House of Commons
Steel Industry (Special Measures) Bill: Business of the House
(2 days, 16 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Leader of the House of Commons (Lucy Powell)
I beg to move,
That:
(a) at this day’s sitting any member of the Panel of Chairs may take the Chair as Deputy Speaker when requested to do so by the Speaker, without any formal communication to the House;
(b) at its rising this day this House do adjourn until Tuesday 22 April; and
(c) the following provisions shall apply to the proceedings on the Steel Industry (Special Measures) Bill:
Timetable
(1)(a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at this day’s sitting in accordance with this Order.
(b) Notices of Amendments, new Clauses or new Schedules to be moved in Committee of the whole House may be accepted by the Clerks at the Table before the Bill has been read a second time.
(c) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be brought to a conclusion, if not previously concluded, at 2 pm at this day’s sitting.
Timing of proceedings and Questions to be put
(2) As soon as the proceedings on the Motion for this Order have been concluded, the Order for the Second Reading of the Bill shall be read.
(3) When the Bill has been read a second time:
(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with Standing Order No. 52(1) (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;
(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(4) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(5) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:
(a) any Question already proposed from the chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a Minister of the Crown;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.
(6) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(7) If two or more Questions would fall to be put under paragraph (5)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(8) If two or more Questions would fall to be put under paragraph (5)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Consideration of Lords Amendments
(9) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on consideration of Lords Amendments shall be brought to a conclusion (so far as not previously concluded) one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(10) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (9) of this Order.
Subsequent stages
(11) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(12) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (11) of this Order.
Reasons Committee
(13) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.
Miscellaneous
(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(16) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(17) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.
(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(19) At today’s sitting the Speaker shall not adjourn the House until:
(a) any message from the Lords on the Bill has been received and any Committee to draw up Reasons which has been appointed at that sitting has reported;
(b) the Speaker has notified the Royal Assent to any Act agreed upon by both Houses.
(20) At the conclusion of proceedings the Speaker shall adjourn the House without putting any Question.
I do not intend to detain the House for long, as we have an important debate to follow, but may I put on record my thanks to you, Mr Speaker, for agreeing to recall Parliament today? As ever, you have been incredibly accommodating and understanding. You recognise the scale and urgency of what we need to do today, and I know that these are very important matters to you personally, and to the House as a whole. May I also thank the House staff, who have responded quickly and professionally to facilitate this extraordinary meeting of the House, and all those colleagues who are here at such short notice?
We meet in these special circumstances because the Government need to act decisively, at pace and with urgency to ensure that the steelworks blast furnaces of British Steel are maintained and kept going, saving thousands of jobs and securing our domestic production of virgin steel. The Secretary of State for Business and Trade will shortly set out the powers that he needs to do this, through the Steel Industry (Special Measures) Bill, published online this morning.
If the House agrees to this business of the House motion, the arrangements today provide for Second Reading, Committee, Report and Third Reading to be considered by the House until 2 pm. The House will then wait to consider any message from the Lords today, before adjourning again until Tuesday 22 April. I also send our thanks to Members and staff in the House of Lords for returning today. Members may be aware that the Lords sit from 12 pm for a “take note” debate on the Government’s proposals, before being expected to consider all stages of the Bill today.
I hope all Members can work together constructively today on the passage of the Bill, and I am grateful to you, Mr Speaker, for facilitating this important request. I hope all Members will agree to this motion, and I commend it to the House.
Alex Burghart (Brentwood and Ongar) (Con)
I associate this side of the House with the remarks that the right hon. Lady has made about staff coming in today. We are incredibly grateful to them.
I am sure we are going to hear a lot today about urgency, moving at pace and the rest of it, but the truth is that the Government have made a total pig’s breakfast of this whole arrangement. The fact is that anyone who has been paying any attention to this story over the past few months has known that this was coming down the track. The House was sitting—[Interruption.]
Mr Speaker
Order. We have come back on a Saturday; that does not mean it is “Crackerjack” day. We are going to listen.
Alex Burghart
The House was sitting on Monday and on Tuesday, and on those days my hon. Friend the Member for Brigg and Immingham (Martin Vickers) raised these issues. The fact is that the Government make bad deals for Britain when negotiating, and, as ever, they are making a bad deal. It is a huge discourtesy to the House that we saw this Bill only 90 minutes before the start of the sitting. Far-reaching powers are being given to the Government—powers not seen in legislation, really, in the past 40 years. I very much hope that the Government will apologise for the way that they have done things, for having taken their eye off the ball yet again, and for having negotiated badly for the British people.
Question put and agreed to.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Mr Speaker
I remind Members that, under the Order of the House of today, notice of amendments and new clauses to be moved in Committee of the whole House may be—[Interruption.] This is very serious. They may be accepted in person by the Clerks at the Table in the Chamber before the Bill has been read a Second time. The deadline for amendments tabled in this way is 12 noon. Any amendments tabled to the Bill will be treated as manuscript amendments, meaning that only those tabled before 12 noon and selected by the Chairman for debate at Committee stage will be distributed and published.
The Secretary of State for Business and Trade (Jonathan Reynolds)
I beg to move, That the Bill be now read a Second time.
We meet in exceptional circumstances to take exceptional action in what are exceptional times. Our request to recall Parliament was not one we made lightly. I am genuinely grateful to hon. Members in all parts of the House for their co-operation, and for being here today as we seek to pass emergency legislation that is unequivocally in our national interest. I thank in particular the staff in Parliament for facilitating today’s sitting, and the Prime Minister, the Chancellor and the Home Secretary for their support. Indeed, we can take this action today only because of the restoration of economic stability and the dedicated resources for steel in the last Budget. I acknowledge my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), the hon. Member for Brigg and Immingham (Martin Vickers) and all my hon. Friends from Teesside for their advocacy and engagement on this matter, throughout, on behalf of their constituents.
As hon, Members will know, since taking office, the Government have been negotiating in good faith with British Steel’s owner, Jingye. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common-sense conditions to protect the workforce, protect taxpayers’ money, and create a commercially viable company for the future. Despite our offer to Jingye being substantial, it wanted much more—an excessive amount, frankly. However, we remained committed to negotiation, but over the past few days, it has become clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running. In fact, its intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel.
I want to make it absolutely clear that, separately from any conversation about a possible deal to co-invest in new infrastructure, the British Government offered to purchase the raw materials in a way that would have ensured no losses whatsoever for Jingye in maintaining the blast furnaces for a period of time. A counter-offer was instead made by Jingye: that we transfer hundreds of millions of pounds to it, without any conditions to prevent that money, and potentially other assets, being immediately transferred to China. Jingye also refused the condition of keeping the blast furnaces maintained and in good working order.
Even if I had agreed to those terms, I could not guarantee that further requests for money would not then be made. In that situation, with the clock being run down, doing nothing was not an option. We could not, will not and never will stand idly by while the heat seeps from the UK’s remaining blast furnaces, without any planning, due process or respect for the consequences. That is why I needed colleagues here today.
David Davis (Goole and Pocklington) (Con)
From what the Secretary of State has described, it is beginning to sound as though Jingye is trying to manoeuvre the Government into a recompensed nationalisation. Will he make it plain that if it tries to manoeuvre us into nationalisation, we will pay not more than a penny for the business?
Jonathan Reynolds
To be clear, where there is a transfer of ownership to the state, we would always pay the fair market value for the assets. In this case, the market value is effectively zero, so I take the right hon. Gentleman’s point entirely. I would say that the intention of Jingye has not been to engineer that situation; its intention has been to keep the downstream mills, which colleagues will know are fundamental to our construction and steel industries, and supply them from China, rather than from Scunthorpe; that is the situation.
Graham Stuart (Beverley and Holderness) (Con)
Is it now the view of the Government that primary steel production in the United Kingdom is an overriding national security issue?
Jonathan Reynolds
As the right hon. Gentleman will know—we have had this exchange at the Dispatch Box before—I believe that the capacity for primary steel production is important. The steel strategy looks at new ways of ensuring that, and at not just protecting the past, but at what the future may bring. Direct reduced iron technology is of significant potential interest to us for the future. However, this situation—involving the last remaining blast furnaces, and the proposition put to us—is exceptional and unique, and I need all colleagues to recognise that.
The legislation ahead of us today is therefore a proportionate and necessary step. It allows us to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. The Bill does not transfer ownership to the Government. We will have to deal with that matter at a later date. I took the decision that given the exceptional nature of a recall, it would be better to limit the powers in the Bill, which are still significant, rather than introduce more complex matters of property rights and public ownership at this time.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Secretary of State is taking extremely extensive powers for the Government, and they apply to what he describes in the Bill as “specified assets”. As far as I can see, they are not limited to blast furnaces or assets required for making virgin steel. Does he accept that he is leaving two hands on the tiller, when it comes to the operation of all the steelmaking companies to which the Bill may apply? In other words, he is saying that the Government can direct a company in relation to specified assets, but that company can do other things of its own initiative. Does he recognise that he is creating considerable legal complexity in the operation of those companies going forward? Why is that the right approach?
Jonathan Reynolds
I am extremely grateful to the right hon. and learned Gentleman for his thoughtful question. The fundamental purpose of the Bill is to allow me, as Secretary of State, and this Government to take control of this situation. The reason why this is the Steel Industry (Special Measures) Bill, and not a Bill specific to British Steel, is, as he will know, that the latter would be a hybrid Bill, and introducing that would be a far more complex procedure. With the clock being run down, that was not an available option.
The Bill broadly replicates the situation that would apply if the Civil Contingencies Act 2004 had been triggered, but rather than seeking to meet the threshold to trigger that Act, I am seeking parliamentary permission—the consent of this House and the other place—to take control, which I think is a better way forward. I want to make it clear to the right hon. and learned Gentleman and to the House that I want this to be a temporary position—I do not want these powers a minute longer than is necessary—but I need the powers to rectify and save the situation.
Richard Tice (Boston and Skegness) (Reform)
Given that the Secretary of State has inferred that the owner, Jingye, is not and has not acted in good faith, surely the right thing to do is to seize this great opportunity now, this weekend, and nationalise British Steel?
Jonathan Reynolds
A transfer of ownership to the state remains on the table. It may well, at this stage, given the behaviour of the company, be the likely option. However, our aspirations for British Steel remain a co-investment agreement with a private sector partner to secure a long-term transformation. The action I seek to take today is not a magic wand or a panacea. The state cannot fund the long-term transformation of British Steel, nor would it want to, but a failure to act today would prevent any more desirable outcome from even being considered, and that, again, is why we must act today.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I applaud my right hon. Friend for his decisive action in this matter. I have only had a chance to read the Bill for 10 minutes—[Interruption.] That is not a criticism; it is the natural procedure of this House. The Bill could not be laid until First Reading. The Bill talks about compensation. He has made the point that he is not planning to take over and run British Steel, which is not the desirable option, but has he done some sort of impact assessment on the potential range of costs to the taxpayer in these circumstances?
Jonathan Reynolds
I think my hon. Friend refers to clause 7, which deals with compensation. Again, let me be clear: this is a clause that we would put in any Bill. We are not Russia, and we do not sequester assets. The language in the clause—the legal definition—is something that we would use in most standard procedures. Going back to the question from the right hon. Member for Goole and Pocklington (David Davis), the effective market value of Jingye is zero, so there is no inconsistency between those two points.
Samantha Niblett (South Derbyshire) (Lab)
What is happening today is something that mining communities like Swadlincote, in my constituency of South Derbyshire, will be feeling deeply in their souls. It is something that they could have only dreamed of back in the 1980s, when they wanted a Government who had their backs and prioritised the national interest. Instead, they had a Conservative Government who sold them down the river. Does the Secretary of State agree that this is a pivotal moment in our history, because we have a Labour Government prioritising our people and the national interest?
Jonathan Reynolds
This is a significant moment. How a country handles economic transitions is not about nostalgia for the past—we have to embrace the future—but how we help our people, our industry and our nation get to that point is key. My hon. Friend and I come from similar places, and we have not managed these transitions particularly well in the past. We are meeting this weekend to discuss the potential loss of thousands of jobs, which is what was on the line. The fact that we do not accept that, and that we will do things differently, is a welcome change.
Ed Davey (Kingston and Surbiton) (LD)
We will scrutinise this Bill today, but we want to do so in a constructive fashion. Given the huge damage that President Trump’s tariffs have done to the British steel industry, accelerating this crisis, does the Secretary of State agree that any Member of this House who actively campaigned for President Trump’s election and cheered him on has behaved shamefully unpatriotically and should apologise to British steelworkers?
Jonathan Reynolds
I am extremely grateful to the right hon. Member and his party for their presence today. He will not draw me on the other principal issue that we have been dealing with at the Department for Business and Trade over the last few days, but to be clear, the issues around British Steel are about more than the imposition of tariffs. The tariffs are not welcome, and I do not think there is justification for them to be put in place. I believe that it is in our interests, but also in the US’s interests, to agree a position that removes those tariffs in the interests of steelworkers.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I fully understand the nature of what the right hon. Gentleman is bringing forward. I also understand some of the requirements for speed in this case, and we can argue about whether this should have been done before. Having quickly looked through the Bill, I do not see a sunset clause. I ask about that not because I want the Government to set a particular date, but because such a clause would bring them back here to debate whether the process should be extended. It would therefore put a reasonable limit on Government activity without debate. Can he explain why there is no sunset clause in the Bill?
Jonathan Reynolds
I absolutely understand and welcome the right hon. Gentleman’s question. I do not want these powers for a minute more than is necessary. I cannot say at the minute, having drafted the Bill, the timeframe for which they will be required, but I will endeavour—and I commit at the Dispatch Box—to keep the House updated. Perhaps I will ask the Business and Trade Committee for its involvement, in order to make it clear how long we believe it will be. To be absolutely specific, where we make an order in relation to control of a steel undertaking, we can revoke the regulations once that control has been established and is no longer required.
Several hon. Members rose—
Jonathan Reynolds
I know there is huge interest, but I will make a little more progress and that might deal with some of the matters Members want to raise.
This is what it means to be a Government unashamedly on the side of working people—one that will never hesitate to take action to protect this nation’s assets and economic security. I understand that some have asked about precedent or referred to other troubled industrial situations. To be clear again, this is an exceptional and unique situation. The question for all Members is whether we as a country want to continue to possess a steel industry. Do we want to make the construction steel and rail we need here in the UK, or do we want to be dependent on overseas imports? As a Government, we are not passive in any way about the future of British industry.
Stephen Flynn (Aberdeen South) (SNP)
The Secretary of State has said this is “unique” and “exceptional” and made reference to energy transitions and thousands of jobs. In the Scottish context, many minds right now will be focused on the situation in Grangemouth, where we know that hundreds of jobs will be lost directly, as well as thousands in the supply chain. Were I, or perhaps even the local Member, the hon. Member for Alloa and Grangemouth (Brian Leishman), to bring forward a similar Bill to save Scotland’s only oil refinery and give the Secretary of State the executive power to do as he pleases—as he is doing with British Steel—would the Labour party back it as it is backing this Bill today?
Jonathan Reynolds
I am pleased for the chance to address this issue. The importance of Grangemouth is why this Labour Government have pledged £200 million to secure its long-term future. It is an important asset, but it is not the only remaining refinery; it is one of three crackers in the United Kingdom—that is important. Specifically, it is not a comparable situation, and the behaviour of the company is not comparable to the case of British Steel.
I also say to the right hon. Member, and indeed to all Members, that this is why we fought and fought again to secure the future of British shipbuilding by saving all four of the Harland and Wolff sites in England, Scotland and Northern Ireland. The right hon. Member will know that the commercial interest was not in the Scottish yards, but we held them together precisely because of our commitment to Scotland and the Union. It is also why within weeks of taking office we secured a better deal for the workers at Port Talbot. We have repeatedly acted, and we will continue to act no matter how hard the circumstances.
Alan Gemmell (Central Ayrshire) (Lab)
Does my right hon. Friend agree that the failure of the Tories and the SNP to develop an industrial strategy for Scotland meant that they had no plan for Grangemouth? They knew for over a decade about the problems at the refinery and did nothing. Does he agree that as soon as Labour came into power, we got to work and delivered support for the site, the workforce and the local community?
Jonathan Reynolds
I endorse my hon. Friend’s comments entirely. I do not believe there is a history of the SNP calling for the nationalisation of Grangemouth. It was, as ever, on the bandwagon. I think we all recognise that the SNP does not campaign on its record in running Scotland; it campaigns on grievance. My hon. Friend is absolutely right that the contrast is with a Labour Government in this place who are on the side of working people everywhere.
Jessica Morden (Newport East) (Lab)
The Secretary of State mentioned Port Talbot. I appreciate the unprecedented circumstances we find ourselves in today, when the Government have rightly moved quickly to safeguard primary steelmaking, and the Secretary of State will be very mindful of the extraordinarily difficult circumstances that the steel industry in south Wales has faced. I recognise the £80 million fund available, but can he make sure that south Wales and Llanwern benefit from their share of the £2.5 billion clean steel fund? Can that also be at the forefront of his mind?
Jonathan Reynolds
I am incredibly pleased to have the chance to answer the point my hon. Friend raises. The Port Talbot deal was originally negotiated by the previous Government. I did try to reopen it; I went to see Chandra in Davos and flew to Mumbai to talk to him about it. To be frank, I kept Port Talbot open on polling day, because it would have closed due to the industrial action that almost took place. The previous Government were nowhere to be seen, even before the result of the election was in. We were not able to reopen the deal, but we did negotiate a better deal. As a result, Port Talbot is in a stronger position than British Steel, because it has a long-term future in place. [Interruption.] This is because we improved on the deal that the Leader of the Opposition botched at the time. To be clear, the £2.5 billion green steel fund the Chancellor has put in place is in addition to the £500 million already going to Port Talbot. That is an incredibly important point.
Sarah Owen (Luton North) (Lab)
I thank the Secretary of State for giving way and for acting in the national interest—the complete opposite of the hon. Member for Clacton (Nigel Farage), who said he was against intervening to save British Steel two years ago. Does the Secretary of State think the hon. Gentleman said that in the British interest or in the foreign interests the Reform party seeks to serve?
Jonathan Reynolds
I believe that that is on the record. I hope to convince all colleagues today to support this action, which is in the national interest.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
When the blast furnaces in Port Talbot closed down last September, this Government could have taken exactly the same legislative action as they have chosen to take today. We will endeavour to amend the Bill to include Wales, because there is still the opportunity for this Government to make a real difference to the community of Port Talbot and the 2,800 jobs that have been lost there.
Jonathan Reynolds
I do not want to embarrass the right hon. Lady, but the blast furnaces have already closed at Port Talbot. They are not available to be saved —that situation has moved on. Let me stress again: Port Talbot is in a stronger position because it has that long-term future in place and the potential additional investments through the green steel fund.
Several hon. Members rose—
Jonathan Reynolds
I think I must progress, Mr Speaker. I can see your indication to do so.
Dawn Butler
I thank my right hon. Friend for giving way and for the considered way in which he is looking after the national interest. The steel unions—the GMB, Community and Unite—would like clarification that any board that is set up will have at its heart the steelworkers who have kept the steelworks going through thick and thin.
Jonathan Reynolds
We remain in close engagement with all the unions, which have been monitoring the situation closely. Again, I reiterate that the Bill is not in itself about a change of ownership; it is about a change of control to rectify the situation. However, I will certainly have regard to the comments my hon. Friend has made and, of course, the role of the workforce at all stages.
We will never accept the argument that steelmaking is a sunset industry. Steel is vital to every bit of the modern economy. Domestic demand for steel is set only to go up, not down. In the past few weeks alone, we have seen Heathrow airport announce multibillion-pound expansion plans requiring 400,000 tonnes of new steel, and Universal Studios confirm it will be building Europe’s biggest theme park and, where possible, will use UK-made steel to do so. This Government are backing the builders, not the blockers. With the action we take today, we have the chance to feed that boom with steel made in Britain.
The legislation we are setting out today will help to end the uncertainty that has been hanging over British Steel’s Scunthorpe site for too long. I welcome the Opposition’s support today for this recall, but this issue should have been resolved years ago. I believe they may now view it as a mistake to have given this essential national asset to this company.
I have to address the statement made by the Leader of the Opposition yesterday, which I do as a matter of genuine regret. She claimed that while she did my job, she negotiated a modernisation plan with British Steel to build an electric arc furnace at Teesside, followed by one at Scunthorpe. I wish to make it unequivocally clear to the House that the new Government inherited no such deal. We could not renege on that deal because it did not exist. On day one, I was told that there had been a lack of progress on this matter to date.
Jonathan Reynolds
If such a deal was negotiated, somehow in secret, I ask the Leader of the Opposition to say how much money she agreed to give Jingye for this deal and what conditions were placed on it. To state the obvious, building two electric arc furnaces in two different locations would be more expensive than building one in one location, and, given that Jingye’s request to build two furnaces in Scunthorpe was for £1.2 billion in taxpayers’ support, what—
Mrs Badenoch
On a point of order, Mr Speaker. I would like advice on how to counter the points the Secretary of State is making, given that they are factually incorrect and a complete misrepresentation of the situation that he inherited.
Mr Speaker
It has just been clarified by your good self. I cannot make the Secretary of State give way when you want to come to the Dispatch Box, but I am sure that if he notices you doing so again, he may wish to.
Jonathan Reynolds
This is an excellent chance to clarify that. If the Leader of the Opposition agreed a deal with Jingye to cause massive job losses in Scunthorpe and transfer the jobs to a completely different place, and at higher cost than the request the company made to us, I think she should be able to tell us. I am more than happy to give way.
Mrs Badenoch
Labour cannot negotiate. We were negotiating a modernisation deal that would have had limited job losses, just as we had in Port Talbot. The Labour Government inherited a functioning commercial deal in Port Talbot, and the same would have happened with British Steel had we not had a snap election. What the Secretary of State is doing now is the union-pushed deal. They brought that deal to me—I said no; he said yes.
Jonathan Reynolds
This is genuinely revelatory. I say again: if Jingye’s request was for £1.2 billion to build at lesser cost in one place, what was the sum of money agreed by the Leader of the Opposition when she was Business Secretary to build in two places? It certainly was not in the accounts that the Chancellor had. I will give way. How much money was agreed to Jingye to close the jobs in Scunthorpe? I ask her.
Mrs Badenoch
When you are negotiating, you do not have—[Interruption.] Labour Members are cheering and laughing because they love this; they think that the public taking on billions of pounds in liabilities is fantastic. We had not finished the negotiation so there was no amount, but it would have succeeded better than the terrible plan that the Secretary of State has now.
Jonathan Reynolds
Our friends in the press will follow that up and find out exactly how much money the Leader of the Opposition secretly promised to Jingye to transfer those jobs out of Scunthorpe. I think it might be wise, on all counts, for that statement to be withdrawn.
The situation we inherited across the board on assuming office is one where most of our foundation industries were in some substantial difficulty. Since 2010, UK crude steel production has almost halved, and we know that rebuilding our steel industry after years of neglect will be a challenge, but it is one that this Government have grasped.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
My right hon. Friend and I were in this House in 2015 when the Conservative party sat on its hands and kissed goodbye to the Redcar blast furnace and, with it, the state-of-the-art coke ovens that could have resolved this situation today. Before he sits down, will he say something about the Jingye activities at Lackenby and Skinningrove and how they will be impacted by today’s announcement?
Jonathan Reynolds
I am really grateful that my hon. Friend has been able to put that point on the record for his community, to avoid the kind of situation we have seen in lots of industrial communities, to be frank, over the years. This is why we take this action today in the national interest: to provide that bridge and that possibility to the future.
Specifically in relation to the downstream mills, even if we were willing to accept a situation in which they were supplied from a foreign country, as in this case, the confidence of consumers and businesses would surely be put at risk and it would bring into question the entirety of British Steel’s workforce and business and a huge part of our strategic assets. That, again, is why this decisive action today is necessary.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The right hon. Gentleman said that steel production is strategically important, and I agree. He said that we should be avoiding having to be reliant on imports, and I agree. However, his Government blocked production of the raw material metallurgical coalmine in the north-west. Will he now go back to his colleagues in Government and the company to encourage them to reapply so we can have security not just of steelmaking, but of the raw materials that are needed to make it?
Jonathan Reynolds
The hon. Lady will know that the company brought into question whether that coal was the right grade for blast furnace supplies. I remember several debates in this place about that. I should also make it clear—I think hon. Members understand this—that we are talking about two blast furnaces that date from the 1930s and 1950s. We must also be looking to the future, to new technology and new investments. Crucially, having the dedicated resources that this Government have put into steel is why we have the chance to look to the future with optimism. The UK steel industry is an outlier, in the sense that it is a much smaller proportion of our overall economy than in any major comparable economy, so of course there is potential, and we should look to the future. I would be more than willing to work with the hon. Lady as a local MP to do so.
Mr Joshua Reynolds
I thank the Secretary of State for giving way. Once he has the powers in this Bill, I urge him to use them decisively and swiftly, but then, as he has said, we need to look to the future. Once we have secured Scunthorpe’s future, we need to discuss what happens next, which is clean energy, and investing in the global clean energy that the UK really could succeed in. Does he agree that the people of Scunthorpe have upheld their end of the bargain for decades, and now it is time that we in this House make sure we uphold our end too?
Jonathan Reynolds
The hon. Member puts it extremely well, if I may say so. The people who have upheld steel as the backbone of construction in the UK for decades deserve better treatment than they would have had if Parliament had not been recalled today to take this action, and we should all bear that in mind.
Whether it is at Port Talbot, via our upcoming steel strategy, via our work to improve public procurement, or in the introduction of our industrial strategy to tackle the most thorny issues of industrial competitiveness, where others have shied away, this Government have stepped up.
Let me conclude by saying that steel is fundamental to Britain’s industrial strength, our security and our identity as a primary global power. Today’s legislation will help ensure that we can retain that steelmaking capability here in the UK both now and for years to come. For British workers’ security, for British industries’ future and—without hesitation—in our national interest, and for the workers of British Steel and their families, this action is essential, and I commend this Bill to the House.
Andrew Griffith (Arundel and South Downs) (Con)
I thank the Secretary of State for taking the time to brief me last night ahead of today’s sitting, and for advance sight of his speech.
To fail to prepare is to prepare to fail. What a way to proceed: recalling Parliament for only the sixth occasion since the end of the second world war to debate a Bill published only 90 minutes ago. This would be conduct unbecoming of a parish council. Our country, our economy and this Parliament all deserve better. That is why the amendment in my name would at least put a sunset on the Bill, and I hope the Government will accept it.
Today is not a failure by the steelworkers of Scunthorpe and elsewhere, their families or the community. They have toiled for generations to ensure that we have the primary steel we need for our structures, our safety and our security. This is a failure on the Government’s watch. Let us be crystal clear what today means: we are entering a tunnel with only one exit. This is a botched nationalisation plan, revealing that the Government have no plan.
In government, we acted to secure Port Talbot and we were negotiating a plan, including British Steel’s preferred option of an electric arc furnace on Teesside, which would have limited job losses and kept Scunthorpe running in transition. Once again, when Labour negotiates, Britain loses—the Chagos islands, US tariffs, the train drivers and now this latest crisis. A bad toolmaker blames his tools, but this time the Government have only themselves to blame.
Matt Western (Warwick and Leamington) (Lab)
Does the hon. Gentleman not accept that, in the years between 2010 and 2023, steel production in this country fell by 50% —40% to 50%—and does that not underline the lack of strategy under the previous Government?
Andrew Griffith
I will talk about the difficulties facing steel around the world, but let us just be clear what is happening today: the British people must not have lost their winter fuel allowance and their disability benefits in order that China can walk away from its liabilities, leaving British taxpayers to pick up the bills.
Steel needs energy, and energy needs steel. No one denies that steelmaking has been difficult for some time, but Scunthorpe is the victim of a dishonesty that pretends it is better for the environment to ship coke halfway around the planet than from down the road, and of an energy policy that has driven costs higher than in any competing nation. No one is more responsible for this than the Energy Secretary and the Prime Minister who appointed him.
Mr Speaker
Order. I remind Members that those who keep intervening will go down the list, so that everybody gets a fair chance.
Graham Stuart
I assume that applies after the warning, Mr Speaker.
