Steel Industry (Nationalisation) Bill

Committee of the whole House
Monday 8th June 2026 Commons Chamber

[1ST ALLOCATED DAY]

Considered in Committee

[Caroline Nokes in the Chair]

Clause 1

Meaning of “steel undertaking”

18:07

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I beg to move amendment 21, page 1, line 6, leave out “of or including” and insert “predominantly of”.

This amendment would narrow the definition of a steel undertaking so that it had to be a business consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 14, in clause 2, page 1, line 14, leave out

“includes (but is not limited to)”

and insert “means”.

This amendment would limit the public interest test to the areas set out in subsections (a) to (c).

Amendment 23, page 1, line 20, at end insert—

“(d) preventing the closure of, or the loss of jobs at, a steel undertaking in Wales.”

This amendment includes the public interest in preventing the loss of jobs in Wales and the prevention of the closure of a steel undertaking in Wales in the meaning of public interest for the purposes of the Act.

Amendment 1, page 2, line 20, at end insert—

“(2A) The Secretary of State may not exercise a principal transfer power unless they have laid a statement before both Houses of Parliament explaining their reasons for concluding that it is necessary to exercise the power in the public interest.”

This amendment would require the Secretary of State to lay a statement before Parliament explaining their reasons for concluding that it is necessary to exercise a principal transfer power in the national interest, before exercising that power.

Amendment 15, page 2, line 20, at end insert—

“(2A) The Secretary of State may not exercise a principal transfer power unless he has commissioned an independent assessment of whether the exercise of the power is in the public interest, and that assessment has demonstrated that it is in the public interest.

(2B) The Secretary of State may appoint such independent person as he thinks fit to carry out an independent assessment under subsection (2A) above, and may pay remuneration and allowances to that person.”

This amendment would require an independent assessment of whether the public interest test had been met before the Secretary of State could exercise the principal transfer powers.

Amendment 16, page 2, line 20, at end insert—

“(2A) The exercise of a principal transfer power may only be considered to be in the public interest under subsection (1) if the Secretary of State has is satisfied that the exercise of the power would provide value for money for the taxpayer.”

This amendment would require the NAO to have concluded that the exercise of the principal transfer power was good value for money before the Secretary of State could consider it to be in the public interest.

Amendment 17, page 2, line 20, at end insert—

“(2A) The Secretary of State may not exercise a principal transfer power under subsection (1) unless they have laid a report before Parliament containing full details of the criteria used to assess whether the exercise of power would be in the public interest.”

This amendment would require the Secretary of State to publish full details of the criteria used to assess the public interest test before exercising the principal transfer power.

Clause 2 stand part.

Amendment 12, in clause 3, page 2, line 10, leave out subsections (3) to (5).

This amendment would prevent the Secretary of State extending the sunset of the principal transfer powers.

Clause 3 stand part.

Amendment 2, in clause 4, page 2, line 30, leave out “negative” and insert “affirmative”.

This amendment changes the procedure for share transfer regulations from the negative procedure to the affirmative procedure.

Clauses 4 to 14 stand part.

Amendment 3, in clause 15, page 8, line 21, leave out “negative” and insert “affirmative”.

This amendment changes the procedure for property transfer regulations from the negative procedure to the affirmative procedure.

Clauses 15 to 38 stand part.

Amendment 18, in clause 39, page 25, line 32, leave out “negative” and insert “affirmative”.

This amendment would require regulations relating to continuity obligations to be subject to the affirmative procedure.

Clauses 39 to 44 stand part.

Amendment 19, in clause 45, page 28, line 37, leave out “negative” and insert “affirmative”.

This amendment would require regulations related to enforcement to be subject to the affirmative procedure.

Clauses 45 to 51 stand part.

New clause 2—Stakeholder Advisory Committee—

“(1) The Secretary of State must establish a Stakeholder Advisory Committee to provide advice on the exercise of principal transfer powers under this Act (“the Committee”).

(2) The Secretary of State must ensure that the membership of the Committee includes representation from stakeholders, including but not limited to—

(a) industries that rely on the supply of steel, including the defence sector and critical national infrastructure,

(b) representatives of the workforce of the steel undertaking, and

(c) local authorities for the areas in which the steel undertaking operates.

(3) The Secretary of State must consult, and have regard to the advice of, the Committee before making a determination that the exercise of a principal transfer power is necessary in the public interest under section 2.”

This new clause requires the Secretary of State to establish a stakeholder advisory committee. The Secretary of State would be required to seek the committee's advice before making a determination that the exercise of a principal transfer power under the Act was in the public interest.

New clause 3—Jobs and industrial transition strategy—

“(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State must prepare and publish a jobs and industrial transition strategy.

(2) A strategy under subsection (1) must explicitly set out how the Government's investment and transition plans for the specified steel undertaking will—

(a) protect skilled employment,

(b) provide and support reskilling and redeployment opportunities for the workforce, and

(c) deliver tangible economic renewal and support economic resilience in the local communities dependent on the steel undertaking.

(3) The strategy must be laid before Parliament within six months of the day on which the regulations exercising the principal transfer power take effect.”

This new clause requires that the Secretary of State publishes a report on jobs and industrial transition strategy where it exercises a principal transfer power.

New clause 5—Duty to report: 10-year strategy for nationalised steel undertakings—

“(1) Within three months of exercising a principal transfer power in relation to a steel undertaking under this Act, the Secretary of State must publish and lay before both Houses of Parliament a report containing a 10-year strategy for the steel undertaking.

(2) Any report published under subsection (1) must include—

(a) a strategy for the operation of any blast furnaces which form part of the steel undertaking,

(b) an investment plan for the steel undertaking,

(c) a vision for the future of the site of the steel undertaking, and

(d) consideration of the need for a steel procurement strategy which prioritises British steel to support the steel undertaking,

for the following 10 years.”

This new clause would require the Secretary of State to publish a 10-year strategy for any steel undertaking nationalised under this Act.

New clause 8—Contingent liabilities—

“(1) The Secretary of State may not exercise a principal transfer power in relation to a steel undertaking unless they have made a statement to Parliament on the value of contingent liabilities associated with the use of the power.

(2) The statement made under subsection (1) must include—

(a) the value of any contingent liabilities to be acquired; and,

(b) the steps the Secretary of State will take to seek to minimise taxpayer exposure to any contingent liabilities so acquired.”

This new clause would require the Secretary of State to make a statement to Parliament on contingent liabilities acquired before they exercise a principal transfer power under this Act.

[Dame Harriett Baldwin]

If I may, I would also like to speak to the other amendments in my name and those of my hon. Friends, and, before I do that, approach the Bill with the serious concern it deserves. Today’s amendments reflect some of the points the Opposition made on Second Reading: that the Bill is a chaotic, unplanned intervention that risks landing taxpayers with an open-ended and potentially unlimited bill. Without addressing those issues as we make this legislation, we need to really focus on the things that are currently making the domestic production of steel unprofitable, such as higher employment costs and policies in pursuit of net zero, such as carbon taxes and associated regulations and levies.

Before I turn to the amendments in detail, I put on record how much I respect the Under-Secretary of State for Business and Trade, the hon. Member for Stockton North (Chris McDonald), and his real-life expertise in the steel business. He is truly a rare example on the Government Benches of someone who has deep private-sector experience and really knows his subject—I salute that. My own private-sector expertise is as an investor, so most of the amendments in my name and those of my hon. Friends are trying to protect the taxpayer from some of the financial risks the Bill lands them with.

The fact is that nobody wanted to nationalise British Steel. The Government told us last year, when they brought in emergency legislation—and brought Members back on a Saturday for the first time since the Falklands war—that they did not want to nationalise British Steel. They may now claim to their Back Benchers and union backers that this is something to celebrate as true socialism, but the reality is that it is an outcome that the Government wanted to avoid.

The Government failed to negotiate a good outcome with the Chinese owners of British Steel. The Prime Minister and the Business Secretary went all the way to China and failed to get a deal. Whenever this Government negotiate, the taxpayer loses out. The Conservatives do not think that the Government should nationalise British Steel, because we do not think politicians should be running businesses. Since the Government intervened last year, it has cost taxpayers over £1.3 million every day.

The Bill is deeply flawed, and it is in a spirit of goodwill that I offer the Government the chance to adopt the Opposition’s amendments. I am sure that they will want to agree to them, as they are all sensible.

[Richard Tice (Boston and Skegness) (Reform)]

To correct the record, I have been calling for British Steel to be nationalised for seven years. I urged the previous Conservative Government not to sell British Steel to the Chinese, and if they had followed my excellent advice, we would not be in the pickle we are now in.

[Dame Harriett Baldwin]

The hon. Gentleman has got his point on the record.

[Mark Pritchard (The Wrekin) (Con)]

It is interesting that the hon. Member for Boston and Skegness (Richard Tice) once again outflanks Labour on socialism, but there we are. As a fellow west midlands MP, I am sure my right hon. Friend will be as concerned about the Bill as I am. My constituent, Mr Peter Hughes of EverEdge, which is a west midlands steel manufacturing company, has suggested that:

“While these measures are positioned as protecting primary steel production (such as TATA Steel), they are inadvertently undermining the much larger UK steel-processing sector.”

Does my right hon. Friend share his concern, in particular, the fact that:

“While raw material costs are rising, there are no equivalent restrictions on imported finished products”?

That could be seen—inadvertently, I accept—as a tax on manufacturing. It will certainly damage UK, Shropshire, and west midlands steel manufacturing.

[Dame Harriett Baldwin]

As a west midlands MP, I absolutely recognise that. In fact, I was with a constituent in Worcester on Friday, Mr Michael Outwin of Industrial & Tractor Ltd, who is going to have to pay a 50% tariff. I tried to table some amendments on the tariff regime, but unfortunately, they were not orderly, so I will limit myself to agreeing with my right hon. Friend. There are many types of steel that will be affected by the tariffs that do not seem to be made in the UK. I would like the Minister to clarify how he expects people to continue manufacturing from the steel that they have been importing for some time, once the tariffs are in place.

On the Opposition amendments, I am sure that everyone in the Committee agrees that the Bill as it stands exposes the taxpayer to unlimited liability for an unlimited length of time. The Bill expropriates businesses, and that will deter inward investment into our country. You do not have to take my word for it, Dame Caroline, as it is also in the Government’s impact assessment that one of the Bill’s potential impacts is that it chills the investment environment in this sector. That is why we have tabled the amendments the Committee is considering today.

18:15

Amendment 21 would ensure that the Bill applies only to businesses predominantly engaged in the manufacture or processing of steel or iron for the purposes of steel manufacturing, rather than to those whose operations merely include it. The way the Bill is written is extremely wide and, as highlighted in the explanatory statement, amendment 21 would narrow the scope to avoid dragging in businesses with only minor steel operations. The current drafting is far too broad and indiscriminate and could exacerbate the chilling effect on business in this country. I am sure the Minister will want to agree to the amendment, because by tightening the definition it responds to business concerns that the legislation could create collateral damage across supply chains and related sectors. It would prevent Government overreach and unintended consequences across the wider industrial base.

