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 company’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 firm “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.

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

Blast furnaces in operation at the British Steel manufacturing site in Scunthorpe, North Lincolnshire | Getty Images

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.

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.”

Prime Minister Sir Keir Starmer speaking during a press conference in the Downing Street Briefing Room in London | Carl Court/PA Wire

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

Business Secretary Jonathan Reynolds said: “We will always do what is necessary to keep Britain secure at home and strong abroad.

“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.”

Conservative Party leader Kemi Badenoch said Labour “bungled” negotiations over British Steel and are now “scrambling for a solution” that will come at a big cost to taxpayers.

She said: “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.

“As business secretary, I negotiated a modernisation plan with British Steel to limit job losses and keep the plant running, including introducing an electric arc furnace in Teesside, similar to what we did with Tata at Port Talbot steelworks.

“However, 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.”

Mrs Badenoch said Labour’s “incompetence” had led to the last-minute recall of Parliament.

“Now the British public can see the Government scrambling for a solution to a problem they created and could have resolved months ago. It is inevitable that it’s going to cost taxpayers a lot of money.”

Stephen Flynn MP, the SNP’s leader at Westminster, accused the UK government of treating Scotland as an “afterthought”.

He said: “If British Steel is considered viable for nationalisation as an industry of strategic national importance then our ability to sustain our energy demand definitely is - it's the same old Westminster story with Scotland and our key industries an afterthought.

“Energy security is national security and if a steel plant in England, rightly or wrongly, merits Westminster taking the extraordinary step of recalling Parliament with a view to nationalise it, then why not our key energy asset at Grangemouth? If there was ever a sign that this union is completely broken then it is this.

“The global landscape has been turned on its head and with the UK Labour Government now seemingly willing to nationalise key industrial assets, there is an immediate requirement to reassess options for the Grangemouth site in that context. “

Green MP Ellie Chowns said nationalisation was “the only sure way to secure this strategically important sector so vital to national security and British jobs”.

She added: “Public ownership of key sectors like steel, water, energy and transport has always been Green Party policy.

“And where it is in the public interest to have public ownership of a key strategic industry, which appears to be the case with Scunthorpe Steelworks, Greens are in full support.

“Taking British Steel into public ownership provides the opportunity to help drive the green industrial revolution, supporting Scunthorpe Steelworks to make the transition from blast furnaces to electric arcs, which are cheaper and far better for the environment to run.”