Government 'has no credible plan for British Steel', MPs warn

The Government has been criticised for not having a “credible plan” for the future of British Steel.

A cross-party committee of MPs has warned steel tariffs could drive firms out of business or move abroad.

A report by the Public Accounts Committee said the Department for Business, Innovation, Science and Trade has not set out how British Steel, which runs a sprawling Scunthorpe plant and further bases in Teesside and East Cleveland will become profitable.

The Government says it remains committed to “building a sustainable, competitive and decarbonised steel sector for the years ahead.”

The call comes just days after the Government revealed it was planning to bring 1300-plus-job Speciality Steel UK into public ownership in a £350 million deal. 

The 26-page Public Accounts Committee document says ministers had not said how much the overall nationalisation will cost after £555 million had already been spent, adding it was unclear how the loan to British Steel will ever be repaid.

It went on to echo concerns from businesses and opposition ministers that the new tariff regime, composed in a bid to boost British steel production and usage, could cause smaller businesses to go bust.

The report said: “The intervention in April 2025 successfully bought time and provided short-term stability for workers, customers and the wider supply chain, but it did not resolve the underlying problem that British Steel remains structurally unprofitable.

“The department took this action without being able to conclude on value for money and still cannot demonstrate how it will achieve it.

“More than a year later, it could not set out what business model or decarbonisation pathway would put the company on a sustainable footing.”

Parliament was previously recalled to renationalise British Steel amid concerns it would go bust and close under the ownership of Chinese firm Jingye.

It had planned to close the Scunthorpe plant, in North Lincolnshire, which would have ended Britain’s virgin steel-making ability for the first time in centuries.

The firm also runs the Teesside Beam Mill, near Redcar, which makes large steel sections for the construction industry, and a special profiles plant in Skinningrove, East Cleveland, which produces parts for the construction, earthmoving, forklift and mining sectors.

The Government published its steel strategy in March, which includes an ambition for 50 per cent of steel used in the UK to be made in Britain.

The strategy confirms electric arc furnaces as the future of British steelmaking, continuing the shift from blast furnaces.

The move has led to job losses at steel plants including Port Talbot.

The Government appointed Environment Agency chair Alan Lovell as the new chair of British Steel last week.

However, the report by the committee of MPs, which is chaired by Conservative Sir Geoffrey Clifton-Brown and includes Treasury minister Dan Tomlinson, highlighted a number of concerns.

It said the department was unable to provide estimates of how much the overall nationalisation could cost.

A Department for Business, Innovation, Science and Trade spokesperson said: “We welcome the report and will review the recommendations.

“Securing the long-term future of the UK steel sector is in our national interest.

“While this will require both public and private investment, we’ve taken the first step towards securing steelmaking by securing British Steel’s future through public ownership and appointing a new board and chair.

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