Amendment 14 would replace

“includes (but is not limited to)”

with “means”. It is a subtle difference, but one that would restrict the public interest test strictly to the listed criteria. As it stands, the public interest test is very widely defined. Amendment 14 would prevent Ministers from expanding the definition of public interest at will by ensuring that the trigger for nationalisation is clearly defined and bounded in law. A vague public interest test increases risk and makes the UK less attractive to investors, especially in capital-intensive sectors such as steel. The amendment would limit the Bill’s chaotic, unplanned intervention with no set limits, which risks creating an open-ended chequebook for state control.

Amendment 15 would require the Secretary of State to commission an independent assessment to prove that nationalisation is in the public interest before the exercise of transfer powers. Industry figures have warned that nationalisation could cost billions of pounds and burden British taxpayers with large contingent liabilities, reinforcing the need for independent scrutiny before action. The amendment would introduce an objective check before a potentially multibillion-pound intervention is allowed, thereby ensuring that decisions are based on evidence rather than political expediency. We cannot have an indefinite and infinite Bill without proper safeguards.

Agreeing amendment 16 would mean that nationalisation could be considered to be in the public interest only if the National Audit Office determined that it would deliver value for money for the British taxpayer. Our amendment would introduce an explicit taxpayer protection test to ensure that Ministers could not proceed unless the intervention was economically justified, not just politically convenient. British taxpayers should not be asked to sign off on a blank cheque. We cannot have nationalisation in search of rationale.

Amendment 17 would require the Secretary of State to publish the full details of the criteria used to judge whether nationalisation is in the public interest before exercising the powers. The amendment addresses the unchecked powers and lack of clarity in the Bill. It would ensure that Parliament and the public could effectively scrutinise the Government’s reasoning.

Amendment 12 would remove provisions allowing the Government to extend the sunset clause for nationalisation powers, which can currently be extended time and again. The amendment would ensure that those extraordinary powers remain strictly time limited. I am sure the Minister will want to accept the amendment, because without it we risk open-ended intervention with no clear exit strategy.

Amendment 18 would require regulations relating to continuity obligations to be subject to the affirmative rather than the negative procedure. Given the enormous scale of intervention in the Bill, the amendment would address the insufficient democratic scrutiny and strengthen parliamentary oversight of potentially intrusive or costly measures. Similarly, amendment 19 would also require regulations related to enforcement to be subject to the affirmative procedure.

Finally, Dame Caroline, new clause 8 would require the Secretary of State, before nationalisation, to publish a statement to Parliament on contingent liabilities. Nationalisation could saddle the state with significant contingent liabilities and long-term financial risks, making up-front disclosure to Parliament essential. Of particular importance in new clause 8 are subsections 2(a) and (b). Paragraph (a) would ensure that the Government are required to be transparent on the value of hidden or future liabilities, including those that relate to environmental, pension or operational risks that could fall on taxpayers. Paragraph (b) would ensure that the Secretary of State takes steps

“to minimise taxpayer exposure to any contingent liabilities so acquired.”

We do not think the British taxpayer should be exposed to unknown and escalating costs without clear disclosure.

In conclusion, taken together, our amendments and new clause will hold the Government to account. We oppose the Bill in its current form, its potential colossal cost to the British taxpayer, and the adverse impact on our steel manufacturing sector and related supply chains. By accepting our amendments and new clause, the Government will simply strengthen accountability and transparency. I commend them to the Committee.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

Before I call the Minister, I will set the record straight: sadly, it is just plain old Ms Nokes in Committee of the whole House.

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

I thank the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), for her incredibly generous remarks at the start of the debate. I think we all try our best here with whatever expertise we have; of course, I recognise her expertise in finance, and will aim to address some of the serious issues she raised.

At the heart of the Bill and this debate is the future of our steel industry. The difference in opinion between the Government and the Opposition over the use of nationalisation as a tool of industrial strategy may be irreconcilable, but it is a useful tool—although not one to be used lightly. It is important that it is used in situations of market failure or some other private sector issue, which is certainly the case today. It was also the case when the previous Conservative Government briefly nationalised one of our steel companies, before that led to a failed private sector ownership.

[Sir Edward Leigh (Gainsborough) (Con)]

Yes, the Minister is right: Greg Clark nationalised it. As far as my constituents who work at Scunthorpe are concerned—and, I am sure, those of my hon. Friend the Member for Brigg and Immingham (Martin Vickers)—all we want is a viable Scunthorpe. We do not take an ideological line on nationalisation in this case. Given the problems we are now reading about in respect of electric arc technology in Port Talbot, can the Minister commit that the Government are fully committed to the blast furnaces in Scunthorpe?

[Chris McDonald]

Perhaps I can even give a slightly fuller answer than that. The particular issue with that previous nationalisation by the then Secretary of State was that it was effected merely to create a change of ownership, without actually improving the quality of the business or attracting additional investment into the business at the time. It is important to take this Bill in the full context of our steel trade measures and our steel strategy, which lays out a forward plan for the steel industry. Nationalisation is one of the tools that we can use.

The Government have been clear in our steel strategy that we see a transition to electric arc furnaces over time—there are good reasons for that, not least because they are the most productive and efficient technology available and are reliable and tried and tested—but our intervention in the Steel Industry (Special Measures) Act 2025 and our ongoing support of the British Steel business has been to ensure that we have blast furnace-produced primary steel available as part of that transition. The furnaces in Scunthorpe are the only two working blast furnaces in the UK, and they are currently our only source of primary steel.

The right hon. Member for Gainsborough (Sir Edward Leigh) also raised reports in the press about delays to the project in south Wales. Delays on such a large project are not unusual, but the specific issue in that case was around the groundworks—I would certainly be happy to expand on that more if it becomes part of the debate. I am, of course, in close contact with Tata Steel about that. In my experience of such projects, it is always difficult to understand what the duration of the project will be until it gets out of the ground, and ultimately there are issues with the groundworks there.

Let me move on to address amendment 21 and the issues raised by the shadow Minister. In terms of its structure, the Bill is very much modelled on the Banking Act 2009, which received incredibly broad support. The clauses in part 1 are vital to the operation of the Bill, and I urge the Committee to reject attempts to remove them.

While I understand the consideration that has gone into the preparation of the amendments, narrowing the scope of the definition of a steel undertaking would, in the Government’s view, introduce ambiguity rather than clarity. In practice, there are unlikely to be many undertakings operating at scale in both steelmaking and an unrelated business practice; if there were, the Government would look to exercise powers in a way that focused on what was necessary to operate the steelmaking business. The drafting of the Bill follows on from the text of the Steel Industry (Special Measures) Act. The Government are therefore of the view that amendment 21 is not necessary.

[Jacob Collier (Burton and Uttoxeter) (Lab)]

I fully support the need to buy British, but does the Minister recognise that JCB, based in my constituency, cannot source the grade and size of steel required for its machines entirely from the UK, and that a significant proportion of its steel comes from the EU? The proposed tariffs will apply to imported steel even when no UK alternative exists, so they are due to cost JCB millions. Will the Minister look into the matter urgently and meet me and JCB to discuss it?

[Chris McDonald]

My hon. Friend raises a specific point about JCB. I am reasonably familiar with its business, and I think its particular concern may be around the sourcing of plate steel. The steel trade measures—the tariffs and quotas that we announced—are designed to ensure that the UK is not subject to subsidised steel, which would damage our upstream industry, and will certainly help to support the upstream sector. Of course, we need a strong upstream sector in order to have a strong downstream sector. The issue with plate steel is that the Dalzell plate mill in Scotland, which is capable of making many of these steels, has not been operating for some time. I would be happy to meet my hon. Friend and JCB to discuss that in more detail.

[Mark Pritchard]

rose—

[Chris McDonald]

I was just going to address the point the right hon. Gentleman made about the business in his constituency. I am not familiar with that business, but the general approach we have taken is to ensure that the groupings of steel under the trade measures are subject to the tariffs where those steels are or can be made in the UK, accepting that some of them are not but could be made in the UK, including at operations such as Dalzell. It is not always possible to separate all those steels out based on the groupings, so that is the purpose of the quota.

I am always interested to hear of specific examples. I had a meeting with a business last week for which this appeared to be a concern, but once we discussed the issue in detail we found that it was not an issue for the business, because of some of the arrangements that were in place. If the right hon. Gentleman would like to share further details about that case, I am keen to hear them.

[Mark Pritchard]

For clarity—perhaps I was not clear— a constituent of mine runs the company but the company itself is actually in another constituency, and it employs people throughout the west midlands. Could I write to the Minister about that particular case in order to seek more clarity?

[Chris McDonald]

indicated assent.

[Mark Pritchard]

I am grateful for that. I want to make two brief points on tariffs, which the Minister mentioned. First, the Shropshire chamber of commerce has said:

“There is growing concern that tariffs may be applied to certain materials and products that are not currently available from UK manufacturers”.

I would be interested to hear the Minister’s view on that. Secondly, concerns have been raised about fabricated steel products that appear to fall outside the tariff regime. In practice, that could create an unintended incentive for steel-processing fabrication work to move overseas to avoid tariff costs. Will the Minister comment on that?

[Chris McDonald]

I am aware of that issue as well, and if the right hon. Gentleman would like to include all those issues in the letter, I will be happy to provide him with a response.

[Gideon Amos (Taunton and Wellington) (LD)]

I have been contacted by Coker Engineering in my constituency, which supplies Rolls-Royce, Leonardo and other defence companies. It can only use steels from certified electric arc mills of certain types and is worried about facing 50% tariffs after 1 July, once tariff-free goods have been used up. Will the Minister similarly look at its concerns and consider exemptions for steels that cannot be sourced in the UK?

18:30

[Chris McDonald]

The hon. Member might wish to let the business know that we have committed to a 12-month review of these tariffs, which, as I said, apply to steels that are made or could be made in the UK. I am aware that Speciality Steel UK is currently not operational as it is going through an administration process. Although the sort of high-quality aerospace steels that he mentioned may not be made there, I think it is probably the most likely location where they will be made, subject to those certifications, which are held by that business. The official receiver is currently in exclusive discussions with the business and a potential owner, so it is possible that the company he refers to may see a UK supplier soon, but if he shares the details with me, I will certainly be able to give him a fuller response.

[Alex Ballinger (Halesowen) (Lab)]

Interestingly, there is also a Coker facility in my constituency, and I have had several other businesses write to me on this subject. Only last week I visited the London Screw Company in Halesowen, which is really concerned that the 50% tariffs will increase the price of its products and make it uncompetitive. Although I am pleased that there will be a 12-month review, I wonder if that will come soon enough for such businesses in my constituency. Can the Minister provide any relief in the interim for those that may be on the verge of something more serious?

[Chris McDonald]

I thank my hon. Friend for raising the issue of the London Screw Company, and also for the discussion he had with me about that very company last week. It looks to me to produce an extraordinarily high-quality range of products, and certainly better than I normally find for my DIY projects, so it is my intention to patronise that company in future—we should all have more high-quality ironmongery, I believe. In a similar vein, if my hon. Friend writes to me with further details, I will ensure that my officials look at that matter, but in the first instance we would look to see whether those steels are made or could be made in the UK.

