House of Lords
Drink-Driving
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hayter of Kentish Town
To ask His Majesty’s Government what assessment they have made of the potential role of innovation and technology in reducing drink-driving, particularly repeat offending.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the Government recognise the role that innovation and technology can play in reducing drink-driving and repeat offending, alongside effective enforcement, education and penalties. Through the road safety strategy, we consulted on measures to tackle drink-driving and drug-driving, including the potential use of alcohol interlocks for offenders. Responses are now being analysed. Our approach will remain evidence-led, proportionate and focused on reducing deaths and serious injuries on Britain’s roads.
Baroness Hayter of Kentish Town (Lab)
I thank my noble friend for his response. He will know that unless an alcolock—which is, in effect, a breathalyser in a car—gets a negative response, the engine will not start. Alcolocks have been introduced in many counties, where they have halved repeat offending and therefore reduced deaths. Might the Government move just a little bit faster than awaiting the outcome of the consultation and take action to either introduce or pilot these as a potential sanction for a drink-drive conviction? Might the Government follow the EU in requiring all new cars to be fitted with a basic kit so that, if this was introduced, it would be very simple to implement?
Lord Hendy of Richmond Hill (Lab)
My noble friend is a great advocate for better policing of drink-driving. I understand the sad reasons why, and our hearts go out to everybody who has suffered bereavement or injury through drink-driving. Alcolocks are widely used internationally, and the evidence shows that they reduce reoffending while installed, but reoffending returns to a similar level once they are removed. That is not a reason for not doing it, but it is a reason for being careful. The Government have published the first comprehensive road safety strategy for many years, and it is right that we consult on that and that, when we have consulted, what we do about it is proportionate and thought-through, so that the measures actually work.
My noble friend also mentioned installation facilitation, and we are thinking about that carefully. Meanwhile, we are carrying on with a package of advanced safety technologies that are ready now.
Lord McLoughlin (Con)
My Lords, the number of drink-driving convictions is falling, which is very welcome news. But the number of drug-related driving offences is on the increase, which is very concerning indeed. In 2015, the law was changed to make it easier to get prosecutions. I think there is still a lack of understanding in the general public of the danger of drug-driving. Will the Government look at whether they are doing sufficient to highlight this as a very serious crime?
Lord Hendy of Richmond Hill (Lab)
The noble Lord is absolutely right: drug-driving is, as he said, on the increase. We are consulting on better detection of drug-driving, because it is a complex issue: there are many different sorts of drugs and not all the methods of testing will currently stand up in court. But he is absolutely right and we are on the case for this. We publicise the huge dangers of doing it, but we need to get through the operational and forensic challenges of detecting different sorts of drugs through alternative forensic testing procedures, including oral fluids, saliva and sweat.
Baroness Finlay of Llandaff (CB)
My Lords, given that somebody with a blood level of 50 to 80 milligrams of alcohol has a six times greater chance of dying in a road accident and, on top of that, of killing other people, when will the Government finally implement a lowering of the limit? They are aiming to have an overall decrease in road deaths of 35%, and this would significantly contribute to it.
Lord Hendy of Richmond Hill (Lab)
The first comprehensive road safety strategy for some time was published a few months ago, and part of the consultation is indeed to look at lowering the limits for drink-driving. All the statistics the noble Baroness quoted are of course correct. We need to do something about it, and one of the reasons for the publication of the road safety strategy was that the number of deaths and serious injuries on the road has plateaued and it should be going down.
Baroness Grender (LD)
My Lords, UK courts can disqualify drink-drivers, but they cannot currently require an alcolock as a condition of returning to the road. Will the Government consider giving courts this option, in particular for repeat and high-risk drink-driving offenders?
Lord Hendy of Richmond Hill (Lab)
That is precisely one of the things that the Government have consulted about, because it is important that the maximum range of penalties and actions is available to deal with drink-driving and, even worse, repeat drink-driving. That is why we have consulted. This is one of the items in the consultation and why I anticipate that we will take action when we have analysed the results of it.
Lord Forbes of Newcastle (Lab)
My Lords, when I was 18, my parents’ car was hit head-on by a drunk driver. Both my parents survived, but my mother was left with life-changing injuries. I therefore warmly welcome the Government’s road safety strategy, especially the consultation under way on lowering the drink-drive limit and expanding the use of alcohol interlock technology. Can my noble friend the Minister give assurances to the House that any new enforcement powers, particularly immediate licence suspensions and alcolock technologies, will be applied consistently by the courts and consistently across all police forces, so that public confidence in the drink-drive reduction measures we are seeking to introduce are strengthened rather than undermined?
Lord Hendy of Richmond Hill (Lab)
I am sure that our hearts go out to my noble friend and to many other people like him who have suffered this sort of terrible family or close relationship catastrophe. Of course, the enforcement of the law is a matter for chief police officers. However, I have no doubt that, if we improve both the techniques that can be used to detect drink-driving and drug-driving and the range of penalties that are available for enforcement, chief police officers will treat this seriously, as will the courts.
Lord Moylan (Con)
My Lords, I too welcome the fact that the Government are consulting on how to improve road safety, and I am sure that the noble Lord would agree that any response to that consultation needs to be evidence-based. In that light, how does he take account of the fact that it appears from Scotland, where the limit has been reduced, that there has been no discernible effect on accidents as a result of that measure?
Lord Hendy of Richmond Hill (Lab)
The noble Lord is right that we should respect the evidence. Scotland’s experience is relevant, but it is not the only evidence. The Government recognise that Scotland did not see a significant casualty reduction, but we also cite wider evidence that alcohol impairs driving ability below the current England and Wales limit. Evidence cited in the consultation found that drivers with a blood alcohol concentration of 20 milligrams to 50 milligrams per 100 millilitres have at least a three-times greater risk of dying, and we will certainly take that into account when we decide what to do as a result of the consultation.
Lord Hampton (CB)
My Lords, alcolocks take an hour to fit, they cost £200 to fit, paid for by the user and, as the noble Lord said, they work while they are being used. Why are we not using them to save lives?
Lord Hendy of Richmond Hill (Lab)
I said that we are consulting on the first comprehensive road safety strategy for many years. It is right to consult, because a number of things in the road safety strategy—not just this one—affect many people, we need to hear from everybody, and we have heard from many people what they think of the proposals in the road safety strategy. I would say to him that it is worth waiting for, because it is not right to legislate before you understand what all the evidence is.
Lord Harper (Con)
My Lords, perhaps I might ask the Minister, given that there have been questions both about reducing the threshold for drink driving but also about enforcement from the noble Baroness, Lady Hayter, what is the Government’s assessment, because it was not clear from the road safety plan, of the biggest contributor to deaths and injuries on the roads? Is it people who do not obey the existing limit, or is it people who obey the existing limit but are none the less not safe to drive?
Lord Hendy of Richmond Hill (Lab)
I have to say there is a whole range of factors that go into it. The reason for the road safety strategy is that the death and serious injury rate has plateaued, rather than going down. The strategy has made it clear that there are a number of reasons for that. If there were only one issue in the strategy, with one consultation, that would be different, but there is a wide range in there intended to make all road users, including pedestrians and cyclists, safer. I think it is right, if the noble Lord reads the whole thing, to look at a number of solutions to this.
Pharmacy Closures
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Janke
To ask His Majesty’s Government what assessment they have made of the impact of increasing numbers of local pharmacy closures on primary healthcare services.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, pharmacies are an easily accessible front door to the NHS and we understand the impact that closures may have. We have increased the community pharmacy budget by £340 million—a 10% uplift that builds on the 19% increase, which was at the time the largest uplift in the NHS. That was delivered in 2024-25 and 2025-26 in order to support pharmacies’ essential role. Recent data indicates that closures have slowed, with 19 net closures in 2025-26 compared with 112 in 2024-25.
Baroness Janke (LD)
My Lords, I thank the Minister for her response, but 65% of community pharmacies are now operating at a loss; 45% have been forced to rely on personal savings or remortgaging their own homes just to keep their doors open, mainly to vulnerable people with the highest levels of need. What is the Minister’s response to the fact that individual pharmacists are subsidising essential front-line services out of their own pockets? Given that the closures are hitting deprived communities the hardest, what specific measures is the Secretary of State taking to prevent the creation of pharmacy deserts in areas with the greatest health needs?
Baroness Merron (Lab)
We are taking a number of actions on the point that the noble Baroness rightly raises. I have spoken about the uplift on the back of a major uplift in the two years previously. For underserved areas, the pharmacy access scheme provides financial support to pharmacies in areas where there are fewer of them. About 1,400 benefit from the scheme and they receive an average of £1,130 per month. Also on the question that the noble Baroness raised, local authorities have health and well-being boards, which assess whether the local provision of pharmacy services meets the needs of the population. Integrated care boards make decisions on pharmacy openings, and they can directly commission a pharmacy if necessary.
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.
Lord Campbell-Savours (Lab) [V]
My Lords, while we all will welcome this year’s very significant increase in funding, which greatly helps the viability of small chemists, we have a real problem in Cumbria, with its small towns, rural communities and limited chemist availability. Could we go further where the result of non-viability is problems in primary healthcare? Could we allow the remaining chemists greater flexibility and discretion in making changes to the strength, quantity and formulation in prescriptions? This could help to relieve the impact on primary healthcare services.
Baroness Merron (Lab)
My noble friend is quite right to identify the very important role that pharmacies play in the move from hospital to community. That is why we are funding the rollout of, for example, independent prescribing from autumn this year. That will build on the success of Pharmacy First and the pharmacy contraceptive service, and provide much more local, on-the-spot care for common conditions. In rural areas, dispensing doctors can dispense medicines to patients who live more than a mile from a pharmacy. Also, online pharmacies can deliver medicines free of charge.
Baroness McIntosh of Pickering (Con)
My Lords, I refer to my interest advising the Dispensing Doctors’ Association, and my late father and my brother were dispensing doctors. The Minister will be aware that where there are no community pharmacies, dispensing doctors stand prepared to give vaccinations, such as for meningitis B for students returning to university. Will she make good the commitment by dispensing doctors to dispense meningitis vaccinations to this cohort? It seems to have been overlooked in this case.
Baroness Merron (Lab)
We are constantly in discussion with Community Pharmacy England and its organisations about how we develop their role. I am very enthusiastic, as many noble Lords are, about the role that they can play. I was looking at statistics between April 2025 and February 2026 about the millions of clinical services, not just vaccinations, that have been delivered. For example, there have been over 4.7 million flu vaccinations. There is scope for discussion on how we can expand the vaccination programme, but the service provided by community pharmacies is to be credited.
Lord Kamall (Con)
My Lords, has the department undertaken any analysis of the characteristics of pharmacies that are most of risk of closure to understand whether geography, deprivation, the ownership model or dispensing volume are the principal drivers? Does she agree that having this data might help the department to target some of the uplift more effectively and prevent closures? Can she update the House on whether the department carries out that analysis?
Baroness Merron (Lab)
I know that the noble Lord is aware of this, but pharmacies are private businesses that open and close for a range of reasons. Sometimes pharmacies close and then reopen. That is why I spoke in my Answer about 19 net closures. It is worth noting, as the previous Government did, that access to pharmaceutical services remains good—80% of patients can access a pharmacy within a 20-minute walk. However, local authority health and well-being boards look at local areas and we have a financial scheme to support the development of pharmacies in underserved areas.
Lord Tyrie (Non-Afl)
Has any consideration been given to some relaxation of the rules which restrict the ability of GPs to open pharmacies at their practices, to which the Minister has already alluded? Might it be possible to alleviate this problem by relaxing those rules?
Baroness Merron (Lab)
As I have said, we keep this constantly under review, but it is the case that GPs can provide dispensing services in a number of situations. That particularly helps if people live further away from a community facility than is ideal.
Baroness Nargund (Lab)
My Lords, I thank my noble friend the Minister for her reassuring reply about the closure of local pharmacies. However, research published in 2025 shows that access to local pharmacies has declined almost four times faster in England’s poorest communities. What assessment have the Government made of the impact of this on health inequalities? What steps will they take to integrate pharmacy services within neighbourhood health centres?
Baroness Merron (Lab)
That comes into the category of underserved areas, particularly if there are fewer pharmacies. I disagree with my noble friend about the overall picture in terms of pharmacies; we are supporting them to do more work, and a bigger range of work strengthens their position. It is not necessary to live right near a pharmacy, because of provision by online pharmacies. Finally, I repeat that local authorities can also seek to open pharmacies where there are underserved areas.
Lord Scriven (LD)
My Lords, community pharmacy has lost thousands of full-time pharmacists in recent years, and many have been recruited directly to other parts of the NHS that can afford to pay more. What more can the Government do to support community pharmacists to minimise this internal displacement and help keep vital local pharmacies open?
Baroness Merron (Lab)
This is an important point and why the refreshed 10-year workforce plan, which we will soon see, will deliver the transformation of the health service, which pharmacists are very much part of. We are also looking to support employers in offering a range of national training opportunities for pharmacists and pharmacy technicians. We need to train and upskill the current workforce, and invest in community pharmacy staff. Pharmacists are very important, but there is a whole team with them. Training will include independent prescriber training, clinical examination skills and training the next generation of education supervisors.
Counterterrorism: AI and Facial Recognition
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Davidson of Glen Clova
To ask His Majesty’s Government what assessment they have made of whether the current legal architecture permits the appropriate use of AI and live facial recognition for counterterrorism purposes.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
The current legal architecture allows effective use of these technologies, but the Government continue to keep legislation under regular review as threats evolve. The Government are investing a record £141 million in AI technology and automation, including over £11 million on 40 new live facial recognition units. The police reform Bill will complement this by introducing clearer rules and independent oversight for facial recognition, ensuring that its use remains lawful, proportionate and responsible.
Lord Davidson of Glen Clova (Lab)
I thank my noble friend for his Answer. The Home Office consultation was a welcome recognition of the gaps in the current statutory framework in this area. I welcome the notion that there will be a development of legislation, particularly the police reform Bill, which covers these important technologies. On the proposed legislation, will there be support for behavioural analytics in relation to counterterrorism? I ask because that is a very important tool.
Lord Hanson of Flint (Lab)
I am grateful to my noble and learned friend for his question. What we are trying to do in the police reform Bill is respond to the consultation he has mentioned, which closed a few weeks back. We are currently analysing the responses to that consultation, and the intention is to put in place a legal framework that covers all aspects of facial recognition technology, so that there is proper governance, proper accountability, and a clear understanding of what, where and how facial recognition technology can be used. I will ensure that when the Bill is brought forward, my noble and learned friend has an opportunity to reflect on the points that he has made today.
Lord Kirkhope of Harrogate (Con)
My Lords, while I welcome the Government’s approach to this, with the postponement of the EU-UK summit, which was to discuss security issues, from 22 July to another date, I am all the more concerned that the re-establishment of our links to SIS II, the information system which gives real-time information on movements of terrorists around Europe, will now be put off as well. I wonder whether the Minister will update us on what we are doing to try to get ourselves back into what is undoubtedly the best means of dealing with terrorists.
Lord Hanson of Flint (Lab)
The noble Lord knows my clear view on this matter: we have to have a very constructive relationship with Europe; the things that we lost due to the Brexit withdrawal need to be examined in detail on the criminal justice front; it is in Europe’s and United Kingdom’s interests to have better access and understanding of who goes where, when and why; and it is the objective of the Government to try to help the European Union and to receive benefits. The summit that was planned for July has been postponed for reasons that are self-evident—because of a change of Prime Minister—but the objective of the Government remains the same.
Lord Anderson of Ipswich (CB)
My Lords, artificial intelligence chatbots are already engaged in skilfully targeted radicalisation. They may even be used in attack planning, as in the case of the Windsor Castle crossbow attacker, who was thwarted, fortunately, in his ambition to kill Her late Majesty but was assisted and encouraged throughout by his online “girlfriend”, Sarai. The Independent Reviewer of Terrorism Legislation has suggested that we may need laws against the creation and deployment of computer programs that can be used for such malign purposes. Could the Minister update us as to what the Government are going to do about it?
Lord Hanson of Flint (Lab)
I am grateful as always for the expertise that the noble Lord brings to this issue. The independent reviewer did indeed consider, in his annual report, the impact of generative AI on terrorism-related activity. The report concluded that, where AI is intended to be used for terrorist purposes, existing terrorism legislation generally provides sufficient coverage. Nevertheless, we are continuing to look at that. It is an important issue. As the noble Lord knows from our long discussions in the last few days, we have a security Bill and a police reform Bill coming up. We keep those matters under review and, obviously, it is a very fast-moving situation. We need to be ahead of the game for the reasons the noble Lord has mentioned.
Baroness Doocey (LD)
My Lords, the Government have committed substantial resources to live facial recognition technology, but, at present, the police authorisation makes no distinction between the technology being deployed on the high street and for counterterrorism purposes. Will the Minister confirm that the forthcoming framework will establish a distinct statutory authorisation regime for counterterrorism purposes so that we are not leaving both of them to inadequate police superintendent authorisation, as we are at the moment?
Lord Hanson of Flint (Lab)
The noble Baroness makes a valid point about the difference between terrorism and what I will term other crime. As she knows, facial recognition technology is sometimes used for things such as identifying missing persons who have not been involved in crime at all. There needs to be a clear framework for this. As she knows, the consultation paper raised a number of questions. We are trying to resolve and respond to those and to look at the great analysis that we had in responses. We will bring forward proposals, which she will have an opportunity to test when we bring forward the police reform Bill.
Lord Cameron of Lochiel (Con)
My Lords, it has been reported that the newly created PoliceAI centre will roll out large-scale pilots in up to 10 police forces to help officers triage, disclose and summarise digital evidence. Can the Minister inform your Lordships’ House as to what impact the police reform Bill, and specifically the proposed mergers of police forces, will have on these plans for a more enhanced role for AI in policing?
Lord Hanson of Flint (Lab)
At the moment, as the noble Lord knows, the Government’s policy objective is to reduce the number of police forces. We have asked the noble Lord, Lord Hogan-Howe, to look at that. Ministers have not yet had his final report with his proposals for the size of police forces. In the police reform Bill, we are trying to establish national responsibilities on crime, counterterrorism, training, and procurement. As part of our consultation, we are looking at what we need to do on a framework for facial recognition technology. As the noble Lord rightly said, we have put in £140 million, including £11 million on 40 new live facial recognition units, and we have looked at retrospective facial recognition. We are trying, in a very long-term plan, to get national capability, better resource and better efficiency for taxpayers, while at the same time recognising, as I know he does, that facial recognition is an extremely important tool for identifying known criminals, people who have broken licence terms and people who are missing, and for intelligence-led policing that can ensure that we know exactly who we are looking for and why.
Baroness Blower (Lab)
My Lords, this is clearly a very useful technology, but given that it has very wide application, can my noble friend say anything about how we monitor the level of possible misrecognition by these systems?
Lord Hanson of Flint (Lab)
That is an absolutely vital point, as it is with many forms of technology. The old identity parade misidentified some people. ANPR—number plate recognition—occasionally looks at information that does not identify the right number plate. This is technology that is used to support the police. I reassure my noble friend that at the end of it there is always a set of human eyes. Humans determine whether to put a case to the CPS for prosecution and whether the information is correct. But AI, including AI used for facial recognition, means that we are saving the police hours, to the extent that we can potentially deploy an extra 3,000 police officer hours for other purposes. That is because AI can sift out, examine, look at characteristics and determine one, five or even 10 suspects who we might need to have further eyes on. It is important to look at the developments. Ultimately, it is under operational police and political control.
IVF Treatment
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Nargund
To ask His Majesty’s Government what assessment they have made of The Lancet article Is IVF treatment heading in the right direction?, published on 23 June, indicating that many IVF add-ons do not work; and what consideration they have given to giving regulators the power to ban them.
Baroness Nargund (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare my interests as the lead author of the Lancet insight paper on IVF add-ons and as a board member of the Human Fertilisation and Embryology Authority.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we are aware of the issues raised in the Lancet article regarding the effectiveness of IVF treatment add-ons. The regulator, the HFEA, provides information to patients on the effectiveness of fertility treatment add-ons through its website. In most cases, there is insufficient evidence to demonstrate that they improve treatment outcomes. The Government are considering a range of proposed reforms to fertility regulation, including the scope of regulator powers to regulate add-ons effectively.
Baroness Nargund (Lab)
I thank my noble friend the Minister for her reply. The concern about IVF add-ons is not only that many are unproven and ineffective but also that some can pose serious health risks to patients and unnecessary emotional and financial harm. The HFEA’s current traffic light system is guidance only and the regulator has no enforcement powers, which means that some add-ons with a red rating continue to be offered in clinical practice. Will she consider granting the HFEA interim enforcement powers for the use of red-rated IVF add-ons to protect patients from harm while the wider reforms to the fertility regulatory framework are being developed and implemented?
Baroness Merron (Lab)
I recognise the situation that my noble friend describes and note that, while the relevant Act has provided a strong framework for over three decades, the fact is that treatment, science and societal expectations have all evolved very significantly since the last major reform in 2008. It is the case that the Act does not currently provide powers to ban add-ons. We are constantly looking at what we can do while we await and consider legislative change, but that really is the best way forward to tackle this.
Baroness Pidgeon (LD)
My Lords, the reality is that patients in England are struggling to access publicly funded IVF, with only two out of the 42 integrated care boards in England complying with NICE fertility guidelines. Can the Minister advise whether the Government are considering following Wales and Scotland in centralising commissioning for IVF rather than the current postcode lottery?
