House of Lords
Royal Assent
Wednesday 8th July 2026
(1 week, 1 day ago)
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Unpaid Carers
(1 week, 1 day ago)
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Baroness Pitkeathley
To ask His Majesty’s Government what assessment they have made of the finding in the Carers UK report The ‘tipping point’: when unpaid carers can no longer combine caring with paid employment, published on 12 May, that 47% of carers are considering reducing their working hours or leaving paid employment because of the pressures they face; and what steps they intend to take as a result.
Baroness Pitkeathley (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as vice-president of Carers UK.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, I pay tribute to the millions of unpaid carers across the UK whose compassion, sacrifice and dedication support loved ones every day and make an immeasurable contribution to our society and economy. The Government recognise the immense contribution made by unpaid carers and the pressures highlighted in the Carers UK report. We take its findings seriously. Supporting carers to remain in work is good for individuals, employers and the wider economy. That is why we have launched a public consultation reviewing employment rights for unpaid carers, including where further workplace support is needed, while ensuring that any future changes remain fair, proportionate and workable for employers.
Baroness Pitkeathley (Lab)
My Lords, I thank my noble friend for that reply. The public consultation that has been launched is very welcome. As my noble friend knows, carers want to combine paid work with caring if they can because it provides income, independence and social interaction. There is never a problem making the moral case for carers—everyone knows they are unsung heroes and heroines—but does my noble friend agree that there is a strong economic case, too? The DWP estimates that carers leaving work results in about £37 billion a year in lost productivity and increased welfare expenditure, so there are economic benefits to supporting them in any way possible, such as paid carer’s leave—as I have said, the consultation is most welcome—access to reliable social care and better support from both employers and healthcare services.
Lord Leong (Lab)
My Lords, I totally agree with my noble friend that supporting unpaid carers is both a moral and economic imperative. When experienced people are forced to leave work, we lose their skills, productivity and contribution to our economy. That is why we are reviewing employment rights for unpaid carers, including paid leave and wider workplace support. But this goes beyond employment rights. We must also consider how healthcare, social care and employers can better support carers to remain in work.
Lord Sharpe of Epsom (Con)
My Lords, the Minister is quite right that this goes beyond employment rights. The chief executive of Care England, Professor Martin Green, warned that the Government’s changes to employer national insurance contributions would leave many care organisations
“on the brink of bankruptcy”.
During the passage of the national insurance contributions Bill, His Majesty’s Official Opposition pressed the Government to exempt adult social care from these damaging provisions, but the Government rejected that exemption for no good reason. Will they now think again and exempt adult social care providers from these employer national insurance changes before more essential care provision—provision on which so many vulnerable people so desperately depend—is lost?
Lord Leong (Lab)
I hear what the noble Lord says about national insurance, but let me say this. There is a moral imperative on employers to play their part in supporting unpaid carers. There are fantastic employers up and down this country that are doing fantastic things to support carers. I shall give an example: Centrica estimates savings of £1.5 million last year in reduced absence costs alone, achieved through support measures for unpaid carers, with further savings on retention. So these measures result in improved retention, better productivity and reduced absence from work.
Lord Fox (LD)
My Lords, when I was piloting the Carer’s Leave Bill 2023 through your Lordships’ House, Centrica was one of the companies I spoke to. Centrica and other companies were already doing phenomenal work, but we all agreed that the Bill was the first step for unpaid carers. The Act has now been in force for just over two years, and data on take-up is sketchy. At best, the Minister’s department puts take-up at 29% of those eligible, but other data says just 10%. We do not have to wait for a consultation. The barriers have been researched by the Minister’s department. The first barrier is that it is unpaid by nature: that is what we hope to change. But the second is awareness, or lack of awareness, by people who might benefit. The third barrier is fear from employers. Can the Minister tell your Lordships’ House what the Government are doing in order to take away those two important barriers—for people getting what little benefit they have already—before his consultation finishes its work?
Lord Leong (Lab)
My Lords, let me be absolutely clear. There is active cross-governmental engagement on how we better support unpaid carers, because we recognise that employment cannot be considered in isolation from health and social care. My department is working with colleagues across government, including the DWP and the Department of Health and Social Care, as we consider the evidence and responses to our current consultation. We must take our time to ensure that we get this right. Our shared objective must be to help those carers who want to work to remain in employment, while ensuring that they can access the wider support that they and those they care for need.
Baroness Finlay of Llandaff (CB)
My Lords, some employers are now adhering to the principles of Hugh’s law when there is a seriously or critically ill child and those unpaid carers are particularly severely affected. Will the consultation cover the issue of children who are very seriously ill? Will the Government also consider —and I declare my interest in Cardiff University—monitoring the family-reported outcome measures of different interventions? These are put in place to support families where there are unpaid carers, and would enable us to get a better idea of what is effective and what is less so.
Lord Leong (Lab)
As the noble Baroness has said, the Casey commission is considering the long-term future of adult social care. We must let the review take its course. Alongside that, we are already reviewing employment rights for unpaid carers through a separate consultation. We are not waiting to gather any evidence, but we will consider carefully what more can be done to help carers remain in employment.
Lord Dubs (Lab)
My Lords, does my noble friend agree that there is a particular difficulty for those who have given up full-time work—indeed given up work altogether—in order to be full-time carers? They are then left in a position where they have virtually no pension and no security. When their loved one dies, they are left entirely on their own without much support.
Lord Leong (Lab)
I totally agree with my noble friend. That is why we are conducting a review and various consultations to ensure that we better support our carers up and down the country to have unpaid leave as is necessary, and also to get the care that they need to support their loved ones.
Baroness Dacres of Lewisham (Lab)
My Lords, my noble friend will know that many young carers take on significant caring responsibilities at an early age. What further action are the Government taking to identify and support young carers, so that their caring responsibilities do not limit their ability to reach their full potential in education, well-being and future opportunities?
Lord Leong (Lab)
My Lords, my noble friend is absolutely right: young carers often face unique challenges in balancing education, work and caring responsibilities. Although the consultation before us focuses principally on employment rights for unpaid carers, we recognise the importance of ensuring that younger carers receive appropriate support and opportunities to fulfil their potential.
Baroness Monckton of Dallington Forest (Con)
My Lords, does the Minister agree that parents who look after children with 24-hour needs, and who cannot get to work, need as much support as everyone else?
Lord Leong (Lab)
Absolutely. We recognise that carer’s allowance has not kept pace with the way that many carers now combine work and caring. The current earnings cliff edge can create uncertainty and unfair outcomes. That is why the Government have launched a call for evidence to modernise the benefit, including on whether payments should gradually taper as earnings rise. We have also increased the weekly earnings limit to £204. We want a system that supports carers to work, rather than one that penalises them for doing so.
Lord Mohammed of Tinsley (LD)
My Lords, given that the issue of NEETs has been looked at by His Majesty’s Government, and that they will report back on Milburn’s recommendations, will the Government please look at the possibility of providing a free bus pass for young carers, particularly given that they have sometimes had to sacrifice their education to look after their loved ones? This support from the Government might be a step up for them in seeking work, training or education.
Lord Leong (Lab)
The noble Lord makes a very interesting suggestion. I will take it back to the officials in my department and other departments too.
Safe Refugee Routes for Students
(1 week, 1 day ago)
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Baroness Royall of Blaisdon
To ask His Majesty’s Government what recent progress they have made towards developing safe refugee routes for students from Afghanistan, Cameroon, Myanmar and Sudan.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, the Government committed to three new safe and legal routes in the Restoring Order and Control Statement. The Home Secretary announced that the refugee study route will be open this autumn, with arrivals in autumn 2027. Officials are working closely with stakeholders to design the new routes to ensure that they are both safe and controlled, and further information will be set out in due course.
Baroness Royall of Blaisdon (Lab)
My Lords, I am delighted to hear that there is progress and that the Government are determined that the scheme should be in operation by the next academic year. However, I ask my noble friend for his assurance that those students who might be able to take up the offer being provided by the Government, and who meet the criteria and have scholarships, will know that they will be able to take up the places by 2027. Further, is the Home Office consulting with UUK to ensure that universities are not overburdened by whatever scheme is put in place?
Lord Hanson of Flint (Lab)
We intend to set out details of the scheme very shortly, which will, hopefully, provide clarity on what the Government are intending to do with the safe and legal routes. As my noble friend said, it is also important that the universities themselves are involved in, and at least have some discussion with the Government on, the implementation and design of the scheme. I will feed that back to colleagues who are dealing with this directly.
Lord German (LD)
My Lords, I declare an interest that I am supported by RAMP. What advice would the Minister give to Afra Elmahdi, a cancer specialist from war-torn Sudan who has secured a master’s place to do cancer science research at Oxford University? That post, that job, that relationship, has ended. What message would the Minister send to her? She seeks to be able to diagnose cancer more swiftly in a country that is torn apart by civil war.
Lord Hanson of Flint (Lab)
As I as have said, the Government are examining safe and legal routes. However, at the moment, we have temporarily suspended the issuing of visas to those from Afghanistan, Cameroon, Myanmar and Sudan. We have done that because there has been an increase of over 470% from 2021 levels, and over a third of asylum seekers have previously entered the UK on a visa. We are trying to put safe and legal routes in place. We will look at that scheme, and the noble Lord and others will be able to facilitate that scheme, with effect from autumn next year.
Lord Davies of Gower (Con)
My Lords, the Government have recently announced that they will allow communities to sponsor refugees on new asylum routes. Given that we had 93,525 people claiming asylum in the United Kingdom in the year ending March 2026, can the Minister tell the House how the Government can be contemplating increasing this number even further?
Lord Hanson of Flint (Lab)
If the noble Lord does not want the Government to meet their obligations on asylum, he should say so. The Government are about trying to meet our international obligations, which we are trying to ensure that we do through this scheme, as the Home Secretary announced in a press conference on 26 June, by giving refugees study and named sponsorship routes, which will be open to applications from lead sponsors in the autumn. That will put real guidelines around asylum applications. It is important that people have sponsorship and places to go, including at university, but it is also important that we meet our international obligations and do not have the abuse of the system that, sadly—dare I say it?—occurred under the Government opposite.
Baroness Gohir (CB)
My Lords, first the Taliban prevented Afghan females studying and now the Home Office are preventing them studying. Why have the Government not given them an exemption, given that Afghan female students make up a tiny proportion of all international students, to allow them to study in this country?
Lord Hanson of Flint (Lab)
As I have said, the Government have decided to put a brake on all applications from nationals of Afghanistan, Cameroon, Myanmar and Sudan. The brake is not intended to be permanent; it will be lifted when the Government consider it appropriate to do so. In the meantime, we are trying to put in place proper safe and legal routes for individuals such as those mentioned by the noble Baroness to be able to come to the United Kingdom with sponsorship in a proper and effective way. That brake is temporary, but it has been put in place for an important reason that I have to report to the House today.
Lord Isaac (Lab)
My Lords, I reinforce the point about the devastating impact on refugee students of the introduction of the visa brake. I am really pleased to hear the assurances from my noble friend the Minister that the brake is only temporary and that there will now be an opportunity for sponsorship from universities. I declare an interest as provost of Worcester College, Oxford. Can my noble friend give an assurance that clever refugee students from Afghanistan, Myanmar, Sudan and Cameroon will be able to come to the UK, study and return to their countries as future leaders?
Lord Hanson of Flint (Lab)
That is really important. My noble friend will know that one of the great things the UK has is soft power through the university sector. People will go back to their countries from United Kingdom universities to be business and political leaders. The brake is in place now, but we are looking at how we design the scheme to ensure that we have safe and legal routes from next year for the type of sponsorship that my noble friend mentions. Further discussion will be undertaken by the Home Secretary very shortly, and I would welcome any contribution he wants to make to that.
Lord Clarke of Nottingham (Con)
My Lords, given the interpretation that British courts and tribunals have put on the UN and European conventions in recent years, I assume that the entire population of places such as Sudan and Somalia would qualify for asylum and be granted it if they could get their feet on to British soil. Would the Government not prefer to tackle this legal problem, get our asylum rules back to common sense and consider putting a cap on the total numbers that our public services and society can absorb before opening up more safe and legal routes for people to come from these and other countries?
Lord Hanson of Flint (Lab)
The noble Lord makes an important point. He will know that I repeated a Statement from the Home Secretary last November on controlling the very issues he mentions. As announced in the King’s gracious Speech earlier this year, there will be an immigration Bill to put into effect some of the issues covered in that Statement on asylum. I suggest that the noble Lord will have a great contribution to make in ensuring that that Bill leaves both Houses of Parliament in a form that meets the objectives he has set out and the Government’s objectives to have safe and legal routes at the same time as putting some control into the system in an effective way. We are cognisant of European human rights issues and are reflecting on them as part of the legislative programme.
The Lord Bishop of Winchester
My Lords, if I may broaden the scope of the Question, given that the recent conflict has not led to any evident improvement in the situation facing ordinary Iranians, what assessment have His Majesty’s Government made of the availability of safe and legal routes for Iranian nationals? I am thinking in particular of members of Iran’s persecuted and vulnerable religious minorities, including Christian converts, Bahá’ís, Sunni and Sufi Muslims.
Lord Hanson of Flint (Lab)
The right reverend Prelate puts his finger on an important point. The scheme that I have outlined to the House is one that the Government are currently developing. We intend to announce further details of the scheme, and we have given a date for when it will be operational. I am happy to receive representations from the right reverend Prelate and his colleagues on how we implement that scheme for countries outside the four that are in the original Question from my noble friend.
Lord Hussain (LD)
My Lords, I hear what the Minister said about setting temporary bars for students from certain countries. However, in relation to the students who belong to the families of Afghan interpreters who are stranded in Pakistan, is there a special provision for the children of the interpreters who worked with our forces in very difficult circumstances?
Lord Hanson of Flint (Lab)
Again, the Government will look at all cases on an individual basis. I am aware of the issue, but I am not aware in relation to where the Government currently examine that aspect of policy. If the noble Lord will allow me, I will write to him on the specific issue of interpreters in Pakistan. Where there are legitimate claims for asylum, they will be considered under existing policies and, with the changes we are proposing, under future policy as well.
Lord Bellingham (Con)
I strongly support what the Government are trying to do here. The Minister will be aware of my long-standing interest in Sudan, and I agree with what he said. There are many Sudanese students who have contributed a great deal to our society and, every time I go to Sudan, I meet many people who have been to our universities and are now in positions of considerable authority in Sudan. If students come here on the safe refugee route, the key point is that they should be returned to their home country if that country then enters a period of stability at the end of their course.
Lord Hanson of Flint (Lab)
On all those aspects, the intention is to allow individuals to benefit from the safe and legal route that gives them the opportunity to study, work or bring a required skill to the United Kingdom. However, it is also important that we do not have a brain drain, or individuals leaving but not returning to their countries when possible. The noble Lords’ points are extremely important. In the scheme we are designing, we are trying to ensure that there are sponsors who have responsibility for the individuals who come to this country and that, ultimately, they return to their home countries to use the benefits they have learned in the United Kingdom to improve their home countries.
Lord Advocate
(1 week, 1 day ago)
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Lord Cameron of Lochiel
To ask His Majesty’s Government what assessment they have made of the appropriateness of the role of the Lord Advocate as a Scottish Law Officer and head of the system of criminal prosecutions in Scotland as delineated in the Scotland Act 1998.
Baroness in Waiting/Government Whip (Baroness Curran) (Lab)
My Lords, this Government acknowledge there is a live debate about the dual role of the Lord Advocate in Scotland. The Scottish Labour manifesto in 2024 committed to splitting the role of legal adviser to the Scottish Government and head of the system of criminal prosecutions in Scotland, and that remains our position. The UK Government would of course consider any proposal brought forward by the Scottish Parliament.
Lord Cameron of Lochiel (Con)
My Lords, I warmly welcome the Minister to her post on the Front Bench. The dual role of Lord Advocate as both the chief legal adviser to the Scottish Government and the head of the prosecution system in Scotland has become increasingly difficult to justify, not least in light of recent events and the potential for conflicts of interest. The current Prime Minister has acknowledged this as a problem. However, any changes to the status quo of course require UK Government legislation. Given that the Labour Party has long supported separating the Lord Advocate’s roles, will the Minister now commit to bringing forward legislation to do just that?
