Lords Chamber

Wednesday 8th July 2026

(began 1 month ago)

Share Debate
Watch Live
Skip to latest contribution
This debate has concluded
16:16
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
-
-
service. They've made 27 recommendations and in answer to points raised by the noble Lord Davies of Gower, we are going to consider those recommendations. We're going to examine them in detail. We want to give them a fair wind, and we will report back in the autumn on our response to those recommendations, and I'll be able to give further clarity and discussion at that time about the the government's approach to the points that have been made. Can I begin in, I hope, a constructive way, but also in a way of challenge to say, I don't accept the noble Lord Davis's characterisation of the police to date.

I think the police are doing a very good job. They're doing it in dangerous circumstances. Police officers from every senior level, from chief constables to ordinary police officers on the beat to police and community support officers, do a very strong job and what our duty to be is to ensure that the recommendations that have been made by the noble Lord Blunkett and noble Lord Herbert help support those police officers to do a better job in the future. Crime is down by theft offences by 11%.

Vehicle related crime is down by 14%. There's a 22% decrease in domestic burglary. Shoplifting is down by 1%, personal robbery has fallen by 12%. Knife enabled offences are down by 10%. Knife enabled homicides have fallen by 21% and knife enabled robberies down 15%. Just to give some examples of the past 18 months worth of statistics on how the police are helping to support those issues. But it doesn't mean that there isn't room for improvement. The noble Lady Baroness Doocey has on many occasions pressed me to examine the issue of training, and she's absolutely right to do so.

And these recommendations form the basis of us examining how we can take those issues forward. I don't also accept that the issue of diversity is one that we still shouldn't put at the heart of our police force. I want to see diverse police officers representing their communities, representing the communities they police, but it is important that we secure training and support for all of those officers, whatever their ethnic background. Now 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 we ensure that we have the backroom support as well, to frontline police officers.

She will know, as indeed the noble Lord Davies of Gower will know, that we're 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 Hogan-Howe on police force areas. We are establishing a National Police Service, which will encompass the very issues currently chaired by the noble Lord Herbert of South Downs in relation to the College of Policing, with also national procurement and with also a focus on what national policing should do, which is from the Crime National Crime Agency perspective, serious organised crime, counter-terrorism, police and other major important issues such as economic crime.

This reform programme is ongoing, but self-evidently, and this is where I agree with the noble Lord Davis and with the noble Baroness, Lady Doocey. We need to ensure that we put in place police support and training to make sure that the officers both meet the needs of the 21st century, but also have the support to do their jobs in effective way. And the report that the noble Lord Blunkett noble Lord Herbert, have made, they have put great care and skill into the recommendations, and I should also thank as well the other members of the commissions that have taken part.

There is a particular emphasis on giving voice to those on the front line, and I think it is right to say, as has been said in the report itself, 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. But it also ensures, I hope that we do maintain that principle of policing by consent. Now, it's right that we take time to consider the recommendations in full.

We welcome the Commission's proposals and the intent behind them. We're actively looking at the recommendation to create a former a formal Senior Constable rank and how this can be done. And the commission also recommends a new professional digital passport for policing and other measures to put in place stronger supporting structures around professional development. I think that the review's recommendations on a fast stream for policing, on a targeted direct entry scheme and on a role of the full forthcoming National Police Service in promoting ethical policing, are all issues we want to to look at and respond to, and we will do that in due course.

I say to the noble Baroness, Lady Ducie, that the points that she's made also about police conduct and about ethical standards of policing are extremely important. And she will know when we pass the Police and Crime Act recently, because we spent a gazillion hours dealing with this in this House of Parliament, that that there's a very strong emphasis in the Policing and Crime Act on improving the performance of the ethical standards and the ability to remove police officers who are not performing well.

And that, again, goes to the heart of the recommendations that we have before us today. So in summary, I can't today. And the noble Lord Blunkett and noble Lord Herbert will both know that I can't today respond to the 27 recommendations, but I welcome them. I think they are giving us a very strong foundation to examine how we can improve police leadership, police performance and the skill levels to face the 21st century. It is a valuable piece of work. I give a commitment to this House.