We have a Government who, I believe, are shipping coking coal just off the Lincolnshire coast today from Japan, when it was perfectly possible to have the world’s greenest production of coking coal in Cumbria, with thousands of jobs. Is it not a disgrace that this Government turned their back on jobs in Cumbria and, indeed, in the North sea because they put ideology ahead of practicality and even ahead of the environment?
Andrew Griffith
My right hon. Friend is absolutely right. It is sad to say that Scunthorpe is the victim of exactly that policy: putting ideology before British interests.
Several hon. Members rose—
Andrew Griffith
I will make some progress.
Millions of other businesses are also struggling with their energy bills, which is why the Chancellor’s tax choices have been so devastating. Steel may be the first domino to topple, but glass, chemicals, cars and concrete are other industries at risk. Does the Prime Minister envisage a whole series of Saturday sittings, or will he change course today and cut energy costs now, and not in 10 years’ time when it is too late?
Wera Hobhouse (Bath) (LD)
We are hearing about the previous Government’s efforts to save British Steel, and we have heard a somewhat confusing account of the deal that the now Leader of the Opposition negotiated. If such a deal existed, can we see a record of it?
Andrew Griffith
My right hon. Friend the Leader of the Opposition has made it extremely clear that the deal was being negotiated, and the point about it being negotiated is that it would have been concluded after the election.
Several hon. Members rose—
Andrew Griffith
I will make some progress.
It did not need to be this way. My hon. Friend the Member for Brigg and Immingham (Martin Vickers) has been warning of a growing threat since last September. The Mayor of Tees Valley has been asking the Government to present their plan for steel for months. Rob Waltham, the leader of North Lincolnshire council, has done all he can to support steelmaking in Scunthorpe. And, on 4 April, Ed Conway of Sky News showed the world that we were just days away from the risk of the furnaces shutting down. But the Government did not listen and they did not act.
It has been almost 10 days since Parliament last debated substantive Government business. Rather than this rushed, one minute to midnight Bill, we could have used that time for proper debate, proper process and proper scrutiny. This is indefensible incompetence. Despite years to prepare, it is clear that the Government came into office with no plan. There is no steel strategy, there is no industrial strategy, there is no export strategy, and now we have this botched nationalisation.
The Secretary of State says that his preference is to find a commercial partner, but let us be serious. Do the Government think that is likely, after attacking business with a £25 billion jobs tax and his Bill to create the most hostile environment for employers since the 1970s? On the Chancellor’s watch, in case she has not noticed, all the flow is of investors leaving this country.
Dawn Butler
I am still a little confused about the deal negotiated by the last Government. As the Leader of the Opposition did not answer, could the hon. Gentleman please clarify the situation for the House?
Andrew Griffith
I am not surprised that the hon. Lady is a little confused; as I said, the Government have failed to lay out their plan and to afford this House the opportunity to debate it. Everything that we have heard this morning says that the Government have not really thought this through. Steelmaking is complex, intense and highly operational. Iron ore has to reach thousands of degrees to become molten iron. It is a dangerous process that poses a serious risk to health. In Birmingham, Labour struggle to collect the bins—
Several hon. Members rose—
Andrew Griffith
Sit down. From midnight, the Chancellor will be standing behind the payroll, settling every bill with every supplier, even if they are in arrears. If these decisions no longer sit with the plant owner, where does the buck stop? Old Admiralty Building? The Treasury? No. 10? How can other steel providers have any confidence in the impartiality of the Government’s steel strategy if the umpire is now on the pitch? What assessment have the Government made of the impact of the Bill on public finances? There is no impact assessment.
The Government have been talking to British Steel for nine months. They have put at least £500 million of taxpayers’ money on the table. Surely by now, the Business Secretary and his officials have a comprehensive understanding of the cost of the actions that he is asking us to vote for. What disrespect it shows to this House for the Government to come along today, having recalled Parliament, after nine months of failing to land a deal, and ask us for a blank cheque. That is no way to run a corner shop, let alone the country. Has anyone in Government asked the Office for National Statistics—
Several hon. Members rose—
Mr Speaker
You will sit down, actually. It is the hon. Gentleman’s choice whether he gives way, so Members should stop hanging around.
Andrew Griffith
I will take an intervention if someone wants to answer this question: has anyone in Government asked the ONS whether, as a result of the powers that are being taken in this Bill, from today British Steel will be classified as publicly owned, whether it has been formally nationalised or not? No answers.
Bill Esterson
That is a relevant question, given that the hon. Gentleman was Boris Johnson’s business adviser when the Jingye deal was being negotiated. What advice did he give Boris Johnson about whether to accept that deal?
Andrew Griffith
Disappointingly, there was no answer to my important question about the ONS and whether this asset will sit on the Government’s balance sheet. Perhaps when the Minister winds up, he will provide an answer to that important question that affects the nation’s finances.
The markets know, the world knows and we know that the Chancellor’s headroom was inadequate from the very moment that she sat down after her last emergency Budget. Only this week, the Bank of England took the unprecedented step of cancelling the planned sale of Government bonds. Today’s botched nationalisation will further unsettle international markets. When will the Chancellor be presenting her next emergency Budget, and what are her plans to update the markets?
There we are: a disrespect of this House; the Government treating Parliament with disdain; nine months of dither and delay; and a botched nationalisation of steelmaking, with the British taxpayer on the hook. It is crystal clear that when Labour negotiates, Britain loses. This is not a serious Government. It is a Government shaped by events, not in control of them. It is government by sulky teenager—not sharing their plans, not answering the question, and when it goes wrong, it is everyone’s fault but theirs.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Mr Speaker, I wonder whether you will forgive me for returning the debate to the Bill, which is about saving British Steel. That is what the debate should be focused on, and I commend the Secretary of State for bringing forward the powers to achieve that goal. He has acted with decisiveness, speed and certainty, and I thank him for the Bill he has presented today. He has acted in the national interest, and he has acted to safeguard our economic security. I am delighted that he has also acted in line with the Select Committee’s advice, which was tabled with him 10 days ago—as we know, that does not always happen. We urged him to maximise pressure on British Steel’s owners, not to do what was easy, but to do what was right. Today he has returned to the House with a Bill asking for the powers to do exactly that.
This legislation matters not simply because it protects 3,700 jobs in Scunthorpe, not simply because it protects 37,000 jobs in the steel supply chain across our nation and not simply because it safeguards nearly £2 billion of economic output; it matters because it defends our economy, our security and, therefore, our future. At the heart of this debate is a very simple question: can we entrust a critical national asset to a company we do not trust? I say no, we cannot, we must not and we dare not. We are presented with a very simple challenge in British Steel’s owners: we have a company in possession of an asset that we need, yet it is a partner that we do not trust. In a world where threats to our economic security multiply each day, we cannot allow that risk to fester at the heart of our industrial core.
Christine Jardine (Edinburgh West) (LD)
Does the right hon. Member agree that there is a wider issue at stake: our energy security and national security? We have seen what can go wrong with a Chinese company that we do not trust, and we see Chinese influence increasing in other vital sectors, particularly our energy industry. Should that not underline our concern and act as a warning that we do not want the Chinese to have control of our energy supply?
Liam Byrne
We are here in the House to answer a very basic question: if we cannot trust a company, can we entrust to it a capability that we need, when that capability is so vital to our strength? That is one reason why the Select Committee has set up a new Sub-Committee on Economic Security, Arms and Export Controls. We will be reporting back to the House on the state of economic security in our country before the summer recess, and I look forward to the hon. Lady’s comments on that report.
The general point I want to land is this: what we value most cannot be entrusted to those we distrust most. The timing of the Bill is critical; we live in an age of intensifying insecurity. President Putin’s violence is unabated, China’s military build-up is unabated and now President Trump threatens to upend the free trading system. In such a world, to surrender our ability to make primary steel would not be a misfortune—it would be negligence.
Rosie Wrighting (Kettering) (Lab)
My right hon. Friend will know that the Select Committee has spoken to defence companies about how necessary it is not to rely on imports at a time such as this. Does he agree that national resilience and defence rely on industrial security?
Liam Byrne
My hon. Friend is absolutely right. In this debate, we need to remember that 95% of our rail infrastructure is made by British Steel. British Steel also supplies three quarters of every major construction project in this country. Thanks to the Chancellor, we are about to invest £10 billion in the rearmament of this country; much of what we need to put in place will be made by British Steel. How can we afford to let British Steel go out of business today? How can we vote against the Bill? British Steel is not simply a pillar of British industry: it is a cornerstone of our economic security.
George Freeman (Mid Norfolk) (Con)
Does the right hon. Gentleman agree with me, as a card-carrying advocate of industrial strategy, that this argument applies to some of our other key high-growth sectors, such as fusion, quantum and space? We have to accept that the days of easy globalisation are over and be a bit more strategic about how we support our emerging industries.
Liam Byrne
Mr Speaker, you know that I could answer that question all day, but you would rule me out of order, so I will confine my remarks to the Bill. However, I agree with the hon. Gentleman. He is absolutely right, and that is why we have to work harder across the House to build a consensus about the big calls that we need to get right for our future.
British Steel faces significant headwinds, not just from Chinese steelmakers flooding the market, but from the new 25% tariff from the United States, and we have to rise to the challenge of decarbonisation, yet we in this House must keep our eyes on the prize ahead of us. The Chancellor has just committed £100 billion-worth of capital investment, we are building affordable homes at a pace not seen in decades and we are investing £10 billion in defence. There is a market to seize, but only if we have the means to supply it. British Steel cannot profit from Britain’s future if Chinese firms are allowed to kill it today.
Jeremy Corbyn (Islington North) (Ind)
I agree with the right hon. Member that we need a steel industry in Britain and that we need to invest in it. Does he not think that we could be going a bit further today and, instead of this temporary measure, taking the whole steel industry into public ownership so it can be what it has always been—the bedrock of manufacturing industry in Britain—and give us security for the future, free from market forces?
Liam Byrne
The right hon. Gentleman may well be right, but this is the second key point that I want to land: the truth is that Jingye is a mess. It has failed to publish accounts since 2021. Two auditors have resigned; one cited material concerns about the company’s ability to remain a going concern. Inventories cannot be verified. Cash-flow statements are missing. The company is not acting in good faith, and that is why the Secretary of State is right to take the powers that he is asking for today.
It is clear that the escalating trade war between China and the United States created the imperative to act today. It is clear that Jingye was about to move primary steelmaking capability from Scunthorpe back to China and merely use the downstream mills in Scunthorpe. That may have been good for China’s economic security, but it is not good for Britain’s national security, and that is why we need to give the Secretary of State the powers that he is asking for.
The options on the table are very simple. The Secretary of State could do nothing and watch the furnaces close; he could hope, but hope is not a strategy; or he could act, as he has done today. He has acted with strength and made a decision in the long-term interests of our country, and the House should give him its full and unabated support.
Daisy Cooper (St Albans) (LD)
Recalling Parliament today was absolutely the right thing to do, but to be frank, it is extraordinary that we find ourselves in a situation in which our sovereign steel industry is in such peril as a result of the Conservatives’ failings and the Labour Government are now trying to give themselves unprecedented powers.
It is astounding that, even after British Steel was sold for £1, even after it entered insolvency and even after the Government’s Insolvency Service temporarily ran it, the Conservatives pressed ahead to erect more trade barriers through their botched Brexit deal, scrapped the Industrial Strategy Council and allowed the sale of the steel plant to a Chinese firm that, according to Ministers, is now refusing to negotiate in good faith at least to keep the plant going. The Conservatives were asleep at the wheel. They failed to tackle energy costs and business rates, and now Trump’s tariffs and contagious protectionism are the straw that has broken the camel’s back.
Chris Vince (Harlow) (Lab/Co-op)
Does the hon. Lady agree that the Conservatives were also in government in 2015, when the steelworks at Redcar closed and thousands of people lost their jobs?
Daisy Cooper
As the hon. Member knows, the three things that I have just outlined—British Steel being sold for a pound, British Steel entering insolvency and the Government’s Insolvency Service being left temporarily running the firm—all happened in 2019.
With Putin’s barbaric war in Europe and Donald Trump’s disastrous tariffs causing economic turmoil around the world, we must secure the future of steel production here at home. We Liberal Democrats welcome the sense of seriousness and urgency shown by the Government in recalling Parliament. We must work together to rescue our steel sector and the tens of thousands of jobs that directly and indirectly rely on it. But under the terms of the Bill, the Secretary of State is giving himself huge and unconstrained powers that could set a very dangerous precedent. I urge him to make a commitment, in the strongest possible terms, to repeal the powers that he is giving himself as soon as possible—within six months at the latest—and to come back to this House for another vote to extend those powers if they are still required after that.
Jonathan Reynolds
As I tried to articulate in my opening speech on Second Reading, I understand the gravity of the situation, which gives puts some context to the demands for further powers to be included in the Bill. The limitation, as wide as it is, is the right measure, and I can give the hon. Member my absolute assurance that I shall seek to do exactly as she says.
Daisy Cooper
I am incredibly grateful to the Secretary of State for giving that assurance, which is important in the context of what the powers in the Bill actually are.
Clause 3(4)(a) gives the Secretary of State the power to break into anywhere to seize assets. Clause 3(4)(c) gives the Secretary of State the power to take whatever steps he considers appropriate—not what a court or a reasonable person might consider to be appropriate—to seize or secure assets. Clause 4(3), on offences, makes it a crime for anyone not to follow the instructions of the Secretary of State, or to refuse to assist the Secretary of State in taking those steps without a “reasonable excuse”. However, a “reasonable excuse” is not defined in the Bill, no examples are given, and, quite frankly, it is hard to work out what defence of a “reasonable excuse” might be accepted given that, under clause 3(4)(c), it is whatever the Secretary of State himself considers to be okay.
Clause 6(1), on indemnities appears to give the Secretary of State and potentially any other person who is with him—a police officer, a civil servant, or a Border Force official—immunity from prosecution for using any of these wide-ranging powers. These powers are unprecedented and they are unconstrained. I am grateful to the Secretary of State for saying that that is precisely why he intends to repeal them as soon as possible.
More broadly, the Government must now also bring forward plans to guarantee the future of this vital sector. We know the steel industry is surrounded by crippling uncertainty. After decades of underinvestment and shocking indifference to our sovereign economic security, the previous Conservative Government have left our sovereign national capacity on steel diminished and endangered. Yet there is no chance that UK demand for steel will disappear. How absurd and irresponsible is it that we have a sustainable and enduring long-term market for British steel, but that our supply could keel over in a matter of days because of the failures of the failed Conservative party?
So looking ahead, let us remember that saving Scunthorpe is necessary, but not sufficient on its own. There have been significant discussions about the future ownership structure of this company. Given the precarious fiscal position in which the Government find themselves, it is important that all options on ownership are put on the table, so that this House can take an informed decision about what they mean for the public finances. I hope the Government will make a commitment that, in the coming weeks, they will bring forward a report that sets out options for future ownership of the plant.
Looking ahead, many big questions remain unanswered. Will the Government immediately designate UK-made steel a nationally strategic asset? Will they be using direct reduced iron, and, if so, will that form part of the UK’s plans alongside protecting the production of virgin steel at Scunthorpe? When will the Government bring forward a comprehensive plan to ensure that more British steel is used in vital infrastructure projects, from defence to renewable energy? Will Ministers work shoulder to shoulder with our European and Commonwealth partners to tear down trade barriers, including by negotiating a customs union by 2030? Will they develop initiatives to retrain and upskill workers across the country as we transition to greener methods of steel production? How do the Government intend to respond to calls from UK Steel for the Government to achieve the lowest electricity prices in Europe, parity with competitors on network charges, and wholesale electricity market reform?
This case should also raise concerns about the role of Chinese corporate interests in the UK’s national critical infrastructure. The decision by British Steel’s Chinese owners to turn down the Government’s offer of £500 million to support the future of the Scunthorpe plant has directly precipitated this crisis. We must now be clear-eyed about the risks posed by Chinese involvement in our country’s vital infrastructure. To that end, will the Minister tell the House when the Government’s promised UK-China audit will be released, and how the Government plan to strengthen protections for critical infrastructure? Can he assure the House that the Government have assessed whether there is any risk that Jingye, on behalf of the Chinese Government, has deliberately run down the plant to jeopardise the UK’s capacity to produce steel?
We are in a precarious position, and it is not as if there were no warnings. In 2022, the Royal United Services Institute think-tank said:
“Domestically produced steel is used in defence applications, and offshoring the supply chain may have security implications—for example, in a scenario where multiple allied countries rearm simultaneously at a time of global supply disruption, such as during a major geopolitical confrontation.”
The fact that Jingye has now closed down the supply of raw materials is further evidence that the plant should not have been sold to it in the first place. Quite frankly, the fact that some Conservative MPs are calling for nationalisation shows how far through the looking glass we really are.
Is not the Conservatives’ attitude abundantly clear? On national security, they cut troop numbers by 10,000; on food security, they undermined our farmers with unforgiveably bad trade deals; and on economic security, they left our country with almost no sovereign steel capacity. On security, the Conservatives left our island nation severely vulnerable, like flotsam in the sea, passively bobbing up and down or being bashed around by the tides of international events.
As for hon. Members from the private limited company Reform Ltd, they have a bit of cheek to claim to support UK steelworkers while cheering on their pal President Trump, whose punishing trade war is putting those steelworkers’ jobs at risk. Perhaps the company’s directors who sit in this House will come clean about whose side they are really on.
Time and again, we have seen the failures of an ad hoc, piecemeal approach to industry across all sectors, from the failure of our water companies to the shocking state of our housing nationally and the dismal situation of our health service. For too long, there has been no stability for these industries, which are constantly fixed on a short-term basis only, to the point where they are practically held together by string and tape and the dedicated workers who remain. We Liberal Democrats stand ready to help constructively to bring about an outcome that delivers real change.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Today, some of us have been surprised to hear the Opposition talk about a failure to prepare. The workers of Scunthorpe might say that they had 14 years to prepare, and failed.
British Steel’s products are essential to industry, to this country’s security, and to the delivery of major infrastructure programmes across the country, including in London. British Steel supplies Transport for London with the power rail used on its transport network, which is not manufactured anywhere else in the country. For railways, including the underground, power rail from British Steel is essential to the everyday operation of the service, which supports up to 4 million customer journeys each day. The closure of British Steel would have a very serious adverse effect on Transport for London’s services, as it would on projects up and down the country—so, above all, Transport for London believes in the importance of a UK-based supply chain for steel.
Finally, everyone in this House understands that the Bill is not about bringing steel into public ownership—whatever the Opposition assert—but some of us hope that moving on to nationalisation will not be ruled out. All of us on the Government Benches believe in what works, but privatisation certainly does not always work. The water industry comes to mind. Since privatisation, not a single reservoir has been built. Instead, billions have been poured into the pockets of shareholders. Now raw sewage floats in our waterways and rivers, and it is the consumer who will have to pay exorbitant charges for investment that should have been made all along.
This House supports the Government in moving to save British Steel and the jobs of thousands and thousands of workers. It also supports the Government in moving so quickly and with such certainty to protect the country’s interests, including in relation to security, and in working to save the community in Scunthorpe, because one of the issues with deindustrialisation is the long-term effect on many communities up and down the country. We all support what the Government are doing.
Sir Edward Leigh (Gainsborough) (Con)
I have just come off the phone to Tom Smith, the trade union convenor at the blast furnaces, on behalf of my many constituents who work next door in Scunthorpe. My primary concern today is with the nearly 3,000 people who work in this plant. Let us be clear: we have been making the best quality steel in the world for 135 years in Lincolnshire, and we intend to go on doing it. We are not going to allow cheap, inferior Chinese steel to kill off our industry. The workers of Scunthorpe are breathing a sigh of relief.
We can be party political. I have to say that I thought the Chairman of the Business and Trade Committee made an excellent speech—he was positive and talked in strategic terms—but I do not know what the Liberal Democrat spokesman, the hon. Member for St Albans (Daisy Cooper), achieved by constantly attacking the Conservative party on what is a very complex issue. Of course we can be criticised because we sold this company to Jingye—yes, I agree—but how many voices on the Liberal Democrat Benches were speaking up at the time? Were they speaking up when Greg Clark, our then Business Secretary, paid the wages of the Scunthorpe steelworkers for many months? Were they speaking up when we saved Sheffield Forgemasters? This is a highly complex issue and we should be working together, so I support the Bill.
I know that we can be critical of the Government. Perhaps we should have acted sooner—my hon. Friend the Member for Brigg and Immingham (Martin Vickers) has been raising this point; I was sitting beside him at the end of March when he raised it and called for nationalisation of the industry—but we have now got to work together to save our steelmaking capacity.
We know, though, that this Bill is a bit of a sticking plaster. It is quite dangerous. Quite extensive powers are being taken by the Government, so there has to be a sunset clause. We are giving unprecedented powers to the Government. We can criticise them for not acting sooner, but this is a sticking plaster on a gaping wound.
Let us be honest: steelmaking in this country is under extreme stress. And why is that? Why are we loading the most expensive energy costs on to our own steel production? Why is Scunthorpe paying almost twice as much in energy costs as those in South Korea or in America? High energy prices make UK steel expensive to produce and uncompetitive versus that produced by our European counterparts. In 2024-25, the average price paid by UK steelmakers was £60 a kWh, compared with the German price of £50 and the French price of £43. We are making our own steel industry uncompetitive. We have to stop these green energy costs. We have to be realistic. The Secretary of State for Energy Security and Net Zero has now left, but we need to get real. We can take steel into public ownership now, but if we go on loading costs on our industry, we will have to come back month after month and year after year.
We will support the Bill, although we want a sunset clause. But we have to get real about China, too. Was it not obvious for weeks and, indeed, for months? This is a so-called private company, but there is no such thing as a private company in China. They are all under the cosh of the Government, under an autocratic regime. What do they care about the steelworkers in Scunthorpe? What do they care about our national interest? Never again, colleagues, must we allow such a strategic industry to fall into the hands of the Chinese, the Russians or anybody else.
Ms Polly Billington (East Thanet) (Lab)
Will the right hon. Gentleman clarify whether he was aware that the Chinese company that is now in possession of British Steel was sold it by a Conservative Government of which he was part?
Sir Edward Leigh
Of course I am, because I just said that. I have just admitted that it was a mistake, but I ask everybody what they were saying at the time. Of course, there is silence. It is easy to be wise after the event, but I am worried about my steelworkers—I am worried about their future.
Sir Iain Duncan Smith
I want to make sure that my right hon. Friend puts the record straight: some of us on the Opposition Benches warned the then Government that it was wrong.
Sir Edward Leigh
There we are: some of us apparently warned the Government. I do not know how many.
We now know the true nature of our Chinese friends. We support the Bill. Let us make our steel industry really competitive again and let us make Great Britain great again.
Several hon. Members rose—
Mr Speaker
Order. Can I make an appeal to everybody? A lot of people want to speak and there is going to be some disappointment. I think those whose constituents are actually going to be affected should be allowed to speak, but let us see how we go for time. We need to be brief to get more Members in. Let us have a good example from Melanie Onn.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I am delighted to follow the right hon. Member for Gainsborough (Sir Edward Leigh). Given his Damascene conversion to socialism today, he could be termed the new “Red Ed”.
I welcome the Government’s decisive action to bring security for workers at Scunthorpe. They are grasping the nettle after the can has been kicked down the road for far too long. British Steel at Scunthorpe is not just of interest to that town; its importance emanates across northern Lincolnshire to my constituents in Great Grimsby and Cleethorpes. Whether directly or indirectly, the employment and training opportunities that come from that single site are so important to our local economy, and the product is, of course, nationally important. When I consider the businesses that operate across the Humber and northern Lincolnshire, I think the industries that are relevant to securing the future of steel seem strong. From the Siemens factory in Goole to the boatyards of Hull and the turbines off the Cleethorpes coast, the products that Scunthorpe could have a role in producing are plain for us all to see.
The Government must turn their attention to the next steps, because the measures we are taking today are not without risk. Unless we set a course for steel in the UK that closely aligns with our industrial strategy, this will be only another sticking plaster for a site that has already been put through the wringer too many times over the years. The powers that the Government seek today will protect the workers at British Steel from any retaliatory measures that Jingye may have sought to take. That is welcomed by those workers, who have often felt at the mercy of the company’s owners and unseen by the Government.
Luke Akehurst (North Durham) (Lab)
Does my hon. Friend agree that one major way in which we could secure markets for British steel is through the “British first” strategy that the Ministry of Defence has set out for the building of future warships?
Mr Speaker
Order. Mr Roca, has somebody texted a photograph outside this place of what is going on here this morning?
Mr Speaker
Okay, can people please not take or text photographs? I do not know if that is the case here, but your name has just been associated with it.
Melanie Onn
I agree with my hon. Friend the Member for North Durham (Luke Akehurst); it is imperative that we tie up all the initiatives that this Government are bringing forward, whether in defence or other critical areas of industry, to make sure we can secure the long-term future of steel.
To ensure the best chance of successfully securing a private partner or long-term commercial solution, the Government must take all actions available within their powers and do all they can to make British Steel viable. I wonder whether now is perhaps the time for the Government to look again at the carbon border adjustment mechanism. The EU has already brought in the adjustment mechanism to protect against international steel dumping. By doing all we can—whether by keeping down energy costs, as I know the Minister has sought to do, investing through the national wealth fund or, indeed, bringing in the CBAM—this is our chance to secure a genuine, long-term solution for the preservation of British Steel.
Martin Vickers (Brigg and Immingham) (Con)
It is a pleasure to follow the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), my Member of Parliament; on this matter we are in complete harmony. Before I talk about the local situation, which is what I want to focus on, may I thank the Secretary of State for giving me a call yesterday evening and outlining the proposals he would be bringing forward this morning? I did say to him that I would not be entirely uncritical, so I am sure he will not mind a few jabs here and there.
The local situation is extremely critical, as has been pointed out. The impact, not only on the workforce but on the wider economy of northern Lincolnshire, would be extensive. I have been a resident in the Grimsby-Cleethorpes area all my life, and I have seen the impact when a town loses its core industry. In the case of Grimsby, of course, that was the deep-sea fishing industry. When that decline happens—it has happened to so many towns up and down the country as a result of the decline in mining, shipbuilding and other heavy industries—it takes a generation or perhaps more for the town to fully recover.
That is the last thing I want to see happen in my neighbouring constituency of Scunthorpe, or to the hundreds of my constituents who work there. Those Members who were here for the Easter Adjournment debate—there were a handful—might have heard me say this only four days ago, but the site extends way beyond the bounds of Scunthorpe, into my Brigg and Immingham constituency. The site is the equivalent of 1,133 Wembley football pitches, which gives an idea of its size and of the amount of work that would be needed were the steelworks to close. There would be demands for vast Government investment over decades, in order to remediate the site and to provide new employment.
I said that I would not be entirely uncritical of the Secretary of State, so I refer him to my first urgent question on this matter, on 5 September last year. I said on that occasion:
“There have been widespread media reports suggesting that coke will stop being imported from October, which would mean production would stop in Scunthorpe by Christmas. There are rumours concerning the fact that employees will be given notice very soon. That is obviously creating great anxiety among those directly employed by British Steel and those in the supply chain, which in northern Lincolnshire extends to many thousands of people and many businesses.”—[Official Report, 5 September 2024; Vol. 753, c. 424.]
Thankfully, we have had a six-month reprieve from those threats in October, but I have to say, the Government have been a little dilatory on this. I appreciate that negotiations have been taking place and Ministers cannot give away their negotiating position, but I made this point as long ago as September, as well as when you granted me an urgent question on 27 March, Mr Speaker—only a couple of weeks ago—and surely the Government were beginning to realise at that point that the negotiations with Jingye were going nowhere.
Jonathan Reynolds
I am extremely grateful to the hon. Gentleman for putting that point on the record. It is precisely because of those concerns that we were able to have ready a legal route to intervene to directly offer support to purchase raw materials. What we could not have anticipated or expected was for a company to act in an irrational economic manner when such a clear, distinctive and generous offer was made.
Martin Vickers
I thank the right hon. Gentleman for his intervention. I would say merely that he has been party to the negotiations, and he must surely have realised that the company was not negotiating in good faith and expected his officials to prepare legislation, if required, to deal with the situation that we are now in. As others have said, this is crucial not just for thousands of my constituents who work at the site, but for the defence of the nation. I assume and hope that Defence Ministers have been lobbying the Secretary of State to make their concerns clear.