Baroness Curran (Lab)
I thank the noble Lord and recognise his position as a former Scotland Office Minister and his knowledge and experience on this matter. He is of course right to emphasise that this has become a very significant issue of public debate in Scotland at the moment, given very high-profile criminal cases. It is a matter that demands attention. The UK Government of course have a significant interest in this, and the Prime Minister has acknowledged that this is a serious issue.
The noble Lord will know that the Law Society of Scotland has recently suggested that there should be widespread consultation on this matter and has acknowledged that this is a complex matter. We recognise that the Scottish Government also have a strong interest in this and would welcome co-operation between the UK Government and the Scottish Government to pursue this matter.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I too congratulate my noble friend on her well-deserved appointment to the Front Bench. On this occasion, however, I agree—for once—with the Opposition spokesperson.
Lord Foulkes of Cumnock (Lab Co-op)
It had to happen some time. We should not wait for the Scottish Government to ask for the legislation to be changed. This is a responsibility of the UK Government and the UK Parliament. There are other areas, such as the Murrell controversy—that embezzlement. Now, there is £1.2 million of Yes Scotland money that has gone missing, and two legal actions against the Scottish Government—and they have had many in the past. We have a responsibility for ensuring good governance in every part of the United Kingdom, including in devolved Governments, and I hope that my noble friend will persuade the Secretary of State for Scotland to take some action on this.
Baroness Curran (Lab)
I thank my noble friend for that question—I think. Of course, he is right on so many things, and I will listen very closely to what he has to say. He makes reference to the Peter Murrell case. Here, I must emphasise to noble Lords that this is a matter of great scandal in Scotland, and there are very serious concerns about what this has meant for Scottish politics and governance. So, I take very seriously these points and recognise what has been said. I commit to having that discussion with the Scottish Secretary and will of course communicate his views, and those of the Opposition, as forcefully as he has put them.
Lord Marks of Henley-on-Thames (LD)
My Lords, we welcome the outline position taken by the Minister. But formally, and uniquely in the United Kingdom, the Lord Advocate is both head of the Prosecution Service in Scotland and a Government Minister who attends Cabinet. This duality, as has been said by everyone, has long been criticised. It has caused considerable public unease, particularly in relation to the Peter Murrell case. So, when will the Government separate and clarify the two roles, probably with the Solicitor-General responsible for prosecutions and the Lord Advocate for advising the Scottish Government on the law? That is the position in Wales with the Counsel General, and I suggest it represents a sensible position that everyone can support.
Baroness Curran (Lab)
I recognise the depth of the argument that the noble Lord has put forward and understand the issues at stake, which are live in Scotland. We also have to acknowledge that this has implications for the Scottish Government, because they are responsible for the justice system and for prosecutions in Scotland. I am sorry to repeat the point, but the best way forward, I believe, is for joint co-operation between the UK Government and the Scottish Government. But, believe me, this is a live issue for the UK Government; it is one that is on our agenda and which we will pay attention to.
The Earl of Kinnoull (CB)
I also welcome the Minister to her seat. The conflicts that have been described are particularly bad for political party and election law. The Political Parties, Elections and Referendums Act 2000, which applies to the whole of the United Kingdom, has an enormous raft of criminal offences. If you look down that list of criminal offences and compare them with the facts in the Murrell mess, you will see that there are quite a lot of things that may well come up and would present a terrible conflict straight away to the Lord Advocate. Given that the political party concerned there is one that operates nationally and is represented in our Houses, it is a UK Government thing and therefore I very much support what the noble Lord, Lord Foulkes, has just said. One way to do something about it now would be to say that at the next interministerial group this will be the number1 item on the agenda and the group will not move on to the second item on the agenda until there is a satisfactory conclusion to something which is potentially so damaging to our democracy.
Baroness Curran (Lab)
What an interesting suggestion. I thank the noble Earl for putting that forward. I will take that back to the department. I draw his attention to the Scottish Government-commissioned McMillan report which looked into these roles. It was a very limited report and was not required to make any recommendations, but even so it highlighted some of the conflicts of the job and some of the political tensions that are there. So I can commit to making sure that I have that discussion with the Secretary of State.
Baroness Goldie (Con)
My Lords, recent events engulfing the SNP with the Murrell conviction crystallise the conflict of interest. The Lord Advocate, Scotland’s independent chief prosecutor, felt able to share information only with her client, the Scottish Government. A chief prosecutor either shares information with everyone or shares it with no one. I am comforted by the response from the Minister, to whom I also extend a welcome to her place. I think she is picking up from this House that there is an overwhelming unease that the duality of this role has run its day and change has to be made.
Baroness Curran (Lab)
I pay tribute to the noble Baroness as well, who commands great respect in Scotland across the political divide. Her comments therefore are of great significance. I repeat that I will take that back, because if someone of her standing is making that point, I regard that as significant.
Lord Jack of Courance (Con)
In the spirit of good will, I start by agreeing with the noble Lord, Lord Foulkes. If we are to look again at this Scotland Act, that requires primary legislation, and if we are going to have primary legislation opening up the Scotland Act again, which I think we should, can we further look at Schedule 5? Schedule 5 to the Scotland Act is everything that was a reserved matter, and anything that was not on Schedule 5 back in 1998 was not a reserved matter. Since then, many things have come to pass: AI, hydrogen gas and other things. I would be happy to give the Minister a list. I think it is important we look again at Schedule 5 and review all the things that should be reserved to this Parliament.
Baroness Curran (Lab)
Again, as a former Secretary of State for Scotland, I pay tribute to the work of the noble Lord and recognise his status within these discussions. I would not want to be in a position where I contradict many of the things that I have recently said about Scottish politics, and I do not dismiss or undermine any of the points that have previously been made. But in Scotland there is a real appetite to talk less about the constitution and more about the interests of ordinary Scots, the standards of public services and some of the failures of the SNP Government. I will be honest with the noble Lord and say that that is my priority going forward.
Maritime and Coastguard Agency
(1 week, 1 day ago)
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Lord Hendy
To ask His Majesty’s Government what assessment they have made of the effect on recruitment and retention of Coastguard Rescue Officers of the decision of the Maritime and Coastguard Agency to cease on-call payments.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, in the light of a Westminster Hall debate last week, representations from coastguard rescue officers and unions, and other information, the Maritime Minister in the other place has been clear on the need to listen and to reflect on the way forward, which he is doing. That is why further scheduled engagement by the Maritime and Coastguard Agency this week has been paused.
Lord Hendy (Lab)
My Lords, I am grateful to my noble kinsman for that Answer.
Lord Hendy (Lab)
I have waited a long time to use that expression, and it is a pleasure to do so. The judgment of the Court of Appeal on 14 January was entirely predictable: that coastguards are what lawyers call limb (b) workers. However, the decision of the Maritime and Coastguard Agency, in response to that, was not predictable. It has degraded that status to nothing at all and removed the protections that Parliament bestowed on limb (b) workers for our heroic coastguards. Those coastguards are no longer entitled to the national minimum wage for the hours they work—indeed, to any payment at all. They are not entitled to paid holiday, to apply for protection from unlawful deductions from wages, to the protection of whistleblowing or to seek recognition for collective bargaining. Following the Court of Appeal case, which turned on this issue, they are not entitled to a trade union representative in a disciplinary hearing. Can my noble kinsman say whether he will use all the weight he can bring to bear to lean on the Maritime and Coastguard Agency to get it to reverse this awful decision?
Lord Hendy of Richmond Hill (Lab)
I am not sure that I am as grateful to my noble kinsman as he is to me—but, as usual, I will answer his questions. This change has not taken place yet; it is due to take place in September. There is time for my colleague, the Maritime Minister in the other place, to listen and reflect. I have talked to him three times today and I will talk to him again after this Question. He will reflect deeply on what he has heard and what needs to be done.
Lord Moylan (Con)
My Lords, the staff survey on which the Maritime and Coastguard Agency has relied in making its case has been reported in the press as having been misrepresented by the agency to Ministers and, consequently, by Ministers to Parliament. In that light, do the Government still have confidence in the chief executive of the Maritime and Coastguard Agency? Do they continue to rely on that staff survey?
Lord Hendy of Richmond Hill (Lab)
I have two things to say. First, in the course of the Maritime Minister reflecting on what he has heard, he will reflect on the accuracy and veracity of the information he has been given. Therefore, it is far too early to say what the consequence of that might be. Secondly, he has asked his officials to tell him the data that can be legitimately released so that Members of Parliament in the other place and Peers in this Chamber can hold the Government to account.
Baroness Grender (LD)
My Lords, does the Minister agree that making it so much harder for working people on low incomes to serve as coastguard rescue officers may jeopardise this life-saving service? Therefore, in this period of reflection that he has described, will he ensure that assessment is made of the impact on the diversity of workforce in this context?
Lord Hendy of Richmond Hill (Lab)
I will say two things. First, the Government recognise and are fully grateful for the extraordinary service of brave and selfless volunteer coastguards. Secondly, the noble Baroness is absolutely right that, in the course of this contemplation, we need to reflect on the diversity of those volunteers. Decisions should not be made that adversely affect that.
Baroness Bull (CB)
Can the Minister say what discussions might have taken place with other government departments to compare the approach that could be taken to the coastguard with the retained firefighter model? There is a risk that, from September, both will provide on-call emergency services, often at great personal risk, but one will be recognised as a worker and remunerated while the other will not be.
Lord Hendy of Richmond Hill (Lab)
I am grateful for that question. I am not currently aware of those discussions, but clearly there are similarities between some of the things that we ask selfless people in our society to do. I am sure that the Maritime Minister and the department will reflect on that with other appropriate government departments.
Lord McNicol of West Kilbride (Lab)
My Lords, the cuts proposed by the MCA have been resisted by the GMB union, as well as by coastguard rescue officers themselves. Is the Minister certain, at a time when we see more people around the coast of Britain using the sea for leisure, that the potential reduction in staff that could come from this will not put people at risk?
Lord Hendy of Richmond Hill (Lab)
The course of action that needs to be taken needs to recognise that the volunteer coastguards have attended over 14,000 incidents each year for the past three years and rescued over 4,000 people annually. The Government have no intention of putting any of those people in danger. That is why my colleague in the other place is thinking so carefully about what to do next.
Baroness Shephard of Northwold (Con)
My Lords, it was a delightful surprise to find that there are two Lords Hendy in this House. Who knew? We are very familiar with the Minister’s skills. He will be aware that more than half of our coastguard rescue officers will leave this vital service if the Government continue on their present course. The Minister mentioned the magic word “September”. I ask him to reconsider that. We are now entering the peak risk period on our coasts, when our coastal waters are full of swimmers and sailors, and when the work of the coastguard rescue service is in peak demand. Do the Government plan to overturn the court decision on which all this stands? Given the risk, how soon should they do so? September is too late. The risk is now.
Lord Hendy of Richmond Hill (Lab)
There are at least two of us in here who knew that there were two Hendys in the House. Maybe that is common knowledge now.
The noble Baroness is right: September is not far away. I put in the present tense the fact that the Maritime Minister is considering this because it needs to be considered right now and for the reasons that the noble Baroness said. Whatever course of action he decides to take needs to be taken very quickly to avoid the service being in anyway affected and to ensure the safety of people on the coast and in the sea.
Lord Hain (Lab)
My Lords, does my noble friend the Minister agree that the Maritime and Coastguard Agency’s total budget last year was £450 million, of which coastguard volunteer allowances cost under £6 million—around 1%—for which we, as a public, get a 24/7, 365-day emergency response network covering 11,000 miles of our coastline by 3,500 volunteers, who get a call-out allowance of £11 an hour, which is a tiny fraction of the 1,200 paid staff in the agency? This is a petty, punitive and pernicious cut, which I urge Ministers to reverse.
Lord Hendy of Richmond Hill (Lab)
My noble friend is entirely right about all the statistics he quoted. That is why I said that the Maritime Minister is currently considering what needs to be done as a result of what he has heard, what I have heard in this House this afternoon and the other information available in order to make the right judgment about how to proceed.
Lord Harper (Con)
My Lords, I am grateful for the Minister’s opening Answer, when he noted that the Maritime Minister was reflecting. This sounds like a case where it would be better to embrace the court decision, recognise the worker status and take the steps necessary to properly reward people who do incredibly valuable work. As the noble Lord, Lord Hain, said, it is very good value for the taxpayer. The MCA is an executive agency of the department; the Minister should take the right decision and direct the agency to carry out its instructions. That is what we expect Ministers to do, and I am sure that the Minister will impress that course upon his Commons colleague.
Lord Hendy of Richmond Hill (Lab)
I do not need to do that, because the course of action that he will take, after having listened and reflected, may well be the course of action that the noble Lord suggested.
Business of the House
(1 week, 1 day ago)
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Baroness Smith of Basildon
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 14 July to allow the Supply and Appropriation (Main Estimates) Bill to be taken through its remaining stages that day.
Business of the House
(1 week, 1 day ago)
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Baroness Smith of Basildon
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 14 July to allow the Taxation (Energy and Vehicles) Bill to be taken through its remaining stages that day.
Commercial Payments Bill [HL]
(1 week, 1 day ago)
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Lord Leong
That the order of commitment of 9 June be discharged and the Bill be committed to a Committee of the Whole House; and that the instruction to the Grand Committee of 9 June shall also be an instruction to the Committee of the Whole House.
Rochdale Grooming Gang: Offender Deportation
(1 week, 1 day ago)
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Lord Cameron of Lochiel (Con)
My Lords, when this Urgent Question was asked by my honourable friend Katie Lam in the other place on Monday, the Minister responding, Alex Norris, said:
“I could not be clearer that all options are on the table at this stage”.—[Official Report, Commons, 6/7/26; col. 28.]
With respect, the only option that should be on the table is the deportation of Shabir Ahmed. There is no justification whatever for him to remain in the country after the despicable crimes he has committed. If the Government say that they cannot deport him because of the law then they must change the law. The Opposition have said we will support that change, so why will the Government not commit to bringing forward the necessary amendment to the Immigration Act 1971 as a matter of urgency?
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
The crimes which led to the imprisonment of the individual concerned were despicable and horrendous. I say again to the noble Lord that we are urgently looking at these matters and will bring potential urgent action on them. We are examining this in detail and nothing is ruled out at all. I will keep the noble Lord updated on this matter. It is not acceptable that this individual is protected. For information, in the last 12 months we have deported 187 foreign national offenders for rape offences and 392 foreign national offenders for sexual offences. However, as the noble Lord mentioned, the 1971 Act places a restriction on this individual, and we are urgently examining that issue.
Baroness Doocey (LD)
My Lords, this case arises from one of the most despicable and notorious failures of local agencies to protect local vulnerable girls. Can the Minister tell the House what specific lessons have been learned from the original Rochdale investigation? How have those lessons now been built into national policing guidance on grooming gangs? How will the Minister ensure that the guidance on grooming gangs now with police will be applied consistently across the UK?
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness. Self-evidently, there are a number of lessons to be learned. That is why we have established the grooming gangs inquiry, currently operating under the auspices of the noble Baroness, Lady Longfield. There are a number of lessons to be learned on this matter. We want to ensure that we take action to give guidance to the police and help prevent future victims. In this case, it should be remembered that of the individuals who were participating in this grooming gang, Mr Ahmed was deprived of his citizenship in 2016, and of the eight gang members in total one was deported to Afghanistan and one was deported to Pakistan, two are British and therefore exempt from deportation but have faced the penalty of prison, one left the UK last year clandestinely, and the final three have been deprived of their British citizenship and have deportation orders in place. We are working speedily to make sure that those individuals face further justice.
Baroness Foster of Oxton (Con)
My Lords, I wholly agree with the point that has been raised around this case. It truly is a despicable case. Yesterday in the Chamber, I raised comments regarding the Government’s position on early release. This is not in isolation. Thousands of victims—women and young girls—are now left in the most awful situation due to the proposals of this Government on early release. Can the Minister tell us, yes or no, whether rapists will be part of the early release scheme that the Government are about to bring in?
Lord Hanson of Flint (Lab)
I told the noble Baroness yesterday, but will repeat it today, that those who are convicted of serious offences will not be considered under the early release scheme. I could not have been clearer yesterday and cannot be clearer today. The early release scheme details will be brought forward in due course. It is the intention of the Government to protect the public while dealing with a prisoner backlog in prisons, which, with due respect to the noble Baroness, lies at the door of the previous Conservative Government.