We will report back in the autumn on the recommendations and what we intend to do about delivering them. Going to the point the noble Lord Lord Davies of Gower made. But I would say in the meantime, there are police officers out on the streets now. This evening. There are leaders out on the streets now and this evening, and they are doing a dangerous job on behalf of us all. And they should have our support. They should have our our admiration, but they should also have our support to improve their performance in the future.

And that's what the recommendations are aimed at doing.
16:22
Lord Mackenzie of Framwellgate Portrait Lord Mackenzie of Framwellgate (Non-affiliated)
-
-
My Lord. Can I start by declaring my interest as former declaring my interest as former president of the Police Superintendents Association of England and Wales, and also as England and Wales, and also as someone who submitted evidence to the Police Leadership Commission, chaired by Lord Blunkett and Lord Hermer, who I see are in their places, having served 35 years in both uniform and CID. Can I say that this report is a major piece of work on leadership of the police in England and Wales, and I congratulate both noble Lords for its content and its clarity.

It recommends major changes throughout the service and builds upon 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've served under both excellent leadership and bad, and this report tackles the problems, which are identified as poor training and supervision, 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 over seven, and you only have 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 lost witnessed in England in 1919. We've witnessed major problems in recruitment and vetting following the slashing of 3000 officers a few years ago. This 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 of the commission report, it recommends a root and branch modernisation of police recruitment and training, development, promotion, monitoring and appraisal.

Scotland Yard is known throughout

**** Possible New Speaker ****

the world as a. Order, order. Interesting comments. I have

**** Possible New Speaker ****

Interesting comments. I have question. Thank you, my Lords. Senior constables. I support that particular provision. My Lords, I wish the implementation of the

**** Possible New Speaker ****

wish the implementation of the Commission report every success. Well, I'm grateful to my noble friend and for him bringing his friend and for him bringing his experience of policing at a leadership level to the debate and discussion we're having today. He
16:24
16:26
16:26
16:27
16:28
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
-
-
Well, on that latter point, we are hoping to publish that as soon are hoping to publish that as soon as possible, as the noble Lord will recognise. There is potentially at recognise. There is potentially at the moment a some issues the government wish to announce are not able to be announced because there will be a change of Prime Minister shortly, but I intend to publish that document as soon as practical, and I will make sure that those reports in the House in due course.

On that matter, I don't accept, with due respect, his contention that there is two tier policing. The document that the noble Lord refers to is designed to give guidance to officers to just understand the various pressures there are and some of the diversity issues that there are. But ultimately, officers deal with crime no matter who commits it, no matter where it is committed, and needs to bring people to justice and arrests accordingly. And I will reflect on what he said. I will discuss the matter via our officers in the Home Office with Gavin Stevens of the Police Chiefs Council.

But the general contention is, from my perspective, crime is crime. Police are there to deal with it and that just needs to have an understanding of some of the diversity issues, to have the confidence of the whole community to deal with those issues.

**** Possible New Speaker ****

I want to thank my noble friend for making this. Statement, and as he's in his place, I've got to mention my. Very good noble.

**** Possible New Speaker ****

Very good noble. Friend Lord Blunkett as well, who brings experience and common sense to pretty well everything he sense to pretty well everything he does. I just. There's a but coming and the. But is this that I get and the. But is this that I get slightly worried when I see in a statement phrase like a new police statement phrase like a new police leadership fast stream and focus on leaders from professions with transferable skills. If leaders are trying to.

The first thing they need for leadership is the respect for the people that they're trying to lead, and they won't get that respect in the same proportion unless the police constables, in whatever force in the country. No, no, that the leaders have been through the same traumas and challenges and anxieties that a normal policeman finds on his normal work when he's breaking up a fight in a city centre? I'm not sure a degree helps a great deal with them dealing with issues like that.

So I'd just like a reassurance from my noble friend that recruitment from the police doesn't need to be just diverse in terms of though that's important to representing the community. It needs to be diverse in terms of the academic and other and professional background of people, just as much as it does by academic qualification.
16:31
16:31
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
-
-
mean that we do need to look at how we do fast track individuals to that leadership, but in doing so, give them effective training and support to understand the issues that they face. But ultimately, the that they face. But ultimately, the core elements of policing is the officer, male or female, on the officer, male or female, on the beat, who deals with the fight on a Saturday night, who deals with the shoplifter, who deals with the anti-social behaviour, and who anti-social behaviour, and who deals with all of the issues that police officers deal with on a regular basis, including, as the noble Baroness Doocey has said, sometimes issues which are not directly their responsibility, but which are issues which they have to deal with because they are the last and first port of call in many cases.