Unless there are any further questions about downstream steel producing, I will move on to address more of the shadow Minister’s comments. She talked about the public interest test in clause 2. Some of the amendments would limit the test exclusively to consideration of the three factors in clause 2, whereas amendment 23 seeks to expand them to include the prevention of closure or job losses in Wales. The inclusion of the three factors in the Bill offers some additional weight, and of course any assessment of an intervention will need to be considered against them. However, there may be a good rationale for an intervention that moved beyond that and did not sit squarely under those factors, so in our view it would be sensible not to bind the hands of the Government in that way.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Sarah Olney (Richmond Park) (LD)]

Steel provides vital materials for our national infrastructure, from defence to renewable energy, and creates thousands of jobs across the UK. The Liberal Democrats therefore welcome the action that the Government are taking to protect British Steel and ensure that the blast furnaces in Scunthorpe do not go cold, but we are clear that the nationalisation of British Steel must be a temporary step to rescue the business before it can be returned to the private sector. We believe in a thriving, privately run steel industry, supported and empowered by the Government through an effective steel strategy.

Although the Liberal Democrats support this step, the Government must provide more detail on the plan, including how they will find private co-investors who can help to modernise the sites and put the money in to help to create more jobs. They must also ensure that the key stakeholders, including industries that rely on steel such as defence, are properly engaged in and represented through the process. We cannot afford another collapse of British Steel in a few years’ time, and we must move on from interim short-term measures to create a robust long-term plan for the future of the plant and sustainable domestic steel production, with an emphasis on national security.

I wish to speak first in favour of amendment 1, which stands in my name. Fundamentally, it is about parliamentary accountability. If the Secretary of State is to exercise a significant transfer power, Parliament should, at the very least, be told why that action is necessary and in the public interest. The amendment would not prevent the Government from acting; it would simply require Ministers to explain their reasoning before exercising the power, providing far greater accountability and transparency. Requiring a statement to both Houses would help to ensure that the use of the powers is proportionate, justified and open to democratic oversight. The Government already argue that the powers will be used only where necessary. If that is the case, there should be no objection to setting out those reasons clearly before Parliament. Amendment 1 proposes a modest and reasonable safeguard. It does not create a veto or impose an onerous process; it merely asks Ministers to account for their decisions.

I wish to speak in favour of amendments 2 and 3, which seek to ensure that regulations relating to property transfers and share transfers are made subject to the affirmative procedure rather than the negative procedure. The transfer of property or shares by ministerial regulation is not a minor or purely technical matter. These provisions are the heart of the Bill and give the Government significant powers with substantial financial, operational and public consequences. Given the importance of such decisions, does the Minister not agree that it is entirely appropriate that Parliament should approve such regulations, rather than having to rely on the limited scrutiny afforded by the negative procedure? The affirmative procedure would guarantee a debate and a vote in both Houses, ensuring proper democratic oversight before the powers were exercised. At their core, amendments 2 and 3 are about reinforcing accountability, transparency and parliamentary sovereignty in the exercise of delegated powers, and I urge Members to support them.

New clause 2, which also stands in my name, would establish a stakeholder advisory committee to ensure that decisions made under the powers in the Bill included input from the relevant groups and those most affected. The exercise of principal transfer powers could have major implications not only for the steel undertaking itself, but for workers, local communities, supply chains and strategically important industries across the country. The proposed committee would bring together voices from industry, the workforce and local authorities, ensuring that decisions were grounded in practical expertise and real-world consequences. The inclusion of sectors such as defence and critical national infrastructure is particularly important, given the strategic significance of the steel supply to national resilience and economic security. A structured advisory mechanism would improve transparency, strengthen confidence in decision making and help to ensure that interventions are sustainable and effective. New clause 2 is about ensuring that the public interest is determined not behind closed doors, but with the benefit of broad expertise and stakeholder input.

I wish to speak in favour of new clause 3, which recognises that intervention in a steel undertaking cannot simply be about ownership or transfer powers in isolation. It must be about people, jobs and the long-term future of industrial communities. If the Government exercise these significant powers, they should be required to set out a clear strategy for protecting workers and supporting economic transition. Not only is the steel industry strategically important to the national economy; it is often central to the identity and prosperity of the local communities within which it is situated. Workers in these industries possess highly valuable and specialised skills. Any transition strategy should therefore prioritise the protection of skilled employment wherever possible. Where change is unavoidable, there must be a serious commitment to retraining, reskilling and redeployment opportunities so that workers are not left behind. New clause 3 would help to ensure that Government intervention was accompanied by a coherent industrial strategy, rather than being another short-term fix and crisis management.

Steelmaking is of vital strategic importance to the UK. It creates thousands of jobs across the country and is central to many communities, and we rely on it for essential parts of our national infrastructure, from defence and transport to clean energy generation and advanced manufacturing. Although the Liberal Democrats are supportive of the pace and urgency of the Government’s action to protect British Steel, nationalisation must be a temporary step, and the Government must ensure adequate transparency and accountability throughout the process. I therefore urge the Minister to support these amendments, to ensure that the legislation can deliver the necessary support to the steel industry, while balancing the needs of local communities and workers and ensuring that the necessary steps are taken to ensure thorough parliamentary accountability.

[Sarah Champion (Rotherham) (Lab)]

As you know, Madam Chair, I have been urging successive Governments for over a decade to back the British steel industry, so it is genuinely a pleasure to be here today as the Government do just that. I support this historic Bill.

Steel is essential for the UK’s economy. It supports thousands of well-paid, skilled jobs and plays a crucial role in ensuring Britain’s security, particularly in an ever more volatile and uncertain world. Yet for years the industry has been allowed to wither. Production has fallen and plants have been lost—and with them jobs, capability and capacity. We simply cannot afford to allow this precipitous decline to go on any longer.

Rotherham is a steel town. It has seen the consequences of past Governments’ neglect up close. Speciality Steel, which is based in Rotherham—and Stocksbridge—should be a crown jewel in our economy, but it has been allowed to lurch from crisis to crisis, choked of investment and left at the mercy of unscrupulous ownership, unfair competition and a lack of vision. The plants currently stand still, shuttered amid the fallout of Liberty’s collapse. The workers are furloughed and uncertain about what their futures hold. I would be grateful if the Minister could update the Committee on the current state of the sale, which is now in its final stages.

My concern is not limited to Speciality Steel. Steel in Rotherham is at the centre of our local economy, and the crisis has had a substantial impact up and down the supply chain. The Minister’s ambition for steel’s renaissance could also be a rebirth for local businesses and local communities, but that requires investment, foresight and commitment. The Government’s steel strategy sets out a strategic vision for the industry and, crucially, delivers real and profound change for the sector as a whole. With £2.5 billion of investment in the sector and an ambitious but achievable target of 50% of the steel used in Britain to be produced here, the strategy is a blueprint for a revitalised domestic steel industry; it is one that has been roundly welcomed by the sector.

Perhaps most importantly, the strategy sets out a new approach to steel imports. Time and again, I and other steel MPs in particular have warned that a failure to tackle cheap, often state-subsidised and heavily polluting imports would destroy any attempt to increase domestic production. Without a level playing field, British steel cannot hope to compete. It is therefore welcome that the Government have acted to protect UK steel producers from unfair competition through a range of new trade measures, quotas and tariffs. While that is good news for steel producers, we do need to get the details right. I thank hon. Members on both sides of the Committee for raising specific examples of that.

Alongside steel producers, Rotherham hosts a large number of steel stockholders and downstream businesses. I have raised with the Government a number of instances in which trade measures have been introduced on products not currently produced in the UK, or where UK production and capacity is far below demand. I urge Ministers to act to ensure that those businesses are not impacted unfairly and that trade measures conform to the realities of the UK market; to do otherwise risks inadvertently harming the very industries and communities that the Government seek to defend.

While the Bill will not have a direct impact on steel production in Rotherham, it does send an important signal. I am proud that the Government are taking resolute action to ensure that they have the necessary tools at their disposal to safeguard the future of British Steel in Scunthorpe. I hope that this will set a precedent as the situation with Speciality Steel develops and that they will take similarly decisive action there, should it prove necessary.

With the right support, British steel can—and should—play an ever greater role in our economy, in infrastructure projects and, crucially, in our national security. I know that steelworkers in Rotherham will be relieved to have a Government who are so clearly on their side—on the side of good jobs and a dynamic economy—and, most importantly, a Government who back British steel.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I will focus my remarks on clauses 1 to 3 of the Bill and the breadth of the powers that they give to the Secretary of State. I start with the meaning of a “steel undertaking” in clause 1, which is one

“that carries on a business consisting of or including…the manufacture or processing of steel, or…iron”.

As the Minister will know, I raised in an intervention on the Secretary of State on Second Reading—indeed my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin), who speaks from the Front Bench, also mentioned this earlier—that that wording could appear to include undertakings that have as little as 1% of their business in iron or steel.

18:45

I take the Minister’s point that such undertakings may be vanishingly unlikely, and that the majority of enterprises we are concerned with are predominantly engaged in the manufacture of steel, but we have to ensure that the legislation we pass is fit for purpose not just in the usual case, but in all anticipated cases. I therefore hope that he will seriously consider amendment 21, tabled by my hon. Friend. It seems sensible to me to ensure that, in pursuit of what may be a perfectly rational Government policy to protect domestic steel manufacture, we are not encompassing in the Bill the possibility of any undertaking being liable for nationalisation when that undertaking produces little of its output in the iron and steel industry. Amendment 21 would mean that steel was a predominant feature of a business in scope of the Bill, not an incidental one.

Clause 2 gives the Secretary of State authority to

“exercise a principal transfer power…if the Secretary of State considers it necessary to do so in the public interest.”

Of course, it is the Secretary of State’s judgment about the public interest that counts here, so we need to be confident that his power to do so is appropriately constrained. As has been discussed, subsection (2) sets out some examples of when the public interest test may be met, but there is plenty of breadth even in those scenarios. Under paragraph (c), for example, the Secretary of State may decide to nationalise a steel undertaking when he considers doing so would support

“the economy of the United Kingdom or any part of the United Kingdom.”

The Minister will recognise that I raised that point, too, on Second Reading.

The question must surely be: how small a part of the UK will do to satisfy that criterion? The closure of one steel-related facility will have an obvious economic impact on the town or immediate area in which it is located. Is that sufficient to meet the paragraph (c) criterion and justify the Secretary of State deciding to nationalise the whole undertaking? The wording would appear to allow that, and would mean that any decision to close a steel plant or any other facility relating to the manufacture of steel could render the company that owns that facility liable to nationalisation. We need to ask: is that what the Government intend and, if so, what are the likely consequences for industrial investment in this country? If that is not what the Government intend—it may well not be—surely the language should be tightened.

The definition of “public interest” in the Bill is wider still, because the three examples given in subsection (2)(a) to (c) are just that—examples. The Bill allows the Secretary of State to nationalise on the basis of any other definition of the public interest that he may choose, undefined in the Bill. I therefore support amendment 14, tabled by my hon. Friend, which would limit the definition of the public interest to the three examples listed in the clause. However, the Government would be wise to think again and tighten the language even within that.

In clause 3, the Secretary of State purports to limit his powers by use of a sunset clause. The problem is, he also proposes to allow himself to reset the sunset, and to do so indefinitely, under subsection (3). I am afraid that makes a mockery of the concept of a sunset clause.

