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The next item of business is a debate on motion S7M-00454, in the name of Tom Arthur, on a motion of legislative consent for the Steel Industry (Nationalisation) Bill, which is United Kingdom legislation. I will leave a minute to allow the minister and others to get themselves into position. Meanwhile, I invite members who wish to speak in the debate to press their request-to-speak button.
17:43
I welcome the opportunity to speak on the legislative consent motion for the UK Government’s Steel Industry (Nationalisation) Bill, which was introduced in the House of Commons on 14 May 2026.
The bill empowers the UK Government to bring steel companies across the UK into public ownership if a public interest test is met, safeguarding long-term production capacity and securing steel’s role in critical sectors, including national infrastructure, defence and clean energy. Domestic production capability is essential not only for economic growth and jobs but for our national security and resilience. The Scottish Government therefore supports the overall intention of the bill.
The Scottish Government had initially, on 15 June, lodged a legislative consent memorandum with the Parliament stating that we would not consent to the bill, due to the UK Government having not agreed to our proposals that it have appropriate regard to devolution. However, we have now changed our position on that, following a period of productive engagement with the UK Government.
I will use my time in the debate to update members on how we have got to this point. The bill, as introduced, included no formal role for Scottish ministers. The Cabinet Secretary for Economy, Tourism and Transport therefore wrote to the UK Government, requesting that the bill be amended to include a statutory consent requirement for the proposed exercise of the powers in respect of steel undertakings in Scotland, where the exercise was for a devolved purpose. The UK Government would not agree to that request, due to practicalities around the operation of the bill.
However, since then, extensive productive engagement has taken place at both ministerial and official level. The UK Government has now given a political commitment that, should the bill’s transfer power be exercised in Scotland, it would “ordinarily consult” Scottish ministers. I met the minister Chris McDonald, from the Department for Business and Trade, and we had a very constructive discussion about the bill and our shared vision for a successful steel sector in Scotland and the rest of the UK.
Will the member give way?
I will give way to the member if he gives me a few more moments to progress.
That positive engagement and the position that we have settled at demonstrate positive intergovernmental relations and highlight the Scottish Government’s desire and willingness to work constructively and collaboratively with the UK Government where doing so will secure the best outcome for the people of Scotland. The Scottish Government will now continue to monitor the passage of the bill and engage with the UK Government on the matter.
If there is constructive engagement, we should all welcome that. However, the minister described the commitment that has been given as a political commitment from a Government that is about to change leadership and, presumably, its whole cast of characters. Is this situation not a reminder of the deficiencies of the current process for agreeing legislative consent, which depends on good will—which sometimes is there and sometimes is not?
Patrick Harvie makes some very important points. The situation is, of course, sub-optimal and would not be our first choice. We have sought to engage constructively on an area of mutual interest, but the points that Patrick Harvie makes nonetheless stand.
As I set out in my letter to the convener of the Economy, Tourism and Energy Committee, it is regrettable that, due to the expedited process for the UK Government’s bill, which does not align with the timetable of our Parliament finishing for summer recess and the post-election period, we have found ourselves in a position whereby the bill could not have gone through the usual scrutiny process of this Parliament. I am, however, grateful to members who are joining this debate today to discuss the bill, and I look forward to hearing members’ views on the matter.
I am very concerned about this bill. First, the UK Parliament expedited the bill—it was fast-tracked—yet it confers huge powers on UK Government ministers not only to intervene in a business and take operational control, but to make a business’s failure to comply a criminal offence. This is a serious piece of legislation. In fact, the UK Parliament was recalled on a Saturday for it, and the last time that that happened was in 1982 for the Falklands war.
This is an intervention, not a speech within a speech.
I am not making a speech.
What reassurances can the minister give around ensuring that such a serious bill, which has not been scrutinised in the UK Parliament and has not been scrutinised here, is sufficient in terms of the Scottish Government’s devolved responsibilities?
