MPs will today debate emergency laws to save British Steel after the prime minister warned the country’s “economic and national security is on the line”.

Sir Keir Starmer said the future of the company’s Scunthorpe plant – which employs about 3,500 people – “hangs in the balance” after its owner said the cost of running it was unsustainable.

The prime minister said legislation would be passed in one day to allow the government to “take control of the plant and preserve all viable options”.

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MPs and Lords are being summoned from their Easter recess to debate the move and will sit from 11am.

The last time parliament was recalled was on 18 August 2021 to debate the situation in Afghanistan.

The government has been considering nationalising British Steel after Jingye, the Chinese owner, cancelled future orders for iron ore, coal and other raw materials needed to keep the blast furnaces running.

The furnaces are the last in the UK capable of making virgin steel.

Jingye last month rejected a £500m state rescue package – raising fresh doubts about the Lincolnshire plant and fears it could close in the coming days.

The steel from the plant is used in the rail network and the construction and automotive industries. Without it, Britain would be reliant on imports at a time of trade wars and geopolitical instability.

In a statement on Friday, Sir Keir said: “I will always act in the national interest to protect British jobs and British workers.

“This afternoon, the future of British Steel hangs in the balance. Jobs, investment, growth, our economic and national security are all on the line.”

The prime minister said steel was “part of our national story, part of the pride and heritage of this nation” and “essential for our future”.

He said the emergency law would give the business secretary powers to do “everything possible to stop the closure of these blast furnaces”.

This includes the power to direct the company’s board and workforce. It will also ensure it can order the raw materials to keep the furnaces running and ensure staff are paid.

Chancellor Rachel Reeves said the government was “taking action to save British steel production and protect British jobs”, while Business Secretary Jonathan Reynolds said the owner had left the government with “no choice”.

Mr Reynolds said Jingye had confirmed plans to close the Scunthorpe furnaces immediately despite months of talks and the offer of £500m of co-investment.

The company said it had invested £1.2bn since taking over in 2020, but that the plant is losing £700,000 a day.

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Conservative leader Kemi Badenoch said the government had landed itself in a “steel crisis entirely of their own making”.

She said when she was business secretary, she had negotiated a plan with British Steel “to limit job losses and keep the plant running”.

Ms Badenoch said the government had “bungled the negotiations, insisting on a Scunthorpe-only deal that the company has deemed unviable”.

She added: “Keir Starmer should have seen this coming. But instead of addressing it earlier in the week when parliament was sitting, their incompetence has led to a last-minute recall of parliament.”

The Unite union said the prime minister’s recalling of parliament was “absolutely the right thing to do to begin the process of nationalisation”.

While the government hasn’t confirmed those plans, the chancellor also said earlier this week that “all options” are on the table.

Sky News understands accountancy firm EY is being lined up to play a role in a nationalisation process.

The government’s intervention over British Steel comes six months after the last blast furnace was closed at Port Talbot in Wales.

Plaid Cymru has questioned why the government didn’t take similar action there.

The party’s Westminster leader, Liz Saville Roberts, said: “Parliament is being recalled to debate the nationalisation of Scunthorpe steelworks.

“But when global market forces devastated Welsh livelihoods in Port Talbot, Labour dismissed Plaid Cymru’s calls for nationalisation as ‘pipe dreams’.”

Veteran cabinet minister Michael Gove has been awarded a peerage in Rishi Sunak’s resignation honours list.

Mr Gove – now editor of The Spectator magazine – was first elected to parliament in 2005 and immediately joined then-Conservative leader David Cameron’s shadow cabinet.

He was appointed education secretary when the party entered government in 2010 and held multiple cabinet posts until the 2024 general election, when he stood down from parliament.

Mr Sunak elevated seven allies to the House of Lords, including former cabinet ministers Mark Harper, Victoria Prentis, Alister Jack, and Simon Hart. Former chief executive of the Conservative Party, Stephen Massey, also becomes a peer, as well as Eleanor Shawcross, former head of the No10 policy unit. He also awarded a number of honours.

It is traditional for prime ministers to award peerages and other gongs upon their resignation from office – with key political allies, donors and staff often rewarded.

An outgoing prime minister can request that the reigning monarch grants peerages, knighthoods, damehoods or other awards in the British honours system to any number of people.

