Commentary on provisions of Act
Section 1 and Section 2: Meaning of ‘steel undertaking’ and Directions about use of assets
- Section 1 defines ‘steel undertaking’ as an undertaking in England that manufactures steel.
- Section 2(1) gives the Secretary of State the power to give a notice to a steel undertaking if it appears to the Secretary of State that the assets have ceased to be used, are at risk of ceasing to be used, or it is in the public interest that their use should resume or continue. Where the Secretary of State has given a notice under Section 2(1), the Secretary of State may give directions requiring the steel undertaking and relevant persons associated with it to use specified assets in a specified way or to take (or avoid taking) specified steps to ensure the continued and safe use of the specified assets. This includes the power to direct the undertaking to enter into agreements, make payments, refrain from taking insolvency proceedings and sharing information with the Secretary of State.
- A notice or direction by the Secretary of State must be in writing and may be varied or revoked by a subsequent notice or direction. The undertaking and relevant persons associated with it must comply with any directions given by the Secretary of State.
- The power to issue directions under section 2(3) is a broad one and includes powers to require the steel undertaking to take (or not to take) specified steps. Section 2(5) gives examples of the steps that a steel undertaking could be required to take (or not to take). Other steps that a steel undertaking might be required to take (or not to take) include, for example, rescinding, varying, entering or not entering into contracts of any description, including contracts of sale, supply or carriage.
Section 3: Breach of directions: power to take control of assets
- Section 3 gives the Secretary of State the power to take control of assets if they consider that a steel undertaking or a relevant person associated with it has failed or is failing to comply with a direction, or there is a risk the undertaking or the relevant person might fail to comply or frustrate the purpose for which the direction was given.
- Upon taking control of the steel undertaking, the Secretary of State may do anything the steel undertaking, or any relevant person, could do to secure the continued and safe use of the specified assets. This includes entry into the premises, preventing disposal of or dealing with assets, exercising managerial functions and entering into contracts. Anything done by the Secretary of State in this regard is deemed as done by the steel undertaking unless stated otherwise by the Secretary of State in writing. Expenses incurred by the Secretary of State in connection with, the exercise of powers under this section are recoverable as a debt due to the Crown from the steel undertaking or the group undertaking in relation to the steel undertaking.
Section 4: Offences
- The steel undertaking and relevant associated persons commits an offence if they fail to comply with a direction from the Secretary of State without a without reasonable excuse. A group undertaking also commits an offence if it does (or fails to do) something with the intention of preventing or hindering the steel undertaking or a relevant person from complying with the Secretary of State’s direction. A person found guilty of the offence is liable, on conviction, to be imprisoned for up to 2 years or a fine or both.
Section 5: Injunctions
- Section 5 gives the Secretary of State power to apply to the High Court for an injunction if they consider that a steel undertaking, a relevant person or a group undertaking in relation to the steel undertaking has committed or might commit an offence under Section 4. The High Court may grant an injunction (or interim injunction) on such terms as it thinks fit to secure the continued and safe operation of the specified assets.
Section 6: Indemnities
- Section 6 provides an exemption from liability for a person for anything done (or not done) in in compliance with a direction from the Secretary of State or as a result of a step taken by the Secretary of State to secure the continued and safe use of the specified assets. The Secretary of State may pay compensation to any person in respect of any loss incurred by them as a result of actions taken to comply with directions.
Section 7: Compensation scheme
- Section 7 confers a power on the Secretary of State to make regulations providing for paying compensation to a steel undertaking to which a notice has been given under Section 2 as a result of the exercise of the Secretary of State’s functions under the Act.
Section 8: Financial provision
- Section 8 provides that any expenses incurred by the Secretary of State under or by virtue of this Act or any increase under any other Act attributable to this Act is to be paid out of money provided by Parliament.
Section 9 and 10: Interpretation, Extent, commencement and short title
- Section 9 sets out the key definitions used in the Act.
- Section 10 provides that the Act extends to England and Wales only. The Act came into force on the day on which it was passed.
