UK Government has no credible plan for British Steel future, MPs say

Harry Taylor, Press Association Political Staff

The UK Government has been criticised for not having a “credible plan” for the future of British Steel, as a cross-party committee of MPs warned steel tariffs could drive firms out of business or to move abroad.

A report by the Public Accounts Committee (PAC) said the Department for Business, Innovation, Science and Trade (DBIST) had not set out how British Steel, which runs the plant in Scunthorpe, will become profitable.

In a 26-page report, the Public Accounts Committee said ministers had not said how much the overall nationalisation will cost after £555 million has already been spent. It said 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.

In the report, published on Friday, the Public Accounts Committee says: “The department has not yet set out a credible plan for the future of British Steel, including how the company will become financially sustainable.”

It adds: “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.”

It continues: “Without a credible long-term plan, uncertainty and costs for workers, industry and taxpayers will continue to increase.”

Parliament was recalled for a rare Saturday sitting in April 2025 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. There are plans to convert it to arc furnaces.

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

The strategy confirms electric arc furnaces (EAF) as the future of British steelmaking, continuing the shift from blast furnaces to cleaner, EAF-based production using recycled scrap to support net zero.

The shift has led to job losses in steel plants including Port Talbot.

The Government appointed Environment Agency chairman Alan Lovell as the new chairman 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. It had projected costs to reach £642 million by June 30 this year, but the Government later said it had only been £555 million.

“Taxpayers remain exposed to significant and growing costs and uncertainty,” the report says.

It highlights concerns that British Steel’s 4,052 workers face uncertainty, and how the steel strategy is still vague about when the 50% target will be achieved. The committee recommends ministers set tonnage usage targets with timescales.

It said the Government needs to set up a “formal route” for steel companies to raise concerns about the new tariff regime. From July, Britain lowered the tariff-free quota level for steel importers by 51% in order to stop the UK becoming a “global dumping ground”.

It also doubled import taxes on steel coming into the UK above certain levels from 25% to 50%. However, firms said that some steels which they need would be affected by the tariffs, but are not able to be bought from the UK.

The committee said: “This risks steel manufacturers having to pay tariffs on types of steel that they cannot avoid importing.

“There is a risk that businesses reliant on these products will face higher costs, which could result in smaller firms going out of business or companies moving production overseas.”

A DBIST spokesperson said: “We welcome the PAC’s 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 this month.

“Taxpayer value for money remains a central consideration in our assessment of the future of the site, and we are also backing the communities that rely on it through our Steel Strategy to build a sustainable, competitive and decarbonised steel sector for the years ahead.”

Deputy chair of the Public Accounts Committee Clive Betts said: “Government moved swiftly to save British Steel – all well and good, and our Committee of course welcomes this action as a means of safeguarding a critical part of our national infrastructure and security. But this was just the beginning.

“Having brought British Steel onto the taxpayers’ books, it is now up to Government to explain its plan for its future. Unfortunately, beyond simply propping up the company with public money, the Government was not able to outline such a plan to our inquiry.

“The reality is that British Steel is unable to wash its own face, and Government is now in charge of making sure it gets onto a sustainable financial footing for the future.”

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