The Public Accounts Committee has issued a critical assessment of the government’s management of British Steel following its nationalization, stating that the Department for Business, Innovation, Science and Trade has failed to articulate a clear pathway toward making the company profitable. The report raised concerns about cost estimates for the overall nationalization effort, noting discrepancies between initial projections of £642 million and revised figures of £555 million as of June.
The government assumed control of British Steel in April after passing emergency legislation when the previous owner indicated plans to shutter two blast furnaces at the Scunthorpe facility. The company became fully nationalized following parliamentary approval in July. The government subsequently released a steel strategy in March that established an objective for domestic production to supply 50% of steel consumed in the UK and identified electric arc furnaces as the technology foundation for future steelmaking operations.
Parliamentary members warned that the new tariff framework enacted to support British Steel and encourage domestic consumption creates significant risks for manufacturing sectors dependent on imported steel varieties unavailable domestically. Beginning in July, the government reduced tariff-free import quotas by 51% and doubled tax rates on steel imports exceeding certain thresholds from 25% to 50%. The committee expressed concern that smaller businesses reliant on specific steel types may face insolvency or relocate operations internationally due to elevated import costs.
The PAC recommended establishing a formal mechanism through which steel companies could petition the government regarding tariff-related hardships. A departmental spokesperson stated that the government welcomed the report’s findings and confirmed its commitment to reviewing the recommendations while pursuing a sustainable and competitive domestic steel sector. The government emphasized that securing the steel industry’s long-term viability serves national interests and that taxpayer value remains central to its decision-making process.
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