Business secretary Jonathan Reynolds said transfer of ownership to the state “remains on the table” and may well be the “likely option” for British Steel, although noted the government could not fund the long-term transformation of the company. Reform UK deputy leader Richard Tice told the Commons: Given the secretary of state has inferred that actually the owners Jingye are not acting and have not acted in good faith, surely the right thing to do is to seize this great opportunity now this weekend and nationalise British Steel?” Reynolds replied: I want to be clear that a transfer of ownership to the state remains on the table and it may well, at this stage, given the behaviour of the company be the likely option. But also our aspirations for British Steel remain a co-investment agreement with a private sector partner to secure that long-term transformation. The action I seek to take today is not a magic wand or a panacea, the state cannot fund the long-term transformation of British Steel itself nor would it want to do so. But a failure to act today would prevent any more desirable outcome from even being considered and that is again why we must act today.” Business secretary Jonathan Reynolds described the legislation as a “proportionate and necessary step”, telling MPs: It allows us to take control of British Steel’s blast furnaces, maintaining steel production and by extension protecting the company’s 3,500-strong workforce. The bill does not transfer ownership to the government. We’ll have to deal with this matter at a later date. I took the decision that given the exceptional nature of a recall, it would be better to limit the powers in this bill, which are still significant, rather than introduce more complex matters of property rights and public ownership at this time.” Conservative former minister Jeremy Wright warned the government risked “creating some considerable legal complexity” in terms of the operation of steel companies. Reynolds, in his reply, said: I want this to be a temporary position, I do not want these powers any minute longer than is necessary but I do need these powers to rectify and save this situation.” Jonathan Reynolds said even if he agreed to Jingye’s terms and conditions for an agreement on support for the Scunthorpe site he “could not guarantee that further requests for money would not then be made”. The PA news agency reports the business secretary as telling the Commons: In this situation, with the clock being run down, doing nothing was not an option. We could not, will not and never will stand idly by while heat seeps from the UK’s remaining blast furnaces without any planning, any due process or any respect for the consequences and that is why I needed colleagues here today.” Conservative former minister David Davis, intervening, said: It’s beginning to sound from what he has described that Jingye is trying to manoeuvre the government actually into a recompensed nationalisation. Will he make plain that in the event they try and manoeuvre us into a nationalisation we’ll pay not more than a penny for it?” Reynolds replied: To be clear, we would always in a situation where the state transfers a change of ownership to it pay the fair market value for those assets. In this case the market value is effectively zero so I take his point entirely. I would say the intention of Jingye has not been to engineer that situation. Their intention has been to keep the downstream mills, which colleagues will know are fundamental to our construction steel industry, and supply them from China rather than from Scunthorpe.” Jonathan Reynolds said Jingye wanted the government to give them “hundreds of millions of pounds” which could have been transferred to China along with British Steel assets. The business secretary said: The British government offered to purchase raw materials in a way that would have ensured no losses whatsoever for Jingye in maintaining the blast furnaces for a period of time. A counter offer was instead made by Jingye to transfer hundreds of millions of pounds to them, without any conditions to stop that money and potentially other assets being immediately transferred to China. They also refused a condition to keep the blast furnaces maintained and in good working order.” Jonathan Reynolds said the government had been negotiating with Jingye in good faith, but said the Chinese company wanted an “excessive amount” from the government. The PA news agency reports that the business secretary said: As honourable members will know, since taking office this government has been negotiating in good faith with British Steel’s owners Jingye. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common sense conditions to protect the workforce, to protect taxpayers’ money and create a commercially viable company for the future. 