[Richard Tice]

The very reason that the Government need the ability to extend the sunset clause is that if they listened to the amendments from the Conservative party, the delays from various items would be so great that they could go beyond the two years. Of course the Government need the ability to extend the sunset clause.

[Sir Jeremy Wright]

I recognise that the hon. Gentleman does not normally engage in the detail of legislation, but if he did, he would know that this is the Committee stage, where we look at the detail.

What the Government could perfectly properly do is pass the legislation, as amended by my hon. Friend the Member for West Worcestershire, and if they felt at the end of the sunset clause period that they needed further powers, they could come back to this House with further primary legislation and seek our consent to do that. The difficulty with what we have before us is that the Secretary of State has the power to extend the sunset clause indefinitely, by regulations, over and over again. That is what the wording of the Bill says, and that seems to me to be something we should not accept here. What we should do is reinstate the natural, ordinary meaning of a sunset clause, which is set out in clause (3)(1), by removing the rest of that clause. If, as the hon. Member for Boston and Skegness (Richard Tice) suggests, the Secretary of State wants to extend those powers, he should seek the authority to do so in primary, not secondary, legislation.

These deficiencies in the Bill are cumulative: the power to indefinitely extend the Secretary of State’s proposed powers is more pernicious because the powers are so broad, and the huge latitude that he would have to define the public interest matters more because the Bill may apply to many more companies than might have been thought when hearing the Government’s original intentions for the Bill. Plus, of course, the Secretary of State’s consequent powers, which are set out in the rest of the Bill—having decided to nationalise and make that initial transfer decision—are mostly constrained only by the scrutiny of secondary legislation, so the initial transfer decision is all the more important. It is my view that the Secretary of State’s powers, as defined in clauses 1, 2 and 3, are simply too wide and need to be constrained.

The Government make two substantive arguments in response to that view, and I want to address those arguments. The first, which the Minister put forward earlier, is that the Government are doing only what a previous Government did in the Banking Act 2009, and that the powers they seek to take here are no wider than those taken in that Act. I do not agree, for three reasons.

The first reason is that the powers in the Banking Act were premised on the existence of a special resolution regime, where the bank in question was already in financial trouble. As far as I can tell, this Bill does not require the relevant steel undertaking to be in any trouble at all for nationalisation to be an option. The second reason is that the Act provides for a temporary transfer to public ownership. This Bill does not use the word “temporary”, and again, I can find nothing in the Bill that prevents a nationalisation being permanent. The third reason is that the Banking Act requires the Treasury to consult before using its powers under that Act. There is no requirement in this Bill for the Secretary of State to consult anyone, so I am afraid it is just not like the Banking Act.

The Government’s second argument, which I discovered lurking in the memorandum from the Department for Business and Trade to the Delegated Powers and Regulatory Reform Committee—I am sure we have all read it— is that broad powers such as the right to define the public interest are

“buttressed by administrative law, including the need for interferences with property rights to be proportionate”.

Of course, that is so: the courts may intervene if the Secretary of State tries to use his powers irrationally or unreasonably, but Parliament should not be subcontracting our work to the courts.

If the legislative powers as drafted are too broad, it is up to the legislature—us—first and foremost to constrain them. The Secretary of State has consistently maintained, as has the Minister, that he wants only the powers needed to act where Government action is unavoidable, and only for the period needed, but the powers that he has in the Bill go well beyond that, and they could and should be restricted.

[Lee Barron (Corby and East Northamptonshire) (Lab)]

I want to start off by saying that I find it absolutely incredible when people turn around and say that our Government should not be intervening and running services, when they are happy to allow other countries’ Governments to run our services and utilities. To be honest, I get a bit tired of it, because it is essential that we do this if we are going to save industries, save sectors and save jobs. That is why we are right in doing this.

I want to speak on amendment 21, new clause 8 and new clause 5. It was a privilege to be recalled here on a Saturday last year to pass the emergency Steel Industry (Special Measures) Act 2025 to save the Scunthorpe works, and I am just as happy to be here today to see this Bill go through its first day of Committee. Since last year, it has become clear that public ownership is in the national interest. Corby is a town built on steel—steel that built this country. At one time, the Corby steelworks was the largest combined steelworks in Europe. I recognise that the Bill does not nationalise the steelworks in Corby, but it will make sure that the sector does well, and where that happens, that will ensure that the other aspects of steel do well.

In 1967, it was the Labour party that nationalised the steelworks and put British Steel in charge. It did so because it knew that home-made steel was essential for our national security, for our economy and for thousands of jobs. In 1980, a Government who failed to see those opportunities closed the steelworks, and with that, tens of thousands of jobs went and almost a third of people in my constituency became unemployed. That is why it is so important that British Steel should be allowed to continue.

This Bill marks a reversal in direction. It shows what can happen when we have a vision for our economy and the dedication to see that vision through. How could the last Government shape our economy and create jobs when they failed to even create an industrial strategy? This Government have a strategy. Their decade-long industrial strategy, and the steel strategy announced in March, show that.

The steel strategy provides £2.5 billion through the National Wealth Fund to help rebuild our steel sector so that we can move towards 50% of all British demand for steel being made in this country, ensuring our security in an unstable world with the capacity for our own virgin steel supply. That is what this Bill leads to, and that is what is going to happen as a result of it.

British steelworking powered the first industrial revolution, and it can do so again, building the renewables and technology for the future. We still have a steelworks in Corby, and we want to make sure that Corby and the towns like it across our country have a new and secure future. I believe that the passing of this Bill will ensure that that happens.

[Richard Tice]

It is a pleasure to stand up and support the Government and this Bill, because we all know that the ability to make primary steel is absolutely in the public interest, and it therefore automatically meets the public interest test. We cannot be the only G7 nation without the ability to make primary steel using a blast furnace, but that will be the consequence if this legislation does not go ahead.

The Conservatives’ line of thinking is to just rely on the private sector. Well, they tried that for some 14 years, but the reality is that the state of the blast furnaces means that they need investment for relining, renewing and rebuilding. The private sector has said that it is not there yet, but it could be, so we need a period of time when the industry has the commitment of the public sector to ensure that a thriving primary steelmaking capability can exist.

19:00

We face real danger. Only over the weekend we heard that the plans for a new electric arc furnace down at Port Talbot have been delayed by at least nine months, and possibly much longer, because of a failure to secure a grid connection. I fear that that is just the beginning: there could be concerns about the reliability of a connection or about the price of electricity. We hear from Tata UK that it is completely committed to opening an electric arc furnace, but I fear that the issues considered by Tata India’s board will be very different. If an electric arc furnace does not open at Port Talbot, it will still sell us steel, but steel that is made in India. That might suit Tata, but it does not suit the workers in Wales and beyond. We have just heard from the hon. Member for Rotherham (Sarah Champion) that the electric arc furnaces at Rotherham are not operational. We therefore face the real risk of having almost no steel manufacturing capability, whether from the electric arc furnace or from the blast furnace. It would be deeply humiliating for us, as a G7 nation, to end up with almost no steel-making capability.

Before I come on to the new clause that we tabled, let me refer to a couple of technicalities. Clause 44, on pension rights, refers to the ability to amend rights and liabilities. Members of British Steel pension funds will want confirmation that there is no intention to amend the existing rights of the workers, be they current or past serving members. I hope that the Minister can address that.

We need to get on with the Bill. As others have mentioned, we are almost in a sort of pause, whereas we need investment. That is why the proposals from the Conservative party are the exact opposite of what is required. What is required is a vision, a strategy and a commitment to the blast furnaces. Alongside that, there is a need for a new plate mill to ensure that we can have greater manufacturing capability. Other hon. Members have highlighted the concerns that we do not currently have enough of that capability. We can, we should, we must.

[Sir Jeremy Wright]

I understand the logic of the hon. Gentleman’s argument. He has referred several times to the series of proposals being made in Committee by the Conservative party, as outlined by my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin). They come to this: that no Government should be able to create for themselves a very wide definition of what a steel undertaking should be, that they should not be able to define for themselves without restriction what the public interest may be, and that they should not be able to extend indefinitely, without parliamentary authority, the effect of the Bill. Will the hon. Gentleman tell us what he objects to in those proposals?

[Richard Tice]

I will indeed. My objection is that the consequence of the Conservative party’s amendments would be to delay the investment that is required to get on with this. People have expressed concern about the current losses. The last thing we should do is create bureaucratic delays that prevent the investment that would turn the cash flow around from negative to positive.

[Martin Vickers (Brigg and Immingham) (Con)]

I have already made clear to my constituents that I do not oppose the Bill, but I support the Opposition Front Benchers in trying to constrain its cost. Will the hon. Gentleman give a specific figure, or is the Reform policy just to spend, spend, spend?

[Richard Tice]

Actually, the consequence of the Conservative party’s amendments would be to delay the vision and investment that is required, and therefore to increase the losses. That is why they should be ignored. If you are going to do a job, then for heaven’s sake, do it properly and get on with it. That is the difference here.

We need the blast furnaces to be refurbished and relined, and we need a plate mill. We need proper, committed investment. We need the Minister to have a pro-British steel procurement strategy at all levels of the public sector, from warships and the railways to even the planning conditions for a new Chinese embassy—let’s make it with British steel from Lincolnshire, not cheap Chinese steel from far away.

[Graham Stuart (Beverley and Holderness) (Con)]

I am trying to understand how constraining Government powers in the three areas of concern would in any way lead to a delay. I do not think that any constraints imposed would stand in the way of this undertaking. In what way would there be a delay? I may not have sufficiently understood the linkage between such constraints on Government powers in other undertakings and how on earth those would impact this particular one.

[Richard Tice]

It is my judgment that the Conservative party’s amendment would prevent the Government from getting on and setting out the vision, placing the investment that is required, and giving the confidence to everybody that there will be a steel-making capability for primary steel. Once we get that investment in the core asset in Scunthorpe—with a refurbished, renewed blast furnace that is ready for the next 50 years—then, with brilliant management from the private sector, we will start to attract private sector capital, which we all want to bring in. This is a moment that requires the proper seed investment, the commitment and the courage from this Government to get on with it, which was so lacking in the previous Administration.

[Sir Edward Leigh]

I agree with a lot of what the hon. Gentleman says. We can surely agree on this point: what is really killing Scunthorpe are the insane green energy policies and the fact that we have the highest energy costs in Europe. If we had a sane energy policy, we could start to make a profit at Scunthorpe.

[Richard Tice]

The Father of the House is absolutely spot on. The net-stupid-zero policies have been catastrophic across the piece, and I fear that those very policies are the reason why people are concerned about the possibility of opening an electric arc furnace. That puts even greater pressure on the need to have a renewed, brilliant, wonderful blast furnace capability for the next 50 years. If we achieve those things, we can bring in private sector capability with a pro-British procurement strategy. That will give confidence to all.

It has been mentioned that the Bill would somehow prevent other investment from the private sector. The discussions that I have had with overseas pension funds and overseas sovereign wealth funds suggest exactly the opposite. They suggest that, with this sense of commitment—what I like to call a joint venture with the core asset, under public ownership—we will attract more international investment, because people will know that there is a long-term commitment as opposed to the wibbly-wobbly, flip-flop approach of previous regimes. That is the reason that we need to get on with this. We need to ignore any delaying amendments.