Lord Harris of Haringey (Lab)
My Lords, the noble Baroness, Lady Doocey, talked about lessons learned from the original case, but are there lessons to be learned about the release process and the way in which this individual’s immigration status was flagged up to the authorities at an early stage? I have the impression that the Government were slightly blindsided by this case. Frankly, that should not have been the case. It should have been clear earlier on from the file which no doubt follows the individual around the prison system.
Lord Hanson of Flint (Lab)
My noble friend asks me about the individual’s management within the prison system, which is a Ministry of Justice responsibility. The individual is on the sex offenders register for life, has been ordered to stay away from victims, is banned from contact with any child or young person, faces strict curfews and restriction zones, and is required to wear an electronic tag. Should he breach his conditions, he will be immediately returned to prison. As I have said in response to other questions, we are urgently examining all options. Nothing is ruled out in the response regarding the deportation. Sadly, the deportation issue relates to the 1971 Act, which was a long time ago, under the Government of Ted Heath. There are Members in this House—I am looking at one now—who were Members of Parliament at that time. It is a long time ago, but we need to examine how we ensure that individuals who have been convicted and face deportation do face the consequences of their actions.
Lord Jackson of Peterborough (Con)
My Lords, the Minister has been commendably robust and consistent on this. There are reports in the media today that the Home Secretary, Shabana Mahmood, is bringing forward legislation. Can he be more precise on the expected timescale to expedite that legislation? Is his department having discussions with the Government of Pakistan on the issuance of visas? The Pakistani Government have issued a number of, frankly, unnecessarily intemperate comments about colonialism over what is essentially one of their own citizens.
Lord Hanson of Flint (Lab)
We are in discussion with the Pakistan Government at all times. I hope that the noble Lord and the House understand that we keep all options under review and will take whatever action is required to ensure that we deal with this issue. I am not in a position today to answer the points that he has mentioned, but can reaffirm that we keep all options under review.
Baroness McIntosh of Pickering (Con)
My Lords, it appears that the said gentleman, Shabir Ahmed, has ripped up his Pakistan passport and claims to be without a state at the moment. That is an issue that has not yet been addressed. The issue of the law, the Immigration Act 1971, could simply be addressed in the Government’s legislation before both Houses. Is that not an option?
Lord Hanson of Flint (Lab)
I am going to sound like a broken record: we keep all options under review. If the noble Baroness will listen to what I have said, we keep all options under review and will take whatever action is required. I cannot further update the House at this moment, except to say that point.
Lord Mohammed of Tinsley (LD)
My Lords, at lot of the attention at the moment is rightly on Shabir Ahmed, but there are two other individuals who are facing deportation. Is the Minister able to update the House on whether there are any obstacles to their deportation from this country? Are they in a similar situation to Shabir Ahmed or is it more straightforward?
Lord Hanson of Flint (Lab)
If it were straightforward, we would have, as the noble Lord will know, dealt with the matter in a way that met the objectives that the House is pressing me to meet. There are three British citizens who have had their citizenship deprived. They have deportations in place and we are in discussions with the authorities in Pakistan to make sure that they can be deported. We will keep all options under review, to make sure that we achieve that objective. If the House will bear with me, that is as far as I can go today, but I hope the House has heard the meaning behind the words that I am saying.
Lord Sentamu (CB)
My Lords, does the Minister agree that a country that prides itself on keeping the rule of law and on the fact that nobody is above the law cannot hastily amend legislation which goes back to 1971? Such a country has to look at all the processes. Does he agree that it is time that he and the Attorney-General appoint somebody to go through all old legislation where we find ourselves caught up because it is the law?
Lord Hanson of Flint (Lab)
I am grateful for the noble and right reverend Lord’s comments. The legislation in 1971 was put in place for a proper purpose, and that was to secure the rights of Commonwealth citizens to remain in the United Kingdom. That is a positive purpose. Part of the challenge for the Windrush generation has been a consequence of the avoidance of dealing with that in a proper way. That does not mean to say that, ultimately, the Government cannot then examine legislation when serious offences have occurred, such as those for which Mr Ahmed has been imprisoned. If that legislation is causing challenges in how we can deal with that individual, we need to examine those issues. As I have said to the noble Lords opposite, we are keeping all those matters under review. I will report back to the House as soon as possible on any outcome of that review.
Police Leadership Commission Report
(1 week, 1 day ago)
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Lord Davies of Gower (Con)
My Lords, I thank the Minister for bringing this Statement to the House today, and I am grateful for the opportunity to ask questions on it. Failures of police leadership are all too evident. Police leadership failed when forces overlooked, ignored and actively downplayed the scale of the grooming gangs. Police officers and police leaders were too afraid of being called out for being racist, and, as such, they left vulnerable young girls to suffer while the perpetrators got away scot free. Police leadership failed when officers manipulated evidence to ban Maccabi Tel Aviv fans from the football match in Birmingham over fears of “inflaming community tensions”. Police leadership is failing when we have officers spending more time trawling through social media posts than investigating and stopping burglary and shoplifting. When the policing of tweets and so-called diversity, equality and inclusion take precedence over the prevention and investigation of crime, we know we have a serious problem.
In 1829, Sir Richard Mayne, the first commissioner of the Metropolitan Police, wrote:
“The primary object of an efficient police is the prevention of crime: the next that of detection and punishment of offenders if crime is committed. To these ends all the efforts by police must be directed. The protection of life and property, the preservation of public tranquillity, and the absence of crime will alone prove whether those efforts have been successful and whether the objects for which the police were appointed have been attained”.
Like all officers who joined Hendon Police College, I had to learn those words by memory, and they are just as relevant today as they were in 1829, so I welcome the statement in the report that:
“Police leaders should be resolute in refusing to take sides, or to be diverted from the course of focusing entirely on the prevention, detection and prosecution of crime”.
I agree wholeheartedly. Unfortunately, that is not what is happening.
We might ask how we got here. Noble Lords might have different answers, but, for me, it is in large part because we took our eye off the ball. We allowed policing to focus, particularly after 2020, more on representation and identity politics than on promoting the best and most qualified people for the job. The report also acknowledges that nepotism has impacted progression at senior ranks, again challenging the notion that promotion should be based on merit alone. I must press the Minister to think seriously about these points. If the Government want to improve public trust in the police and restore robust but fair policing, we cannot have reforms that place greater emphasis on the identity of senior officers than on their experience and leadership qualities.
Fundamentally, good police leadership is not hard. It is about cutting crime and having your officers’ backs. Those on the ground need to know that they can take action they deem necessary and will not be hung out to dry by senior leadership when they do so. Officers need to be able to exercise their professional judgment and common sense, and not be second-guessed by endless policies and guidance. Police leaders must stop prioritising public perceptions over robust policing.
This all requires a significant cultural shift within police leadership. But to engineer that, we need to improve not just the quality but the amount of leadership training. The report highlights the striking disparity between military leadership training and the police equivalent. It points out that:
“15 years after leaving Sandhurst, a colonel in charge of 1,500 people will have undertaken 72 weeks of leadership development. By comparison, chief superintendents in the MPS”—
the Metropolitan Police Service—
“who have had comparable progression are likely to have had two or three weeks”.
The comparison with the military is particularly apt here, because British military leadership training is widely regarded as some of the best in the world—there is a reason why military officers from around the world flock to Sandhurst. I urge the Minister, when considering the work of this commission, to feed in best practice from our military academies into future police leadership training.
I also ask the Minister to think carefully about introducing new direct entry schemes. I can say from my own experience that I do not think they had a positive effect on senior leadership. The report acknowledges that the total cost of the previous direct entry superintendent programme, which ran from 2015 to 2021, was almost £10 million. Only 33 people graduated from that scheme, putting the cost per graduate at around £342,000. I do not think that can quite be considered a success. Bizarrely, though, after pointing out the cost and low numbers passing through the previous direct entry route, the report goes on to recommend the creation of new direct entry routes. This is a somewhat bizarre situation.
I wish to end with some simple questions to the Minister. The Government have this report, it is obvious to us all what is going wrong with police leadership, and it is not too difficult to figure out what needs to change, so how are the Government going to take forward these recommendations? What work is going on within the Home Office, right now, to implement leadership reforms, and when will be able to see the outcomes of the Government’s work?
If the Government are serious about restoring trust in policing and fulfilling the aims of the commission, they must take swift action to overhaul police leadership training. I look forward to the Minister’s response.
Baroness Doocey (LD)
My Lords, I welcome the report from the noble Lords, Lord Blunkett and Lord Herbert, which rightly starts with an uncomfortable truth: leadership across policing is too inconsistent and, for decades, we have failed to invest in developing leaders for the world they now face.
We support clearer standards, stronger developments of all ranks, and more transparent senior appointments, but consistency must not become Whitehall control. Before creating a national police service and a national academy, the Government must explain how police chiefs will be protected from politicisation. A central appointments panel may help, but only if it insulates chief constables’ appointments from political influence and ensures a diverse candidate pool, including those with neighbourhood and safeguarding experience.
We urgently need clarity about what we expect policing to deliver in the 2030s. Too often the police are left to pick up responsibilities that properly belong to other agencies, because those agencies are underfunded and lack the capacity to respond. But the police cannot walk away; they have a duty to the public, even when the work falls outside their remit. This results in police being increasingly drawn into non-crime work, spending hours in hospitals awaiting mental health assessments or caring for vulnerable children, leaving forces overstretched and officers shuttled from one crisis to another.
Ethical leadership cannot be a values programme instead of the hard work that inquiries have already recommended. Delivering ethics requires legally enforceable vetting and misconduct standards across forces, a complete overhaul of the complaints investigations so that they do not drift for years, and transparent monitoring of disproportionality in discipline, including for BAME officers. The public will not judge us by how many workshops we run but by whether the Angiolini, Jay and inspectorate recommendations are finally implemented in full.
Around 80% of crime now has a digital element, yet policing is still largely analogue, with 43 forces running separate IT systems and an obsolete police national computer. Outdated, poorly connected systems with multiple entry points heighten cyber security risks, given the high value of police data on the dark web. A lack of national co-ordination and the scrapping of ring-fenced capital funding means that most technology spending is now used just to maintain existing outdated systems. What is needed is a unified cloud-based technology platform and common procurement to enable seamless information sharing and good practice across forces. This will require very significant investments in IT and AI but offers the prospect of rapid returns in improved outcomes and would finally allow policing to exploit the wealth of operational data already at its fingertips.
We need national training frameworks that prioritise digital investigation skills for every officer and proper professional pathways for cyber, data, digital and forensic specialists. But highly trained specialists are locked into the same nationally set pay scales as everyone else, and chiefs have virtually no flexibility to pay them more than an entry-level constable. That is almost unbelievable. Is it therefore surprising that these specialists are routinely poached by the private sector, after they have been trained by the police for many years, on salaries that are several multiples of their police pay? If we are serious about tackling AI-enabled fraud, deepfake child abuse imagery and complex online exploitation, we must introduce genuine pay flexibilities for shortage specialties and parity of esteem for police staff.
I am deeply concerned that we are proposing a national academy and a licence to practise when there has been no independent national audit of police training since 2012. Officers need high-quality, regular, properly accredited refresher training to keep themselves and the public safe. If the College of Policing is absorbed into a new police service, we must avoid the police marking their own homework by ensuring that appropriate standards are set and independently audited.
This report gives us an opportunity to transform how we choose and develop leaders. But those leaders will succeed only if we define the mission clearly, fix the broken funding and training systems, and give policing the technological tools and special staff it needs. I very much hope the Government are prepared to meet those challenges.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I place on record my thanks to my noble friend Lord Blunkett and the noble Lord, Lord Herbert of South Downs, for their work on this important report commissioned by the Home Office to look at the important issues of policing. My noble friend Lord Blunkett is a former Home Secretary and the noble Lord, Lord Herbert, is a former Policing Minister; indeed, I shadowed him for a while in a previous life. They both bring extremely important experience to bear and on a cross-party basis they have examined the future training needs of the police service.
My noble friend and the noble Lord have made 27 recommendations and, in answer to the points raised by the noble Lord, Lord Davies of Gower, we are going to consider those recommendations. We are going to examine them in detail. We want to give them a fair wind. We will report back in the autumn with our response to those recommendations. I will be able to provide further clarity and discussion at that time on the Government’s approach to the points that have been made.
I begin in, I hope, a constructive way but also in a way of challenge to say that I do not accept the characterisation of the police to date by the noble Lord, Lord Davies. The police are doing a very good job in dangerous circumstances. Police officers at every level, from chief constables to ordinary police officers on the beat to police community support officers, do a very strong job. Our duty is to ensure that the recommendations that have been made by my noble friend Lord Blunkett and the noble Lord, Lord Herbert, help support those police officers to do a better job in the future.
Crime is down: theft offences by 11%; vehicle-related crime by 14%; domestic burglary by 22%; shoplifting by 1%; personal robbery by 12%; knife-enabled offences by 10%; knife-enabled homicides by 21%; and knife-enabled robberies by 15%. Those are just some examples from the past 18 months of statistics of how the police are helping to tackle those issues. But that does not mean that there is not room for improvement.
The noble Baroness, Lady Doocey, has pressed me many times to examine the issue of training; she is absolutely right to do so, and these recommendations form the basis of us examining how we can take those issues forward. I do not accept that we should not put diversity at the heart of our police service. I want to see diverse police officers representing their communities and representing the communities they police. But it is important that we secure training and support for all those officers, whatever their ethnic background.
There is a need for reform. The noble Baroness, Lady Doocey, is absolutely right that we need to examine what policing is for and how to ensure that we have the back-room support for front-line police officers. She and the noble Lord, Lord Davies of Gower, will know that we are in the middle of a radical programme of police reform. We are abolishing police and crime commissioners. We are waiting for a report from the noble Lord, Lord Hogan-Howe, on police force areas. We are establishing a national police service, which will encompass the very issues currently considered by the noble Lord, Lord Herbert of South Downs, as chair of the College of Policing, with national procurement and a focus on what national policing should do, which is, from the National Crime Agency’s perspective, serious organised crime, counterterrorism policing and other important issues such as economic crime.
This reform programme is ongoing, but self-evidently —and this is where I agree with the noble Lord, Lord Davies, and the noble Baroness, Lady Doocey—we need to put in place support and training to ensure that police officers both meet the needs of the 21st century and have the support to do their job in an effective way. In their report, my noble friend Lord Blunkett and the noble Lord, Lord Herbert, have put great care and skill into the recommendations. I also thank the other members of the commission who took part.
There is a particular emphasis on giving voice to those on the front line. It is right to say, as the report itself says, that
“the policing profession has not consistently had the excellent leadership it needs”.
The commission has highlighted the critical importance of leadership and we all know that. It will also ensure, I hope, that we maintain that principle of policing by consent.
It is right that we take time to consider the recommendations in full. We welcome the commission’s proposals and the intent behind them. We are actively looking at the recommendation to create a formal senior constable rank and how that can be done. The commission also recommends a new professional digital passport for policing, along with other measures to put in place stronger supporting structures around professional development. The review’s recommendations on a fast stream for policing, on a targeted direct entry scheme and on the role of the forthcoming national police service in promoting ethical policing are all issues that we want to look at and respond to. We will do so in due course.
The points made by the noble Baroness, Lady Doocey, about police conduct and ethical standards of policing are extremely important. She will know from when we passed the Crime and Policing Act recently, because we spent a gazillion hours dealing with it in this House of Parliament, that there is a strong emphasis in it on improving the performance of the ethical standards and on the ability to remove police officers who are not performing well. Again, that goes to the heart of the recommendations before us.
In summary, the noble Lords, Lord Blunkett and Lord Herbert, will both know that I cannot respond today to the 27 recommendations, but I welcome them. They give us a strong foundation to examine how we can improve police leadership, police performance and skill levels to face the 21st century. It is a valuable piece of work. I commit to the House, on the point made by the noble Lord, Lord Davies of Gower, that we will report back in the autumn on the recommendations and what we intend to do about delivering them.
In the meantime, there are police officers and leaders out on the streets now, and they are doing a dangerous job on behalf of us all. They should have our admiration but they should also have our support in improving their performance, and that is what the recommendations are aimed at doing.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, I declare my interest as a former president of the Police Superintendents’ Association of England and Wales and as someone who submitted evidence to the police leadership commission chaired by the noble Lords, Lord Blunkett and Lord Herbert, who I see are in their places.