Locally, there is continuing concern. Like the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), I will support the proposals. I floated the nationalisation issue on 27 March, and I see this as a stepping-stone to that situation. To those who will perhaps demand nationalisation today, I would say that this is a very complex issue, and what matters more than anything else is the future of the workforce and the ability to produce virgin steel. Nationalisation legislation would not, I sincerely hope, be passed in three hours; it would involve a great deal of work.
Having got themselves into this situation, the Government are now taking the right action. There has been disappointment locally—to put it mildly—that the Prime Minister did not, following my question to him only 10 days ago, take up the option to meet a cross-party delegation of MPs to discuss the situation, but now that we are where we are, I fully support the Government, and I hope that they accept the sunset clause amendment, which would be prudent. I can assure them of my full support today, which they will continue to have when they act in the best interests of my constituents.
Several hon. Members rose—
Mr Speaker
Order. Can we try to help each other by not speaking for too long? I hope we do not have reams of paper for the next speech. Bill Esterson will be a good example of a shorter speech.
Bill Esterson (Sefton Central) (Lab)
Well, thank you, Mr Speaker—no pressure. [Interruption.] I will put some of my papers down.
May I start by praising the Business Secretary and his team for the way in which they have introduced the legislation? I add to that my praise for trade unions, local management and Members of Parliament of both main parties—not least my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), who, being a Minister, is not speaking in the debate. I joined him on a 2023 visit to Scunthorpe, where the very concerns about Jingye that we have heard today were shared with us by local management and trade unions alike. It is no surprise that those concerns have come to pass.
The last Government were warned, and they chose not to take the action needed. Ministers in the last Government told me that steel needed by the Navy and by those across our economy could not be made at Scunthorpe, or at other steel plants. Interestingly, the local management and the trade unions told me that they could make whatever their customers asked them to make by adjusting production. Again, it is a pity that the last Government did not listen, or we might be in a rather different place now. During the last Parliament, we were the only country in the G20 where production of primary steel, and steel overall, was falling. If the blast furnaces were allowed to close, we would be the only country in the G20 without any primary steelmaking capacity, which underlines why today’s legislation is so important.
The steel at Scunthorpe is of strategic national importance. Some 95% of our rail tracks are made at Scunthorpe, and the steelworks there carry out automotive, construction and defence production, all of which are critically important to this country. In addition to what is made now, there are opportunities in energy transition and defence. Some 25 million tonnes of steel will be required over the next 25 years in the offshore wind sector alone, so there are great opportunities if we can secure the future of Scunthorpe.
At the Liaison Committee last Tuesday, the Prime Minister mentioned that the grid connection plan for the Scunthorpe site is only due in 2034. Our electricity prices are 46% above the average for International Energy Agency states. The Government have to address the challenges of slow grid connections and uncompetitive industrial energy prices if they are to enable the modernisation of industry as a whole, and steel in particular.
Sarah Edwards (Tamworth) (Lab)
The Business and Trade Committee, of which I am a member, has heard evidence about the importance of the steel industry, and about the need for primary steelmaking to be retained as a key pillar of UK industrial sovereignty. We have heard that blast furnaces still play a critical role in strategic and high-grade steel production. Does my hon. Friend agree that our economic security is intrinsically linked with our onshore industrial capabilities, and that our Government’s focus on both construction and defence in these uncertain times means that this Bill is very welcome news?
Bill Esterson
My hon. Friend makes extremely well the point that our economic security and our national security are two sides of the same coin. I am pleased to hear about the work being done by the Business and Trade Committee; in his excellent speech, the Committee’s Chair, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), mentioned the Sub-Committee that has been set up.
I want to talk about Port Talbot, because the Energy Security and Net Zero Committee visited it two weeks ago. There will be a delay of several years between the closure last year of the blast furnaces there, and the opening of the new electric arc furnace, which is a massive cause for concern in south Wales and beyond. The excellent financial support provided by this Government, and Tata’s willingness to engage, are a good example of industry and Government being partners, and an indication that the industrial strategy that the Government plan to bring forward is already being effective.
The Bill gives the Government the opportunity to secure steelmaking in this country. I congratulate the Secretary of State and his colleagues on their decisive action. Workers and the nation as a whole are grateful for the work of this Government, who are doing absolutely the right thing.
Richard Tice (Boston and Skegness) (Reform)
My hon. Friend the Member for Clacton (Nigel Farage) and I have been calling for British Steel to be a strategic national corporation for some six years. We said to the previous Administration that the last thing they should do is sell it to the Chinese, but they ignored our splendid advice. The industry requires long-term investment. The problem, as we all know, is that it has been beset by short-termism and short-term thinking, as well as by the vast electricity costs in this country, partly caused by net stupid zero and the carbon tariff.
There is now a great opportunity for the House to unify. As the Secretary of State confirmed, we have the opportunity to take British Steel into public ownership—this weekend, we would urge, for the sum of £1. We could do a great deal for the taxpayer. We should invest in refurbishing and relining these blast furnaces, in the same way that the French are doing in Dunkirk. They are spending a quarter of a billion euros in Dunkirk, and we should do the same. We should bring in excellent global expertise to help British Steel. There will be opportunities if we do those things and have long-term procurement contracts for raw materials, including the opportunity to use British coal from Cumbria. That is an opportunity that the Government declined, but it would create more jobs and save on transport costs. There is also the opportunity for long-term procurement contracts for British Steel products. Those are opportunities to make British Steel a long-term, viable business for the taxpayer. We can bring in long-term patient capital. If we do those things, we can get everything that we want. Primary steelmaking is a vital strategic asset, and Scunthorpe can be its epicentre.
We will support the Government’s Bill today, but there is an opportunity to go further, to be bold and to be courageous. The Secretary of State should show his cajones and show some mettle. This weekend, he and the Government have the opportunity to remove the uncertainty for 3,000 families in Scunthorpe. Let us go for it. Let us nationalise British Steel this weekend and make British steel great again.
Carolyn Harris (Neath and Swansea East) (Lab)
Today I represent not only my constituents in Neath and Swansea East, but those of my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock). After years of under-investment and neglect by the previous Government, this Government’s commitment to steel is truly welcome. However, it is vital that the £2.5 million steel renewal fund already announced by the Government is used to support the industry across the UK, and Wales needs to get its fair share. Some 2,800 steelworkers lost their jobs in the region, but they recognise that the circumstances in Port Talbot were different from those in Scunthorpe.
In Port Talbot, half the steel production had already been shut down when the Labour Government came into power, despite Plaid Cymru’s desperate attempts to electioneer this as an issue. It was impossible to reverse the deal that had already been struck between the previous Tory Government and Tata. Although steelworkers understand the urgency of the current situation and support the Government’s action to prevent further closures and job losses, they need commitments for Wales that will attract investment and create much-needed employment opportunities, like those being offered by the floating offshore wind industry. It was too late to save the furnaces in Port Talbot and the jobs are long gone, but investment in the area will bring new jobs—and, most importantly, new hope to all our constituents.
David Davis (Goole and Pocklington) (Con)
You will not need reminding, Mr Deputy Speaker, but I will remind the House of quite how unusual a day this is, for a variety of reasons. The last time we met on a Saturday was at a time of war, and the last time we put a Bill through in one day was at the beginning of the pandemic. That is how serious the disastrous circumstances in which we find ourselves are. I assume that this House will accept the Bill, so I will address my comments directly to the Secretary of State.
At one level, this is a “nationalisation in all but name” Bill, because of the powers it gives the Government. Indeed, it actually gives them more powers than a nationalisation Bill would. It will allow the Government to do things that they could not do under a nationalisation Bill. Frankly, I would have voted for one. I am not a fan of nationalisation, as the Secretary of State will know, but I would have voted for nationalisation. I will vote for this Bill, for a simple reason: it buys us time. People have to understand that this is a reprieve, not a rescue.
I do not agree with the hon. Member for Boston and Skegness (Richard Tice) on his strategic nationalisation argument. Nationalisation under these circumstances buys the Secretary of State time and leverage, and he needs to be able to use his judgment on how to use that time and leverage. We have had just a hint of a view of how complex a game Jingye is playing. In fact, if I were to recommend any amendment to the Bill, it would be an amendment to limit to one penny the amount of money that the Government could pay to Jingye, because then no court could challenge that amount, and Jingye would know full well that it was not in line to make money out of the British taxpayer. We have to look at this in strategic and tactical terms.
David Davis
If the hon. Lady will forgive me, I will not, because lots of people want to speak. I will refer to something she said in a minute, so if she really needs to intervene, I will let her come in then. We are trying to manage a disaster—a disaster for Scunthorpe, which is local to me, as members of my community work at Scunthorpe. The knock-on economic effects will be felt much more widely than in one town; this will affect thousands and thousands of people all round.
This is also a disaster for our last primary steelmaker, and steelmaking has suddenly become more important. It was always an important part of national strategy, but Mr Trump has made it a vital, unavoidable piece of national strategy. We have to create a circumstance that allows the Secretary of State and the Government to manoeuvre us through that. As Members have said, that means having an energy policy that makes the plant viable—not just viable when it is owned by the state, but commercially viable. It means having an energy policy under which we do not have the highest energy costs of our competitors, which we do now. It also means that we have to think very hard about carbon supply. At the moment, the technology does not exist that allows us to make primary steel without carbon supply, so we have to think about that. Primary steel is a strategic supply, so we cannot rely on another country for it.
I want to see this Bill used in a way that gives the Secretary of State the time to deliver those things, but it must also give this House the right to see what he is doing and how the strategies are turning out. Nobody has got this right. If those on the Government Benches want me to, I can go back to 1997 and park blame, but I do not want to do that today. I want to make this viable. We have to get our energy, environmental and industrial policies all in line to make this work.
To put this in context, last year British Steel lost about £408 million—that was the September number. This year it is about £250 million. Neither of those are small amounts of money. The Treasury would shut down an operation if we just left something like that running inside the Government for very long. We need a new strategy that cuts our carbon emissions without exporting our industry to the rest of the world. I am afraid that most of our successes in carbon reduction over the last decade or two—or three—have been by dint of exporting industries to other countries, often with much worse records than us. In this case it would be China. China has 50% of the world market already. It has massive excess in steel capacity, and its steel capacity is the most carbon inefficient there is, so we would actually be worsening the circumstances.
Liam Byrne
The Business and Trade Committee has taken clear evidence that we need a carbon border adjustment mechanism, so that carbon-rich steel, such as that from China, is taxed much more heavily. Crucially, what is needed on the table are the steel safeguards from the Trade Remedies Authority to guard our markets from a flood tide of Chinese steel right now.
David Davis
I am afraid the right hon. Member is right. The difficulty is that we are in a new world. The terrible thing is—the House will only ever hear me say this once—that Trump has a small point in some respects, and we have to deal with the world as it is.
Moving on to the sunset clause, I can imagine that the instinct is not to put a sunset clause in the Bill, because we are dealing with a difficult negotiator, and putting in a sunset clause would be putting in a backstop. When we put a backstop on ourselves, we give the other side a negotiating advantage. In his speech, the Secretary of State mentioned that the Civil Contingencies Act 2004 would be a route. For those who have not read that legislation, we spent a year putting it in place under the Blair Government, and it has recourse to Parliament at every turn: Ministers are properly controlled, it must be transparent, and so on. I suggest to him that at some point he might organise a transition to that, so that the House has greater control. The Coronavirus Act 2020 did not have that—it missed all those defences—and look what happened to the policy as a result.
This is what I would like to see: recourse to Parliament over the actions the Secretary of State takes to manage the survival of Scunthorpe and the policies to ensure its viability and, in the post-Putin and Trump era, the security of supply. We want to see all those things, and we can organise legislation to permit them. I ask the Secretary of State to take the House into his confidence and do this properly.
Chris McDonald (Stockton North) (Lab)
In 1976, a group of steelworkers emerged from the Templeborough steelworks following a night shift. At the time, Temple-borough was the largest electric arc steelmaking plant in the world. Those steelworkers had just done something rather spectacular: they had broken a shift record. They were surprised to find a letter from the Prime Minister, Jim Callaghan, congratulating them on their contribution to the national effort. After 48 years, it is marvellous that we finally have a Prime Minister who is prioritising the steel industry once again.
I know what it is like to emerge bleary-eyed from a night shift on a steelworks. As much as we are emotionally attached to our steelworks, the past analogies are not entirely helpful here. There is too much of a narrative in this country that steel is a sunset industry, when in fact it is not only essential, but advanced. Perhaps this is the time for me to direct Members to my entry in the Register of Members’ Financial Interests, as the former chief executive of the UK’s national steel innovation centre.
A lot of that innovation is embedded in our facility in Scunthorpe, from advanced high-speed rail from the rail mill to rods that are drawn down to wire the thickness of a human hair, produced to pharmaceutical levels of precision. The beam mill in Teesside is one of a handful of plants capable of producing large-scale beams that have been used to build buildings from Hong Kong through to the west coast of the USA. The Skinningrove works produces the tines for yellow goods for Caterpillar, which move directly into that factory. I am sure that all Members agree on how vital those plants and facilities are, but they may be unaware that two thirds of the steels we produce today did not exist 15 years ago, such is the level of continuous innovation in the steel industry.
Everything that we have is made either from or with steel. Our steel industry has declined so significantly over the past 14 years that just last week, when I went to the constituency adjacent to mine to visit the Hartlepool pipe mill, which makes the pipes for the carbon capture and storage network in which this Government have invested £4 billion, I saw that stamped on the plates of steel was the word “Voestalpine”. An Austrian steel producer that sits in the foothills of the Alps is able to produce plate steel more competitively than those in the UK, while we have a plate mill in Scotland that is practically idle—the slabs for that plate mill would have been produced in the Scunthorpe steelworks.
I welcome the legislation today as an opportunity for us to take back control of our steel industry and deal with the chaotic fragmentation of the industry that occurred over the past 14 years. I believe that the UK can be just as competitive as steel companies in Austria, Germany, France, Spain or the Netherlands, which are, in fact, the biggest importers of steel to the UK.
Chris McDonald
I am sorry; given the shortage of time, I will not.
I also believe that we can be at least as good as the steel industry in Belgium, which is now larger than the steel industry in the UK. Clearly, there was a lack of ambition on the part of the previous Government. They did not believe that our steel industry could be as competitive as Belgium’s.
Julia Lopez (Hornchurch and Upminster) (Con)
Will the hon. Gentleman give way?
Chris McDonald
I am sorry, but I am not going to give way, simply because of the lack of time.
It is important to correct the record on a number of earlier comments. The hon. Member for Boston and Skegness (Richard Tice) and others referred to the coal from the west Cumbria mine, but I must inform the House that the management of British Steel has ruled that coal out on the grounds of quality. The sulphur levels are too high.
Chris McDonald
I would be quite happy to talk to the hon. Gentleman about steel desulphurisation in the Tea Room later, if he would care to join me. I also completely refute his comment about bringing in global expertise—we have the expertise in the UK to run steel companies effectively. Again, I would be happy to introduce him to people who could do that, if he wishes to know.
It is important to remember that the steel market globally is not a free market, which is why Governments work together. The US Government use tariffs and blocked a merger between Nippon Steel and U.S. Steel. The French Government traditionally use procurement; the German Government subside their steel industry with energy prices; the Chinese Government give cash. It is really important to recognise that steel companies do not compete in a free market, and that if we ask our steel companies to do that, we are asking them to compete with national Governments overseas and letting those national Governments set our steel and industrial policies, and, fundamentally, our defence policy. I think that is unacceptable. We need to recognise that the corporate interest of a company is not the same as the national interest of the UK. The Secretary of State has recognised that and shown real leadership.
I want to reserve my last remarks for the steelworkers in Scunthorpe. I worked in Scunthorpe for a time, both at the ironworks and at the steelworks. To the steelworkers in Scunthorpe, I say: I know exactly the pain that you are going through. I am sure that they will be relieved by the words of the Secretary of State.
We all think fondly of the four blast furnaces in Scunthorpe—the four queens: Bessie, Vicky, Mary and Annie—but ultimately, I think we all recognise that their time has come. While they will be nursed into their ultimate retirement, we look forward to regenerating the steel industry in Scunthorpe and around the UK with the most modern, most efficient and most high-productive steel plants. Just as a past Labour Government did when they nationalised the steel industry for the second time in 1967—it was so good we nationalised it twice—this time, we can hopefully work with the industry to create a world-leading steel industry for the future.
Stephen Flynn (Aberdeen South) (SNP)
It is a privilege to follow such an impressive speech from the hon. Member for Stockton North (Chris McDonald). I am sure his constituents will be incredibly impressed at his knowledge of this issue. I want to be kind not just to him but to the Secretary of State, once again. That is becoming a habit that I want to break, but certainly his sincerity today cannot be doubted. If there is one person who could be afforded the executive powers in this Bill with an element of trust, it is probably him.
There are some topics that have not been touched on in a huge amount of detail today and I will touch on them briefly now. Whether it is tariffs, competition or energy prices, we must not forget the fundamentals of why the steel industry faces such a challenging position. There is one other hugely important issue that has not been discussed at any length in the Chamber today, notwithstanding the future contribution that I imagine will be made by the hon. Member for Alloa and Grangemouth (Brian Leishman)—it will not pass the lips of any other Members—which is the situation in Grangemouth. I say “the situation in Grangemouth” with an element of despair, because we all know that there are hundreds of people who are on the brink of losing their jobs.
The similarities are astounding. We have PetroChina on the one hand and a Chinese company in Scunthorpe on the other. We have a Chinese company in Scunthorpe saying that there are losses of around £700,000 and we have a Chinese company at Grangemouth saying that there are losses of around £500,000. We have a cracker in Grangemouth that has been deemed not useful anymore and we have blast furnaces in Scunthorpe that are categorised in the same manner. We all need to be conscious of those comparisons.
I say that on the basis that while the Secretary of State is right to say that this is important for jobs in Scunthorpe, this is right for the communities in Scunthorpe and this is right for Westminster’s national, UK-wide interest, is it not the case that it is important to the workers in Grangemouth? Is it not the case that it is important to the communities in Grangemouth? And is it not the case that it is in Scotland’s national interest that Grangemouth is protected?
Stephen Flynn
I am afraid that I will not give way because we are all constrained by time, in the same way that Labour Members will not take interventions either.
The Secretary of State’s answer to me earlier was that £200 million has been put forward through the National Wealth Fund. Each and every one of us knows that that is not in the gift of the Prime Minister or the Secretary of State to dictate. It ultimately relies on the private sector coming forward with a proposal. Indeed, in evidence given to the Scottish Affairs Committee just last week by EY, which has done the Project Willow report, it was quite clear in its observations that there will be no progress until 2030 at the earliest. That is simply not good enough, because while the Government mobilise every effort to save British Steel, they allow Grangemouth to fall on the back burner.
The hon. Member for Central Ayrshire (Alan Gemmell) referred to industrial strategies. He seems to forget in that context that energy is a reserved matter for this United Kingdom Government—something the Secretary of State is all too familiar with, given our previous roles in this here House.
The final thought I will leave with Labour Members is that they should remember the fact that the Bill they are supporting extends solely to England and Wales.
Stephen Flynn
The right hon. Member from Plaid Cymru corrects me to clarify the fact that the Bill applies only to England. The important consideration is: why is this not being extended to Scotland? Why is Grangemouth not being included, why is the smelter up at Lochaber not being included and why are the Dalzell steelworks not being included? The answer to why they are not being included is that Westminster is only interested in Westminster; it is not interested in Scotland. [Interruption.] I will not be shouted down by Labour Members, because they need to hear the truth. Scotland’s interests matter, and the people of Scotland are watching.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Let me bring us back to the Bill that we are here to debate. We have heard some of the data, statistics and information, and about the finances and the associated commercial considerations. We have heard about the importance of British Steel to our defence industry and our national security, about the importance of energy and resilience, and about the infrastructure we need to build to give us the growth in this country that we can feed back and inject into the public services that so need it. Of course, the big thing here is the 3,700 jobs, and today I represent the voice of my residents in the Isle of Axholme and those living in neighbouring towns, including Scunthorpe, who are feeling it today and who are listening to every single word we say. I have to say that the risk to them and the impact—the personal impact—on them are unquantifiable. That is what I want to talk about.
Yesterday, I spoke to Richard, a fifth-generation worker at Scunthorpe who has recently finished there. He said that this is about the individual, about the families, about their colleagues and friends, and about the town. This is about their identity, and he described it in this way. He said that British Steel in Scunthorpe is the “beating heart” of the area, and over the last few years that beating heart has started to slow. As it has slowed, every time it skips a beat, as it has in the last couple of weeks, people hold their breath. They are anxious, they are scared and they are frightened. With every skip of that beating heart, people lose hope, and we cannot let people lose hope. He says to us that we need to come together and we need to pick up a community defibrillator, take it there, give it the injection of pace that it needs, and make sure that we stimulate that heart for all the generations in the future.
We have the opportunity with this Bill today to take control and to start to make that happen. We can turn British Steel—making primary or virgin steel, which is vital for all the things we have talked about—into a treasure, and not just a treasure, but a national treasure, which is exactly why we need to move this on today.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Last year, the Government said they would introduce a new steel strategy that would create more well-paid jobs in the places where they are most needed. Following last year’s closures of the blast furnaces at Port Talbot, many of my constituents have lost their jobs or seen their incomes fall. That includes the thousands of workers who were laid off at the plant itself, but also those further down the supply chain, including haulage drivers and payroll clerks providing services to the 2,000 local businesses that have been impacted by that closure.
The closure of Port Talbot’s blast furnaces started an economic contraction in south Wales that is still under way. Many highly skilled workers, particularly welders, are leaving south Wales in search of opportunities elsewhere. It is rubbing salt in the wounds for the people of Port Talbot to hear the Government now acknowledge the importance of primary steel production as a strategic national asset. Where was this urgency when Welsh steel communities were crying out for support?
Last year, when Tata Steel announced over 2,800 job losses at Port Talbot—the largest steelworks in the country, a key strategic asset, and the manufacturing heart of south Wales—there was no recall of Parliament, no Saturday sitting, no emergency legislation and no rapid mobilisation of the Government to save the day, despite every warning sign being there. The unions raised the alarm and industry experts warned of the economic shock, but the warnings were ignored. Now, faced with similar risks in England, the Government suddenly rediscover their ability to act swiftly.
The simple fact is that the Government did not recall Parliament for Port Talbot, and they did not recall Parliament for Wales. If today’s decision is in the national interest, why did the Government not offer similar protections to Port Talbot, which had more capacity and greater output? Have the Government been fenced in by closing the blast furnaces at Port Talbot too early? How much of the steel supply chain will the Government now commit to protecting?
Employment at Port Talbot fell from over 18,000 employees at its height over the past few decades to around 4,000 before last year’s closure decision, and now there are just 2,000 steelworkers employed there. Those jobs are sorely missed. Welsh steel is all around us, and Port Talbot once produced the steel used in everyday products such as Heinz baked beans tins. It is absolutely right that we are now acknowledging the importance of domestically produced steel. Communities that once powered the UK’s growth, particularly the Swansea valley, the Neath valley, Port Talbot and Maesteg, now face an economic reckoning with far too little urgency from this Government in return.
This is personal for many of us from south Wales. My grandfather worked at the blast furnaces at the Port Talbot steelworks, and it gave him the opportunity, as it did many others, to set up his own business—in his case, a waste management company. That is what is really at risk now, and that is what is really withering away in south Wales. It is not just the jobs on the steelworks floor, but the entire network of small businesses, tradespeople and suppliers that rely on the steel industry’s presence in our communities. We know that for every steelworker made redundant, up to three or four local jobs are at risk of disappearing. The message from Westminster has been clear: when crisis hits in Wales, it is tolerated; when it hits elsewhere, it becomes a national emergency.
We cannot go on like this. Steel is strategic, it is critical to our national resilience, and it matters just as much in south Wales as anywhere else. This Government’s failure to act swiftly in Wales, to consult transparently with workers and to invest in a serious and just transition has undermined confidence and left people in Port Talbot, Llanwern, Shotton and many others across Wales feeling abandoned.
Some 2,800 jobs were lost at the blast furnaces alone, and many of those workers say they have simply been left behind. We have heard the Prime Minister say over the past few days that he wants to take control of steel. Why did he not say that when Welsh jobs were on the line? Why was Port Talbot not worth fighting for in the same way?
We need a proper UK-wide industrial strategy—one that recognises the vital role of Welsh steel in our national economy and, most importantly, one that treats workers in every part of the UK with the same respect, urgency and seriousness. The steelworking communities of Wales have not forgotten the silence that met their cries for help, and they will not accept a future in which their communities are left behind.
Lee Barron (Corby and East Northamptonshire) (Lab)
Frankly, some of the contribution that we have just heard from the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) should have been made when the decisions were taking place—they should not have had to wait until today.
I commend the Secretary of State for how he has dealt with this issue and for getting us together for today’s debate. The idea that somehow we could have debated the negotiations as we were having them is for the birds, frankly, because all we would have done is tell our negotiating partners what we were going to the negotiating table for. Negotiations are not done like that, and nor should they be. And to those who have been moaning about us having been recalled on a Saturday, I say that you can recall me on any Saturday, at any time, and twice on a Sunday, if it means we can save industries and thousands of jobs. I will be here every time.
Some of us know what it is like. The town of Corby was built on steel. The people of Corby and East Northamptonshire know only too well what it is like to have the steelworks closed down and devastation befall local communities. When the Corby steelworks closed, 14,000 people lost their jobs and unemployment rose to 30%. Corby and East Northamptonshire was once home to the largest steelworks in Europe. Today, it employs just shy of 500 people, and it still manufactures 250,000 tonnes of steel tubing per year. We would not be the place that we are without the steelworks that Corby once had, and we know the devastation that the job losses would cause for the community of Scunthorpe. That is why this is the right thing to do.
We must maintain steelmaking capacity in the UK. In these increasingly uncertain times, we must maintain national security by having the ability to produce our own virgin steel. All options should be open, but the blast furnaces must not be switched off, because once that happens, they are gone. That is the problem in other parts of the country, and it should have been raised at the time. In any modern economy with a central mission for growth, production of our own steel is crucial. That will be at the heart of any future industrial strategy.
I am proud to be here today to support the Bill and to secure a future for steelmaking in the UK.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will try to be brief and stay focused on the Bill. Let me start by saying that we should all focus on the requirement to save the jobs of those 3,500 people who have this threat hanging over them. In fact, I understand from my hon. Friend the Member for Brigg and Immingham (Martin Vickers) that 2,500 people have already received a redundancy notice, and they will be very worried at the moment. Our thoughts should be with them today. Coming in on a Saturday is right if it saves their jobs. I am certainly prepared to vote for that.
The Bill does give vast powers to the right hon. Gentleman the Business Secretary and the Government. As others have said, I trust him personally—this is not an attack on him—but we in this House should never trust Government more than we have to. I have said this on both sides of the Chamber, by the way. I therefore urge him to have another look at the sunset clause, which I raised earlier. It is not saying, “We don’t trust you”; it is saying that sometimes Governments are taken down sidetracks, and before we know what has happened, the powers are beginning to be used for the wrong purpose. I urge him to introduce the sunset clause, or even to do so in the other place, to give the House real powers to come back. For everyone’s sake—even those on the Government Benches—I think that would be worth doing, because it would allow us to have a strong debate on how the powers are being used and would perhaps even enable us to influence what is taking place.
The reason for this debate is clearly the massively changed needs of this country, particularly after the event that we never thought would happen: Russia’s brutal invasion of Ukraine. As a result, weapons and arms are needed on an unprecedented scale, there is a plan to build up the armed forces, and they need the very high-quality virgin steel that is produced in this plant. Without it, we would have to import it. Frankly, China does not produce that quality of steel. The other reason is the tariff war now taking place, which has introduced 25% tariffs on the car industry, which is one of the biggest purchasers of steel. All those things make the Bill very much necessary.
