Speciality Steel UK
Tuesday, 15 September 2026
Contributions
Statement
The following Statement was made in the House of Commons on Monday 14 September.
“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 taken, in effect, 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 steel-making capabilities, which have historically produced products such as 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 honourable friend the Member for Rawmarsh and Conisbrough, John Healey, and my honourable 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 steel-making.
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”.
Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister for the Statement. I should say at the outset that, above all, our thoughts are with the more than 1,300 employees of Speciality Steel UK and their families, who once again face considerable uncertainty about their future. However, I am afraid that this announcement appears to be a sign of things to come under this Government. When Parliament was recalled last year to pass the Steel Industry (Special Measures) Act, we were told that these extraordinary powers were required to deal with the immediate crisis at British Steel. When the Government returned with their nationalisation legislation earlier this year, Ministers again presented it a targeted, last-resort response to the situation at British Steel. British Steel has since been nationalised, yet the Government have still failed to secure the private investment needed for its long-term future. Now, only two months later, we have another steel company moving towards public ownership after the proposed sale to Blastr fell through. Why did that deal fall through? Yesterday the Guardian quoted a Blastr spokesman as saying: “We have a fully-funded proposal—at no cost to the British taxpayer—that is ready to complete within 12 weeks”. Surely the bigger question is: why does the private sector increasingly find it so difficult to invest in British steel companies? Surely part of the answer is that successive decisions by this Government have made Britain, and particularly energy-intensive industries such as steel, simply too expensive in which to operate. Our industrial electricity prices remain among the highest in the developed world, around four times those faced by manufacturers in the United States. Then there are the additional employment costs. The Government’s own latest assessment puts the direct annual cost to business of the Employment Rights Act at around £1 billion. During the passage of that legislation, businesses repeatedly warned Ministers about its cumulative impact on investment and recruitment. During the passage of the Steel Industry (Nationalisation) Bill, we on these Benches gave Ministers opportunities to address some of these underlying problems. We sought greater discipline over regulation and reporting, proper scrutiny of taxpayer liabilities, and action on the cumulative burden of carbon and energy policy. Instead, from 1 January next year the Government will introduce the UK carbon border adjustment mechanism. Their own figures forecast that the CBAM will raise £140 million in 2027-28, £180 million the following year and £175 million in 2029-30. Those costs ultimately fall on imported steel, aluminium, cement and other materials used throughout British manufacturing supply chains. At the same time, domestic steel-makers remain exposed to the UK emissions trading scheme and the Government are now negotiating to link that scheme more closely with the EU’s ETS. We also understand that the Government wish to participate in the EU internal electricity market. The negotiating framework envisages dynamic alignment with relevant EU electricity rules and an indicative UK renewable energy target comparable to that of the European Union. That will only add more costs. The new Secretary of State for Energy Security and Net Zero has spoken of the need for greater realism in our progress to net zero. Can the Minister therefore tell the House whether that realism will translate into a material change in energy policy for energy-intensive industries? What specific action will the Government now take to bring industrial energy prices materially closer to those faced by our major international competitors? The Business Secretary told the other place yesterday that public acquisition could require approximately £350 million, including the acquisition itself and working capital over a period of one to three years. The taxpayer is already supporting Speciality Steel UK to the tune of a reported £3.5 million a month in salaries while production remains largely dormant. Can the Minister therefore tell the House the Government’s current estimate of the total taxpayer exposure? How much has already been spent? How much working capital do the Government expect to provide? Will Ministers publish a clear timetable setting out the expected costs over the next three financial years? What is the exit strategy? Yesterday, the Business Secretary said that his ideal remains for the company “to be run in the private sector ”—[ Official Report , Commons, 14/9/26; col. 1441.] —and that he is “keen” to see it return to private ownership. If that is the objective, will the Government commit to publishing measurable conditions for doing so, as well as to regular assessments of opportunities for private investment and a clear process for returning Speciality Steel UK to private ownership? Public ownership does not in itself give workers long-term certainty. A competitive business, sustained investment and customers who want to buy steel domestically give workers long-term certainty. That matters particularly when the Government tell other sectors that there is no money available. Only yesterday, the Government were defending their refusal to reduce VAT for our struggling hospitality sector on the grounds of the cost to the Exchequer, yet when another nationalisation is proposed, hundreds of millions of pounds of taxpayer exposure apparently becomes possible. We cannot return to a model in which the Government continually absorb the losses of industries that their own policies have helped to make uncompetitive. The Minister will know the history as well as anyone in this House: Britain tried widespread state ownership of major industries before. By the 1970s, taxpayers were repeatedly required to support loss-making nationalised industries, while investment, productivity and competitiveness suffered. That experiment ended at the IMF, and, looking at gilt yields today, that is again where the markets think we are headed. We do not want to see that history repeated. Will the Government recognise that nationalisation is not an industrial strategy? Will they instead set out a serious plan to slash industrial electricity prices, reduce the costs of unnecessary regulation, make Britain internationally competitive again, and create the conditions in which private investors want to invest in British Steel?