I know that points around the process were discussed last week in Parliament. I fully recognise—and I repeat what I stated in responding to the intervention from Mr Harvie—that the situation is clearly sub-optimal. It is a reflection of the period of time in which we are operating; the UK Government’s decision to progress the bill through an expedited process; and the election cycle, the formation of a Government and our reconvening after the election in this place. I fully recognise that this is not a model way in which to go about the process of seeking legislative consent.
I hope that the member understands that we have sought to act in good faith by keeping the Economy, Tourism and Energy Committee informed and by ensuring that Parliament has the opportunity to consider, at the very least, the matter of legislative consent through the debate that we are having this afternoon. However, she is absolutely right to highlight the significant powers that are conferred on UK ministers through this legislation. As I sought to indicate in my letter to the committee’s convener, assuming that the legislation receives royal assent, the Scottish Government and ministers are happy to continue to engage with the committee and, of course, with the Parliament in relation to any utilisation of the legislation that may have effect in Scotland. These matters are contingent on the progress of the legislation at Westminster, but I would be happy to keep Parliament up to date, particularly when we return from recess.
The steel sector remains a foundational industry within the UK economy, underpinning key supply chains in construction, manufacturing, energy and defence while sustaining tens of thousands of skilled jobs across industrial communities, including in Scotland. The sector continues to play a critical role in enabling economic growth and is central to the transition to net zero, given its importance to low-carbon infrastructure, clean energy technologies and the wider industrial base.
Of course, the Scottish Government wants to see a sustainable future for the steel sector, building on the long and proud heritage of steelwork in Scotland, and that is reflected in our green industrial strategy. We welcome the UK Government’s action and we recognise that this needs to happen at a scale and with an intensity that reflects the uncertainty that is being felt by businesses, workers, and families across the UK. Potential interventions demand a co-ordinated response from Governments and our economic development agencies, which do so much to attract investment, develop talent and secure jobs.
Last year, we were supportive of the UK Government’s decision to introduce the Steel Industry (Special Measures) Act 2025, which protected the British Steel operation in Scunthorpe, providing some hope that the UK Government is prepared to act when vital national interests are at stake. We said at the time that we hoped that it would form part of a comprehensive future strategy, and that is, indeed, the case.
Members will have seen in UK minister Chris McDonald’s recent written statement that the UK Government
“is strongly minded to use the powers in the Bill to bring British Steel into public ownership in the future, subject to the public interest being satisfied and taking into account all the relevant facts at that time.”
I suggest that this is an important point for members to reflect on, given the clearly implied policy intent of the legislation and where it could be applied.
Scottish ministers remain committed to constructive engagement with the UK Government and to supporting measures that could lead to increased economic activity in Scotland. We will continue to work with the UK Government on this bill, as well as on the future of the steel industry in Scotland. Our commitment to the industry is clear through ministers’ ongoing involvement in the UK steel council, as well as our role in and input to the development and publication of the recent UK steel strategy.
This has always been—and will continue to be—a Government that takes action. We have shown, over many years, that we are prepared to step in to support vital national assets to survive and prosper, that we will take action to protect jobs and communities and that we are prepared to take a strategic view of the importance of critical skills to long-term economic success. This is the right approach when the international economic outlook continues to be an uncertain one. I therefore ask Parliament to agree to the motion for legislative consent in relation to this bill.
I move,
That the Parliament, noting that the Steel Industry (Nationalisation) Bill, introduced in the House of Commons on 14 May 2026, makes provision that falls within the legislative competence of the Parliament, agrees to give consent to such provision as is made by clauses 1-7, 9-23, 25-43, 45-59 and 61-64.
17:53
I welcome both the Government’s motion and the minister’s comments this afternoon. This is an incredibly important issue and steel is an incredibly important product. Let me make some overarching comments, because I understand the Scottish Government’s reservation regarding the legislative consent motion that is before us today. In a broad sense, the economy is an area of overlapping responsibilities. Although it is reserved within the Scotland Act 1998, many of the key component parts of policy around the economy lie within devolved areas, and therefore it is an area of overlap.
The more fundamental point in relation to this situation is that national security and the economy have become more intertwined in recent months and years than they perhaps were when the 1998 act was being drafted. That is one of the issues at hand here. There are clear matters of national security, but they also have clear economic consequences.