Let us have the vision. New clause 5 would require the Government within three months to set out that 10-year vision and 10-year commitment to the blast furnaces and others in the steel undertaking, to ensure that we have a vibrant and, ultimately, viable primary steel-making capability in the United Kingdom.

[Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)]

I am pleased to speak in support of the Bill and comment on a number of the amendments. I do so as a Member of this House who represents a proud manufacturing constituency, which includes a number of industries that rely on steel in a variety of ways, from the rail industry and advanced manufacturing to the cluster of innovative defence and space-related companies at NETPark—North East Technology Park—in Sedgefield. Steel is not only used by some of those companies, but extensively used in their supply chain. It underpins manufacturing not just in my seat, but across the north-east and many other constituencies in the country, as we have heard. I have also campaigned successfully to protect sovereign supply of key materials in my constituency and the wider economy. Given the importance of steel to our national security and national critical infrastructure, it is crucial that we get our approach to steel right.

So what does this mean? First, as hon. Members across the House have said, we need to ensure that the Government can act quickly and with agility. That is why I have concerns about several amendments, which, as other colleagues have raised, could slow down the Government’s ability to act decisively. That appears in a number of amendments but, for example, amendments 2, 3, 18 and 19 and new clause 2 seek to impose additional requirements on Ministers before they can act using the provisions of the Bill. Others have gone into some of the specifics, but my concern is that when considered in the round, these proposed changes would have the cumulative effect of hampering the Government’s ability to act and to act swiftly. It is critical that Ministers can act because that is the key purpose of the Bill; that is why we are here debating it today.

Why is it important that Ministers can act quickly, and why might some of the amendments be a challenge? Because, as we are discussing, when a steel plant faces significant challenges and the Government are minded to intervene, Ministers need to achieve three things. First, they need to be able to provide certainty about the future of the business, which helps sustain the workforce and gives certainty to its supply chain and reassurance to its contractors. We have heard Members talk from their private sector experience—I myself worked in regeneration and housing previously—that when there is doubt about the future of an industry or a particular business, or there is a particular commercial concern, we know that when business confidence starts to fall, if action is not taken quickly, the lack of confidence in the supply chain and the contractor chain can do serious damage.

The second priority for Ministers must be to minimise risk. We know not just in this process, but in other similar processes undertaken by the public and commercial sectors that the longer the process, the higher the commercial and legal risk and the more likely it is that we will not get the outcome we desire. It was that desire to act swiftly and show significant national leadership that, as hon. Members mentioned, is why we were all recalled last year on a Saturday, to intervene quickly in the steel sector.

Thirdly, and crucially, the reason that speed is important is if this is agreed, it is important that Ministers have the powers they need to enact the will of Parliament quickly. Quicker intervention in circumstances like this, given the factors we have discussed, is likely to be more successful, particularly in complex cases as we see at British Steel in Scunthorpe.

[Graham Stuart]

The hon. Gentleman makes the point about the need for speed in these circumstances, but perhaps he could explain to the House why the endless resetting of a sunset clause, contradicting the whole purpose of a sunset clause, plays into the need for urgent action right now? Or does he agree that it is something that should be looked at again and does not need to delay any of the effective action for which he is calling?

[Alan Strickland]

Ministers will speak for themselves, but I think they are seeking the flexibility to act in the national interest and to do so appropriately. My concern is more with some of the clauses that add lots of prerequisites to what needs to happen before Ministers can act. My view is that in the limited, and hopefully rare, circumstances where Ministers do feel the need to exercise these significant powers, they need to be able to act quickly, and that is what we are discussing today.

Several of the amendments relate to concerns around value for money, which of course is an incredibly important consideration. It is important for all of us to remember that one of the key reasons we are here today is precisely because Ministers have said that they want to do more to ensure value for money for taxpayers delivered in the Government’s potential intervention in British Steel Scunthorpe. That is why my hon. Friend the Minister for Industry was clear in May that the Government intended to bring this legislation forward precisely because Ministers were unable to agree suitable terms with the current owner of British Steel that represented a

“responsible use of public money,”

so value for money has been a key driver of ministerial action on this matter and the reason we are debating it in the Chamber today.

I turn to new clause 5, which the hon. Member for Boston and Skegness (Richard Tice) was just describing. I am sort of slightly astonished that Reform, a party with no plan for steel, has put an amendment demanding a plan for steel. I am pleased to tell Reform Members who are here that we already have one. The Labour Government, as the Minister mentioned, published the UK steel strategy in March. It clearly addresses a number of the important points that the hon. Member rightly mentioned earlier, including specifically the need for the public sector to buy more steel. A year ago in June 2025, the Cabinet Office published guidance—procurement policy note 22—that required public bodies nationally and locally, and their executive agencies, to ensure that UK-produced steel is routinely considered in public procurement and that this is done at an early stage in the process, so the mention of public procurement around steel in that amendment is redundant. Ministers have already issued clear guidance on that some time ago.

14:30

The second problem with Reform’s new clause 5 is that it misses the point of the Bill. This Bill is not about a national strategy on steel—one was published, as I have just mentioned. The proposed law before us deals with specific questions of ownership and with Government intervention in specific steel undertakings. My concern is that subsection (2) risks fundamentally undermining any steel company that might be acquired by the Government. Why? Because by requesting the publication of internal strategies, investment plans and the various things mentioned in the new clause, it risks asking the Government to release into the public domain highly sensitive commercial information about that new public corporation—information that I know, having spoken to people in the sector, other commercial steel operators would be unlikely to publish.

I have a broader point about not only the new clause but some of the wider discussion of the Bill. At the heart of new clause 5 sits a slight misunderstanding of what nationalisation means. To give a local example, I was proud to work with the Defence Secretary to secure the nationalisation—or the “strategic acquisition”, as the civil service preferred to call it—of a semiconductor plant in Newton Aycliffe in my constituency. The process was designed to protect the sovereign supply of the semiconductor chips that are vital to the UK-Italy-Japan global combat air programme. There was a risk of that sovereign supply being lost from NATO soil.

Octric, as the company is now called, has its own board and its own chief executive, recruited from industry, along with industry experts supporting it. It is of course supported by the Ministry of Defence, but it operates as a commercial concern—as a company in which the sole shareholder is the British Government. That is what we are talking about. Let us be clear: we are not talking about the Government acquiring a steel company then getting involved in the day-to-day running and making all sorts of detailed day-to-day demands. We are discussing the provision of powers to allow the strategic acquisition of a key element of the steel industry, if that is required and in the public interest.

I am concerned that, given the importance of steel to defence and to our critical national infrastructure, forcing the publication of the details set out in new clause 5 could compromise our national security, given that we are talking about using steel for such vital purposes. I say respectfully to the hon. Member for Boston and Skegness that, of course, Reform’s slightly muddled position on steel strikes me as nothing new. In 2023, Reform appeared to oppose intervention in Scunthorpe; now it proudly supports it. Last year, Reform talked of reopening blast furnaces in Port Talbot; I noticed that that pledge had disappeared from its manifesto for the recent Senedd elections.

The Bill deals with serious and crucial issues—not just for our national economy but, as Members have said, for many of the constituencies represented by right hon. and hon. Members present, and it deserves to be taken seriously.

Before I finish, I have three issues that I would like the Minister to address, if he could, when he responds to the debate. First, we need to bring clarity to what nationalisation would mean in this context. My understanding is that were British Steel to be nationalised, it would effectively remain a private company, but its primary shareholder would be the Government, and commercial leaders with relevant sector experience would be brought in to run it. Can the Minister confirm that the best commercial minds from the steel manufacturing industry and other relevant industries would be recruited to run the company and that that is how it would function?

I think of comparisons from local government. When I was a cabinet member in charge of planning, housing and regeneration, we had a number of subsidiary companies as the council, but they had operational independence. We recruited the best people from the relevant sectors and did not interfere in the day-to-day operational running of those organisations. If the Minister could give clarity on whether that is a suitable comparison to what he envisages, that would be helpful.

Secondly, a number of the amendments seek clarity on transparency or accountability, on which Members rightly want reassurance. I have expressed concerns that the commercial reality of the company operating would mean that some steps just would not be appropriate, reasonable or helpful, and could slow things down. But can the Minister give some clarity on the entirely reasonable and legitimate desire of Members to understand, if British Steel is acquired, how things are going, how public money is being spent, what is being delivered, and how transparency might be brought to the House in an appropriate way?

Finally, the hon. Member for Richmond Park (Sarah Olney) tabled new clause 3, on jobs and the industrial strategy transition. I will not get into the specifics of the new clause, but it flags up an important point about how Ministers will ensure that any acquisition of a plant will deliver social value, including jobs, apprenticeships, traineeships and other opportunities.

I have been very pleased recently to meet the new apprentices at the semiconductor plant in my constituency that, as I mentioned, was acquired by the Ministry of Defence, and have seen for myself how that Government intervention is delivering wider value to the community. A new apprenticeship programme has been established and 35 additional people have started working there, with more being recruited and work going on to expand the business and make it work better commercially, which is exactly what we want to see. Will the Minister say more about the important issues raised by the hon. Member for Richmond Park around how jobs, skills and apprenticeships might be looked at and considered in any potential acquisition?

To conclude, I support the Government’s approach to the Bill and have been happy to set out some of my thoughts on the amendments from across the Committee. Given the importance of steel, it is entirely right that the Bill seeks to move us to a more proactive position and to give Ministers more options to act in the national interest. That is important not only to provide a more secure future for the sovereign supply of steel, but to avoid the permanent loss of our country’s steel-producing capacity.

A modern, dynamic, future-facing steel industry is critical to the Government’s ambitions for industry and modern industry. As we have heard from Members across the Chamber, it is also crucial and central to the ambitions of many of the communities represented in this debate. I commend the Minister, with his significant expertise on steel, for pushing this important matter forward.

[Ann Davies (Caerfyrddin) (PC)]

I rise to speak to amendment 23, tabled in my name, which seeks to strengthen the public interest test that decides when Governments may nationalise steel sites under the Bill. Specifically, it would ensure that nationalisation can and should be used to prevent the loss of jobs in Wales and to prevent the closure of 16 sites in Wales.

Why is this change needed? Currently, the public interest test notes three specific factors for when nationalisation powers may be used, two of which are

“the construction, maintenance and operation of critical infrastructure in the United Kingdom”

and to support

“the economy of the United Kingdom or any part of the United Kingdom.”

While those provisions could allow the Government to intervene to protect Welsh steel sites, they offer no guarantee that they will.

Welsh steel communities know all too well what happens when Governments choose not to act. We have experienced this before. Port Talbot stands as the most painful example, where the blast furnaces were allowed to close in 2024, resulting in thousands of job losses and devastating a community that had a proud history of making steel for over 100 years. Before the closures Wales had the largest steel workforce in the UK, with 9,300 people employed in the sector. The Labour party had several years in opposition prior to entering government; the Government could have developed a plan to nationalise Port Talbot to safeguard jobs, as they have done for British Steel in Scunthorpe. They could have acted, but chose not to. Port Talbot deserved equal treatment. Wales deserves equal treatment. The Welsh economy cannot afford a repeat of the calamity of Port Talbot.