Baroness Merron (Lab)
We are not doing that, not least because, as the noble Baroness is aware, we believe that the needs of the local population are best served through local decision-making and through the integrated care boards. That said, I absolutely recognise that access to NHS-funded fertility services is variable, and we are reviewing the situation so that we can determine the next steps. I should emphasise that NHS commissioning organisations are expected to commission fertility services. They do have NICE guidance, which we are supporting them in following.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark)
My Lords, we will hear from the Cross Benches next and then from the Conservative Benches.
Baroness Deech (CB)
My Lords, I declare an interest as a former chair of the HFEA. Does the Minister agree with me that we really must get on with modernising the Act, as more and more gaps are revealed? In the meantime, does she agree with me that the HFEA should collect data by asking clinics to supply it? Then it would get firm evidence about what works and what does not. It could then publish the data, and make sure that patients are informed by their clinics, or by leaflets in the waiting room, to go on the clinic website and the HFEA website to get the accurate information.
Baroness Merron (Lab)
I would agree with the noble Baroness about the importance of ensuring that those who are considering accessing services—particularly the “add-on services”, as they are referred to—have the full information. The place for that is the HFEA website. The HFEA does make efforts, as do we in the NHS, to ensure that people are guided; however, it will be down to the individual. I absolutely agree with her about the need for reform for the reasons that I said earlier, and that is why we are looking at it.
Baroness Owen of Alderley Edge (Con)
My Lords, the HFEA has reported a 44% increase in the number of patients freezing their eggs from 2022 to 2024, yet data shows that very few women return to use those stored eggs and success rates decline with age. Given the frequent promotion of egg freezing to women without adequate reference to these limitations, will the Minister set out what steps the Government are taking to ensure that accurate information is widely available to those considering this procedure?
Baroness Merron (Lab)
The noble Baroness is quite right to identify that this is not an insurance policy to be relied on to guarantee a baby in the future, no matter what suggestion there may be to the contrary. It is also worth knowing that, while egg freezing is the fastest growing fertility treatment, it is proportionately still small—comprising about 5% of treatments. To her point, there is a responsibility on fertility clinics to ensure that anyone using their services understands the risks—which I must emphasise—as well as the long-term impacts of any treatment decisions that they make. It is quite right and proper that they do that.
Lord Hunt of Kings Heath (Lab)
My Lords, with the abolition of NHS England, ICBs will be given many more responsibilities in the future. However, does the Minister agree that their record on IVF, where they are not following the clear, specific guidance that they have been given, does not induce confidence in ICBs’ performance? Inevitably, Ministers will be drawn to make decisions more centrally. Does the Minister think ICBs understand that the kind of rationing that they undertake at the moment in relation to IVF is utterly unacceptable?
Baroness Merron (Lab)
I do find it unacceptable that people have different access to treatments in the way that noble Lords have described. I would expect that the move through the Health Bill will enable us to have a far more effective means, in all sorts of areas, to ensure that local populations are properly served. That is why we will be bringing the functions of the NHSE into the department. As my noble friend will know, that will ensure that we no longer have duplication and that we have the right resources. I very much expect and want to see adequacy of access and fairness, which is the basic thing in all NHS treatment, to be established in fertility treatment.
Lord Kamall (Con)
My Lords, I begin by thanking and paying tribute to the noble Baroness, Lady Nargund, and to her co-authors of this fascinating paper. Clearly, it shows that IVF is an area in which innovation is important but so too is the need for evidence. At a time when add-ons have sometimes quite fancy scientific names such as platelet-rich plasma, embryo imaging or intralipid infusion, it is understandable why patients may feel confused and think that this is a much-needed medical intervention. Are the Government aware of high-quality research into IVF add-ons that would give patients, clinicians and regulators greater confidence about which treatments generally improve outcomes for patients?
Baroness Merron (Lab)
All of this is important, not least because noble Lords will have seen in the women’s health strategy that we want to ensure that every woman can access effective fertility services easily and safely. I would certainly agree that there are areas where the fertility evidence base could be strengthened, and we are looking at how we can best support research and data collection, which was another point raised by noble Lords. We are currently working with NHS England, which will become part of the department, because we want to support equitable commissioning but also the right evidence base so that information is properly available. At present, there is scant evidence that many of these add-ons are anything other than optional and not recommended.
Baroness Gerada (CB)
My Lords, would the Government consider requiring the HFEA to share data on these inappropriate and harmful add-ons with the General Medical Council so that fitness to practise concerns can be acted on?
Baroness Merron (Lab)
It is important that, where there are concerns, they are acted on. Perhaps the noble Baroness, with her experience, has a particular way in which that could be followed up, but certainly the GMC would be expected to take action if there was incorrect and unacceptable practice. I am not suggesting that in respect of add-ons to fertility treatment; I am focusing on the need for fair, equitable, NHS-funded fertility services and ensuring people know that there is not evidence that their chances of conceiving will be improved currently by any of these add-ons that are being offered, which is the worrying situation that we have.
Numeracy for Life Committee
The Senior Deputy Speaker
The Senior Deputy Speaker (Lord Ponsonby of Shulbrede)
My Lords, I beg to move the three Motions standing in my name on the Order Paper en bloc.
Prisoner Early Release
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Keen of Elie (Con)
My Lords, victims of rape and child sexual exploitation have now received letters informing them that their attackers and abusers are soon to be released from custody, much earlier than would have been expected. Yet during the recent passage of the Sentencing Act, which paved the way for such reductions in custody, Ministers repeatedly assured Parliament that the most serious offenders would not benefit from these changes. Today we have been told that some convicted rapists and child abusers will be released only half way through their custodial sentence. I therefore ask the Minister two simple questions. First, does he consider that rapists and child abusers are not serious offenders? Secondly, will he explain why the assurances the Government gave to Parliament during the passage of the Sentencing Act have been so swiftly abandoned?
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
First, I would like to express my sincere sympathy with the victims of all these appalling crimes. Convictions for child sex offences are at a record high, and we as a Government have made grooming an aggravated factor so that perpetrators face longer sentences. Without the Sentencing Act, the courts would be at risk of grinding to a halt, preventing sex offenders and others from being brought to justice. We have acted to avert that crisis. We are delivering the largest prison expansion since the Victorians, with 14,000 extra places by 2031, and we have already delivered 3,100 since taking office. But if we do not tackle this problem of prisons running out of space, we will be back to where we were again. Two years ago, when I first took on this job, there were some very dark days in the Ministry of Justice. When you have fewer than 100 prison places left, that is dangerous for victims and future victims.
Lord Marks of Henley-on-Thames (LD)
My Lords, these issues are very difficult, but we share the Government’s determination to ensure that we do not run out of prison cell space as a result of past serious underprovision. However, I have two questions on early release. First, can the Minister say how effectively victims notified of the impending release of their perpetrators are signposted to victim support services, and how such provision can be improved? Secondly, the Minister has often stressed the importance of technology in the context of early releases. How far away are we now from having details of prisoner release arrangements available online in all prisons, including release dates, release locations, tagging arrangements and intended addresses following release, where those are available?
Lord Timpson (Lab)
The noble Lord is right to raise the point about prison building, because we have to keep building these prisons. There is a role for them but there is also a role for technology. I have been keen on pushing technology in all parts of the justice system. I am pleased that we have £82 million going into the justice ID project, for example, and there is a load of AI work going on. In fact, if you walk into the Ministry of Justice and see someone who looks about 19 in jeans and a T-shirt, they are probably one of our amazing AI team, who are making a very big difference.
But it is very important that victims are notified as soon as we know. We work closely with those who sign up for the victim liaison scheme. We have the highest ever amount being invested in victim support services, over half a billion pounds, because we want to work with victims to make sure that they get transparency and all the support—for example, making sure that the exclusion zone is right, and explaining what the electronic monitoring provisions will be. It is important that we work together in the interests of victims, and that we keep investing in technology to improve accuracy and improve speed.
Baroness Hyde of Bemerton (Lab)
My Lords, having previously worked with people being released from prison and having helped people resettle in the community, I know how crucial the right support is after release to prevent reoffending and to prevent further victims. In light of this, is my noble friend the Minister confident that our Probation Service, which was so appallingly treated by the party opposite when they were in government, is now strong enough to cope?
Lord Timpson (Lab)
I thank my noble friend for that question. Probation has had a very difficult time, but I am pleased to tell noble Lords that 90% of our probation regions are now improving, ahead of last year. I am doing a series of roadshows at the moment, going around the country speaking to probation staff—in fact, I will be in Bristol tomorrow—talking about the £700 million of extra investment we are putting into probation. There are extra staff—in fact, we have recruited more staff than we expected and more than ever before, and we are investing in technology and more housing too. While probation has had a difficult time, we are seeing green shoots across the whole of the Probation Service, and the support we are giving it through extra stability, extra recruitment and extra tech will mean that it can get back to the levels of service it was delivering many years ago.
Baroness Falkner of Margravine (CB)
My Lords, I want to draw the House’s attention to a specific case concerning child-grooming gang rapists who are no longer British citizens. I think the Minister will not be surprised to hear me refer to the case of Mr Shabir Ahmed, who we are told cannot be deported because of an immigration law passed more than 55 years ago in a different context. I ask the Minister a simple question: will the Government pass an amendment to that law so they can follow the law and the will of the people as exists now—that very serious offenders who are not British citizens are not welcome in this country and should be deported?
Lord Timpson (Lab)
What I can tell the noble Baroness is that all our sympathies are for the victims of these shocking crimes. It is absolutely terrible what happened. By law, tomorrow this this criminal will have to be released. What is important is that there will be substantial and robust licence conditions under MAPPA, with a recall option as well. He will know that the eyes of the state will be on him 24 hours a day.
Lord Garnier (Con)
My Lords, there are 3,650 women in prison in England and Wales. There are 12 women’s prisons and, as it happens, all 12 of them are in England. Of that 3,650, 2,500—that is about 70% of the women’s prison population—are in custody for non-violent offences. Why do the Government not release them, or at least some of them, and redesignate some of the women’s prisons to house the rapists and child molesters that seem to be about to be released?
Lord Timpson (Lab)
The noble and learned Lord’s figures are correct. What I also believe is that most women should not be in prison. I believe most women are victims. When you know that over 60% of women in prison have brain damage as a result of being beaten up, you have to ask yourself the question, “Where is the right place for them?” What we need is a very robust and well-invested Probation Service. We need to make sure they have a house to live in when they are released and that they get the support both in prison and out, so that the likelihood of reoffending can be reduced. With the Women’s Justice Board that we set up last year, we have done a great amount of work on a women’s diversion fund. We already had one women’s intensive supervision court, and we have announced another four, so this is part of the process of getting to a point where we can close a women’s prison.
Lord Brooke of Alverthorpe (Lab)
Does the noble Lord agree that tagging has an important part to play in this—the investment in new technology should cover that—and are the Government going beyond that to explore implanted chips?
Lord Timpson (Lab)
I thank my noble friend, who probably reads Inside Time newspaper, because it had a headline about implanting chips. That was suggested by a potential supplier when we had a sort of a “Dragons’ Den” day, and it was not something we accepted at all. At the moment, 29,000 offenders are on an electronic tag, and that will be going up to 40,000 as a result of the changes we are carrying out. The technology is robust and it works, but we are also making sure that we use that technology better by using data better. That means working with the police, for example, so we can link crimes to where people are going about with their tag. We are also very interested in something called proximity tags, which means, for example, that a victim of stalking or domestic violence will know at any time where their perpetrator is so they can have the freedom to move wherever they want, not their perpetrator.
Baroness Gohir (CB)
Can the Minister tell us the projected number of rapists and child groomers who will be released, and over what period? Are we expecting hotspots around the country?
Lord Timpson (Lab)
What is important is that we get the numbers right. While we are here today, our incredibly hard-working and talented staff in our offender management units are working out the release dates of a large number of people who are currently in prison. We have already stated that we think, as part of our impact assessment, that there will be 7,500 prison place savings, but there is more work to be done. We have a quarterly update that we publish, and that is where this sort of information goes. But the most important thing throughout all this is that we cannot run out of prison places. We need to make sure we do this safely, with great communication with victims, but we need to make sure we do not run out of prison places again.
Draft Conversion Practices Bill
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Cash (Con)
My Lords, it should go without saying that anyone who has been subjected to violence, coercion or abuse because of who they are or whom they love deserves the full protection of the law, but this Bill provides no necessary new protections and risks criminalising people who have done nothing wrong. It is deeply flawed in its drafting, and the evidence on which it is based is at best weak and at worst misleading. I will come back to that.
The Government’s Explanatory Notes say that abuse ranges from beating a person to coercive control, but these are already crimes, and those who are not in a relationship are covered by harassment or common-law assault. The Explanatory Notes also say that the Bill will cover “psychological or emotional pressure”, “economic pressure” and conduct that
“causes serious alarm or distress which has a substantial adverse effect on their usual day-to-day activities”.
This represents an average day for most teenagers when one is parenting them, as I am.
That drafting and those terms would put in question a wife who asks her husband to stop wearing her clothes, or parents who tell their child that they will not fund puberty blockers or cross-sex hormones, or a school that insists on referring to all its pupils as girls and boys. Despite reassurances from the Minister in the other place, the way this Bill is drafted causes all these possible problems. Can the Minister tell the House why the Bill contains no carve-outs for such interactions, and can he explain how the clear conflict with Articles 8 and 10—the right to freedom of expression, and the right to a private and family life—are to be reconciled?
This Bill also hands the power of private prosecution to any organisation that wishes to use it, without requiring the consent of the Attorney-General or the Director of Public Prosecutions. This means that litigious, bad-faith, privately funded campaign groups, such as the Good Law Project, could destroy the lives of those with whom it disagrees by bringing prosecutions. Can the Minister tell the House why there is no requirement in this Bill for prosecutorial consent?
I turn to the evidence base on which the Bill is built. The Minister Olivia Bailey quite rightly stated in the House of Commons that
“it is beholden on us all to ensure that this conversation is based on real facts”.—[Official Report, Commons, 25/6/26; col. 548.]
I am sorry to say that she then relied on the report from Galop, an LGBT+ anti-abuse charity. She claimed that it contains hundreds of case studies demonstrating appalling abuse happening right now. But it contains fewer than 200 identified cases and, of those, only 51 people were specifically seeking help with conversion practices. The rest were already seeking help for domestic abuse, forced marriage, housing or mental health.
I am sorry to say that the Minister also failed to mention a highly significant fact: that Galop ran a helpline on behalf of the Government, funded to the tune of £360,000 over three years. This is a government contractor’s report, therefore, created to justify further funding for that same contractor, and presented as independent evidence. In their report, the Galop researchers themselves admitted that the cases they found align with existing offences including ABH, rape, sexual assault, forced marriage and coercive control. Will the Minister explain why a report produced by a government contractor was presented to Parliament as independent research?
The impact assessment, published yesterday, fares no better. That relies on a Stonewall opinion survey that found that 10% of LGBT people had undergone an exorcism, which—as one mathematician, helpfully verified by the charity Sex Matters, has calculated—would imply 24,600 gay exorcisms a year in this country. That is preposterous and incredible, and yet the Government have used the same survey and flawed methodology for the 75,000 to 93,000 prevalence figure on which the entire financial case for the Bill rests. This is not a small matter, because every government department is required to follow the Treasury’s Green Book rule against cherry-picking data. This document fails that test. Can the Minister please explain why the data has been used so selectively, and what will be done to correct this?
I am afraid it gets worse. It is said that the Bill will generate a benefit of £783 million by assuming, first, that this legislation will prevent 100% of conversion practices occurring and, secondly, that—and very precisely—38% of those saved from conversion practices will also avoid depression. It is curious that the 38% figure came from a US study with no assessment of multifactorial causes of depression and without any peer review. As for preventing 100% of offences, if any law in history had achieved that, we would have no crime at all. The estimated costs of the Bill are then limited to 45 minutes of training per police officer and other workers troubled with implementing it. No other police time, court time—wasted time—is factored in; it is all to be confirmed. One might laugh, if only it were not so gravely serious.
I very much welcome the fact that the Bill is going to a Joint Committee for pre-legislative scrutiny. As we can already see, that scrutiny will be vital. Can the Minister give a firm assurance to this House that the Joint Committee will be given adequate time to take comprehensive evidence from all interested parties? It is worth us remembering that the Scottish Government tried a Bill like this in 2024 and that the public ferociously rejected it—leaving it, as one commentator said, “torn in shreds”. As this Bill goes forward, I very much hope the Minister will ensure the scrutiny it requires.
Lord Scriven (LD)
My Lords, before I start, it is worth remembering that in the middle of all this conversion therapy are individuals who are dealing with trauma. It is beholden on all of us to dial down the volume and discuss this much more calmly.
We on these Benches welcome this Statement and the publication of the draft Bill for pre-legislative scrutiny. For eight years, across five Prime Ministers—most of them Conservative—we have heard repeated commitments to end conversion practices. It is conduct that the British Psychological Society and professional bodies have long condemned as unethical, so it is a relief to the one-in-six LGBT individuals who have been offered this unacceptable practice that this Government have finally advanced a draft text to fill any potential gaps in our laws.
However, publication for pre-legislative scrutiny is the commencement, and not the conclusion, of where we will get to. The Liberal Democrats have constantly pushed for an effective, workable ban. We acknowledge the Government’s intent to create a framework that includes protections regarding gender identity, as it is vital that no individuals are subject to genuinely abusive, coercive or harmful practices. Yet we must acknowledge that, for some, it is precisely around the intersection of gender identity, clinical guidance and the family sphere that this legislation will face its most contentious challenges. Striking the right balance here is an incredibly delicate task. We and the Government must get this right to avoid any unintended consequences.
In particular, we must ensure that the threshold of “abusive acts causing serious harm” is drawn with clear legal precision, so that it does not create problems for some parents, for example. It is a fundamental part of loving parenting to guide children as they navigate deep, complex questions about who they are. A parent who in good faith advises a child to take time or who expresses questions about social or medical transition is acting out of care and duty for their child’s protection. This legislation must be drawn carefully enough to guarantee that these supportive conversations within families do not unintentionally cause a crime to have been committed.
Furthermore, we must ensure absolute clarity for teachers, clinicians and therapists so that they can continue to offer objective, non-directive and exploratory support, without the fear of legal reprisal or professional hesitation. The Liberal Democrats have always championed a balance between robust protections from abuse and the defence of civil liberties, free expression and freedom of religion. These boundaries between parental guidance and legitimate healthcare must be balanced, and the work of the Joint Committee will be incredibly welcome in guiding this House in deciding on this legislation. It provides the exact rigorous cross-party forum needed to test these definitions, listen to all viewpoints and build the workable consensus required.
Therefore, I ask the Minister three important questions. First, how will the Government ensure that the draft definitions explicitly and robustly protect the rights of parents to have open and loving conversations with their children without fear of investigation? Secondly, what specific steps are being taken to ensure that the Joint Committee’s scrutiny processes actively engage with all views within the LGBT+ community, family support groups and medical professions to ensure that these boundaries are balanced and appropriate? Finally, what is the anticipated timescale for this pre-legislative scrutiny, so that this House can eventually examine a Bill that is genuinely balanced, fair and effective?
The Deputy Leader of the House of Lords (Lord Collins of Highbury) (Lab)
I thank the noble Lords for their questions. I am acutely aware that there is a consensus across this House. There are no bipartisan divides here. The previous Government were committed to the principle of this legislation, and I welcomed it at the time. So, irrespective of what the noble Baroness says, there is consensus and there is concern. At the end of the day—I agree with the noble Baroness here—we can all agree that no one should face abuse just because of who they are, and our draft Bill is about protecting LGBT+ people from serious physical and psychological harm.
The Galop anti-abuse charity has for many years supported people who have suffered abuse. It is only reflecting the evidence that has been given to it. We must be clear that we are talking about victims of severe abuse here. One case of this abuse is one too many, which is why we are criminalising it. So let us not say that we are getting this out of proportion.
The noble Lord, Lord Scriven, addressed the fact that there are gaps in the existing law that mean we cannot prosecute offences properly with domestic abuse legislation. For example, on coercive control, the legislation is designed for someone who has a relationship with an intimate partner, and it would not capture an offence committed by someone they did not know. There are many other examples of gaps in the law that need to be addressed.
Secondly, the noble Baroness missed an important point: for the first time, we will have a clear definition in law of conversion practice. As with other offences, such as upskirting or non-fatal strangulation, a definition is important to help victims understand what has happened to them and be able to come forward, and for prosecutors to build a case. I am confident that there is a need to legislate in this area.
On the points that both noble Lords raised about parents and legislation, I want to be absolutely clear that this Government and this law will not dictate how people raise their children. Our measures are not intended to infringe on the right of parents to bring up their children in line with their beliefs or core values. We are absolutely clear that the ban must be balanced and targeted so as not to impinge on legitimate healthcare or the range of broader support that those exploring their sexual orientation or gender identity might seek or receive. I also stress that this draft Bill is not about regulating medical care. We understand how important it is that people get the medical support they need, depending on their particular needs and circumstances. This is a matter for the DHSC and the NHS.
I and Minister Bailey in the other place have been clear right from the beginning about the importance of the pre-legislative scrutiny. I very much welcome the fact that the Liaison Committee has agreed to this. It will be scheduled and the usual channels will bring forward calls for participation in that committee fairly shortly. That will hopefully be a great opportunity to reassure people about what are genuine questions and concerns that we should not be afraid to deal with. Many people in this House know and have met people who have experienced the abuse defined in this Bill, so I hope that through the pre-legislative scrutiny we can all come together and return to the consensus that we have had on dealing with this terrible abuse.
Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)
My Lords, I gently remind noble Lords that this next session of 20 minutes is for Back-Bench questions only. We will start with the Conservatives and then work our way around.