We need to note, as the minister did, that steel is the most important primary product in manufacturing processes. National security requires it. We need to acknowledge the current situation of war in Europe with a belligerent Russia. Taking that seriously means acknowledging that our defence industry is built in steel. Civil contingency also requires steel to build infrastructure.
Beyond that, wider strategic national economic interests require steel. We are very focused on renewables, renewables infrastructure and the electrification of the economy. Those things are built in steel. The reality is that the Scunthorpe site is the last site in the entire UK that is capable of producing virgin steel. Once those furnaces close, they cannot simply be turned back on again—and there is a very real risk of that.
I note Rachael Hamilton’s concerns, but this is not just AN Other sector or AN Other business. If the site closes, that will have very serious and dramatic consequences not just for the whole of UK industry but for UK national security.
Nor is this an isolated action. The UK steel strategy was announced in March, with £2.5 billion allocated by the UK Government through the National Wealth Fund, targets set to boost UK steel production to 50 per cent from the current level of 30 per cent and support confirmed for the development of electric arc furnaces to secure the future of UK steel production.
Even the legislation for the pandemic had a sunset clause. That bill went through two houses to get to the stage of being passed, and it was expedited. It had amendments that were not even passed or considered. The bill before us is deficient, and the UK Government is making de facto law.
There is a clear, overarching national interest in securing the steel industry, which I think goes far beyond other considerations. The bill is vital, and it is important that it is expedited so that we have the powers to ensure that the furnaces do not close.
I acknowledge many of the points that the minister made about the circumstances. Unfortunately, the timing of the bill’s introduction coincided with the election of this Parliament, the setting up of its committees and the recess. We should think about how committees can respond flexibly in the future. Although we seek to anticipate the requirement for legislative consent motions, situations such as this sometimes arise and it is important that committees can—as they do—scrutinise consent for such bills. That goes beyond the two Governments agreeing. It is important that Parliament has the opportunity to scrutinise the consent that it is giving and the powers that are being conveyed to the UK Government by the Parliament.
In closing, I direct members to my entry in the register of members’ interests: I am a member of Community, the steelworkers’ union.
17:57
I welcome the comments from the minister and Daniel Johnson. I acknowledge Rachael Hamilton’s concerns and also what Daniel Johnson said. It is a pity about the timing, which meant that the bill could not be considered by the Economy, Tourism and Energy Committee. A statement about the reasoning for that was made at its meeting today.
We need to support the legislation that is before us. The manufacture of steel remains an economically and strategically important industry, especially as we enter this new geopolitical era. We need to reindustrialise, and we may need to revitalise our military.
Make no mistake: we need to recognise how we have got here—to the point where we need to save our steelworks across the country through nationalisation. There has been a failure of industrial policy, which does not seem to care about maintaining national capability or about domestic ability to produce key industrial items. As we discussed just 15 minutes ago in the climate change debate, net zero policies have driven the highest industrial energy costs in the world. They are double those of the US and four times more than those in China, and that is driving deindustrialisation. The steel industry, which is of course very energy intensive, is on the front line of enduring the pain, and that is why we have had to enact such legislation.
As I said, I welcome this legislation, but I fear that, until we change our energy policies and get serious about developing domestic capability in manufacturing and producing things, such as steel, that are critical to our infrastructure and to just about every manufacturing step, we will have a sector that—whether it is nationalised or not—will struggle.
I will keep my comments brief. I support the motion, but I think that some key challenges for the steel industry remain.
18:00
In raising concerns about this LCM, I want to make it clear from the outset that I do not have any disagreement with the intention behind the bill or, indeed, any desire to question the importance of the steel industry. The steel industry is critical, both in decarbonising the industry itself and in its contribution to decarbonising Scotland.
If anything, I welcome the fact that the UK Government is now willing, at least in some circumstances, to recognise that private ownership of critically important industry is not always in the public interest and that there should be a more assertive role for the state. To be frank, I would like to see more rather than less of that, so I welcome the intention behind the bill and I recognise its importance.