Having served for 35 years in both uniform and the CID, I want to say that the report is a major piece of work on the leadership of the police in England and Wales, and I congratulate both noble Lords on its content and its clarity. It recommends major changes throughout the service and builds on the proposed creation of a national police service, the NPS, which should take a lead role in promoting ethical and inclusive policing and be responsible for building a community of good practice across the country.
I have served under both excellent leadership and bad. The report tackles the problems, which are identified as poor training and supervision, a lack of resources and the culture of leadership across the service. The surprise is that the police service continues to deliver—remarkably, every day—to protect the public 24/7. You have only to witness the annual police bravery awards to witness this all the time.
Like the armed services, the police are legally prevented from taking strike action, which was last witnessed in England in 1919. We have witnessed major problems in recruitment and vetting following the slashing of 3,000 officers a few years ago. That was followed by the murder of Sarah Everard by PC Wayne Couzens and the conviction of serial rapist David Carrick, both in the Metropolitan Police. As a result, the commission’s report recommends a root and branch modernisation of police recruitment and training, development, promotion, monitoring and appraisal. Scotland Yard is known throughout the world—
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I ask my noble friend if he could bring his comments, interesting though they are, to a conclusion with a question.
Lord Mackenzie of Framwellgate (Non-Afl)
I support the provision dealing with senior constables, and I wish the implementation of the commission’s report every success.
Lord Hanson of Flint (Lab)
I am grateful to my noble friend for bringing his experience of policing at a leadership level to the debate and this discussion. He will know that leadership is critical in delivering high performance and for the public. The recommendations intend to help generate that discussion and to focus on how we improve leadership. Last year, for example, we had significant levels of vacancy for chief constable positions and a relatively small pool, sometimes internal, of people applying for them. We need to encourage better use of senior leadership.
I was a Member of Parliament for 28 years and my local police force probably had around 30 police superintendents during that time. That is not sustainable for continuity and performance. We have very strong leadership at the top of the triangle but a large pool of officers at the bottom end who need to be recognised for the work they do, and encouraged to have training and to have ambition to go through the system in a positive way. We will look at the recommendations and I give my noble friend the assurance that we will report back when we have had a chance to consider them in detail.
Baroness Stuart of Edgbaston (CB)
My Lords, I am grateful for the report and I see that the recommendations include the creation of a national academy of police leadership. I declare my interest, as the First Civil Service Commissioner, as a regulator for entry into the senior Civil Service. I argue that, at that level of leadership, the different professions—whether it be the Armed Forces, the police or the most senior civil servants—have a lot to learn from each other and would benefit from each other’s experiences. As the Government respond to that, I urge the Minister to look at other professions and top-level leadership so that they can learn from each other and exchange their experiences.
Lord Hanson of Flint (Lab)
My noble friend brings great experience from her role in the Civil Service Commission to the matter of recruiting individuals at a senior level. It is quite clear—the report makes this point very strongly—that police officers at all levels must be able to develop skills earlier in their career to enable them to develop and progress. The commission’s report highlights the fact that policing needs a clearer and more coherent system that supports professional development at all ranks. As the noble Lord, Lord Davies of Gower, mentioned, there are undoubtedly lessons and models that can be looked at in other aspects of society that will help support the development process.
Lord Young of Acton (Con)
My Lords, I declare my interest as the director of the Free Speech Union. I welcome this report, which contains many sensible suggestions.
Gavin Stephens, the chairman of the National Police Chiefs’ Council, announced a review last month of guidance contained in the NPCC and College of Policing’s race action plan and its anti-racism commitment. That guidance suggested that officers should treat ethnic minorities differently in order to ensure what it described as equality of outcomes, defined as equalising arrest and charging rates between different groups. Given that some ethnic groups are more likely to commit crimes than others, that inevitably means treating some groups more leniently than others—aka, two-tier policing. Will the Minister give the House a progress report on Gavin Stephens’s review of this guidance? Can he also tell us when the independent review into hate crime and public order legislation by the noble Lord, Lord Macdonald of River Glaven, will be published? A couple of weeks ago the Minister said that it would be published before the Summer Recess.
Lord Hanson of Flint (Lab)
On the latter point, we are hoping to publish the review as soon as possible. As the noble Lord will recognise, there are some things that the Government wish to announce but which they are not able to due to the upcoming change of Prime Minister. However, I intend to publish the document as soon as is practicable and will ensure that a report is made to the House in due course.
With due respect, I do not accept the noble Lord’s contention that there is two-tier policing. The document to which he refers is designed to give guidance to officers to understand the various pressures and some of the diversity issues that exist. Ultimately, officers deal with crime, no matter who commits it or where it is committed. They need to bring people to justice and make arrests accordingly. I will reflect on what he said and will discuss the matter, via our offices in the Home Office, with Gavin Stephens of the National Police Chiefs’ Council but, from my perspective, the general contention is that crime is crime, the police are there to deal with it, and we must have an understanding of the diversity issues in order to have the confidence of the whole community when dealing with those issues.
Lord Grocott (Lab)
My Lords, I thank my noble friend for making this Statement. As he is in his place, I must also mention my noble friend Lord Blunkett, who brings experience and common sense to pretty much everything he does. There is a “but” coming, and it is this: I get slightly worried when I see phrases in a Statement such as
“a new police leadership fast stream”,
and
“a focus on leaders from professions with transferable skills”.
The first thing leaders need for leadership is respect from the people they are trying to lead. They will not get the same proportion of respect unless the police constables, in whatever force in the country, know that the leaders have been through the same traumas, challenges and anxieties that a normal policeman finds in his normal work, such as when he has to break up a fight in a city centre. I am not sure a degree helps a great deal with dealing with issues like that. I would therefore like my noble friend to assure me that police recruitment does not just need to be diverse, although it is important to represent the community; it also needs to be diverse in people’s professional and other backgrounds, just as much as it does in academic qualification.
Lord Hanson of Flint (Lab)
I am grateful to my noble friend; it is good to see him in his place. The recommendations are looking at how we can significantly improve senior leadership. Some of the recommendations may mean that we need to look at how we fast-track individuals to leadership and, in doing so, how we give them effective training and support to understand the issues that they face. Ultimately, the core element of policing is the officer on the beat, male or female, who deals with the fight on a Saturday night, who deals with the shoplifter, who deals with anti-social behaviour, and who deals with all the issues that police officers deal with on a regular basis—including, as the noble Baroness, Lady Doocey, said, issues that are not directly their responsibility but which they have to deal with, because they are the last, and first, port of call in many cases.
With this whole package, we are trying to look at how we improve skill levels across the board, and that might well include looking at how we give greater skills, support and training to the front-line police officer. However, a clear issue has been identified: the failure of effective management at a senior level in some areas. It is equally important that that is addressed, and that is what we intend to do when we have a chance to reflect on the recommendations.
Baroness Wheatcroft (CB)
My Lords, I welcome the report and the sensible recommendations in it. It highlights the current importance of cliques and networks in promotions in the police. There are comments such as:
“If you don’t have a network, you’re not going to get a promotion.”
The Met has decided that membership of organisations such as the Freemasons has to be declared, and many hundreds have declared their membership, but has that made any difference, and do other forces go far enough? Does the Minister think that more needs to be done to rule out the sort of nepotism and networks that have meant that, in the end, the pool of talent is much reduced?
Lord Hanson of Flint (Lab)
The noble Baroness makes a very interesting point on the discussions. I believe that promotions should be made on merit. They should be made on the skills and adaptations of individual officers to do the next job that they face—or, for an ordinary police constable, on the different types of skills that might be required, such as those that do not necessarily involve being on the beat. That should be done on merit. Going back to the recommendations that have been made, the commission’s report highlights that policing needs a clearer and more coherent system that supports professional development and, by that very mechanism, supports people being promoted on merit. When we have a chance to reflect on those recommendations, I hope that will be at the heart of what we do.
Lord Paddick (Non-Afl)
My Lords, I declare my interest as a non-executive director of the Metropolitan Police. I welcome this report, but a lot of it appears to be reinventing wheels that came off policing many years ago. For example, we had a physical, centrally located police staff college—a centre of excellence—as this report recommends, and by the time I reached chief superintendent I had had 18 months of full-time police leadership training, the same as an equivalent Army officer, on an accelerated promotion scheme as a non-graduate. Most of this was lost because of cuts to national police training budgets. Because of my declared interests, I am not allowed to ask for more money for policing, so I will put it like this: what will the Government do to make these recommendations a reality?
Lord Hanson of Flint (Lab)
Maybe I should also have declared an interest, because I have a very close relative—a daughter—who works as a serving police officer. The key thing is that, while 27 recommendations have been given to the Government and we have to look at and assess them, we accept the general tenor of what the noble Lords, Lord Blunkett and Lord Herbert, have said. We need to improve the basic level of training, look at the skills needed for the 21st century, improve senior leadership and the training for it, and make sure that we have a wider pool for people to reach the senior chief constable positions. There is a very limited pool for chief constables at the moment and, very often, internal candidates have been inoculated through the police forces they have worked in, generally without any examination.
As part of wider reforms, as the noble Lord will know, we are looking at improving the College of Policing’s work by merging with it a senior level of activity. We are looking to shrink the number of police forces to give more effective local control and change the management structures from police and crime commissioners to mayors and other authorities, as part of a wider programme that the recommendations from the noble Lords, Lord Blunkett and Lord Herbert, fit into. I cannot give definitive answers now but, as I have said, we will report back on the recommendations and our responses as soon as practicable.
Lord Sahota (Lab)
My Lords, I read this report from cover to cover. It acknowledges that ethnic-minority officers have a poorer retention rate and slower progression because they continue to face discrimination within their organisation. Some 20 years ago, when I was on the West Mercia Police Authority as a councillor, I raised this issue constantly, yet here we are and ethnic-minority officers are still leaving at a far higher rate than white officers. This report acknowledges this issue, yet it offers no tangible or practical solution to this problem. Does my noble friend agree?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend. It is important that the police reflect the communities they serve. Many parts of this United Kingdom have populations with a level of ethnic-minority British citizens who will want to see people who look like them in the police service. The point he makes is extremely important. Once we have recruited individuals, we need to value them, retain them and train them for the future, not lose that skill to outside businesses or because they are facing discrimination inside the force. The recommendations highlight the problem; we need to examine how we improve that. I want the police service to reflect the community it serves.
Lord Thomas of Cwmgiedd (CB)
My Lords, the Minister has explained over and over again the number of changes that are occurring. I welcome them all, just as I welcome the noble Lords’ report. However, there are various ways in which these changes can be implemented. Can we have in the autumn a broad strategic overview, pulling together leadership, governance and the changing of the police forces? All of these interlock, so it would be of immense assistance to this House if someone could be asked to produce an overall strategic document, dealing also with the very real issues of technology.
Lord Hanson of Flint (Lab)
I am grateful to the noble and learned Lord. I will take that suggestion away and discuss with my right honourable friend the Home Secretary how and whether we can do that. We had a police White Paper which has led to the changes that will see legislative approval, as announced in the King’s Speech this May. He makes a valid point. At some point we will have to pull these strands together. I can commit only that changes to senior levels of activity at a national level and to local policing will be put into the potential police Bill announced in the King’s Speech. I will respond to these suggestions in due course. There are a range of issues that we are continually dealing with, so I will take his suggestion away.
Lord Blunkett (Lab)
My Lords, I thank my noble friend for his generous response. With the House’s indulgence, I want to say what a great pleasure it has been, and how much I appreciate the tremendous collaboration with the noble Lord, Lord Herbert of South Downs, the 10 other commissioners who generously gave their time, the secretariat from the college and my own employee, Joanna Firth. On the response in the autumn, if anything is going to happen quickly, it will be fundamental that recommendation 27 to set up an implementation group be put front and centre, because without immediate steps to bring these recommendations to fruition, they will languish on a shelf until another report some years hence will come back with the same recommendations we are making today.
Lord Hanson of Flint (Lab)
I assure my noble friend that when we have agreed the recommendations, we will make sure that we include the very point he mentioned. If I sit down now, it gives one other Member a chance to ask a question.
Lord Barber of Chittlehampton (Lab)
My Lords, it is an honour to follow my noble friend Lord Blunkett. I congratulate the noble Lords, Lord Blunkett and Lord Herbert, on an outstanding report. Does the Minister agree that police leadership is at its best when police leaders feel they can confidently take on crime, and have the skills they need, the backing they deserve from Government and the active support of the other public services involved in tackling crime in our country?
Lord Hanson of Flint (Lab)
Absolutely—that is central to what the Government seek to achieve. I again pay tribute to both noble Lords, their staff, the commission members and the voluntary staff who supported them. They have tried to identify the challenges in leadership, and that the policing landscape and crime are changing—some 45% of crime is online fraud. The police will face a range of new challenges, and we need effective, strong leaders who reflect their communities, understand the levels of crime and have the strategic skills to tackle them. At the same time, we are still going to rely on the support of the everyday police officer working on the street. We need to recognise those who have given long service and the skills they need.
In closing, the noble Lords’ recommendations are valuable and welcome, and I thank them for their assistance. I assure the House that we will reflect on the recommendations and bring back a coherent plan of action.
Steel Industry (Nationalisation) Bill
Wednesday 8th July 2026
(1 week, 1 day ago)
Lords ChamberRead Full debate Steel Industry (Nationalisation) Act 2026 View all Steel Industry (Nationalisation) Act 2026 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 22–R–I(a) Amendment for Report (Supplementary to the Marshalled List) - (7 Jul 2026)
18:22 - Division on Amendment 31 - Ayes: 95 / Noes: 202 - Amendment 31 disagreed.
Lord Fox
(b) has had regard to the impact of exercising that power on the public finances.”Member’s explanatory statement
This amendment would add a new condition that the Secretary of State must consider before exercising principal transfer powers.
Lord Fox (LD)
My Lords, in moving Amendment 1, I will speak to Amendments 7, 9 and 24 in my name.
In Committee, I noted the difficulty of phasing the exercise of the principal transfer powers and the need for scrutiny by Parliament—there is a dichotomy. At the heart of my concerns then was that Parliament would potentially be signing a blank cheque. On the other side, there may very well be a need to move swiftly in the event that a decision is made to nationalise a steel asset.
The first three amendments in my name in this group go some way to brokering this compromise. They offer two different routes of addressing the issue of the Secretary of State’s obligations regarding the financial cost of any intervention. Amendment 1 directs this attention to Clause 2 and inserts an obligation on the Secretary of State to take into account the impact on public finances before exercising the principal transfer. However, during Committee and subsequent discussions with the Minister, it became clear that the Government feel they have some legal reservations about any modification of Clause 2. Therefore, Amendments 7 and 9 seek a similar action but focus on Clauses 4 and 15 respectively instead.
Overall, of course, government decision-making relies on tests that must be conducted by accounting officers. I expect the Secretary of State would have the impact on public finances in his or her mind at all times, and I am sure there would be some Treasury Ministers leaning over that particular Secretary of State in the event that any decisions were made. However, by putting this responsibility in the Bill, it will be easier to hold the Secretary of State and the Government at the time to account on the value for money of any issue. In the event that the Minister feels constrained in accepting Amendment 1, I hope he will accept Amendments 7 and 9.
Amendment 24 addresses a different issue and returns to pension liabilities, which we debated in Committee. It is clear that, in the event the Government exercise the principal transfer power enabled by the Bill, the pensions of all ex and current workers of that asset become an important responsibility. This amendment is clear in its assertion that Parliament needs a view on these liabilities. If the Minister is unable to accept this amendment, I hope he will take the opportunity to clarify the Government’s approach to pensions from the Dispatch Box. I beg to move.
Lord Redwood (Con)
My Lords, I am grateful to the noble Lord, Lord Fox, for reminding us of the importance of contingent liabilities and the need for the Government to complete due diligence before any acquisition. He rightly says that in a hypothetical case—not British Steel Scunthorpe—it might be necessary to move quickly, and then there will have to be some trade-offs. But if we are talking about British Steel Scunthorpe, there is obviously no need to move quickly. The Government moved very quickly many months ago, and there can still be proper analysis. I would hope, indeed, that as Ministers and their chosen executives are now responsible for British Steel, while they do not own the assets, they would have done a lot of this very important preparatory work on discovering the contingent liabilities.