So what we're trying to do in this whole package is to look at how we improve the skill levels across the board, and that might well include looking at how we give greater skills and support and training to the frontline police officer. But it equally is important that a clear issue has been identified, that there is a failure of of effective management in some areas at a senior level, and that needs to be addressed, and that's what we will intend to look

**** Possible New Speaker ****

at doing when we have a chance to reflect on the recommendations. I welcome the report.

**** Possible New Speaker ****

And the. Sensible recommendations in it. But what the report does is But what the report does is highlight the importance of cliques and networks in promotions in the and networks in promotions in the police. At the moment, there are comments such as if you don't have a network, you're not going to get 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 memberships.

But has that actually made any difference? And do other forces go far enough? And does the noble Lord 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?

**** Possible New Speaker ****

It's a very interesting point that the noble Baroness makes in terms of the discussions. I happen terms of the discussions. I happen to believe that promotions should be made on merit. They should be made on the skills and adaptations made on the skills and adaptations of individual officers to do the next job that they face, or indeed next job that they face, or indeed as an ordinary police constable, to do the different types of skills that might be required, which don't involve necessarily being on the involve necessarily being on the beat, but might involve another range of skills that should be done on merit.

And again, if I go 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 therefore, by that development, and therefore, by that very mechanism, supports people being promoted on merit. And I being promoted on merit. And I would hope that when we have chance to reflect on those recommendations, that that would be something that that that would be something that is at the heart of what we do. Declare my interest as a non-executive director of the Metropolitan Police.

Whilst I welcome this report, a lot of it appears to me to be reinventing wheels that came off policing many years ago. For example, we had a
16:34
16:35
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
-
-
Well, can I say, first of all, perhaps again, maybe I should also declare an interest because I have declare an interest because I have a very close relative, a daughter who works in the police service as a serving police officer. So perhaps I should have declared an perhaps I should have declared an interest also. But but the key thing in all of this is that the recommendations are given to the government, 27 in total. We have to assess them. We have to look at them.

But the general tenor of what has been said by the noble Lord Blunkett and by the noble Lord Herbert, is one that the government accepts, and that is, we need to improve the basic level of training. We need to look at the skills needed for the 21st century. We need to improve senior leadership, and we need to improve the training of that senior leadership, and we need to make sure that we have a wider pool for people to reach the senior senior positions of chief constables, because there is a very limited pool for chief constables at the moment, and very often internal candidates who have been inoculated through the police forces they've worked in without any examination, generally.

Now, as part of the wider reforms, the noble Lord will know we're looking at the wider reform of improving the College of Policing work, merging it with a senior level of activity. We are looking to shrink the number of police forces to give more effective local control. We're looking to change the management structures from police and crime commissioners to mayors and to other authorities. And this is part of a wider programme that the noble Lords, Blunkett and Herbert's recommendations fit into.

I can't give definitive answers now, but I will say to the House again, as I've said already, we will report back on the recommendations and our response to them as soon as practicable.
16:37
16:38
16:39
16:39
16:40
16:41
16:41
16:42
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
-
-
Absolutely. And again, I think >> Absolutely. And again, I think in my final remarks, then can can I say that yes, that is absolutely central to what the government seeks to achieve. And again, I think the report for which, again, I pay tribute to both noble Lords, to their staff, to the Commission members and to their voluntary staff who helped on this support area. They are trying to identify the fact that there are challenges in leadership, but they've also identified that policing landscape is changing, crime is changing.

4,546% of crime now is fraud online. There are a range of new challenges that the police are going to face, and what we need is to have effective, strong leaders who reflect their communities, who understand the levels of crime and have strategic skills to tackle them. But at the same time, we're still going to be based on the support of the everyday police officer who is working on the street. We need to give recognition to those who've given long service. We need to give recognition to the skills they need.

And in closing, the recommendations that the noble Lords have made are very valuable, very welcome. I thank them for their assistance and we will, I assure this House, reflect on those and bring back a coherent plan of action in due course.