In the case of peerages, the House of Lords Appointments Commission vets the list, and for other honours, the Cabinet Office conducts checks.

Resignation honours are separate from dissolution honours, which are awarded by the incumbent prime minister and opposition leaders after the dissolution of parliament preceding a general election.

Here are the biggest names given honours by Mr Sunak:

Michael Gove – peerage

From when the Conservatives returned to government in 2010, Michael Gove spent almost the whole time in a ministerial role.

After reforming the education system, he went on to hold roles like chief whip, environment secretary, justice secretary and housing secretary.

He led the pro-Brexit side of the 2016 referendum alongside Boris Johnson, and famously sunk the latter’s leadership bid with his own.

However, both failed at that juncture, and Mr Gove’s reputation never recovered to allow him another go at the top job.

The debt was repaid when Mr Johnson fired Mr Gove as his administration collapsed in 2022.

Mr Gove returned to government under Rishi Sunak, and ultimately retired from the Commons at the 2024 election.

James Anderson – knighthood

One of England’s most successful cricketers, Jimmy Anderson, has been awarded a knighthood in avid cricket fan Rishi Sunak’s resignation honours list.

He is regarded as one of the greatest bowlers in the history of the sport, and holds the record for the most wickets taken by a fast bowler in Test cricket.

Jeremy Hunt – knighthood

A former chancellor and serial runner-up in Tory leadership competitions, Jeremy Hunt was ever present in Conservative cabinets while the party was in government.

He was both foreign secretary and defence secretary before failing to take over the party after Theresa May stood aside.

Following a stint on the backbenches, Mr Hunt returned as chancellor under Liz Truss in a bid to stabilise markets – retaining this position under Rishi Sunak.

Despite persistent speculation he was set to be ditched in favour of Claire Coutinho, Mr Hunt kept his job until the 2024 general election – where he won his seat and now sits as a backbencher.

James Cleverly – knighthood

A former leader of the Conservatives in the London Assembly, James Cleverly entered parliament at the 2015 general election as the MP for Braintree.

In 2018, he was appointed deputy chairman of the party, and in April 2019, was appointed a minister in the Brexit department.

Boris Johnson appointed him as party chairman after taking over the top job, and he took on a succession of junior ministerial posts before becoming education secretary following Mr Johnson’s resignation as prime minister.

Liz Truss appointed him as foreign secretary – a post he held until November 2023 when Rishi Sunak brought back David Cameron for the role, and he took over as home secretary – a post he held until the general election.

Mr Cleverly was one of the lucky cabinet ministers to survive the Labour landslide and retained his seat. But he was less successful in the Conservative Party leadership contest, losing out in the final round of MP voting.

Andrew Mitchell – knighthood

The former deputy foreign secretary has been a fixture in Westminster since 1987, when he was first elected as the MP for Gedling. He was appointed to the government in 1994, but lost his seat in the 1997 Tony Blair landslide.

He returned to parliament in 2001 as the MP for Sutton Coldfield, and took on a number of shadow cabinet and then cabinet roles, culminating in his appointment to the Foreign Office in 2022, before becoming deputy foreign secretary to David Cameron in 2024.

He rose to public prominence in September 2012 when he allegedly swore when a police officer told him to dismount his bicycle and leave Downing Street through the pedestrian gate rather than the main gate. The incident became known as “Plebgate”.

Mel Stride – knighthood

One of Rishi Sunak’s closest aides, he chaired his campaign to be Tory leader against Liz Truss and was rewarded with the Work and Pensions brief when his man finally entered Number 10.

He was also a prominent figure in the downfall of Ms Truss as chair of the Treasury select committee – regularly requesting information from the Treasury and Bank of England that highlighted damaging information.

A capable media performer, he was ever present during the general election as he tried unsuccessfully to get Mr Sunak back into office.

Mr Stride kept his seat after the vote, and was rewarded by Kemi Badenoch with a role as shadow chancellor of the exchequer.

Stephen Massey – peerage

Described as a “sensible man” by former chancellor George Osborne, Stephen Massey was appointed chief executive of the Conservative Party in November 2022 after Rishi Sunak took over as leader in the coronation leadership contest following the collapse of the Truss government.