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.” Earlier Reynolds opened the second reading of the steel industry (special measures) bill, by saying: We meet under exceptional circumstances, to take exceptional action, in what are exceptional times. Our request to recall parliament was not one we have made lightly, and I am grateful, genuinely grateful to honourable members on all sides of this house for their cooperation and for being here today as we seek to pass emergency legislation that is unequivocally in our national interest.” Shadow Cabinet Office minister, Alex Burghart, has said the government could receive “far-reaching powers not seen in legislation really in the past 40 years”. Speaking as acting shadow Commons leader, Burghart told MPs: I’m sure we’re going to hear a lot about urgency today, moving at pace and the rest of it. But the truth is that the government has made a total pig’s breakfast of this whole arrangement. The fact of the matter is, anyone who has been paying any attention to this story over the past few months has known this was coming down the track.” After noise from Labour benches, speaker Sir Lindsay Hoyle said: We’ve come back, it’s Saturday. It doesn’t mean it’s crackerjack day. We’re going to listen.” Burghart later continued: The fact of the matter is, the government as ever when negotiating makes bad deals for Britain, and it is making a bad deal.” He added that “far reaching powers are being given to the government, far reaching powers not seen in legislation really in the past 40 years”. Business secretary, Jonathan Reynolds, tells the Commons that the decision to recall parliament “wasn’t taken lightly”. He says MPs are meeting under “exceptional circumstances, to take exceptional action, in what are exceptional times”. Commons leader, Lucy Powell, has said Saturday’s recall of parliament is aimed at “saving thousands of jobs and securing our domestic production of virgin steel”. She thanked the speaker, Sir Lindsay Hoyle, for allowing the recall and added: We meet in these special circumstances because the government needs to act decisively, at pace and with urgency to ensure that the steelworks, blast furnaces of British Steel are maintained and kept going, saving thousands of jobs and securing our domestic production of virgin steel.” Conservative MP David Davis says the current owners are trying to force the government into nationalisation. He asks if that happens: “will the business secretary refuse to pay more than a penny?” Jonathan Reynolds confirms the government would not pay more than the market value, which is zero. Lucy Powell, leader of the house, says the Commons needs to act “decisively” and “at pace” to ensure furnaces are kept going. Alex Burghart, acting shadow leader of the house, says the government had “made a total pig’s breakfast” of the situation with British Steel. This gets a big reaction and the speaker has to settle the Commons. MPs have begun debating the government’s steel industry (special measures) bill, kicking off the first recalled session of parliament on a Saturday since 1982. Lucy Powell, leader of the house, has opened the debate by thanking all involved in facilitating a recall of parliament and outlining the schedule. MPs are due to sit in the House of Commons now to debate the steel industry (special measures) bill. Here is a photograph of the prime minister, Keir Starmer, leaving No 10 this morning: There is a live stream from the Commons at the top of this blog. You may have to refresh the page to view it. Richard Tice, deputy leader of the Reform party has said he will be joining the government debate over British Steel. In a post on X, the Boston and Skegness MP wrote: We urge the government to do the job properly and fully nationalise British Steel this weekend. Don’t do half a job. This can be a great opportunity done well. Let’s go for it.” In a further video he said: We will be urging the government to show some courage, have some mettle and do the job properly.” If you want to read the 10-page steel industry (special measures) bill, you can access it here (nb: opens as pdf). The government has published its steel industry (special measures) bill before Saturday’s sitting of parliament. The 10-page bill allows the government to instruct steel companies to keep assets running, and to take over those assets if they fail to comply with those instructions. The PA news agency reports that it also provides for a compensation scheme for costs incurred by a company following the government’s instructions, and criminal sanctions for executives who disregard them. Redcar MP Anna Turley is travelling down to Westminster from North Yorkshire to debate the bill on British Steel, reports the PA news agency. In a post on X, Turley wrote: On the train down to vote for something that should have been done back in 2015 for the steelworkers and families of Redcar. So pleased to have a government that believes in steel and believes in our industrial future.” Turley MP also posted a video message saying primary steel making in Scunthorpe is “critical to the UK’s national security and our economic resilience.” If you are just joining us now, here’s what to expect today: MPs will vote on whether to grant the government control of British Steel as emergency legislation paving the way for nationalisation comes before parliament. The House of Commons will sit from 11am The House of Lords will sit from 12pm British Steel makes the vast majority of UK rail track and the government has been seeking a deal to keep the plant open. The industry will be hit by a 25% tariff on steel exports to the US imposed by Donald Trump but the government has insisted British Steel’s problems are not related to this. Talks with Jingye’s chair, Li Ganpo, had dragged on for three days after the government offered to buy raw