Jonathan Reynolds

With permission, I shall make a statement on Speciality Steel UK, but before I do so, I would like to say that I know the thoughts of the whole House will be with the Prime Minister following the passing of his father Roy earlier today. The workers at Speciality Steel UK have faced years of uncertainty. The plants have been mothballed and the jobs furloughed for several years. This outrageous situation is a monument to years of neglect by successive Conservative Governments who let this industry decline, but this Government and I have taken a different approach. We have done all we can to rebuild the sector, and we have confronted its challenges head-on. In the case of Speciality Steel, complex ownership structures and opaque financing arrangements have amplified the headwinds of the wider sector. I do not need to remind the House about this case’s links to a prominent ongoing corporate scandal involving a former Conservative Prime Minister. As the House may recall, Speciality Steel UK entered liquidation in August last year, with the independent court-appointed official receiver managing the liquidation process. Since then, the Government have provided funding to enable the official receiver to carry out his statutory duties, including maintaining site safety, supporting employees and conducting a sales process for the business and its assets. Throughout that period, our priority has been facilitating a private sector solution. The official receiver engaged with a range of interested parties and earlier this year identified a preferred bidder. That bidder subsequently requested Government support to make its purchase of Speciality Steel UK possible. However, following extensive engagement between the bidder and its advisers, and having done all the due diligence and given the case the consideration that taxpayers would expect, the Government have decided that they cannot provide support on the proposed terms. This decision has not been taken lightly. For over a year, we have funded the official receiver process, while working constructively on efforts to secure a private buyer. We took a long, hard look at the offer that was on the table, but the truth is that we had serious concerns about the proposed financing of it, the protections for UK taxpayers, and whether it could offer long-term stability for the local economy and community. Having concluded that we cannot support the preferred bidder’s proposal, we are faced with a choice: we can allow events to take their course through the liquidation process, and risk being left with no say in the future of the sites, or we can act. This Government choose to act. We have made a commitment to reindustrialise Britain—to bring good growth to every postcode of our country. Backing the proud communities of Stocksbridge, Rotherham, Wednesbury and Brinsworth is absolutely part of that commitment. These workers and those across the wider business have endured a prolonged period of uncertainty. The Government cannot accept the prospect of another prolonged process that will create more worry and anxiety for workers, deter businesses and hang over the local community. Nor can we accept a situation in which decisions impacting the future of communities in South Yorkshire are effectively taken by default, rather than through a deliberate assessment of what will best support growth, opportunity and prosperity in the years ahead. We will therefore engage with the official receiver’s sale process and develop a proposal for the public acquisition of SSUK. This will preserve strategic control and ensure that all credible future opportunities can be properly considered before irreversible decisions are taken. We are taking this step because SSUK occupies a unique place in the UK’s steel ecosystem. It offers specialist capabilities that have served advanced manufacturing supply chains, including in aerospace and defence. In other words, it is capable of supplying the growth-driving sectors of our economy—those that we have committed to supporting through our industrial strategy. SSUK’s strategic value extends well beyond its economic contribution. It lies in its specialist steelmaking capabilities, which have historically produced products like aircraft landing gear, helicopter rotors, missiles and munitions. It would not be right to let this go by default. I want to make an important clarifying point: we will work towards public acquisition, but that is not the end of the process, or the end of the conversation about the long-term future of the business and its sites. It means that we are keeping our options open while Government, local leaders, industry experts, private investors, workers and other partners consider what is best for these strategically important locations. I want to thank those Members of this House with SSUK sites in their constituencies for their engagement with my Department, and I welcome their continued input. That includes my right hon. Friend the Member for Rawmarsh and Conisbrough (John Healey), and my hon. Friends the Members for Rotherham (Sarah Champion), for Penistone and Stocksbridge (Dr Tidball), and for Tipton and Wednesbury (Antonia Bance). I recognise the role played by the Mayor of South Yorkshire, Oliver Coppard, and his team in ensuring a joined-up vision for the future of South Yorkshire. I welcome the work that I know we will do in lockstep to deliver this future. Working towards public acquisition will create the time and space necessary for undertaking a full assessment of the opportunities available. It will let us consider future industrial use, regeneration opportunities and the role that specialist manufacturing capabilities could play in supporting growth and our national resilience. One option that will be assessed carefully is the future of speciality steel production. However, we are not prejudging the outcome of that assessment. All options will be considered rigorously against their economic and industrial benefits, their impact on regional growth and their value for money. I should note that all future decisions and spending commitments will be subject to detailed due diligence and funded from existing Government budgets. Our announcement today must also be seen in the wider context of the Government’s commitment to the future of the British steel industry. Steel remains fundamental to our economy, our infrastructure, our energy system, our advanced manufacturing base and our national security. It underpins critical supply chains and supports thousands of skilled jobs across the United Kingdom. That is why we nationalised British Steel earlier this year; why we intervened to secure stability and maintain production at the site while we develop long-term options; and why we secured a better deal for the steel communities of south Wales, with £500 million of Government support for a new electric arc furnace at Port Talbot. In our steel strategy, we committed to stabilising and rebuilding the steel sector. What is more, we set out a goal of supporting productive and profitable steel producers that can meet their customers’ needs, strengthen our national security and provide high-quality, secure, long-term jobs, backed by private investment. That was not an empty promise or wishful thinking. We have acted to tackle the challenge posed by global steel overcapacity through trade measures that protect our domestic production from unfair pressure and support the viability of the nation’s steelmaking. I want to speak directly to the workers of Speciality Steel UK, who have been stuck on furlough, unable to do the jobs of which they are so rightly proud, through no fault of their own. I know that they feel ignored and let down by previous Governments, but as Business Secretary, I will not duck these difficult decisions, and neither will this Government. I will do all that I can to secure a bright future for you, your communities and your families. Taken together, these actions demonstrate that this Government are serious about reindustrialising Britain, and the steel sector playing its part. We want to attract private investment, strengthen domestic supply chains and ensure that industrial communities have a genuine opportunity to thrive in the decades ahead. That is why we are moving towards the public acquisition of Speciality Steel UK. As ever, I commit to keeping all Members informed as this important work progresses. I commend this statement to the House.