Where in Amendment 11, the contingent liabilities are mentioned by category, there is an omission which could be extremely important: liabilities to employees for past problems with safety and health, and—God forbid that this does not happen—for any liabilities that might follow now that the business is under the operation or control of Ministers and their chosen executives, if some safety or other health problem arose. Where people are running these very large, industrial businesses, with the obvious threats of a very powerful fire in the furnace and the dangers of extremely hot liquid steel being moved around, it is crucial that Ministers and their chosen executives have taken all the right decisions on making sure people have the right protective clothing, there are the right protocols, and there is an absolute segregation for the employees from the risks. There also needs to be an understanding of whether there have been any longer-term health risks from the atmosphere around the blast furnace or the intense heat of some working conditions.
If Ministers have not already done so, they need to take this very seriously. Whenever I was responsible for a big plant, my main nightmare was that something would go wrong on safety, and that would be unforgivable. I am not expecting the Government to give ground on these amendments, but it would reassure the House and the wider public if the Minister could tell us more about where they have got to, at least in general terms, with exposing the contingent liabilities on pensions, safety and employee health, as well as with the other financial matters mentioned clearly in these amendments.
Lord Wigley (PC)
My Lords, I am delighted to support the amendment put forward by the noble Lord, Lord Fox, and I agree with his earlier analysis. As it happens, I agree with a lot of what the noble Lord, Lord Redwood, said on this as well. Whereas there may be certain safeguards in Scunthorpe, there is considerable worry in somewhere like Port Talbot arising from some of the experiences we have had, which I referred to in Committee. I hope the Minister will be able to give some assurances on this.
Lord Sharpe of Epsom (Con)
I rise to speak to Amendment 11 in my name and that of my noble friend Lord Hunt of Wirral. It is vital, as we have said throughout our consideration of this Bill, that there is clarity about the liabilities which may be acquired when the Government exercise a principal transfer power. That is particularly important in relation to environmental liabilities. Steelworks are substantial and long-standing industrial sites and any environmental liabilities associated with the transfer could represent a significant future cost to the taxpayer.
I am very grateful to the noble Lord, Lord Fox, for his amendments in this group, which rightly focus on the need to consider the public finances. We have consistently raised the issue of the costs associated with share and property transfers and pension liabilities when compensation is assessed. I thank the Minister and the Government for their engagement on these amendments, and I look forward to hearing what the Minister has to say and hope that at least some of these amendments will be accepted.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, before turning to the amendments before us, I begin by placing on record my sincere thanks to the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for the constructive and collegiate way in which they have engaged throughout the passage of this Bill. We have not agreed on every point, but their contributions have been thoughtful, serious and rooted in a shared recognition of the importance of the UK steel industry. I am grateful for the time they have taken to meet with me to test the Government’s position and, for raising their concerns in such a fair and friendly spirit.
Responding to the points raised in this group, I will speak first to Amendments 7 and 9 in the name of the noble Lord, Lord Fox. Over the course of this Bill’s passage, I have had ongoing and constructive conversations with the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, about the cost of nationalisation and the importance of parliamentary scrutiny. The noble Lords and I agreed that the Government must consider the costs of any nationalisation before exercising the powers. As I have stated to this House previously, existing public spending governance controls provide for this, with cost and value-for-money considerations embedded in the Managing Public Money principles and the well-established process of accounting officer tests.
However, the noble Lords have sought a statutory requirement on the face of this Bill. Through our conversations, I have been persuaded by their arguments, and I am pleased to say that the Government will support the amendment of the noble Lord, Lord Fox, which requires the Secretary of State to consider costs before exercising the share or property transfer powers in Clauses 4 and 15. We hope the House will agree. Our agreement on this issue reflects the commitment of noble Lords to ensure that this Bill is as comprehensive and effective as possible. It is an excellent representation of this House’s ability to work collaboratively, and I thank the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, for their engagement on this issue.
The noble Lord, Lord Fox, has also put forward Amendment 1, which would require the Secretary of State to have regard to the public finances when considering exercising the principal transfer powers. Given that the purpose of this amendment is achieved through Amendments 7 and 9, I do not think this is necessary in addition.
The noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, have tabled Amendment 11, which would require the Government to provide a statement to Parliament outlining the value of contingent liabilities associated with a steel undertaking, and the steps taken to minimise taxpayer exposure to them, prior to an intervention. As I have set out previously, I have concerns about creating additional hurdles that must be cleared prior to the exercise of the transfer powers, given the likely need to act at pace. There is also a practical difficulty in publishing the details of a private company’s financial information prior to a nationalisation. None the less, the Government share the desire of the noble Lords to minimise the taxpayer’s exposure to liabilities as far as possible, and that will inform our decision-making. If a steel undertaking is nationalised, we would expect its annual report to include details of its liabilities, where relevant. We will discuss liabilities again in later groups today, and I look forward to that discussion. I hope that that helps to clarify the matter and provides the noble Lords and the rest of your Lordships’ House with sufficient reassurance.
Amendment 24, tabled by the noble Lord, Lord Fox, requires that where the Government have exercised the transfer powers, the independent valuer must prepare a written estimate of a steel undertaking’s pension liabilities and provide that to the Secretary of State, who should then publish the estimate before Parliament. Pension liabilities will of course differ for different companies. If the Government were to decide that it was in the public interest to nationalise British Steel, I reassure noble Lords that our understanding is that there would not be significant pension liabilities, as the company has a defined contribution scheme and so pensions would be funded from an existing pot. In cases where pension liabilities are relevant to the value of a steel undertaking that is subject to the powers under the Bill, the independent valuer should consider that as part of their assessment. None the less, publishing this in isolation would be unhelpful without the full context. The Government have already committed to publishing the outcome of any compensation scheme. Therefore, I do not consider this amendment necessary.
I hope I have been able to reassure noble Lords, even though there are amendments in this group that I do not support.
Lord Fox (LD)
My Lords, I thank noble Lords for their contributions to this debate. Before coming to the Minister’s words, I will pick up on the point made by the noble Lord, Lord Redwood, on health and safety. I turn his attention to Amendment 21, which returns to the issues of health and safety and environmental liabilities. Although his point does not need to be made again, the debate on that amendment is when the Minister can respond to it.
I thank the Minister for his response to Amendments 7 and 9; I believe that they will take scrutiny a step forward. His approach to accepting them is very heartening. It is therefore clear that, if we accept Amendments 7 and 9, we do not need Amendment 1.
On Amendment 24, I am reassured by the Minister’s comments on one particular steel asset. Although we do not expect it, in the event that the future Act is used for other assets, pensions may become an issue. Picking up on the point made by the noble Lord, Lord Wigley, particularly in Committee, there have been some missteps around employee pensions. It is very important that, whoever the Government of the day are, they do not make those missteps again and create the situation we have seen and on which the noble Lord commented.
On that basis, and in thanking the Minister for his acceptance of Amendments 7 and 9, I beg leave to withdraw Amendment 1.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would limit the public interest test to the areas set out in paragraphs (a) to (c).
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 2, 3, 4 and 5 standing in my name and that of my noble friend Lord Sharpe of Epsom. I have no wish to repeat at length the arguments made in Committee, but I feel that the Government should be clearer about the public interest test that lies at the heart of these powers.
Lord Redwood (Con)
My Lords, there will be an issue with the public interest case, if and when we get to the full nationalisation of British Steel at Scunthorpe. Many of us are unclear as to whether the Government’s aim is to find a medium-term or longer-term solution to the problem of how to keep the two existing blast furnaces running and keep a basic steel-making capability in the United Kingdom, or whether their policy aim is still—as with the previous Government and as is the case in south Wales—to move to closing the blast furnace and opening an electric arc furnace in a new plant, which may be on that land or somewhere else.
If it is the latter, it will be much more difficult to establish the public interest case for the complete nationalisation and transfer of the blast furnaces, because that will end in tragedy for the people working there, so it will no longer be the case that the main purpose is to keep the jobs. It will not resolve the issue of the electric arc furnace, because that will need separate grant aid and might even be better on a different site. We need to know more about the phasing. In the case of south Wales, the blast furnaces were closed before the electric arc furnace was available. If they did the same again at Scunthorpe, there could even be a period when the United Kingdom will not be making any steel at all on those two works, given the transition plan.
It would be very helpful if the Minister, who will have to take this policy on, gave us a little more on the Government’s thinking about the duration of the investment in the blast furnaces, and whatever information he has about the state of those plants and the ability to maintain continuous production there, and on the Government’s intention in their net-zero strategy, which implies that steel would have to be made in a different way.
Lord Fox (LD)
My Lords, because this is Report, I will not repeat my Committee speech. Briefly, Clause 2 is unchanged and Clauses 4 and 15 have been amended along the lines that the previous groups suggested and begin to bring the rigour at the start of this process. The request made by the noble Lord, Lord Hunt, for information after the fact, if it has to be brought forward, seems reasonable, but on that basis I do not support the amendments as they stand.
Lord Leong (Lab)
My Lords, I am grateful for the contributions to this debate. Noble Lords have highlighted that the public interest test in Clause 2 is a vital part of the Bill and I very much agree. It is important that we get it right. Noble Lords have tabled several amendments to this clause and we have had fruitful discussions on them at previous stages, but I am happy to return to them.
Amendment 2, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would limit the public interest factors that could be considered by the Secretary of State to those explicitly set out in statute in Clause 2. As I have set out previously, the Government agree that these are likely to be the most pertinent issues in relation to an intervention in the steel sector. We have sought to strike a balance in the Bill between minimising the scope as far as possible and ensuring that we can adapt to evolving circumstances. That is why we think it is necessary to retain some flexibility to consider other factors that may be relevant to a particular case, which may be difficult to anticipate.
Let me be clear that the legal test in this clause places particular emphasis on the factors that are explicitly set out. Where the Government seek to rely on other factors, they will need to be satisfied that those factors mean that an exercise of the powers is necessary in the public interest. I therefore do not consider the amendment necessary and respectfully ask that it be withdrawn.
Amendments 3 and 5, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would create procedural steps that would need to be fulfilled before the transfer powers are exercised. Amendment 3 would require the Secretary of State to commission an independent assessment of whether the public interest test has been met and for that assessment to be met prior to using the powers. Amendment 5 would require the Secretary of State to provide details of the criteria used to demonstrate the public interest. Both are difficult to reconcile with the likely circumstances under which the powers could be exercised. The Government will likely need to act at pace to deliver an effective transfer. However, the Government will commit to publishing a Written Ministerial Statement following an exercise of the principal transfer powers, which would include details of how the public interest test has been met. I hope that provides some reassurance to the noble Lords, even if we cannot meet the full ambition of their amendments.
Finally, Amendment 4, also tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require the Secretary of State to be satisfied that the exercise of the transfer powers would represent value for money for taxpayers. The Government are mindful of the potential costs that could be incurred in relation to the nationalisation of a steel company. This consideration is already taken into account in government decision-making under the usual public spending processes, as I have set out previously.
Additionally, as we discussed in the previous grouping, the Government are supportive of Amendments 7 and 9 from the noble Lord, Lord Fox, which would require the Secretary of State to consider costs prior to the exercise of the principal transfer of powers. These amendments go some way to addressing the concerns raised by the noble Lord Hunt, and I hope that will provide some reassurance.
Lord Hunt of Wirral (Con)
My Lords, I am grateful to my noble friend Lord Redwood and the noble Lord, Lord Fox, for their comments. I am grateful indeed to the Minister for his reassurances and the commitment that he has given, which meet many of the concerns I expressed earlier. In those circumstances, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would retain the ability for the Secretary of State to extend the principal transfer powers, but only in increments of up to two years at a time and only with the approval of both Houses under the affirmative procedure.
Lord Sharpe of Epsom (Con)
My Lords, these amendments stand in my name and that of my noble friend Lord Hunt of Wirral. As we stated in Committee, we cannot have a perpetual sunset clause. A sunset that can be extended indefinitely and for an unlimited period at a time is not a meaningful sunset at all.
I welcome the Minister’s engagement on this aspect of the Bill. The amendment would provide an important safeguard by ensuring that any extension of the principal transfer powers can be for no more than two years at a time. That would provide greater certainty for investors, greater assurance for taxpayers and a clearer expectation that these exceptional powers are not intended to become a permanent feature of the Government’s industrial policy. It is also important that we have a Government who are confident in their stated aim of securing private investment for British Steel so that it can thrive on a commercial basis. Regular parliamentary approval for any extension will help to ensure that Ministers continue to focus on that objective.
I thank the Government for recognising these concerns and for working constructively with us to ensure that this amendment can be accepted. I beg to move.
Lord Redwood (Con)
My Lords, two years is quite enough for these powers, and it is generous of my noble friend to suggest allowing another two-year extension. As I understand it, these steel matters are being considered under a £2.5 billion multiyear estimate, which was meant to be for the modernisation of the steel industry. When it was originally agreed, people had in mind that this was going to be grant aid for new electric arc furnaces and other such investments—not to pay continuous and high losses on an older technology plant that may not have the long future we would like.
To get into better order with the Treasury, the Government might want to have some self-imposed restraint on the duration of this. We have been led to believe that the rate of loss is at least £500 million a year on the two blast furnace activities that are currently under the Government’s control but not in their ownership. That would be a totally unacceptable continuing rate of loss and would eat into what should be modernisation money. That would mean they would get to the end of this Parliament with very little improvement to show.
Lord Fox (LD)
My Lords, I am in slight confusion that I hope the Minister can clear up. My understanding of Amendment 6A is that it offers a one-term renewal of two years, meaning a four-year total for any sunset clause. I might have misheard what the noble Lord, Lord Sharpe, said. I am assuming that is what Amendment 6A is seeking to achieve.
If we are reassured by the Government’s assurances on their intention, in a sense we do not need this—but it is certainly helpful to have it. If my reading of Amendment 6A is correct and it moves it four years as a maximum, it will move it into the next Parliament, where the Liberal Democrat Government will take a view.
Lord Leong (Lab)
My Lords, I am very grateful to all noble Lords for their contributions. I will respond to the point from the noble Lord, Lord Redwood, on financial assistance when we cover financial assistance in the sixth group.
I am grateful for the points raised regarding the sunset provisions in Clause 3. The noble Lords, Lord Sharpe and Lord Hunt, have tabled an amendment that would limit any extension of the sunset period to two years. I have had helpful discussions with them on this matter. Throughout debates on this Bill, we have emphasised that the Government are strongly minded to use the powers in the Bill to nationalise British Steel, subject to the public interest test, and do not currently see a need to use them for other steel undertakings. However, the steel sector faces challenges that can be beyond the control of government or companies themselves. It is important that we reserve the possibility of intervening in this way if it is needed in the public interest.
The amendment from the noble Lords, Lord Sharpe and Lord Hunt, strikes a good balance, allowing the Government to preserve the powers if absolutely needed while limiting any extensions of those powers to a limited period and subjecting them to an affirmative parliamentary debate. We recognise the need for this level of scrutiny, and it is appropriate that any extension be limited to a short period only. I am therefore pleased to lend my support to the noble Lord’s amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would provide that, where the Secretary of State extends the period during which a principal transfer power may be exercised, the extension may not be for more than two years.
“(3A) When deciding whether to make share transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making share transfer regulations under clause 4.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would require regulations transferring securities of a steel undertaking to be subject to the affirmative procedure.
Lord Hunt of Wirral (Con)
My Lords, I rise to speak to Amendments 8, 10, 12 to 14 and 40, standing in my name and that of my noble friend. I thank the Minister for working constructively with us on Amendments 12 and 13. It is vital that where the Bill confers regulation-making powers of real consequence, the default should be the affirmative procedure. Amendments 8 and 10 would apply that principle to the core transfer powers, regulations transferring securities, and regulations transferring property rights and liabilities. We understand the Minister’s argument that in exceptional cases powers may need to be exercised.
Turning to Amendment 40, I ask the Minister for a clear assurance that a thorough impact assessment will be brought before both Houses of Parliament after the various powers in the Bill have been used. Given the potential effect on taxpayers, workers, investment and the wider steel industry, they must assess whether these exceptional powers have delivered the outcomes claimed for them.
Finally, Amendment 14 would remove Clause 50. The Constitution Committee was clear that the broad power allowing the Secretary of State to modify the law in relation to a share or property transfer
“should either be removed or significantly tightened”.