**** Possible New Speaker ****

And also, before we move to next business, we'll take a moment for Report Report of Report of the Report of the Steel Report of the Steel industry Report of the Steel industry Nationalisation Bill Lord Leong. Nationalisation Bill Lord Leong. Question is that this report. The question is the question is the question is that this report be now question is that this report be now received? As many as of that opinion will say content and the contrary not content.

The contents contrary not content. The contents have it. Amendment one Lord Fox.
16:44
None Portrait Legislation: Steel Industry (Nationalisation) Bill - report stage
-

My Lords, I rise. Amendment seven, nine and.
16:44
Lord Fox Portrait Lord Fox (Liberal Democrat)
-
-
24. >> The committee. >> Stage of this bill. >> I noted. >> The difficulty.

**** Possible New Speaker ****

Of phasing the exercise or the exercise of the principle transfer powers and the need for scrutiny by Parliament. There is a dichotomy. At the heart of my concerns then, was that Parliament would be potentially 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 of the the first three amendments in my name in this group go some way to brokering this or breaching 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 one directs his attention to clause two and inserts an obligation on the Secretary of State to take into account the impact on public finances before exercising the principle transfer. However, during committee and subsequent discussions with the Minister, it became clear that the government feels it has some legal reservations about any modification of clause two.

Therefore, amendments seven and nine seek a similar action, but focus on clauses four and 15 respectively instead. Now, my Lords, overall, of course, government decision making relies on tests that must be conducted by accounting officers and I expect the Secretary of State would have would would have the impact on public finances in his or her mind at all times. And I'm 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 on the face of the Bill, I believe 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 going forward, and I hope in the event that the Minister feels constrained in accepting amendment one, that he will accept amendments seven and nine. Turning to amendment 24, this addresses a different issue and returns to the issue of pension liabilities that we debated on committee.

My Lords, it's clear that in the event that the government exercises the principle transfer power that is enabled by this Bill, the pensions of all ex and current workers of that particular asset become an important responsibility. This amendment is clear in its assertion that Parliament needs a view on these liabilities. My Lords, 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. In the

**** Possible New Speaker ****

meantime, I beg move to. I beg leave to move amendment one. Here.

**** Possible New Speaker ****

Here. Here is clause two, page one, line 13. At the end, insert the words as printed on the Marshal's

**** Possible New Speaker ****

list. My Lords. I'm grateful to the Lord Fox for

**** Possible New Speaker ****

I'm grateful to the Lord Fox for reminding us of the importance of contingent liabilities and the need for the government to complete due
16:48
Lord Redwood Portrait Lord Redwood (Conservative)
-
-
for the government to complete due diligence before any acquisition. And he rightly says that in a hypothetical case, not not British Steel, Scunthorpe, it might be necessary to move quickly and then there has 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 and I would hope indeed that as Ministers and their chosen executives are now responsible for British Steel, or they don't own the assets, they would have done a lot of this very important preparatory work on discovering the contingent liabilities, where in 11 the contingent liabilities are, are mentioned by category.

I think there is an omission which could be extremely important. And that omission is liabilities to employees for for past problems with with safety and health. And God forbid this doesn't happen. But for any liabilities that might follow. And now that the business is under the operational 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 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 that people have the right protective clothing, there are the right protocols, and there is an absolute segregation for the employees from the risks.

And 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 from the intense heat of some working conditions. So I do think the Ministers, if they haven't already done so, need to take this very seriously. Whenever I was responsible, once responsible for a big plant, that was my main nightmare, that something would go wrong on safety and that would be would be unforgivable. So I'm not expecting the government to to give ground on these amendments, but I think 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, at exposing the contingent liabilities on pensions, on safety and employee health, as well as on the other financial matters mentioned clearly in these amendments.
16:51
16:51
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Conservative)
-
-
I. I rise to speak to amendment 11, which is standing in my name, and that of my noble friend, Lord Hunt of Wirral. It's vital, as Hunt of Wirral. It's vital, as we've said throughout our consideration of this Bill, that there is clarity about the liabilities which may be acquired when the government exercise a principle transfer power, and that's particularly important in relation to environmental liabilities. Steelworks, my Lords, are substantial and long standing industrial sites, and any environmental liabilities associated with the transfer could represent a significant future cost to the taxpayer.