We have another problem, which I hope the Government will deal with in the context of the Bill when they talk to the Department for Energy Security and Net Zero. Things have changed. The Prime Minister himself has said that the world has changed. We have been operating in what we considered to be a global free market. I have argued for some time that this is not a free market. Far too many countries such as China have abused the rules of the free market, subsidised their industries ridiculously and used slave labour to produce their products. When that happens, the free market is dead. We must recognise that we will have to deal with those whom we trust and who do not break the rules. That means a whole rethink of the Government’s China policy and of whether we need to rush to China for investment. We need to ensure that we deal with our industry at home and that we produce things again.
One problem is the energy costs our industry faces, which are really quite stark. Our industry is not just in competition with China; even the costs in Europe are far less now. I will give a short list. The costs in the UK are now the highest in the world, at $400 per megawatt-hour. Germany, which has the highest costs in the rest of Europe, is at $250 per megawatt-hour, while France and the others all have lower costs for producing energy. That energy is critical for the steel industry, and that is one of the big issues that the Secretary of State has to deal with. China, with its subsidies and broken free market rules, is at $60 per megawatt-hour. We should not attempt to compete with it; we must say that it is not competitive at all. [Interruption.] Exactly right, as my right hon. Friend the Member for Goole and Pocklington (David Davis) says.
Others are complaining about China right now. Countries in the far east, such as Vietnam and South Korea, are accusing it of dumping. What we have in China is something that will really hit us hard and make the Secretary of State’s job even worse: very simply, China is now suffering from the over-production of steel. Its housing industry has gone static, and that was one of the biggest users of the steel it produced. Where will that steel go?
By the way, it is no surprise that a Chinese company, Jingye, is involved. In pushing to shut down the blast furnaces in the UK, it knows that we will have to buy slab steel from China. That is not a coincidence; it is all part of the plan. That company is linked directly to the Chinese Communist party, and it is high time that we called that out. In his negotiations, the Secretary of State needs to remind Jingye that the reality is that it is not a private company. The previous Conservative Government should never have awarded it the contract, and I warned them about that. It is time for us to make sure that we deal with China at face value and do not accept the pretence that this company is private or in any way detached from its Government. That is a critical point.
There is much to be dealt with, and I urge the Government to listen to the House and to check all of this. Cheap Chinese steel is a desperate problem for us, and we need to work with other countries in dealing with it. We also need to get our costs down. On net zero, I hope that the Secretary of State will tell the Secretary of State for Energy Security and Net Zero that we cannot go on like this.
Jonathan Reynolds
This is such an important point, and I will be exceptionally brief, but the right hon. Gentleman knows from debates that he and I have been in that I am obsessed with the issue of industrial energy prices and by the very substantial rise from 2010 to 2024—a 50% real-terms increase. As I think he knows, the two fundamental issues are: first, our network charges and how we do those, which is different from other countries; and secondly, fundamentally, the marginal cost is set by the price of gas—the fossil fuel price—for the overall system. I am not completely rejecting everything that he is saying, but we must understand that key point: it is the gas price.
Sir Iain Duncan Smith
I am grateful for that, because it allows me to say something that I had not been planning to say: we sit on an island of gas, so why, for goodness’ sake, are we not drilling for it? We need it, and we will need it strategically. There is a need for strategic industry, and I agree with the Secretary of State on that. However, the issue does not stop there; it stops elsewhere, in the production of energy. I simply leave that point for him, and he can argue it with his right hon. Friend the Secretary of State for Energy Security and Net Zero.
I want to say one final thing. In the course of this Chinese company’s operations, I have talked to a number of people involved in the business, and its record on health and safety and on the abuse of the workers in the blast furnace area has been shocking. We should look into that much more carefully. The company has brought in cheap Chinese workers and pays them nothing like what it pays the British workers. Many of those workers have ended up burned and in great difficulty. I simply say that this is not a company we should be doing business with right now.
Mr Deputy Speaker (Mr Clive Betts)
We will go to the Front Benchers at 1.40 pm, so if Members who are called could be as brief as possible, that would be appreciated.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I thank the Secretary of State for his speech and his decisive action. This will be a meaningful day for the people of Scunthorpe. I know how important jobs in the steel industry are. Davy Roll, otherwise known as Union Electric Steel, has stood at the heart of Gateshead, in our town centre, for over 150 years. It is the only cast steel roll maker left in the country and it is at risk of closure. Steel is incredibly important for our future, and the Government are taking decisive action.
I am reminded today of a place close to my constituency. Ten years ago, the people of Redcar were let down. I pay tribute to Members, including my hon. Friend the Member for Redcar (Anna Turley), for their campaigning. At the time, Redcar had the second most efficient blast furnace in Europe, and yet it was abandoned, along with 2,300 jobs. A proud town was let down. Today, Scunthorpe and Redcar have learned the difference a Labour Government make and the difference decisiveness makes: they save jobs and change lives.
Mr Deputy Speaker
Thank you for that. If Members can keep contributions to around three minutes, that will be helpful. I call Liz Saville Roberts.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd.
Today’s legislation to safeguard the UK’s last bastion of primary steelmaking capacity is of course to be supported, but what my party cannot support is this Government’s approach to steel in the UK, which deems that steel in Scunthorpe is worth saving but steel in Wales is not. Today is a bitter day for the people of Port Talbot, where the blast furnaces have been extinguished because Labour let that happen. Job losses there will take an estimated £200 million from the local economy in lost wages. People in south Wales have been loyally voting for Labour for decades. Do this Labour Government feel proud that those votes have been paid back by Tory-style deindustrialisation in Port Talbot?
Plaid Cymru has called consistently for nationalisation, but the Labour First Minister of Wales rejected our calls and described nationalisation as “pipe dreams”. Labour in Wales was quick to mock our proposal, which we made 21 times—over and over again—in Cardiff and here in Westminster. Now it is UK Labour policy.
The Government must set out how much of the £2.5 billion steel fund will be allocated to securing Scunthorpe, and how that compares with the amount given to support laid-off workers in Wales.
Liz Saville Roberts
The right hon. Gentleman’s Government did not intervene in Wales.
Liz Saville Roberts
I will take no interventions. His Government did not intervene in Wales. Under his Government, Scunthorpe gets security; Port Talbot gets a pittance. Plaid Cymru believes that Port Talbot should and could have received equal treatment alongside Scunthorpe. That is why we have tabled an amendment to include Wales in the terms of the Bill, and to highlight that the measures we are debating today could have been used to save the blast furnaces at Tata Steel in Wales. We will not let Labour hide from the fact that it owns the decision not to intervene to save Welsh steel when it had the opportunity to do so.
Workers and communities must be at the heart of any long-term solution for the steel industry. So far, Labour in Westminster and Labour in Cardiff have worked in partnership to dispatch thousands of Welsh workers to uncertainty and hopelessness. People in Wales will not forget today. It is a day of bitter disappointment for Port Talbot.
Tom Rutland (East Worthing and Shoreham) (Lab)
Today, we are taking an extraordinary but necessary step not just to safeguard a single industry, but to defend the long-term interests of our country. On that point of interests, I refer to my entry in the Register of Members’ Financial Interests.
Let us be clear: today is about not nostalgia, but national resilience and securing Britain’s future. Retaining a sovereign, primary steelmaking capability is critical to our economy and our national security, because steel is the backbone of our infrastructure, defence, energy and transport systems. Without the capacity to make steel from raw materials here in Britain, we are at the mercy of global markets and geopolitical shocks, and we would be outsourcing not just production, but power. Although we are resolute in our commitment to a green industrial future, the transition to clean steel must be a managed and just transition, not a cliff edge. That means keeping the furnaces operating in Scunthorpe as we establish and scale up the electric arc furnaces, because if we lose our primary steelmaking capability, we will not get it back. The skills will be lost, the supply chains broken and we will become entirely dependent on other countries, many of which do not share our environmental or labour standards, or, indeed, our geopolitical outlook.
Let us not forget the people. This is about jobs—good, unionised, skilled jobs that sustain communities, generations of families and the dignity of work. The steelworkers in Scunthorpe are not just making steel; they are making Britain. We owe it to them to ensure that this industry has a future. I pay tribute in particular to the work of Community and GMB unions, which have fought for the future of British steelmaking and British Steel workers.
The Labour party was founded to give working people a voice in Parliament, and, today, as a Government, we are honouring that legacy by standing up for British industry, British workers and Britain’s future. I am proud to support this legislation and I urge all Members to do the same.
Ellie Chowns (North Herefordshire) (Green)
Steel is strategically vital for the UK and the foundation of our industry. We could and should be producing much more of it domestically. Steel is also integral to the green industrial transformation that is essential for our future. Wind turbines, trains, rail tracks and electric vehicles are key elements of the sustainable future for our economy.
The Green party believes that public ownership is the best solution in this case, because only public ownership would give us the control that we need to ensure a proper strategic, long-term plan for the renewal of the steel industry not just in Scunthorpe but nationally. None the less, we will be supporting the Bill.
We do, however, need to think long term. We have an opportunity to reprocess far more of our waste steel to feed our industry, instead of exporting it. We have an opportunity to use the skills of the communities in places such as Scunthorpe to drive that green industrial transformation. Moreover, the Government have an opportunity, a need and a duty to use not just this Bill but the other levers that are available to them to support this crucial strategic industry.
As the Secretary of State has just acknowledged, electricity prices, because they are locked to gas prices, are kept too high. We need to decouple electricity from gas. As the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) mentioned, we should be introducing the carbon border adjustment mechanism at the same time as the EU—a year earlier than currently planned—to protect our steel industry. We should be making use of anti-dumping mechanisms to prevent the dumping of steel that is sold on the global market at below cost price. We should be using industrial and innovation policies to support the development of innovations—which were referred to by the hon. Member for Stockton North (Chris McDonald), who clearly knows a great deal about the industry—that will be the future of the steel industry. We cannot just patch up our old technology. We should be looking to the future and considering what innovations we need to produce clean, green steel as the foundation for that green industrial transformation?
David Smith (North Northumberland) (Lab)
Forty years ago in this place, the Conservative Minister of Trade and Industry said:
“I believe that…privatisation will enable”—
British Steel—
“and its work force to…secure a firmly based competitive industry with a long-term future”.
In the same debate, the then Labour shadow Minister asked whether the Minister has
“not rewarded British Steel…with a plan which quite unnecessarily places its future in jeopardy?”—[Official Report, 3 December 1987; Vol. 123, c. 1107.]
Today, I think we can conclude that that privatisation did indeed place British Steel in jeopardy and that privatisation has left Britain’s steel industry dangerously exposed.
In the post-war period, railways, steel, mines and mills covered the country in a thicket of industry, but for ideological reasons the Conservatives tore those networks apart, with the result that in my North Northumberland constituency, the electricity grid is owned by Warren Buffett, the water system is overseen from Hong Kong, and the buses are ultimately run out of Miami. We have the chance to correct this with British steelmaking, and that is what we are trying to do today. This matters because national security is about much more than defence; it is about trust, mutuality and our common endeavour.
Lola McEvoy (Darlington) (Lab)
Does my hon. Friend agree that home-made steel is the fire in the belly of this country’s industrial strategy, and that without steel being made on our shores to the highest quality, we are weaker? Today’s Bill—a Labour Bill—will guarantee the future of steelmaking in our country, which is essential.
David Smith
My hon. Friend makes a good point, and I agree absolutely. I want my constituents to trust that the people pumping their water, providing their power, connecting them to the wider world and making their steel have their interests at heart. I want them to get jobs in businesses that serve the common good, not international stock markets or foreign Governments. We need to have strategic industries in-house, so that we can trust that our economy is working for us.
As we have heard today, Jingye appears to have at heart not the interests of the British people, but its own profit. Why should we accept that a decision made in a boardroom in China with links to the Chinese communist party can risk wiping out an industry that is the heart of one of our communities, and vital to our nation’s flourishing? If we were ultimately to nationalise steel, that would not necessarily be a perfect solution. A sluggish and over-subsidised steel producer would not serve Britain’s interests any more than one owned by foreign firms, but I believe we should keep nationalisation on the table. As my hon. Friend the Member for Stockton North (Chris McDonald) said, we have the expertise and certainly the passion here in this country to succeed, and recent events have proved that the safest way to safeguard strategic parts of our national infrastructure is to do it ourselves.
Privatisation has often been very bad for our country. That it takes Government intervention to secure the continuation of our last remaining plant producing virgin steel speaks volumes. My hope is that we soon move to the full nationalisation of British Steel and align that with our planned massive investment in skills through Skills England. After decades of fire sales of British industry, it is time for us to rebuild our industrial pride, our national security and our social covenant. To those ends, I urge the House to back Britain and back British Steel.
Several hon. Members rose—
Mr Deputy Speaker
Order. I remind Members that each contribution should take no more than two to three minutes.
Clive Jones (Wokingham) (LD)
A potential tragedy is unfolding for many people in the Scunthorpe area, not just those at the steelworks, but people in the wider community who work in the supply chain, their customers and workers in the local economy, and the family and friends of those working at the steelworks. Well over 35,000 families in this country could be affected—nearly a whole parliamentary constituency. Trump’s steel tariffs will hurt the UK steel industry. Trump supporters in this House in the two shades of the blue team are strangely silent on the impact of his unnecessary tariffs. Has anyone heard them condemn Trump’s tariffs? No. The Liberal Democrats believe the Government should stand strong against Trump’s 25% tariff.
The relationship between the Jingye company and the Government has clearly broken down, which is why the Secretary of State is taking wide-ranging powers for himself. As it appears that the Bill will be passed today, I have two questions for him. Can he confirm that the pension fund of employees and former employees is not in deficit, that all company contributions are up to date, and that the assets of the scheme have not been transferred to the holding company or any offshore business; and if they have been, will he commence measures to get them back? Can he also confirm that ownership of the assets of the business, such as plant, land and buildings, have not been transferred to any holding company or offshore business?
Laurence Turner (Birmingham Northfield) (Lab)
I am glad to be called in this debate. I declare an interest: the GMB—one of the steelworkers’ unions, whose parliamentary group I chair—has donated to my constituency party.
Twenty years ago, the MG Rover car plant in my constituency collapsed, with devastating consequences that are felt to this day. Today, all our thoughts are with the steelworkers and their families at Scunthorpe and Teesside, and I hope that we can do something to avoid such a future for them.
I do not want to speak for too long, but I would like to make a few points. First, today’s decisive action is welcome. I think all our constituents would rather have a Government who acted at great speed than a Government who acted too late. Secondly, I echo the point raised earlier by my hon. Friend the Member for Brent East (Dawn Butler) about the importance of steelworkers’ participation in the days ahead. If the Government could also clarify any changes in plans for the UK Steel Council, that would be appreciated. Thirdly, what role will Jingye now have in the running of British Steel on a day-to-day basis? It is clear that workers have lost confidence in the management—as shown by reports this morning that management from Jingye were refused entry to the plant—and that a change in that day-to-day management is needed.
I would like to respond to a couple of points made in the debate. The last time that this House carried legislation that had the effect of nationalising steel, that legislation was 108 pages long. Nationalisation is clearly outside the scope of the urgent emergency legislation that we are debating today. We have also heard much about costs, including energy costs. I do not wish to add to the informed comments made earlier, but the OECD has also said that the root cause of the industry’s current problems is “global excess capacity”. In other words, the UK has been left at the mercy of over-production and the dumping of artificially subsidised goods. The Manufacturing Trade Remedies Alliance has long called for our trade defences to be strengthened, and I hope that those calls will be listened to in a way that they were not under the last Government.
I would like to end on a personal note, because I have thought about one person in particular today: a family member, my aunt’s father, who began his career at the Ravenscraig steelworks in Motherwell. He rose to become a branch officer, national executive member and later a salaried official of the Iron and Steel Trades Confederation, the forerunner of today’s Community union. In the peripatetic life of a trade union official, he later worked in the west midlands, Corby and Scunthorpe. He was fierce in the defence of his members, and the gentlest and most modest of men in private. I understand that he is still remembered on the executive of Community, and if he could be here today to witness this most difficult chapter in the steel industry’s history, I am sure that he would offer valuable perspective and wise counsel. With your permission, Mr Deputy Speaker, I would like to enter his name in the record of this place: Dick Knox.
Mr Deputy Speaker
I thank all Members for their help in being brief for the last few contributions, but unfortunately we have time only for a final Back-Bench contribution. I call Sir Jeremy Wright.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I am grateful to you, Mr Deputy Speaker.
I can accept that there is broad agreement in this place that we should take action to preserve virgin steelmaking capability in the UK, but quite frankly, it is not enough for this House just to agree that we should do something. It is our responsibility to look at the detail of what the Government are proposing and to decide whether it is properly targeted and appropriate for the task. There is not going to be a Committee stage or a Report stage in this Bill; that is what the clock tells us. This is our only opportunity to look at the detail of the Bill, and I am afraid that precious little of that has been done today.
Let us have a look at what powers the Secretary of State is going to be given—by the end of today, as things will probably unfold. The Secretary of State will have powers that apply to all steel manufacturers in England and Wales, not just to the particular company over which he has specific concern. There will no doubt be shivers running down the spine at Tata Steel as well, because the Bill applies to that company too. The Secretary of State can act, according to this Bill, in order to instruct those companies to deal in specific ways with what are described as “specified assets”. As I mentioned to him earlier, that does not limit the measure to blast furnaces or to anything else that is specifically required to generate virgin steel. The Secretary of State can give directions to ask and require a company to do pretty much anything that company could otherwise do, and if the company refuses to do it, the Government have powers to take control of assets, including powers to enter premises by force if necessary, and criminal penalties that can lead to imprisonment. These are very serious powers indeed, and I am afraid that this House is simply not being given the opportunity to scrutinise them as they require. They also look suspiciously, by the way, like nationalisation—so perhaps it would be easier to call this thing what it really is.
Let me address one or two specifics before I finish. I hope that the Secretary of State, for whom I have huge respect, will think about—I think he has and will—some of the problems that this legislation will throw up. First, there is highly likely to be considerable controversy over whether a company in question is complying with a Government instruction. A company is likely to argue that point. As the Secretary of State pointed out, in respect of his particular concern we are dealing with a company that he does not trust and that he believes has acted in bad faith thus far. I have no reason to think, nor does the Secretary of State, that the company might not continue to do so.
Secondly, the Secretary of State is making himself responsible for claims against the company that arise from specific instructions given to it by the Government. That is what the indemnity clause means. In those circumstances, there will be a further dispute about whether the relevant problem has arisen because of what the Government have told the company to do or because of something it has control over. As I said, the Secretary of State is enabling there to be two hands on the tiller, and that will store up headaches for the Government. I urge him, despite the fact that we have not had the chance to explore the matter today, to think very carefully about how the Government will protect themselves and the taxpayer from the oncoming complexities.
Mr Deputy Speaker
I call Dame Harriett Baldwin for the official Opposition.
Dame Harriett Baldwin (West Worcestershire) (Con)
I add my thanks to everyone who has enabled us to be here this afternoon, but the fact is that this is a bungled way to do parliamentary legislation, following a bungled set of negotiations, and we are likely to end up with a bungled nationalisation. The Labour Government have landed themselves in a steel crisis entirely of their own making. They have made poor decisions and let the unions dictate their actions. The fact is that the union-led Labour Government have bungled the whole negotiation, insisting on a Scunthorpe-only deal that is not viable.
Frankly, the Government should have seen this coming. In fact, instead of addressing it 16 days ago, when British Steel announced its plans to close the site and Parliament was sitting, their incompetence has led to this last-minute emergency recall. Colleagues including my hon. Friend the Member for Brigg and Immingham (Martin Vickers), the Tees Valley Mayor Ben Houchen and Councillor Rob Waltham of North Lincolnshire Council have been warning about the issues at British Steel. But no: Labour Ministers thought they knew better. The British public can now see the Government scrambling for a solution to a problem they created and could have resolved months ago.
Graham Stuart
The Government give themselves powers in the Bill to compensate steel undertakings, yet the Minister has told us nothing about the scale of that or the estimate of it. The Secretary of State tells the House that he has no trust or abiding faith in the company, but he is giving himself powers to give whatever sums he deems appropriate to the company. Do we not need more answers before we pass this legislation?
Dame Harriett Baldwin
I wholeheartedly endorse what my right hon. Friend said. All new Government Members should be aware that the explanatory notes to the Bill, which have only just been circulated to colleagues, make it very clear—[Interruption.] I hear cries of “Shame!” from behind me. On the financial implications of the Bill, the explanatory notes say that there has been no impact assessment of the effect on the country’s finances, and nothing has been prepared for this House while we make this decision today.
The Bill is a sticking plaster for a Government who, in opposition, had years to come up with a plan, but they have dithered and delayed. Ultimately, nothing will change for UK steel until the Government understand the damage that unrealistic and impossible “net zero by 2050” targets have done to British business and industry.
We have heard a range of really excellent contributions from my hon. Friends. From the Father of the House, we heard an excellent exposition of the importance of this industry to his constituents in Lincolnshire and the impact of energy costs on the industry. We heard from the great champion of the industry, my hon. Friend the Member for Brigg and Immingham, who has regularly brought this issue to the forefront of Members’ consideration. We heard from my right hon. Friend the Member for Goole and Pocklington (David Davis), and from my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who raised incredibly important issues to do with tariffs and China. We then heard from my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), who raised some important legal questions.
If I may in the time available to me, I would like to raise a few further detailed questions for the Minister to respond to when she gets to the Dispatch Box. The Secretary of State has said that he does not want these powers indefinitely, so why will Labour Members not back our amendment to implement a sunset clause for this Bill?
We have heard from a range of voices in the debate about the confusion over the territorial extent of this legislation. It makes it very clear that the territorial extent applies to England and Wales only, yet clause 2 refers clearly just to England. There is another thing I would like the Minister to make clear at the Dispatch Box: if a new provider came into the UK and decided to set up a new steel-making enterprise in England or Wales, would that new enterprise be covered by this legislation?
Can the Minister also tell the House what the Attorney General has advised on compliance with international law, including article 1 of protocol 1 to the European convention on human rights, the World Trade Organisation subsidies agreement, and the trade and co-operation agreement, particularly with reference to state aid?
The Secretary of State was unable to tell the House this morning how much this intervention will cost. We are being asked this afternoon to sign off on a bottomless pit of money. How often will this House be given an update on how much taxpayer money is being sent into this bottomless pit? Families across the country are already being hit in the pocket every day. Can the Minister give the House a ballpark figure from the Dispatch Box? Are we talking about £100 million a year? Are we talking about a billion? Are we talking about more than a billion?
It is a fact that the Government themselves have made the situation worse for the steel industry with their determination to impose higher energy prices, higher taxes and higher business rates. Where is the steel strategy that they have had nine months to develop? What we can say with certainty about today’s legislation is that this is no way to govern the country. Whenever Labour negotiates, Britain loses. We can see for ourselves that this is a Government controlled by events; they are not in control of events. Yet, according to the Secretary of State, it is everyone else’s problem and nothing to do with them. This Government have treated Parliament with disdain. We have had nine months of dither and delay for these workers at Scunthorpe. When Labour negotiates, Britain loses. I look forward to hearing the answers to all those questions from the Minister.
The Minister for Industry (Sarah Jones)
I thank hon. Members on both sides of the House not just for participating in this debate, but for returning to this place in these exceptional circumstances. There seems to be some debate about it, but I think this is the sixth time since the second world war that we have met on a Saturday, and only the second time that the House has been recalled on a Saturday—the other being during the Falklands war.
Before I respond to Members’ comments, I echo the point made by my right hon. Friend the Secretary of State in his opening remarks: this Government will never hesitate to protect our steel industry and the thousands of steel workers in this country who built it. We always said, from the outset of our negotiations with Jingye, that we would keep every option on the table and would act in the national interest to protect jobs. UK-forged steel built our railways, bridges and buildings. It is integral to our economy’s future, just as much as it has been to our rich industrial past. That is why we need to pass this legislation today.
I will try to address as many of the points raised as I can. Members made the argument for British Steel. My right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) pointed out that 95% of Network Rail steel is from British Steel. My right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) pointed out that TfL would not get anywhere were it not for steel. My hon. Friend the Member for Stockton North (Chris McDonald), who has such expertise, pointed out that steel is the future and everything we have is made from or with steel.
I can reassure the House that our plan for steel—the £2.5 billion that we committed to in the manifesto—will work to break down the trade barriers that we have on steel, consider the all new technologies that we can introduce, and look across the whole of the UK to ensure that we protect steel everywhere.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Minister speaks about the whole of the United Kingdom. I am very pleased that the Government are acting, literally at pace for once, by stepping in to protect the workers in Scunthorpe, in precisely the opposite way to when they turned a blind eye to the plight of workers at Grangemouth, which is also critical national infrastructure labouring under energy prices. Why is there one rule for industrial production in England and another for industrial production in Scotland?
Sarah Jones
In the first 10 weeks after coming to power, this Government negotiated a better deal on Port Talbot and delivered a £200 million commitment to secure the future of Grangemouth. We acted last week on the zero emission vehicle mandate to secure our automotive industry. We are acting today to save the workers of Scunthorpe. The Government believe in direct action—in an active state securing the future of our industry across the UK.
My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) raised trade protection issues. I want to reassure her that we will ensure that the right trade protections are in place for our steel industry. Concerns were raised about future decisions about moving towards nationalisation and whether we would come back to this place. I can reassure the House that we will come back to this place if are any further matters relating to ownership or otherwise. We will keep the House updated.
Concerns were raised about the “reasonable excuse” part of the Bill, and examples were requested. The “reasonable excuse” clause could include physical inability, illness or accident, and it is reasonable and measured in this case.
Many hon. Members talked about China. We are focusing on this company today; we are not focusing on the nation of China. The Bill is about what has happened with British Steel and what this Government are going to about British Steel. I would not want this House to believe that the policy of this Government is anything other than a belief in free and fair trade, and that includes with China.
Turning to the sunset clause amendments that have been tabled and the suggestions during the debate that those measures should be included in the Bill, I reiterate what the Secretary of State explained about the risk of a hard backstop reducing our leverage, which was why we did not include a sunset clause. However, we have heard the House’s concerns. I confirm that we will repeal the legislation as quickly as we can and that we will involve the Select Committee. I also make this pledge to the House: we will update the House regularly and the Secretary of State has committed to do so every four working weeks. I hope that that will give the House reassurance.
Several hon. Members rose—
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
I welcome the Government’s actions today. I thank my hon. Friend the Minister for Industry for all the hard work that she has put in to get us to this place. Does she agree with me that our future industrial strategy must contain an extended section on Government procurement for steel, so that British-produced steel has a fair crack of the whip in the future?
Sarah Jones
My hon. Friend is right that procurement has a key role to play in our industrial strategy in steel and beyond. We are working with colleagues in the Cabinet Office to ensure that that is the case. I speak to the hon. Member for Brigg and Immingham (Martin Vickers) about these issues regularly, as does the Secretary of State—
Graham Stuart
On a point of order, Mr Speaker. It is reported that Jingye management has been turned away by workers and the Humberside police today, so will the Minister tell the House whether the Government’s policy is to bar Jingye management from going on to the premises?
Mr Speaker
As the right hon. Member knows, that is great information but not a point of order.
Sarah Jones
I will not comment from the Dispatch Box on reports that have been made during the debate. We are actively engaged, minute by minute, on activities in British Steel. If anything, those reports underwrite the need for the powers in the Bill to be introduced on this day. I hope all hon. Members will support the introduction of the legislation and vote for it today.
The hon. Member for Brigg and Immingham suggested that we could have moved faster. I reassure the House that we do not recall the House lightly. We do it because we have a choice today: do we want to deny any possibility of the future of the steelworks at Scunthorpe and do we want to see the closure of the blast furnaces, or do we want to secure a future for those workers and for primary steelmaking in this country?
Brian Leishman (Alloa and Grangemouth) (Lab)
On that point, will the Minister give way?
Sarah Jones
I hope my hon. Friend will forgive me, but there is no time for me to give way. I reassure the hon. Member for Brigg and Immingham that in no way have we moved slowly—we have been moving at pace throughout our time in government.
There were suggestions that we should move to nationalise British Steel today and that this Bill is already nationalisation. It is not nationalisation and we are not moving to nationalise British Steel today. We are taking very significant powers that we do not underestimate. That buys us time to have the leverage and the time we need to look at what must be done next, but we will act in the national interest. As the Prime Minister said yesterday, nothing is off the table. There was a suggestion that we should use the Civil Contingencies Act 2004. That is difficult to do because it is very hard to meet the criteria; there has to be a risk of death, so we did not meet that criteria.