Lord Fox (LD)
My Lords, I congratulate the Minister on his new role, which is fast becoming that of a steel baron. As I said from these Benches during the passage of the nationalisation Bill—which, as the noble Lord, Lord Sharpe, pointed out, focused on British Steel—Liberal Democrats recognise that national security, energy security and food security are all intertwined, and that steel is critical to our renewable sector, defence and national infrastructure. In one sense, yesterday’s announcement adds yet another complication to the Government’s attempts to ensure that the UK has a viable and strategic steel industry. In another, it was perhaps inevitable, and gives the Government a chance to consider two sides of the steel industry at the same time. My first focus is on the timeline and how the Speciality Steel UK part fits with other activities. In the Commons, in answer to the question from my honourable friend Daisy Cooper MP, the Secretary of State said that he expects the process for Speciality Steel UK to take between four and six months. Can the Minister update your Lordships’ House as to the timeline for British Steel and the valuation process that is under way? Can he tell us whether there is any crossover between the two or whether they are discrete processes? The Secretary of State set out the different scale of the task to rejuvenate British Steel—in fact, he implied that any involvement of the private sector would be at some time in the future. Can the Minister confirm the Government’s thinking around private sector involvement in British Steel and how it would affect attempts to get private sector involvement in Speciality Steel UK? Can he also confirm the scale of investment that Speciality Steel UK will need to make it an attractive investment for the private sector? Additionally, how does all this affect Tata Steel in Wales? The Secretary of State said that he hopes British Steel will follow Tata and install electric arc technology. How does Tata, which despite government support is investing a great deal of its own money into electric arc, compete with a government-funded competitor —competing for raw material at the very least, but also markets? Moneywise, in the Commons, the Secretary of State said that the cost of nationalising Speciality Steel UK will be met from existing budgets. He went on to remind the House of the huge sums involved, but it is quite clear that this pot is emptying fast. Can the Minister undertake to bring detailed costings to this House, covering valuations of both this asset and the British Steel asset, as soon as they are available? Daisy Cooper MP also raised in the Commons the issue of Europe. The steel sector generally, and tariffs and carbon border taxes specifically, all hinge on our relationship with the European Union. Can the Minister agree that having a much closer relationship with the EU could make many of these issues much easier to deal with and iron out? Can he tell us when the Government will be making substantive moves to achieve this closer relationship? As the Statement observes, the Government of the noble Lord, Lord Sharpe, created the legacy that this Government inherited. Central to this legacy have been the structurally sky-high costs faced by this and other manufacturing industries. I know the Minister is new to his role, but I am sure that energy was one of the first things he was asked about when he took over. The Government have made some efforts to help some high energy users, but these bypass most manufacturers and, for those they affect, reductions are being cancelled out by other measures in the opposite direction happening at the same time. Can the Minister confirm and agree with me that, without new measures which substantially cut energy costs so that they are much closer to global competitors, it really does not matter who owns the steel industry because with costs like this the sector will always struggle to flourish? I close by recognising the people working in the industry and their importance. They are vital; the UK needs their skills, and indeed needs many who have left the industry to come back. But these people need to know they have a future and that their industry has a future. The Government have made first steps in this, but there is a great deal to do. We on these Benches will support the Government where we can, to help pick up momentum and get this industry back on its feet.