So I'm very grateful to the noble Lord Lord Fox for his amendments in this group. His amendments rightly focus on the need to consider the public finances, and that's something that obviously we've consistently raised as an issue regarding the costs associated with share and property transfers and pension liabilities, where when compensation is assessed. But I'd like to thank the noble Lord, the Minister and the government for their engagement on these amendments, and I look forward to hearing what the noble Lord has to say.

Noble Lord, the

**** Possible New Speaker ****

Minister has to say and hope that accepted. Yeah, yeah. My Lords, before turning to the

**** Possible New Speaker ****

My Lords, before turning to the amendments before us, I begin by placing on record my sincere thanks placing on record my sincere thanks to the noble Lords Lord Sharpe, Lord Hannett and Lord Fox for the constructive and collegiate way in constructive and collegiate way in which they have engaged throughout the passage of this Bill. We have not agreed on every point, but
16:52
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
their contributions have been thoughtful, serious and rooted in a shared recognition of the importance of UQ of the UK steel industry. I'm grateful for the time they've taken to meet, to test the government's position and to raise their concerns in such a fair and friendly spirit. My Lords, I'm grateful for the opportunity to respond to the points raised in this group. Let me speak to amendment seven and nine in the name of the noble Lord Lord Fox. Over the course of this bill's passage, I've had an ongoing and constructive conversations with Lord Faulks Lord Sharpe and Lord hunt about the cost of nationalisation and the importance of parliamentary scrutiny.

The noble Lords and I agree that the government must consider the costs of any nationalisation before exercising the powers. As I've 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 a 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've been persuaded by the arguments and I'm pleased to say that the government will support Lord Fox amendment, which requires the Secretary of State to consider costs before exercising either the share or property transfer powers in clause four and 15.

We hope the House will agree. Our agreement on these issues reflects the commitment of the noble Lords to ensure this Bill is as comprehensive and effective as possible. It is an excellent representation of this House ability to work collaboratively, and I wish to thank Lord Fox Lord Sharpe and Lord hunt for an engagement on this issue. Lord Fox have also. Forward has also put forward amendment one, which would require the Secretary of State to have regard to the public finances when considering the exercise of the principle transfer of powers.

Given that the purpose of this amendment is achieved through amendment seven and nine, 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 damp prior to any intervention. As I've set out previously, I have concerns about creating additional hurdles that must be cleared before the exercise of the transfer of 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 nationalisation. Nonetheless, the government shares the desire of noble Lords to minimise the taxpayer's exposure to liabilities as far as possible and that will inform its 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 later in today's debate in later groups, and I look forward to this discussion.

I hope that helps to clarify the matter and provide noble Lord Lord Sharpe and Lord Hain and your Lordships' House with sufficient reassurance. Amendment 24, tabled by the noble Lord Lord Fox, requires that where the government has exercised the transfer of powers, the independent valuer must prepare a written estimate of a steel Undertakings pension liabilities and provide it 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 can reassure noble Lords that our understanding is that there would be no significant pension liabilities, as the company has a defined contribution scheme and pensions will be funded from an existing pot. In cases where pension liabilities are relevant to the value of the steel undertaking that is subject to the powers. Under this Bill, the independent valuer should consider that as part of the assessment.

Nonetheless, publishing this in isolation would be unhelpful without the full context. The government has already committed to publishing the outcome of any compensation scheme. I therefore do not consider this amendment necessary. I hope I have been able to reassure noble Lords on the amendments in this group, which I will not be supporting.
16:57
Lord Fox Portrait Lord Fox (Liberal Democrat)
-
-
My Lord, I thank noble Lords for their contributions into this their contributions into this debate and before coming to the Minister's words, I pick up on the point that the noble Lord Redwood made on health and safety, and I would turn his attention to amendment 21, where we come back to the issue of health and safety and environmental liabilities, and I think that's the point where his his his point can be made or doesn't need to be made again, but it can be made in in order for the Minister to respond.