materials to keep the plant running for the next few weeks while trying to find a longer-term solution. Scunthorpe is the last remaining steelworks capable of making steel from iron ore and so is seen by some people as strategically important for the UK. However, Jingye last month said it planned to close the plant’s two blast furnaces, putting 2,700 jobs at risk. It has since refused to pay for new raw materials, with coal and iron ore deliveries to Immingham port not yet paid for. The government had offered £500m in financial support to switch the blast furnaces to cleaner electric arc furnaces, but Jingye had requested much more. Talks this week are thought to have stalled when Jingye balked at the conditions attached to the offer to pay for new raw materials. The delays in reaching an agreement had caused increasing alarm among workers, who feared at least one blast furnace might be forced to close as soon as next week, leading to job losses. Scunthorpe’s blast furnaces would have closed within days if the government had not recalled parliament to pass emergency legislation, the industry minister has said. Sarah Jones told GB News: Without the raw materials, it’s only a matter of time before the blast furnace is inoperable.” Asked whether this would have happened within days, she said: “Yes.” It’s been a busy morning for Sarah Jones, who is now on BBC Breakfast. Asked whether the government had received any private offers for the company’s Scunthorpe plant, Sarah Jones said: There is not at the moment, to answer your question, a private company that is there willing to invest at this point. Asked how the situation in Scunthorpe is different from the steel works in Port Talbot, Jones said there was a private company willing to invest in the latter. When we came into government, there was a deal on the table with Tata Steel in Port Talbot. We negotiated in 10 weeks a much better deal, but there was a private company willing to invest, who are now investing. We have maintained 5,000 jobs on the site and there will be a future for that site with an electric arc furnace. There is no such deal on the table at the moment (for Scunthorpe), that’s what is different. The other difference is that these are the last blast furnaces making primary steel that we have in this country, and also what is different of course is that the world is changing. As we have seen with the prime minister’s support for our defence industry in recent times, we need to ensure as a country we have sovereign capability to make steel, and that is what we are securing today. The industry minister has said there would be “no extra costs” for the taxpayer as a result of taking control of British Steel’s Scunthorpe site, beyond the £2.5 billion already budgeted for supporting the industry. Sarah Jones said: We are hoping that the company will co-operate with what we are asking them to do, we hope that we will give them a notice and they will continue. If they do not, we will step in. Now the company will be liable for any costs that we incur, and we will seek to get that money back. But let me be really clear on the finances. We have a fund which we put into our manifesto because we have been committed to steel for the duration. She added: We have the £2.5 billion fund for steel which we had in our manifesto, that we will use if necessary, so there will be no extra costs to the Exchequer that we don’t already have in our plans. We’ve got more from industry minister Sarah Jones, who has said MPs face a choice between passing the government’s steel bill and seeing the end of primary steel making in the UK. She told Sky News: If blast furnaces are closed in an unplanned way, they can never be reopened, the steel just solidifies in those furnaces and nothing can be done. So the choice that is facing MPs today is do we want to take back control, to give the business secretary the power to act as a company director and to instruct the company to ensure we get the raw materials and we keep the blast furnaces operating, or do we want to see the end of primary steel making in this country and the loss of jobs? That is the choice that is on the table today. British Steel owner Jingye was not negotiating “in good faith” about saving the blast furnaces at Scunthorpe, the industry minister has said. Sarah Jones told Sky News: We have been negotiating with the owners of British Steel to try and secure a way forward. We made a very generous offer to them, which has been rejected. We have been acting throughout this period in good faith, but we believe that in recent times the company have not been acting in good faith. This problem has now become existential because the company have refused to bring in the raw materials that we need to keep the blast furnaces operating. Blast furnaces have been making steel in Britain for 300 years, ever since they helped start the Industrial Revolution. This weekend, parliament will sit for the first Saturday in decades as it tries to keep the last two furnaces running for a bit longer. Keir Starmer has recalled MPs to discuss emergency powers to direct steel companies, including British Steel’s Scunthorpe steelworks, to “preserve capability and ensure public safety”. The move would be short of nationalisation, but it would give the government more influence on the steel industry