The Minister of State, Department for Business, Innovation, Science and Trade (Lord Sarwar) (Lab)
My Lords, I am grateful for the contributions and serious consideration that the House has given to the future of Speciality Steel UK. I will come on to address some of the specific questions that both noble Lords have rightfully asked, but first I thank both noble Lords for mentioning the workforce and echo what they said. For the workforce, it is a time of particular anxiety. It is important that they know that, regardless of party politics, this House and the other place stand fully behind the fantastic workforce. Before I get on to some of the detailed answers, it is important to clarify some of the facts on where we are and what the Secretary of State outlined yesterday. This is an important matter for the employees of the business, the communities surrounding its sites and the United Kingdom’s wider industrial capability. I therefore welcome the opportunity to clarify the Government’s position, explain the decision we have taken and set out the next steps. Speciality Steel UK entered liquidation in August 2025. Since then, the independent court-appointed official receiver has been responsible for managing the liquidation process. A question was asked about how much that has cost to date. We have supported the official receiver with around £148 million to date, supporting staff and safety at the individual site. That funding has allowed the receiver to carry out his statutory duties. It has included maintenance of the site, as I said, and conducting a sale process for the business and its assets. For more than 12 months, the Government have worked to facilitate a private sector solution, and the noble Lord is right to say that a private sector solution remains the first preference. As part of that process, the official receiver engaged with a number of parties interested in acquiring the business and its assets, and the party granted preferential bidder status by the official receiver subsequently sought government support in connection with its proposed acquisition of Speciality Steel. We engaged extensively with the bidder and its advisers, and considered the request in detail. To clarify, it was requesting upfront financial commitment from the Government. Following the work we did, we concluded we could not provide the support on the terms proposed. This decision was not taken lightly. The Government carefully examined the proposal and explored whether an arrangement could be reached that would provide a sustainable basis for the future of the business, while offering appropriate protection for public money. Despite that extensive engagement, material concerns remained regarding the evidence supporting the proposed support package and the protections available for taxpayers. I want to be really clear, because this is important: we are talking specifically about the financial support that was requested. That should not be interpreted as a wider judgment on the bidder itself or its other business activities, either here or elsewhere. Our responsibility was to assess the proposal before us, including whether it provided a suitably robust basis for intervention and the appropriate safeguards. Having considered those matters, we could not support the proposal on the terms put forward. However, that conclusion does not diminish the significance of Speciality Steel UK. The business occupies a unique place in the United Kingdom steel ecosystem. Its specialist capabilities have potential applications in advanced manufacturing, aerospace and defence. Therefore, it is of strategic importance. That is why the Government remain committed to the sites, the workforces, the local communities and the local economies that are impacted. We believe, therefore, that the viable future options should be assessed properly before the range of possibilities is permanently narrowed. For that reason, the Government will engage with the official receiver’s sale process and develop a proposal for the public acquisition of Speciality Steel UK. Any engagement will respect the independence of the official receiver and its statutory responsibilities. Developing a proposal does not remove the need for proper processes to be followed, nor does it prejudge the outcome of the work under way. The purpose of developing an acquisition proposal is to preserve control of the sites and maintain every option available while decisions are taken about their longer-term future. Let me stress that public acquisition is not the endpoint and it is not the first preference. It would not in itself determine the permanent future of the business, its operations or its sites; rather, it would create the space required for detailed assessment of the available options. These include a sustainable future for Speciality Steel UK as a speciality steel-maker supporting advanced manufacturing sectors, the regeneration of the sites or a combination of the two. This Government will remain focused on engaging closely with the employees, the trade unions, the local communities, elected representatives, the mayor, industry experts and other interested parties. Again, I open that offer to noble Lords on all sides of the House too. I recognise that noble Lords will want and expect proper safeguards for public money. They have that firm commitment from me and from the Secretary of State. All options carry significant costs—there is no point in pretending otherwise. The risks exist and significant costs exist. That includes the risk of immediate closure. We will develop our estimates as the work progresses. Again, I am happy to share those assessments as much as possible with noble Lords on all sides of the House. I also recognise the desire for certainty, particularly among employees and their families. It would not be responsible to pre-empt the detailed assessment or suggest that decisions have already been taken where they have not, but