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 BBC understands UK government officials are at the Scunthorpe site ready to take control of operations.

After the legislation was given royal assent, Prime Minister Sir Keir Starmer said: “Today, my government has stepped in to save British steel.

“We are acting to protect the jobs of thousands of workers, and all options are on the table to secure the future of the industry.”

He said steel made in Britain “will be the backbone as we get Britain building once more,” adding: “Our industry is the pride of our history – and I want it to be our future, too.”

Speaking to steelworkers earlier on Saturday at a village hall near Scunthorpe, Sir Keir said: “You are the people who have kept this going.”

It came as several hundred people, including steelworkers and their families, took part in a march and a rally at Scunthorpe United’s Glanford Park stadium, chanting “we want our steel back”.

British Steel worker Rob Barroclough told the BBC: “Our family, like many others, is built around the steelworks. Who knows… my boys might end up working there one day, if it can be saved.”

He added: “We’re hoping for the best but planning for the worst.”

Meanwhile, it has emerged that police were called to the steel works this morning after a suspected breach of the peace.

Jingye officials have been on-site regularly in recent days, and it’s thought that relations between them and the workers have become increasingly tense.

Sources told BBC News that when Jingye executives arrived at the plant this morning, the automatic number plate recognition scanners didn’t allow them through the site barriers.

Humberside Police said officers conducted checks and spoke to individuals but that there were no concerns raised and no arrests were made.

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.