PARLIAMENTARY DEBATE
British Steel - 16 July 2026 (Commons/Commons Chamber)

(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.

The Act is now law and the House has still not been told how any of this is going to end, so I have three questions for the Minister. First, Jingye has said it has started the process to seek compensation from the Government for nationalisation; will the Minister confirm what compensation Jingye is asking for, the Government’s assessment of the amount, and how the House will be able to scrutinise any compensation paid?

Secondly, precision-engineering firms throughout the country have confirmed that they cannot buy the specialist grades of steel they need from the approved domestic supply list because they are not manufactured in the UK. Owning a steel company is not the same as having steel capability. What plan is there to widen the range of grades that British Steel can produce to support British industry?

Finally, what process has been arranged for new private co-investors to come in to help to modernise the sites? Without them, the taxpayer is not the rescuer of British Steel but ends up being its permanent owner.

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.

Our energy, defence and railway sectors depend on steel. Does my hon. Friend agree that steel made by British workers, in Britain, and owned by the British people, is not only in our infrastructure interest but in our national interest?

I could not agree more. On a day when many of us will be thinking about travelling back to our constituencies by rail for the summer, it is worth noting that 80% of the rails we will be travelling on are made by British Steel. My hon. Friend raises an important point about taking more steps to ensure, as taxpayers would expect, that when we engage in public procurement British Steel is firmly in the mix.

Congratulations to the Government on doing what I have been urging for seven years, which is to take this strategic national asset into public ownership. What is needed now is a comprehensive, bold vision for the blast furnaces. I am concerned about the talk about more electric arc furnaces. We already have them at Rotherham, and others are being built down in Port Talbot. We need a comprehensive vision to invest in blast furnace plate mills, so we have a real job-creating, world-class industry based around Scunthorpe in the great county of Lincolnshire. How long will it take to get that vision, so that we know which way we are going?

As the steel strategy set out, we believe the most sustainable and competitive future across the industry in general is through technologies such as electric arc. The blast furnaces at Scunthorpe will be operational for the immediate term. We are now 11 hours and five minutes into the ownership of the site. The issues that the hon. Gentleman raises will be high on the to-do list of the new board, as we appoint them shortly.

Many manufacturing businesses in Keighley and Ilkley, including GESIPA, Airedale Springs and Olicana Products, are deeply concerned about the tariffs and quotas associated with the national steel strategy. They have said to me that the measures will result in increased costs, reduced supply and weakening competitiveness, and will directly threaten jobs in Keighley. Can the Minister outline a response to the managing directors of those businesses on the concerns that they have raised directly with me about the steel strategy that the Government are adopting?

The hon. Gentleman will be aware that the measures we took were necessary because of the ending of the steel safeguards. Without the measures we took, there was a real prospect of our becoming the global dumping ground for uncompetitively subsidised over-production. That being said, the Minister for Industry, the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Stockton North (Chris McDonald), has been meeting manufacturers and listening to those concerns. That is why we have the transitional arrangements and have ensured that they will be reviewed after 12 months. It is also, frankly, why we are working so hard with the EU to ensure we get mutual arrangements there as well.

The Liberal Democrats supported the passage of the Steel Industry (Nationalisation) Bill, but we tabled amendments, in my name and in those of my hon. Friends, to increase the provision of scrutiny and transparency under the Bill. The Government voted those amendments down in this place, but then had a change of heart and supported them in the other place. Given that, it is extremely disappointing that a move of this magnitude has been made and no statement has been made to the House. On the change of heart in the Lords, was that merely a sticking plaster, or is there a genuine commitment to give parliamentarians scrutiny of the important decisions being made about the future of our steel industry?

As the Minister for Industry has set out, on the issue of cost, it is our intention to continue with the practice under the previous Act of coming to Parliament on a quarterly basis with a written ministerial statement to set out the costs. As we appoint the new board, we will also be keen for the owners and operators of British Steel to be accountable to Select Committees.

Steelmaking is clearly important for our national security. Some of the issues for British Steel are the costs that it has and the full orderbook that it needs to remain sustainable. What will the Government do to ensure that British Steel turns out steel at a competitive rate, and that it gets the orders that it needs?

On the point about a competitive rate, I refer the hon. Gentleman to an answer I gave a moment ago on the investment the Government are putting in across the steel industry to ensure costs are reduced. On the orderbook, through the work we are doing on public procurement, we are ensuring that there is a clearer line of sight for British steel producers—both publicly owned British Steel and others—on all the coming work linked to investment in national infrastructure or the industrial strategy, so that they get a fair shake at those contracts.

I welcome the nationalisation of British Steel, not least because it protects critical infrastructure needs, as well as local jobs and neighbourhoods. On procurement and competition rules, what assessment have the Government made to ensure British Steel does not fall foul of regulations on supplying steel within the United Kingdom?

As Minister with responsibility for regulations, if there are any particular regulatory issues that the hon. Gentleman has in mind, I encourage him to bring them to me and I will pursue them across the system. In addition to the reviewed guidance that we have given to ensure British Steel is in the mix for procurement, the clean industry bonus scheme—for offshore wind, for example—will incentivise its use.

I appreciate the point that the Minister made about the taxpayer having only owned British Steel for a matter of hours, and how the board is still being appointed. It is, however, imperative that the Government are clear, once the board is appointed, what the strategic priorities are for the board—as opposed to British Steel at large. Top of those priorities must be a timescale to get to profitability. Can the Minister—or his successor—commit to ensuring that the red lines set for the board are made clear to this House as soon as it returns in September, when the board will have been functional for five or six weeks?

I am disappointed in the hon. Gentleman’s lack of faith in my career prospects. I am sure that the Minister for Industry, who has deep expertise in steel and is an excellent Minister, intends to update the House on the strategic objectives of the new board.

The Minister failed to respond to any of the questions asked by the shadow Minister, my hon. Friend the Member for Reigate (Rebecca Paul), so I will try again: some companies have expressed an interest in the business, so what discussions is the Minister, or his colleagues, having with potential buyers?

We did not take the decision lightly, and we would have preferred commercial options. We are now 11 hours and 12 minutes into ownership of the company. We are deeply committed and open to private sector partnerships to ensure the future of British Steel, and that is an essential and early part of the conversation.

As always, the Minister is positive and giving us encouragement. I welcome the steps that have been taken to secure the wider British steel industry, but I will press the Minister on the critical issue facing manufacturing in Northern Ireland. As the Minister will know, under the Windsor framework, businesses in Northern Ireland are being hit by a double whammy of 50% tariffs on imports exceeding the slashed quotas. That is catastrophic for our engineering firms, so will the Minister commit to urgent discussions with the Northern Ireland Executive and local businesses to resolve the tariff anomaly, protect internal UK trade, and ensure that Northern Ireland’s manufacturing backbone is not broken by an unintended own goal?

Having got through this urgent question without making any commitments on behalf of my hon. Friend the Minister for Industry, I will give one now and say that I am sure he would agree to the meetings the hon. Gentleman suggests. There are specific arrangements within the trade measures we have taken that are intended to ensure the flow of steel into Northern Ireland, and there is advice for GB companies taking steel products into Northern Ireland. The hon. Gentleman’s question again highlights the importance of having that ongoing conversation with the EU, because we are not the EU’s problem when it comes to steel, and it is not ours.