Parliament recalled to debate emergency law to save British Steel

Parliament will be recalled on Saturday to pass an emergency law to save British Steel’s plant in Scunthorpe from imminent closure.

At a press conference, Sir Keir Starmer said the legislation would allow ministers to “take control” of the Lincolnshire plant, which employs 2,700 people.

The move stops short of fully nationalising the company at this stage, but the prime minister said “all options” remained on the table.

Talks have been taking place this week to keep production going at the firm, after its Chinese owner said its blast furnaces are “no longer financially sustainable”.

MPs left Westminster for their Easter break on Tuesday, and were not due to return until 22 April.

Both Houses of Parliament are being recalled, with Sir Keir confirming the government wants to pass the legislation in a single day.

The prime minister added that the future of the company “hangs in the balance”.

Adding that steelmaking was “essential for our future”, he added: “our economic and national security are all on the line”.

Chinese company Jingye, which bought British Steel in 2020, says it has been suffering financial losses of around £700,000 a day.

The BBC understands that ministers are seeking immediate powers to control the site so it can ensure it has enough raw materials to keep going, with current supplies due to run out in the coming weeks.

After Easter, Parliament could then be asked to give the government the power to nationalise the company.

The business department said the new law would give the government the power to “direct the company’s board and workforce, ensure they get paid, and order the raw materials to keep the blast furnace running”.

It added it would also mean anyone at the plant “who takes steps to keep it running, against the orders of the Chinese ownership” can be reinstated if they are sacked.

The company announced plans last month to shed jobs at the Scunthorpe site, blaming “highly challenging” market conditions, tariffs and costs associated with lower-carbon production techniques.

The government has offered £500m of support to partly fund a switch from blast furnaces to more energy efficient electric arc furnaces. But the offer has been rejected by the company.

Earlier this week, the government offered to buy the coking coal to keep the blast furnaces running until a longer-term solution to saving the plant could be found, but was unable to get the company to agree to this in tense negotiations this week.

The business secretary is thought to have lost confidence in the company’s Chinese owners, with a government source saying they are “no longer trustworthy partners”.

The move to take control of the company has been welcomed by unions representing employees at the site, with Unite saying it would grant workers a “reprieve” whilst a longer-term solution is worked out.

“Ministers could not have allowed a foundation industry to go under,” added general secretary Sharon Graham.

The GMB union said the government’s move looked like the “first step” towards nationalisation, which it supported as the “only way to save the UK steel industry”.

Conservative shadow Cabinet Office minister Alex Burghart said the surprise recall showed the government had “completely flunked its negotiations” with British Steel.

“Parliament rose on Tuesday – Labour knew this was coming down the track and did nothing,” he added.

Liberal Democrat leader Sir Ed Davey said “nothing should be off the table in this matter of national security” and added that the recall of Parliament should be seen as “an opportunity to come forward with a serious plan for the sustainable future of domestic steel production”.

Reform UK leader Nigel Farage said the situation in Scunthorpe was “desperate”.

He urged the government to “do the right thing… and bring it [British Steel] back into public ownership”.

Parliament was last recalled from a scheduled break in August 2021 to discuss the US withdrawal from Afghanistan.

The House of Commons has been recalled 34 times since 1948.