The need for certainty is not theoretical. Only recently, last Thursday night, a major fire at Port Talbot caused significant disruption. We are so grateful to the emergency services for acting so quickly, evacuating the area so there were no casualties, but significant damage was caused to the steelworks. We have also learned that the installation of a new electric arc furnace at Port Talbot may be delayed for months because of an electrical connection issue. I believe that is a planning issue with the local authority. These events have not helped the precarious situation at Port Talbot. To safeguard the site and jobs, the Government should make it clear that they will step in to prevent closure or job losses, as a measure of last resort—a position Plaid Cymru has consistently called for.

Steel jobs in Wales are not just jobs: they are strategic assets. They are essential for the future of our economy, for major infrastructure projects and for the development of offshore wind in the Celtic sea. They are also the backbone of our communities from one end of Wales to the other. Alongside Port Talbot, Wales is home to the Trostre works in Carmarthenshire, 7 Steel in Cardiff, Tata in Llanwern and the steelworks at Shotton in the north-east of Wales. Each of these sites deserves the same level of protection that is being offered to sites in England. All deserve equality.

[Graham Stuart]

Does the hon. Lady share my concern that the funds put in place by Government—£2.5 billion for the steel plan—are completely inadequate to match the enthusiasm of Members across the House for nationalisations? The National Audit Office suggests there would be £1.5 billion in losses from running the Scunthorpe plant alone, without any investment and without any compensation for Jingye, so the £2.5 billion would be rapidly gone. The truth is that this House and this Government are unable to put in place the sums of money that would allow Scunthorpe sensibly to be supported and invested in, let alone the long string of 16 sites in Wales that the hon. Lady so bravely speaks up for today.

[Ann Davies]

I thank the right hon. Gentleman for his intervention. Some £500 million has been ringfenced for Port Talbot; that money is rapidly gone, with no benefit to the local community, but that is another issue that I will not talk about now.

We want an end to the double standard. Welsh steel must be given the same guarantees as English or Scottish steel. What we want is equality for all the sites across the UK; we want the same security and the same commitment to preventing closures and safeguarding jobs.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I am delighted to welcome the Bill, and will speak to a couple of the new clauses and amendments. I declare my role as chair of the all-party parliamentary group on steel and metals-related industries, through which it is a pleasure to work cross-party in the interests of the industry.

Just outside Middlesbrough, wedged between the gas pipes and the railway, is an old path. Someone walking there 200 years ago would have found sailors trudging through salt marsh hamlets, and 100 years ago they would have found steelworkers—hundreds of them—walking home on the tired commute. The cinders underfoot gave the path its name: “the black path.”

If someone walks that path today, they will see the remnants of a bygone age for Teesside iron and steel. They will see a former railway station, now disused, which was used for industry. They will see a lost ironworkers’ village and the red wild flowers that thrive on former slag pile soil. And, of course, they will arrive at one of the largest brownfield sites in Europe: the former Redcar steelworks, which once stood as a great shadow on our skyline, the heart of the region, pumping out steel across the world.

The phrase on Teesside goes, “We built the world.” Everything from the Sydney harbour bridge to the Churchill War Rooms were made with Teesside steel. It can never be forgotten that, in 2015, the then Conservative Government’s laissez-faire approach to Chinese steel dumping denied us the intervention that we needed on Teesside. The closure of Redcar steelworks tore a hole through our region and cost thousands of jobs. I pay tribute to my constituency neighbour, my right hon. Friend the Member for Redcar (Anna Turley), who at that point was a newly elected MP and fought tirelessly for the workers of Teesside, but we can never allow a situation like that to happen again.

We cannot change the past, but steel is not our past, as the workers at British Steel Special Profiles at Skinningrove in my constituency will tell us, or the workers at Teesside beam mill at Lackenby, along with the many supply chain SMEs on Teesside. Having run a Teesside steel company for many years, the Minister for Industry knows that landscape well. I commend the decisions that the Government have taken, particularly on British Steel, that have protected and safeguarded jobs in my constituency and my region.

14:30

Independent analysis earlier this year found that British Steel alone supports more than £1 billion in GDP and over 20,000 jobs across the UK. We have seen a range of different interventions this year, including the steel strategy and the measures on trade, which have been welcomed by industry as some of the most significant interventions in over a decade to support sovereign domestic production, and now we have this Bill, which allows the option of full public ownership. As the Minister said, that is another useful tool in the arsenal to protect sovereign capability.

The public interest test, as set out in clause 2, strikes a good balance between the flexibility required to act in the national interest and recognising the need for limitations on excessive power. It should not be restricted any further or we would risk leaving critical assets out of scope of the interventionist powers.

I also want to speak to clause 3 and Opposition amendment 12. I am a little cautious about clause 3. The powers enabled by the Bill must not be overly restricted by the sunset clause, as future Governments may not be as interventionist when it comes to our critical sovereign industry and may not be guaranteed to renew them. If these powers are too quickly withdrawn, it will leave the industry with greater uncertainty. For that reason, I oppose amendment 12. I understand the instinct behind it—Parliament should always be careful about broad powers, and it is our right to ask how they will be used, how long they will last and what accountability will sit around them—but I do not support the amendment as, in my view, it would risk building unnecessary uncertainty into the Bill.

The steel strategy, published in March, was right to recognise that rebuilding resilience in the sector will take time. It will not be “job done” within two years; the challenges facing steelmaking, from energy costs and international overcapacity to supply chain fragility and strategic ownership, are long-term challenges. As the Minister says, the strategy is inseparable from the Bill, so I welcome the decisions on trade, but it would be useful to hear from him some clarity on carbon border adjustment mechanism alignment with Europe, which is a bit of a limbo issue at the moment.

I was disappointed not to see new measures in the strategy on industrial energy prices, which remain one of the greatest barriers to competitiveness for steel. We have seen the British industry supercharger and the British industrial competitive scheme that help ease the pain, but we need to think much more strategically about the long-term energy future of industry.

The Government are racing ahead with small modular reactors. In my view, there should be an alignment here by ensuring that SMRs are based in industrial clusters and supporting industry there, but also vice versa, so that as we move ahead with the SMR programme, we ensure that British steel is used throughout the supply chain. It was a courageous decision by the Government to choose Rolls-Royce SMR for that programme when other international bidders were available. We need to make the most of that by ensuring that the procurement for those contracting for that work uses UK steel.

I worry that if we pass Opposition amendment 12, we will bake in instability and loss of control, and we will not allow some of the long-term issues to be addressed when Government intervention is needed to ensure long-term resilience in the national interest.

[Graham Stuart]

The hon. Gentleman is giving a powerful speech and showing great expertise. Is he confident, as so many critics of the steel plan were not, that the £2.5 billion that has been found by the Treasury is sufficient to allow the interventions that he so enthusiastically supports? If it is not, is there not a danger that we will not invest in things, but just bleed out public cash on facilities that continue to be uncompetitive and do not get renewed? If we do not put the right resource in, as France and other countries have arguably done, we will be losing out and not winning.

[Luke Myer]

As a Back Bencher, I will always fight for more funding to modernise our steel industry. What I do know is that the current owners of British Steel are not responsible owners. We saw last year the crisis that was created when they failed to provide sufficient supply to keep the blast furnaces running. We cannot allow the current situation to continue if we are to protect our domestic industry. This Bill is about having the powers to nationalise and ensure that the national interest is served. Whether there is sufficient funding is a question on which I will continue to push the Government.

We are not focusing today on clause 58, but the freedom to make the necessary fiscal decisions to support operational stability and competitiveness is fundamental to the sunset clause we are discussing, as well as the potential for ongoing considerations on other critical assets that the Bill might be used for. It would be helpful to hear more about the Government’s intentions on issues like energy and procurement, as my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) said. We had a positive intervention from the Cabinet Office last year and the ambition to increase domestic steel market share back towards 50% is right, but the test will be in the delivery.

For too long, we have had industrial strategies while approving publicly backed projects that import vast quantities of overseas steel. Taxpayers rightly expect public investment to strengthen British industry and British jobs. Mechanisms like contracts for difference and other subsidy schemes must align much more closely with procurement objectives, so that public money genuinely supports UK supply chains. The forthcoming defence investment plan is a major opportunity to ensure that we are using UK steel across the country in industrial communities to support national security. At the end of the day, economic security is national security. Britain cannot become dangerously dependent on overseas steel for critical infrastructure or defence capability.

While I support the shift to electric arc furnaces and the increased focus on how we use domestic scrap, which is welcome, Britain should seek to retain some primary iron capability. Other countries are investing heavily in technologies like direct reduced iron. We need only look at Luleå in northern Sweden, for example, where an operational hydrogen-powered DRI facility is already producing steel. That has not held the region back in any way. Economically, it has had the opposite effect of attracting inward investment in new industries, from data centres to clean power. I would like to hear a little from the Minister about DRI and whether we will be looking seriously at that, but I do not wish to stray too far out of the scope of the Bill.

The legislation was brought forward in the context of British Steel, but we should not pretend that British Steel is the only critical asset that may ever require Government action. There may be other sites, capabilities and parts of the supply chain where future intervention is needed to protect jobs, sovereign capability and the national interest, so my concern with amendment 12 is that it would make these powers too easy to lose. A future Government may not share the same commitment to active industrial strategy and may not be as willing to renew the tools needed to protect the sector, so we should not remove the extension mechanism now because we may leave workers and industry more exposed later on.

Opposition Members made the point that politicians should not run businesses, although of course the Minister for Industry did run a steel business for many years and did so very effectively. They may mean that politicians from this country should not run businesses. The Bill is before us because of the approach that Jingye has taken. The Chinese steel industry has long benefited from huge state subsidies, and cheap state-directed finance, energy support and overcapacity policies. Beijing did not leave it to the market; it used state power aggressively to expand industrial capacity, which is worth bearing in mind.

I will finish on this point. While the Government cannot say which assets they wish to use these powers for, it is evident that British Steel cannot remain in Chinese hands. I do not know what the long-term ownership structure will look like—perhaps it will be modernised and sold to a new buyer, or perhaps it will be taken into public hands and remain there, with steelworkers having some stake in the company that they built—but I do know this. When a Labour Government intervened to create the nationalised British Steel Corporation in 1967, Teesside enjoyed such high employment and high wages that it was classified as one of the best places to live anywhere in the UK. It brought stability to tens of thousands of families and built the second largest blast furnace in Europe.

In 1979, a very different Government took office with a very different theory of Britain—a small state and a blind faith in the global free market. In just five years, our region had the highest registered unemployment rate anywhere in Great Britain. By the end of Thatcher’s premiership, almost 250,000 jobs in our region had gone. They took a British industrial economy and turned it into a globalised service sector economy.

Today the Thatcherites are back, with a new logo and a new face. They will talk a big game on steel, but we have been here before. It is my belief that only a social democratic Government can truly protect our steel communities and equip them to face the future, because a social democratic Government recognise something that a foreign private owner cannot: the value of protecting sovereign industry, even when the going gets tough.

This issue is about our jobs, but it is also about our security. Will we be left exposed in a volatile world, or will we build for the future again? I hope that this Labour Government have the courage and ambition to do so.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

Minister McDonald, I believe you wish to contribute again.

[Chris McDonald]

There is so much so say, and so little time until the rise of the House. Members who are standing may wish to take a seat, because we might be here for a little while.