I agree with my hon. Friend the Member for Sefton Central (Bill Esterson) that economic security and national security are two sides of the same coin. The emergency legislation we have brought forward today is essential to protect British Steel, its workforce and the national interest. This Government will never hesitate to act in the national interest to keep Britain secure at home and strong abroad, and this legislation is proof of that. Today we take back control, and I urge all Members of this House to vote for this Bill.
Steel Industry (Special Measures) Bill (Money)
Saturday 12th April 2025
(2 days, 16 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Commons ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Madam Deputy Speaker (Caroline Nokes)
It might be helpful if I begin by explaining how the Committee stage will proceed. A number of amendments have been tabled, published and selected for debate. The amendment paper and selection list are available in the Vote Office. However, because it is now after 2 pm, there is no time available for debate. Amendments that are not debated are not subsequently selected for separate decision.
Alex Burghart (Brentwood and Ongar) (Con)
On a point of order, Madam Deputy Speaker. It is obviously deeply regrettable that the Government were not prepared for the eventualities that they have faced. We know they were not prepared because the Bill was not ready until 9.30 this morning. An obvious omission from the Bill is a sunset clause, and many Members here today have spoken in favour of such a clause. Indeed, Ministers have suggested that they want this legislation to be time-limited. Consequently, it is deeply regrettable that it sounds as though the House will not have an opportunity to vote on a sunset clause. Can you advise the House on whether there is anything that can be done at this stage to ensure that we get a vote on amendment 1 and/or new clause 2?
Madam Deputy Speaker
I thank the hon. Member for his point of order. He will know that it is long-standing practice that the Chair does not select for separate decision any proposition that has not been debated. It is therefore not possible for any of the amendments or new clauses to be called at this stage.
The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Order, this day).
Clauses 1 to 10 ordered to stand part of the Bill.
The Speaker resumed the Chair.
Bill reported, without amendment.
Question put forthwith (Order, this day), That the Bill be now read the Third time.
Bill read the Third time and passed.
Mr Speaker
Under today’s order of the House, I may not adjourn the House until any messages from the Lords have been received and I have reported the Royal Assent of any Act agreed by both Houses. The House is accordingly suspended until we have received a message from the House of Lords about the amendments to the Bill and I am able to signify Royal Assent. I will arrange for the Division Bells to ring, and for a message to appear on the annunciators, a few minutes before the sitting is resumed.
Mr Speaker
I inform the House that a message has been received from the Lords, as follows:
“The Lords agree to the Steel Industry (Special Measures) Bill, without amendment.”
Royal Assent
Mr Speaker
I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Act:
Steel Industry (Special Measures) Act 2025.
Adjournment
Mr Speaker
Before I adjourn the House, I once again pass on my thanks to all the staff of the House, who have worked extremely hard at very short notice to make this sitting happen. The House stands adjourned —I have had apologies from Jim Shannon, by the way. [Laughter.] Have a good Easter, everyone.
Business of the House
Lord Kennedy of Southwark
To move that, in the event the Steel Industry (Special Measures) Bill has been brought from the Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with today to enable the Bill to be taken through its remaining stages and that, in accordance with Standing Order 47 (Amendments on Third Reading), amendments shall not be moved on Third Reading.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the Motion standing in her name on the Order Paper. In doing so, I thought it would be helpful for noble Lords if I set out how proceedings will work today. As the House will know, the House of Commons is currently considering the Steel Industry (Special Measures) Bill. While this is happening, our House will have a general take-note debate led by my noble friend Lady Jones of Whitchurch. This is intended to form the substantive debate on the Bill, ahead of a formal Second Reading when the Bill reaches our House.
Twenty-seven noble Lords are signed up to speak, with an advisory Back-Bench contribution time of five minutes. This is designed to balance the importance of scrutiny with concluding our proceedings at a reasonable hour. When the clock reaches four minutes, Back-Bench speakers should begin to make their concluding remarks and at five minutes, their time is up.
If the Bill arrives from the Commons during the take-note debate, we will briefly adjourn the debate to give the Bill a First Reading. This allows the Bill to be printed and means that noble Lords can then approach the Public Bill Office to table amendments. Once the debate has concluded, we will have a formal Second Reading and adjourn for an hour to allow noble Lords to table amendments for Committee stage. The precise timings for amendments will be announced in the House and advertised on the annunciator. Today’s list will then be reissued with the groupings of any amendments for Committee stage debates.
Once Committee has concluded, and if no amendments have been made, we will then proceed to a formal Report stage and Third Reading. If the Bill is delayed in the Commons for any reason, some of these arrangements will change, and the Whips and I will update the House at a suitable point. The House will rise once the Bill has received Royal Assent.
Finally, I thank all our colleagues working for the House who have come in on a Saturday during the Easter break to allow the House to sit at short notice. The police and security staff are keeping everyone on the Parliamentary Estate safe. The House officials, the Library staff, the staff of the Government Whips’ Office and the Leader’s office, special advisers, Opposition, Liberal Democrat and convenor’s office staff, Black Rod and her team, the doorkeepers and the catering staff in the River Restaurant and the Long Room are all here, and I am very grateful for their dedication and support. I also place on record my thanks to the usual channels for their helpful and positive engagement yesterday. I beg to move.
Steel Industry
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Baroness Jones of Whitchurch
To move that this House takes note of His Majesty’s Government’s legislative proposals to ensure the continued operation of the steel industry in the light of the Steel Industry (Special Measures) Bill.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, the House has reconvened under exceptional circumstances, which merit an exceptional response from the Government. Our request to recall Parliament was not made lightly, and I am grateful to noble Lords on all sides of the House for being here today as the Government seek to pass this emergency legislation.
This legislation allows the Government to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. I reassure noble Lords that, given the exceptional nature of a recall, the Government thought it better to limit the powers in the Bill—which are still significant—rather than introduce more complex matters of property rights and public ownership at the same time. This is not about nationalisation. We are keeping all options under review, and we will of course return to Parliament for further scrutiny should the need arise.
As noble Lords will know, since taking office, the Government have been negotiating in good faith with British Steel’s owners, Jingye. We have sought to prevent the early closure of the two blast furnaces at the company’s Scunthorpe site, which Jingye has claimed are no longer financially viable. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel with sensible, common-sense conditions to protect the workforce and UK taxpayers, and to create a commercially viable company for the future. Jingye’s refusal to accept the deal on the table, and to accelerate the closure of the blast furnaces at Scunthorpe, has left us no other choice: we must now take control of the company’s blast furnaces.
Let there be no doubt: this Government will never hesitate to take action to protect this nation’s assets. We will not abandon the hard-working steel-making communities that have given so much to both our economy and country. Where vital industries are on the verge of collapse or where communities face devastation, we will always act in the national interest.
We do not accept the argument that steel-making has no future in the UK. As the Prime Minister asserted yesterday, our plan for change means that domestic demand for steel is set only to go up, not down. In the last few weeks alone, we have seen Heathrow Airport announce multi-billion-pound expansion plans requiring 400,000 tonnes of new steel. We have seen Universal Studios confirm that it will build Europe’s biggest theme park, and, where possible, it will use UK-made steel to make it. We need British steel for this and our critical infrastructure projects, from rail to renewable energy. We need it to keep Britain secure at home and strong abroad.
The legislation we are setting out today will also help end the uncertainty that has been hanging over British Steel’s Scunthorpe site for far too long. We know that rebuilding our steel industry brings its fair share of challenges, but we believe that they are worth facing and that we are more than prepared to overcome them. It is why we agreed a new deal with better protections for workers at Port Talbot within weeks of taking office, which will transform production and deliver a modern electric arc furnace. It is why we have delivered measures as part of the British industry supercharger to cut electricity costs for steel firms and bring prices more in line with international competitors.
It is why we have simplified public procurement, aligning it with our industrial strategy, which is putting UK firms, including those in the steel industry, in the best possible position to bid for and win public contracts. It is why we launched a consultation on our steel strategy as part of an effort to work with industry on overcoming difficult issues, such as high electricity costs and unfair trading practices, so that we can protect the UK’s industrial heartlands.
It is why we have taken the decision today to safeguard British Steel. Britain is a steel-making country. Steel-making has been fundamental to Britain’s industrial strength, security and identity as a global power. Today’s legislation will help ensure that we can retain that steel-making capability here in the UK, both now and for many years to come, and I urge the House to support it. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I begin by echoing the words of the Government Chief Whip: I thank all the staff of Parliament for their tremendous efforts in facilitating this recall today. It is no small task to bring us all together at short notice, and their dedication to the democratic process is deserving of recognition.
At its heart, this debate is about whether we have a steel sector in this country at all, and whether it is run in the national interest. Earlier today, the Government confirmed that they will take control of British Steel, following the collapse of negotiations with its Chinese owners. This is a pivotal moment, not just for the future of British steel-making but for the future of Britain’s industrial base itself.
Before I go any further, perhaps I may say that our thoughts today must be with the steel-workers, their families, their suppliers and the communities whose futures now hang in the balance. They deserve better than uncertainty and neglect, and they must certainly have a Government who are on their side.
This the first time that Parliament has been recalled to sit on a Saturday since I was sitting in the other place in 1982, after the Falklands war began. It is only the sixth occasion since the end of the Second World War—and for a Bill published just two hours ago. There has been no respect for Parliament whatever. I really must say that this is not the way in which to treat this precious institution.
The Bill itself grants far-reaching powers to the Secretary of State. The Government will argue that this is necessary because of the emergency we face. However, just now, in the other place, the Secretary of State said:
“I do not want these powers a minute more than necessary”.
So where is the sunset clause in this Bill? How can we be assured that these extraordinary powers will not be abused or extended indefinitely? The Government have to make clear the precise timeframe for these powers and, more importantly, they must demonstrate how they intend to ensure that public and Parliament are not left in the dark once this emergency has passed.
The choice before Ministers should never have become this stark. Faced with the collapse of British Steel, the Government had little option but to intervene. Let us be clear: nationalisation is not a triumph but a last resort made necessary by failure. Without it, Britain would indeed have become the only G7 country without primary steel-making capacity. However, today’s events are not simply the result of forces beyond the Government’s control. The truth is that nationalisation must be a platform for urgent and permanent modernisation, not a short-term bailout or a delaying tactic. Without decisive action, Britain’s steel industry will wither under the combined pressures of global competition, green regulation and technological change.
It is essential that we consider the effect and impact of green targets, which have placed immense strain on our industries. The policies driving us towards net zero by 2050 have hit our industries hard, especially energy-intensive sectors such as steel. Energy costs in the UK are now the highest in Europe, and four times those in the United States, and the current trajectory of green regulation is making it harder, not easier, for our industries to compete internationally.
We just need to ensure that our environmental goals do not come at the cost of our industrial base. The Government must urgently review their net-zero policies to ensure that they support, and do not strangle, British industry. If we do not strike the right balance, we will continue to see industries such as steel driven offshore, taking with them not only jobs and investment but the very emissions targets we champion. We cannot allow this to happen.
Let us remember that, just a few months ago, Ed Miliband banned coal and coke production in the UK and boasted about sending a signal to the world. Yet today, as we heard in the other place, the Government are going around the world with a begging bowl, trying to find enough coal to keep the last blast furnaces running. Could British Steel survive today if access to coal was not artificially restricted? Possibly, but we are in this mess because decisions such as this have been made in pursuit of political point-scoring by this Government, with no thought for the long-term health of our core industries.
How is it possible that no one in the Government saw this crisis coming? How could they have been so unprepared? The warning signs have been flashing for months: ageing infrastructure, soaring energy prices and growing global competition. We debated in this Chamber just a short time ago the fact that there had been no serious contingency planning, as yet no coherent industrial strategy and certainly no sense of urgency. Instead, the Government are now scrambling to nationalise British Steel as a last resort. That is not leadership; it is crisis management at its worst.
On 31 March, the Minister stated that
“we will be producing a steel strategy very soon”.—[Official Report, 31/3/25; col. 18.]
Following the events of the last 24 hours, and now that the Government have found time to lay an emergency Bill, it is surely time for them to publish an emergency steel strategy too. Where is it? The Secretary of State in the other place just referred to quotations from the steel strategy, so it must exist in draft. Should this House not be given a copy? Steel-workers and their families, and the taxpayer, need more than vague assurances—they need clear timelines—so when will this strategy be published? Will it commit to the urgent modernisation that our steel sector desperately needs? Will it address the crippling energy costs faced by our steel-makers? Will it set a clear and credible path to return British Steel to private ownership?
We have to learn from industry. The last time steel was nationalised, back in the 1960s, the results were disastrous. I will cite figures from Hansard. Grants and loans to the British Steel Corporation between 1967 and 31 March 1980 totalled £4,925 million, and the net total loss for BSC since 1967 has been £1,552 million. Rather than revitalising the industry, nationalisation led to bureaucratic inefficiencies, losses, a decline in productivity and widespread industrial action.
The Government’s approach to the steel sector is compounded by the broader challenges they face and are imposing on employers right across the country. The Government increased employers’ national insurance contributions and they are rushing through the unemployment Bill, which, in its current form, will add further strain to the already fragile labour market. It is difficult to see how these measures align with any credible strategy to attract private investment. Surely the Minister must acknowledge that the Government’s policies have made it more difficult to deliver the investment that the steel industry so desperately needs. If they are serious about a future where British Steel is returned to private hands, they must urgently reconsider their policies. We agree that uncertainty has to end, so will the Government confirm today that, should nationalisation be pursued, it will be only a temporary measure? Will they clearly set out the timeline for that transition to private ownership?
We cannot afford to hear again the standard vagueness of “all options are on the table”. This does not provide the certainty that workers, who deserve clarity about their future, need. It does not provide certainty for the taxpayer, who is now footing the bill. Which brings me to my final point: can the Minister tell us what estimate the Government have reached of the cost of nationalisation to the taxpayer? This is not leadership; this is not planning; this is a crisis, and one that should never have been allowed to happen in the first place.
Baroness Brinton (LD)
My Lords, from these Benches, I too thank all the staff who have come in. We are very grateful to them, not just for giving their time but for taking care under the special circumstances which have complicated today.
The urgent and serious position that this country now faces means that emergency action must be taken, and it makes complete sense to recall both Houses of Parliament, but this must be the start of a serious plan for the sustainable future of domestic steel production. The circumstances requiring these measures have been known for some time, and it is clear from the diplomatic language of government statements in the last 48 hours that the word “forthright”, when used in the context of government negotiations with the Chinese company Jingye, is doing a great deal of heavy lifting, so it is good that the Minister has outlined some of that detail this morning. It explains the nature of the urgent crisis.
However, it is worth noting that this is not a recent problem—not even one of a few months, as just suggested by the noble Lord, Lord Hunt of Wirral. Ever since privatisation, which these Benches do not oppose in principle—nor, by the way, are we against nationalisation as a last resort—there has been a disregard for the impact of the repeated change of ownership of our state infrastructure companies. That may have been less important at the time,but other changes in global manufacturing and trading patterns should have been a warning signal—especially to past Conservative Governments. I say to the noble Lord, Lord Hunt of Wirral, that it is worth reminding ourselves that a past Conservative Government sold British Steel for £1. Then there were the consequences of the extra trade barriers as a result of Brexit, scrapping the industrial strategy council and allowing the sale of steel plant to a Chinese firm which, it is now clear, is not negotiating in good faith.
The entry of foreign state-owned enterprises into the British economy and infrastructure means that a number of other Governments now own all or part of key UK infrastructure, sometimes leaving us vulnerable. In today’s Financial Times, Ewan Gibbs says that the UK is
“an outlier in Europe, where the state still often owns important industries”.
President Trump’s tariff wars mean that all other nations are now reviewing their ability to maintain their own infrastructure in the light of tariffs, and the Government are right to do so at a time when our steel industry is already in crisis. We start from a weaker position than those countries because we do not own our own infrastructure. Can the Minister say, as we increase defence spending for the existential threats facing the UK, Europe and, of course, Ukraine, whether the Chinese company’s threat to remove manufacturing back to China acceptable? Is it not a clear security threat?
Before I turn to the Bill, it is really important to focus on the broader issue of the possible closure of the Scunthorpe works. This Government promised that they would deliver on the promises made by the previous Conservative Government, which were woefully underdelivered, to strengthen communities in the north of England. The Scunthorpe community is like many other steel communities, such as Port Talbot and others in the past, with centres in south Wales, Teesside and Scotland. I remember Corby in the 1970s and, visiting it 20 years later, I saw a community utterly broken by steel closure. Our thoughts at the moment are very much with the workers, people and community of Scunthorpe.
The Scunthorpe works employ 2,700 staff, as well as others in the local, national and international supply chain. The consequences of a possible closure of the works would be severe for them and for the entire community. The Bill talks about compensation for a steel undertaking but it is totally silent on the support for workers and the community in the event of a disruption or, worse, closure. Are there any plans for support for the community during this period of uncertainty? What happens if negotiations do not work?
Only last autumn, we saw from the Port Talbot experience the effect on a community of closing down one furnace before its successor—a much greener one, of course—is even fully planned, let alone being built. Can the Minister say why, last autumn, the Government did not do what they are doing today, after the previous Government failed to support and save Port Talbot? What help are they providing for the Port Talbot community with new skills and enterprises?
In Clauses 3 and 4 of the Bill, the Secretary of State is taking extraordinary powers to himself. Given the urgency, that is understandable. However, we on these Benches say that the Government need to understand that they have to communicate with Parliament, through Statements and debates, on the use of these extraordinary Henry VIII powers as it happens. Will the Government undertake to do this? As with when the Conservative Government took such powers to themselves in 2020, at the start of the Covid pandemic, they should remember that post-event openness is vital; otherwise, the trust put in their hands by all parts of Parliament will be lost.
In Clause 3—
“Breach of directions: power to take control of assets”—
subsection (2) says that:
“The Secretary of State may do anything for the purpose”
set out. Anything? That is certainly sweeping. I hope that the Government will keep Parliament abreast of any such powers taken.
Clause 4, on offences, creates very serious crimes either for the steel undertaking or for individuals associated with it, and includes such terms as “connivance”, which I am not sure I have seen defined in criminal law before. Has the Secretary of State for the Ministry of Justice, the Attorney-General, been consulted on the creation of these new crimes?
Clause 7 deals with the compensation scheme. Although I accept that there needs to be such a scheme, as and when that happens, will the Government please undertake to publish the full details? The behaviour of Jingye, as outlined by the Minister, means that the public need to know the cost of compensation.
We on these Benches are concerned about the lack of a sunset clause. We hope that there is still time for the Government to consider adding one in Committee.
We support the Bill as it appears, given the concerns that we have. The crisis must override those, and we will support the Government in its deliverance.
Lord Reid of Cardowan (Lab)
My Lords, I will make five simple points.
First, the Government are absolutely correct to intervene. Like the noble Baroness, Lady Brinton, I have personal experience of the devastation that is wrought on communities by the closure of steel industries. Some noble Lords may remember that we once had a steel industry in Scotland, with 7,000 jobs in Ravenscraig itself and more than 20,000 jobs in the ancillary plants. I can testify to the absolute devastation of communities, individuals, workers and families from the 1980s onwards. The Government are undoubtedly correct to intervene on social grounds alone.
Secondly, whatever the Government do, there will be no free pass for the workforce. Let no one think that this is an easy way out. From my experience, I have seen steel-workers meet the challenges that these circumstances pose by getting rid of restrictive practices, increasing productivity, increasing efficiency and so on. In the case of Ravenscraig, it probably extended the life of the steelworks by 10 years or more. I hope that the workforce in Scunthorpe responds positively and constructively to the efforts of the Government intervening.
Thirdly, the Government are right to emphasise the crucial role of blast furnaces. This is not a mere technicality. These blast furnaces are designed to operate continuously, to maintain the high temperatures and reactions that are necessary in quality steel. Turned off prematurely, they will effectively lower production, decrease quality, increase slag and possibly render the whole edifice unworkable. A shutdown would force the entire steelworks, which relies on the furnaces’ molten iron, to cease operations altogether. Therefore, it is crucial—though it seems a technical point—that the Government are projecting and focusing on the question of the blast furnaces.
Fourthly, there is a matter of wider national and strategic importance. I was surprised by the spokesman from the Opposition Benches, who seems to have forgotten that it was the previous Government who sold this industry to the Chinese. We are constantly told, not least by the party opposite, that there is no firewall between the Chinese Government and Chinese industry. Did it never occur to anyone in the last Government that, in a competitive world, it may be in the interests of the Chinese Government to purchase British Steel and then close down the industry? If that was not considered then there was a gross omission of responsibility by the previous Government.
Fifthly, the potential loss of virgin steel-making capacity in the UK, which has not been mentioned, would be very serious. With the closure of the blast furnaces at Port Talbot, the only virgin steel-making, or primary steel-making, is in Scunthorpe. Should that close, the UK would be the only G20 country that does not produce its own virgin steel. For the uninitiated, virgin steel, also known as basic oxygen steel-making, is primarily used in industries that require high-quality steel for various applications, including construction, manufacturing, defence and transportation. It is produced from iron ore and coke, using a blast furnace process, which takes us back to the importance of that. Being the only G20 country that does not produce its own virgin steel raises immense questions around national security and whether virgin steel production should be retained as a sovereign capability. In my opinion, it should be.
It is therefore right that the Government explore every avenue to ensure that the social, economic, employment and national security implications of the present situation are addressed. Not to do so would be a dereliction of duty to the country as a whole. The Government deserve our support in what is a necessary national endeavour.
Baroness Coffey (Con)
My Lords, it is fair to say that the steel industry has been in special measures for some time. The noble Lord has just referred to the acquisition that was made in 2020. Indeed, the last Government made sure that Scunthorpe did not close, and there was only one private investor prepared to invest in British Steel. I am conscious that the last Government nationalised another steel producer, Sheffield Forgemasters, again recognising how important that was to the needs of national security.
The strategy put out for consultation less than two months ago recognises that primary steel is still important, but the end is nigh for this blast furnace way of producing it. I am concerned that, on the one hand, we now seem to be in a temporary situation: let us recognise that the technology is not around the corner; it will be a long time before we are able to produce primary steel in a more environmentally friendly way. At the same time, it is concerning that Scunthorpe is close to its life end. I want to understand from the Minister whether she has asked the HSE for its view on the lifetime of these assets and the cost of repair. I am not suggesting that the Government should shy away from seeking to extend its life, but it is important to understand the amount of money being invested.
The other issue is the supply of coke. As has just been explained, that is the only way that steel can be produced with a blast furnace today. Yet, within a week of taking office, the Government decided to pull out of the legal case concerning the coke mine in Cumbria. I would like to understand from the Government whether they will revisit this, recognising that, at the moment, they are trying to source coal from around the world.
Thinking further about the issues with the Bill, the sunset clause has already been mentioned. With candour to the House, I can see these powers probably being used for at least 10 years. In taking charge of effectively nationalising British Steel, the Government have made a commercial decision. On Clause 7, I therefore want to clarify the following: while the regulations will not be available and will be done by negative resolution, is it the Minister’s expectation that there will be a 100% reimbursement to the owners of British Steel?
On thinking ahead, the steel strategy very clearly talks about the electric arc furnace. I am conscious that the Government had the deal in Port Talbot to make that transition, and I expect that they will want to make that transition in Scunthorpe in due course. However, there seems to be one part of the country where there is a site ready, with planning permission already granted and connections already sorted with the national grid and where there is already the political will locally, but it seems there is very clearly not the political will nationally. I am sorry: it feels, just because the voters of Teesside decided to vote for my noble friend Lord Houchen of High Leven, that, where there is an open deal to be done—it is my understanding from speaking to my noble friend that the owners of British Steel are keen to invest in Teesside—the Government have indicated that there is no way that they will help British Steel to do that. Thinking just about political back and forth is not—dare I say it—a grown-up way. We should be looking to the future, to have a comprehensive steel strategy, and to make sure that the political colour of who represents people locally does not matter or determine whether there will be good green electric arc furnaces producing steel in the future, which are necessary for the expansion of many industries. Living in Suffolk, not far away from the nuclear power station but also very close to where a significant number of wind farms are being or will be constructed, I am conscious that we need to try to increase the amount of production of those turbines onshore with green energy.
I am conscious that this Bill will sail through today and that the Act will be in place for a long time, but we need to make sure that, while steel is produced domestically, it covers all the sectors heading forward, as well as those that we are trying to rescue today.
Lord Kerr of Kinlochard (CB)
My Lords, it is difficult—in fact, almost impossible—to appear more gracious than the noble Lord, Lord Hunt of Wirral, but for once, I think I can. I thought it was extremely good of the Minister to get us a letter this morning explaining what we are up to here and including the draft of the Bill. I am grateful for that—and that is the only bit of my speech that she will like. I ask her four questions.
First, what is so special about steel? Why does she say in her letter that
“UK-made steel is critical to the country for jobs, for economic growth and our national security”
and that “domestic steel production” is “a crucial national capability”? Let us take aluminium: it is now more strategic, in a sense, given its conductivity and its use in computers as well as aeroplanes and vehicles. We used to have an aluminium industry in this country; we now have one tiny smelter left in Scotland. The largest user of electricity in Britain was the big smelter in Wales, and we had a smelter in Northumberland, close to the coal industry up there. We have closed them all and have one tiny little one left. We are happy to live off imported aluminium coming from countries where they have bauxite and where they have cheap electricity, such as Canada. We do not feel that we need, for strategic reasons, to have an aluminium industry. Why steel?
Secondly, how will we ensure that this Bill—which must pass, I accept—does not deter other potential inward investors? These powers are, as the noble Baroness, Lady Brinton, has said, extremely draconian. I was a director of a company developing an LNG plant in Russia. The techniques the Russians used to take control were much more subtle than this sledgehammer of a Bill. How will we ensure that there is not a deterrent effect from these draconian powers that we are giving the Secretary of State?
Thirdly, where is the wider public interest in all this? The Minister says in her letter that the Bill is
“a proportionate and necessary intervention … in the wider public interest”.
I understand the community interest in Scunthorpe. I understand that argument. I understand the wider public interest in the water industry and in trying to stop the pollution of our rivers and beaches and the diversion of resources into dividends for Australians, but I do not understand the wider public interest in distinguishing steel from, say, aluminium and maintaining a perpetual subsidy. That is what I think we will get: a perpetual subsidy for as long as we insist on having a domestic primary steel industry.
What is the end game? That is my last question to the Minister. How does she see it coming to an end? In 1982, as the noble Lord, Lord Hunt, recalled, the Commons met over the Falklands. I had to go to see the Prime Minister that morning to get her to agree to the seizure of the Argentine gold held in the Bank of England. I thought it was my duty to inform her that there was much more British capital investment in Argentina and we would undoubtedly see it seized in retaliation. The ratio was about five to one. She dismissed the point with contumely. She said, “Now is hardly the time to be thinking about details like that, is it?” I feel that we need to think about the end game. In her case, the end game was obvious: she was going to take back the Falklands, and she did. How are we going to handle this down the line? British companies have failed to make a go at commercial primary steel production in Britain. A Dutch company failed to make a go. Two successive Indian companies have failed to make a go. Here we have a Chinese company failing to make a go of it. Will the Secretary of State, when using his powers to nationalise—this clearly ends in nationalisation, but not today, I agree—do any better? Why should we expect him to do better? It seems to me that, so long as we go on believing that we have an absolute requirement to maintain a primary steel industry, we are condemned to perpetually supporting it financially. So, my last question to the Minister is: what is the end game?
Lord Tunnicliffe (Lab)
My Lords, I rise to totally support the Government and to congratulate them on their draft Bill. I think the actions of the Government have changed the tone of the debate. The role of government is being redefined. There is an acceptance that government is in the business of involvement in industry, where it is necessary. I suspect that, in coming to the conclusions, some sacred cows within government have been, if not slaughtered, certainly put under some new pressures.
