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. 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.