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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.

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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.

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Inside the UK’s last blast furnaces

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.

A general view shows British Steel's Scunthorpe plant.
Pic Reuters
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The Scunthorpe plant is the last in the UK that can make virgin steel. Pic: Reuters

One of the two blast furnaces at British Steel's Scunthorpe operation
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One of the two blast furnaces at Scunthorpe

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.

Read more:
Govt intervention in British Steel ‘a remarkable step’ – analysis

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What will happen with British Steel?

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’.”

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UK-US pact neither a free-trade agreement nor broad trade deal of Brexiteer dreams

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UK-US pact neither a free-trade agreement nor broad trade deal of Brexiteer dreams

Sir Keir Starmer was at home in Downing Street, watching Arsenal lose in the Champions League, when he got a call from Donald Trump that he thought presented the chance to snatch victory from the jaws of trading defeat.

The president’s call was a characteristic last-minute flex intended to squeeze a little more out of the prime minister.

It was enough to persuade Sir Keir and his business secretary Jonathan Reynolds, dining with industry bosses across London at Mansion House, that they had to seize the opportunity.

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The result, hurriedly announced via presidential conference call, is not the broad trade deal of Brexiteer dreams, and is certainly not a free-trade agreement.

It’s a narrow agreement that secures immediate relief for a handful of sectors most threatened by Mr Trump’s swingeing tariffs, with a promise of a broader renegotiation of “reciprocal” 10% tariffs to come.

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‘A fantastic, historic day’

Most pressing was the car industry, which Mr Reynolds said was facing imminent announcements of “very difficult news” at Britain’s biggest brands, including Jaguar Land Rover, which sounds like code for redundancies.

In place of the 25% tariffs imposed last month, a 10% tariff will apply to a quota of 100,000 vehicles a year, less than the 111,000 exported to the US in 2024, but close enough for a deal.

It still leaves the car sector far worse off than it was before “liberation day”, but, with one in four exports crossing the Atlantic, ministers reason it’s better than no deal, and crucially offers more favourable terms than any major US trading partner can claim.

For steel and aluminium zero tariffs were secured, along with what sounds like a commitment to work with the US to prevent Chinese dumping. That is a clear win and fundamental for the ailing industries in Britain, though modest in broad terms, with US exports worth only around £400m a year.

US and UK announced trade deal
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US and UK announced trade deal

In exchange, the UK has had to open up access to food and agricultural products, starting with beef and ethanol, used for fuel and food production.

In place of tariff quotas on beef that applied on either side (12% in the UK and 20% in America) 13,000 tonnes of beef can flow tariff-free in either direction, around 1.5% of the UK market.

The biggest wins

Crucially, sanitary and phytosanitary (SPS) production standards that apply to food and animal products, and prevent the sale of hormone-treated meat, will remain. Mr Trump even suggested the US was moving towards “no chemical” European standards.

This may be among the biggest wins, as it leaves open the prospect of an easing of SPS checks on trade with the European Union, a valuable reduction in red tape that is the UK’s priority in reset negotiations with Brussels.

Farmers also believe the US offers an opportunity for their high-quality, grass-fed beef, though there is concern that the near-doubling of ethanol quotas is a threat to domestic production.

Technology deals to come?

There were broad commitments to do deals on technology, AI and an “economic security blanket”, and much hope rests on the US’s promise of “preferential terms” when it comes to pharmaceuticals and other sectors.

There was no mention of proposed film tariffs, still unclear even in the Oval Office.

Taken together, officials describe these moves as “banking sectoral wins” while they continue to try and negotiate down the remaining tariffs.

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The challenge from here is that Mr Trump’s “reciprocal” tariff is not reciprocal at all. As commerce secretary Howard Lutnick proudly pointed out in the Oval Office, tariffs on US trade have fallen to less than 2%, while the UK’s have risen to 10%.

As a consequence, UK exporters remain in a materially worse position than they were at the start of April, though better than it was before the president’s call, and for now, several British industries have secured concessions that no other country can claim.