My concern is about the process. We are just one week on from the Government lodging a legislative consent memorandum that said that it recommended against giving consent to the passing of the bill. Now, at the very last minute, just before we vote in Parliament, we see a letter that changes that position.
I was a member of the Constitution, Europe, External Affairs and Culture Committee in the previous parliamentary session and I am a member of its successor committee in this session. I am not speaking on behalf of the present committee, because we have not discussed the issue, but its predecessor committee held an inquiry into the transparency of intergovernmental activity and its implications for parliamentary scrutiny. We published a report in March this year. The Scottish Government’s submission for that report said that restoring confidence in the Sewel convention—the convention by which we are asked for and either give or withhold legislative consent in these circumstances—
“is key to resetting the relationship between the UK and devolved governments and ensuring that the position of the Scottish Parliament is protected, with sufficient opportunity for scrutiny.”
Yet here we are again, just a few months later—by no means for the first time—seeing a legislative consent motion for which we have not had time for proper scrutiny and a bill that is being fast tracked through Westminster. I know the problems that I am identifying are outwith the minister’s control, but that in itself is a problem as well.
We have not seen progress between the two Governments on renewing the Sewel convention or adopting a new memorandum of understanding about how it is supposed to work. As I said in my intervention, the agreements that are reached—and I am pleased if there has been progress between the two Governments—are on the basis of a handshake and a degree of trust that has been expressed with a minister at the UK level who might well not be in post when the new Prime Minister reshuffles the Cabinet and creates a new Administration. This is a deeply inadequate process.
I have no wish to block the granting of legislative consent, but I do not feel that, as an Opposition party, the Greens have had the opportunity to scrutinise the details sufficiently, so we will abstain on the motion.
I hope that the minister and his colleagues will impress on the UK Government the need to fast track, if anything, the renewal of the Sewel convention and the restoration of respect for devolution in what is currently a deeply inadequate process.
18:04
For the same reasons as Daniel Johnson, I will support the legislative consent motion.
However, if Ivan McKee will tolerate it, I will return to one of my favourite obsessions: the Dalzell steel plant in Lanarkshire, about which I have deep concerns because of recent developments that I hope the minister will address when he is summing up. As the minister says, it is an important part of the UK steel industry.
The minister knows that the plant has been dormant since 2024, which is now almost two years ago. We were promised that Navantia would be rolling steel plate for the Royal Navy’s fleet support vessels, but because of problems in purchasing raw materials—the slab—production has been intermittent. I understand that a German company will now use the Dalzell plant as a jobbing mill, importing 4,000 tonnes of slab from a foreign supplier outside the UK instead of purchasing that slab from Scunthorpe.
All that raises serious questions about an important part of the steel industry in Scotland. Therefore, while we are discussing this LCM, I want the minister to address the following questions in his conclusion. Why has the plant been dormant for two years? Given that a £7 million loan has been made to the company—to GFG Alliance, Liberty Steel and Mr Gupta—why has the Government allowed it to be dormant for two years? Why will the plant be used as a jobbing plant for slab that is purchased from outside the United Kingdom, rather than Scunthorpe? What will now happen to the £7 million loan from the Scottish Government? Will that be repaid, and at what point? When will we have a proper functioning mill—the only wide-plate mill in the United Kingdom—at Dalzell? When will it have a constructive relationship with the Scunthorpe plant?
All those issues should be at the front of the Government’s mind, but, as usual, it is not paying attention.
18:06
I am grateful to members for their speeches. I will be brief, because most of the substantive points have been covered.
Daniel Johnson was absolutely correct to highlight the overlap of powers in relation to devolved and reserved functions, which contributed to some of the procedural complexity in this matter and led to, as Mr Harvie described it, a deeply inadequate approach, particularly with the compressed timescales. However, it is a process in which we have sought to be pragmatic and get a constructive outcome.
Mr Johnson was also correct to highlight the growing importance of national security and economic concerns. Today, we are marking 10 years since the Brexit referendum. When this Parliament first reconvened, it had been fewer than 10 years since the fall of the Berlin wall, but we recognise that we now occupy a very different world. National security and the economy are important concerns that occupy the attention of ministers and form an important part of our considerations when it comes to engaging with UK ministers.