Baroness Meyer (Con)
My Lords, given that abusive conversion practices are already criminal offences, can the Minister tell the House what conduct the Government intend this Bill to criminalise that is not already unlawful? Can he identify a single case in which a victim was denied justice because existing criminal offences were insufficient, thereby demonstrating the need for this new criminal offence?
Lord Collins of Highbury (Lab)
I had hoped that the noble Baroness would have listened to my response to the Front Benches. To be clear, we have identified gaps in existing law where we cannot prosecute offences properly. The legislation on domestic abuse and coercive control, for example, is designed for someone who has a relationship with an intimate partner and would not capture the offence committed by someone they did not know. There are many other examples that I think the pre-legislative scrutiny will be able to identify.
We should not forget the point I made about the other offences that we have introduced, where people could have argued that existing law would capture them. Upskirting and non-fatal strangulation are two good examples, because they highlighted offences that were being committed and could have been prosecuted, but the victims were not prepared to identify or could not identify properly that it was an offence. That is an important element of why this Bill is so important.
Baroness Thornton (Lab)
My Lords, can I say how much I welcome this draft Bill and the pre-legislative scrutiny that will take place? His Majesty’s loyal Opposition have to sort out their lines on this, because as late as 2023 their Government confirmed their intention to publish a trans-inclusive draft Bill and set out time for scrutiny.
I know that the noble Baroness, Lady Cash, feels strongly about some of these issues. I had to smile, though, because she is probably an utterly brilliant lawyer, but we are not a court of law. My question to my noble friend the Minister is: would he agree that the next step is to ensure that the draft is carefully considered during pre-legislative scrutiny, so that we can be sure that it will protect all those who are vulnerable to abuse, while not criminalising important exploratory conversations about people’s sexuality or gender identity?
Lord Collins of Highbury (Lab)
I thank my noble friend for her question. She is absolutely right, and that is why the pre-legislative scrutiny will be important. We are very clear that the Government will not dictate how people raise their children. Our measures are not intended to infringe parents’ rights to bring up their children in line with their beliefs and values. We are clear that the ban must be, as my noble friend pointed out, targeted and balanced, so as not to impinge on legitimate healthcare workers who may be giving advice.
I was at the Spanish embassy last night and I was very pleased that Spain has adopted similar legislation. It has passed it, and there is similar legislation in other European countries. We can learn from their experience. I also met the ambassador when I was in Copenhagen at the IDAHOT+ conference to talk about the experience in Iceland, which has also adopted similar legislation. So there are plenty of examples where, in pre-legislative scrutiny, we can understand some of these issues and how they have been adapted.
Baroness Ludford (LD)
My Lords, the Minister says the Bill is intended to criminalise only seriously abusive conduct and not, for example, to impinge on parents’ rights to bring up their children. So why does Clause 1 say that any conduct can be a conversion practice? Is a parent who fails to take a child to private services that offer puberty blockers, or to give them the money to go themselves, guilty of psychological or emotional pressure, given that we know that sometimes teenagers do not like the word “no”?
Lord Collins of Highbury (Lab)
I cannot be clearer, and I will repeat the point: this is not about the Government dictating to people how to raise their children. The measures in the Bill are not intended to infringe parents’ rights to bring up their children in line with their beliefs or core values. That is the straight answer. We will see how this can be properly tested and scrutinised in the pre-legislative Joint Committee of both Houses. I am absolutely satisfied that we can do that. The draft Bill seeks to target harmful and abusive acts; it will not impinge on any other legislation.
Lord Hayward (Con)
My Lords, I will take the opportunity to repeat what has been said, so that some of my noble friends can recognise that this is a piece of legislation that was to be introduced by a Conservative Government, but they failed to do so. They were repeatedly committed to introducing that legislation. The detail that has been raised by noble Lords this afternoon is a matter for pre-legislative scrutiny, but the principle of the legislation is absolutely clear and correct.
I wear the tie of the Kings Cross Steelers. One of our members was subjected to conversion therapy over a long period of time. How he has remained so balanced and such a nice person I do not know, because I would not have been so balanced if I had been subjected to what he was subjected to. All those, including the Minister, who are going to question aspects of the law in the proposed Bill should have serious conversations with people who have actually been subjected to conversion therapy, rather than reading from a script that has been concocted by people who do not like the Bill, which the Conservatives wanted to introduce in the first place.
Lord Collins of Highbury (Lab)
I thank the noble Lord and I appreciate his comments. I meant what I said: there is cross-party consensus and a consensus across this House on stopping this abuse, and he is absolutely right. The United Kingdom has long championed the rights of LGBT+ people at home and abroad, and we proudly uphold one of the most expansive legislative frameworks in the world—and I want to make it clear that that has been delivered by both Labour and Conservative Governments.
However, I also remind the House that this is part of the work to fulfil the commitments set out in the Government’s manifesto on advancing rights and protections to LGBT people. Therefore, as well as this legislation banning conversion practices, noble Lords will know that we have equalised hate-crime laws, established a scheme to address the historical wrongs against LGBT veterans, and improved healthcare services for LGBT individuals. Additionally, we are collaborating with international allies to strengthen our position as a global leader. One of the important things is that we set standards which are important for other countries to see because, with some of the abuse and the legislative changes that we are now seeing, we are facing more countries that have criminalised homosexuality than there were two years ago. So we are going the wrong way, and we need to set a positive tone here.
The Lord Bishop of Leicester
My Lords, I welcome the intentions behind the draft Bill. Indeed, in 2017, the General Synod of the Church of England passed a Motion, in fact by a large majority, which called on the Government to outlaw conversion therapy. However, I want to mention today that I have a number of concerns about the drafting of the Bill, and indeed particular concerns about the lack of clarity on the difference between harmful conversion practices and perfectly acceptable practices of pastoral care and indeed prayer, which is much needed for those who are in difficulty. If this difference is not crystal-clear within the legislation, it will potentially have a very significant negative impact on what I believe is legitimate spiritual care offered by faith groups. So, alongside the vital importance of consulting with LGBT+ people, can the Minister tell me what consultations have taken place with religious groups, and is he open to further conversations about how appropriate spiritual care can be guarded within this legislation?
Lord Collins of Highbury (Lab)
I thank the right reverend Prelate. The important thing here is that the consultations have been going on for some time, as have the debates on this legislation, as the noble Lord, Lord Hayward, pointed out. However, we remain committed to that level of consultation. The Government have no intention of interfering with people’s right to religious belief and expression. We are not seeking to prevent people living a life that aligns with their religious or cultural values. This is not about telling people that they cannot hold certain views. We are targeting clear instances of abuse here, and we are very clear about sending a message that LGBT+ people deserve to be safe from harm.
An offence occurs only if someone seeks to change a person’s identity through abusive conversion practices that result in harm. A religious leader teaching their faith’s views on LGBT+ matters should not be affected by this draft Bill. The principle that the right reverend Prelate raises with regard to counselling and advice is covered by what I said about parental responsibility and medical advice. These things are absolutely covered in the Bill, but we will address these questions in the pre-legislative scrutiny.
Lord Isaac (Lab)
My Lords, I start by congratulating my noble friend on his appointment as the UK Special Envoy for LGBT+ Rights. It is significant that we need this role to address some of the real lack of progress that we see around the world. I also thank my noble friend and the Minister for Equalities for their important work in bringing forward this Bill. Having grown up gay in the 1980s, I know what it is like to be a young person growing up in a society where people say that you are not normal, and there is no sense of belonging by you and by your family. I am glad that that is no longer the case for very many people but, sadly, that is not universally the case. I know people who are constantly put under pressure to change their identity, not necessarily by their family but by external third parties. As a lawyer, I think that the draft legislation does plug gaps in the criminal law, so my question is: does my noble friend agree that passing this legislation after examining it in the pre-legislative scrutiny phase will help him in his role as the special envoy but also help us regain our place as a leader in LGBT rights across the world?
Lord Collins of Highbury (Lab)
I thank my noble friend for emphasising that point, because I think it is really important. I also thank him for his congratulations on my appointment as Special Envoy for LGBT+ Rights. That is an additional task I am extremely willing to take on, because in the current global climate, it is important that we can set out how we and our values in this country are so important—how we have taken the lead and that lead has shown other countries how to behave. We are absolutely clear on that. I do not think we should underestimate the importance of that because, in my recent travels, I attended the conference of the Organization of American States, where I met 200 civil society activists from across Latin America, central America and South America who were talking to me about the sorts of pressures that they were under as LGBT people. It is unbelievable the pressure that they are under, but they were determined to highlight how progress can be made. Progress can be made by seeing the example that this country sets, and we should not underestimate that.
Baroness Fox of Buckley (Non-Afl)
I appreciate the Minister’s intention but will the Government note that already family lawyers have warned that allegations under this law—not another law—as drafted, with its loose definition of “abusive” and so on, could indeed trigger criminalising parents; for example, if you are a mum who says to a teenager who says that they are born in the wrong body, “No you’re not”. That is a challenge to their identity, and that could even trigger social services investigations. Does the Minister hear those voices? Does he appreciate that in this pre-legislative scrutiny period, the last thing we want is consensus? What we need is scrutiny and proper and robust argument, so that we draft the law that the Minister obviously wants but is not the one that is written down at present.
Lord Collins of Highbury (Lab)
I think I am inclined to agree with the noble Baroness that scrutiny is about challenge. I have no problem with questions being asked. I have no problem in addressing the issues that have been raised this afternoon. I have attempted to give very clear reassurances, as did my honourable friend in the other place, that the Bill will not interfere with the rights of parents, will not impact on the rights of medical people giving advice, et cetera. We are talking about horrendous abuse. The noble Lord, Lord Hayward, knows what I am talking about, because he has heard people tell others about their experience. Serious harm and abuse, that is what we are talking about. We all know that much of that remains hidden and is not talked about because people are afraid to express it. That is why I think it is really important—I come back to my original point about the gaps in the law—that when people understand that what they have suffered is subject to law, is subject to the possibility of prosecution, I think we will find a lot more people coming forward, and that is good for them and it is good for this country.
Lord Sentamu (CB)
My Lords, the right reverend Prelate the Bishop of Leicester talked about the General Synod in 2017 debating outlawing conversion therapy. I put my head on the block and supported the motion that it should happen because in my book conversion is to make the person whole but not to oppress them. It is not to put your ideas on to them. Why has “conversion therapy” been taken out and replaced with “conversion practice”? When you read the first clause of the Bill, which defines these conversion practices, you have to reorientate yourself about what is being talked about. Why has “conversion therapy” not been used? We should be committed to the scrutiny of the legislation and all play our part in making sure that it arrives in a better place than it is at the moment.
Lord Collins of Highbury (Lab)
I thank the noble and right reverend Lord for his question and sort of agree with him. I have tried to be clear that the Bill criminalises abusive, harmful acts that are intended to change a person’s sexual orientation or transgender identity. That is what it is intended to do. Like my honourable friend in the other place, I welcome questions. I am not fearful of challenge. That is why we have put forward a very clear programme of pre-legislative scrutiny. It is an opportunity for these issues to be properly addressed.
Baroness Brown of Silvertown (Lab)
I am delighted that the Minister is here today with this piece of legislation. I thank him for that. When I was in the other place, I had members of my religious communities come to talk to me about their fears regarding conversion practices and therapies being undertaken in our community for vast amounts of money. Can the Minister assure me that we will do all that we can to protect those who are most vulnerable to abuse while not criminalising conversations about people’s sexuality or gender identity? That is what my religious community would want me to ask.
Lord Collins of Highbury (Lab)
I am glad that my noble friend has asked that question because I cannot be clearer. I might be offended by someone saying to me, “You’re gay, we don’t like it” or “It’s against my religious belief, I don’t want to be associated with you”. I can certainly be offended, but I would not argue that it should be against the law. When we have debated same-sex marriage in this House and the right reverend Prelate’s colleagues have stood up and said that it is wrong, I have never felt offended. Some of the comments in that debate I did feel offended by, but I expressed my views at the time.
We have really positive values in this country. Where is our compassion? Where is our urge to protect people from abuse? That is what this legislation will do. I ask noble Lords not to shake their heads. They do not need to. If noble Lords have questions and concerns, we have a process of pre-legislative scrutiny where these can be addressed. I am not afraid of debate or discussion. I am certainly not afraid of debate. As Minister for Africa, I faced Presidents of countries which were criminalising my sexual orientation. I was not afraid to enter into a debate with them. I am not afraid to enter into a debate with noble Lords opposite.
Farming Road Map and Profitability Review
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Roborough (Con)
My Lords, I thank the Minister for the Statement, the noble Baroness, Lady Batters, for her excellent review on farming profitability, and my noble friend Lady Rock, who is in her place, for the Rock report, which also seems to have been carefully read by the Government. I draw the House’s attention to my register of interests as a farmer, forester, and landowner; as a commons owner and non-grazing grazier on Dartmoor; and as the owner of SSSIs.
This farming road map is intended to provide a long-term strategy for farming for the next 25 years, but often seems disconnected from this Government’s other actions and policies. The family farms inheritance tax directly threatens long-term business viability and the partial U-turn has not been enough to restore broken trust or confidence. The £15 million investment in genetic improvement networks until 2029 remains overshadowed by the threat of the SPS negotiations to precision breeding and gene editing. Can the Minister give us any assurance that these, or the development of bovine TB vaccinations, will not be impacted?
The road map promises to make trade easier with the EU through the SPS agreement, but the new regulations will also apply to our domestic produce without input from Parliament. Growers and breeders are making production decisions now for produce which will be sold beyond mid-2027, without any guarantee that this produce will still be compliant. We have highlighted the need for a sufficient transition period to mitigate these potential consequences, but the Government will not even publish an impact assessment until after the agreement has been signed. The road map also states that it wants to protect UK farmers from unfair competition, yet it lacks any mention of closing the flag loophole on food packaging.
The draft Carbon Budget Order that we debated just last week requires a reduction in livestock numbers, and in meat and dairy consumption. The road map is right to say that farming and the environment should not be positioned against each other, but that is exactly what is happening. We recently saw this confusion between farming and the environment on Dartmoor, where the latest ELMS agreements administered by Natural England require a 60% to 90% reduction in grazing pressure, in a one-size-fits-all policy for moorlands around England. Natural England disclaiming responsibility for any resulting pony cull is disingenuous, as the consequence will inevitably be sharp reductions in pony numbers.
The 2030 goal of 50% of SSSIs being on track to be in favourable condition is disappointing. How is this progress from the 62% that Natural England reported to be in favourable or improving status as recently as last year? What exactly has Natural England been doing all these years, with 2,800 staff and £300 million per annum of funding? These are our most important biodiversity sites, and that shows remarkably little progress. Imposing the same grazing policy across all the moorlands around England in order to improve SSSIs fails to reflect that every SSSI, moor, and every part of every moor, is different.
Can the Minister tell us whether she believes that Natural England is fit for purpose and delivers value for money for the taxpayers who fund it? We need an overhaul of arm’s-length bodies, of which there are over 34 in Defra alone. There is a clear lack of co-ordination, accountability and value for money.
Within the Statement, though, we welcome commitments such as increasing domestic timber production, and helping farmers and growers to access a greater share of the public sector food and catering market. However, there are a number of concerning commitments in this road map: doubling the number of Environment Agency farm inspections by 2029; turning sustainable farming incentives into unremunerated regulations; environmental permitting for dairy and beef farming; and a geospatial enabling programme to monitor land use. Does the Minister believe that this punishment and regulatory approach is really the right one? Would it not be more helpful to farmers to deregulate and allow them to focus on their businesses?
There are also encouraging comments throughout the road map on bringing in greater private investment to support environmental outcomes, which we on these Benches robustly support. However, the detail is lacking. Will the water Bill that we expect in this Session include support for nature-based solutions helping farmers diversify their income? Which other carbon and nature markets does the Minister expect to deliver meaningful revenue for the rural economy by 2030? I look forward to the Minister’s response.
Baroness Grender (LD)
My Lords, I thank the Minister for the Statement. I have several questions and would be more than happy for her to write if she is short of time or the relevant information. I also join in the thanks to the noble Baroness, Lady Batters, and there will be more about the Rock review later.
For these Benches, a central question raised by the Farming Roadmap 2050 remains: what, in practical terms, has changed in the short term for farmers on the ground as a result of this document? The language of clarity and partnership is welcome, of course, but many of the underlying challenges—income instability, an uncertain transition away from direct payments, and rising regulatory pressures—remain firmly in place. What immediate measures within the road map are intended to restore confidence, particularly for small and upland farms?
I turn to funding. The headline figure of £2.5 billion for England is in regular use, but there is limited clarity as to how that funding is allocated in practice. Can the Minister undertake to provide the House with a breakdown of how that budget is spent across the principal schemes, including the sustainable farming incentive, Countryside Stewardship, higher-level stewardship and capital grants? In addition, what proportion of that budget was actually spent in 2025-26 and what is the projected spend for 2026-27? Can the Minister confirm how many farmers have been in receipt of payments in each of the past six years and whether the Government expect that number to increase or decline under the new framework?
The reopening this week of the sustainable farming incentive is, of course, welcome. However, concerns remain about the operation of a first come, first served system. What assessment has been made of whether this approach risks favouring better-resourced farms with access to professional support, such as accountancy, over the small family farms that the early release scheme is intended to benefit?
The road map presents itself as a shared vision, yet it makes no direct reference to the tenant farmers review by the noble Baroness, Lady Rock, which set out clear and practical recommendations on fairness, access and security for tenant farmers. Recommendations in this road map appear to have been informed by that review; it is just a bit of a shame that there is no explicit acknowledgment of that.
On land use, the document does not adequately address the complexity of common land arrangements, particularly in upland areas. Commoners operate within systems of shared rights that do not align easily with standard scheme design. What specific provisions are being made to ensure that those farming common land are not disadvantaged? I wonder whether, in that context, the Government will perhaps consider something such as a rolling over of higher-level stewardship agreements, with appropriate uplifts, to provide a certain level of continuity while a more suitable long-term approach is developed for what I am calling the common land conundrum, which affects around 4,000 farming businesses.
On trade, farmers continue to face a dual pressure: competition from imports produced to lower standards and friction in exporting to key markets, particularly the EU. I thank the Minister for keeping us regularly informed on progress on the sanitary and phytosanitary agreement with the EU. Would it be fair to say that some of the assumptions underpinning the road map mean that we need this resolved sooner rather than later? I wonder if even the date in the road map is a little too late.
The Government say that food security is national security. Can the Minister explain how the road map will improve the UK’s level of self-sufficiency, over what timeframe and against which measurable indicators?
Finally, at present, the gap remains clear between the laudable ambitions set out in the road map, which I think we can all support, and the immediate realities facing farmers. Can the Minister please explain how the Government intend to bridge that gap in practice in the meantime?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, there was an enormous number of questions—and, obviously, I do not have an awful lot of time. We are talking about the Statement on the road map; many of the questions are not about the road map and are much broader. As I have only a certain amount of time, I shall concentrate initially on the questions to do with the road map.
Questions were asked about the UK-EU SPS agreement, which is still ongoing. I am sure noble Lords are very aware that the summit was postponed. Currently, we do not have a new date for the summit, but we are continuing with negotiations. Just because the summit has been postponed, that does not mean that we are not continuing to engage with the EU. We are making good progress in a number of areas. Clearly, I am not able to tell the House about the specifics on gene editing, pesticides and so on while negotiations are ongoing, because I would not want to impact them or the outcomes in any way.
The noble Lord, Lord Roborough, said that the environment and farming are being pitted against each other. I dispute that. We have a huge challenge in farming, which the road map is designed to tackle. That is why it is a long-term, 25-year plan. Farming is among the sectors most exposed to climate shocks, environmental degradation and growing resource pressures. So, we have a huge challenge here. How are we supposed to maintain food production and food security, and support profitable farming, while we move towards a lower-impact, market-led, climate-resilient system? That is what this road map is designed to do.
From our nature security assessment, we know that ecosystem degradation is a significant risk to food production. That is why, instead of the environment and farming being pitted against each other, we are trying to bring resilience to farming. We know that environmental resilience means that we have better food security and food production, and that is what the road map is designed to achieve.
We are trying to make farm inspections and environmental permitting more effective. We need to have inspections and permitting because we need to tackle issues such as water pollution, air pollution and problems with emissions. It is really important that we get farm inspections better organised. On a grant that we had a few years ago, we had three separate groups of people come round to inspect the same thing. That is what we have to stop—it is a waste of everyone’s time and money. We need to look at how we regulate and how we manage permits.
The noble Lord talked about land use. The Land Use Framework is an important document, because land management will be absolutely central to our commitment to maintaining domestic food production at at least its current level, while at the same time restoring biodiversity and, as I just mentioned, improving water and air quality and reducing emissions. One of the key things this document does is bring together our different policies. We have an animal welfare policy and the land use framework, as well as the different farming grants and taxations. We need to bring them together, because if farmers are to be able to properly plan for the long-term future, they need to understand how all these different things link together. Having too many different things going on at the same time is not helpful. That is something else we are trying to look at.
The document mentions the water Bill, alongside water pollution and things such as planning for reservoirs. Various things to do with farming and water that we need to be getting right are mentioned in the document.
The noble Baroness, Lady Grender, talked about the importance of restoring confidence. We absolutely need to do that, but there are so many things we need to do to ensure that farmers have that confidence. They need access to the right skills and advice—again, that is central to our approach. One of the important things about this road map is that we spent a lot of time talking to the sector, right across the board, because we wanted to hear what farmers had to say and what they were concerned about. A consistent message came through from whoever we spoke to: the need for clarity so that they could plan for the future. The overview of the road map is designed to answer that call for clarity so that farmers can plan. They need to know what the Government are looking to achieve and the future direction of travel, so that they can plan with confidence. Ultimately, farmers are businesses; you cannot plan for the future as a business unless you have some form of clarity and security in the future.