than at any point since Margaret Thatcher. The government is scrambling to save Scunthorpe after its Chinese owner, Jingye Steel Group, last month said it was considering closing it, with the likely loss of 2,700 jobs. Starmer and the business secretary, Jonathan Reynolds, hope to keep the plant running for the next few weeks while they work out the longer-term plan, with nationalisation one option. British Steel is facing a crisis within a crisis: in the short term – the next week or so – it needs materials, including iron pellets and coking coal, or else it faces the prospect of the furnaces cooling beyond easy or affordable recovery. Customers would flee, making job losses inevitable. People with knowledge of this week’s talks between the UK government and Jingye said it appeared that the government had run out of patience with the Chinese company’s negotiating. The government had offered to buy the raw materials to keep the blast furnaces running in the short term but that offer was not taken up. Parliament may be able to avert the short-term crisis on Saturday. Some opposition parties were also furious that other industrial plants in trouble had not been given the same treatment from the government. Plaid Cymru said “the people of Wales would not forget” that the steel plant at Port Talbot was allowed to close its blast furnaces and convert to electric arc production, while the SNP highlighted the different treatment for Grangemouth – Scotland’s only oil refinery, which could close. Government sources said those plants were facing different situations. The Conservative leader, Kemi Badenoch, said the government had “bungled” the negotiations with British Steel. “They must have seen this coming for a while,” she said. “Instead of addressing it earlier in the week when parliament was sitting, their incompetence has led to a last-minute recall of parliament.” The Green Party has said it will support any bid to nationalise British Steel. 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”. The last time parliament was recalled during recess was in 2021, when Afghanistan had to be evacuated during the Taliban takeover. It is also the first recall of parliament on a Saturday since 1982. One MP said the move was “going down extremely badly” with colleagues who had been given no warning about the need to return to Westminster, when it had been known for weeks that British Steel was in trouble. Speaking on Friday, Starmer said the “future of British steel hangs in the balance” and he would not stand by while the last blast furnaces in the UK were closed, shutting an essential industry. He said: 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. A No 10 spokesperson said: The prime minister has been clear, his government will always act in the national interest. All actions we take are in the name of British industry, British jobs and for British workers. Tomorrow (Saturday), parliament will be recalled to debate the steel industry (special measures) bill. The bill provides the government with the power to direct steel companies in England, which we will use to protect the Scunthorpe site. It enables the UK government to preserve capability and ensure public safety. It also ensures all options remain viable for the future of the plant and the livelihoods it supports. We have been negotiating with British Steel’s owners in good faith ever since coming to office. We have always been clear there is a bright future for steel in the UK. All options remain on the table. When the legislation is passed, Jonathan Reynolds will be able to order the company to buy the raw materials to keep two blast furnaces going at the plant and the taxpayer will take on the costs of the purchases. The company’s owner, Jingye, has said it is losing about £700,000 a day. The issue of nationalisation will be dealt with separately and is not certain to happen, but senior sources said it was the likely outcome and the government would look at potential private sector partners for a transfer of ownership and co-investment. The company declined to comment and it remains unclear how Jingye will respond to being directed by the UK government. Government sources said generous offers had been made to the Chinese company that any rational actor would have accepted, and that the UK was taking action to keep the furnaces going in order to continue talks about the next steps. Once they had been allowed to stop, the furnaces would be impossible to restart. Good morning and welcome to a slightly unusual Saturday edition of our politics live blog. Keir Starmer is stepping in to seize control of British Steel to stop its Chinese owner shutting the Scunthorpe plant in an unprecedented move that paves the way for likely nationalisation. The prime minister was granted a recall of parliament on Saturday, with MPs set to debate emergency laws that will give the business secretary, Jonathan Reynolds, the power to direct the company. The Commons will sit at 11am, with MPs called back from Easter recess to discuss putting the assets under public control. The government will aim to get emergency legislation through the Commons and Lords in one day of sitting. We’ll cover the debate live while also bringing you analysis and other political updates throughout the day.
Author: Amy Sedghi (now) and Hamish Mackay (earlier)