I will touch on the point that Rachael Hamilton made in an intervention. There is a sunset clause in the legislation, and UK ministers have the power to extend the legislation through the affirmative procedure, but that would obviously require a parliamentary vote. That is just a point of information in relation to the legislation—it will initially last for two years.
I welcome the support expressed by Mr Massey, but I want to emphasise that the transition to net zero will be dependent on the steel industry, which will be crucial. There will also be an opportunity: whether it comes from electric arc furnace transition projects or grid reinforcement and improvement, there will be significant demand for steel because of the move to net zero. Therefore, net zero is not just about our obligation to hand a better planet to the next generation; it presents a tremendous economic opportunity, which future generations would not forgive us for failing to seize.
I recognise the points that Mr Harvie made regarding the process. As I said previously, it is not the process that we would have liked to see—the UK Government knows my views on that through the engagement that I have had with it. However, I have sought to engage in a pragmatic and constructive way, given the compressed timescales in which we are operating. It is important for the UK Government that there is learning from the process and that the circumstances of our Parliament—for example, when we re-form following an election—are not an afterthought in relation to the UK Government’s formulation of its approach to legislation and when it decides to introduce it.
The papers for this morning’s committee meeting stated that one of the reasons for the Scottish Government’s not supporting the LCM was that it was at risk of breaking the Sewel convention. Considering that the Scottish National Party is pretty obsessed with constitutional convention, does the minister now believe that the Sewel convention is intact?
The Sewel convention is fundamental to the functioning of relations between the UK Parliament and the Scottish Parliament. All of us here, irrespective of our views on Scotland’s constitutional future, should be committed to upholding the rights of this Parliament and recognising the importance of the Sewel convention.
As I have said several times, this process does not meet the highest standards, but—recognising the unique set of circumstances that we face—we have sought to move forward in a way that acknowledges the significant implications of the legislation and to work constructively in doing so.
Mr Rennie raised a number of points about the Dalzell site. I confirm to him that we are keen to see the site restart. We continue to work closely with the GFG Alliance to understand how it can do that.
So far, the Scottish Government has not been formally asked to provide support, but I advise the member and the chamber that the issue was part of my discussions with the UK Government minister yesterday.
The legislation extends to Scotland, and the steel undertaking would capture the site.
[Made a request to intervene.]
It would appear that the member is poised to intervene.
Was the minister aware that 4,000 tonnes of steel slabs would be coming from outside the United Kingdom and not from Scunthorpe? Did he know that it was going to be turned into a jobbing plant?
The member is bringing information to my attention for the first time, and I appreciate his doing so. I will certainly follow that up with my officials following this debate.
We recognise the sustained interest in the site, and we collectively want it to be a success. The legislation, as it relates to British steel and the broader strategic picture of the steel industry across the United Kingdom, provides an opportunity to contribute to a sustainable future for the Dalzell site.
The minister mentioned Dalzell. As the only plate mill that is left in the UK, it is critical to national infrastructure and to steel plate production for shipbuilding. We have already permanently lost the quenching and tempering facility for strengthening steel plates at Clydebridge. Given the information that Mr Rennie has supplied, will the minister make a statement in early course on what the Scottish Government intends to do to develop the Scottish steel industry?
I can feel the Minister for Parliamentary Business and Veterans’ eyes boring into the back of my head. It would not be for me to do that, and it would be for Parliament to decide that.
The member has registered his point, and his party is free to raise the matter through the usual procedures at the Parliamentary Bureau. I am happy to engage with the member on these matters.
I think that I have covered most of the points that were raised during the debate. I welcome members’ engagement. I recognise that, ideally, we would have had the opportunity to consider the issue at committee. Should the committee wish to explore the matter in more detail following summer recess, my officials and I would be more than happy to engage with it to do so.
I ask Parliament to support the motion that is before it this evening.
That concludes the debate on a motion of legislative consent for the Steel Industry (Nationalisation) Bill.
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