That is a serious recommendation from an important committee of this House. The Government should either accept the committee’s recommendation or make much clearer in the Bill the limited circumstances in which such a power may be used. I look forward, therefore, to the Minister providing some assurance on Amendment 40 and on the Henry VIII powers. I beg to move.
Lord Fox (LD)
My Lords, I rise to speak to Amendments 15 and 16 in my name, but first I speak in support of Amendments 12 and 13 in the names of the noble Lords, Lord Sharpe and Lord Hunt, which I have co-signed. Importantly, these would add necessary additional parliamentary control over continuity obligations and property transfer regulations. We moved similar amendments in the Commons that failed to attract sufficient support there.
Regarding Amendment 10, the Minister has convinced me that the need to quickly transfer property rights transcends the necessity of moving to an affirmative form of approval from a negative regulation. That is why I have not co-signed Amendment 10.
I tabled Amendments 15 and 16 as it is important that Parliament must be kept informed once any nationalisation is effected. Amendment 15 would create a new clause causing there to be a report on principal transfer powers from the point at which those powers are exercised under the Act. It says that the Secretary of State must
“make a written statement to each House of Parliament setting out … the progress, and the operational and financial performance, of the steel undertaking in respect of which a transfer power has been exercised, and … the impact of this Act, including (so far as it is possible to assess) its effects on the steel industry in the United Kingdom, on employment and on the public finances”,
and that this duty
“continues until no steel undertaking remains in public ownership”.
I hope the Minister has something positive to say on this, which includes reflecting on how the communities and skills requirements are being met in whichever part of the UK is affected by any nationalisation and subsequent changes.
It is a shame that the noble Lord, Lord Empey, was not with us in Committee, because he would have participated in a debate on an amendment that was very similar to Amendment 15, which covers not only the territory of Northern Ireland but the whole of the United Kingdom. I feel that the noble Lord’s point is important, but if it is important for Northern Ireland then it is important for the rest of the UK. I think he will see that Amendment 15 seeks to bring that across our entire country.
Amendment 16 seeks to create a stakeholder advisory committee. I will not repeat my speech from Committee, but its aim is to have stronger input into the steel strategy from steel users. The Minister responded with news that the steel council may be augmented by additional new members. I hope he can elaborate some more on how the voice of steel users is reflected more effectively in order for the Government to avoid such issues as those that have been created by the steel tariffs.
Lord Wigley (PC)
My Lords, I draw attention to a part of Amendment 16. I am delighted to see that the noble Lord, Lord Fox, has included the words
“industries that rely on the supply of steel, including the defence sector”.
That is one of the themes that is running, perhaps in the undergrowth, behind much of the thinking on the Bill. We must have a steel industry that is capable of responding, and quickly, in an emergency to the needs of the defence industry. The model has to be developed with that in hand. That is why I very much welcome the fact that that is written in the amendment.
Lord Empey (UUP)
My Lords, my Amendment 45 arises from an exchange in the other place last week with the Minister, Sir Chris Bryant. Members will be aware that Northern Ireland’s situation is different in so far as, for goods, it is covered by the Windsor Framework. Therefore, EU quotas on steel obviously apply. The issue is that we have the preposterous situation of having quotas of steel flowing from one part of the United Kingdom to the other. These two regimes are clashing.
The Minister in the other place indicated that HMRC is
“taking steps to confirm the arrangements with industry”.
Bearing in mind that this was happening with about 36 hours’ notice, it was a huge challenge for businesses and so on to get their heads around it. He went on to say:
“The Government will continue to provide guidance and support to traders moving goods from Great Britain to Northern Ireland through the trader support service”.—[Official Report, Commons, 30/6/26; col. 764.]
That is another example of why we do not have a free internal market within the United Kingdom. Can the Minister confirm whether both these matters have taken place: has HMRC taken the steps to confirm arrangements with industry, and is the Trader Support Service providing that guidance? It was not available last week, which is why I tabled this amendment.
The other issue arising is speciality steels, because of the United Kingdom’s current limited ability to produce them and because some firms which intend to produce them are not actually doing so. I will give the Minister an example of our concerns. If a European company has a branch in our jurisdiction in Northern Ireland—for instance, Harland & Wolff—and has access under its quota arrangements to speciality steel for, say, the defence sector, which the noble Lord, Lord Wigley, mentioned and which is a particular issue in my mind, and it bids for defence work that will require a significant amount of speciality steels, those steels may not be able to be sourced within the United Kingdom. Our anxiety, therefore, is that competitiveness, price and other things could create difficulties.
I fully understand the rationale for having quotas, because there is huge surplus capacity throughout the rest of the world. We understand that that has to be managed but, given that we cannot necessarily get the steels from within the United Kingdom, can the Minister give an assurance that those steels will be available, that the quotas are adequate—whatever we say about having them in the first place—and that there is sufficient headroom to ensure that companies’ competitiveness will not be significantly damaged by the unavailability of those products within the United Kingdom?
Lord Elliott of Ballinamallard (UUP)
My Lords, I support the amendment from my noble friend Lord Empey and will speak to the issue raised by the noble Lord, Lord Fox, in Amendment 15, which unfortunately does not cover the specific circumstances of Northern Ireland. I support Amendment 15, but my noble friend’s amendment goes further to, I hope, give protection to Northern Ireland.
The UK introduced a new steel trade measure on 1 July—
Lord Fox (LD)
I have a point of information. The Bill has nothing to do with steel tariffs. We have had several Statements on steel tariffs in your Lordships’ House, to which I do not think the noble Lord spoke. I am happy to debate the effect of nationalisation on the Northern Irish market and to dispute that issue. However, the issue of tariffs is not covered in this legislation.
Lord Elliott of Ballinamallard (UUP)
I recognise the noble Lord’s point about the tariffs, but the issue is that we need some protection, and my noble friend Lord Empey believes the only way to have that protection is through this amendment. There is no other mechanism for protection. We have had Statements and I have asked Written Questions, but the answers we have had are unsatisfactory. Why is it not reasonable to table an amendment to this legislation that could assist the processors and manufacturers in Northern Ireland?
Maybe the Minister will find another way of doing this. If he can then that would be extremely helpful to us, but we want to raise the issue and it is not beyond our reasoned power to do so. At the moment, there is no other way of doing that except through this legislation.
The tariffs are extremely important. We now have dual tariffs. We have not only EU tariffs, because we are part of the EU economic base, but UK tariffs. This is important in Northern Ireland, and we and our processors, fabricators and manufacturers will have to deal with it. It is unfair for the noble Lord to indicate that it is unreasonable for us to table this amendment—
Lord Fox (LD)
I am just confused, because the wording of Amendment 45 from the noble Lord, Lord Empey, asks for an impact assessment on the likely effects on Northern Ireland, and the wording of paragraph (b) of my proposed new clause in Amendment 15 asks for an impact assessment of the effects on the United Kingdom, which, of course, includes Northern Ireland. I wonder what Amendment 45 brings in addition that is not covered by Amendment 15. Thereafter, I will shut up.
Lord Elliott of Ballinamallard (UUP)
I thank the noble Lord for his intervention, but will he not agree that we are in a different situation in Northern Ireland from that in GB? We are under a double tariff. We are under a tariff from not only the European Union but the United Kingdom, which does not impact on those processors, fabricators and manufacturers in GB. So why is it not reasonable to ask for a special impact assessment for Northern Ireland? I think that is quite reasonable. I am surprised that the noble Lord has indicated that he does not want that. Surely, if he wants transparency and a reasonable outcome to this, it is only reasonable that we would have that impact assessment for Northern Ireland. I am happy to give way to the noble Lord if he wants to argue and demonstrate why that is not reasonable. If you are a Northern Ireland fabricator, like I have in my area in Northern Ireland, you will possibly have a double tariff now: one from the European Union and one from the United Kingdom. That is totally unfair and totally different—
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I think we have given the noble Lord a fair hearing. I ask him to bring his comments swiftly to a close so that we can get on with the business in hand today.
Lord Redwood (Con)
My Lords, I support my noble friends on the issue of the affirmative resolution. I think it is a superior device, given the importance of the matters that could be brought before us. I also fully support the idea of a proper impact assessment, which should of course include the impact on Northern Ireland, which may well be different because of the Windsor Framework—an arrangement which, in another life, I opposed very strongly.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions and for ensuring the ongoing scrutiny of any steel undertaking that is subject to the use of the powers in the Bill. Before turning to the amendments tabled by the noble Lord, Lord Fox, I will reflect on conversations I have had with noble Lords from across the House in recent weeks as we have sought to secure agreement on the drafting of the Bill.
The noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, have provided detailed feedback on and suggestions for how parliamentary scrutiny can and should continue following any acquisition. Following consideration of their feedback, I am pleased to confirm the following government commitments, which reflect the importance of transparency and parliamentary scrutiny.
I confirm that a debate will take place in both Houses on the steel strategy and the impact of the Bill, within 12 months after Royal Assent. Alongside this, the Secretary of State will lay a quarterly Written Ministerial Statement for at least the first year that a steel undertaking is in public ownership, reverting to a slower rate after that. Where a Minister considers it appropriate, the Written Ministerial Statement may provide an update on jobs, communities and other issues; I will detail this further in subsequent groups. As I have already set out, the Government will lay a Written Ministerial Statement following the acquisition of a company, setting out how the public interest test has been met.
In addition to these commitments on the impact of the Bill, I can confirm that, following any acquisition of a steel company, the company’s new chair would be able to attend a Select Committee to set out their plans for the publicly owned steel undertaking. I hope that that reassures the noble Lord, Lord Redwood. Alongside the chair’s attendance, the Government will write to Select Committees, including the Business and Trade Select Committee, with information following any acquisition, and subsequently on any future plans for any steel undertaking that falls within the scope of the Bill’s powers, and to respond to any specific requests from a Select Committee. I emphasise that it is for the Select Committees to set their agenda. If the Government, or the chair of a nationalised company, are asked to provide information and attend meetings, we will of course do so. These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out.
Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. This Act contains various reporting requirements that vary depending on the size of the entity. The Government will work closely with the company and, where necessary, if there are any material changes to the company’s circumstances outside the regular reporting cycle, the Government will be able to ask the company to produce an interim report on that particular issue.
Noble Lords have also raised a concern about ensuring that stakeholders are appropriately engaged in decision-making. I will provide further detail on this later, but I emphasise that the Steel Council will continue following the publication of the steel strategy. The council is made up of representatives from across the sector, and they would include a representative from any publicly owned steel company.
In addition to our continued engagement with the sector, I recognise the importance of ensuring that there are opportunities for Parliament to engage with the sector. I therefore confirm that the Government will convene an ad hoc round table on the future of the steel sector six months after Royal Assent. I hope that this series of commitments reassures noble Lords that the Government are committed to ensuring that Parliament can scrutinise any publicly owned steel undertaking where appropriate.
I thank the noble Lord, Lord Wigley, for his continued engagement with the Bill. I reassure him that Minister McDonald, the Minister for Industry, recently met with Minister Price from the Welsh Government, and my officials continue to engage with Welsh Government officials to try to secure a recommendation of legislative consent for agreement on the Bill. I am grateful to the noble Lord, Lord Wigley, for the discussions on these matters, and I hope to update the House on the outcome of these conversations at Third Reading.
I thank all noble Lords who have taken part in debates on Amendments 12 and 13, and particularly the noble Lords, Lord Sharpe and Lord Hunt, for their constructive engagement with me over the past few weeks. The Government respect the concerns that have been raised. Throughout the passage of the Bill, we have been clear that the Government are committed to as much transparency as possible with regard to the powers in the Bill. We have listened carefully to the cases made during our debates to date and have considered where it may be possible to amend the procedure for the power without harming the Government’s ability to carry out their objective under the Bill.
I am therefore delighted to confirm that the Government will support Amendments 12 and 13, which amend parliamentary procedure for continuity of obligations and enforcement powers. Under these amendments, the power to make regulations in relation to certain aspects of continuity obligations will change from the negative procedure to a draft affirmative procedure unless the Secretary of State considers the made-affirmative procedure necessary, and the power to make regulations on the enforcement of obligations will change from the negative to the made-affirmative procedure respectively. This compromise reflects your Lordships’ House at its best.
I shall address the other amendments in this group. Amendments 8 and 9, tabled by the noble Lords, Lord Sharpe and Lord Hunt, set out the opposition to the parliamentary procedure associated with the exercise of the share and property transfer powers in Clauses 4 and 15 respectively. While I recognise the magnitude of these powers, I must emphasise that any use of the principal transfer of powers would need to be exercised promptly to ensure operational and legal certainty. I cannot overstate the importance of this. In a scenario where the Government chose to use these powers, they would need to be exercised at pace in a commercially sensitive environment. The affirmative procedure would introduce significant delays to the transfer process and create a lack of clarity regarding ownership. This in turn would significantly affect the business, particularly supply chains and third-party contracts. This must be prevented.
Amendment 14 was tabled by the noble Lords, Lord Sharpe and Lord Hunt, and they have indicated their opposition to Clause 50 remaining part of the Bill. I am afraid that I have to disagree unequivocally in this case. I have previously set out that removing the clause would risk undermining the effectiveness of the Bill. The Bill confers powers that interact with the complex area of commercial company and insolvency law in a way that was not anticipated during the drafting of the legislation concerned. There will therefore be some tension in the way that the powers are applied. Clause 50 allows us to smooth over those challenges and avoid any unintended consequences or obstacles to a successful transfer.
I am sympathetic to the fact that it is difficult to justify a power of this nature when its potential use is quite abstract at this stage. By its nature, it is intended to deal with unforeseen circumstances in non-consensual, highly atypical transfer scenarios, and I remind noble Lords that it was necessary in the Banking Act context as well. As an example, the power could be used to modify or disapply certain corporate laws, such as disapplying shareholder voting or approval requirements to prevent any delay to the transfer. That is not to say that we plan to use it in this way but merely to illustrate its potential utility. It is worth repeating that the power can be used only to ensure that the transfer of power can be exercised effectively. It cannot be used outside the context of nationalising a steel undertaking to change or amend other laws. The use of the power will be subject to the draft affirmative procedure except in particular circumstances that justify proceeding on a “made affirmative” basis. I hope that this provides some comfort regarding the issue.
Amendment 5, also tabled by the noble Lord, Lord Fox, would require the Secretary of State to provide quarterly Written Ministerial Statements to Parliament updating on the progress of the nationalised steel undertaking and the broader impact of the Bill. I thank the noble Lord for our discussions on this point, and I recognise the appetite for further parliamentary scrutiny of the approach to a nationalised undertaking. As I have already set out to the House, I can confirm that the Government will commit to provide quarterly Written Ministerial Statements to Parliament for at least the first year of a steel undertaking in public ownership. This reflects the Government’s commitment to ensuring that Parliament is appropriately informed about the progress of any publicly owned steel undertaking.
I turn to Amendment 16, and thank the noble Lord, Lord Fox, for his continued discussions on stakeholder engagement throughout the passage of this Bill. This includes the amendment he has tabled, which would require consultation with the stakeholder advisory committee on whether an intervention was in the public interest before exercising the powers in the Bill. I believe that the noble Lord and I agree that stakeholder engagement is critical to supporting the Government’s vision for the future of the steel industry and to ensuring appropriate scrutiny. As previously mentioned, I am pleased to confirm that we will shortly be inviting the UK Metals Council to join the Steel Council, which will ensure that the views of downstream users can be fed into engagement and discussions.
However, as I previously set out, any decision to exercise the transfer powers would need to be made at significant speed. The amendment would delay the exercise of the transfer powers, creating additional risks to the business viability and ongoing operations and uncertainty over ownership. In addition, there are commercial sensitivities associated with any decision to exercise the transfer powers, making it extremely difficult to consult in advance of a decision. While I cannot accept the amendment tabled by the noble Lord, Lord Fox, I will reflect on the range of ongoing engagement that Ministers and officials from my department undertake with industry and stakeholders.
A notable forum for engagement is the Steel Council, which I have already confirmed will continue following publication of the steel strategy. The council will support the delivery of the strategy by providing evidence and feedback on evolving or emerging policies that affect the sector’s competitiveness, and by providing strategic oversight of the working groups on research and development, investment and skills. Having considered the amendments tabled by the noble Lord, Lord Fox, I can confirm that the Government will convene an ad hoc parliamentary round table on the future of the steel sector six months after Royal Assent. I hope this reassures the House that the Government regard stakeholder engagement as critical to the revitalisation of the steel sector.
