News Story

The Government is planning to take over Speciality Steel UK in a move set to cost around £350 million, after a private sector bid failed to secure its backing.

Business Secretary Jonathan Reynolds said the Government would work towards the “public acquisition” of the UK’s third-largest steelworks.

Mr Reynolds said a bidder had come forward to take over SSUK earlier this year, reported to be Norwegian firm Blastr Green Steel, but the Government could not support it and was instead developing its own proposal.

The company was placed into the control of the state’s Official Receiver last August, after it was forced to liquidate by the High Court.

Mr Reynolds said he expected the process of bringing it into public ownership to take around four to six months.

He said the Government would “have to pay off the creditors”, acquire the assets and “inject some working capital over a period between one and three years”.

The Business Secretary continued: “I would anticipate the cost of that to be around £350 million.”

Asked by Liberal Democrat Treasury spokeswoman Daisy Cooper “where that money might come from”, Mr Reynolds replied the Government had not yet spent “the lion’s share” of £2.5 billion set aside for the steel industry, pledged in Labour’s 2024 manifesto.

Mr Reynolds said there was “nothing ideological” about the decision to acquire SSUK, adding: “I want this to be run in the private sector. That is my ideal.”

Speciality Steel employs about 1,300 people, many of whom have been put on furlough with reduced wages.

Production at the business, which runs sites across Stocksbridge and Rotherham in South Yorkshire, and Wednesbury in the West Midlands, has been on pause in recent months.

Mr Reynolds said the Government had “serious concerns about the proposed financing” of a potential offer for SSUK and “whether it would be able to offer the long-term stability for the local economy and community”.

Mr Reynolds said: “We took a long, hard look at the offer that was on the table, but the truth is that we had serious concerns about the proposed financing of it, the protections for UK taxpayers, and whether it would be able to offer the long-term stability for the local economy and community.”

The deal will “keep options open” for the business while working to determine the long-term future of its sites.

Trade unions said they welcomed the Government’s intervention after failing to find a credible buyer for SSUK.

Gareth Stace, UK Steel director-general, said: “This Government is once again stepping up to do what is needed for the UK steel industry.

“SSUK is already well on its way to returning to full operations and retaking its place at the heart of critical UK supply chains.

“It is crucial that the custodian of this key strategic asset is the right owner and investor, with the expertise and long-term ambition that the dedicated workforce deserve.”

Roy Rickhuss, Community Union general secretary, said it was a “disappointing outcome” that a private sector buyer had not been secured, but that the Government’s intervention was a “welcome move”.

“SSUK is a unique and integral component of the UK’s steelmaking capabilities, without which we would be entirely reliant on foreign suppliers for high-value speciality inputs to our critical energy infrastructure and our advanced manufacturing base including the defence industries,” he said.

First Secretary of State Louise Haigh said: “This Government refuses to be a passive observer to the decline of our critical industries and the loss of good jobs. Inaction is not an option.

“Over the coming months, we will work with regional and local partners to agree a way forward that delivers for employees, the community and the country.”