From a protectionist, capricious president, this might well be the best deal on offer.

Quite what incentive Mr Trump will have to renegotiate the blanket tariff, and what the UK has left to give up by way of compromise, remains to be seen. Sir Keir will hope that, unlike the vanquished Arsenal, he can turn it round in the second leg.

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Energy customers secure compensation for overcharging error

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Energy customers secure compensation for overcharging error

Tens of thousands of household energy customers have secured payouts after a compliance review found they had been overcharged.

The industry regulator said that 10 suppliers had handed over compensation and goodwill payments to just over 34,000 customers. The total came to around £7m.

Ofgem said those affected, between January 2019 and September last year, had more than one electricity meter point at their property recording energy usage.

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It explained that while suppliers were allowed to apply multiple standing charges for homes with multiple electricity meters, it meant that some were “erroneously charged more than is allowed under the price cap when combined with unit rates”.

The companies affected were revealed as E.ON Next, Ecotricity, EDF Energy, Octopus Energy, Outfox The Market,
OVO Energy, Rebel Energy [no longer trading], So Energy, Tru Energy and Utility Warehouse.

Of those, Octopus Energy accounted for the majority of the customers hit.

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Ofgem said that the near-21,000 customers impacted had received compensation of £2.6m and goodwill payments of almost £550,000.

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The redress was revealed at a time when energy bills remain elevated and debts at record levels in the wake of the 2022 price shock caused by Russia’s invasion of Ukraine.

Higher wholesale natural gas prices over the winter months meant that the price cap actually rose in April when a decline would normally be seen.

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The latest forecasts suggest, however, that bills should start to decline for the foreseeable future.

Charlotte Friel, director of retail pricing and systems at Ofgem, said of its compliance operation: “Our duty is to protect energy consumers, and we set the price cap for that very reason so customers don’t pay a higher amount for their energy than they should.

“We expect all suppliers to have robust processes in place so they can bill their customers accurately. While it’s clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded.”

The watchdog added that all ten suppliers had updated their systems and processes to prevent the error occurring in future.

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Interest rate cut to 4.25% by Bank of England

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Interest rate cut to 4.25% by Bank of England

The Bank of England has cut interest rates from 4.5% to 4.25%, citing Donald Trump’s trade war as one of the key reasons for the reduction in borrowing costs.

In a decision taken shortly before the official confirmation of a trade deal between Britain and the United States, the Bank’s monetary policy committee (MPC) voted to reduce borrowing costs in the UK, saying the economy would be slightly weaker and inflation lower in part as a result of higher tariffs.

However, it stopped short of predicting that the trade war would trigger a recession.

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Further rate cuts are expected in the coming months, though there remains some uncertainty about how fast and how far the MPC will cut – since it was split three ways on this latest vote.

Two members of the nine-person MPC voted to reduce rates by even more today, taking them down to 4%. But another two on the committee voted not to cut them at all, leaving them instead at 4.5%.

In the event, five members voted for the quarter point cut – enough to tip the balance – with the accompanying minutes saying that while “the current impact of the global trade news should not be overstated, the news was sufficient for those members to judge that a reduction in Bank Rare was warranted.”

Even so, the Bank’s analysis suggests that while higher tariffs were likely to depress global and UK economic growth, and help push down inflation, the impact would be relatively minor, with growth only 0.3% lower and inflation only 0.2% lower.

Governor, Andrew Bailey, said: “Inflationary pressures have continued to ease, so we’ve been able to cut rates again today.

“The past few weeks have shown how unpredictable the global economy can be. That’s why we need to stick to a gradual and careful approach to further rate cuts. Ensuring low and stable inflation is our top priority.”

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The Bank raised its forecast for UK economic growth this year from 0.75% to 1%, but said that was primarily because of unexpectedly strong output in the first quarter.

In fact, underlying economic growth remains weak at just 0.1% a quarter.

It said that while inflation was expected to rise further in the coming months, peaking at 3.5% in the third quarter, it would drop down thereafter, settling at just below 2% towards the end of next year.

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