[The Chairman]

In case you are confused, Minister, we have until 10 o’clock.

[Chris McDonald]

Indeed, Madam Chair—I was banking on 10 o’clock.

I thank all Members, including the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin); the Liberal Democrat Front-Bench spokesman, the hon. Member for Richmond Park (Sarah Olney); and the former leader of Reform, the hon. Member for Boston and Skegness (Richard Tice), for the extremely constructive and civil way in which this debate has been conducted. I know that that comes from a real enthusiasm among all Members in the Committee for having a successful steel industry.

In fact, there were many points of agreement in the debate. In debating the amendments to the first part of the Bill, the importance of the steel industry came through extremely strongly, as did the importance and reliability of the use of public money. We all share that view across this Committee, and we also want there to be extreme care in the use of the powers in the Bill. I know that Members who moved amendments in that regard are concerned about that, and the Government are too. I will address some of those points, and I will endeavour to address some of the points raised by Members during the debate. I will start by addressing a recurring theme in the debate: what nationalisation is.

[Jim Shannon (Strangford) (DUP)]

I am thrilled that the Minister has until 10 o’clock to speak—if you are agreeable, Madam Chair, we will have lots of interventions. The issue is not whether people agree with the nationalisation of the steel sector, so we can set that aside; the issue is whether we will have a steel manufacturing sector that can produce steel for all the United Kingdom of Great Britain and Northern Ireland. We in Northern Ireland need the steel from here, and we need it for our defence sector, which is really important. Just before Christmas, my pastor in my church told me, “There are 69 wars in the world.” We have to be prepared for the world wars we are going to have to fight. We need a steel sector to do that, and what the Minister has put forward is a justification for it.

[Chris McDonald]

The hon. Gentleman is quite right. The steel sector is vital for our national security and our infrastructure and construction industries throughout the whole of the United Kingdom, including in Northern Ireland. He speaks very well about that.

Nationalisation or national ownership is not an objective in and of itself; it is simply a pragmatic tool of industrial strategy that can be deployed with care in order to achieve legitimate aims of Government. If we think about some of the nationalisations of the past, it may be that some of those were driven by the pragmatic use of industrial strategy, and it may be that some were driven by ideology. In general, the way that the nationalisation of a business works is that the Government intervene when a business is in distress or is no longer viable but is important. Those businesses are returned to the private sector only once they are successful.

Contrary to the narrative that is often peddled about public ownership, the purpose of public ownership is to pick up businesses when there is a market failure or where a private sector operator is unable to continue. We have seen that in other instances, such as in the railway industry. I see nationalisation simply as a useful and pragmatic tool of industrial strategy.

19:45

[Sarah Champion]

Does the Minister share my concern and confusion about the comments made by the right hon. Member for Beverley and Holderness (Graham Stuart)? I was not sure if he was supporting the nationalisation of British Steel but thought that there was not enough money or that there was too much money. However, he seemed to support the fact that in Europe, the Government subsidise electricity, and I felt that he wanted that to happen here. For all the reasons that Members have said, I just want a really strong and secure steel industry in this country.

[Chris McDonald]

I think the right hon. Member for Beverley and Holderness (Graham Stuart) also wants a strong steel industry, but he has been quite clear that he does not see nationalisation as a tool for delivering that—I think that is fair. He is also concerned about the use of public money, which I think is fair as well. I shall address both of those points as I continue.

I am very pleased that my hon. Friend the Member for Rotherham (Sarah Champion) raised those issues. This is an opportune time to mention that in her earlier comments, she asked for an update on the current status of the Speciality Steel UK business, which I know affects her constituency and that of my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball). That business shows the power of a productive Government intervention, working carefully with industry, because the Government have underwritten the costs of the official receiver to allow a proper sale of the business. The official receiver is in exclusive discussions with a potential buyer, and there was a high level of interest in the business from the market.

As we look forward to the potential sale of the business, we can see the vital role that the Government have played in recognising that steel undertakings are complex, that it can be difficult and can take time to assess them, and that they require high levels of working capital. That contrasts significantly with Governments in the past, who allowed steel companies to close simply by not allowing that process to continue.

[Sarah Champion]

Will the Minister give way?

[Graham Stuart]

Will the Minister give way?

[Chris McDonald]

I will take an intervention from the right hon. Member for Beverley and Holderness. Given that he was referenced, it would be helpful to give him the right to reply.

[Graham Stuart]

To help the hon. Member for Rotherham (Sarah Champion), I do not think I said anything about subsidising. What I am looking for, and what I think all of us across this Committee would like to see, is the continuation of steel, especially in a dangerous world. I was questioning whether we have a coherent strategy and sufficient funding to take the steel industry—the specific site in Scunthorpe and others—on the journey that the Minister set out, which requires intervention to take it back to being a thriving industry. I worry that there is not such a pathway or sufficient resource, so we could be in the worst of all possible worlds, where we just bleed public money without it leading to the restitution of a healthy steel industry in this country. That is what I am looking for an answer to.

[Chris McDonald]

Let me address that point. It is helpful for us to think about the potential options. There is agreement across the Committee that we want a successful and thriving steel industry, and the Government have made some serious financial commitments. We have committed £500 million to support the transformation of the plant in Port Talbot, which has attracted another £500 million of private sector investment. We have committed £2.5 billion through our steel strategy and an additional £400 million to support the Forgemasters operation, which is successfully under public ownership.

We have to think about the potential options. Given that the Government have put that money on the table and are seeking private sector partners to work with for all our steel plants, the alternative would be the closure and the loss of those facilities. This comes down to a judgment as to whether we think the UK is capable of having a successful, profitable and investable private sector industry.

It is the Government’s view that it is possible for the UK to have that, not least when we compare ourselves with similar advanced economies in Europe—we are not necessarily comparing ourselves with low-cost economies around the world—but it is a matter of ensuring that we have the right business environment to enable that to happen, and it is clearly incumbent on Government to arrange policy in that way. I think our steel strategy, in particular, and our trade measures provide that response, which is what gives us confidence that we have the resources to do that.

[Sir Ashley Fox (Bridgwater) (Con)]

Will the Minister give way?

[Chris McDonald]

If the hon. Gentleman does not mind, I will take the second intervention from my hon. Friend the Member for Rotherham, and then I will give way to him.

[Sarah Champion]

The Minister is being very generous with his time. I want to take him back to the issue of Speciality Steel, because this is not just about the business itself—it is also about the supply chain. For example, the steel that is made in my constituency goes into Formula 1 cars and almost every plane in the sky. I think many hon. Members need to understand the consequential impact of saving not only British Steel, but all of our steel industry, on our whole economy and on global industries.

[Chris McDonald]

The supply chain is incredibly important. My hon. Friend is right about the jobs and the economic value in the supply chain; my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) also referenced the supply chain, and particularly how its needs relate to the measures in the Bill.

A number of the proposed amendments to the Bill would ultimately slow down the ability of the Secretary of State to make decisions—that point was also made by the hon. Member for Boston and Skegness. If the Secretary of State cannot act swiftly, there is a risk of greater uncertainty among employees and commercial partners in the supply chain, as my hon. Friend the Member for Newton Aycliffe and Spennymoor rightly said. That can have real-world consequences for businesses that rely on trade finance or other forms of working capital support, as a lack of confidence can rapidly turn into business closures. While some of those amendments are well-meaning—I am speaking particularly about amendments 2, 3, 18 and 19—they would fundamentally interfere with the speed and operational ability of the Secretary of State under the legislation and reduce legal certainty.

[Sir Ashley Fox]

Does the Minister believe that the Government’s current energy strategy is consistent with a successful British steel industry, or does he envisage that energy strategy having to change in order to lower industrial electricity prices?

[Chris McDonald]

I am pleased that the hon. Gentleman has raised that question, because it was mentioned by a number of Members during the debate. To go back to the point about having a business environment that creates a profitable and investable steel industry, energy is clearly part of that. Some of the changes that the Government have already made—increasing the rebate on the supercharger from 60% to 90%, or the British industrial competitiveness scheme, which will support some of the downstream industry—will be particularly helpful in supporting not only the steel industry but other parts of heavy industry between now and 2030, which is when the Government’s clean power mission will come fully online. We anticipate that at that point, we will have not only clean energy, but secure and lower-cost energy.

If we consider the timescale of some of the investments in steel companies that we are talking about—not only multiple-year investments in order to commission, but multiple-decade investments beyond that—we can see that we have a pathway on energy that will enable us to get from now to 2030 and beyond. The Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), who is not currently in his place, was concerned about this issue as well. He was also concerned that the UK has the highest energy prices in Europe, but we do not currently, and it is certainly our plan to ensure that our energy prices for industry are competitive with Europe in future.

Returning to the amendments that have been tabled, there was quite a lot of discussion about the sunset clause in the Bill. There were a number of objections to it, but the case for its continuation was made extremely well by my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer). As it stands today, the Government have no intention of extending the sunset period, but we recognise that we are living through particularly volatile times. There is geopolitical and economic uncertainty, which is likely to have a bearing on the steel sector in ways that it is difficult for us to see at the moment. As such, our view is that it is simply pragmatic to include this level of flexibility in the Bill, and of course, regulations made under that clause would be subject to the affirmative procedure.

It is important that I address some of the concerns of the hon. Member for Caerfyrddin (Ann Davies), who spoke with great passion and commitment about the importance of the steel industry throughout the whole of Wales. There is often considerable discussion of Port Talbot in this House, but as she rightly set out, there are also steelworks in Llanwern, Cardiff, Newport, Trostre and Shotton—I hope I have remembered all of them—that deserve recognition and investment.

I could not disagree more, however, that this Government have treated the Welsh steel industry unfairly, or not in an equitable way, compared with the steel industry elsewhere in the UK. The steel industry in Wales is the only part of the industry that has a ringfenced fund—£500 million for Port Talbot. The hon. Lady said that that has been spent with no benefit to the local community, but I frankly cannot agree with that. That £500 million has enabled Port Talbot to invest an additional £500 million in a transformation of that steelworks that will secure steel production at that site and the future of the south Wales steel industry for decades to come. It is a significant investment in the local community.

I know that the hon. Lady, like me, would have preferred for that transition in south Wales to have happened without the hard stop between the closure of the blast furnaces and the restart of the electric arc furnace, and I support Tata Steel’s view on the installation of its electric arc furnace. However, the decision to close was taken before the general election, and my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds)—the former Secretary of State, who is now Chief Whip—was able to intervene at that point and get a much better deal for the workers at Port Talbot and the community there than the previous Government did. I share the hon. Lady’s frustration and concern, but we need to be clear about where the indifference to the blast furnace closures in Port Talbot was. It was not with this Government; it was with the then Conservative Government.

[Richard Tice]

As we are talking about the new electric arc furnace in Port Talbot, can the Minister guarantee with certainty his confidence that, when built, it will open?

[Chris McDonald]

I am really glad that the hon. Gentleman has asked me that question—I know he has great experience in the property industry, and certainly with construction projects. As I mentioned earlier in the debate and as he will know very well, in any construction project you only really have certainty on the timeline when you have got out of the ground, and this project is still very much in the ground.