The noble Baroness, Lady Grender, also mentioned uplands. Pages 37 and 38 of the document have a specific section on supporting upland farmers, and that includes improving access to schemes and support. One of the bees in my bonnet, as somebody in Cumbria, is that uplands have not had access to support, particularly regarding common land. I have spoken in this Chamber about that before, and I am pleased the noble Baroness raised it, as there is also a commitment in the document to ensure that
“support is accessible, practical and viable for common land”
where improvements are needed. That is why, given that the SFI has not been available for common land due to technical reasons, we have asked the RPA to look at this and try to come up with something that will work for common land. This is something I am very keen to encourage further.
On the breakdown of the budgets and the details on the numbers of different applicants, I think the best thing will be to write to the noble Baroness. She has requested quite a lot of detail, and I would not want to say something off the top of my head that was not entirely accurate.
On small family farms, we have just announced the latest SFI—the Written Statement on this has just come out—and the latest round is designed specifically to target and support smaller farms and those who have not had an agreement. We want to ensure that as many farms as possible are involved in agreements that help support sustainability, improving the environment while allowing them to continue to become more productive as farms.
That leads into the whole discussion around food security. We have to get this right. If we are to have food security for the long term, we have to get our soils right. We have to get our water pollution and our emissions right. This is why it is so important that we bring absolutely everything together.
Thinking about small farms brings me back to the comments made about Dartmoor and, again, uplands. It is important to remember that, as well as the farming road map, we are carrying out other things right now that are designed to make a difference. That comes back to the noble Baroness’s point: this covers 25 years, but what we are doing now? One of the things I am particularly excited about is the role Hilary Cottam will be playing in running pilot schemes in both Dartmoor and Cumbria on how to support those more challenging environments. Hopefully, that will make a real difference. She will be working with local communities as well as with Natural England.
On tenancy, it is great to see the noble Baroness, Lady Rock, in her place; she has done so much on tenancy. “A vibrant tenanted sector” is the headline on page 36. A lot of people do not realise just how large the tenanted sector is. It is incredibly important that it is supported in the way it needs to be. The Tenant Farmers Association welcomed the farming road map. I am looking forward to continuing to work in a constructive way with the noble Baroness on how we can make sure the tenanted sector gets what it needs out of this road map, so that we have long-term security and longer-term tenancies. The average tenancy is now only five years, which is not ideal, to say the least.
I have just about run out of time. The important thing here is that the Government are serious about having proper, long-term, year-on-year policy-making so that, instead of having short-term opportunities, farmers understand where the Government want to go. If farmers do not understand where the Government want to go, what we are trying to achieve and that we want to work with them on such things as innovation and skills—those long-term investment plans—they will never know where they are going to get the next grant or trade agreement from. That is what we are trying to achieve with this.
Baroness McIntosh of Pickering (Con)
My Lords, the road map does not appear to address the very real issue of the funding gap between the collapse in basic farm payments, which is accelerating faster than anyone expected, and the incoming funds from environmental land management schemes. Have I missed it? How does the road map address that very real challenge to farm incomes this coming year?
Baroness Hayman of Ullock (Lab)
The road map is designed to be a long-term look forward. Clearly, the important thing is that we make sure, because of that gap, that farmers can access the schemes that they need to support the farming that they are doing. Access to grant schemes has not always been straightforward. We want to make schemes simpler, fairer and more accessible, so more farmers can take advantage of the support they need.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for bringing this Statement to your Lordships’ House this afternoon and the Government for ensuring that the road map was published, because I asked about this on several occasions during Oral Questions. I recognise that agriculture is a devolved matter, but does my noble friend agree that the UK Government’s farming road map is an opportunity to set out a vision for supporting Northern Ireland farmers and helping to grow the sector’s future contribution to UK food security? And will she discuss this issue with the Minister for DAERA in Northern Ireland when she next meets him?
Baroness Hayman of Ullock (Lab)
As my noble friend is very aware, agriculture is a devolved policy area in the United Kingdom, so the Northern Ireland Executive are responsible for their own farming policy and can tailor that to best support their farming sector, which is different from England’s in a number of ways. I work very closely with DAERA and with the office of the Secretary of State for Northern Ireland as well as with the other devolved Governments. Regarding her question about raising this with my counterpart in Northern Ireland, I am meeting him online next week, so I am more than happy to do that. We work regularly on this. I go to Northern Ireland quarterly and discuss exactly these issues.
Baroness Rock (Con)
My Lords, I welcome the objectives for a vibrant tenanted sector set out in the road map. I draw the House’s attention to my interest as a tenant farmer. However, the Government appear to be a bit reticent still about taking the radical and necessary steps to improve the security of the tenanted sector. As the Minister has pointed out, 80% of all new farm business tenancies are now for five years or less. Short-term tenancies are the greatest barrier to sustainability, resilience and profitability. Both my review and that of the noble Baroness, Lady Batters, to which this Statement is also the response, identify taxation as the most appropriate lever to achieve greater security. Will the Government look again at the way in which stamp duty land tax penalises the very tenancy agreements that the road map says it wants to encourage? We must also ensure that tenant farmers are not unfairly treated when land is taken away for development, including solar development, so will the Minister confirm that they are willing to look again at the legislative changes needed to improve compensation for tenant farmers who lose land so that they are compensated for the real loss their businesses suffer?
Baroness Hayman of Ullock (Lab)
The noble Baroness makes some good points. I am more than happy to discuss these issues in the department and with the Farming Minister. Looking at our response to the review by the noble Baroness, Lady Batters, on tenancy, because she particularly mentioned this, we recognise the benefits of longer agricultural leases and the importance of security of tenure for tenant farmers. New industry-led guidance was published in March of this year, which hopefully will help more landlords and tenants look at how long-term agreements are of benefit to both landlord and tenant. Also, we know that the Law Commission is looking to review agricultural tenancies within its 14th programme, and we welcome that, because we genuinely believe that longer-term tenancies are better for the sector.
Lord Redwood (Con)
Is this not a policy to make us more dependent on imported dairy and meat from the EU, because these policies will find that the carbon targets, the grazing policy and the wilding policy will mean far fewer farm animals in our country?
Baroness Hayman of Ullock (Lab)
I disagree with that. In fact, I think the opposite. When we have met industry sectors, whether pigs, cattle or whatever—particularly in Northern Ireland, interestingly enough—we have found that they really see the benefit in the opening up of markets by us working closer with the EU. A lot of the trade restrictions, the paperwork and the bureaucracy will go. We lost, I think, 40% of our trading opportunities with Brexit, but this is an opportunity to have more trade and support for our farming industries.
Lord Harlech (Con)
My Lords, I declare my farm management interests as set out in the register. I would be interested to hear more from the Minister about more direct and clear support, helping farmers to access markets that are close to them; that is, public buildings and organisations. How can we prioritise local British farmers getting their produce into local schools, hospitals and that sort of thing?
Baroness Hayman of Ullock (Lab)
I do not have time to find the exact page, but I know that somewhere in this lovely document is a whole section on procurement and trying to achieve exactly what the noble Lord is talking about. We have talked about the importance of “buy British”—all Governments do that—but we need to look at how to make that happen. I urge the noble Lord to read that section; if he has not, it is great. I see that he has it in front of him—excellent. He is right: this is critical. If we are going to become more sustainable for the future, we need to look at how we support our farmers through public procurement.
Baroness Bennett of Manor Castle (GP)
My Lords, under the heading “Government actions and commitments”, the road map says that the Government will work with industries to
“co-develop horticulture and poultry Sector Growth Plans”.
Given that we are only 17% self-sufficient in fruit and 55% in vegetables, I hope that no one in your Lordships’ House would disagree with the need for a large and urgent growth plan in the horticulture space. However, I question the inclusion of poultry. We already kill 1 billion chickens a year in the UK. Particularly in the hotspots in Lincolnshire, Norfolk, Shropshire and Herefordshire, we have huge environmental and public health problems from highly concentrated nitrogen and phosphate waste, problems with air pollution from ammonia and, of course, huge animal welfare issues. Are the Government planning to further concentrate the poultry industry in those areas or are they going to spread the problem more widely?
Baroness Hayman of Ullock (Lab)
It is not for the Government to decide where poultry farmers want to farm. I will say that we are working closely with the poultry industry to improve animal welfare, because there are some issues around that. I am sure noble Lords who have been on the Tube have seen the posters about fast-growing chickens; again, that is something we are discussing with the industry. We are keen to promote the better chicken commitment, and we are very disappointed that certain restaurant chains decided to renege on their commitments on that—Nando’s was the key one. We are looking to improve things with the poultry industry and are working closely with it to make that kind of progress.
Lord Mackinlay of Richborough (Con)
My Lords, I pay tribute to the Minister for so adroitly finding her way through the document, but are we not rather discussing it in a vacuum? She said clearly that she did not want to stray into issues relating to the EU reset, but is it not the fact that this whole document will be put on to the altar—that is, will be thrown away—in an instant depending on what the EU requires us to do under the reset? As my noble friend Lord Roborough said, farmers do not know what they will be allowed to grow, what they will be allowed to sell, what types of herbicides or pesticides they will be able to use or even the genome of what they might be allowed to grow in the future. We have already seen that with foie gras, which will have to be imported into the UK under the reset. Can the Minister please give me her absolute assurance that there will never be live animal exports ever again through my old port of Ramsgate, which I and other activists worked so hard to stop? That was delivered only because of Brexit.
Baroness Hayman of Ullock (Lab)
There have not been any live exports since Covid. It stopped then, as I am sure the noble Lord is very aware. I am sure everybody knows that I simply cannot talk about what we are discussing in the reset, but I can give my absolute assurance to the noble Lord that that is one of the exceptions carve-outs we have asked for.
Lord Bellingham (Con)
My Lords, the noble Baroness, Lady Rock, mentioned tenant farmers being forced out of farms to make way for solar arrays. There is evidence of this happening today in Norfolk and Suffolk. The road map mentions “sustainability” and “food security” on a number of occasions—food security is mentioned many times. What is the Minister’s view of the location of large-scale solar arrays on prime agricultural land?
Baroness Hayman of Ullock (Lab)
This is what the land use framework does. It looks at what we use land for, and that includes farming, energy, housebuilding and so on. That is why the farming road map is designed to bring those different policies together. We need to be looking at how we meet our net-zero targets and how we become more sustainable in energy. We have seen with the war in Ukraine and other problems that if we rely too much on other countries in the volatile world that we live in, it is not good for our long-term security. We need to look at more renewable energy, but it needs to be in the right place.
Lord Fuller (Con)
My Lords, the Government have made their long-term choice for our farmers, and it is to align with the EU. I accept that the Minister cannot talk about the detail of the SPS, but it has been reported that it does a huge amount of harm, whether it is the abandonment of black grass chemistry or turning our back on enhanced breeding. The land use framework will take 1.7 million hectares—20% of the country’s farmed land—out of production. That is the long-term choice that Labour has made for our farmers. But the system of alignment with the EU works only because the EU has subsidies that we do not have in this country. Why are the Government damaging our farmers so badly with all the trade costs, the friction costs and the insane carbon costs—all those costs—but providing none of the subsidy revenues?
Baroness Hayman of Ullock (Lab)
I suggest that we do have grant schemes available. The SFI has just been announced and ELMS has been running for some time. ELMS came in under the previous Government, who decided that we would not have basic payment systems as the EU does and would move to a more environmentally sustainable grant system, which I support. That is the long-term future. As I keep saying, I cannot comment on the EU negotiations. There are a lot of discussions around things such as pesticides and transition periods, but we do not know what the final outcomes will be.
The Duke of Wellington (CB)
My Lords, I declare my farming interests as detailed in the register. My noble friend Lady Batters is sorry not to be here today, but she sent me a WhatsApp earlier, and if I can get the technology to work and read it, which I currently cannot, she has asked me to ask this question, which I hope I am allowed to do on her behalf—
Lord in Waiting/Government Whip (Lord Katz) (Lab)
I suggest that perhaps the noble Duke can find a way of asking the question in his own words.
The Duke of Wellington (CB)
Then I will happily do so. My noble friend Lady Batters—I am sure we all thank her very much for the work she did in this area—did a report that has led to the production of the road map. What I, and she, now ask is: when will the road map be turned into action?
Baroness Hayman of Ullock (Lab)
The plan is to crack on with it, because that is what we need to do. One of my frustrations is that it is very easy to write a document, or to say lovely things, but what we need is delivery. At Defra we are very keen to focus on delivery.
Baroness Bennett of Manor Castle (GP)
My Lords, the word “agroecology” and its grammatical variants appear three times in this road map. It is rather swamped by references to technology and things such as gene editing. On this poisoned planet and on these poisoned islands, we have exceeded the planetary boundary for novel entities, of which pesticides are a significant part. Does the Minister see that healthy soils, healthy water and healthy air have to be at the core of delivering both food security and a healthy environment for people to live in?
Baroness Hayman of Ullock (Lab)
Absolutely. The word “agroecology” may be used only three times, but sustainability—improving water, air and soil quality—runs all the way through the document. Just because it does not say the word, that does not mean this is not a key part of what the document intends to deliver. As I said earlier, environmental degradation leads to poor farm profitability: the Batters review was about farming profitability. That is also what the farming road map is designed to improve, because we need to improve our farming profitability.
Lord Redwood (Con)
Why are the Government asking for carve-outs from bad EU laws when, as a sovereign country, we should just say that we do not accept bad laws?
Baroness Ritchie of Downpatrick (Lab)
My Lords, does my noble friend the Minister agree with me, from talking to farming organisations in Northern Ireland and to the Minister, that there is considerable agreement about the need for the SPS agreement? They see it as underpinning profitability in the agri-food industry.
Baroness Hayman of Ullock (Lab)
This is really critical. What is often missed is the impact that Brexit has had on Northern Ireland, and the increased amount of bureaucracy and red tape in trade with Northern Ireland. Even for, say, a supermarket taking its goods over into Northern Ireland, it is much more complex than it used to be. We have red lanes and green lanes, and we have the Northern Ireland retail movement scheme. These things add not just complexity but expense to people trading in agri-foods with Northern Ireland.
One of the things that the SPS agreement is looking to achieve is to get rid of the majority of those checks and to make much smoother and more frictionless trade with Northern Ireland. The department and the Ulster Farmers Union are very keen that we work with it to achieve the best outcomes in this area.
Lord Fuller (Con)
My Lords, the arithmetic of the sustainable farming incentive proposals for later this year is that the £240 million, divided by the typical claim from last year, means that only about 5,000 claims would normally be successful, out of a total constellation of 60,000 eligible claimants. This means that less than 10% of claims are likely to be met. What advice does the Minister have for the 95% of farmers who do not get their application in by 9.05 am on 1 September?
Baroness Hayman of Ullock (Lab)
To be honest, I was not aware that 95% of farmers did not get their application in on time. The important thing is that we have a long-term, clear road map so that farmers do not end up not knowing what they are eligible for, what they can apply for and the Government’s direction of travel. The road map is designed to bring an end to exactly those sorts of problems.
Baroness Rock (Con)
My Lords, I welcome the Minister’s comments on the Law Commission review, and the indication in the road map that the Government will support that review and act on its recommendations. It would be very helpful if the Minister could reiterate that commitment today.
Baroness Hayman of Ullock (Lab)
The Law Commission has an important role to play here, because, if we are to start to unpick some of the issues, we need proper, clear evidence and facts. A review by the Law Commission—a responsible, highly regarded body—will enable us to do that.
Defence Investment Plan
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Goldie (Con)
My Lords, I thank the Minister for both the briefing and prior sight of the defence investment plan, which he provided to me and my colleague, the noble Earl, Lord Minto, yesterday. I doubt any plan was so dogged by delay and preceded by such drama as this one, but that doleful prelude was eclipsed by the gloom and scepticism that engulfed the plan when it became public. To quote my honourable friend in the other place, Mr James Cartlidge, it is “too little, too late”.
The threat we face is now. This plan, lacking in significant detail, is for the next four years. It was intended to deliver the recommendations in the SDR. It does not. It should have laid out a path to the 3% of GDP needed before the end of this Parliament, never mind during the next one. It does not. As for a path to NATO’s target of 3.5% of GDP by 2035, that apparently remains in the mists of the Prime Minister’s imagination: undiscernible and shortly to disappear.
The Prime Minister criticises the previous Government for not spending enough, but I point out to your Lordships that my party responded to the threat as we understood it then, in the wake of a searing economic challenge inherited from a Labour Government in 2010. However, despite austerity, we kept the RAF Lossiemouth air base open; ordered the vital Poseidon planes that operate from there; ordered eight Type 26 frigates and five Type 31 frigates, which are being built now; launched the Global Combat Air Programme to produce the next-generation fighter; and commissioned the Dreadnought programme to renew our nuclear deterrent. I am not going to speculate on Mr Burnham’s Harry Potter powers to wave a magic wand to fix this deficient defence investment plan. Given his projected political strategy to date, fixing defence is not on any wish list I have seen. However, I know that none of this is the Minister’s making. He is here to answer questions, which I know he will do with his customary loyalty, integrity and courtesy.
I will start with the Secretary of State’s foreword to the plan. If we strip out the roseate language, £298 billion is to be spent over the next four years. Some £283 billion of that is not new money; it is simply what is required to keep the doors open, pay the people turning up and ensure that the day-to-day bills are paid. The crux question is: how much is needed on top of that? The Chief of the Defence Staff, Sir Richard Knighton, says that £28 billion of additional money is needed over the next four years to do what must be done to keep us safe. My party is prepared to answer that call and fund it by reinstating the two-child benefit cap, reallocating up to £50 billion currently being spent on welfare and costly net-zero projects, and scrapping Labour’s catastrophic Chagos deal. This Government are not prepared to answer that call and will short-change defence by the £13 billion that they were never going to provide. That is completely unacceptable.
The former Secretary of State, John Healey, has said that this plan leaves the country “less safe”. The authors of the strategic defence review have said that the funding package is “not enough”. What will it take for the Government to listen to the service chiefs, the retired senior officers, and indeed members of their own party, and find the money that they all say is needed to keep us safe?
Even the inadequate £15 billion that the Government are going to provide immediately starts to fall apart under scrutiny. We know from the Chancellor that £4.7 billion is not there. According to the accompanying funding explainer, it is to be allocated at the Autumn Budget, presumably by a new Prime Minister and a new and as yet unknown Chancellor.
If this were not bad enough, page 73 of the Defence Investment Plan is revealing. It discloses that £10.7 billion of the £15 billion is to come from “defence efficiencies” over four years. So, as we speak, that money is not there either. This is accountancy smoke and mirrors. On the defence efficiencies, £1.1 billion is to come from “reform and service redesign”—so what reform, what redesign and what details can the Minister provide? Some £3.3 billion is to come through “workforce and resourcing”. What does that mean and what detail is available? Some £2 billion is to come through “infrastructure”. What infrastructure? How is that money to be provided? Some £0.2 billion is to come through “digital”—how? Some £3.7 billion is to come through “acquisition and supply chain”. How has that figure been arrived at, and what underpins that estimate? The more alert among your Lordships will have noticed that that totals £10.3 billion, not the £10.7 billion that is at the head of the defence reform efficiencies. So we have another £400 million whistling into the blue yonder. Separately, the plan also states that £1.1 billion will come from asset sales, so what assets will the Government flog off?
Unless the questions I have posed can be answered, this plan is meaningless. NATO, the MoD, politicians and the public need clarity about how much money is being given, when it is coming and how it is being provided. Smoke and mirrors and Treasury trickery do not cut it.
Lord Fox (LD)
My Lords, this is clearly a very delayed and extremely underfunded plan. As we have heard, at £15 billion it falls well short of the £28 billion requested by the defence chief to keep our country secure. But we know that it actually falls even shorter than that, as nearly £5 billion is unfunded and some £11 billion or more relies on undetermined efficiency savings. So, after months of paralysis, resignations and Cabinet chaos, the Government have short-changed the Armed Forces.
However, we should remember that it was the Conservatives who hollowed out our military, leaving the Army and Navy smaller than they had been for hundreds of years. The Tories failed to look after service personnel properly, through a lack of suitable housing and poor mental health support—that was unforgivable.
This Statement is a long way from solving these vital issues and many others. It is a political choice made by Sir Keir Starmer and the Treasury, and it leaves us less safe. Furthermore, it undermines our reputation as a leader in NATO. Last year, all NATO countries pledged substantially to increase investment so that we all hit 3.5% of GDP by 2035. But, even if the missing money is found, the share of GDP that we spend on defence by the end of the decade will be only 2.7%. In media interviews today, the Procurement Minister, Luke Pollard, said that the spending review next year will describe a pathway to 3.5%. That review will need to find an extra £25 billion per year to get to our stated target. Given where we are starting from, this is hardly credible.
This lack of credibility is not just a domestic phenomenon. When I attend NATO Parliamentary Assembly meetings, I can sense the reputation of the UK falling back. This is more than just worrying. So I will suggest some ways to increase investment and leverage what resources we have more effectively. The Liberal Democrats’ plan for defence bonds would provide an additional £20 billion at least, funnelling in private sector investment. This is not pie in the sky. Poland’s armed forces support fund, for example, was established in 2022, with the main source of funds being issuing bonds. For context, last year Poland spent 4.7% of its GDP on defence.
