercial and diplomatic sensitivities involved in the transfer, and to ensure operational continuity, the Government decided that it was necessary for the acquisition to take place outside of working hours.

Following Royal Assent of the Steel Industry (Nationalisation) Act 2026, the Secretary of State has taken the decision that it is necessary, in the public interest, to exercise the powers in the Act to transfer British Steel into public ownership. We have not taken the decision lightly, but we consider that it is the only viable route forward in the circumstances. British Steel is among the UK’s largest steel producers and has an important capability in the production of several essential steel products that are integral to the construction and maintenance of our critical national infrastructure.

I reiterate the Government’s thanks to parliamentarians on all sides for their constructive approach during passage of the Act. Today’s decisive action secures British Steel’s immediate future, secures steelmaking in support of our steel strategy, and supports the jobs and steelmaking communities that have underpinned the business for decades.

We have a duty to stand by our steel sector, especially as it navigates unprecedented challenges such as President Trump’s unfair steel tariffs, China’s anti-competitive state aid practices, and the transition to environmentally sustainable production methods. If we are to foster a thriving steel economy, we cannot allow more producers to collapse, we cannot allow more jobs to be lost and we cannot risk our last blast furnaces going cold. That is why the Liberal Democrats welcomed the steel industry legislation as a temporary, emergency and targeted step specifically aimed at turning around British Steel before it can be returned to the private sector.

I am particularly glad that the Government accepted many Liberal Democrat amendments to the steel industry Bill, even if they did not accept them in this place and they had to be tabled in the other place instead. Our amendments require the Secretary of State to have regard to the costs of nationalisation and to come back to this House for approval before tabling regulations. Furthermore, our amendments require the consideration of environmental liabilities in any valuation because, as we all know, public ownership without public accountability is not a plan. The changes we secured strengthened the legislation and direct the Act and the Government’s broader steel strategy towards a truly sustainable footing in the long term, while giving taxpayers true value for money.

British Steel is now owned by the people. We will appoint non-executive directors and a board to take forward the transformation of the company so that it becomes productive, profitable and resilient. Part of the conversation will, of course, be about how the company can act in support of the wider objectives of the steel strategy, including the issues the hon. Gentleman raised in respect of the availability of specialist grades of steel.

The hon. Gentleman asked what compensation Jingye is asking for. We have been in discussions with the company, as we were looking for a commercial solution, but we did not feel we were going to get value for the taxpayer. The company has been running at a loss for some time. That said, in the autumn we will, through regulations, appoint an independent valuer to make a judgment on any compensation that is due, and that could be nil.

Teessiders know what it looks like when Governments stand back and fail to protect steel jobs, so on behalf of the British steelworkers in my constituency who work at Special Profiles in Skinningrove and Teesside Beam Mill at Lackenby, I thank the Government for their decision to step in and protect primary steelmaking in this country. They have preserved jobs and preserved our industry, and the decision will allow British Steel to modernise and prepare for the future, but one of the critical challenges in doing so will be addressing industrial energy costs. I am aware of the decisions that the Government have taken on energy to support industry. What more decisions will they take to bring down costs and make sure that there is a competitive environment for British Steel going forward?

My hon. Friend is quite right to say that steelmaking communities have been impacted by previous Governments standing by rather than intervening —we have seen it in community after community over decades. As a Community trade union member, I am very aware of that. On energy costs, he will be aware of the various interventions that we are making through the supercharger and the uplift in network charging compensation, and we also have the British industrial competitiveness scheme. A key priority for the new board will be looking at ways to reduce costs, and a huge part of that will be investing to help with energy costs.

I call the shadow Minister.

Britain’s steel industry is not competitive, because of high energy costs and excessive red tape, but instead of addressing the root causes, this Labour Government revert back to their default solution of nationalisation. Why are this Government so keen to take us back to the 1970s? If we cannot bring our ruinous energy costs under control, Britain’s steel industry will never be profitable and the UK taxpayer will be left footing the bill.

Can the Minister confirm how much working capital has been provided and the forecast cost to the taxpayer? Will it be more than the £2.5 billion that has been set aside in this Parliament for steel, and if so, where will the money come from? Will the Government provide compensation to Jingye, and what assessment have they made of the threat of legal action from China over nationalisation? The previous Secretary of State, the right hon. Member for Stalybridge and Hyde (Jonathan Reynolds), said that the Government would seek to find a buyer for British Steel, and several parties have expressed interest. Are discussions ongoing with those parties, and if not, why not?