Having spent his career as a financial adviser, Mr Sunak probably thought he was a safe pair of hands in which to entrust the leadership of the party machinery as they built their war chest ahead of the general election to come.

The personal donations of £343,000 to the party and £25,000 to Mr Sunak’s leadership campaign also likely made him an attractive candidate for the job.

Has Rishi Sunak previously awarded honours?

Mr Sunak previously granted peerages to former prime minister Theresa May, Sir Graham Brady, the former chairman of the influential Conservative backbench 1922 committee, as well as his right-hand man Liam Booth-Smith on 4 July 2024 – the day of the general election.

He lost the election by a landslide to Sir Keir Starmer’s Labour Party, and resigned as prime minister that day. He remains in parliament as the MP for Richmond and Northallerton.

When the sun sets on Scunthorpe this Saturday, the town’s steelworks will likely have a new boss – Jonathan Reynolds.

The law that parliament will almost certainly approve this weekend hands the business secretary the powers to direct staff at British Steel, order raw materials and, crucially, keep the blast furnaces at the plant open.

This is not full nationalisation.

But it is an extraordinary step.

The Chinese firm Jingye will – on paper – remain the owner of British Steel.

But the UK state will insert itself into the corporate set-up to legally override the wishes of the multinational company.

A form of martial law invoked and applied to private enterprise.

That will come at a cost to the taxpayer.

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No number has been specified, but there are wages to pay and orders to make at a site estimated to already be losing £700,000 a day.

There is also clear frustration in government at how the Chinese owners have engaged in negotiations around modernising the Scunthorpe site.

“Jingye have not been forthright throughout this process”, said the business secretary in his department’s official announcement about the new laws.

Time is so tight because of the nature of the steel-making process.

Once switched off, blast furnaces are very hard to turn back on.

If this had happened in Scunthorpe – as seemed likely in a matter of days – then it would have been game over.

This move keeps the show on the road and opens up more time for talks over the long-term future of the plant.

While the official line in Whitehall is that “all options are on the table”, nationalisation seems increasingly likely.

That would need more legislation, if it was done – as seems likely – without the approval of the current owner.

Finding an alternative commercial partner has not been ruled out, but one is not waiting in the wings either.

As for what that long-term future looks like, with just five years of life left in the Scunthorpe blast furnaces, modernisation is inevitable.

Port Talbot’s plant saw its blast furnaces closed last year amid a switch to the more environmentally friendly electric arc furnaces and a loss of thousands of jobs.

Political figures in Wales are now questioning why nationalisation wasn’t on the table for this site.

The response from government is that the deal was done by the previous Tory administration and the owners of the South Wales site agreed to the terms.

But there is also a sense that this decision over British Steel is being shaped by the domestic and international political context.

Labour came to power promising to revitalise left-behind communities and inject a sense of pride back into places still reeling from the loss of traditional industry.

With that in mind, it would be politically intolerable to see the UK’s last two blast furnaces closed and thousands of jobs lost in a relatively deprived part of the country.

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Reform UK’s position of pushing for full and immediate nationalisation is also relevant, given the party is in electoral pursuit of Labour in many parts of the country where decline in manufacturing has been felt most acutely.

The geo-political situation is perhaps more pressing though.

Just look at the strength of the prime minister’s language in his Downing Street address – “our economic and national security are all on the line”.

The government’s reaction to the turmoil caused by President Donald Trump’s pronouncements on tariffs and security has been to emphasise the need to increase domestic resilience in both business and defence.

Becoming the only G7 nation unable to produce virgin steel at a time when globalisation appears to be in retreat hardly fits with that narrative.

It would also present serious practical questions about the ability of the UK to produce steel for defence and the broader switch to green energy production.

Then there is the intriguing subplot around US-China trade.

While this decision is separate from discussions with the White House on tariffs, one can imagine how a UK move to wrestle control of a site of national importance from its Chinese owner might go down with a US president currently engaged in a fierce trade war with Beijing.

This is a remarkable step from the government, but it is more a punctuation mark than a full answer.

The tension between manufacturing and decarbonisation remains, as do the challenges presented by a global economy appearing to fragment significantly.

But one thing is for sure.

As a political parable about changes to traditional industry and the challenges of globalisation, the saga of British Steel is hard to beat.