The noble Lords, Lord Sharpe and Lord Hunt, have tabled Amendment 40, which would require the Secretary of State to publish an impact assessment of the operation and effect of the Bill within two years of Royal Assent. This is straightforward for me to address. As the Government have already published an impact assessment for the Bill, in line with our Better Regulation Framework requirements, further impacts will be assessed as part of a post-implementation process or review. I reassure noble Lords that if the powers under the Bill are exercised, we will publish further impact assessments to accompany any transfer regulations. Following this, the Government will consider any further impacts in the post-implementation review. As I have already set out, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent. This reflects our commitment to ensuring that parliamentarians remain well informed about our plans for the steel sector.
Lord Hunt of Wirral (Con)
My Lords, this has been an important debate. I pay tribute to the Minister. His approach to the Bill has been exemplary. We may disagree, and we do disagree, but the Minister has set an example that will be difficult for his ministerial colleagues to follow. He has listened and cared deeply about all the points we have raised. I am sure I speak for the noble Lord, Lord Fox, as well as for my noble friend and friends across the House, when I say that the Minister has not only listened to us but responded in positive terms, and, where he has not been able to agree, he has explained why he cannot agree.
I thank the noble Lord, Lord Wigley, for making sure that we do not forget the vitally important Welsh dimension. I thank my noble friend Lord Redwood for always scrutinising the public expenditure side of the Bill.
I say to the noble Lord, Lord Fox, that, with him, I believe we have now received from the Minister a series of comprehensive assurances, particularly on the impact assessment, which will enable us to proceed in a positive way.
The noble Lords, Lord Empey and Lord Elliott of Ballinamallard, have raised issues that—as the noble Lord, Lord Fox, pointed out—do not fall directly within scope, but they do fall within the impact assessment. That is why it was important that those points were raised.
The Minister will argue that there is a case for a Henry VIII power in an emergency Bill of this kind. We remain concerned about the breadth of Clause 50 and the precedent it may set, but I am grateful to the Minister for his engagement with this debate, and I thank him. In the meantime, I beg leave to withdraw Amendment 8.
“(3A) When deciding whether to make property transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making property transfer regulations under clause 15.
Lord Sharpe of Epsom
(a) the affirmative procedure, or(b) if the Secretary of State thinks it necessary to make regulations without using the affirmative procedure, the made affirmative procedure.”Member’s explanatory statement
This amendment would upgrade, from negative to affirmative or in some cases made affirmative (see clause 61), the procedure for regulations about consideration and terms for the performance of continuity obligations (see clauses 33 to 38).
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would upgrade, from negative to made affirmative (see clause 61), the procedure for regulations about the enforcement of obligations under share transfer or property transfer regulations.
Lord Leong
Member’s explanatory statement
This amendment would require (rather than enable) compensation scheme regulations to make provision for the role of an independent valuer and would focus more explicitly on their role in carrying out valuations for the purposes of the regulations.
Lord Leong (Lab)
My Lords, I am pleased to introduce a set of amendments that the Government have tabled. I hope that we have demonstrated throughout this Bill’s passage a willingness to listen to and engage with the concerns raised by your Lordships and to consider potential solutions. In tabling these amendments, we seek to address the concerns raised by the noble Lord, Lord Fox, regarding the discretionary nature of the appointment of an independent valuer. I previously noted that the Government intend to appoint a valuer whenever the principal powers in the Bill are exercised. We therefore consider the noble Lord’s suggestion to make this mandatory reasonable.
Amendment 17 will therefore make the required change by ensuring that any compensation scheme regulations must provide for the appointment of an independent valuer. The amendments that follow to Clause 54 make minor consequential changes clarifying that the valuer’s role is to carry out valuations for the purposes of the regulations, which is a critical step in determining any amounts of compensation. I hope that these amendments demonstrate the Government’s constructive approach and that noble Lords will support them.
Turning to Amendments 20, 21 and 23 from the noble Lord, Lord Fox, I am grateful to him for his engagement over the past few weeks on this and other points. These amendments would ensure that compensation scheme regulations must require the independent valuer to take into account environmental and health and safety liabilities when assessing the value of the relevant steel undertaking. I refer also to the points made by the noble Lord, Lord Redwood, earlier. I have said during the Bill’s passage that the Government will seek to address concerns from noble Lords as far as possible.
Many companies operating in heavy industries such as steel operate as normal with contingent liabilities. The precise cost associated with environmental liabilities would depend on many factors, including the extent to which land will be retained for future steel-making, kept safe or remediated for alternative light industrial use. None the less, we agree that the environmental and health and safety liabilities are likely to be an important part of any compensation determination and that this should be made clear in statute. I am therefore pleased to confirm that the Government will support these amendments, and I hope the House will support them too.
Lord Fox (LD)
My Lords, that was a very positive response from the Minister, and I thank him and his team for really listening to what we have been saying. Amendment 17 is an important step forward and I am pleased that he has tabled it. Amendment 21, as the Minister pointed out, makes something that might happen mandatory, taking on board fully the issues raised on another group by the noble Lord, Lord Redwood, and absolutely taking on board the issues I raised in Committee. I thank the Minister for his enthusiasm and look forward to this being added to the Bill.
Lord Sharpe of Epsom (Con)
My Lords, I echo my noble friend Lord Hunt’s comments on the previous group. I thank the Minister for his engagement, and the Minister and the noble Lord, Lord Fox, for their amendments in this group. Amendment 17 is very welcome. It ensures that compensation regulations must provide for valuations to be carried out by an independent valuer rather than leaving that as an optional feature of the scheme.
I also welcome the Government’s work with opposition parties to ensure that relevant liabilities are properly reflected in the valuation process. In particular, Amendment 21 ensures that environmental and health and safety liabilities must be taken into account, as my noble friend Lord Redwood powerfully articulated on an earlier group.
Lord Redwood (Con)
My Lords, I too welcome this from the Government. I think they will find it very helpful because, should we move on to the full acquisition of British Steel at Scunthorpe, there remain, as I understand it, financial issues outstanding with the current Chinese owners. It will be very important to have an accurate and full account of all these long, deep-rooted and sometimes very expensive liabilities to provide some counter to what we read in the press is their rather extravagant idea of how much they ought to be paid.
Lord Leong (Lab)
I thank all noble Lords for their support. I want to share with noble Lords that the issue of health and safety is definitely a priority. At British Steel there has been a clear improvement in health and safety standards since the introduction of the special measures Act last year. This will remain a central priority going forward. Indeed, since the passage of the Act we have already spent some £8.1 million on essential improvements in this area, so we do take health and safety seriously and it is a priority for the Government.
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on Lord Fox’s amendments to clause 54(4).
(a) must require;”Member’s explanatory statement
This amendment would make it mandatory for an independent valuer to take environmental and health and safety liabilities into account when making a determination.
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on Lord Fox’s other amendment to clause 54(4).
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would limit the financial assistance that can be provided under the Act.
Lord Hunt of Wirral (Con)
My Lords, in moving Amendment 31 I will also speak to Amendments 32, 33, 35 and 36 standing in my name and that of my noble friend. I support the similar sentiments and approach expressed in Amendment 37.
I do not wish to repeat the arguments made in Committee, but on these Benches we remain gravely concerned by the open-ended cost to the taxpayer that the Bill potentially permits. The Government have already announced £2.5 billion of taxpayer funding for the steel sector. That is the figure that Ministers have chosen to present as a demonstration of their commitment to rebuilding and modernising British Steel and the steel sector. Yet in this Bill they seek an unlimited power to provide financial assistance with no statutory ceiling whatever. I believe this is bad economics, bad politics and, unless some clarity is forthcoming, quite possibly bad faith too. If £2.5 billion is not enough, how much is? Is there any maximum figure at all that Ministers are prepared to put before us and then stand behind?
Lord Redwood (Con)
My Lords, I am so glad my noble friend has raised once again this crucial and fundamental point. It is of great importance and of help to the Government.
When I have in the past had some responsibility for trying to recover the financial position of the odd distressed company—although nothing nearly as distressed as British Steel at Scunthorpe—I have always found it was an essential discipline to first of all institute very frequent reporting, because you need to signal to the executives undertaking the day-to-day work that the financial state of the company is at risk and that they need to give great priority to this. You need to help them get clarity over why cash is draining out of the business. This business, British Steel, which is under the operational control of the Government, is draining cash, we believe, at £500 million a year. That is a phenomenal rate of loss, which is going to have an obvious impact on the public accounts, at a time when we know that government money is scarce and there are many other priorities. We need to know rather more about why it is £500 million.
Is there any residual investment programme left? That would be the first thing to go when you are trying to save cash. Is it still committing money to raw material stocks? It clearly should not be allowing more material stocks. Does it have a very large stock of finished product which it is not able to sell? If that is the case, what is the plan for trying to move that stock on? What is the reality of the price level it is going to get for that stock? Obviously, stock is a mixture of volume and value, and you have to try to maximise the cash you can get for the stock you have got before you would normally go on to produce more. This plant has the particular problem that it has to keep producing, even if it is not able to sell enough of the product at a sensible price. You would expect regular reporting, certainly to the chief executive appointed by Ministers, but I would have thought that the Minister with day-to-day responsibility for this would know what is going on, and on the trading accounts, because a lot of the cash going out may be trading losses. You would want to see an urgent plan for selling more and economising on costs wherever you can, whether that is bought-in materials, the productivity of labour or other overhead costs that the business is incurring.
During the debates so far, I have not felt the Government’s urgency around this financial problem. Every pound that goes out of the door on losses that you are responsible for as a steel-maker is a pound that cannot be spent on the new and better industry that you really need in order to take the country forward. I am not blaming the Minister, who has been exemplary in his conduct and helpfulness—I am sure he wants, as we all do, a good outcome to this—but in those conversations within ministerial offices, it would be good if a Minister in the other place, for example, could make more Statements which showed that there was a plan and a determination to rescue this industry that we all wish to rescue.
In this group of amendments, there is talk of quarterly reporting. That is a big enterprise in terms of people and scale of loss. Quarterly reporting is quite common and normal now in the public quoted sector. It is a good discipline, even for the most profitable businesses in the world, because people like to make sure the trends are still good and the managers are in charge of it. I would have thought that quarterly reporting was the bare minimum, and if it was somebody’s day-to-day responsibility then they would obviously need rather more frequent reporting than that.
The public deserve quarterly reporting from this industry, which they now have a substantial operational stake in. I urge the Minister to think about more regular public clarity. I hope that such detailed, short-term regular reporting is going on. It would be good to get some good news out of the Government that they are applying the right kind of financial disciplines to control the outflow of cash. If they do not control the outflow of cash, it will end in tears and redundancies.
Lord Sentamu (CB)
My Lords, I want to simply question Amendment 31. In Clause 58(2), there are many different ways in which the Government can provide assistance, such as
“by way of grant, loan, guarantee or indemnity … by the acquisition of shares or any other interest in, or securities of, a body corporate, … by the acquisition of any undertaking or of any assets … pursuant to a contract, or … by incurring expenditure for the benefit of the person assisted”.
I am one who believes that we should plan for the future and make sure we do not spend above our means. However, it seems to me that, in a Bill of this nature, putting a tag of £2.5 billion by the end of 15 August 2029 is a restricting element and it does not give me confidence that we are actually interested in nationalising steel.
There are so many unknowns. During the debate when we were all summoned by the Prime Minister to rescue the steel industry in Scunthorpe, it was quite clear that the books were not very encouraging—but this is a national asset, so what do you do? It seems to me that to put that amount in the Bill is almost legislating for failure. If, for example, it is £2.6 billion, not £2.5 billion, what would happen? Would the whole thing collapse? Putting figures in the Bill is not good for legislators. We have got the Exchequer and all kinds of other people for that. Let us not try to conduct this Report as if we are the Treasury—we are not. I urge the noble Lord, having flagged it up, to nevertheless withdraw his amendment. I would find it difficult to support.
I remember being in Birmingham when Rover collapsed. BMW announced that it would build the Mini there but left the other plant. The Government were being asked for only £600 million to keep the plant. They were already in agreement with China to sustain it, but, because of the laws around government support for businesses from the EU, the Government found that they could not, and the plant went.
I always respect the noble Lords, Lord Hunt and Lord Sharpe, because of their wisdom. However, if they do not mind me telling them this, as a Cross-Bencher rather than one of those rarefied Lords spiritual, I think that they are losing a little of what I have always taken them for—just no.
Lord Fox (LD)
My Lords, I welcome the noble and right reverend Lord’s descent from the spiritual to the temporal, and indeed the financial. His contribution is appreciated. I also welcome all those who have not had the joy of participating in the steel Bill debate so far.
Before I speak to Amendment 31, I am going to speak to Amendments 34 and 37, which are in my name. I am happy to say that the Minister pulled the rug from under my feet with respect to Amendment 34 when he spoke to a previous group of amendments. Amendment 34 seeks to promote a role for Select Committees going forward. I am happy to say that the Minister has taken that suggestion on board to a large extent. It is important that Select Committees are able to get under the bonnet of this, to look at the nature and amount of financial assistance, the beneficiaries of that financial assistance, the purpose and the effect of that financial assistance, and the conditions of repayment. I am happy to say that the points the noble and right reverend Lord made about the nature of any support were covered by previous comments.
Amendment 37 would insist on a report to outline the impact of financial assistance provided under Clause 58, with a focus on the short-term and long-term investibility of any nationalised steel undertaking. In tabling this amendment, I hope the Minister can put on record again what he told us in Committee about the long-term aim of the Government regarding returning these public assets into private hands. It would help your Lordships if the Minister were able to repeat that.
On Amendment 31, the Liberal Democrats in the Commons tabled an amendment to cap financial assistance, but we are now dealing with a different Bill. The Government have accepted Amendments 7 and 9, where value for money is accepted as a criterion in the Bill. We have inserted rigorous quarterly reporting. The noble Lord, Lord Redwood, will remember from two groups back that that amendment has been accepted and we will have quarterly reporting. As we have just said, we have ensured a role for Select Committees in scrutinising any nationalised industry, and we have implemented mandatory valuation of contingency liabilities. That Bill is not the Bill we are talking about.
I am persuaded that flexibility is required. The noble Lord, Lord Hunt, put in a spirited performance and, at one point, was possibly auditioning for the role of Chancellor—when he talked about magic money trees, I thought he was pushing his name forward to become the next Chancellor of the Exchequer. But then, he seemed to very freely talk about spending £2.5 billion here and £2.5 billion there. My worry is that his £2.5 billion would become a target, rather than the limit. Given the controls that we have put into the Bill, we will not be supporting Amendment 31.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions, and I thank the noble and right reverend Lord, Lord Sentamu, for his support.
Amendment 32, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would require that details of any proposed financial assistance under Clause 58 be provided to Parliament before the assistance can be granted. The noble Lord, Lord Fox, has raised the issue of parliamentary scrutiny in respect of this clause in Amendment 34, which would require detailed proposals to be put forward before Parliament for a 90-day period and allow the Select Committee to make recommendations which the Government must respond to before any assistance is forthcoming. I understand that these amendments address the concerns of all noble Lords about the potential to incur costs in relation to the powers in this Bill.
As I have noted previously, there is a framework of public-spending principles and governance, designed to ensure that public funds are well managed, and the Public Accounts Committee holds government to account in this respect. Where the Government use the powers in the Bill to transfer a steel undertaking into public ownership, costs may be incurred from day one and will need to be funded to maintain an ongoing operation. It is vital that a steel company that is running production continuously does not face disruption due to funding shortfalls. That is why these two amendments cannot be accepted by the Government, despite the good intentions behind them. As set out in Clause 59, we will provide annual reports to Parliament detailing the costs incurred under the financial assistance provided. A nationalised company will also need to publish an annual report and accounts, as the department does, so this information will be available in several places.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to the Minister, in particular for those additional comments. I and my noble friend Lord Sharpe—as well as, I believe, the noble Lord, Lord Fox—have been reassured by how the Minister has termed the positive future that we all want to see. However, as my noble friend Lord Redwood pointed out, the Government have still not provided Parliament with a clear limit on the potential exposure facing taxpayers. I do not know whether the Minister has any aspiration to become a Treasury Minister. To become one, you have to believe in caps—there is no other way to become a Treasury Minister.