There are better ways of leveraging our existing defence spend. The UK could take part in the nascent defence, security and resilience bank. This ticks a number of important boxes: it would be multilateral; it would work with a greater number of allies; it would help project financing to span election cycles; and it would cost-effectively pull in private finance, multiplying our state investment by many times. The Canadian Prime Minister, Mark Carney, is a major proponent of this initiative. He met with Sir Keir’s envoy, Gordon Brown, last month to discuss it but, disappointingly, there seems to have been no progress.
The Government could also take bolder steps towards working with our European allies. Last month, the Lib Dems announced a plan for a UK-EU defence pact, including our intention to join Security Action for Europe—the SAFE programme. Andy Burnham is quoted as having said favourable things about both defence bonds and the DSR bank. He has also been historically in favour of closer relations with the EU. Does the Minister agree that the new Burnham-led Government should issue defence bonds, work with Canada to deliver the DSR and join the SAFE initiative in Europe?
There are also ways of making our spend on big ticket items go a bit further. For example, GCAP currently involves the UK, Japan and Italy. Canada, Saudi and possibly Germany have been mooted as additional partners. Can the Minister confirm that, through adding to the GCAP group, money could be diverted to other UK defence needs?
Much has been made of the headline spend of £5 billion for advanced uncrewed systems over the rest of this Parliament. I am sure this is welcome, as these systems are at the heart of modern warfare. However, to put this into context, the three-year £5 billion investment is only a tiny percentage of the plan’s £298 billion spend over four years.
We welcome the commitment to establish six new energetics factories by 2030. However, the nine-month delay in publishing this spending plan has frozen procurement and put many SMEs in peril. Now that we have a funding plan, how will the Government change the procurement process to give SMEs the certainty to invest and the cash flow to thrive?
Finally, last year’s strategic defence review rightly stated that national resilience cannot be bought with military equipment alone. It stressed the need for a comprehensive national conversation to shift our mindset and prepare the wider British public, local government and business for the hybrid, cyber and non-traditional threats that we already face. This is a whole of society challenge that spans far beyond the MoD, so what concrete progress is the Minister making with his government colleagues to initiate this national conversation?
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Goldie, for their contributions and important questions.
I will start by dealing with the question of spending, which goes to the heart of what both noble Lords were saying. Let me put on record some of the things that were said about the defence investment plan. I will make only one political point—that there will be a 27% real-terms increase in defence spending between 2023-24 and 2029-30—because all of us have at heart the security and defence of our nation and how best we should do this.
As both noble Lords and the House will know, the Government have set out plans for an agreed £15 billion increase in spending. This is outside the normal spending review process. That is not necessarily the way that Governments normally do things, but I gently remind the noble Baroness that it is not unheard of for Governments to take action outside the new spending process and to refer to the next Budget as the place where the detail will be confirmed. Indeed, the previous Government announced their five-year NHS plan in 2018 outside the Budget and the spending review. What did they say when challenged about it? I think the noble Baroness and the noble Lord, Lord Fox, will know: “We will be able to explain exactly where every penny is coming from, but we will do it in the next Budget”.
I will also refer to when the Conservatives published the integrated defence review in 2020. What did they do? They said that they would set out the funding at the next spending review. So, let us drop the idea that this is an abnormal process. It is important that the Government have taken the decision outside the spending the review to reprioritise and reallocate spending between spending reviews.
We have said that we will lay out the process for the 3% in the next Parliament. We will come back to the 3% and, indeed, the 3.5% at the next spending review, which will be next year. That is not an abnormal process; that process of taking action outside the spending review is one that Governments have taken over the past few Parliaments. That is an important point to make. Indeed, the foreword by the Secretary of State refers to the commitment until 2035 as a “promise”. It is laid out in there. He and I would expect all of us to be held to account with respect to that.
The noble Baroness, Lady Goldie, and the noble Lord, Lord Fox, mentioned defence savings. I will be clear about the efficiencies, or the savings—whatever we want to call it. The allegation seems to be that the efficiencies are to be taken out of the spending power that the department would have. To be clear, the increase in our spending power is not conditional on these efficiency savings. That is a really important statement for us to make. Who would expect the Treasury, under any political party, not to require a department to have some sort of target for tackling fraud? Who would not see the use of increased efficiency through the use of AI or better technology as bringing about savings that could be reinvested? Who would not expect the Treasury to say, “We would wish you to find efficiencies through an increased reliance on consultancy”? Who would not expect efficiencies to be dealt with? Many noble Lords opposite have called on me in the past to find a way to make sure that we have the most efficient use of the workforce that we have.
The noble Lord, Lord Fox, asked me about housing. Over the next 10 years, the Government, having spent nearly £6 billion to bring Annington Homes back into public ownership, will spend nearly £9 billion over the next 10 years on improving military housing. That is hugely significant.
The noble Lord, Lord Fox, mentioned reputation. I often say that this country faces challenges, but the idea that this country is not respected in Europe or across the globe is not true. In fact, this country is hugely respected in Europe and across the globe. Do not take my word for it: read what the Secretary-General, Mark Rutte, said about the defence investment plan. He welcomed it; noble Lords can read that in today’s and yesterday’s papers.
With respect to the important contribution that we make to NATO—I do not want to risk the ire of the noble Baroness, Lady Bennett—I just remind everyone that one of the most important contributions that our country makes is through the nuclear deterrent. That is a huge contribution that we make to the security of NATO and of Europe, and to our defence.
On GCAP, of course there is always a need to look at new partners. A few weeks ago, the noble Lord, Lord Fox, and many other noble Lords questioned whether GCAP would actually be in the document. Now the accusation is that we are spending it too late—it is over £8 billion-worth of money—and that it is not being spent quickly enough. A huge amount of money has gone into GCAP. Of course the Government will negotiate on new partners, but that has to be agreed not only with us but with Italy and Japan. That is important for us as well.
There is a whole section on SMEs in the defence investment plan; it is not only on the big primes but on the SMEs. I say to the noble Baroness, Lady Goldie, that all the chiefs are content with the defence investment plan and have been involved in bringing it forward.
A number of noble Lords asked me about private finance initiatives and how we can bring that on board. I know that the Government are looking at the Defence, Security and Resilience Bank and whether that is a good way forward rather than necessarily defence bonds, which count as borrowing. No decisions have been taken about that, but we are of course looking at alternative ways of bringing that in. I say to the noble Lord that we tried very hard to get into SAFE, but we failed—we could not get into it. So it is not a question of trying to get into it; we tried and we will try again, but we were not successful. But in the meantime, the country will obviously continue to do what it can to build up its own defences.
The defence investment plan is a huge contribution to the defence of this country. It points to a way forward, it is transformative and it improves our readiness. For any investment plan brought before this House and indeed this country, that is quite an important statement of where we are.
Baroness Stuart of Edgbaston (CB)
My Lords, all European countries are struggling with coming to terms with new realities and what that requires for their defence and equipment to be appropriate to modern warfare. However, irrespective of the money and the percentages spent, if we do not start the national conversation—which we have been talking about for several months, if not years, now—the British public will not accept that they will have to accept cutbacks in other areas to defend our borders and our airspace, and, above all, the sea around us. Let us not forget that we are a nation, and our resilience and our capability to defend ourselves is not just about money; it is all about the support of the people. Can we start with that now?
Lord Coaker (Lab)
Indeed, we will come forward with proposals and plans with respect to a national conversation. The noble Baroness is right in her suggestion. We can see—many Members of this House will know this—that some of the ways in which the Government have asked different departments to contribute to this uplift in defence spending are already starting to cause some angst among certain communities. For example, in the east Midlands, where I live, the building of some roads is now being delayed, which is causing people to say, “Where’s the money going? What’s it being spent on?” Of course, having a national conversation is right, and the Government and all of us in here will have to make the case that defence is a priority, and that may require us to reallocate resources from one budget to another. We started that process, but as part of that process we must have the national conversation the noble Baroness refers to.
Lord Howell of Guildford (Con)
My Lords, I welcome part of this plan—it obviously has some holes in it, as we have already heard. I also welcome, as I do every time I hear the Minister speak, a great deal of his comments and his profound thinking. However, I wonder today whether the brief he has been given really tells the whole story. Not only have we heard about the deficiencies on the arithmetical and budget side but in the Second World War, for instance, our military spending rose to 69% of our total budget, and here we are, talking about 3% and 3.5%—it may be rather more than that when we look at the unfolding scene. I just wonder whether we should not be a bit more frank with the British people—or whether our briefing or the Government’s words should—in reminding them that we are beginning to move towards a total war footing. The late Lord Skidelsky often reminded this House that this is the way we are going, and we will have to seriously consider the sort of percentages that I am talking about. I am not sure that term comes through at all in the blue paper that we have all been given to read.
I am very pleased that we are reaffirming the huge global combat air co-operation between ourselves and Japan and Italy. This link with Japan and Japanese industry is hugely important. It is one of our ways into the giant consumer markets of Asia, which is where all the action is going to be. So good on that, but let us have a brief that honestly faces the fact that we are moving towards a war footing, and that that will cost far more than we are considering now.
Lord Coaker (Lab)
I thank the noble Lord for his question and his comments, which come from a great knowledge and experience, and I thank him for his remarks about me. Just to reiterate, the GCAP programme is extremely important, and as he just said, that is outlined in the money allocated within the paper. The debate is about how quickly we move towards increased spending, and I have outlined—without repeating myself—how the next spending review in 2027 will look to 3% but that the absolute commitment is to 3.5% to reflect the change in the security environment in which we are operating. In addition, I mentioned the nuclear deterrent, and across this House we have mentioned the importance of preparing for war, because one of the ways you deter war is to prepare for it.
Baroness Foster of Aghadrumsee (Non-Afl)
First, I welcome this Statement, which this House has been waiting on for some time, and share my concerns about the funding, which I hope will be sorted out under new leadership. However, I welcome the fact that there is an emphasis on innovation and supporting small businesses, and I hope to see that coming through. In terms of the detail of the plan, I note that there is £330 million to be spent on investment in critical underwater infrastructure protection to tackle hostile activity within UK waters. I have raised this issue with the Minister before. Can we expect the Republic of Ireland’s Government to pay towards helping with that undersea capability, because, as he knows, it is as important to the Republic of Ireland as it is to the UK?
Lord Coaker (Lab)
I cannot give the noble Baroness an assurance about what the Republic will pay for, but let me just say that there has been improved and increasing co-operation between the Republic and ourselves where it is in both our interests to do so. She will know that underwater cables and underwater infrastructure are important to the Republic and to the whole of the UK, so it is in both of our interests to work together. I cannot give her a commitment about paying for that, but I can give her the commitment that there is increasing co-operation and working together to deliver the shared objectives we would all have.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I think it is time to hear from the Labour Benches and then we can hear from the Liberal Democrats.
Viscount Stansgate (Lab)
My Lords, I welcome the publication of the defence investment plan and the recognition in it that science, technology and innovation are going to play a very big part in the future. Does my noble friend agree that it is not just a financial challenge that faces the defence investment plan; there is also a credibility challenge? We are going to have to explain to the public more effectively than perhaps we have been able to do so far exactly why we need a funding plan to reach 3% of GDP by 2030 and 3.5% by 2035.
Lord Coaker (Lab)
Indeed, as I said to the noble Baroness, of course we need a conversation to more fully and carefully explain to the public why we need to increase our expenditure on defence and security and, alongside that, to help them to understand why that might mean changed priorities for budgets within the sort of priorities that people would have. Whether that means less spending on this area or that area of government, I think we would all agree that the increase for defence and security is essential, and there will be difficult decisions ahead. As part of resolving that, we need to talk openly to the British people.
Lord Teverson (LD)
My Lords, one of the unfortunate realities is that the United States is moving away from the defence of Europe. Whether we like it or not, this is not just for this Administration; it is a danger that is likely to happen in future as well as the US looks to the Pacific. We understand that, and we understand that Europe should take more effect of its defence, but there are a number of capabilities that are not replaceable if the United States is not there—strategic airlift, a lot of the space intelligence, ISR and missile defence. I see nothing in this strategy or this expenditure report that tries to replace that. Clearly, one sovereign nation cannot do that, so how does Europe, together perhaps with Canada, ensure that we can defend ourselves into the future?
Lord Coaker (Lab)
There is a lot in the strategic defence review and the Defence Investment Plan about building up a greater sovereign capability in some of the areas that the noble Lord has addressed. But I think it is important in every debate to say that the alliance between the United States and our country and the alliance between the United States and Europe, notwithstanding the fact that the President has called for Europe to do more for itself, is absolutely essential to the defence and security of our country. The noble Lord may disagree, but I am telling him what the Government’s view is. The Government’s view—and, I am sure, the view of the vast majority of your Lordships’ House—regards the alliance between ourselves and the United States as absolutely essential for the security of this nation, so we have to be very careful about that. Of course there are challenges and difficulties, but the document refers to how we build up some of the capabilities to which the noble Lord refers. Of course Europe needs to do more, but it also needs to stand with the United States, not only in Europe but across the globe.
Lord Craig of Radley (CB)
My Lords, I share widely the view that this belated DIP comes nowhere near funding the strategic defence review, but the DIP does make clear the Government’s commitment, together with Japan and Italy, to the next-generation Global Combat Air Programme. This is welcome news, given the inevitable withdrawal of the RAF Typhoon air fleet from front-line service due to airframe fatigue and age in the early 2040s. Following the recent break-up between Germany and France on their similar programme, what political approach are the Government making to Germany to get them interested in GCAP?
Lord Coaker (Lab)
The noble and gallant Lord is right to point out the importance of GCAP and how it offers a sixth-generation option for us after 2040, when Typhoon is expected to go out of service. There is money in the defence investment plan for the upgrade of Typhoon to ensure that it has the capability that it needs until 2040. Regarding other partners in GCAP, as I said to the noble Lord, Lord Fox, we are open to discussions with anybody who comes to us with proposals or desires to join that programme, but that will be a matter for international negotiation between ourselves, Italy and Japan, although we are not opposed to looking at having further partners as part of that scheme.
Lord Robathan (Con)
My Lords, may I say that this is a disappointment, to put it mildly? I am on the same side as the Minister on this. This, I assume, was what led John Healey to resign—I suspect that it was the same document. Given that, does he think that any other Minister should resign, given the appalling lack of money in the Statement?
Lord Coaker (Lab)
There is an additional £1.5 billion, and there are also some changes with respect to the way in which there is a greater emphasis in this document on autonomy, AI and the transformation of the Armed Forces to have more new types of aircraft, vessels and capabilities. For me, that is as important as the amount of money, compared with not spending on new capabilities. But I would just say to the noble Lord that it requires difficult decisions to do that. On replacing the Type 45, we have scrapped the plans that we had in the document in favour of replacing them with new, uncrewed vessels. That requires us to make really big decisions, and there are a number of those sorts of decisions all through the document. Of course there is a debate about the amount of money, which is why I have talked about the 2027 spending review, but it is also about the type of capabilities that we need. The document shows that we are not afraid to make big decisions around that to give us the capabilities that we need in the future as well.
Lord Liddle (Lab)
My Lords, is it not clear that this is a welcome step forward, but that it cannot be the end of the story? We have to reaffirm our commitment to 3% by the end of this decade, and 3.5% by the middle of the next decade, as firm commitments of this Labour Government, and that in the period ahead we will carry out the kind of national conversation that was referred to earlier, and find a means of getting there. With due respect to noble Lords opposite, you cannot achieve this just by welfare cuts.
Lord Coaker (Lab)
In terms of the spending, I have made the point about the 2027 spending review, and that the document lays out that we will come back to the 3% commitment at the 2027 spending review, and, of course, the 3.5% commitment is laid out in the document as well. That lays out what the Government’s plans are.
Baroness Bloomfield of Hinton Waldrist (Con)
The noble Lord, Lord Liddle, has just alluded to the elephant in the room, which is that there are no cuts to the £333 billion welfare bill, which would go a long way to helping with additional support for the defence industry. My worry is that most of these cuts are unknown, and they are optimistic efficiencies, but I know that the £2 billion being cut from the BEIS budget is a worry. How is this going to affect Mr Miliband’s ambitions for net zero?
Lord Coaker (Lab)
I do not know about the ambitions for net zero. All I can say to the noble Baroness is that, of course, spending is important, and increasing the amount of spending on defence is important. Whatever decisions are made will require the reprioritisation of budgets for what the Government plan to do. That is the reality of finding more money for defence. We are ensuring that everything in the current plans, and the defence investment plan, is funded. The spending review will come back to how it is funded beyond 2029-30, and how that is done will be a matter for that review.
Lord Kerr of Kinlochard (CB)
My Lords, I was head of the Treasury’s defence division, and I welcome all this concentration on the money, but the document is actually about investment and where the money is to be spent. Ukraine is making, using, and losing 7 million drones a year. The life cycle of any particular model of drone is under three weeks, because they have to be continually reprogrammed because of countermeasures, so I rather like the emphasis in this document, in section 3.2, on industrial agility. I hope that the Minister can deliver on industrial agility, as it is crucial that the Ministry of Defence gets away from operational requirements that are negotiated for months and fixed for years, and accepts that there has to be an open partnership with business, and a two-way flow of intelligence and innovation. From now on, the weapon is the production facility, the drone is only the bullet and the only constant is change.
Lord Coaker (Lab)
I agree with that. In the document, it talks about the need for the transformation of our Armed Forces, and much of that will be around uncrewed capabilities and drones. It is not only about big primes; much of this, including in Ukraine as the example, is delivered by small and medium-sized businesses, which have that particular agility to which the noble Lord refers, and we need to develop that.
Baroness Bennett of Manor Castle (GP)
My Lords, with the honourable exception of the noble Lord, Lord Kerr, much of our debate today, as in the many months leading up to the defence investment plan, has focused on the bottom line and where the money is coming from; we have, unfortunately, had far less debate about how the money is being spent. I note that less than £10 billion over four years is set aside for homeland defence in areas such as cyber security, air and missile defence, and undersea infrastructure protection. By comparison, about £100 billion is being spent on nuclear submarines and jet fighters, AUKUS subs and cruise missiles. As the leading article in the Guardian said today, we are still binding our force structure to an American-led posture. Is that not deeply dangerous in the current geopolitical circumstances of an unstable, uncertain America?
Lord Coaker (Lab)
“No” is the answer to the noble Baroness’s question. Homeland defence runs all the way through the document: how we have better air defence, what we do about improving the use of reserves, and various protections for our critical national infrastructure, which is really important. As I have said before, on our alliance with the United States, the development and maintenance of things such as our nuclear deterrent are really important, not only for our defence and security but for the defence of Europe and beyond, and we should continually reiterate that.
Lord Spellar (Lab)
My Lords, I put it to the Minister that it would have been better to have had the conversation with the public before we put out the policy, so that we had rolled the pitch and people understood the nature of the threat. I welcome, therefore, what he is saying about the position going forward, but can we also make sure that the public understand the chronic neglect of our defence capacity that took place under previous Governments—notably the Annington housing and the neglect of maintenance—not least the failure to order nuclear submarines and the six-year delay between 2010 and 2016, which has left us in a very difficult position regarding our deterrent and our crew? Will the Government be making clear who the guilty men and women were?
Lord Coaker (Lab)
The catastrophic decision to pick out of what my noble friend said—given the importance that I, the Government and Members across this House attach to this—was the delay in 2010 for a number of years in renewing the nuclear deterrent. That was a really bad decision, and as a result our nuclear submarines are at sea for months and months. That is a problem we have to deal with, as is the fact that renewal of the deterrent, which is included in the defence investment plan, will be later than we would wish.
My noble friend talked about Annington Homes. It was a disastrous decision to privatise it, and we have brought it back in at a cost of £6 billion.
I know that a number of people who wanted to ask questions were unable to. We have the Armed Forces Bill on Monday, and if noble Lords and Baronesses wish to ask a question then on the defence investment plan, I am perfectly happy for them to do that, so that they do not feel that they have missed the opportunity to ask about something which is massively important to the defence and security of our nation and beyond.
Steel Industry (Nationalisation) Bill
(1 day, 5 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
“(3A) On the day on which this Act is passed, the Secretary of State must lay before Parliament a consultation document on the proposed exercise of the powers under this section.(3B) The consultation document must invite representations from—(a) every steel undertaking affected by the provisions of this Act,(b) trustees or managers of any pension scheme in respect of which such an undertaking, or a group company of such an undertaking, is or was an employer,(c) persons appearing to the Secretary of State to represent members and other beneficiaries of such schemes,(d) trade unions representing employees of such undertakings,(e) the Pensions Regulator, and(f) the Pension Protection Fund.(3C) Before making regulations containing provision by virtue of this section, the Secretary of State must have regard to the interests of members and other beneficiaries of affected pension schemes, including the protection of accrued rights and the security of benefits.”Member’s explanatory statement
This amendment requires the Secretary of State to lay a consultation document before Parliament on the day the Act is passed, consult affected steel undertakings and pension stakeholders, and have regard to scheme members’ and beneficiaries’ interests before exercising the pension powers.
Lord Sharpe of Epsom (Con)
My Lords, my apologies: I was asleep at the wheel, much like the England defence. I rise to speak to Amendments 16 and 17 in my name and that of my noble friend Lord Hunt of Wirral.
I thank the Minister for his letter on Clause 44 and for meeting us to discuss the Bill and the ways in which it may be improved. I welcome his confirmation that the Government’s intention is for workers’ pension benefits to remain unchanged, but where the Bill gives the Secretary of State powers to modify or apportion pension rights and liabilities, transfer accrued rights between schemes, and amend scheme terms, workers and pensioners need more than an assurance of present intent. They need a clear legal safeguard, which my Amendment 17 would provide. It would ensure that regulations made under Clause 44 could not reduce the value of accrued pension rights or benefits, nor make the terms on which benefits accrue less favourable in future.