There is much debate about jobs. If the initiative that is being taken was about jobs and jobs alone, I am afraid I would be less sure. I suspect that, as a jobs exercise, we would discover the cost per job saved to be rather high, and that rather high price would be a bad precedent. But I support the strategic case. It is impossible to imagine a period in our history since the Second World War where the world has been more unstable. I remember the Cuban crisis—I was a student at the time. It was dodgy, but it was clear, in a sense, that men—and it was men in those days—of a serious conscience would at the end of the day find a solution, and they did. That is not at all clear now. We have all sorts of unstable characters in the mix and we could be a victim of that instability.
When peace breaks out, demand for steel will escalate. The world is in a destructive state: in war zone after war zone there will be a requirement for reconstruction, infrastructure, growth and repair. The demand for steel will escalate in these circumstances. Defence spending will require much more specialist steels. Supply is uncertain, both in areas of specialism and overall. It is wholly credible that the world could run out of steel and, if steel fails, the results for this country would be catastrophic. I believe the Government should press on with this legislation, and I accept the point made by my noble friend Lord Reid that, in the longer term, it will almost certainly lead to nationalisation.
I would certainly encourage the Government to beware the concept of partnership. Partnership is an unusual phenomenon at the level of a steelworks. Both parties need the same objective. A private sector partner that has the size and capability to be a useful partner has got there through the good old-fashioned market objectives of maximising shareholder value. Rather sadly, in this day and age, that is short-term shareholder value. The state is entering a difficult process of maximising the public good. That is what it is there for and I strongly recommend that it does not try to do it in a confusing partnership situation.
Lord Howell of Guildford (Con)
My Lords, it takes only a few minutes to see why British Steel is in dreadful trouble and chaos, and why we are where we are today. First, its costs are very uncompetitive indeed, especially the cost of electric power, as my noble friend Lord Hunt pointed out in his excellent opening speech. We have some of the highest energy costs for industry in the entire world—so we are told. Secondly, there is this premature and badly planned rush to go green—in all industries, not just steel—with various levies and additional costs at every point, and the cutting out of gas and coke, as we have heard, and all other cheaper alternatives.
We have to ask why electricity costs are so crushingly high that they are having this effect on our economy and the whole of our steel industry, including the giant Scunthorpe plant. It is a big plant by our standards. We are fed stuff about costs being linked to the world gas price. We are big importers of gas nowadays, but this is the sort of marginal-cost economic argument that, frankly, could be swiftly corrected. There has been talk about blame, and that applies obviously to the previous Government as well as this Government.
But again, world gas prices are falling quite fast right now and there is plenty of gas available throughout the world, both through pipelines from Norway and elsewhere and from LNG galore—although Mr Trump may put a stop to that, because most of it comes from shale gas in the United States. So, no, the exceptionally high price does not come from that, really. It comes from the fact that we have drifted as a nation into the most extravagant and costly patterns of electricity generation possible. The planned massive increase in reliance on renewables will therefore mean massive reliance when the wind around the UK does not blow—about 3,000 hours a year: slightly under one-third—mainly on new gas-fired plants, which we are sensibly looking at now, and new nuclear, preferably small, attractive to the private sector and built on time, to ensure that we continue to get a first-world, reliable, affordable power supply at a vastly higher level than hitherto, which we need in a modern industrial state.
In a few years it may be that cheaper hydrogen will help on this front, but, for the moment, there is no possible alternative to new gas-fired stations, which will have to be combined with carbon capture and storage facilities—one is being built and many more are needed—and new nuclear, which I hope will be small and attractive to private investors, in line with new technology and not in the white-elephant class, and a brand new transmission grid as well, at an estimated cost of £600 billion.
So no wonder our small steel-making sector—which, remember, is 0.3% of world production, as against China’s 54%—was going to be in severe trouble, and that, as the noble Lord, Lord Kerr, has just reminded us, will continue. Why? Because, whether Scunthorpe is saved or not, we will continue to import Chinese steel. Most products and services in the world have a Chinese component because most of the world is computerised and most computers have Chinese components of some kind, whether through services or actual production. I hope that the President of the United States understands this but, frankly, I do not think he does. Instead, I fear that he will lead us not to MAGA—Make America Great Again—but to Make America Small Again. That would be a tragedy that we must seek ourselves to help America recover from.
The Lord Bishop of Lincoln
My Lords, I welcome the attention that the Government are paying to this matter in recognising the gravity of the situation we face. At a time of tariffs, threats to jobs and wider economic uncertainty, it is vital to safeguard the steel industry while transitioning towards a greener future. Production of steel is vital to the well-being and identity of Scunthorpe, a place I am proud to serve as bishop. That is before we consider its importance to our national infrastructure, recognising the need for connectivity through our railways in order to see one another, stimulate our economy and reduce regional disparities. Protecting these jobs and the vital work done through them required action that has not appeared to be forthcoming from private investment. I wish the Government well in their endeavours, which are not without cost.
We are learning something about the state of our economy a quarter of the way through this century. When we have some distance from the immediate challenge we face today, I urge this House to engage in a broader conversation about economic trends and our role in shaping them as well as responding to them. We heard from the Minister that a former brickworks will become a theme park that could create 28,000 jobs and attract 8.5 million visitors per year. I raise this not to pass judgment on that particular investment—who among us would be upset by the prospect of a theme park featuring both James Bond and Paddington Bear on one site?—but I note what it says about our economy, which year by year seems driven more and more by the delivery of goods and services, especially through entertainment. While our economy is changing before our eyes, the need for a secure manufacturing base is essential, all the more so given global pressures and the attendant disruption to our economic and political norms.
I conclude by turning away from global headwinds and back towards the communities I live among in Lincolnshire. Naturally, my prayers are with the many people who will feel uncertainty and anxiety about the present and the future. They will require a response that is pastoral as well as practical. In our churches, we will seek to respond in love and to share the hope we hold on to, doing so now as we approach the disconsolation of Good Friday and the joy of resurrection on Easter Day.
In response to this issue, I encourage the Government to remember the pastoral issues alongside the practical measures they are outlining today. The two are linked and getting this right will require the Government to engage with local partners on the ground, including the combined authority and the voluntary and community sector, to ensure that we are able to respond together to the impact of what is happening to a resilient but fragile community.
Baroness Drake (Lab)
My Lords, the Prime Minister is absolutely right to move quickly and ask Parliament to approve powers to protect and secure the UK steel industry. Urgent action today, which is what is before us, is absolutely in the interests of the nation and those communities where steel is such an important part of the local economy. They are feeling deep anxiety for their futures—we know it and can feel it.
Retaining our steel industry is integral to the UK’s economic growth—I have no hesitation on that point—and to our resilience as a nation at a time of growing geopolitical turbulence. The Government’s economic growth aspirations for our country mean that we need more steel, not less. We need a secure supply of steel for decades to come—for infrastructure, homes, energy, transport and for so many more reasons, particularly our country’s defence. We know we need to build a greater national defence capability as we adapt to our changing defence alliances and the emerging threats. Without that supply, we undermine our long-term economic security and lose our national resilience.
As my noble friend Lord Reid spelled out, if Scunthorpe ceases production, we will be the only member of the G7 without an ability to produce virgin steel—an unthinkable proposition. A lack or loss of capacity to produce our own supply of steel also poses a wider national security issue for our country. If we depend increasingly on China, India or other countries for our supply, we will be vulnerable to the actions of others who will seek to leverage and exploit that dependency. We must be in no doubt; recent world events have exposed such vulnerabilities all too clearly.
We need to expand and modernise our steel industry. Maintaining production in Scunthorpe through government intervention would save some 2,700 jobs at risk. It would also prevent the loss of many other jobs in the wider economy and supply chain. Failure to defend our steel industry would mean the loss of the high-value engineering that is delivering bespoke and customised products; the loss of high-value jobs; and the loss of knowledgeable, experienced and skilled employees—the very assets and people that are valuable for sustainable growth. We need more steel, not less, in our net-zero future—something the Prime Minister recognises. Steel can contribute to our decarbonisation, not only by reducing emissions from its production but through the use of steel in energy infrastructure and technologies that enable the transition to a net-zero economy.
Demand for steel produced using less carbon-intensive processes is increasing as a growing number of companies focus on reducing emissions in their supply chains—they are very focused on it. The UK could be well placed to lead on green steel-making, given that we have one of the largest scrap resources; given our progress on renewable energy; given the Government’s intention to introduce a carbon border adjustment mechanism in 2027; and given that they are now focused on an integrated power strategy for the nation as a whole, including all its economic elements.
A principal cause of high electricity prices for the steel industry was high gas prices, rather than the cost of net-zero policies. Nevertheless, the steel industry needs an affordable, sustainable and resilient energy supply to support productive investment. Will the Government’s steel strategy road map for the industry specifically address those energy supply needs, and will it strengthen the policy framework and strategy for building a net-zero steel sector?
Lord Moylan (Con)
My Lords, during the speech of my noble friend Lord Hunt of Wirral, I carefully watched the Labour Benches and, when he made some moderate criticisms of the Government, he faced what might be described as a certain degree of genteel barracking. What I did not see on the faces of those on the Labour Benches opposite was any suggestion or hint of apology—an apology, first of all, for rushing this legislation through Parliament with practically no scrutiny, when it, or something like it, must have been foreseeable in recent weeks. There is no apology at all for the policies chosen to implement net zero, which have included ramping up the price of electricity to an unprecedented level, and one that has no comparison in similar economies—as explained with such patience by my noble friend Lord Howell of Guildford. There has been no apology for the incompetence of their negotiations. An insight into their negotiating ability has already been given to us in relation to the Chagos Islands, and now we see something similar happening with the steel industry. There has been no apology for their recent resultant decision to block the domestic mining of coal fit for coking. This is no way to treat Parliament and no way to treat our industrial sector—and no way to treat the workers involved and their families.
I accept that there may be a case for extraordinary measures in the case of steel production, for the reasons set out—I thought quite well—by the noble Lord, Lord Tunnicliffe, in relation to defence and the needs of our industry more broadly. What I am not persuaded of is the assertion that steel is somehow exceptional. There may be a case for that but, as the noble Lord, Lord Kerr of Kinlochard, pointed out, the case needs to be made and, so far, the Government have done nothing but assert it. Even the speech just now from the noble Baroness, Lady Drake, did nothing but assert what is so special about steel. What about other industries under threat from high electricity prices? What about glass, chemicals, cars and concrete? Do the Government have a plan? Are these extraordinary measures that we are taking today part of a strategy, or are they simply the result of panic?
The Bill itself is remarkable. It is not in fact nationalisation, as the Minister was keen to point out. It is in some ways almost worse: it is the confiscation and control of a private company, for whatever reasons, with no safeguards and no sunset clause, as things currently appear. Who knows—one may be inserted in the Bill before it completes its passage.
I conclude with a question that illustrates the rush with which the Bill has been prepared. In Clause 3(4)(a), the Bill allows the Secretary of State to enter the premises “using force if necessary”. I am curious to know whose force he is going to use; he does not have a force at his own disposal. The Bill does not give him powers to direct police forces to enter the premises and creates no provision, that I can see, whereby he can apply to the court for something that would allow bailiffs to operate. I would simply like to know, as a practical matter, how the Secretary of State is going to exercise this power to use “force if necessary”, should the owners of the factory choose to close the doors in his face.
Lord West of Spithead (Lab)
My Lords, I have here a long list of the numerous occasions on which, over the past 10 years, I raised my concern over the emasculation of our steel industry and the fact that, if we did not do something very urgently, we might well lose the ability to produce, with a sovereign capability, virgin steel. That is very important for our national security broadly and in particular for our military power.
I can think of a number of specialist steels that are required, for example, in our deterrent submarines, our attack submarines and elsewhere, that we used to be the world expert at producing. Now, we have to go elsewhere to look for them in a world that is changing and becoming very dangerous. We cannot rely on getting them. Before the Second World War, we put an order in with Czechoslovakia for 40,000 tonnes of steel to be delivered here to help build ships. Of course, along came Hitler and he stopped all that happening, which put us in a very difficult position. We are in a world now where we do not know what will happen. Interestingly, Bismarck always referred to blood and iron—I think that changed to blood and steel—as the most important things for military power within your nation. Therefore, this really concerned me.
At the end of this long list of times I raised my concerns, I asked the previous Government whether they felt there was a strategic need to maintain a steel industry and, if not, how could we ensure our military and industrial resilience. The answer I got really made me feel that they did not think there was such a need, and they would not be able to ensure that resilience. I have to say that I was slightly worried about that.
I congratulate the Government on taking this issue seriously and taking action quickly. In the Cold War, when we worked on how we were going to kill Soviet submarines—we would have been jolly good at it, I hasten to add; I am glad we did not have a war, but we would have been good at it—the slang we used was “fastest with the mostest”. In other words, when you got a sniff of a submarine, you moved really quickly—the Government moved really quickly when they saw that something needed to be done—and put every effort, everything you had, into killing that submarine, which you needed to do. There are things that need to be done on this issue, and I am not sure that all of them are being done. I have a concern about the cost of energy, but all these things need to be looked at.
Noble Lords would be very sad if I did not mention ships, which, of course, are made of steel, and we have too few of them. There are plans that would involve using about 90,000 tonnes of steel—it is not very much, really, compared with some areas, but a lot of it is specialist steel—but those plans have not been turned into orders. We need to realise how important steel is for our maritime capability and ensure that those orders go in.
Finally, I say “flag hoist Bravo Zulu” to the Government, which means well done, because this is a good thing to do. I am glad we have come in to do this. It makes the nation realise that it is important, and the steel industry will realise that it is important, which it is. As my noble friend Lord Tunnicliffe said, there is going to be a huge demand for steel more broadly.
Lord Hannan of Kingsclere (Con)
My Lords, the question posed by the noble Lord, Lord Kerr of Kinlochard, and then repeated by my noble friend Lord Moylan hangs in the air of your Lordships’ Chamber, brooding and unanswered: what is the justification for having a permanent, open-ended commitment to subsidise domestic production? We have heard a perfectly reasonable case that we need lots of steel and security of supply. I agree with that, but the way to have security of supply, whether of steel or anything else, is to source from the widest possible variety of sources so that you are not subject to a localised shock or disruption, which might as easily happen in your own territory as anywhere else.
That is exactly where we are with steel. There is no foreign country that accounts for more than 15% of our total imports—not our total use, our total imports. It is an extremely comfortable position. There is a very widespread view, I think, outside this Chamber that we are somehow dependent on China or other unfriendly autocracies. We heard it from the noble Baroness, Lady Drake, a moment ago, but which countries actually are our chief suppliers? The first is Germany, the second is Spain, the third is the Netherlands and the fourth is Belgium. If, in some bizarre world, we were blockaded by the EU, we would still be able to import from Algeria, Turkey, Vietnam and South Korea before we got to China, which accounts for only 7% of our imports. We need to be realistic about the numbers.
If, for whatever reason, we decide that, despite that, we must have some kind of domestic production capacity at whatever cost then the easiest way to ensure that is to make our industries competitive by no longer imposing on them the most expensive energy costs in the developed world. We seem to have forgotten that actions have consequences. We pass resolutions and laws, we make decisions that make us feel warm and comfortable about net zero, such as not allowing the coking coal mine in Cumbria to be opened, and then we wonder at the consequences. If we want to have a domestic steel capacity, the way to do it is not to burden the producers and, indeed, our taxpayers with the costs of this policy and to be honest about the realism of deferring it.
I close by saying that we are again about to take a decision that will have consequences, which will be a repeat of a policy that has never, ever worked: the nationalisation of steel, which fails every time. It is like that scene of Homer Simpson constantly trying to grab his beer can from some electric wires and electrocuting himself each time and going back to it. In 1949 and in 1967, nationalisation led to disinvestment and maladministration, to political rather than economic decisions and, in the end, not only to the failure of the industry but to taxpayers being left on the hook, as it will this time, to the tune of £700,000 a day in this case.
“… the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire”.
Lord Razzall (LD)
My Lords, like many in your Lordships’ House, I lived through the history of the steel industry. In the 1970s and the 1980s, we had the debate over nationalisation, privatisation, nationalisation, privatisation, and in the past 10 years we have had a series of crises, culminating—until now, I suppose—with Port Talbot, where the last blast furnace was closed in 2024, leaving Scunthorpe as the UK’s remaining primary steel-making facility. Of course, Port Talbot has now been given planning permission for the construction of electric arc furnaces, but they will not come on stream until 2028.
I think it is accepted on all sides, with the possible exception of the noble Lord, Lord Kerr, and maybe the noble Lord, Lord Hannan, that steel is a nationally strategic sector that supports thousands of skilled jobs. As many noble Lords have said, if Scunthorpe is allowed to close, we will be the only G7 country without primary steel capacity. So where did it all go wrong? The noble Lord, Lord Moylan, called for the Government to apologise. Is he going to apologise for the previous Government’s behaviour with the steel industry in allowing it to lurch from near collapse to last minute rescue? Is he going to apologise for his Government scrapping the industrial strategy, or for approving the sale of Scunthorpe to what is probably a front for the Chinese Government?
Noble Lords would expect me to say that Brexit did not help. It reduced our capability to sell into Europe, which we had done with some success before Brexit. Of course, Trump has not helped with his 25% steel tariffs. I should say to the noble Lord, Lord Hannan, that the risk is not now of China selling only 7% to us, but that China will now use the opportunity given by Trump to dump steel on to the UK market.
What do we need? We need a real industrial strategy giving manufacturers certainty with clear plans for the steel industry. We probably need a complete overhaul of business rates, giving steel mills breathing room. We also of course need a new UK-EU customs union, reopening export markets for us with the EU and rebuilding our previously existing trade links.
In the meantime, any steps that the Government can take to keep Scunthorpe operational are obviously welcome to your Lordships—apart from one or two speakers—which will give time to implement the essential measures that I outlined above. From these Benches, we support this, but the big question remains, as one or two noble Lords have said. The Government earmarked £500 million to purchase new materials, which was turned down by the Chinese owners. However, if the Government have to nationalise the plant because no private sector interest has come forward, the funding costs will be huge. A new electric arc furnace costs £3 billion and Scunthorpe may need two—£6 billion will test the limit of the Chancellor’s fiscal rules.
Baroness Ramsey of Wall Heath (Lab)
My Lords, the Round Oak Steelworks was a steel production plant in Brierley Hill, West Midlands, close to where I grew up. Many of my classmates’ fathers worked there, meaning that I was often asked as a child, “Can we come round yours to play? My dad’s on nights?”—because my dad did not work nights. During the Industrial Revolution, the majority of ironmaking in the world was carried out within 20 miles of Round Oak. At its peak, as in Scunthorpe now, thousands of people were employed at the works. The steelworks were the first in the United Kingdom to be converted to natural gas, which was supplied from the North Sea. The works were nationalised in 1951, privatised in 1953 and nationalised again in 1967, although the private firm Tube Investments continued to manage part of the operations at the site. The works went through other ownership in later years. The steelworks finally closed in December 1982, making the remaining 1,300 workers redundant. Gone were not only the jobs making steel but all the ancillary work that went with it, supplying goods and services to Round Oak. That provided work to thousands more local people. With it, went the social network and community fabric of the sort that the noble Baroness, Lady Brinton, referred to in Corby and my noble friend Lord Reid so eloquently spoke about in Glasgow.
After the closure at Round Oak, unemployment rates locally reached 25%, which was shocking, even for the early 1980s. I am therefore pleased to support our Government’s efforts in this Bill to preserve steel production in Scunthorpe and the once-proud industry in our country and jobs, and to try to avoid the devastating and long-lasting effects of mass local job losses—and with it the sense of community and support that existed where I grew up, and no doubt exists in Scunthorpe, which has a similarly long history of steel-making.
Baroness Redfern (Con)
My Lords, I refer to my interests in the register. Scunthorpe, as we have heard from many speakers today, is a proud steel town that I have known for many years. Its people are fighting with all the strength and resilience that they have to keep those coke ovens burning. Some 2,700 jobs hang in the balance. With every family in the area, there is some connection or they know someone working there. There are also the hundreds of people employed in the supply chain, which will be thrown into chaos if Scunthorpe loses its steel capacity.
The big British Steel sign at Scunthorpe says, “Building stronger futures”, but there will be no future if the coking coal does not arrive in time to keep Anne and Victoria, the blast furnaces, going hot. If they are closed in an unplanned way, they can never be reopened. With this important decision today feels like everything is going down to the wire. Scunthorpe is proud, and rightly so, that it makes the highest-grade virgin steel available. Let us not forget that, as we have heard from many speakers today, if we let the blast furnaces go cold, we will be the only country in the G20 that does not produce primary steel, against a proud 160-year industrial legacy. All this is against the backdrop that the demand for steel is likely to go up, not down.
Our resilience and national security are threatened as steel becomes the subject of tariffs and trade conflicts. As we know, there is already a proposal on the table for a 25% tariff on steel exports to the US, which we must be very mindful of. The UK has much scrap steel, but we need the import of large quantities of iron pellets and coking coal—although we have the Cumbria mine, mentioned before, which is ready to develop and could supply coking coal in the interim. Transition will take a period of time, so it is vital we keep the blast furnaces burning in Scunthorpe while working towards a gradual transition to low-carbon arc furnaces.
Regrettably, the ongoing issue is for the workforce, who are working with high electric prices, and the industry has called for a cap on energy prices for heavy industry in order to match. We are charged twice as much as Germany and France are for their industrial electricity, which does not allow us to compete on a level playing field. This is unfair competition and has to be addressed.
Finally, the Government must do the right thing during the period of transition: bring the Scunthorpe site back into public ownership while protecting workers during this time, with a clear plan for the workforce. How can the UK not produce its own, high-quality steel? It must and it should.
Lord Falconer of Thoroton (Lab)
My Lords, it is an honour to follow the speech of the noble Baroness, Lady Redfern, which showed real understanding of the position. The facts are clear. Without intervention, Jingye will not commit to buying raw materials immediately. Those raw materials are required immediately to prevent the blast furnaces cooling down. If they cool down, permanent damage is done to the blast furnaces and they cannot be repaired. Then the plant is lost, and the consequence is that the United Kingdom ceases to have the ability to produce primary steel—that means steel not made with scrap metal but of the highest quality.
The Government are absolutely right to intervene and to try to solve this problem by negotiations. They have failed not because of their efforts, and they now intervene to save the steel plant at Scunthorpe and are right to do so. It is churlish of those opposite to say that they have left it too late. They have done all they can; now they move to save. While there are difficult questions about how you ensure steel production, there should be no real question that we should try to ensure that there is domestic steel production in this country.
I disagree with the noble Lords, Lord Kerr, Lord Moylan and Lord Hannan, that we should not have a domestic steel industry. I disagree as well with Kemi Badenoch, who was the Business Secretary in February 2023, who said that perhaps we should not have a domestic steel industry. That may explain why those opposite found it so difficult during the past few days to decide whether they supported this Bill—I am still at a loss to discover whether they do or not.
Steel is essential for the modern economy. It has no viable substitutes that can match its unique properties of strength, durability and versatility. It is critical, as an important element of almost all infrastructure and construction, and as an essential part of a broad range of manufacturing supply chains. As well as making the UK a clean energy superpower, steel is a fundamental component in activities such as the construction of wind turbines, manufacturing the next generation of electric or autonomous vehicles, and building the infrastructure needed to sustain our digital economy, particularly in advanced manufacturing, clean energy industries and defence. For example, it is estimated that offshore wind alone will require 25 million tonnes of steel. That represents a potential £21 billion market for UK steel.
The Government have committed to deliver 1.5 million homes over this Parliament. This, too, will accelerate the use of industrial construction and offer new demand for steel, providing opportunities to the industry. Then, of course, there is defence, as my noble friend Lord West of Spithead referred to. The Ministry of Defence is currently undertaking an independent strategic defence review, alongside the development of a defence industrial strategy. These will inform our understanding of future steel demand, which is bound to increase as defence expenditure increases.
The noble Lord, Lord Moylan, said that it was only assertion. The noble Lord, Lord Hannan, said we should rely on the foreign production of steel, which we should import. We should not. We should have our own domestic steel industry, and it may well be that it will have to be subsidised by the state to some extent. We should take that responsibility. As the noble Baroness, Lady Redfern, said in her impressive speech, we should save the town of Scunthorpe and make sure that there are jobs.
Baroness Jones of Moulsecoomb (GP)
My Lords, I would love to support the Government wholeheartedly on this Bill. From wind turbines to trains, steel will be needed for the transition to a green economy. However, this Bill contains huge powers for the Secretary of State and no sunset clauses. That is always going to be a source of problems.
I am worried that this is the same old story of taxpayer money paying for private profits and private sector failure. We have seen it with the water industry, where bill payers are taking the hit for billions of pounds in share dividend payments, and a third of my own water bill goes on paying debt. We saw it with the steel mill in Port Talbot, which was a missed opportunity that still grieves many people in Wales. We saw it with the collapse of Carillion, the private sector company that existed on public sector contracts. It paid out higher and higher dividends for 16 years. The owners fleeced it and left the pension fund half a billion pounds short—and, of course, cost the taxpayer £148 million.
Instead of the Government doing the obvious thing and taking over these failing companies, they should be bringing them into public ownership so that we can run them better and bring down bills. We keep throwing bill payers’ money at them and expecting a different result. No Government should allow key infrastructure to fall into foreign private investors’ hands in the first place; the minute it is not profitable, they pull out, with no recourse.
I have a few questions for the Minister. What is the Government’s model for ownership? If we put £500 million into keeping this plant going, what are we getting back? Are we getting shares in the company? Are we getting worker representatives put on to the board? Are we getting guarantees that the steel plant will be handed over to the public sector?
The Minister said in her opening remarks that all options are under review, yet one constantly gets the feeling that, for this Labour Government, nationalisation is something that spooks them quite badly. I would like to know if nationalisation is one of the options under review.
What is the timetable for shifting the Scunthorpe blast furnaces from coal to green hydrogen? We have an increasing number of days when our wind farms and solar panels are producing more renewable energy than the national grid needs. Instead of closing things down on those days—when renewables cost us nothing—why do we not use that free energy to produce hydrogen?
We must not leave the future of steel communities and steel-workers to the whims of multinational companies or bullies in the White House. These communities deserve better. Green steel in public ownership is the way to ensure that these communities not only survive but thrive into the future.
Lord Glasman (Lab)
My Lords, it is with great joy that I commend my Government for redeeming their promise to Scunthorpe. It is a place that I know well—I do a lot of work in Grimsby—and, without this, it would be another town left to die.
I am saddened but not surprised by the unrepentant Thatcherism expressed by the noble Lord, Lord Hunt. The whole escapade of privatisation subordinated our national security and national assets to profiteers, and it has ended up under Chinese ownership—that of a hostile power. We have to assert our fundamental national interest in preserving the steel industry.
I apologise to the House for not speaking more here. I think that I was the only Member of this House to be invited to the inauguration, so I will share one story. I was sitting in the White House, and President Trump walked past with his entourage. He is entirely one-faced, by the way; he is always the same. He was saying that his favourite word in the English language was “tariff”—I remember that. It was a discussion about putting industrialisation as the prime goal of US policy—the producers rather than the consumers. I was sitting with a group of his advisers, and I said, “What’s your favourite word?” One of them said, “The United States of America”. I said, “That’s four words—I want one word”. He said, “America”, and another said, “Family”. They asked me my favourite word, and I said, “Nationalisation”. I said that I sought the opposite to them—that I sought assurances that the steel industry would never, ever, be put back into the hands of profiteers and hostile powers.
I believe that this is a hugely important moment for us, in that we can now develop what has been squandered over the past 50 years: our industrial strength and our industrial power. It is absolutely vital for our defence and our defence industry. In response to my noble and learned friend Lord Falconer, I say that it is not just about the digital economy and the other things he mentioned; we have to produce weapons now.
This morning, I received many phone calls from Ukraine asking whether it is true that we are engaged in an industrial strategy. But we are living, as the Prime Minister said, in a new era, and I urge the House to pay attention to the Prime Minister’s words. It is an era based on national security and not merely the whims of the market; a new era that is entirely opposite to the era that other noble Lords pioneered, and which is not based on finance in the City but on the faraway towns and industry. I absolutely respected what the noble Baroness, Lady Redfern, said in her speech. This era is going to be based on weapons production, not TV production. It is a very different world.