I say to the noble and right reverend Lord, Lord Sentamu, that the Government just have to come to Parliament. If they require more money, they should ask Parliament for more money. At the moment, they have said that £2.5 billion is necessary. If there is a need for more money, it is perfectly open to the Government to come to Parliament and ask for it. Without a clear limit, there is a real risk that the cost could run into tens of billions of pounds.
Lord Sentamu (CB)
Therefore, if they can come to Parliament to ask for it, do not put the limit in the Bill. That is what the noble Lord seeks to do in his Amendment 31.
Lord Hunt of Wirral (Con)
If the noble and right reverend Lord does not support this amendment, it will be unnecessary for the Government to come and ask for more money. It is only when there is a cap that the Government have to be accountable to Parliament. For the reasons I have outlined, and because taxpayers should never be asked to sign a blank cheque, I wish to test the opinion of the House.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, before we divide the House, I need to inform the House that there have been intermittent network issues on the estate. Because of the small risk that this may cause temporary disruption to the pass readers and the Division system, I have agreed with the usual channels to extend the time for Divisions from eight to 10 minutes.
I ask all noble Lords to ensure they firmly tap their pass on the pass reader. If in doubt, they should tap their pass a second time. The system will only record a vote once. If we all remember that beep means you have voted and no beep means no vote, we will all be fine.
Lord Sharpe of Epsom
“Report on the impact any nationalisation of steel undertakings has had on inward investment to the United KingdomWithin six months of the day on which this Act is passed and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”Member’s explanatory statement
This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 38 and 39, standing in my name and that of my noble friend Lord Hunt of Wirral. On Amendment 38, I hope that the Minister can give a clear assurance that the future impact assessment will include an assessment of the effect of nationalisation on investment in the domestic steel sector.
On Amendment 39, the Minister gave assurances in Committee that financial assistance would comply with domestic and international subsidy control rules. I would be very grateful if he could put that reassurance more clearly on the record. Could he please confirm that the Government have assessed whether any proposed support could give rise to concerns under the domestic subsidy control regime, including any conversations that they have had with the Competition and Markets Authority? Could he also confirm that Ministers are satisfied that the proposed support will comply with the World Trade Organization’s subsidy rules? I look forward to the Minister’s response. I beg to move.
Lord Leong (Lab)
My Lords, the amendments in this group address inward investment and a level playing field. I emphasise at the outset that the Government are committed to ensuring that any publicly owned steel undertaking is subject to the same requirements and standards as any privately owned steel undertaking.
Amendment 38, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would place a duty on the Secretary of State to report to Parliament on the impact of any nationalisation of a steel undertaking on inward investment in the UK. I reassure your Lordships that the Government are committed to revitalising the steel sector and to establishing an investible and competitive business environment. To date, we have had positive feedback from industry on the Bill and the Government’s approach to nationalisation.
To be clear, public ownership is not an end in itself; it is a means of safeguarding our strategic domestic capability in exceptional circumstances. Our intention behind any intervention would be to make the changes necessary to put the steel undertaking on a sure footing and, where possible, return it to a position where it could attract private investment.
As I have set out previously, any use of the transfer powers would require an impact assessment. This would set out the impact of a nationalisation on the economy and, where appropriate, the Government would undertake post-implementation reviews. As I have confirmed, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent.
Amendment 39, again in the names of the noble Lords, Lord Sharpe and Lord Hunt, seeks to require the Secretary of State to maintain a level playing field between publicly and privately owned steel companies. I sympathise with the concern expressed by the noble Lords and want to make it clear that the governance and regulatory treatment of any nationalised steel company will seek to ensure a level playing field.
To emphasise this, I state that any financial assistance would be time-limited, targeted and proportionate to avoid market distortions. The provision of any funding would comply with domestic and international subsidy control obligations. I hope this reassures noble Lords that the Government are committed to ensuring that any publicly owned steel undertakings will not be unfairly advantaged.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the Minister for his remarks. It was particularly pleasing to hear that the Government have received positive feedback from the industry. It is not for now, but I wondered whether the Minister might be in a position to be a little bit more specific and perhaps write to noble Lords who have taken part in the debate, outlining some of those positive comments. That would help to contextualise our future debates. I am also pleased, as we have discussed in earlier groups, that we will deal with post-implementation reviews and that there will be a debate within 12 months in both Houses. That is a very welcome development.
As regards Amendment 39, I listened to what the Minister said. I am particularly pleased that he assured us that the Government will seek to pursue a level playing field quite explicitly and to avoid market distortion. Those are incredibly important things for so many reasons, particularly when it comes to encouraging inward investment and ensuring that existing operations are not disadvantaged by anything that the Government do on behalf of the taxpayer. In the light of those assurances, I beg leave to withdraw my amendment.
Lord Hunt of Wirral
“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 new Clause 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 Hunt of Wirral (Con)
My Lords, I will also speak to Amendments 42 and 43 standing in my name and that of my noble friend.
As we stated in Committee, the carbon border adjustment mechanism and emissions trading scheme will have a material effect on the domestic steel sector. The Government will no doubt argue that the CBAM and ETS are necessary to meet their net-zero objectives and that they will not harm British industry. We may have significant disagreements on that point. However, what cannot be disputed is that these measures will affect steel undertakings in this country. The question is whether that effect will be positive or negative on costs, production, exports and international competitiveness.
In Committee, Ministers suggested that the business environment, including the ETS and CBAM, would be relevant to valuation. But that is not the same as a clear assessment of the practical effect of these policies on the future of domestic steel-making. I therefore invite the Minister to confirm that the future impact assessment to which the Government have referred will include a full assessment of the effects of the CBAM and ETS on the domestic steel sector.
If the Government are right that these measures will protect industry, support investment and improve competitiveness, they should have no difficulty at all in providing that assurance. If, however, that assessment shows that these measures are damaging production, exports, investment or competitiveness, that would also give the Government the evidence needed to change course, and that is why I wish to move this amendment. I beg to move.
Lord Redwood (Con)
My Lords, I am very grateful that my noble friend has raised this important point. We would probably not be having these big debates about steel nationalisation if the United Kingdom in recent years had had competitive energy pricing, and if it had not gone in for carbon pricing and carbon taxes that can have an adverse bearing on energy-using industries. However, we are where we are, and so my noble friend is right to ask the Minister to give some reassurances. We seem to be involved in overtaxing carbon and then having to subsidise those businesses that suffer as a result.
Of course, the CBAM is an EU-designed scheme which we are copying, to try to offset the impact that very high carbon and energy costs have on domestic economies and industries, by imposing a similar tax or tariff on the imported goods from countries that do not impose such carbon taxes and carbon additions to the energy they are using in industrial plant. That does help in some way for the domestic steel-producing industry; it becomes a problem for the domestic steel-using industry where it is having to import steel beyond the tariff-free quota provided under the CBAM. We note that the tariff-free quota is skewed to favour European producers, rather than other producers around the world who might be otherwise cheaper or more advantageous.
Lord Fox (LD)
My Lords, we debated CBAM and the ETS in Committee, so I will not add to that debate, but I will ask a question of the proposers which I did not ask then: how is a steel business affected differently by CBAM or the ETS, whether it is publicly or privately owned? The answer is that it is not. The Bill is about the potential public ownership of steel. We will have to have a debate about CBAM and the ETS. The Liberal Democrats often talk about energy prices but not in the context of this Bill, because it is about whether a steel entity is in public or private ownership, and frankly, the CBAM will affect them the same way, no matter where that ownership lies.
Lord Leong (Lab)
My Lords, I thank noble Lords for their contributions to this debate on the emissions trading scheme and the carbon border adjustment mechanism, which I will refer to as CBAM, and their impacts on the steel sector.
Notably, these amendments seek to exempt a publicly owned steel undertaking from both these environmental measures, thereby undermining the level playing field that the noble Lord mentioned in the previous group. At the outset, I emphasise the Government’s commitment to their industrial decarbonisation policies and to moving towards a green, decarbonised steel sector. Although I appreciate that there may be differing views on this issue, these amendments would completely undermine the Government’s objectives for these measures.
These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out. Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. That Act contains various reporting requirements, which vary depending on the size of the entity. Where relevant or material, our Written Ministerial Statements may refer to any wider contextual or regulatory impacts. In addition, as previously mentioned, the Secretary of State would have the ability, if needed, to request an interim report on a particular issue.
Amendment 41 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the concern expressed by the noble Lord; however, I emphasise that CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It gives industry 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.
I understand the intention behind Amendment 42 and the desire to ensure that Parliament remains informed about the impact of carbon pricing policies on the steel sector. The Government are committed to supporting a competitive and sustainable steel industry while delivering our decarbonisation objectives. However, the UK emissions trading scheme and the carbon border adjustment mechanism are economywide policies designed to address carbon leakage and support the transition to net zero across industry as a whole, rather than for any particular company or ownership model.
The UK ETS Authority already keeps the operation of the scheme under review. The scheme contains statutory review mechanisms. The authority has committed to continued monitoring of both free allocation policy and the interaction between ETS and CBAM. The authority has also recently confirmed the extension of the UK ETS beyond 2030 and will continue to engage with industry and consult on future scheme design, ensuring that the impacts on affected sectors are properly considered. Given these existing review mechanisms, it is not necessary to create a separate statutory requirement for a particular transferred steel undertaking.
Amendment 43 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this imposes a cost on activities that have significant emissions. However, as with Amendment 41, accepting Amendment 43 would grant 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.
The Government remain firmly committed to both a competitive steel sector and our decarbonisation objectives. Exempting a publicly owned steel undertaking from ETS or CBAM would create an uneven playing field, weaken the integrity of these schemes and undermine efforts to tackle carbon leakage. Steel producers, regardless of ownership, should operate within the same fair and consistent framework. I hope that my comments reassure noble Lords.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to my noble friend Lord Redwood for highlighting the importance of ETS and CBAM. I say to the noble Lord, Lord Fox, that the British taxpayer has a right to know the effect of ETS and CBAM. I take his point that it would apply whether it was in the private or the public sector, but we are now dealing with a nationalised industry which is funded by the taxpayer, and the taxpayer has a right to know exactly what the effect of the UK ETS and CBAM will be on the costs, production, exports and competitiveness of the transferred steel undertakings.
However, I recognise that the Minister has done much to explain the method by which the Government are approaching this situation. We will keep it under careful scrutiny but, in the meantime, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“Industrial action affecting a transferred steel undertaking(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State may prohibit or restrict industrial action affecting that undertaking if the Secretary of State considers that the industrial action creates, or is likely to create, a sufficient risk to the public interest in respect of which the principal transfer power was exercised.(2) An act done in contravention of a prohibition or restriction under subsection (1) is not protected by section 219 of the Trade Union and Labour Relations (Consolidation) Act 1992 (protection from certain tort liabilities).(3) Industrial action in contravention of a prohibition or restriction under subsection (1) is not protected industrial action for the purposes of section 238A (participation in official industrial action) of that Act.”Member’s explanatory statement
This amendment would enable the Secretary of State, following the exercise of a principal transfer power, to prohibit or restrict industrial action only where it creates a sufficient risk to the public interest grounds on which the steel undertaking was brought into public ownership.
Lord Sharpe of Epsom (Con)
My Lords, when we debated this amendment in Committee, the Minister suggested that it was somehow about industrial relations. It is not. This amendment is about our national security. The Prime Minister himself has warned the House and the country that we may face aggression from Putin’s war machine against a NATO ally before the decade is out. Let that sink in. It is not “if” but a real and growing risk, on our watch, in this decade.
What is the Government’s answer when it comes to the very steel from which we forge our warships and our defences? Their answer, apparently, is that production could grind to a halt whenever a strike is called—no matter the stakes, no matter the moment, no matter who benefits from Britain’s weakness. This amendment does not abolish the right to strike. Let no one on the Benches opposite pretend otherwise. It says something far narrower and far more reasonable: that, where the Secretary of State has taken a steel undertaking into public ownership precisely because of its importance to the public interest, industrial action which threatens that public interest cannot simply proceed as though nothing were at stake. Where the risk is sufficient and where the ground for public ownership was the public interest itself, the Secretary of State may act to protect it.
We are told again and again that this Bill is about safeguarding a strategic national asset. Very well, we accept those arguments—but let us mean them. You cannot claim with one hand that steel production is too vital to be left to the market and with the other hand leave that same production exposed to disruption whenever it suits a dispute wholly unconnected to the nation’s defence. You cannot have it both ways.
If a strike stopped the plates and the girders needed for a Royal Navy hull at the very moment that the Prime Minister’s own warning came to pass, would the Government stand by, hands tied by statute, and watch it happen? If the answer is no, the Government should accept this amendment today rather than legislate the problem into existence and hope it never arrives.
In an earlier group, the Minister used as a defence how difficult the industry is and the massive external pressures that it faces. This is an issue that is within the Government’s potential control. They should accept this amendment. We on these Benches are not afraid to say what needs to be said. In an uncertain and dangerous world, national security must remain a priority. I urge the Government, in the interests of national security, to accept this amendment. I beg to move.
Lord Fox (LD)
My Lords, the noble Lord, Lord Sharpe, raises a serious issue. There was a moment when I thought I had passed through the looking glass. Your Lordships on that side of the House were sitting on this side, and those Lordships who were here were sitting on that side of the House. The only thing that broke me from that reverie, far from it being the noble Lord, Lord Sharpe, at the Dispatch Box, was the noble Lord, Lord Callanan. He was proposing the Strikes (Minimum Service Levels) Act 2023, with which the Government of the day sought to do exactly as the noble Lord, Lord Sharpe, seeks with this amendment.
I ask the noble Lord, Lord Sharpe, how many times that Act was applied. How effective was it? The issue that he raises is important. Of course the security of the country is important, but this is not the way to ensure the security of our country. Having a proper partnership with the workers in the industry is the way in which you secure the security of this country.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Fox, for those words. As this is the last group of amendments, I thank all noble Lords for their constructive approach to the scrutiny of this Bill. In particular, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for taking the time to meet me over the last few weeks. The way in which we have been able to collaborative to refine and improve the Bill truly shows your Lordships’ House at its very best.
Amendment 44 is in the names of the noble Lords, Lord Sharpe and Lord Hunt. Before I speak to it, I state that the Government take national security seriously; it is a priority. The amendment seeks to prohibit or restrict industrial action where there is a sufficient risk to the public interest grounds on which the steel undertaking is brought into public ownership. I understand that the intent of this provision is to ensure that any publicly owned steel undertaking can operate effectively without delay.
However, this is not the appropriate means to achieve this goal. I emphasise the absolute importance of workers’ rights. The steel workforce is the backbone of this industry. This Government are committed to protecting their rights and working with the trade unions and the workforce to ensure that operations are as effective and secure as possible. Noble Lords will know that I was closely involved in the delivery of the Employment Rights Act. Workers’ rights is an issue that is close to my heart. While political differences remain, we are not in the business of counterproductive approaches to industrial relations. As part of delivering the Employment Rights Act, our plan to make work pay, we are continuing to consult with businesses, trade unions and civil society to make sure we get the detail right. Several consultations are still live, including on reforms to zero-hours and similar contracts. This amendment is neither necessary nor appropriate to ensure that a publicly owned steel undertaking can operate effectively.
I hope I have convinced noble Lords of the reasons why the Government cannot support this amendment. I therefore respectfully ask that it be withdrawn.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the Minister for his response and, in particular, for the recognition of the central importance of national security in this matter. That is very welcome, but recognition is not the same as resolve. If the Minister truly accepts the force of the argument, the surest way to demonstrate that is not warm words at the Dispatch Box but acceptance of the amendment. I gently say to him that he could have strengthened his own case considerably by doing just that.
I am grateful to the noble Lord, Lord Fox, for pointing out my party’s admirable consistency, which sometimes we are criticised for. I suggest that nothing in this amendment would prevent any sort of proper partnership—to use the noble Lord’s words—with the workforce, which of course we would approve of and endorse as a first and foremost. The simple fact of the matter is that this is a different set of circumstances. We are talking here about the national interest and national security. They are of fundamental importance as regards this entire Bill, and that is why we have proposed this amendment.
To finish there would be to finish on a slightly discordant note, and I do not wish to. I am enormously grateful to the Minister for all his engagement and for accepting so many of our arguments. We are very grateful for the reassurances we have received from the Dispatch Box and the acceptance of some of our amendments, and we wish the Minister well in his future endeavours. I beg leave to withdraw the amendment.