I really thank the Minister for his response with respect to amendment seven and nine, and I do believe that it does take scrutiny. A step forward and his approach to, to, to to accepting this is is really very heartening on the subject. Therefore, clearly, if we've got seven and nine, we don't need amendment one on amendment 24. I am reassured on his comments around one particular steel asset, I think, in the event. And we don't expect it. But in the event that this, this, this, this act is used for other assets, it may be that pensions become an issue.

And I think picking up on the point that the noble Lord Wigley has made, particularly on committee, there have been some missteps around employee pensions. And I think it's very important that whoever is government of the day does not make those missteps again and create the sort of situation that we've seen to which the noble Lord Wigley comments. But on that basis, thanking the noble Minister for his for his acceptance of seven and nine, I beg leave to withdraw amendment one.
16:59
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
-
-
Pleasure that the amendment be withdrawn. It is by leave withdrawn. Amendment two Lord Sharpe of Epsom. >> My Lords, I rise to speak to

**** Possible New Speaker ****

My Lords, I rise to speak to amendments two, three, four and five standing in my name and the name of my noble friend, Lord Chancellor of Epsom. Now I have no wish. To repeat at length the arguments made in committee, but I do feel that the government should be clearer about the public interest test, which lies at the heart of these powers. Now the Bill confers exceptional powers to transfer a private undertaking into public ownership.

Now the test governing their use should therefore be precise, transparent and capable of meaningful scrutiny. It should not be so open ended that businesses and investors are left uncertain about the circumstances in which it may be invoked. That matters, particularly in the steel sector. Investors are already making decisions in an uncertain and intensely competitive global market. They will examine every detail of the legislative and regulatory environment before committing capital, a broad and undefined public interest test risks adding to uncertainty and damaging confidence in the United Kingdom as a place to invest.

Now, we do understand the Minister's argument that in an emergency, it may not always be practicable to undertake every assessment or publish every detail before a principal transfer power is exercised. However, where that is the case, can the noble Lord, the Minister, take this opportunity to reassure the House that clear reasons will be published as soon as possible after the transfer? Parliament should be told why the Secretary of State considered the transfer necessary in the public interest.

What factors were taken into account? What alternatives were considered and what the anticipated consequences are for public finances, investment and the future viability of the undertaking. And I do so much look forward to hearing the noble Lord. The Minister's response. The amendment.
17:02
Lord Redwood Portrait Lord Redwood (Conservative)
-
-
Proposed. leave out includes, but is not limited to and insert means.

**** Possible New Speaker ****

My Lords, I think there is an issue over the public interest case. issue over the public interest case. If and when we get to the nationalisation of British Steel. Scunthorpe, because I think many of us are unclear as to whether the government's aim is to find a medium term or longer solution to the problem of how you keep the two existing blast furnaces running and keep a basic steelmaking capability in the United Kingdom, or whether their policy aim is still, as with the previous government and in the case in South Wales, to move to closing the blast furnace, steel and to opening electric arc furnace steel in a new plant which may be on that land or maybe somewhere else.

And if it is the latter, then it is much more difficult to establish the public interest case for the complete nationalisation and transfer of the blast furnaces, because that is going to end in tragedy for the people working there. So it's no longer the case that the main purpose is to keep the jobs, and it doesn't resolve the issue of the electric arc furnace, because that is going to need separate grant aid and might even be better on a different site.

And we we need to know more about the phasing, because in the case of South Wales, it was decided to to close the blast furnaces before the electric arc furnace was available. If we did the same again, or they did the same again at Scunthorpe, then you could even have a period when the United Kingdom wasn't making any steel at all on those two works, given the the transition plan. So I do think it would be very helpful for the Minister who is going to have to take this policy on to give us a little more of the government's thinking about the duration of the investment in the blast furnaces and whatever information he's got about the the state of those plants and the ability to maintain continuous production there, and what the government's intention is on their net zero strategy, which would imply making steel in a different way.
17:04
17:05
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
My Lords, I'm grateful for the contributions to this debate. Noble Lords have highlighted that the public interest test in clause two is a vital part of the Bill, and I is a vital part of the Bill, and I very much agree. It is important that we get it right. Noble Lords that we get it right. Noble Lords have raised several amendments to this clause, and we have had fruitful discussions on them at previous stages, but I'm happy to return to them now.