Easter is coming and it is Passover for me tonight, so I may have to leave a little early, but I certainly believe in the resurrection, and it should be in our thoughts: the resurrection of Scunthorpe. I believe it is said that the last will be first. If we can have an absolutely modern, productive steel power in Scunthorpe, it will be one of the most wonderful miracles that we could witness. Port Talbot was absolutely necessary, but we have to integrate steel with titanium and graphite. Those are the modern materials of industrial top-end weapons production. I entirely agreed with the noble Baroness, Lady Jones, in what she has just said—if Scunthorpe could become the European leader in steel production, I believe that we would have a proper Labour Government; a Labour Government who actually put labour and workers first, and our national security and defence industry first. If, today, we can only hear that beautiful word “nationalisation”, it would be a great day and a day to celebrate.
Lord Bailey of Paddington (Con)
My Lords, I associate myself with the comments about how wonderful it is that the staff have been able to open Parliament on a Saturday to facilitate this very important debate.
Of course the Government had to act quickly—speed is of the essence here—but it remains to be seen whether that speed will be of any use. The Government will have to focus on the many things going on now and will have to make very quick decisions. The Bill would have been far better if there had been a longer debate because, as has been said many times in your Lordships’ House, some very draconian powers are about to be handed out. How they are to be administered will send a message around the world about who we are as a place to do business.
I will concentrate mainly on the effects on the community. The noble Baronesses, Lady Ramsey, Lady Brinton and Lady Redfern, very clearly highlighted the reverberations that this will have for communities in Scunthorpe, where the blast furnaces are. We Londoners have very few relationships with steel, but we do have some. Rainham Steel, a business out in Essex, is very close to London; it has been a viable employer for years. It is exactly the kind of business that pushes our economy and provides employment, and it will suffer if this situation is not resolved correctly.
Having said that, I have three questions for the Minister. Again, as a Londoner, steel is not my specialisation, but communities are. I come from a community that struggles hugely with high levels of unemployment. The idea that an entire community’s employment will be whipped away makes this a social question for our country as much as a financial or strategic development one. How can British Steel survive under the current burdensome regulations and unrealistic net-zero targets, especially those around importing materials from abroad rather than using coke from here? I want to be clear: I am not saying that we should not have the net-zero targets, but we have to ask whether they are the correct ones. Are they driving our industries into the ground, making it uncompetitive to run a business in this country, or are they cleaning our environment? We need to make sure we do not do one at the expense of the other.
Has a financial impact assessment been made of the cost of this Bill? It may not lead to nationalisation, but the effect for the British taxpayer will be the same: a huge, growing and ongoing bill. If that has not been considered by an assessment, it really needs to be done urgently. Unfortunately, that cost will reverberate with other communities in this country, and we will be unable to afford the support that they need because we are spending money to subsidise this industry.
How long will this arrangement last? There is no sunset clause but there also seems to be no idea of how long it will go on. I repeat my earlier question: if you have a growing bill, and no way to end it, what happens if the British taxpayer is on the hook for it again and again? We need to get a handle on that.
I wish this Government every success in resolving the situation speedily, but history would suggest that Governments are not good at procurement or at running businesses efficiently. Ultimately, if this business cannot stand on its own two feet, what will we do then? It is very important that we keep the strategic ability to deliver our own steel. What will the Government do to make it work as a business? We have heard lots of talk in the Chamber about the large amount of steel that will be needed in the future but, if that is the case, surely the business is viable today. What work will the Government do to make sure that those orders come in and that this business works, to protect this community and our strategic goings-on around the production of warships in particular?
Can the Minister answer my questions in a direct and simple way that people from my community, as well as other communities across the country, can understand? There has been an awful lot of finger-pointing in the Chamber today, and the people of Scunthorpe, whose jobs, livelihoods and families are at risk, do not want to see that; they want to see a resolution.
Lord Sikka (Lab)
My Lords, the Minister said that the Government seek to take control of blast furnaces at Scunthorpe without taking control of British Steel. They are trying to avoid the words “nationalisation” and “public ownership”, but that is really where we are heading. British Steel’s most recent accounts show a falling turnover, increasing losses and a negative net worth. It is bankrupt and there should be very little compensation, if any.
Steel is essential for civil and defence industries. In a world of trade wars, we need to be self-sufficient. We need permanent public ownership of the steel industry. I do not support temporary nationalisation, under which the public purse revives the industry and the Government then hand it back to the private sector for more subsidies.
One of the reasons for the current crisis is that privatisation of essential industries has failed. The 1988 privatisation of steel by the Conservative Government was completely divorced from any industrial strategy, need for jobs and self-reliance. There are those who object to nationalisation but, at the same time, have been content for Governments to hand vast subsidies to the steel industry. This free money enables companies to acquire assets and income streams that enrich their shareholders, and they keep coming back for more.
Steel-making is in crisis because of the failure of other privatisations. Steel-making relies on extensive use of energy but our energy costs are absolutely extortionate. British businesses pay the highest price in the developed world for industrial electricity. It is twice the EU average, 2.6 times the Korean cost, four times the US cost and even more compared to China. In the last four years, the UK’s 20 biggest energy companies have made operating profits of £514 billion and, in doing so, have destroyed steel and other industries.
With the use of electric arc furnaces, UK steel would be even more expensive and uncompetitive. Some 34,000 gallons of water are used to produce one tonne of steel and water costs are extortionate too. No steel nationalisation or industrial strategy can succeed without control of the key costs. Can the Minister explain how the Government will control profiteering associated with energy and water industries?
Yesterday, the Prime Minister said that he will
“protect British jobs and British workers”
and added:
“Jobs. Investment. Growth. Our economic and national security are all on the line”.
Against this background, people in Scotland and Wales really deserve a straight answer. Grangemouth, Scotland’s only refinery, is set to close with the loss of thousands of jobs, but the Government have not sought to bring it into public ownership. Why? The Government did not prevent the closure of traditional steel-making at Port Talbot in Wales. Tata could have accompanied its electric arc furnace with another plant making direct reduced iron, as suggested by trade unions. Again, the Government did not support that strategy. Why not? The inevitable conclusion is that a London-based Government protect jobs in England but do not really care about job losses and decline in Scotland and Wales. Can the Minister please explain why the Government are willing to save the Scunthorpe plant but not Grangemouth or Port Talbot?
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I agree with the premise that the UK needs a flourishing domestic virgin steel industry to enable our industrial regeneration goals to be met, but I also express my deep personal regret that virgin steel is no longer made in Wales. My father started his career in Cardiff Steelworks at a time when Welsh steel, particularly that from Llanwern, was known to be the best in the world.
I also echo the deep concern aired throughout this House about the way this has been handled and the potential enormous cost that may fall on the taxpayer. I hope that the Government will agree to a sunset clause, at least to enable them to take stock at some point in the future. For now, my thoughts go out to the steel-workers and their families during an undoubtedly stressful and anxious period. Now may not be the time for political posturing or, indeed, engaging in a baseless blame game, but the facts speak clearly for themselves.
There are a number of issues that have directly caused the precarious situation we now face. For the last few years, it has become increasingly apparent that Chinese companies have developed an insatiable agenda to close down all their competition in the steel market. The hostile actions of the parent company, coupled with some reckless decisions taken by this Government, have engineered this predicament. The Government’s failure to tackle crippling energy prices, instead deciding to hike national insurance, have caused further, and, I might add, unnecessary pressures on our already struggling industry.
If noble Lords require any further evidence of this Government’s short-sightedness, they just need to remember that it was the current Energy Secretary, Ed Miliband, who decided last September to block the planning application from West Cumbria Mining Ltd to mine the coking coal necessary to make virgin steel. Now it must be imported, at greater financial and environmental cost. Bluntly, this made no sense and caused some of our plants to become even less competitive. The Labour Government’s poor decision-making has helped engineer the steel crisis. This begs the pertinent question: the Government must have seen the writing on the wall, so why did it take them so long to act?
When faced with a crisis, it is imperative that we act swiftly and decisively, just as the last Conservative Government did with Port Talbot steelworks. In 2023, the then Government were told by Tata Steel that the plant needed to undergo operational changes or face closure, meaning 10,000 jobs would be lost. The company was facing a £1.5 million loss every single day—a huge financial shortfall that no company, and indeed no Government, could sustain. Importantly, it was known that the two blast furnaces there were nearing the end of their useful lives. The Conservative Government acted quickly, leaving no stone unturned in trying to save as many jobs as possible. The agreed plan involved a £500 million government grant support package to build an electric arc furnace, plus millions more to help retrain those who would lose their jobs.
The electric arc furnace currently being built on the site will make us less dependent on imports, because it will recycle the UK’s huge tonnage of domestic scrap steel. Of course, it is my hope that, one day, Port Talbot will have a dedicated power supply provided by an on-site advanced modular nuclear reactor, such as those that data centres are helping to finance in order to secure their own energy demands. Nationalisation should be a last resort; it is always the taxpayer who foots the bill. I am confident that everyone in this House will agree with me that steel is of strategic national importance and that we cannot allow the Scunthorpe plant to fail.
Lord Hendy (Lab)
My Lords, the Government are to be congratulated on acting decisively and promptly. Like, I think, the noble Lord, Lord Hunt of Wirral, I came here thinking that we were going to be debating the nationalisation of the steel industry; I confess that I am disappointed to find out that we are not. However, the Bill that the Government have put forward buys space and time for them to put forward a real plan for the saving of the steel industry. I hope that the ultimate decision will be to nationalise the steel industry. It is a national asset, as many speakers have described today—and by “national asset” I do not just mean the blast furnaces, the presses, the cranes and the buildings: the workforce also form a national asset and they deserve to be protected.
The Bill that the Government have put forward demonstrates the complete failure of the privatisation of this industry. I hope the Government will conclude that nationalisation is the answer and I hope, too, that they will consider that remedy for Grangemouth, the water industry and, of course, the energy industry, whose profiteering has done so much damage to the steel industry.
Viscount Hanworth (Lab)
My Lords, why have we been recalled with such urgency to debate the future of British Steel? The immediate answer is that the blast furnaces at Scunthorpe require to be fed with iron ore and coking coal to keep their fires alight. If the fires were to be extinguished, the contents of the furnaces would solidify and we should lose our capacity for creating virgin steel from basic ingredients. We should lose a facility on which we have relied for more than 300 years to sustain our industrial productivity. Our steel-making capacity would become entirely dependent on electric arc furnaces, which would be used for the reprocessing of scrap metals.
The Chinese owners of British Steel, Jingye Group, have been impervious to the blandishments of the Government, who offered to pay for the ingredients that would feed the blast furnaces. From Jingye’s point of view, it is simply uneconomic to produce steel in Britain.
The problems of our steel industry were developing throughout the Conservatives’ period in office, during which time the industry was in foreign ownership and financial crisis. The British Steel Corporation was privatised in 1988 by the Thatcher Government, and it merged with the Dutch National Steel Company in 1999 to form the Corus Group. This was taken over in 2007 by the Indian Tata Steel Corporation. In 2016, Tata divested itself of its UK assets, which were acquired by Greybull Capital for the sum of £1. It was sold to the Chinese Jingye corporation in 2020.
The writing had been on the wall long before the acquisition by Tata Steel. However, during the years of the Conservative Administration, nothing was done to protect this strategic asset. The question that concerns us today is whether it is appropriate to take drastic and costly action to protect our native steel industry and whether it is an industry that is worth saving. I believe that the preservation of our native steel-making capacity is a national priority. Our long-term prosperity and our national security depend on our being self-reliant. If we do not create a viable industry on the basis of the existing British Steel Corporation, we shall be hard put to re-establish a steel industry.
An immediate issue is whether the two blast furnaces at Scunthorpe need to be kept alive, and the answer must be in the affirmative. They represent the only means by which we can produce the high-grade steels that are required by our automotive and aviation industries. The preservation of the blast furnaces would be the first step in a protracted process of restructuring our steel industry, which would be beset by numerous difficulties. Blast furnaces require iron ore and coking coal, which come from foreign sources. Sweden is no longer the principal source of iron ore: it comes mainly from Russia, Brazil and Australia. Coking coal exports are dominated by Australia, the US, Canada, Russia and Mongolia, which together account for 90% of the world’s exports. I must assert, by the way, that Cumbrian coal, which has a high sulphur content, is inappropriate for producing coking coal.
Ultimately, blast furnaces, which depend on vulnerable supplies of materials and produce large quantities of carbon dioxide, must be replaced by other technologies that are yet to be fully developed. These might depend on hydrogen and electrochemical processes but, in the meanwhile, some major reorientations will be required if we are to fully exploit the technology of electric arc furnaces. At present, Britain exports 80% of its scrap steel, making it the world’s second-largest exporter. We are thereby stripping ourselves of a vital resource at a time of rising domestic demand.
The scrap steel ought to be consigned to domestic arc furnaces. However, as we have heard time and again, Britain has some of the world’s costliest industrial electricity. The cost is three or four times greater than in the United States and significantly greater than in any of our European neighbours. The costs of our electricity are due in large measure to the costs of our network, which is increasingly reliant on renewable sources of energy that are intermittent. Such costs will not be alleviated unless we resolve to generate a substantial proportion of our electricity from nuclear power.
The preservation of our steel-producing capacity will depend on a long-term strategic plan, with social direction from the Government, as well as ample funds provided by the Government. This surely implies the nationalisation of the industry. In the absence of such a strategy, we will become increasingly dependent on and subservient to other nations, which will be both the owners of our industrial infrastructure and the providers of our strategic materials.
Lord Young of Norwood Green (Lab)
My Lords, at this point in this vital debate almost everything that can be said has been said, so I will certainly not repeat everything. I will just observe that there used to be steel-making in London, of course. Not so long ago, the last historic bell-making foundry closed, and you can still see the names of steel-producing companies as you look at bridges and various other means of transport production.
The transition to green production will be vital and will require the production of coking coal. It is a savage irony that the current owners are reported to have visited Scunthorpe and asked its workers whether they want to transfer to China to produce coal there. I thought that that was an interesting proposal, but not one that we would want to support.
Will the Government reconsider the decision not to support the Cumbrian mine, which can produce high-quality coking coal? I might have a disagreement on that with the previous speaker. If that mine will not be the source of the coking coal that will be required to keep the Scunthorpe mine open during the transition period, what will be?
Baroness Laing of Elderslie (Con)
My Lords, I had not intended to speak in this short debate. However, I feel compelled to do so as a member of the Constitution Committee, because the Government have not answered all of the questions that the committee, in its report, Fast-track Legislation: Constitutional Implications and Safeguards, set out as ones that ought to be answered when the House is being asked to approve fast-track legislation and the normal processes of scrutiny are being truncated.
In the Explanatory Notes, which in these circumstances become more important than usual, there are 14 questions in all—it is all right; I am going to ask just two of them—set out very specifically. Two of them have not been addressed, and I hope that the Minister will be able to address these specific questions in summing up the debate.
The first question is:
“Does the Bill include a sunset clause … If not, why does the Government judge that their inclusion is not appropriate?”
The answer given in the Explanatory Notes is that the Bill does not include a sunset clause—that is obvious in the Bill—but there is no explanation as to why there is no sunset clause. The second question that has been omitted is:
“Are mechanisms for effective post-legislative scrutiny and review in place? If not, why does the Government judge that their inclusion is not appropriate?”
Again, the answer given is that the Government decided that such scrutiny and review were not needed, but there is no explanation as to why. It would assist the House if those questions could be answered before we are asked to make decisions.
Lord Fox (LD)
My Lords, it has been an unanticipated pleasure to have a debate with noble Lords today. Many of us following the British Steel saga expected to find ourselves debating the issues in your Lordships’ House at some point, but I do not think we expected to debate them today. I will not comment on how on earth this scramble happened, but, like the Chief Whip and others, I thank the House authorities, Black Rod and her team, and all those across the House who made this debate possible.
The noble Lord, Lord Hunt of Wirral, with his characteristic hubris, made remarkable accusations—remarkable because the decline of the steel industry has been largely under the auspices of his party. Years of neglect and drift have happened on its watch and that has led to the crisis that we now see today. I do not think that the Government should take any lessons from that party, and I do not think that they will.
Having seen the Bill for the first time just a few hours ago—I thank the Minister for her characteristically clear explanation and her letter—I think it is a Bill that gives the Government of the day very strong powers. It is a shame that we should be rushing it through, but we on these Benches understand why the reason for haste is there. Time is now of the essence. The future of the UK’s last blast furnaces at Scunthorpe steelworks hangs in the balance. Closure would bring British virgin steel production to an end, as noble Lords have set out.
As we have heard and read, Scunthorpe’s Chinese owner, Jingye, has turned down offers of help and declared the Lincolnshire plant unviable. President Trump’s tariffs seem to have been the final straw that exposed the remaining elements of the British steel industry to a harsh global reality. Perhaps those in the past who have spoken volubly and favourably on the merits of Trump II would now like to reflect on a global trading environment with higher tariffs than in living memory, and that is after the 90-day suspension.
Owning and running a steel business should be a long-term enterprise; it should be measured in decades, not months. Scunthorpe’s owners since 1988 include the British-Dutch Corus partnership, the Indian Tata Steel conglomerate, then Greybull Capital and finally Jingye. For the latter, Scunthorpe has been a bit-part player in a global multinational with strong Chinese Government links, and Jingye seems happy to walk away from the Government’s £500 million offer to keep Scunthorpe open. But steel is not a bit-part player in our industrial economy; if Britain is to have a green and long-term industrial strategy, and if it is to have a defence industrial strategy, it needs steel.
Finally, after years of successive Governments producing piecemeal temporary fixes, we reach the crux. It is now or never, and nationalisation seems to be the only route to some sort of salvation. Steel has been here before, as my noble friend pointed out, but, of late, nationalisation has been anathema. Perhaps we should not be so squeamish. As my noble friend pointed out, the French, Irish, Danish and Norwegian Governments own our wind farms; the Dutch state runs our trains; and the Chinese Government, through PetroChina, own part of Grangemouth, the UK’s oldest oil refinery. No matter what the Minister had to say, this Bill looks like a paving Bill for nationalisation.
Given the sweeping powers within the Bill, will the Minister tell your Lordships’ House what additional powers the Government think they need to grant themselves full ownership of this industry? Do they actually need any more powers than are currently within the Bill? Given that this is one part of the UK’s remaining steel industry, how does Port Talbot fit into the picture?
Clause 7 speaks to compensation. There is government-backed finance in this. Can the Minister assure us that the measures taken today will not inadvertently increase the value of this business and therefore increase the necessary compensation that may be forthcoming from this Government? Finally, can the Minister tell your Lordships’ House what will happen to the other Jingye steel businesses in the United Kingdom?
We are still waiting for the Government’s so-called modern industrial strategy, but now, with steel in the balance and automotive on the edge, it is time for the Government to get it out there and start working with industry to deliver it. Within that strategy, the future of our steel industry must have a place. We are clear that steel should be classified as a national strategic asset and be backed by a comprehensive plan to ensure that more British steel is used in vital infrastructure projects, from defence to renewable energy. I say to the noble Lord, Lord Kerr, that just because we abandoned aluminium, why should we abandon steel?
Within the industrial and defence strategies, the Government need to determine what sort of steel we need, and need to produce locally, in order to deliver on our key strategic and security objectives. That requires a real analysis of whether electric arc manufacture can produce the sorts of steel that we need. Can the Minister assure your Lordships’ House that this analysis is a priority and will be published before any irrevocable steps are taken on the blast furnace?
That begs the question, of course, on environmental impact and energy. Whatever the future looks like, it must still be executed within a long-term carbon strategy. We do not support going back on our environmental objectives, but I suggest that the route to achieving them might be different from the one envisaged a while ago.
Secondly, it is clear that certain key industries are massively hampered by energy costs. It is a big issue that this Government handed to that Government: the price for energy has not materially increased since the Conservative Party relinquished control of government. That is on their watch, not this Government’s, but it is now on this Government’s watch to do something about it, and that is what we want to see happen.
As has been pointed out, we also need to understand how the UK will handle the Chinese dumping of steel on our industry. With the US market gone, how will the Government create a level competitive playing field? May I ask that the Trade Remedies Authority accelerate its review of Chinese markets?
Turning to another international issue, at this stage, the Government are not taking the enterprise into full public ownership, so presumably they will transfer money from a UK taxpayer to the plant ownership. Parts of Clause 2 give the necessary powers. This Government seek to uphold the international rule of law, and there are commitments on subsidies arising from the UK’s continued membership of the World Trade Organization, primarily set out in the agreement on subsidies and countervailing measures. Further commitments are contained in the General Agreement on Tariffs and Trade, in trade-related investment measures and the general agreement on trade and services. These are not new commitments, as your Lordships know; the UK was subject to WTO rules when it was a member state of the EU.
Furthermore, the UK-EU Trade and Cooperation Agreement contains a chapter on subsidies aimed at ensuring that subsidies do not have a detrimental effect on trade and investment between the UK and the EU. The requirements of the TCA are incorporated into the UK’s Subsidy Control Act, which has been in force since 4 January 2023. It is important for the Minister to set out how, under its proposed activity, it will meet these international obligations. I want the Government to succeed, but they should succeed within the rule of international law. More especially, at a time when we desperately need a closer trading relationship with the European Union, as set out by my noble friend, we want to know how this Bill and these actions will affect our relationship via the TCA obligations that we have made.
I had the pleasure of working on the Subsidy Control Bill, and it seems to be the core of this issue, yet somehow absent from any discussion of this Bill. Given the complexity of the Act, I do not propose to go into details, but Sections 19 and 20 are the key specific areas. The Act says that a
“subsidy … given during the preparation by the enterprise of a restructuring plan”
can be legal as long as it
“contributes to an objective of public interest”.
That is the point that the noble Lord, Lord Kerr, made, and it is what it seeks to achieve. However, further on is the condition that the public authority giving the subsidy needs to be
“satisfied that the restructuring plan … is credible … is based on realistic assumptions, and … is prepared with a view to ensuring the return to long-term viability of the enterprise within a reasonable time period”.
Do we have such a plan—or when will we get one? Perhaps the Minister can give a brief answer on the subsidy issue and set out in writing the detail of how we will meet our legal obligations to support the Scunthorpe plan.
A great deal of concern has been expressed about the open-ended nature of the Bill and the strength of the measures contained therein. We believe that there needs to be some end point in the Bill, and we are happy to discuss with His Majesty’s Government ways of alleviating our concerns on this—but these are genuine concerns felt right across this Chamber, and possibly at the other end.
This is a very difficult time for the people of Scunthorpe and everybody connected with this important plant. I close by reiterating comments we have heard right across the House: our thoughts go with this community—to the people who must be sick with worry about what is going to happen in their town. We on these Benches will do our utmost to support and maintain this industry so that it can move forward and they can have a future.
Lord Davies of Gower (Con)
My Lords, I thank all noble Lords who have attended to contribute to this important debate, and I repeat thanks to all the House authorities who have allowed this to happen. The fact that Members of both Houses have been called in for an emergency Sitting reflects, in part, the way that this Government have managed this issue. Reports released earlier this week clearly show that serious questions over the delivery of coking coal were left outstanding following talks with the CEOs of Jingye and British Steel on Wednesday, and it was clear that they did not yield a deal. Indeed, British Steel released a statement on 27 March in which it said that
“the blast furnaces and steelmaking operations”
at Scunthorpe
“are no longer financially sustainable”.
Given this, I ask the Minister why the Government appear to have had no plan in place to manage these developments, given that they should have been able to anticipate the need to intervene to keep the furnaces in operation.
The actions taken by the Government to secure the raw materials needed to keep the furnaces in operation are, of course, necessary, and this is the right course of action in the short term, but the Bill demonstrates a complete and utter failure to act. This should never have been necessary in the first place. The mess we are in today is entirely of this Government’s making. If they had acted sooner and negotiated better, this entire debacle could have been avoided.
The Secretary of State in the other place said at the beginning of the Second Reading debate that the previous Government did not have a deal in place with British Steel. However, on 30 April last year, British Steel was granted planning permission to build an electric arc furnace at its Scunthorpe plant and a further furnace at Teesside. This represented £1.25 billion of investment in modernising steel production. The previous Government were taking action to safeguard and improve Britain’s steel industry.
As my noble friend Lady Laing said, the Government believe that specific measures for post-legislative scrutiny and review are not needed for the Bill. I am afraid that this response is wholly inadequate. It cannot possibly be true that the Government believe it unnecessary to include post-legislative scrutiny for a Bill passed in one day and of which noble Lords had had sight for only two hours before our debate commenced. We understand the urgency required today, but that cannot come to the detriment of proper and effective scrutiny of these wide-ranging powers after the Bill is passed.
To that end, my right honourable friend in the other place, the shadow Secretary of State, tabled amendments to permit the Secretary of State to be able to use the powers under Clause 2 for the period of only one year and to insert a sunset clause which would see the Act expire either after one year or six months after the issuing of a direction under Clause 2. These amendments are crucial to ensure that the provisions in the Bill are not open-ended powers. I urge the Minister to consider placing reasonable time limits on the Bill.
The experience of the workers and communities affected by the changes at Port Talbot demonstrates the importance of these decisions and how they are taken for the thousands of people who are directly involved with the production of steel. At this juncture, I take issue with the noble Baroness, Lady Brinton, who said that the Conservatives failed to support Port Talbot. In fact, it was the Conservative Government who agreed the half a billion pound investment in the electric arc furnace at Port Talbot, and millions of pounds more to support the workers and families. This was adopted by the current Government. I remind the noble Baroness that I represented the steel-workers and the community of Port Talbot in the National Assembly for Wales for a number of years. Indeed, many of them were my constituents when I was a Member of Parliament.
Can the Minister outline how the Government are engaging with the affected communities in both areas to provide support? Furthermore, can she confirm that she and her Government understand the importance of clarity and openness with communities as to their next steps in the medium and long term? Can she share those today?
To that end, it is important to press the Minister on how long the Government intend to continue this intervention in the operation of the steelworks. Can she also outline the discussions that the Government are having with commercial providers in their exploration of solutions that do not sign the taxpayer up to a sustained liability? Furthermore, what assessments have the Government made of the relative benefits and limitations of commercial solutions versus any proposed nationalisation?
It is imperative to remember that the acquisition of an organisation also involves picking up the tab for how that organisation has been operating. A full assessment of this needs to be performed as a matter of urgency, if it has not already been completed. Can the Minister provide any information on the cost to maintain blast furnaces beyond the immediate short term?
It is vital that decisions we make in this matter centre on supporting the national interest. It is important that the Government make choices pragmatically and responsibly. I therefore ask the Minister: what, if any, role has been played by trade unions in negotiations over the future of the Scunthorpe steelworks? Can the Minister assure the House that the Government’s next steps will be determined by the national interest and not by the unions?
The events of this week have affected the relationship between the UK and China, and I am aware that the Chinese Government actively attempted to transfer ownership of some raw materials to Jingye yesterday. Can the Minister provide any updates to the House on talks the Government have held with the Chinese Government on this issue? In addition, have these events led the Government to undertake a renewed assessment of the security and defence implications on our trading relations with China?
In closing, it is important to reiterate that the Government are proposing a very short-term, temporary measure that will not provide a stable solution to the problems we face. In the interests of the affected communities and, most importantly, the taxpayer, the Government must take their next steps sensibly, and we need to make sure that we do not see another panicked response like the one this weekend. To that end, can the Minister set out the next steps the Government are taking to support the operations of the Scunthorpe steelworks in the medium and long term, beyond the intervention that is being discussed today?
Baroness Jones of Whitchurch (Lab)
My Lords, I thank all noble Lords not just for participating in this debate but for returning to this place in these exceptional circumstances. Before I respond to the comments that have been made, I reiterate the points made by the Prime Minister yesterday and by the Business Secretary in the other place today: the Government have always said from the outset of their negotiations with Jingye that we would keep every option on the table and act in the national interest to protect British jobs.
UK-forged steel built our railways, bridges and buildings. It is an integral part of our economic future, as it has been in our industrial past. That is why we need to pass this legislation today. I am therefore grateful to my noble friends Lord Reid, Lord Tunnicliffe, Lord West, Lady Drake, Lord Glasman and Lord Hanworth, and to my noble and learned friend Lord Falconer for reminding us how fundamental steel is to our infrastructure and our future economic growth plans. I also thank the noble Baroness, Lady Redfern, and my noble friend Lady Ramsey, who reminded us of the human cost of the potential closure of the Scunthorpe site. We reiterate our commitment to protecting jobs and communities impacted by that potential closure.