Amendment 16 addresses consultation and engagement. It would require the Government to consult affected undertakings, pension trustees and managers, scheme members and beneficiaries, trade unions, the Pensions Regulator and the Pension Protection Fund, and to have regard to the interests of members and beneficiaries, including the protection of accrued rights and the security of benefits. The Minister suggested that full consultation before the use of these powers may not be realistic where urgent action is required. We understand the need to avoid delay where a transfer must take place swiftly, but urgency cannot mean that pension stakeholders are simply bypassed. If consultation cannot practically take place before a transfer, will the Minister commit to a prompt and meaningful consultation afterwards, and in any event before any further pension regulations are made? Will he also confirm that the Government will engage formally with the Pensions Regulator, the Pension Protection Fund, trustees, scheme members and their representatives, so that any necessary arrangements are made to protect members’ accrued rights and the long-term security of their benefits? I beg to move.
Lord Fox (LD)
My Lords, I, too, am confused, because I thought Amendment 20 was in this group.
Lord Fox (LD)
Unfortunately, the proposer failed to mention it in his speech. I signed it merely because I wanted to indicate that the contingent liabilities are an important part of the Bill as we discuss it. However, the main issues within this group are those that I will discuss later, in group 4. In that respect, I am going to keep my powder dry.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, before I start, I am sure all noble Lords want to join me in wishing the England team the very best for the rest of the match this afternoon.
First, let me thank the noble Lord, Lord Sharpe, for his contribution and his amendments. Amendment 20, in the name of the noble Lord, Lord Fox, would require the Government to provide a statement to Parliament outlining the value of contingent liabilities and the steps they would take to minimise taxpayer exposure to them before an intervention. As I have set out previously, the Government are somewhat constrained in the procedural steps they can take before exercising the power in the Bill. This is why the transfer powers are exercisable by regulations subject to a negative procedure. We will likely be operating in a fast-moving commercial environment where intervention needs to be done at pace, and negative procedure transfer regulations do not require prior parliamentary approval before they take legal effect.
It is not appropriate to publish details of a private company’s contingent liabilities prior to nationalisation. If a steel undertaking is brought into the public sector, its financial position will rightly be subject to parliamentary scrutiny, including the publication of its annual report and accounts. Of course, the Government will take steps to minimise taxpayers’ exposure to liabilities wherever possible. Any decision to exercise the transfer powers will be subject to the usual principles of Managing Public Money and government approval processes.
Amendment 17, tabled by the noble Lord, Lord Sharpe, seeks to prevent any pension regulations from reducing accrued pension rights or benefits or worsening future pension terms. I thank the noble Lord for his amendment and understand his concerns that the Bill may adversely affect pension rights, benefits or terms for employees. I reassure the noble Lord that any use of these powers would be considered on a case-by-case basis, with the primary objective of ensuring alignment across pensions. These powers give the Government the flexibility to achieve this. Any changes to the terms would likely be due to regulatory changes where pension terms may need to be standardised or contributions adjusted. The Government would seek to consult regulators, unions and employees, where possible, on any future changes.
Amendment 16 seeks to require the Secretary of State to consult with affected steel undertakings and affected pension stakeholders before exercising the pension powers. To address the concerns raised by the noble Lord, Lord Sharpe, perhaps it would be useful to set out the Government’s intent behind Clause 44. Clause 44 is essential for managing the consequences of a transfer for pension schemes and for employees’ rights under a pension scheme. It enables the Government to make provision for pension schemes where the steel undertaking is or was an employer.
These powers are necessary and give the Government flexibility on a case-by-case basis to make suitable provision for pensions during the transfer. For example, the provision would enable the Government to modify terms in the event of regulatory changes where pension terms may need to be standardised upon transfer or contribution minimums adjusted. It also gives the Government flexibility on a case-by-case basis, if needed, to consider a fair division of pension liabilities between the transferer and transferee in complex transfers.
In the case of British Steel, if, after Royal Assent, the Government decided that nationalising British Steel was necessary in the public interest, this power would not be required. To the best of our knowledge, British Steel has a defined contribution scheme, so there is nothing to transfer or leave behind.
In relation to the requirement to consult before exercising these powers, I reassure the noble Lord that, wherever possible, the Government would seek to consult with regulators. However, a statutory duty to consult could delay the transfer of the pension schemes, causing uncertainty and concern among employees. That is exactly what the Government are trying to avoid. For those reasons, I do not consider this amendment necessary and ask for it to be withdrawn.
Lord Sharpe of Epsom (Con)
I am grateful to the Minister for his answers and to the noble Lord, Lord Fox, for correctly pointing out that I neglected to mention Amendment 20 on contingent liabilities. We will come back to that.
As regards Amendments 16 and 17, I am grateful for the Minister’s commitments, particularly on consultations where possible. Perhaps we could explore in another forum what potentially that will mean in practice. People’s pensions are their future and their security. It is vital that the Government ensure that workers’ pension rights are properly protected—I have no doubt at all that the Minister agrees with that—and that the relevant experts, regulators and representatives are fully consulted as these powers are exercised. We are merely trying to explore how that is done. I look forward to picking up that subject again in the future. For the present, I beg leave to withdraw Amendment 16.
Lord Hunt of Wirral
“Duty to try to find a private sector purchaser for any nationalised steel undertakingWhere a steel undertaking has been subject to a principal transfer power under this Act, the Secretary of State must—(a) make all practicable efforts to find a private sector purchaser for the steel undertaking, and(b) lay a report before Parliament every six months which sets out progress made towards finding a private sector purchaser for the steel undertaking.”Member’s explanatory statement
This new clause would put a duty on the Secretary of State to seek a private sector buyer for any steel company that has been nationalised, and report to Parliament on progress made every six months.
Lord Hunt of Wirral (Con)
My Lords, Amendment 21, standing in my name and that of my noble friend Lord Sharpe of Epsom, would, ultimately, put into the Bill what the Government say is their objective. The then Secretary of State for Business and Trade said that the Government’s aspiration for British Steel was
“a co-investment agreement with a private sector partner to secure a long-term transformation”.—[Official Report, Commons, 12/4/25; col. 841.]
The future of British Steel cannot rest indefinitely on public ownership and continuing working capital injections, together with an open-ended commitment from the taxpayer. It must be a viable, competitive and investible business able to secure private capital for the investment and the transformation that it requires. Yet that objective does not appear in the Bill. There is no statutory duty on the Secretary of State to seek a private sector purchaser, no clear exit route from public ownership and no requirement to report to Parliament on progress. Without that discipline, there is a real risk that nationalisation becomes not just a temporary intervention to stabilise and restore business but an accumulating and indefinite cost to the taxpayer. If the Government are serious about a private sector-led future for British Steel, they should have no difficulty in accepting that duty.
Amendment 23 from the noble Lord, Lord Fox, is very important indeed. It goes to the heart of concerns raised throughout these debates, including by my noble friend Lord Redwood on the first day in Committee, that the Government need a genuine business strategy for steel. Where nationalisation is contemplated, there must be a strategy for skilled employment, retraining, reskilling and local economic renewal. Workers cannot be treated as an afterthought to a transfer of assets or as a balance sheet exercise. I look forward to hearing the Minister’s response. I beg to move.
Lord Fox (LD)
My Lords, Amendment 23 is in my name. I was very pleased to hear what the noble Lord, Lord Hunt, just said, because I had put in my notes that I feel that this is an important amendment. I hope it is pushing at an open door.
In the previous debate, on Monday, the noble Lord, Lord Wigley, spoke of the effect on local communities. I agreed then, and this amendment would put in place a requirement for a jobs and industrial transition strategy to follow once the Secretary of State has exercised the principal transfer power in respect of the steel undertaking. I emphasise that this would be post exercising that power.
This amendment calls for the strategy to be laid before Parliament within six months—sooner, I would hope—from the exercise of the transfer powers. This published strategy must set out the Government’s investment and transition plans to protect employment, deliver a skills and reskilling programme and, if necessary, redeployment opportunities, and deliver real economic renewal, while supporting resilience in communities that are dependent on that steel undertaking. I am happy to discuss with the Minister ways of achieving this objective, but this process is aimed at ensuring that there is an explicit plan to which Parliament will be able to hold the Government to account.
Lord Redwood (Con)
My Lords, these are indeed important amendments. It is a tragedy what has been happening to our steel industry in this country. It suffered considerable decline under the last Government thanks to very high energy prices and decarbonisation, which turned out to be disruptive. In the last full year of the Conservatives, we were down to 5.6 million tonnes of manufactured steel—around half our requirement.
There has now been a further very big collapse, such that our output last year was, I think, around half of that in 2023—around 2.5 million tonnes—and we are heading for an even smaller output this year unless the business plan is provided, kicks in and starts to do something to help the ailing Scunthorpe business that we are talking about. I think we are united in our belief that this is not what we want from our steel industry. It means that we have a chronic dependence—in the last year, 7.1 million tonnes—on imported steel and we are heading to a position where we import practically all our steel. I fear we will discover that, unless we do something about electricity prices, even when electric arc production starts to kick in on a bit of a bigger scale, it will be very difficult to sell that steel at a profit because the electricity costs are unrealistic and uncompetitive, as well as the general carbon taxes and carbon costs, which have been adversely affecting the blast furnaces.
Given our common interest in saving jobs and having a better steel sector, I again urge the Government to provide that plan and that thought-through work, which should be shared without commercial secrets with the wider public and both Houses of Parliament. This would give us some confidence that there is a way out of this very deep tunnel that we are going down to producing less and less steel of our own.
The Government have clearly introduced very penal tariffs on importing steel from non-EU sources, with the 50% increase in tariff. They hope that that will change the situation but, because they have relaxed the quotas for the EU, I suspect that we are still extremely vulnerable to EU import competition at a time when our industry is not properly competitive. They will find that the tariffs will not protect the diminishing British steel industry, but that the much bigger and somewhat stronger steel-using industries in the United Kingdom will be very gravely affected, because more than half our imported steel may well have to come from sources that attract tariffs. That will be very penal and, therefore, will reduce the amount of steel-using activity that we can undertake.
I urge the Government to take some of these points seriously. I am glad that two sensible amendments have been put forward to concentrate this debate.
Lord Wigley (PC)
My Lords, I am glad to have the opportunity to support Amendment 23, tabled by the noble Lord, Lord Fox, concerning a jobs and industrial transition strategy, which is very much in in line with the comments I made in our previous debate. The question of protecting skilled employment, in particular, and the need to reskill and deliver the tangible economic renewal, support and resilience in the local communities is very close to my heart. It is also very close to the minds of those in places such as Port Talbot who have faced insecurity in these matters. I hope that the Government, if they are not able to accept this amendment, will at least underline their agreement with its approach. I would be very surprised if it was not the Government’s approach, in fact.
When it comes to Amendment 21—I address this to the noble Lord, Lord Hunt, who moved the amendment —if a duty is placed to find a private sector purchaser as soon as possible then surely that has to be constrained very much more than in the amendment. What would the situation be if an overseas company in the private sector was to make a bid? As I see it, the whole logic behind the nationalisation that we have here is to defend the United Kingdom’s strategic interests as well as its economic interests. If an important part of the steel industry was to fall into overseas hands—perhaps a perfectly reputable company but an overseas company outside the control of anybody within the United Kingdom—would that not raise serious questions? These are issues that I put to the noble Lord, Lord Hunt, rather than to the Minister. I regard them as a serious weakening of the Bill’s strategic objectives, which I generally support.
Lord Leong (Lab)
My Lords, I thank the noble Lords, Lord Hunt, Lord Fox, Lord Redwood and Lord Wigley, for their contributions. I am very grateful that the noble Lords, Lord Sharpe and Lord Fox, are raising important questions about the future structure and operations of any steel undertaking that may be brought into public ownership under the Bill.
Before addressing their specific amendments, I should make this very important point: no decision has been made in relation to any particular steel company. Any decision to exercise the powers in the Bill can be made only after the Bill has received Royal Assent and only if the statutory public interest test is satisfied.
With that important caveat, I turn to the specific amendments before the Committee. Amendment 21, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would place a duty on the Secretary of State to secure a private buyer for any nationalised steel undertaking at the earliest opportunity. As a matter of corporate governance, however, we would expect responsibility for exploring future ownership options to rest with the company’s board and chair, working closely with Ministers, rather than being imposed as a statutory duty on the Secretary of State. More fundamentally, I reassure the Committee that the Government share the amendment’s underlying objective. As we made clear in the steel strategy, the long-term future of the UK steel industry depends on attracting sustained private investment.
Public ownership is not an end in itself; it is a means of safeguarding a strategically important asset when exceptional circumstances require government intervention. The Government do not envisage a steel undertaking remaining in public ownership indefinitely. Our objective would be to stabilise the business, restore its commercial viability and place it on a sustainable footing so that it is well-placed to attract private investment in due course.
That said, timing is critical. A company requiring nationalisation is, by definition, unlikely to be an attractive investment on day one. It will first need financial stability and operational improvements, and in many cases a revised strategic direction, before credible private investors are prepared to commit significant capital.
Throughout that process, Ministers and the company’s leadership would remain in close dialogue about its long-term future, including the most appropriate ownership model and opportunities for private investment when the conditions are right. I hope this reassures noble Lords that the Government’s ambitions align with the intent behind this amendment. We are happy to consider further whether there are appropriate ways to make that position clearer, but we do not believe that placing a statutory duty of this kind in the Bill would improve its operation.
I turn finally to Amendment 23, in the name of the noble Lord, Lord Fox, which would require the Secretary of State to publish a jobs and industrial transition strategy after the exercise of the principal transfer power. I fully appreciate the purpose of the amendment. If the Government were required to intervene to safeguard a steel undertaking, Parliament would rightly expect a credible plan for its future. The Government share that objective. However, the success of any nationalised steel undertaking will ultimately depend on strong commercial leadership, not on a strategy prescribed by legislation.
One of the Government’s first priorities would be to appoint a board and an executive team with the expertise, commercial experience and vision to restore the business to long-term sustainability. The detailed strategy for the company’s future—including its workforce, investment, operations and industrial transition—should therefore be developed by that leadership team in close partnership with Ministers, rather than being imposed from Whitehall via a statutory reporting requirement. That approach provides the flexibility to respond to changing commercial circumstances while ensuring that the company is run on sound business principles.
That said, I recognise the importance of parliamentary scrutiny. When a steel undertaking enters public ownership, Parliament should have appropriate opportunities to understand the company’s strategic direction and to hold the Government to account for its stewardship. I am therefore happy to reflect further on the most appropriate mechanisms to provide that transparency. I am grateful to the noble Lord for raising these important issues. I hope I have provided assurances about the Government’s approach. For the reasons I have set out, I respectfully ask that the amendment be withdrawn.
Lord Hunt of Wirral (Con)
My Lords, the purpose of any debate in Committee is justified when the Minister responds by giving us the series of assurances that he has just done, and I warmly welcome his approach. He has clearly outlined that without a clear route towards private investment, this ownership, as I pointed out in moving the amendment, becomes an open-ended commitment. I thank my noble friend Lord Redwood and the noble Lord, Lord Fox, for their contributions, and I owe my good friend the noble Lord, Lord Wigley, an explanation, because this is very much a probing amendment. He is quite right that you can envisage various circumstances which are counterproductive, and that is why I warmly welcome the fact that the Minister has given such a clear commitment that there is no public ownership in perpetuity intended here. We are all determined to produce a plan which will last for generations to come and secure the future of our great steel industry, so I have no hesitation in seeking to withdraw the amendment.
“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.”Member's explanatory statement
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.
Lord Fox (LD)
My Lords, I move Amendment 22 in my name, but just briefly, with your Lordships’ indulgence, let me first respond to the Minister’s response to Amendment 23. I think he is quite right that it is up to the management of the company to set its own course, but that course will have wider implications than simply the company itself. It will have implications on the community in which that company is located, and that is something the Government, local government, and indeed the Welsh Government if appropriate, have to be concerned about. That was very much part of the point I was bringing forward. There might be another way of doing this, and perhaps we can discuss it when we get to a later group, but I am pleased to hear the Minister’s relatively positive response.
Turning to Amendment 22, in a sense the purpose of this follows on from Amendment 23 and keys into some of what the noble Lord, Lord Redwood, was talking about just now. An area not covered to date is the need for the wider supply chain to have an explicit voice in what is going on here. We should remember that there are about 400,000 employees working in the steel-using community and about 40,000 in the steel production capacity, so this is a 10 times bigger part of our national wealth and we need to make sure that there is a place for steel users and producers to have a voice within the strategic decision-making going forward.
I believe the Government have a steel board, but it is not clear to me how the steel-users community feeds into that steel board. In what we have seen in the setting of tariffs, users seem to have a somewhat second-class status within the decision-making process. This amendment envisions the creation of a statutory stakeholder advisory committee, which would make sure that those producers are well represented in the decisions that Government make concerning the industry on things like tariffs. Union and community interests and those kinds of things should also be included.
I am very flexible about the approach taken to do this, but I feel there needs to be a formalised, statutory approach. We have seen with respect to the proposed tariffs that users are falling behind producers on the Government’s agenda. This amendment is there to ensure that users have a formal voice. Trade associations do a great job, but in the end Secretaries of State can and do ignore them on a regular basis. This amendment is there to add a voice for the manufacturers in any debate. I beg to move.
Lord Redwood (Con)
My Lords, I welcome the intent behind Amendment 22. We should not be careless about the interests of the steel-using industries. Many years ago, I was responsible for Darlington & Simpson Rolling Mills. In those days, that was a profitable and successful business, but the price of raw material was critical to that type of operation. I was very interested to learn from noble Lord, Lord Fox, that he thinks that there are 10 times as many people involved; that may well be an underestimate. When I was trying to do some research on this, I identified a number of sectors where steel use is an important part of cost, and I came up with about £200 billion of business activity in those areas, excluding construction, which is obviously the main steel user in the country. That was many times the amount of turnover we are talking about in trying to protect maybe 2 million tonnes of steel production in this country from our own resources. Both in setting the tariffs and in setting the plans, and in the details of any future nationalisation, we need to have fuller recognition than we have had so far of the legitimate interests and concerns of the steel-using industries.
I hope that Ministers will see that we are also interested in a report and audit on where we are at already. Although we have not nationalised British Steel and do not own the assets, we are otherwise completely responsible for the people who do those jobs and their families, for the safety and success of the production processes of those two ageing blast furnaces, and for that part of what remains of the British steel industry, so I think we are probably owed a bit more consultation and plan already.
Lord Wigley (PC)
My Lords, I am delighted to support the amendment moved by the noble Lord, Lord Fox, and to be following the noble Lord, Lord Redwood. I am sorry the noble Lord, Lord Hunt, is not in his place at the moment, but both he and the noble Lord, Lord Redwood, will be very familiar with a project that took place in north-west Wales 40 to 50 years ago now—the construction of the pumped-storage scheme at Llanberis by the CEGB. The reason that is relevant is that, in the very early days of that project, the CEGB was wise enough to pull together trade union leadership and the local authorities in a regular meeting to review issues that were arising. Over the 10-year period of the construction of that exciting project, only about a week was lost due to industrial difficulties. The company, the CEGB, was working with the workforce and the local community, and problems were sorted before they boiled up to triggering strikes and all the rest. It is motivated self-interest to have such an approach to bring in these forces: with good leadership coming from the company involved and, yes, from central government but also from local government and from the trade unions within the company involved, so many problems can be overcome before they cause difficulties and boil up to something that they do not need to be. I believe such an approach should appeal to the Government, and I am very glad to support the amendment.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Fox, for this amendment. He is quite right to point out that decisions about the future of a steel undertaking affect a wide range of sectors that rely on secure domestic supply, including defence, construction, advanced manufacturing and critical national infrastructure.
National security has, rightly, featured prominently throughout our debates. If the Government are relying on that argument to justify the exercise of these exceptional powers, it is surely right that those with responsibility for defence and critical infrastructure should have a voice in the wider policy discussion. The number of workers potentially affected in the broader and wider supply chain, as cited by both the noble Lord, Lord Fox, and my noble friend Lord Redwood, is staggering.
It is difficult to argue that the steel-using community is really being consulted, as the noble Lord, Lord Fox, pointed out; that is certainly true of the representations we are getting from members of that community. I urge the Government on this occasion to have a careful think about what this amendment is trying to achieve. It recognises, as the noble Lord, Lord Wigley, has pointed out, the importance of the workforce and of local communities. Workers, their representatives and local authorities will understand better than most the consequences of a transfer for jobs, skills, supply chains and of course the local economy. It is difficult to see how the Government can judge properly what is in the public interest without hearing from the workers, communities, industries and strategic sectors most affected by the decision. I look forward to hearing the Minister’s response.
Lord Leong (Lab)
My Lords, I am pleased to inform noble Lords that we have equalised—so come on, England!
I thank the noble Lords, Lord Redwood, Lord Wigley and Lord Sharpe, for their contributions. I am grateful to the noble Lord, Lord Fox, for tabling Amendment 22, which would require the Secretary of State to consult a stakeholder advisory committee before determining whether an intervention under the Bill was in the public interest. I fully understand the motivation behind the amendment. Decisions of this significance should be informed by expert views, and I have considerable sympathy for the desire for strong parliamentary and stakeholder engagement.
