UK takes control of British Steel under emergency powers

The UK government is taking control of Chinese-owned British Steel after emergency legislation was rushed through Parliament in a single day.

Business Secretary Jonathan Reynolds told MPs the government's likely next step would be to nationalise the Scunthorpe plant, which employs 2,700 people.

But he said he was forced to seek emergency powers to prevent owners Jingye shutting down its two blast furnaces, which would have ended primary steel production in the UK.

MPs and peers were called back from their Easter holidays to debate the legislation in an extremely rare Saturday sitting of both houses of Parliament. It has now received Royal Assent after being passed by the Commons and Lords.

The legislation going through Parliament was not resisted by opposition parties – but the Conservatives said the government should have acted sooner and made "a total pig's breakfast of this whole arrangement".

The new law hands Reynolds sweeping powers to control management and workers at the plant to ensure production continues, including entering it by force, if necessary, to secure assets.

But Jingye will retain ownership of it for now.

The government remains hopeful it can secure private investment to save the loss-making plant, but ministers concede there are currently no companies willing to make an offer.

In the Commons, Reynolds acknowledged that public ownership was "the likely option".

He said the government would "pay the fair market rate" to shareholders in the event of nationalisation but added: "In this case the market value is effectively zero."

Keeping a loss-making plant open could come at a high cost to taxpayers.

But Reynolds insisted it was in the "national interest" to retain the ability to make steel from scratch and he believed the company had a future, particularly as the government was boosting infrastructure spending.

"Steel is fundamental to Britain's industrial strength, to our security, and to our identity as a primary global power", he told MPs.

He said he had been forced to take over the running of the plant because Jingye, which bought British Steel in 2020, had rejected the government's offers to buy raw materials to keep the blast furnaces running.

"Despite our offer to Jingye being substantial, they wanted much more. Frankly, an excessive amount. We did however remain committed to negotiation.

"But over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw material to keep the blast furnaces running, in fact, their intention was to cancel and refuse to pay for existing orders.

"The company would therefore have irrevocably and unilaterally closed down primary steel making at British Steel."

Reform UK's deputy leader Richard Tice urged the government to "show your cojones" and go further by fully nationalising British Steel "this weekend".

Several Conservative MPs also spoke in favour of nationalisation. Liberal Democrat Treasury spokeswoman Daisy Cooper said recalling Parliament had been "absolutely the right thing to do" but urged ministers to use the "unprecedented legislation judiciously".

Former Labour leader Jeremy Corbyn, now an independent MP, urged the government to nationalise all steelmaking in the UK.

Green MP Ellie Chowns said steel is integral to the "green industrial transformation" - including making wind turbines, trains and tracks - and nationalisation would give the UK the control it needs to renew the industry.

The government came under fire for acting to save the Scunthorpe plant but not taking the same action when the Tata Steel works in Port Talbot was threatened with closure.

Plaid Cymru's Westminster leader Liz Saville Robert said it was a "bitter day for the people of Port Talbot", as she urged the government to change the legislation to take control of what is left of the steelworks there.

The SNP's Westminster leader Stephen Flynn asked why the legislation only applies to England, when a Scottish oil refinery is facing closure.

"Why is this not being extended to Scotland? Why is Grangemouth not being included?" he asked Reynolds, adding the UK government was "not interested in Scotland".

Reynolds said Grangemouth was "not comparable" with the situation at Scunthorpe, which he said was "unique".

"The question for all members is whether we as a country want to continue to possess a steel industry, do we want to make the construction steel and rail we need here in the UK, or do we want to be dependent on overseas imports?" he told MPs.

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