The noble Lords, Lord Hunt and Lord Moylan, complained about the urgency with which we have had to rush this legislation through. I think they do not appreciate the urgency of the situation we find ourselves in. Those blast furnaces were in danger of failing within days. That is why we are here today and why this action was so necessary. Like the noble Lord, Lord Fox, I am not inclined to take lessons from the party opposite, given their record over the previous 14 years. In her year and a half as the Business and Trade Secretary, Kemi Badenoch met UK steel companies on just three occasions. On the party opposite’s watch, UK steel production plummeted by 4 million metric tonnes between 2010 and 2023—an eye-watering fall of 42% in manufacturing. The UK went from the 17th largest steel producer in the world to the 26th largest over that period. The economic output of UK steel halved to £2.3 billion in that time. The noble Lord, Lord Hunt, heralded the use of coal and the opportunities that it would provide. I must remind him that it was his party that closed the coal mines and made us reliant on imported coal in the first place.
The noble Lord, Lord Moylan, asked if we would apologise. The Government will not apologise for acting in the national interest. As my right honourable friend said in the other place, this issue should have been resolved years ago. The situation we inherited across the board on assuming office is one in which most of our foundation industries found themselves in difficulty. Since 2010, UK crude steel production has almost halved. We know that rebuilding our steel industry after years of neglect will be a challenge, but it is one that this Government have grasped and it is why today, where others have shied, we have stepped up to take action.
I move on to some of the points that have been made. The noble Baroness, Lady Brinton, asked about the legal advice from the Attorney-General. It is the Government’s policy not to discuss advice provided to the Government.
The noble Baroness, Lady Coffey, asked about Teesside. Ultimately, British Steel has been responsible for commercial decisions regarding its location strategy. The Government were right to prioritise protecting as many jobs as possible during those negotiations, but it is not right to force job losses in Scunthorpe to benefit Teesside. However, of course we want to do the best we can by Teesside communities, so the Government are continuing to work with the Tees Valley Combined Authority and local partners on regional investment and growth opportunities.
The noble Lord, Lord Fox, asked about international law and our obligations. I can assure him that everything we do is in compliance with our international law obligations under the WTO, the GATT framework and international law more generally. I reassure him that we are entirely satisfied that these short-term powers are within the terms of our international law obligations.
The noble Lord, Lord Kerr, the noble Baroness, Lady Brinton, and others asked whether compensation would be paid. We need compensation provision within the Bill to preserve the investment climate and to comply with international standards, but the chances of compensation being recovered are slim because the powers are there to protect the company’s assets, not to damage them. Compensation would also have to be done via an SI, which would be subject to parliamentary scrutiny through the negative resolution.
The noble Baroness, Lady Brinton, also asked whether the Bill’s powers were overreaching for the Secretary of State. The powers are linked to what a relevant person could have done. Basically, they are to do anything that management is empowered to do, so they are there within those confines.
The noble Lord, Lord Hunt, the noble Baronesses, Lady Brinton and Lady Laing, and other noble Lords asked about the sunset clause. Because of the speed at which the legislation has been drafted and the uncertainty of the situation, it was neither necessary nor appropriate to set a timeline for these specific interventions. The current international situation is unpredictable, so a fixed sunset clause would not be workable or acceptable, as we might have to come back to Parliament and do it all again. We can, of course, revoke directions at any time in relation to a particular steel company once the need for intervention has passed. We would welcome working with the Business and Trade Select Committee to make sure we work with Members and keep them updated so that these powers are not in place any longer than is absolutely necessary. We understand the concern of the House about the use of these powers, and it is right that Parliament closely monitors this. We will be updating the House every four weeks on the use of these powers.
Lord Fox (LD)
My Lords, I thank the Minister for those words. What this House seeks, rather than an update, is the opportunity to invoke these powers in a way that they appear to be intended. They have been called emergency powers, and the Minister has called them short-term powers. Will the Government, within six months of this Bill coming into force, commit to having a substantive debate, in both Houses, to determine whether the Act will continue and to acting on any resolution of the House of Commons on the further continuation of those powers?
Baroness Jones of Whitchurch (Lab)
My Lords, I have been here on a number of occasions answering questions on the situation with steel. In the future, we will continue to engage as widely as we have done to make sure that Parliament is updated on these matters. As I have said, we will update the House every four sitting weeks on the use of these powers. I honestly think that, in these circumstances, that is sufficient.
The Earl of Kinnoull (CB)
The Business and Trade Select Committee, which the Minister just spoke of, is a House of Commons committee. Within our own House, we have the Industry and Regulators Committee. Are the Government proposing that they would offer the same service, as it were, to our committee as well?
Baroness Jones of Whitchurch (Lab)
I thank the noble Earl for raising that question. I am sure that we would be happy to consult with the relevant committees within your Lordships’ House as well.
A number of noble Lords, including the noble Lord, Lord Hunt, asked about the cost of providing these safeguards. We are directing British Steel to act in a way that safeguards its assets, and this funding should be provided by the company. If the Government need to spend money, we will look to recover that from the company if we can and where reasonable. We have committed up to £2.5 billion for steel, via the National Wealth Fund and other routes, and no further government borrowing is envisaged to support any intervention. The alternative would be importing steel at considerable extra cost to our economy. As noble Lords have pointed out, we would then be the only country in the G20 without domestic steel production. There is a cost either way, and we must balance those costs when we make decisions going forward.
The noble Lord, Lord Sikka, asked what was happening in Port Talbot and whether we are nationalising British Steel in response to this situation. As I made clear in my opening comments, we are not nationalising anything. We have put forward a Bill to ensure the continued safe operation of the blast furnaces. Without swift intervention, there was a risk of accelerated closure, jeopardising the safety and production outcomes of British Steel.
Tata Steel decided to close the blast furnaces at Port Talbot in January 2024 under the previous Government, and the decision to provide a grant agreement towards Port Talbot’s transition project was made by the previous Government. This transition was already well under way by the time we came into office. This is the point that the noble Lord, Lord Davies, made. However, I say to the House that we negotiated an improved deal with Tata, after just 10 weeks in office, with better terms for workers, future investment opportunities for the area and the highest voluntary redundancy package Tata has ever offered. Since then, we have provided more than £50 million directly to the local community, from the £80 million available from the UK Government to help people learn new skills, to support the supply chain and to protect people’s mental health.
The noble Lord, Lord Kerr, the noble Baroness, Lady Jones, and others asked about the endgame for British Steel. Our long-term aspiration for British Steel remains a co-investment agreement with a private sector partner to secure a long-term transformation. We are determined to see a bright and profitable future for steel-making in this country.
A number of noble Lords asked about energy prices and the cost of energy. The Government are committed to tackling high industrial prices in the UK. The British industry supercharger package of measures for energy-intensive industries came into force in April 2024 and brings energy costs for strategically important UK industries, including steel, closer in line with other major economies around the world, so that they remain competitive on the world stage. Once fully implemented in April 2025, the measures will save eligible businesses on average £24 to £31 per megawatt hour on their electricity costs. The total value of reduced electricity prices is estimated to be between £320 million and £410 million in 2025 and around £5.1 billion over 10 years. This will help keep business energy costs down.
To reiterate the point about future scrutiny of the implementation of the Bill, as the Secretary of State said in the other place, we are happy to engage with relevant committees, and I am happy to keep the House updated on these matters. We will continue to update the House every four sitting weeks on the use of these powers.
Lord Hunt of Wirral (Con)
Can I just say to the Minister how grateful we are that she understands the House’s concern about the use of these powers? As I understand it, she has told the House that she will return every four weeks to update the House on the use of the powers. However, she was intervened on by the noble Lord, Lord Fox, to suggest that she might go a little further than that and have a clear debate after six months. I still think that this whole question of a sunset clause is very relevant indeed. Can the Minister expand on what she said earlier—that she believes that a fixed sunset clause would not be workable or acceptable? Why not? It is generally accepted in this House that powers of this nature should have a sunset clause. Can she perhaps expand on that and give a little more detail before we consider whether to table such an amendment?
Baroness Jones of Whitchurch (Lab)
My Lords, I thought I had answered that point. The Bill, as it stands here, is to deal with one emergency. As we know, it is a volatile sector and we might need to use those powers at other times. We will use them judiciously and with care, and, as I keep saying, we will continue to update the House as to the use of those powers. We do not feel that a sunset clause is necessary or desirable in this Bill. To clarify, my general comment to the noble Lord was that we would continue to engage with the Lords committees to make sure that they are fully updated with progress going forward.
In concluding this debate, I convey my thanks to all noble Lords for their thoughtful contributions and for helping us to pass this legislation so that we can retain steel-making capacity in the UK—for British workers’ security, for British industry’s future and for the future of British Steel workers and their families. That is our priority and that is how we intend to go forward.
Baroness Brinton (LD)
The Minister did not respond to my specific question about ensuring that the amount of any compensation paid under the terms of the Bill would be absolutely clear and stated to the public and to Parliament.
Baroness Jones of Whitchurch (Lab)
The noble Baroness makes a reasonable point. I am sure that we can accommodate that and make sure that that information is available.
Lord Davies of Gower (Con)
Can I just point out to the Minister that I asked a number a questions that she has not answered? Will she look at the record and write to me?
Baroness Jones of Whitchurch (Lab)
I apologise to the noble Lord—he was speaking more quickly than I can write. I will endeavour to respond to the points that I have not been able to respond to so far.
Baroness Jones of Moulsecoomb (GP)
Before the Minister sits down again, I made a specific point about whether nationalisation was one of the options on the table under review.
Baroness Jones of Whitchurch (Lab)
I make it clear that nothing is off the table. All options will be considered. I have also made it clear that this Bill is not about nationalising steel. If we need to take any further steps, we will obviously have to come back to the House with further proposals.
Baroness Butler-Sloss (CB)
What opportunity will this House have to reflect on the Bill?
Baroness Jones of Whitchurch (Lab)
Obviously, we have had a full debate today. As I said, we will come back regularly to report on progress to the House, including to the relevant committees of the House, so there will be plenty of opportunities to measure the implementation of the Bill as we go forward.
Motion agreed.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Arrangement of Business
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, I thought it would be useful to update the House on what will happen next. Now that the Bill has had its First Reading, we will adjourn the House for 15 minutes while it is printed and prepared for its Second Reading. That should be brief and formal in the light of this afternoon’s debate. After Second Reading, the House will be adjourned again for at least one hour to enable noble Lords to table any amendments for Committee. The precise timings for Committee will be advertised on the annunciator when we can be more precise. With that, I beg to move that the House do now adjourn during pleasure until 2.57 pm.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Baroness Jones of Whitchurch
That the Bill be now read a second time.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, for the record, we debated the purpose of this Bill earlier today.
Arrangement of Business
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, we will now adjourn the House once more. Noble Lords will have an hour to table any amendments. If there are amendments, additional time will be needed to prepare the relevant paperwork in order to facilitate Committee stage. We will advertise the precise timings on the annunciator in due course when the details are clearer.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Lord Hunt of Wirral)
Lord Hunt of Wirral (Con)
My Lords, as I indicated earlier today, in this House we have a responsibility to ensure that legislation is properly scrutinised and debated, and that it does not give unlimited powers to the Executive without the essential checks and balances that are largely portrayed in the work in depth of this House, in particular.
My noble friend Lady Laing of Elderslie reminded us that, in its report, Fast-track Legislation: Constitutional Implications and Safeguards, the Constitution Committee stated that
“whenever possible sunset clauses should be incorporated into emergency legislation particularly in relation to legislation that impacts upon civil liberties”.
It continued,
“emergency legislation should automatically be subject to post-legislative review”.
A number of us have had a chance to reflect not only on the debate we have just had but on the words of the Minister, who, in her closing speech, said that she would regularly update the House every four weeks. Reflecting, though, on what the Constitution Committee said, we do not believe that that goes far enough. That is why my noble friend Lord Davies of Gower and I have tabled this amendment, to ensure that there is a sunset clause. We look forward to hearing from the Minister as to whether or not she accepts the need for some check on the power of the Executive.
A number of noble Lords quoted from the Bill, which we have, of course, seen for the first time only today. One such quotation was the unfortunate wording in Clause 3 that:
“The Secretary of State may do anything for the purpose of securing the continued and safe use of the specified assets”.
It is essential that that power is there available for the sake of the future of the Scunthorpe steelworks, but should it be there available in perpetuity? That is the key question that this Chamber must now decide.
The fact that the Government are saying that they may need to return to Parliament to extend these powers is not, as they seem to believe, an argument against a sunset clause. I believe that it is imperative that emergency powers are subjected to constant oversight, and I hope that the House will agree with me. These amendments that we are proposing would simply allow Parliament to do its job. Emergency powers should never be allowed to become permanent by default. Surely, they have to be justified continually, not assumed indefinitely.
We recall the Coronavirus Act, as my noble friend pointed out. That was a piece of emergency legislation containing a sunset clause. That was in recognition of the fact that the Bill provided extraordinary powers—it was not power that should ever be delegated to the Government indefinitely. What we are now proposing has a strong precedent, and we would strongly encourage the Government to adopt this. If these are emergency powers designed to allow the Government to intervene in Scunthorpe’s steelworks in the short term, why would the Government resist a sunset clause? Indeed, in the debate in the other place, the Secretary of State said in response to an intervention that these are short-term measures to deal with an emergency situation, and he used “temporary” in opening. Why can the Government not accept that these are temporary but necessary powers?
I suppose there is also the argument that there is greater certainty if we know exactly where we are so far as the powers devolved to the Government are concerned. Earlier today, I agreed with the noble Lord, Lord Fox, in calling for a sunset clause, and heard his further comment that a debate might perhaps help to focus attention in a way that would then enable Parliament to understand the motivation behind it. I am slightly nervous at that. There is no substitute for an out-and-out sunset clause, which I believe is the right thing to do in these circumstances. I hope that the Minister, particularly accompanied by the wording of the Bingham lecturer, the person sitting alongside her—with which I agreed and have quoted on many occasions—agrees that it is time for a reset between Parliament and the Executive. This is the time. I beg to move.
Baroness Freeman of Steventon (CB)
My Lords, I speak very briefly to my Amendment 2. Clause 3(4) makes it clear that the Secretary of State has power to enter premises and make orders on the premises, but the wording in subsection (4)(a), in which it says that
“the Secretary of State may … be accompanied by any person”
could be read to imply that the powers are invested in the Secretary of State in person—that is, that the Secretary of State themselves would need to be present on the premises. After speaking to the Public Bill Office, I wanted to give the Government the opportunity to clarify that a designated representative of the Secretary of State would be imbued with these same powers, so that any intransigent company could not seek to delay government action by demanding that the Secretary of State was present in person.
Lord Moylan (Con)
My Lords, I rise on the back of that very interesting amendment to take the brief opportunity to ask again the question that I asked when we debated the Bill earlier today, which relates to the same clause of the Bill—namely, when the Bill says that the Secretary of State has the power to exercise force on entering premises, which force in practice would he intend to use? The Bill gives him no power to direct chief constables; it would be practically, and probably constitutionally, improper for him to send civil servants from his department to force entry into premises. There is also no provision in the Bill allowing him to seek a warrant that would result in bailiffs being able to enter the premises.
I genuinely want to know how, in practice, the Secretary of State would exercise force. When I asked that question in today’s earlier debate, I did not get a satisfactory answer—or, indeed, any real answer at all. I have no doubt that, now that the Minister has had the opportunity to discuss it with the Attorney-General, who is sitting next to her, it may be possible that she can answer me in her response to this debate.
Baroness Coffey (Con)
My Lords, I will speak to the amendment tabled in my name. I am conscious of the extraordinary powers that are being granted to the Secretary of State today.
I will briefly speak in response to the amendment tabled by the noble Baroness, Lady Freeman of Steventon. It is my understanding, having been in government, that anything in the name of the Secretary of State can be automatically delegated to a civil servant, but it cannot go beyond that. As we have seen in a number of cases, civil servants already have some powers to gain entry, but only in relation to specific Acts of Parliament—so perhaps this amendment would give a wide-ranging element.
This is clearly not an occasion to use the Civil Contingencies Act, but something that surprises me about this Bill is that the powers being given to the Government and the Secretary of State today are extraordinary and go way beyond what happened with the Coronavirus Act 2020. The inspiration for my amendment comes from the Bill that was presented to Parliament then. It set out that, to have scrutiny, a report would be put forward by the Secretary of State—over several periods, not just a year—and that there would be a debate on that report. Having a report matters because it would bring together how the powers have been used: have they been used in the way that both Houses anticipated? It may even extend to the provision of how the finances would be distributed for the regulations we have yet to see.
Overall, it is important that, when we give these powers for just one industry—I guess that if we were to name the company it would end up being a hybrid Bill, so that has been deliberately avoided to make sure that it covers the entire steel industry—we should be able to have regular discussions, not simply because this is the steel industry but due to the scale of the powers being granted. To that end, that is why I have literally lifted, with a bit of adjusting, what happened in the Coronavirus Act. Frankly, for something that took over our country in such an unprecedented way, I hope that the Government would concede to think carefully about how they will report back to this House and how this House can be involved.
Lord Fox (LD)
My Lords, I will speak to Amendment 5, which is in my name and that of my noble friend Lady Brinton.
The whole House heard my contribution during the take-note debate, and I am grateful for the subsequent supportive comments that noble Lords made to me afterwards. Amendment 5 reflects that contribution. As noble Lords can see, it calls for a debate in Parliament after six months. That would be a substantive debate on which the House could vote if it so decided.
The whole House also heard me pledge to work constructively with the Government to get a solution to the question of giving Parliament an opportunity to debate a possible continuation or cessation of these emergency powers. I hope that the constructive discussions we have had over the past hour or so will bear fruit and that the Minister will be able to accept the spirit, if not the letter, of Amendment 5 from her Dispatch Box. Like the noble Baroness, Lady Coffey, we too have, in a sense, lifted experience from Covid, but—with all due respect to her—we believe that Amendment 5 offers more flexibility to the Government while also giving the oversight that Parliament needs at a level that is not overbearing.
These are emergency powers and periodic debate is essential. Equally, the Minister called for sufficient flexibility for the power to be either kept or discarded. We should recognise that there will be times when this may need to be turned on and turned off, and the process I propose would allow that happen. Our amendment provides for that flexibility while also somewhat enhancing parliamentary scrutiny. I hope that the Minister can reassure your Lordships that she agrees with us.
Lord Carter of Haslemere (CB)
My Lords, I will make a brief supplementary point to the points made by the noble Lord, Lord Fox. I cannot support a sunset clause of the sort proposed by the noble Lord, Lord Hunt. That would cause these provisions to cease altogether after 12 months, and I think these provisions are necessary—albeit very draconian, as has been accepted.
I would have gone for a different option that combines a sunset provision with a debate, of the sort that we used to have with the Prevention of Terrorism (Temporary Provisions) Acts, year after year, from 1989. We would have a clause providing for the expiry of the provisions after a certain period—be it six or 12 months—subject to renewal by an order subject to affirmative resolution. That would mean there would then be a debate in each House and approval would be required for the provisions to continue. We would have a debate but would also have the provision for expiry if the Houses voted for that. That is not here, but I am reassured that the noble Lord, Lord Fox, thinks that his amendment could procure a vote, because that is the key to this, with these powers being so draconian.
Baroness Butler-Sloss (CB)
My Lords, I entirely support the Bill and I ask this question only because I am concerned about exactly what is meant by Clause 3(4)(a) saying that the Secretary of State can enter a premises “using force if necessary”. How is that expected to work?
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I am sure that by now noble Lords will be more than familiar with what the Government are seeking to do with this legislation. It will allow us to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. As such, I will turn swiftly to the amendments at hand.
Noble Lords across the House have raised a number of important issues relating to the parliamentary scrutiny of this Bill. I want to reassure noble Lords that this Government take these concerns very seriously. With regard to the amendment in the name of the noble Lord, Lord Hunt of Wirral, that seeks to add a sunset clause to the Bill, I will reiterate what I said earlier: because of the speed at which this legislation has been drafted and the uncertainty of the situation, it was neither necessary nor appropriate to set a timeline on those specific interventions. As noble Lords are keenly aware, the current international situation is unpredictable. A fixed sunset clause would not be practical and would cause an unacceptable amount of uncertainty if a solution to the issue at hand became protracted. In those circumstances, we might have to come back to Parliament and go over this whole process again.
We can revoke directions given to a particular steel company at any time once the need for intervention has passed. As I have said, we would welcome working with the Business and Trade Select Committee in the other place and relevant committees of your Lordships’ House, to make sure that we work with your Lordships and Members of the other place and keep everyone updated, so that these powers are not in place any longer than is absolutely necessary.
I was clear in the debate earlier today that the Government will provide an update to Parliament every four sitting weeks, as well as providing information to relevant Select Committees. I do not want to pre-empt discussions in the usual channels across both Houses about the nature of these updates, but it is our intention that the first instance will be an Oral Statement and that subsequent updates will be made in an appropriate manner. What this means in practice will be subject to further discussion but could, for example, be determined by the reality on the ground at that time.
Given the interest in both the steel sector and the use of powers in this Bill, I can confirm that my noble friend the Chief Whip will facilitate a fuller debate on the Floor of the House on the operation of what will then be the Act. This will take place within six months, with exact details to be subject to further discussion in the usual channels. In addition, as stated in the Government’s letter to all Peers this morning, we intend to publish our steel strategy in the spring. We will continue other related work, such as on our modern industrial strategy, and we will of course update noble Lords on that as well. All of these moments will allow scrutiny of the Government’s use of the powers in this Bill and of our wider efforts to support the vitally important steel industry.
The noble Lord, Lord Hunt, draws attention to Clause 3(2) and his concern about the words that the Secretary of State can do “anything”. I have to say to him that those words need to be read in conjunction with the rest of that sentence, which limits them to anything that a
“relevant person in relation to that undertaking could do”.
It is for only a very specific purpose. I hope that this commitment satisfies the concerns raised by the noble Lord, Lord Fox, and the noble Baroness, Lady Coffey.
I underline that a sunset clause would create further uncertainty for thousands of workers, who need to know that their jobs are secure on a long-term basis. Inserting a sunset clause would create an arbitrary deadline by which the long-term future of that plant would need to be settled. As I said before, nothing is off the table in our response to securing the future of steel in this country. We should send a strong message today to those whose livelihoods depend on the steel sector that this Parliament stands behind them.
The amendment of the noble Baroness, Lady Freeman, seeks to add to Clause 3(2), after “the Secretary of State”, the words,
“or a responsible person they designate”.
I can confirm that Clause 3(2) entitles the Secretary of State to do
“anything … that the steel undertaking, or any relevant person … could do”.
So officials can act in the name of the Secretary of State.
Regarding the question of the noble Lord, Lord Moylan, about using force if necessary, this will be a statutory power to be carried out by those acting on behalf of the Secretary of State. Officials or their agents could use force to enter the premises, but this would have to be lawful force; therefore, they could not assault anyone, and there would have to be clear barriers on their actions. It is up to police judgment as to whether they would intervene, based on usual policing principles.
I hope I have been able to provide reassurance on all these matters. I therefore respectfully ask that all the amendments in this group are not pressed.
Lord Hunt of Wirral (Con)
My Lords, I join the Minister in wanting to send a strong message from Parliament to all those involved in the Scunthorpe steelworks that we are solidly in support of them, and that everything we do today is directed to that end.
Turning to my amendment and the debate we have just had, I think that the noble Baroness, Lady Freeman, made a very important point about civil servants being able to act in the name of the Secretary of State. My noble friend Lady Coffey confirmed that that was the case, so at least we know where we are.
I thank the noble Lord, Lord Fox, very much indeed. He and I have been working together on this as hard as we possibly can to find a way through, because we do not want to stop this action in its tracks—far from it. We just feel that Parliament—in particular, the House of Lords—and the words of our Constitution Committee should not be disregarded. The committee has a right to stress the importance of sunset clauses.
However, having heard this debate, I am quite happy, following discussions through the usual channels, to indicate that such a debate could be postponed until we know a little more clearly where we are. In six months’ time, if we are to have—as the noble Lord, Lord Fox, and the noble Baroness, Lady Brinton, have suggested—what he referred to as a substantive debate, and, as the Minister said, further debate on the operation of this legislation, we have made a great deal of progress. The voice of this Chamber has been heard, and I am very pleased to have been able to speak in this debate. I say to my noble friend Lord Moylan that he and I still await the reply to the question that he posed, but no doubt the Minister will write.
I do not think that the noble and learned Baroness, Lady Butler-Sloss, has had an answer to her point about force. That is something that we will have to leave for another day, but it is a very important issue. We should not be giving powers in this Parliament to individuals to use force without clarifying exactly the circumstances in which they can be used.
All in all, we have reached a reasonable conclusion, and I am very grateful to the Minister for having listened so carefully and taken to heart the concerns of this Chamber about the need for this legislation to have an end date. We will return to that in the debate that we will have in October on a substantive Motion, as the noble Lord, Lord Fox, said. In the meantime, I beg leave to withdraw my amendment.
Lord Fox
“Debate on provisions of this ActWithin six months of this Act coming into force, a Minister of the Crown must, in both Houses of Parliament, table a motion for debate on the continuing necessity of the provisions contained in this Act.”
Lord Fox (LD)
My Lords, I would just like to say a few words. I first thank the noble Lord, Lord Hunt, for his kind words—which I had not expected—but, mostly, I thank the Government Front Bench, in particular the Chief Whip, for the constructive discussions that we have had, which enabled the Minister to say the things that we hoped she would say. The point is that we understand the need for flexibility, but we also understand the need for parliamentary scrutiny. I hope that, between us, we have got to that point, thanks to the flexibility and the scrutiny that we have had over the past few hours.
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
Steel Industry (Special Measures) Bill
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, we are moving at pace, which is a good thing. I remain grateful to all noble Lords who have contributed to this process, in particular those who tabled amendments and those who have spoken in today’s debates.
The passing of this legislation is needed not just to protect British Steel and its 3,500 employees; it is needed to protect the future of the UK steel industry to forge the steel needed in our railways, homes and critical infrastructure. That is what is at stake here, which is why I am grateful to all those who have supported the Government in our action today. Our decision to protect UK steel-making now and long into the future is essential.
We know that events such as this are exceptionally rare, but the Government would never have requested a reconvening of Parliament were it not absolutely necessary. The emergency legislation introduced to this House means that the Government will now be able to order the iron ore, coal and other raw materials needed to keep the blast furnaces at Scunthorpe running.
I am grateful to everyone who has played a part in getting this legislation over the line. This includes noble Lords in this place, officials at the Department for Business and Trade, those in departments across government who have worked on the Bill, and the staff here on the estate who were called in at incredibly short notice. It is thanks to all those efforts that we can protect steel-making in this country now and for years to come. I beg to move.
Lord Davies of Gower (Con)
My Lords, I shall be very brief. I just want to say that this is a very important and necessary debate, and it is right that we have had it today to do everything we can to support our remaining steel industry. I have sadly witnessed the demise of this great industry in Wales, particularly south Wales. As I say, we must do all we can to protect Scunthorpe, and this emergency Bill is intended to do just that.
It has been a very good debate, with passion from all sides of your Lordships’ House. On behalf of His Majesty’s loyal Opposition, I thank all noble Lords for their contributions. In particular, I thank the Minister for her part in this. Without further ado, I wish noble Lords well for the rest of the recess and a particularly happy Easter.
Lord Fox (LD)
Even more briefly, I hope, I thank both Front Benches for facilitating an open and very clear debate, which proceeded in the right spirit. I associate myself with the Minister’s list of people to thank. I reiterate what I said at the beginning to the House authorities and everybody across the House. Today has been incredibly smooth and like a normal working day, which is very much to everyone’s credit. We should all be very grateful. Finally, I thank Humphrey Amos in our Whips’ office, who has kept us all in line.
Royal Assent
Saturday 12th April 2025
(2 days, 16 hours ago)
Lords ChamberSteel Industry (Special Measures) Act 2024-26 View all Steel Industry (Special Measures) Act 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 94-I Marshalled list for Committee - (12 Apr 2025)