In March 2025, the Government received advice on the state of the blast furnaces in Scunthorpe, the cost of decommissioning and land remediation. Can the Minister tell the House the state of the blast furnaces, how long their lifespan is, and the expected cost of remediating the site? We cannot allow British Steel to become a multibillion-pound liability for the taxpayer without any scrutiny, so when will the Minister next provide an update on British Steel to the House?

Let me begin with the hon. Lady’s question about relations with China. We have been very clear that this decision was made in the national interest, not because of the national identity of those who previously owned the site. We have been very clear in the steel strategy that we think the future of UK steel will be determined in partnership with the private sector and will require co-investment. That was the approach that we took with Tata and have taken elsewhere in the sector, and we have made significant resources available to encourage new private entrants into the sector.

I slightly take issue with the hon. Lady’s “year zero” approach, which suggests that British steelmaking was in a fantastic state under her Government. Crude production has fallen by 50% over the last 10 years, and we have seen community after community abandoned. I simply do not accept the idea that we will all be wearing flares and kipper ties and going back to the 1970s because we have a Government who are willing to intervene, rather than standing by and letting people and communities fall on to the scrapheap.

I say to the Minister that we should never apologise for taking bold action that protects well-paid, unionised jobs in this country and is crucial to the reindustrialisation of our nation, which we know is the future policy agenda.

Further to the point made by the hon. Member for Maidenhead (Mr Reynolds), I have companies in my own constituency such as Langley Alloys, Hallmark Fabrication, Don-Bur, Brown McFarlane and Glebe Engineering that are all going to be impacted by the quotas and tariffs, because the grades of steel they need are not made in the UK. Now that we have this capability in public hands, do the Government intend to extend the range of steel that we make domestically, so that we can feed our domestic manufacturers and producers with the grades of steel they need?

As my hon. Friend will be aware, the point of the steel strategy is to do exactly what he describes, which is to ensure that a far greater proportion of UK demand, including for specialist steels, is produced in the UK. That demand will increase significantly in the coming years, not least because of the industrial strategy. We have owned British Steel for all of 11 hours, and the board is being appointed, but it is fair to say that the issues he raises will be among those that the new board will want to address.

I call the Father of the House.

What concerns me is the jobs of my constituents who work at Scunthorpe. That is all I am worried about; I have no ideological objection. If it is what is needed now, fair enough. As long as the blast furnaces are totally uneconomic because of high energy costs, however, it can only be a sticking plaster. I was struck by the question put to the Minister by his own Back Bencher, the hon. Member for Middlesbrough South and East Cleveland (Luke Myer)—there is no point my demanding that we scrap green energy and all that sort of stuff—so will he take that away and do more with grants to ensure Scunthorpe’s blast furnaces are competitive on world markets?

I thank the Father of the House for the spirit in which he asks that question. The key moment for jobs was the intervention last year, which resulted in the cancellation of the consultation on about 2,700 redundancies. The blast furnaces on the site will continue for some time to come. We have said in our steel strategy that we believe the future of the industry is in modernised, cleaner technologies. I am sure that will be at the forefront of the minds of the new board members as they look to transform and modernise the site.

I congratulate the hon. Member for Maidenhead (Mr Reynolds) on securing this urgent question, and the Minister on his answer and on the Government’s bold action. Redditch manufacturers rely on British Steel, and to be frank, want more and different grades of it to expand their own production. I fully support the measure taken today—or, rather, last night—but can the Minister explain to us what engagement is happening on the ground to reassure workers?

This decision is of critical importance to the entire economy, our national security and our national infrastructure. However, as the Father of the House has said, it is also a matter of getting to the end of the month for thousands of people. This morning, the workers on the site have been briefed on the decision. We would expect the new board to remain deeply engaged with the workforce, who will be central to ensuring a revitalised and resilient future for British Steel.

Thank you, Mr Speaker, for your earlier comment. It is surprising that the Secretary of State is not here to make a statement before he visits Scunthorpe, which I understand he is doing today.

Like the Father of House, I have no objections to—and have supported the Government on—saving the steelworks by nationalisation, but it can only be a short to medium-term solution. The challenges—most notably, energy costs—remain. If, as the steel Minister has previously said to me, the Government are looking to attract private investment into the industry, will he acknowledge that energy costs must be dealt with before that investment will follow?

I absolutely agree with the hon. Gentleman on that point. The Government are very clear today that we are seeking that partnership with the private sector across the steel industry. From our side, the partnership comes with significant resources on the table, through the National Wealth Fund, to help the steel industry become more competitive, particularly on energy efficiency.