Why new laws could open doors to nationalise steel industry - including in Sheffield
Move to allow steel works to be nationalised
New laws announced could open the door to nationalisation to protect the whole steel industry, say union official.
New legislation to be announced in the King's Speech on Wednesday will give Government the option to bring British Steel into public ownership, Prime Minister Keir Starmer said on Monday (May 11) morning.
The move comes after the government seized control of British Steel's Scunthorpe steelworks from its Chinese owners Jingye in April last year in order to halt the potential closure of its blast furnaces.
But officials at the GMB union say that the same laws that are now being brought in would allow for similar measures to be taken at other companies - which could include companies like Speciality Steel UK, formerly Liberty Steel, which owns sites in Stocksbridge and Rotherham.
The union says that the wording of the legislation does not refer specifically to British Steel, but to steel companies generally.
Sheffield Forgemasters was nationalised by the Conservatives under Boris Johnson.
British Steel operates a research centre in Catcliffe, near Sheffield, but its main production sites are in Scunthorpe and Teeside.
Charlotte Brumpton-Childs, GMB National Secretary, said: “Unions have long known Jingye will not negotiate in good faith.
“This legislation will cover the whole steel industry - it isn’t specifically for British Steel but it is what will protect it from foreign owners.
“British Steel is a nationally strategic asset, it is right the Government does everything in its power to secure its long term future.
“GMB welcomes this decisive and timely intervention by the Government which will protect one of the UK’s most important industries.”
New legislation to be announced in the King's Speech on Wednesday (May 13) will give government the option to bring British Steel into public ownership.
The new powers would be subject to public interest tests. The public interest test considers factors including national security, maintaining critical national infrastructure and supporting the economy.
The Prime Minister announced the new legislation in a speech today (Monday 11 May) where he set out his plan to boost our sovereign capabilities, protect British industry, and prioritise British jobs and industrial communities.
The Government has been in discussions with British Steel’s owner to find a solution for the business on acceptable terms.
But it says it has not been possible to agree a commercial sale with the current owner, and the Government does not believe an agreement could be reached which would deliver acceptable value for money for taxpayer.
It follows the Government’s Steel Strategy, announced in March, which set out its long‑term plan to revitalise the UK steel sector and bolster economic resilience by meeting up to 50 percent of UK steel demand domestically.
Prime Minister, Sir Keir Starmer, said: “Steel is strategically important to our economy and our national resilience. That’s why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we’re now bringing forward legislation to give us options to protect Britain’s steelmaking capability.”
“This Bill would allow us to take action if we need to, while we continue rebuilding our steel sector.”
Business Secretary Peter Kyle said: “Strong domestic steel production is vital for our economy, and this legislation would allow us to ensure stability for British Steel’s workers, suppliers and customers and avoid damaging disruption to crucial supply chains, while we consider options for the site’s future.”
Concerns have also been raised over the future of steel plants in Stocksbridge and Rotherham.
Previously part of Sanjeev Gupta’s Liberty Steel empire, Speciality Steel UK employs 1,450 at sites in Rotherham, Wednesbury and Stocksbridge, Sheffield.
In October, minister for industry Chris McDonald MP said he had a “high level of confidence” a buyer would be found. It is understood Rotherham has not produced anything since July 2024 and Stocksbridge only sporadically.
Workers have been on a form of furlough, with the government pumping in £50m to cover wages and other costs.
In March, it was reported SSUK had debts of £618m.
Speciality Steel UK was among scores of companies owned by parent company GFG Alliance, led by Sanjeev Gupta.
GFG Alliance borrowed millions from Greensill Capital to pay suppliers. Greensill collapsed in March 2021. Creditors, including investment bank UBS, were left trying to get at least some of their £288m back.
Another of Sheffield’s famous steel companies, Sheffield Forgemasters, was nationalised in 2021, amid national security concerns because of work it carried out for the Ministry of Defence.
The Government said at the time that the move to take over the company, based at Brightside in the city, was to secure the supply of parts that are vital for the Royal Navy’s ships and submarines.
The Ministry of Defence said it would spend £2.6m to acquire the whole of the company, and planned to invest as much as £400m over the next decade to replace critical equipment and infrastructure required for its military production capacity.
The Ministry of Defence-owned business, which is celebrating its 250-year anniversary, is currently building a new 13,000-tonne forging line at its Brightside site, with steelwork for the building projecting to 45 metres high, more than 10 metres taller than surrounding structures.
Last year, Forgemasters were awarded a contract to manufacture artillery barrels.