However, as I said in relation to earlier amendments, the Government cannot support a statutory precondition of this nature. The powers in the Bill are intended for exceptional circumstances in which events may be moving quickly and decisive action is required. Introducing a mandatory consultation process before intervention could delay action at precisely the moment when speed is essential to protect jobs, safeguard strategic capability and secure the future of a steel undertaking. In some cases, a delay could undermine the very purpose of the intervention.
Nor do I believe that establishing a statutory advisory committee is necessary to ensure that the Government receive expert advice. My ministerial colleague, Minister McDonald, regularly maintains contact and extensive engagement with the sector through a wide range of established forums. This includes the steel council, the steel council working groups, the metals circularity group and a programme of industry round tables. Alongside those formal structures, Ministers and officials regularly meet with steel producers, downstream users, trade associations, trade unions, recyclers and other stakeholders throughout the supply chain. These relationships provide the Government with a detailed understanding of the opportunities and challenges facing the sector and ensure that policy is informed by those with direct operational experience.
I am also pleased to inform the Committee that we will shortly be inviting the UK Metals Council, which I understand is the largest downstream user group, to join the steel council, so we are reaching out to downstream users too. This will strengthen the representation of downstream users and ensure that their perspectives are fully reflected in future discussions about the sector.
The Government firmly believe that sustained engagement with industry is essential to delivering our steel strategy, but there is an important distinction between ongoing engagement and creating a statutory procedural hurdle that could impede timely intervention when the national interest requires it. For those reasons, while I fully recognise the amendment’s intent, I do not believe it would improve the Bill and I therefore respectfully request that the noble Lord withdraw it.
Lord Fox (LD)
I thank noble Lords for their contributions to this short debate. It was stark that when the Minister went through his long list of parties that the Minister at the other end consults with, the vast majority of the ones that the noble Lord, Lord Redwood, and I were discussing came under the “other stakeholders” category, so it is encouraging that the UK Metals Council will be invited.
I take the point about the nature of preconditions for any activity, and I understand the Minister’s reaction to that, but the purpose of the amendment was to make the point that users are underrepresented as it stands. We can wait and see whether adding the UK Metals Council is sufficient to reweight that, but I hope the Minister can go away and perhaps come back to us with a statement as to how users will become central to the Government’s philosophy in making plans, rather than being just another stakeholder, which is where they currently seem to be. Leaving that to one side, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
Before we move to the next group, I want to point out that Amendment 25 in that group is in fact to Clause 54, not Clause 53 as printed on the Marshalled List.
Clause 52: Compensation scheme regulations
Amendment 24
“(5A) Compensation scheme regulations must include provision which specifies that payment of compensation may not be made until any written estimate under section 54(4A) is laid before Parliament.”Member’s explanatory statement
This amendment and others in the name of Lord Fox require that payment of compensation cannot be made until the Secretary of State has published a written estimate of the environmental liabilities of the steel undertaking, provided to them by the independent valuer.
Lord Fox (LD)
My Lords, I will also speak to Amendments 25 to 28, 39 and 45, all in my name—I think I must have gone slightly mad at the time.
As promised when we touched on the contingent liabilities earlier, this group homes in on how such liabilities affect possible compensation in the event of nationalisation. As I set out at Second Reading, the possible environmental liabilities and future remediation costs for a site as large as Scunthorpe, let us say, are potentially huge. Scunthorpe has been there for a long time and is a very big site. The site has also employed a lot of people for a long time, and their pensions and any contingent liabilities should be fully understood by Parliament, as we discussed in the debate on the previous group.
Those contingent liabilities are likely to majorly impact the current and future valuation and sustainability of any steel undertaking. The current draft has evaluating the environmental liability as a voluntary exercise and the pension liability seems to have been ignored, but I take on board what the Minister has just said and perhaps withdraw that sense, as some elements seem to be covered.
Amendments 24 to 27 together would require that the payment of compensation could not be made until the Secretary of State had published a written estimate of the environmental liabilities of the steel undertaking provided to them by an independent valuer. Amendment 28 would require that the payment of compensation could not be made until the Secretary of State had published a written estimate of the pensions liabilities of the steel undertaking provided to them by an independent valuer.
Amendment 39 would require the Government to report on the compensation paid under any compensation scheme regulations made under Clause 52. Finally, Amendment 45 seeks to place a limit on financial assistance and compensation without additional parliamentary approval. This proposed new clause would prevent the Secretary of State paying more than £500 million—which I point out is quite a lot of money—in financial assistance and compensation under the Bill unless the House of Commons passes a resolution authorising them to do so. In this way, we would ensure that there was no blank cheque.
I am happy to approach these issues in other ways, as long as the material objective of this group of amendments is achieved. I beg to move.
Lord Redwood (Con)
My Lords, I am glad that the noble Lord, Lord Fox, has raised this; it was also something that I mentioned in our previous debates. In my experience of old industrial sites, the land under and around the plant is often heavily polluted and may contain toxic substances. Clearly, the Government need a report on that and would need to consider it not only when considering any possible compensation to a previous owner but as part of the costings of the whole project. Sooner or later, that land will have to be cleaned and if there is any current risk to water courses, it might be sooner rather than later that action would need to be taken. I trust that will all be properly investigated and has been properly investigated where we have already taken operational and financial responsibility for the plant in the case of Scunthorpe.
On other liabilities which can occur in these situations, which probably should be mentioned for the sake of completeness, it is a good idea to find out about current and retired staff to see whether any long-term health issues have arisen which can be attributed in any way to the processes they have been handling and the working conditions they have been in. Those, too, need sensitive treatment and can, if something has gone wrong, amount to significant sums of money.
Lord Wigley (PC)
My Lords, I want to speak briefly to Amendment 28, which deals with pension liabilities of the undertaking that has gone into state ownership. Some noble Lords will remember in our pensions Bill debates that we had the example of Allied Steel and Wire, where employees, who had been given all sorts of promises that they would be safeguarded, feel that they have been very badly let down. If the shadow of Allied Steel and Wire is to find its way to Scunthorpe, or any of the other locations where these questions may arise, the failure to safeguard the interests of those pensioners will militate against employees wanting to accept the course being taken by the Government unless provisions are written into the Bill of the sort provided by Amendment 28. There may be other ways of doing it, but certainly these assurances need to be given.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the noble Lord, Lord Fox, for tabling these amendments, which raise an important point of principle. Where the Government are taking a steel undertaking into public ownership, the environmental, pension and other contingent liabilities which may fall on the taxpayer should be clear to Parliament and, of course, to the public. The Minister in the other place suggested that further disclosure was unnecessary because the Government already had a reasonably good understanding of the potential liabilities and that the independent valuer would take them into account, but that is not the same as ensuring that Parliament can see the likely costs before compensation is paid and further public money is committed.
I was very taken with my noble friend Lord Redwood’s comments about the environmental impact. From memory—and I might have this date wrong—I think the oldest of the blast furnaces dates back to 1939, so it is inconceivable that that site is not contaminated in some way, which we probably do not have any accurate historical records for.
I have also recalled the reason why I was a bit lukewarm on my own Amendment 20. I hate to say this, and I hope I never have to admit it again, but it is rather because I preferred Amendment 27 from the noble Lord, Lord Fox—a shocking admission to have to make.
Environmental remediation, pension obligations and historic liabilities can amount to very substantial sums. The Government are using taxpayers’ money, and Parliament should be able to scrutinise the liabilities assumed alongside the compensation and support provided. For those reasons, the amendments make a valuable contribution to transparency and accountability, and I look forward to the Minister’s response.
Lord Leong (Lab)
Harry Kane, thank you.
The noble Lord, Lord Fox, has several amendments in relation to the compensation provisions in the Bill. I appreciate his careful attention to detail, which is a key aspect of this Bill, and will respond to the points raised in order. I will preface these points by noting that, if introduced, compensation regulations will be subject to the affirmative procedure, thereby providing opportunities for parliamentary scrutiny.
Amendment 27 is on the approach to environmental liabilities in the compensation process. The noble Lord, Lord Fox, has indicated that this would prevent the payment of compensation until the independent valuer has delivered to the Secretary of State a written estimate of the environmental liabilities of the steel undertaking in question and the Secretary of State has published that estimate and laid it before Parliament.
It is important that the independence of the valuation process is maintained. It is not appropriate for the inputs to the valuation exercise to be disclosed before the valuer reaches their determination. This may risk exposing the independent valuer to undue pressure while they are still deliberating on an outcome, thereby undermining the independence and fairness of the compensation scheme. None the less, the Government would have the power to direct the independent valuer to consider environmental liabilities in their determinations of compensation. We also intend to allow the final compensation determinations to be made public, including any consideration of environmental liabilities carried out. There is an opportunity for further parliamentary scrutiny, as the compensation scheme regulations will be subject to the affirmative procedure, allowing all Members to debate the specific framework set at that stage.
Amendment 24 would prevent the payment of compensation until an estimate of liabilities arising from the environmental and health and safety matters under Clause 54(4) is provided to Parliament. An important principle of the compensation process is that it is assessed independently to ensure that affected parties are treated fairly. The proposed amendment would begin to erode this independence by making the payment of compensation contingent on parliamentary scrutiny of one of the factors that would inform the outcome. It is therefore not feasible to proceed with the proposed amendment. As a general point, compensation scheme regulations would require the independent valuer to consider environmental liabilities as part of the assessment. Additionally, in the event that a steel company is nationalised, we would expect it to publish an annual report setting out its financial position, including any liabilities.
I now turn to Amendment 28. The noble Lord has tabled a similar amendment that would require the Secretary of State to publish an estimate of the pension liabilities of the relevant steel undertaking before compensation is paid. I understand the concerns the noble Lord has about taking on unknown liabilities and putting undue pressure on the public balance sheet. If the Government decide to nationalise British Steel, subject to the public interest test, I can reassure the noble Lord that the Government would not be taking on a large contingent pension liability. The company’s pension scheme is a defined contribution scheme with a pot funded by contributions made by the employees and the company over time. In other cases, the pension scheme may be based on different arrangements, but we have built flexibility into the Bill to address these circumstances on a case-by-case basis.
The pension power in Clause 44 allows us to adapt to regulatory changes, standardise terms and adjust contribution minimums. Where necessary, it also allows for consideration of a fair division of pension liabilities between the transferor company and the government corporation. This follows the approach in the Banking Act. Where relevant, pension liabilities will form only part of the picture in the valuation exercise, and publishing them in isolation without the wider context would not be helpful. As I have already mentioned, following nationalisation we would expect contingent liabilities to be included in the company’s annual reporting.
I am more sympathetic to the noble Lord’s Amendment 25, which would require that the compensation regulations provide for the appointment of an independent valuer in all cases to determine compensation. The current wording makes it discretionary whether an independent valuer is involved in any given case. In practice, it is very likely that the Government will consider it fair to provide for an independent valuer to be established in compensation scheme regulations to consider any compensation for a transferor. The clause is currently discretionary because there could be situations where independent valuation is not required. For example, where the Government and the transferor agree on a sum, it would be unnecessary for the legislation to require that an independent valuer be engaged. However, I will reflect further on the noble Lord’s points and consider how I expect to return to this on Report.
Lord Wigley (PC)
Before the Minister sits down, will he please address the question of why steelworkers in Scunthorpe, Port Talbot or anywhere else should have faith in the Government’s provisions for pensions when they failed to safeguard the pensions of Allied Steel workers in Cardiff and continue to do so?
Lord Leong (Lab)
I will have to write to the noble Lord, because I do not have specific information on that particular pension scheme.
Lord Fox (LD)
My Lords, I thank noble Lords for their contributions—particularly the noble Lord, Lord Wigley, who was saying what I was thinking, but he said it with authority: he understands the issue for those workers quite viscerally. It was in my mind that some level of protection or safeguard needs to be there. I thank the Minister for his very thorough answers. They are so thorough that I will have to spend some time with Hansard, reading them through, to find out how much comfort there is in there. His comments regarding Amendment 25 were certainly encouraging, and I hope we can come to some sort of agreement. On the others, I will have to come back him later, but, with those comments, I beg leave to withdraw Amendment 24.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to limit the financial assistance that can be provided under the Act.
Lord Sharpe of Epsom (Con)
My Lords, in moving this amendment, I will speak to Amendments 33 to 35, 40 and 41 standing in my name and that of my noble friend Lord Hunt of Wirral. These amendments address a basic question: if the Government are to provide financial assistance under these powers, what limit is there on the liability being placed on taxpayers? I heard what the Minister had to say in the previous group, but I will carry on regardless and probe a little further.
Clause 58 permits financial assistance in an exceptionally broad range of forms. This could be grants, loans, guarantees, indemnities, the acquisition of shares or assets, contractual payments or other expenditure. It is additional to any other funding powers available to Ministers. Yet the Bill contains no overall financial ceiling, no requirement for advanced detail to Parliament and no explicit statutory value-for-money test.
We understand the need for urgent support, but the Government’s stated objective is not permanent public subsidy but a viable, competitive, private sector led future for British Steel. That requires a business capable of attracting investors with capital, commercial expertise and a long-term commitment. To achieve that, public support must be disciplined, transparent and as limited as is consistent with the securing of the strategic objective. Otherwise, the Government risk creating a perverse incentive: a prospective purchaser may conclude that it need operate the business efficiently enough only to maintain access to public support, rather than to establish a genuinely sustainable commercial future. This would be an indefinitely subsidised business model, with the taxpayer carrying the risk.
Amendment 32 would place a £2.5 billion limit on financial assistance until August 2029. That figure reflects the Government’s own stated steel funding envelope in the steel strategy. Amendment 33 would provide a further test of proportionality by limiting assistance over five years to £1 million per employee. It is intended to ensure that support is targeted at transformation and viability, rather than becoming a substitute for a credible business plan.
Amendment 34 would require a detailed statement to Parliament before assistance is provided. Parliament should know the amount, form and recipient of support, its intended purpose and expected effect, and any conditions, repayment arrangements, guarantees, indemnities or other liabilities attached to it. That is particularly important where exposure may not appear as a simple cash grant. Guarantees and indemnities may create significant liabilities that only crystallise later. Taxpayers should not be asked to accept those risks without clear disclosure.
Amendment 35 would ensure that the Secretary of State is satisfied that financial assistance represents value for money. Value for money does not just mean ignoring strategic capability, national security, skilled employment or supply chain resilience. Ministers must weigh those against the costs, the liabilities, the alternatives and the likelihood that support will lead to a competitive business capable of standing on its own feet. In the other place, it was rightly argued that, if the Government believe in this intervention, they should be willing to set limits on it. Without such limits, taxpayers are simply being asked to sign up to an unlimited liability. The Government have already been providing working capital support and have been in discussion with potential private sector partners. Therefore, they should now have a clearer understanding of the likely financial assistance required, the risks involved and the route to a sustainable outcome.
I turn to Amendments 40 and 41. The Government have been providing monthly updates on working capital being provided to British Steel since the passing of the Steel Industry (Special Measures) Act 2025, which is welcome. It should be the same for financial assistance if British Steel, or indeed any steel undertaking, is nationalised. I beg to move.
Lord Fox (LD)
My Lords, Amendment 37 is in my name. This amendment covers concerns regarding the level of financial assistance but also focuses on the relationship between the United Kingdom and the EU. I think we covered this in a previous group on Monday, so I am not opening up that, but I have some contributions that I hope are helpful to the noble Lord, Lord Sharpe. I am still reeling from his bombshell on the last group, but bear with me.
Clause 52(1)(a) says that the Secretary of State must make regulations for compensation. Clause 57 makes those regulations subject to the affirmative procedure. However, Clauses 58 and 59, on financial assistance, do not have such requirements to make affirmative regulations. It seems that there is an asymmetry here. If the Government are prepared to use the affirmative procedure for the compensation process then why is there not an affirmative process for the financial assistance process? If the Minister was prepared to give ground on that then many of the discussions that the noble Lord, Lord Sharpe, wishes to have about financial assistance would be had during the discussion of the affirmative resolution. That is a helpful and, indeed, balanced way of dealing with this issue.
Lord Redwood (Con)
My Lords, I am grateful to the two noble Lords on the Front Bench for setting out this challenge to the Government. When you have a company in loss that is really struggling, there is an absolute requirement for accurate, speedy and regular financial reporting. Many years ago, I was a chairman with a large group of industrial companies reporting to me. I am pleased to say that none of the subsidiaries reported anything like the losses or the cash haemorrhage of British Steel, and we could not have afforded such a thing. I remember that if I or the chief executive saw one of our subsidiaries in danger of going into loss or dipping into bad performance, it would be put on to monthly reporting and quite often weekly reporting. That was not just because we wanted to know the bad news early but because it started a conversation between us, and other senior directors and executives, and the leading executives of the ailing subsidiary around how they could generate more cash and revenue, win more business and reduce costs in the meantime. If there was no immediate prospect of increasing the revenues, they needed to reduce the cash outflow.
My advice to Ministers, who took responsibility for British Steel many months ago, is that they should be seeing that kind of information, because it is now their responsibility. They decided to undertake this action without advice on value for money, so they need to have that sort of detailed information in front of them. They or their representatives also need that informed conversation with the people they have entrusted with running this business to find out why, as I understand it, the numbers are still not going in the right direction. You need that information weekly, and certainly monthly, because these things accumulate. The National Audit Office has led us to believe that the losses in this business have already accumulated to £642 million.
The description that the Government have offered help with working capital is true, but I do not think it is the whole story. As I understand it, there is a massive trading loss, and taxpayers—through Ministers and the Treasury—are having to pay trading losses. That means the Government are both subsidising the customer, who is getting it too cheaply, and paying for costs that the business needs to meet, which the customer is not going to pay for. In addition, the Government may need to provide additional working capital to provide for the work in progress and the stocks and raw materials for the next bit of production. I would regard the loss as a different category from the provision of additional working capital to keep the business running, and I would be much more worried about the loss.
From my business experience with industry, my conclusion is that cash is the king. By all means look at the P&L—that will give you an indication—but a business has to generate more cash than it spends. Otherwise, it goes bankrupt. That is the fundamental discipline that Ministers, through their chosen representatives, need to impose on this business. They need to see the cash line of outflow starting to reduce—otherwise, they need a fundamental rethink of policy.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions on this group. I will address each of the issues raised in turn. Amendments 32 and 33, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would impose a cap on the amount of financial assistance the Government could provide under the Bill. Amendment 32 seeks to place a statutory cap of £2.5 billion on financial assistance until 15 August 2029. Amendment 33 would apply a cap on a different basis, relating to the number of employees in a steel undertaking.
Imposing a fixed cap of any kind on financial assistance would risk constraining the Government’s ability to respond effectively to evolving circumstances. It could ultimately undermine the very objectives the Bill is designed to achieve, namely the protection of our domestic capability in a strategically vital sector. The Bill contains proportionate and robust measures to ensure transparency and accountability in the provision of financial assistance. Clause 59 requires the Secretary of State to report to Parliament every 12 months on the use of financial assistance. Furthermore, as I am sure all noble Lords will know, any financial assistance provided by the Government will be subject to the established framework for managing public funds, including HM Treasury approval processes, departmental accounting officer responsibilities, and reporting to Parliament through the usual public spending controls.
Lord Sharpe of Epsom (Con)
My Lords, I am grateful to the Minister for his response, and I agree with him that the focus must be on operational challenges. But I think the Minister will have agreed very much with what my noble friend Lord Redwood said about cash flow. The Minister is a businessman and will know exactly what my noble friend was talking about. Therefore, the focus should not be solely on operational challenges; there obviously also has to be a very keen focus on the cash position. I would have thought that the transparency we are suggesting would aid the Government in that.
If one month is not right, as per Amendment 40, I am happy to have a conversation about what might be. But we think that 12 months is far too long a gap between reports. Far be it from me to help the Government in this regard, but I would have thought that it would minimise the potential for political shocks if there was a more of an ongoing dialogue with the British public about the state of play in any entity that is nationalised, as opposed to one-off bombshells on an annual basis—but I will leave that for the Government to ponder.
I am grateful to the noble Lord, Lord Fox, for his helpful comments about asymmetry—he is correct. I believe the Government’s heart may be in the right place on all this. We want to see growth, we want to see investment, and we want to secure jobs in the steel sector, but we are ultimately talking about taxpayers’ money. That is why we think there must be clear limits and proper discipline around this financial assistance. Support should not be simply open-ended with no clear ceiling, no transparent statements of exposure and no statutory tests of value for money. We would welcome further discussions with the Minister on how the Bill can better reflect those safeguards but, for the present, I beg leave to withdraw the amendment.
“(1A) Financial assistance under subsection (1) must be provided through regulations, specifying—(a) the financial assistance proposed to be provided, and(b) the estimated cost to public funds of that assistance.(1B) Regulations under subsection (1A) are subject to the affirmative procedure.”Member’s explanatory statement
This amendment requires financial assistance under Clause 58 to be approved by a resolution of both Houses of Parliament before it may be provided.
Lord Fox (LD)
My Lords, I thought it would be helpful, on this group, to bring together the necessary levels of scrutiny about which I have spoken on various other groups in various different ways. In moving Amendment 36A, I will speak to my Amendments 38 and 41A.
As prefaced on the previous group, Amendment 36A would require financial assistance under Clause 58 to be approved by a resolution of both Houses of Parliament before it may be provided. By amending Clause 58, financial assistance under the relevant subsection would have to be provided through regulations specifying the financial assistance proposed to be provided and the estimated cost to public funds of that assistance. These regulations would be subject to the affirmative procedure.
The Minister got his revenge in early on the previous group, because Amendment 38 outlines a mechanism by which parliamentary scrutiny of the public interest test and nationalisation could work. I propose a new clause after Clause 58 that would prevent financial assistance being provided until 90 days after information about the package of financial assistance has been made available to a Select Committee of the House of Commons or the House of Lords.