equally it is important that potentially viable options are not lost by default. I believe the approach that the Government have set out yesterday and today strikes that right balance of giving reassurance to the workforce, of keeping every option on the table and making sure we have the back-up of a public acquisition option. That is the right and responsible course to take. There were some specific questions that I have not addressed. I have already talked about the private sector preference being the first one. Secondly, we should accept that there is a global challenge around steel, not just a UK challenge. Thirdly, I recognise the challenge set out by both noble Lords that we have to drive down the cost of living and the cost of doing business as it relates to energy. That is of course of huge significance for us if we are going to make sure we protect our steel industry and other industries that are energy intensive. These are all considerations that are being made in advance of the Budget. I noted that many questions from the noble Lord, Lord Sharpe, related to the Budget process. I imagine those are questions we will come back to as we get closer to, and arrive at, that Budget point. I also noted that he spoke about history and not repeating the mistakes of the past. All I would say is that he was very selective about which part of history he chose and which bits we do not want to repeat. There are other parts of our history that we do not want to repeat, and we need to learn lessons from them. The noble Lord from the Liberal Democrats asked questions around finding longer-term private sector solutions. We will find those solutions only if we make the steel industry sustainable, if we get the energy crisis right, if we address the challenges around the broader cost of production, if we deliver the orders that are required for there to be manageable order books and a functioning business and if we back it up with the appropriate skills. The steel strategy is ambitious, but it is also deliverable, and we all have work to do to make sure that happens. Let me repeat that I commit to work with noble Lords on all sides to make sure they are fully apprised of the situation as it develops. There is one final and slightly broader point about our relationship with the European Union, some of which will come from the UK-EU summit that we continue to work towards. There is also a wider lesson around the defensive and protection measures that the UK and the EU are grappling with in relation to their steel industries. The more the relevant Ministers and Governments across the continent work in lockstep on many of the same issues we are confronting together, the better it will be for our industry here in the UK and for steel industries across Europe.
Lord Mohammed of Tinsley (LD)
My Lords, I welcome the Minister to his position; I look forward to quizzing him as someone from Sheffield and from a steel-making heritage. I will miss my interactions with his noble friend Lord Leong; I really enjoyed them and wish him well. I will make two points. First, we need a frictionless relationship with the EU, so whatever barriers and bureaucracy the Minister can take away in the reset with the European Union will be welcomed by these Benches. Secondly, I will pick up on the point that my noble friend Lord Fox raised about people. Due to the unstable nature of the industry over the past couple of years, it has lost some skilled, experienced workers, both through redundancy and because some have sought stability elsewhere. Therefore, following my noble friend, I press the Minister on how we can bring back that skills base and how we can grow the next generation through apprenticeships. I would welcome responses to that people question; he rightly commented on it at the beginning, but I would like to press him further.
Lord Sarwar (Lab)
I thank the noble Lord for his questions. Let me reassure him that my noble friend will continue to fact-check me on a regular basis in the absence of him answering questions directly. The workforce is fundamental to this. We will of course make decisions based on what it means for production, GDP, growth and broader calculations, but for these communities—either those working directly at these sites or those relying on them for employment indirectly—this is their everyday life. Many of the sites, particularly Speciality Steel UK, are in some of the most deprived communities in the country. Therefore, it is important that we work right across government, including the Department for Education and the DWP, as well as with BIS colleagues, the local authority and the broader mayoral and regional authorities, to make sure that, where we can, we are protecting these jobs and provide reskilling opportunities. To the noble Lord’s final point, we have to make sure that the next generation also feels that this is a sector in which they want to train and then work, because that too is very much a part of having a sustainable steel future for the UK.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I congratulate my noble friend the Minister on his patience in dealing with some of the questions from opposition spokesmen—they were quite astonishing. I am old enough to go back to the Thatcher years. In 1980, she appointed Sir Ian MacGregor to run the British Steel Corporation and close down Redcar, Port Talbot, Consett, Corby, Shotton, Ebbw Vale and, in Scotland, Ravenscraig. Let us make sure that the Tories are never allowed to forget that. Would my noble friend consider arranging a little seminar, so that they can learn from history?
Lord Sarwar (Lab)
I thank my noble friend for his usually robust contribution. I gently tell him that, while he was here to witness what happened in 1980 and can therefore tell us the lessons that must be learned, I was born in 1983.
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Source: UK Parliament Hansard API. Debate ID: 5408143.