The hon. Gentleman’s question gives me the opportunity to clear up some issues. I know that the delay as reported by Tata Steel—this is Tata Steel’s project, not the Government’s—related to an electrical connection, and specifically the soil condition as it relates to building a substation. At the outset, quite rightly, assumptions were made about the soil condition based on engineering assessments. Right hon. and hon. Members must be aware, though, that there have been steelmaking activities on that site in Port Talbot for well over 100 years. Not all of those operations had been fully documented, and the ground conditions were considerably worse than had been anticipated. That is now being dealt with, and as soon as the project gets out of the ground, we will have great certainty about when the electric arc furnace can turn on. Until that happens, as a project manager, I would hesitate to give a cast-iron guarantee, because you need to get out of the ground first.

What I am looking forward to, though, is the delivery of the electric arc furnace in Port Talbot, because that is the point when the project will feel real—when the workforce will be able to see the furnace itself. I have been around the shop and seen the space that has been created for the installation of the furnace, but once it arrives on the dock of Port Talbot, we will all feel a greater degree of certainty about that. That will be a big boost to the workforce when it does happen. I am absolutely confident that it will happen, but to say when—to pin it down to an individual week or month—is more difficult.

There was one more point I wanted to make about the contribution of the hon. Member for Caerfyrddin. She essentially called for public ownership of Port Talbot, and I am really sorry, but that is another point on which we disagree.

The Government’s view is that where a steel undertaking is running adequately under private ownership, that ultimately should be allowed to continue, because the Government believe in private involvement in the steel sector. It goes back to the point about investment that I think the shadow Minister made earlier. She described her concern about a potential chilling effect on investment.

20:03

As I mentioned on Second Reading, since we have published the steel strategy, and in the background to this Bill, Sev.en has announced an additional £100 million of investment in the steel industry. That £100 million would not be there without our steel strategy. I have already mentioned the intense interest in the ownership of Speciality Steels UK. We can see that there is great interest in investing in the steel industry in the UK, and that is no wonder, given the opportunity that our market presents, so long as we can get the business environment right to ensure that people can invest and make money in the industry, too.

[Mr Alex Barros-Curtis (Cardiff West) (Lab)]

I am grateful to the Minister for putting on the record this Labour Government’s record on Welsh steel, because it contrasts with the 14 years of ruin under the Tory Government. Their failure to have an industrial strategy caused decisions to be taken in Port Talbot before this Government came into power. The Tories do not like to be reminded of that, but we will remind them about it every time. It is something that Plaid Cymru—I have great respect for the hon. Member for Caerfyrddin (Ann Davies)—and Reform would do well to remember when they turn up for their photo op outside Port Talbot.

I want to touch on something that my constituents are grateful for, which is this Government’s steel strategy. As the Minister rightly says, that resulted in a £100 million investment by Sev.en in 7 Steel in Cardiff. Does he agree that that is not only a sign of the importance of the steel strategy, but will mean that at least half of future UK steelmaking will be Welsh steel? All Members in the House should welcome that.

[Chris McDonald]

I thank my hon. Friend for making that point. He is right that we should welcome that 50% of UK steel will be made in Wales. We talk about Port Talbot specifically, but 7 Steel’s plant has operated incredibly well for so long, making the rebar steels that are essential for our construction industry in the United Kingdom, as well as in Ireland, which 7 Steel supplies, too. Long may that continue. I am sure that the investment will help with that.

The right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright) raised a number of concerns, such as the operation of the Bill, its powers, public money and so on. He made a comparison with the Banking Act 2009, and he is right that I have made great play about the similarity between this Bill and that Act. I reassure Members that, having passed the Banking Act to great acclaim, this Bill is following its path, and we made a positive decision to do that.

The right hon. and learned Gentleman mentioned the requirement in the Banking Act for the Chancellor of the Exchequer, I believe, to consult with the Prudential Regulatory Authority, the Financial Conduct Authority and the Bank of England, and how a consultation requirement is not in the Bill. He is right to point that out, but these are different industries. The banking industry is highly regulated, and there are statutory bodies that require consultation. There is no opportunity to replicate that in the steel sector, because there are no such statutory bodies. He rightly made the point that it is important that we engage on the detail in Committee, and I thank him for raising that point and giving me the opportunity to respond.

[Jim Shannon]

The Minister quickly and helpfully responded to my earlier intervention, and he will be well aware of the economic position of Northern Ireland due to the Windsor framework. Should the Bill go forward, the Government must provide a cast-iron guarantee that the nationalisation and supply chain structures outlined in this Bill will operate seamlessly. Can he give us a guarantee that that will happen and that Northern Ireland will not be disadvantaged by any new tariffs or tariffs that are already in place?

[Chris McDonald]

From the Government’s perspective, there is certainly no intention to disadvantage Northern Ireland. The unique position that Northern Ireland holds is enabling it to attract additional investment above and beyond. In fact, the economic growth rate in Northern Ireland is incredibly impressive, and I look forward to seeing that when I visit in two or three weeks’ time.

Having addressed the amendments, I will move on to some of the new clauses. First, I acknowledge the incredibly constructive dialogue I have had with the hon. Member for Richmond Park (Sarah Olney) in preparing for the Bill and the tabling of her amendments. New clause 2 would place a requirement on the Secretary of State to consult an advisory committee as part of his decision-making process. The Government agree with the sentiment—we have had wide consultation with stakeholders—but there is a practical reality and in particular a commercial consideration for the exercise of the Bill’s powers. It is therefore not possible for us to accept that new clause.

New clause 3 relates to the detail of a jobs and industrial transition strategy, which my hon. Friend the Member for Newton Aycliffe and Spennymoor asked a specific question about. I reassure Parliament that from a skills perspective, the Government will assess any impacts of a transfer on jobs, skills and local communities. In fact, that is an incredibly important part of why we would seek to intervene at all. Following an acquisition, the company’s objectives will be published as part of the shareholder framework document.

Finally, I will move on to new clause 5. Again, this issue was mentioned by my hon. Friend the Member for Newton Aycliffe and Spennymoor, and it also comes back to where I started the discussion about the nature of a nationalisation. While the Government in this situation would own a steel undertaking, and as the main shareholder in the business would have the opportunity to set the direction and appropriate strategic objectives, it is not the Government’s aim that the steel companies would then become an extension of the civil service, as amazing as my civil servants are. Instead, steel undertakings should be run by those who are knowledgeable and skilled in the industry, as we have seen at Sheffield Forgemasters and, as we heard, at the semiconductor factory at Octric.

Having covered the amendments and the new clauses, and perhaps tried the patience of the Committee to a great extent, it would be wise to conclude. I point out to hon. and right hon. Members that there is an additional day of debate on the Floor of the House on this Bill tomorrow. Rather than me standing here and talking to myself for six hours, they would be most welcome to come back then. If I have addressed their points sufficiently, perhaps some of those who have tabled amendments may see fit not to press them to Divisions, but otherwise, I feel I have addressed the points sufficiently for now.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

I call the shadow Minister.

[Dame Harriett Baldwin]

It is wonderful to see so many people interested in following this debate until 10 pm, which when our scrutiny of the Bill ends today. I will make just a few remarks, if I may. Despite the fact that we still have another day tomorrow, there were a few things in today’s debate that I have not heard sufficiently answered.

First, I pay tribute to the wise remarks from my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright). I encourage the Minister to take on board his points about the wide scope of the powers the Minister is taking in this legislation. My right hon. and learned Friend is a former Attorney General, so his remarks should be heeded with a great deal of seriousness. I reiterate the questions from my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) and my hon. Friend the Member for Brigg and Immingham (Martin Vickers), who sought assurances that the blast furnaces will continue. I am not sure we heard that on the record. When the Minister next gets to the Dispatch Box in these days of debate, will he clarify his intentions as far as that is concerned?

Will the Minister provide clarity on the public interest test? Sensible remarks were made about the Regulatory Reform Committee and how the public interest test is too broadly defined. How can it ever be reversed once it has been invoked? I did not hear anything about limiting the contingent liabilities or the sunset clause, or the possible impact—mentioned in the impact report itself—on investor confidence in this country.

The Minister mentioned that he was willing to meet Members who have concerns about the steel tariffs, which are a separate issue. May I urge him, over the next 24 hours, to try to find some time in his diary so that they can raise specific examples with him?

[Charlie Maynard (Witney) (LD)]

On 21 May, the Business and Trade Committee met representatives of more than 20 steel fabrication companies who were deeply worried about the potential loss of hundreds, or thousands, of jobs. I second that, in respect of the urgency, because 1 July is around the corner, and this represents a major risk to the sector.

[Dame Harriett Baldwin]

Indeed; and, as we have heard, one of the suppliers is still in administration. I think that the Minister needs to rethink that deadline, and I hope he will find time in his diary, perhaps as early as tomorrow, to meet Members on both sides of the House to discuss the issue.

With no more ado, Ms Ghani, I will now attempt to press as many of the amendments as you will allow, and we will test the view of the Committee. However, I beg to ask leave to withdraw amendment 21.

Amendment, by leave, withdrawn.

Clauses 1 and 2 ordered to stand part of the Bill.

Clause 3

Sunset for exercise of principal transfer powers

Amendment proposed: 12, in clause 3, page 2, line 10, leave out subsections (3) to (5).—(Dame Harriett Baldwin.)

This amendment would prevent the Secretary of State extending the sunset of the principal transfer powers.

Question put, That the amendment be made.

20:11

Division 12

Question accordingly negatived.

Ayes: 81

Noes: 266

Clauses 3 to 51 ordered to stand part of the Bill.

New Clause 3

Jobs and industrial transition strategy

“(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State must prepare and publish a jobs and industrial transition strategy.

(2) A strategy under subsection (1) must explicitly set out how the Government's investment and transition plans for the specified steel undertaking will—

(a) protect skilled employment,

(b) provide and support reskilling and redeployment opportunities for the workforce, and

(c) deliver tangible economic renewal and support economic resilience in the local communities dependent on the steel undertaking.

(3) The strategy must be laid before Parliament within six months of the day on which the regulations exercising the principal transfer power take effect.”—(Sarah Olney.)

This new clause requires that the Secretary of State publishes a report on jobs and industrial transition strategy where it exercises a principal transfer power.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

00:00

Division 13

Question accordingly negatived.

Ayes: 65

Noes: 257

New Clause 8

Contingent liabilities

“(1) The Secretary of State may not exercise a principal transfer power in relation to a steel undertaking unless they have made a statement to Parliament on the value of contingent liabilities associated with the use of the power.

(2) The statement made under subsection (1) must include—

(a) the value of any contingent liabilities to be acquired; and,

(b) the steps the Secretary of State will take to seek to minimise taxpayer exposure to any contingent liabilities so acquired.”—(Dame Harriett Baldwin.)

This new clause would require the Secretary of State to make a statement to Parliament on contingent liabilities acquired before they exercise a principal transfer power under this Act.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

20:40

Division 14

Question accordingly negatived.

Ayes: 145

Noes: 251

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

It has been drawn to my attention by the Tellers that the numbers were incorrectly reported for the Division on the Question that amendment 12 be made. The correct numbers were 81 for the Ayes and 266 for the Noes. I will direct that the numbers be corrected in the Journal.

The occupant of the Chair left the Chair (Programme Order, 21 May).

The Deputy Speaker resumed the Chair.

Progress reported; Committee to sit again tomorrow.