I take the Minister’s point about timing, but this is a useful probing amendment to look at the role of Select Committees going forward in the scrutiny of this. I hope the Minister will have something broader to say if he continues to shoot down the principle of the timing of this intervention. This amendment proposes that the Select Committee should look at
“details of the nature and amount of the financial assistance … the intended beneficiary or beneficiaries of the financial assistance … the expected purpose and effect of the financial assistance … any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and … any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal”.
Whether this is before or post hoc, the Select Committees —either of just the Commons, or of the Commons and the Lords—need to have this important investigation. Of course, any information that would be made public that might compromise national security, fiduciary duties or commercially sensitive issues would not be included. Going forward, it would be useful to hear from the Minister his understanding of how Select Committees will be involved.
I had hoped to persuade the Government to commit to an annual parliamentary debate on the steel industry—its strategy, the market and the state of nationalised businesses in the industry—both in the Commons and in the Lords. This would take place once a year, as long as there were still steel undertakings in public ownership. Perhaps we can discuss this, but Amendment 41A proposes an alternate approach to information sharing. It would require the Secretary of State to make a Written Ministerial Statement every three months on the progress of any nationalised steel undertaking.
During the during the passage of the Steel Industry (Special Measures) Act—SISMA—just before Easter last year, Ministers committed to a debate six months following Royal Assent on the use of direction-giving powers. That took place in October 2025. This was a commitment to a single occurrence, but SISMA also included a commitment to a monthly Written Ministerial Statement on the use of direction-giving powers. If British Steel were taken into public ownership, this commitment would fall away, replaced only by any commitments associated with this Bill.
To date, there are no provisions of anywhere near this level of information sharing within the Bill. So, without this amendment, as the cost to the taxpayer increases, the level of parliamentary scrutiny would actually decrease, creating less scrutiny for steel nationalisation than there is under SISMA. I accept that a monthly report may be unreasonable, and I know that the Minister has mused in our discussions about half-yearly reports, but I think quarterly would be a sensible interval, and that is what this amendment seeks to achieve. I do not think any Minister would be afraid of doing this because, as the noble Lord, Lord Sharpe, said on the previous group, a level of public understanding of what is going on—the difficulties, the struggles, the cost and the importance of the industry—is important. This is an opportunity to restate that, coming back to the point about what is happening in the communities, and with jobs and skills. We would expect that to be included in those quarterly reports. If we are not getting a debate every year, this would be a better response, in a way.
Taken together, these three amendments are designed to deliver a level of comfort: an affirmative process for assistance, a role for the Select Committees and a quarterly reporting mechanism. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, this is a very important debate, and I thank the noble Lord, Lord Fox, for these amendments. It is not just a case of public understanding; I think the public would expect Parliament to hold the Government to account. In many ways, I hope we are pushing at an open door with these amendments. In an area potentially involving substantial financial assistance, the Government must be able to provide both Houses of Parliament with a clear indication of the estimated cost to public funds. Parliament must be able to scrutinise not only the principle of financial assistance but its scale, purpose, conditions and likely liabilities.
The proposed 90-day period in Amendment 38, which we have already debated, strikes a sensible balance. It would allow an expert Select Committee to examine the proposals and make recommendations, while preserving the Government’s ability to proceed once that scrutiny has taken place. The noble Lord, Lord Fox, seemed uncertain several times as to whether it should be a Select Committee of the House of Commons or of the House of Lords. I have always been a great believer in Joint Committees. Something of this importance requires both Houses of Parliament to scrutinise it, and the best way to do that is through our expert Select Committee process.
Parliament has enormous expertise which should be used in determining the appropriate level and form of support. That is particularly important where taxpayers may be exposed through grants, loans, guarantees or indemnities. I hope the Minister will be able to respond positively on how he intends to proceed.
Lord Leong (Lab)
My Lords, I am grateful for all the contributions in this group of amendments.
Amendment 38 in the name of the noble Lord, Lord Fox, would require the Secretary of State, before providing any financial assistance, to put forward a proposal to Parliament for doing so, setting out the underlying details. The amendment stipulates that a Select Committee would have 90 days to provide any recommendations on the proposal before it can proceed. I respectfully suggest that this amendment is not realistic, given that financial assistance may need to be provided immediately following a transfer. It is unlikely that there would be time for the parliamentary scrutiny envisaged by this amendment without imposing significant risk to the continued operation of the steel undertaking. I appreciate the noble Lord’s intention in tabling this amendment but, for the reasons I have outlined, I ask that he does not move it.
Amendment 36A would require the financial assistance power in Clause 58 to be exercised by regulations specifying the purpose and estimated costs. I understand the desire for further parliamentary scrutiny of the costs that might be incurred in relation to an intervention in a steel undertaking. The Government have been transparent about the costs incurred to date as a result of the intervention in British Steel under the special measures Act. Estimating future costs relating to nationalisation is more challenging because they would depend on decisions not yet taken about the future operation of a particular steel undertaking.
I hope I can provide reassurance by emphasising the extensive controls over expenditure that would apply by default. If these provisions are used, the Government would need to consider the potential range of costs and make the usual value-for-money tests under the accounting officer. These spending processes are subject to ongoing parliamentary scrutiny by the Public Accounts Committee. The Permanent Secretary to the Department for Business and Trade appeared before PAC last week to discuss steel.
As with Amendment 38, I am concerned that this amendment does not reflect the operational realities of a potential intervention. It is likely that there would be urgent and immediate pressures to draw down on the financial assistance spending power to maintain operations in a way that would not be conducive to the set-up of the secondary legislation process. However, I understand that the noble Lord would like us to go further in this respect, and I appreciate the constructive engagement we have had on this and other issues. I will of course consider whether anything more can be done to give him the reassurance he desires.
Amendment 41A, also tabled by the noble Lord, would require the Secretary of State to make a Written Ministerial Statement every three months on the progress of any publicly owned steel undertaking. I am sympathetic to this amendment and recognise Parliament’s interest in the Bill’s impact on the steel industry, employment and public finances. That is why the Bill requires the Government to produce an annual report on financial assistance under it and the company will publish its annual report and accounts. I do not think reporting every three months for as long as a steel undertaking remains in public ownership is necessary. However, the principle is sound and the noble Lord made some excellent points. I recognise that our current reporting commitments may not encompass the full scope of his amendments. I ask him not to move the amendment, and the Government will consider this further before Report.
Lord Fox (LD)
My Lords, I thank the Minister for his positive response on the last amendment, and I understand the nature of his concerns on the first two. All roads point back to Clause 2 and the public interest test, frankly, so perhaps we should have another discussion about that. However, on that basis, I beg leave to withdraw.
Lord Sharpe of Epsom
“Exemption of iron and steel carbon border adjustment mechanism goods(1) Section 143 of the Finance Act 2026 (charge to carbon border adjustment mechanism) does not apply to emissions embodied in a CBAM good which is an iron and steel good for the purposes of Schedule 16 to that Act where the good is imported by a transferred steel undertaking for use in connection with the carrying on of its business.(2) In subsection (1), “transferred steel undertaking” means a steel undertaking in respect of which the Secretary of State has exercised a principal transfer power.”Member's explanatory statement
This amendment would exempt iron and steel CBAM goods imported for use by a steel undertaking brought into public ownership under this Act from the carbon border adjustment mechanism.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 47 and 48 in my name and that of my noble friend Lord Hunt of Wirral. These amendments address two costs which bear directly on the viability and competitiveness of a transferred steel undertaking: the carbon border adjustment mechanism and the United Kingdom emissions trading scheme.
Amendment 47 would exempt a transferred steel undertaking from the carbon border adjustment mechanism in respect of iron and steel goods imported for use in its business. Amendment 48 would disapply the United Kingdom emissions trading scheme in relation to installations forming part of such an undertaking. These amendments go to a wider question which has run throughout our debates: whether the Government’s approach will genuinely secure steel-making in this country or simply add further costs to an industry already exposed to intense international competition.
The Government’s impact assessment on the free allocation review makes the point. It accepts that reducing free allocations increases businesses’ exposure to carbon costs. It accepts that energy-intensive industries producing globally traded commodities are particularly vulnerable because they cannot simply pass those costs on to consumers. It also recognises the danger of carbon leakage—production, investment, jobs and emissions moving overseas, rather than emissions genuinely being reduced. The assessment says that the traded carbon price could be approximately £25 per tonne lower by 2030 if free allocations do not fall in line with the industry cap.
This is a policy choice, and it has consequences for industry. The steel sector has warned of the effect of reducing free allocations. It has described the proposed changes as an “earthquake moment”. The Government must listen to that warning. CBAM can affect imports into the domestic market; it does not protect a United Kingdom producer competing in export markets. Moreover, higher costs can be passed down the supply chain to downstream manufacturers, reducing their competitiveness and risking the relocation of activity and jobs abroad.
We have now seen the Government introduce new trade measures with substantial tariffs and lower quota volumes. The Minister in the other place, Chris Bryant, said:
“We are determined to make sure that we have a proper steel production industry in the UK, and that means that we have to take some tough measures”.—[Official Report, Commons, 30/6/26; col. 767.]
But thus far the tough measures appear to fall on downstream manufacturers and therefore, inevitably, on British consumers. The Government cannot impose new trade barriers and costs on those who use steel while also increasing carbon costs for domestic producers, and then claim to have solved the competitiveness problem. When will they get tough on the ideological net-zero policies which are imposing substantial costs on the steel industry?
The Government need to make a clearer choice. Do they want a steel sector which can compete, invest and employ people in the United Kingdom, or do they want to continue a policy framework which makes domestic production more expensive and pushes activity overseas? This is particularly important as they pursue electric arc furnace production. If they want greener steel, they must ensure that the electricity required to make it is available at a competitive price. It is no good requiring industry to electrify while maintaining a policy environment in which power and carbon costs make that transition commercially unviable.
The Government should not use nationalisation to shield themselves from the consequences of their own industrial and environmental policies. They should instead create the conditions in which steel can be produced competitively in Britain, with lower energy costs, realistic carbon policy and a serious commitment to preventing industrial activity leaving our shores. I beg to move.
Lord Redwood (Con)
My Lords, I support my noble friend. I have also referred to this in past interventions, so I need not say very much. Looking at the tragedy of the British steel industry under successive government policies, there is no doubt about it: the very high energy costs, carbon taxes, emission trading arrangements and CBAM coming in are the main reasons why we are not competitive and we have had this colossal collapse. If the Government will not accept that, they will never have a successful steel industry.
Lord Fox (LD)
My Lords, I will be equally taciturn. I have spoken a lot about CBAM, and I do not intend to repeat it. It occurs to me that if the Government become a major owner of the steel industry, they might become more sympathetic to some of the arguments that the noble Lord, Lord Sharpe, has just advanced.
Lord Leong (Lab)
My Lords, I am grateful to the noble Lords, Lord Sharpe and Lord Hunt, for their thoughtful amendments on the UK emissions trading scheme and the carbon border adjustment mechanism and their impact on the steel sector.
A common theme across these amendments is the proposal that a publicly owned steel undertaking should be exempt from one or both of these measures. I understand the concerns that have been raised about the sector’s competitiveness and the costs faced by steel producers. However, I must be clear that the Government cannot support this approach. We remain firmly committed to industrial decarbonisation and to securing a competitive, sustainable and low-carbon future for the UK steel industry. The UK cannot build a resilient steel sector by exempting it from the very policies designed to support the transition to cleaner production and to create a level playing field against higher-carbon imports.
The UK emissions trading scheme and the carbon border adjustment mechanism are complementary policies. Together, they encourage investment in cleaner production, while ensuring that UK producers are not undercut by imports from countries with lower environmental standards. Exempting a publicly owned steel undertaking from these measures would not only undermine those objectives but create an uneven regulatory framework within the UK steel sector. With this in mind, I will turn to the amendments tabled by the noble Lords, Lord Sharpe and Lord Hunt.
Amendment 47 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the noble Lords’ concern that CBAM will increase the cost of imported products for steel undertakings. However, I emphasise that the CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It will give industry the confidence to invest in the UK, knowing that its decarbonisation efforts will not be undermined. CBAM makes no exemptions for particular UK firms. Its intent is to target the problem of carbon leakage and ensure that highly traded carbon-intensive goods from overseas, including steel, pay a comparable carbon price to that paid by UK manufacturers.
Amendment 48 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this also imposes a cost on activities that have significant emissions. However, as with Amendment 47, accepting Amendment 48 would provide preferential treatment based on ownership and undermine a level playing field across the industry. The transition to low-carbon steel must be fair, credible and consistent across all operators, whether publicly or privately owned.
I emphasise that the ETS includes targeted protections for energy-intensive, trade-exposed industries, including steel. Further protections will be introduced through CBAM from 2027. It is for these reasons that I cannot support these amendments and ask that they not be pressed.
Lord Sharpe of Epsom (Con)
I am very grateful to the Minister, but I have to admit that I am very disappointed in his response, and I wonder if he is a bit disappointed in the response that he had to give. It seems to me that you can either have decarbonisation or have a competitive steel industry, but at this precise moment in time you cannot have both; at this precise moment in time, they are mutually exclusive. That is not to say that we should not pursue net zero in the future—of course, we should—but this is a particularly exposed industry at a particularly critical time.
Lord Hunt of Wirral
“Strategic reports: transferred steel undertakings(1) Chapter 4A (strategic report) of the Companies Act 2006 does not apply in relation to a company carrying on a transferred steel undertaking.(2) In this section, “transferred steel undertaking” means a steel undertaking in respect of which the Secretary of State has exercised a principal transfer power.”Member’s explanatory statement
This new Clause would disapply strategic report requirements for companies carrying on transferred steel undertakings.
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 49 to 55 standing in my name and the name of my noble friend Lord Sharpe of Epsom. As we have just discussed, the explosion of environmental, social and governance—ESG—red tape has created a vast and complex web of rules, which force businesses to comply with political targets at a cost to investment, job creation and, above all, the competitiveness of Britain.
Admittedly, I should add a declaration of interest, as a practising solicitor in the City of London. This has undoubtedly created an explosion of work and therefore I should probably declare an interest. But I do not take any pride in the fact that ESG reporting requirements have become more and more burdensome and onerous.
This is why I am delighted to confirm that His Majesty’s Official Opposition have committed to repealing a number of ESG reporting requirements, including those addressed by this group of amendments, so that unnecessary business costs can be removed and businesses can focus on investing, growing and creating jobs. However, if the Government are going to nationalise a steel undertaking, in order to minimise the cost of its transition, attract private sector investment and reduce the burden on the taxpayer, they should at least disapply these regulations in respect of that undertaking. British Steel employs more than 4,000 people and is, therefore, likely to be caught by a number of these costly and burdensome requirements.
Amendment 49 would disapply the Companies Act strategic report requirements, which require quoted companies to include annual greenhouse gas emissions information and reporting on environmental impacts in directors’ reports. Amendment 50 would disapply greenhouse gas emissions and related environmental reporting requirements. Amendment 51 would exempt a nationalised steel undertaking from the energy savings opportunity scheme, which requires large companies, including those with more than 250 employees or turnover above the relevant threshold, to carry out energy audits every four years to identify energy efficiency opportunities.
Amendment 52 would disapply the energy and carbon reporting requirements which apply to large companies and limited liability partnerships. Amendment 53 would remove executive pay ratio reporting requirements. These require certain companies to report chief executive pay against median, lower-quartile and upper-quartile employee pay, with the figures subject to audit. Amendment 54 would disapply forest-risk commodity due diligence and reporting requirements. These would require businesses using certain commodities to conduct supply chain due diligence and publish annual reports. Finally, Amendment 55 would disapply climate-related financial disclosure requirements. These require companies and LLPs to report how their boards oversee climate risks, the impact of climate change on strategy, and the metrics and targets used to assess those risks.
None of these requirements reduces electricity costs, secures orders, improves productivity or makes British Steel more competitive, yet each requires additional reporting, auditing and compliance costs on a business which the Government may have taken into public ownership at substantial expense to taxpayers. I therefore say to the Minister that, if the Government are serious about making a nationalised steel undertaking viable, investable and capable of returning to the private sector, they should focus on reducing unnecessary burdens and allowing management to concentrate on commercial recovery, investment, modernisation and jobs. I beg to move.
Lord Fox (LD)
My Lords, I was planning to say nothing and I will say little more than nothing. I have a question for the noble Lord, Lord Hunt, which he can answer when he gives his response to the Minister. Can he remind me when most, if not all, of these measures were brought on to the statute book?
Lord Leong (Lab)
My Lords, the noble Lords, Lord Sharpe and Lord Hunt, have tabled a number of amendments regarding the deregulation of the steel sector. These amendments focus on three core areas of regulation: industrial action, environmental regulations and reporting, and company reporting.
I recognise the concern from noble Lords that any publicly owned steel undertaking will face a significant array of reporting requirements. That is true, and the Government believe that these are necessary to ensure that any publicly owned company operates in a similar way to its privately owned counterparts. Any publicly owned steel undertaking must protect its workers’ rights, fulfil its environmental obligations and transparently report on its progress.
At the outset, I make the general point that a company under public ownership is ordinarily treated as a public corporation—that is, it is run as a private company with an independent board of directors, operating under broad strategic direction from Government Ministers. It is right, therefore, that such a company is subject to the regulatory frameworks within which any similar private company operates. I also emphasise to noble Lords that amendments seeking to level the playing field within the steel industry are inconsistent with that position. Instead, the amendments in this section seek to give preferential treatment to publicly owned steel undertakings.
I will now address the amendments directly. I believe that Amendments 50 to 52, 54 and 55 are intended to address the noble Lord’s concern that the Government’s industrial decarbonisation policies could impose additional costs and burdens on publicly owned steel undertakings. In summary, these amendments seek to exempt publicly owned steel undertakings from a number of statutory requirements, including greenhouse gas reporting, the energy savings opportunity scheme, energy and carbon reporting, forest-risk commodity due diligence, and climate-related financial disclosures. Although I recognise the noble Lord’s concern that there is a range of requirements on the steel sector with regard to environmental reporting, I cannot support these amendments.
The reporting requirements the Opposition have identified are integral to this Government’s commitments to decarbonising our industries. Our steel strategy set out a vision for a move towards green, decarbonised steel production. We are committed to supporting the sector in achieving those objectives, as evidenced by the £500 million of funding to Tata Steel for the development of its electric arc furnace in Port Talbot.
A public steel company, no more than any other steel company, should not be exempt from these important transparency requirements. Accepting these amendments would undermine the intent of the Government’s industrial decarbonisation policies, creating an unfair system for other domestic steel producers. The Government are committed to revitalising the entire UK’s steel industry, not only the companies in public ownership. Alongside this, the Government believe that these requirements are critical to industrial decarbonisation and to meeting net zero.
Finally, I will address Amendments 49 and 53 together, as both seek to exempt a publicly owned steel undertaking from existing corporate reporting requirements. Amendment 49 would disapply the strategic reporting requirements under Chapter 4A of the Companies Act 2006, while Amendment 53 would remove the requirement to publish information on executive pay ratios.
I recognise that the purpose of these amendments is to reduce the administrative burden on a publicly owned company. However, the Government do not believe that public ownership should entail lower standards of transparency or accountability. Indeed, if a steel undertaking is brought into public ownership, there is an even greater expectation that it should operate openly and be subject to appropriate public scrutiny. That is why the Government expect any publicly owned steel undertaking to comply with the standard reporting obligations that apply to comparable public corporations. Its annual report and accounts should provide Parliament, taxpayers, employees and the wider public with a clear and comprehensive overview of the company’s financial position, operational performance, governance and remuneration arrangements.
Transparency is not merely a regulatory requirement; it is an essential part of maintaining public confidence. It supports effective parliamentary scrutiny, promotes sound corporate governance and demonstrates that public assets are managed responsibly. It also serves a practical commercial function. Should the company seek external finance, strategic partners, or, in due course, a return to private ownership, prospective investors and creditors will rightly expect access to robust, reliable and consistent corporate reporting. Maintaining those standards will enhance rather than diminish the company’s long-term prospects.
For all these reasons, the Government believe that a publicly owned steel undertaking should be held to the same high standards of openness and disclosure as comparable public corporations. Public ownership should set the bar for transparency, not lower it. I therefore hope I have explained why the Government cannot support these amendments, and I respectfully invite the noble Lord to withdraw the amendment.
Lord Hunt of Wirral (Con)
My Lords, I should first deal with the question raised by the noble Lord, Lord Fox, who perhaps sought to point the finger at me as a Minister for having introduced some of these requirements. I was indeed a Minister for 16 years, and I cannot recall having introduced any of these requirements at any stage. In fact, the Minister answered the noble Lord by pointing out that, under Tony Blair, the Companies Act 2006 started a process of requiring companies to include many of the things we are now debating and discussing. That is his answer. Perhaps when the noble Lord next gets to his feet—perhaps sometime next week—he might tell us what Vince Cable, who inherited all those requirements, did about minimising the burden on business.
Undoubtedly, at the present time, there is an overregulated regime facing the private sector, and in many ways, we are seeking to alleviate that burden as far as the new, nationalised steel industry is concerned, if the Government proceed down that road.
I remain concerned that the Government do not recognise the cumulative burden that these requirements place on an energy-intensive and strategically important industry. If Ministers are serious about restoring a nationalised steel undertaking to competitiveness and attracting private sector investment, they should be looking to reduce unnecessary compliance costs, not preserve them. No doubt we will return to these issues at a later stage. For the present, I beg leave to withdraw the amendment.