Amendment two, in the name of names of noble Lord Sharpe and noble Lord hunt would limit the public interest factors that would be considered by the Secretary of State to those explicitly set out in statute in clause two, as I have set out previously, government agrees 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's necessary to retain

**** Possible New Speaker ****

some flexibility To consider other factors that may be relevant to a particular may be relevant to a particular case, which may be difficult to anticipate. Let me be clear, though, anticipate. Let me be clear, though, that the legal tests in this places particular emphasis on the factors particular emphasis on the factors that are explicitly set out, where the government seeks to try to rely on other factors, it will need to on other factors, it will need to be satisfied that those factors mean that an exercise of the powers is necessarily in the public interest.

So I therefore do not consider the amendment necessary and respectfully ask that it be withdrawn. Now, turning to amendments three and five, also tabled by the noble Lords. Lord Sharpe and Lord hunt. Both amendments create procedural steps that would need to be fulfilled before the transfer of powers are exercised. Amendment three requires the Secretary of State to commission an independent assessment of whether the public interest tests have been met, and for that assessment to be met prior to using the powers.

Amendment five requires 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, I can say that the government will commit to publishing a written ministerial statement following an exercise of the principle transfer of powers, which will include details of how the public interest test has been met.

So I hope this provides some reassurance to the noble Lord. Even if it cannot meet the full ambition of their amendments. Finally, amendment four, also tabled by the noble Lord Sharpe and hunt, requires the Secretary of State to be satisfied that the exercise of the transfer of powers would provide value for money for taxpayers. The government is mindful of the potential costs that would 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 is supportive of Lord Sharpe Lord Fox amendment seven and nine, which would require the Secretary of State to consider costs prior to the exercise of the principle transfer powers. So I think these amendments go some way to addressing the concern raised by the noble Lord hunt and hear. So I hope that it will provide some reassurance.
17:09
17:09
17:11
Lord Redwood Portrait Lord Redwood (Conservative)
-
-
Amendment proposed clause three, page two. Line 11 leave out from regulations to end of line 12 and regulations to end of line 12 and insert. Extend that period for a further period not exceeding two years, beginning with the end of

**** Possible New Speaker ****

that period. My Lords, I think two years is quite enough for these powers, and quite enough for these powers, and I think it's generous of my noble friend to suggest allowing another two year extension. And I just point out to the Minister that, as I understand it, these these steel matters are being considered under a 2.5 billion multi-year estimate, which was meant to be, I believe, for the modernisation of the steel industry. And I think when originally agreed people had in mind this was going to be granted for new electric arc furnaces and other such investments, not to pay continuous and high losses on on older technology plant which which may not have the long future we would like.

And so I would say to the Minister to get into a better order with the Treasury. They might want to have some self-imposed restraint on the duration of this, because we have been led to believe that the the rate of loss is at least 500 million a year on the. The two blast furnace activities that are currently under the government's control, but not in their ownership. And that would be a totally unacceptable continuing rate of loss and would eat into what should be modernisation money, which would mean they'd get to the end of this Parliament with very little improvement to show.
17:12
17:13
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
My Lords, I'm very grateful to all noble Lords for their all noble Lords for their contributions. I will respond to noble Lord Redwood point about financial assistance in a later financial assistance in a later group six when we cover financial assistance. So I'm grateful to the points raised regarding the sunset provisions in clause three of the Bill. The noble Lord Oates Lord Sharpe and Lord hunt have tabled an amendment that will limit any extension of the sunset period to two years.

I've had helpful discussions with the noble Lords, Lord Loomba Lord Sharpe and noble Lord hunt on this matter. Throughout debates on this bill, we have emphasised that the government is strongly minded to use the powers in the Bill to nationalise British Steel, subject to the public interest test, and does 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, and it is important that we reserve the possibility of intervening in this way, if it is needed in the public interest, in case necessary.

The noble Lord Sharpe. Noble Lord Sharpe and noble Lord Soames amendment strike a good balance here, 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 a affirmative parliamentary debate. So, my Lords, we recognise the need for this level of scrutiny and it is appropriate that any extension be limited to a short period only. So I'm therefore pleased to lend my support to the noble Lords Amendments Amendment.

Brother.
17:15
17:16
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
-
-
My Lords, I rise to speak to >> My Lords, I rise to speak to amendments. Eight. Ten, 12, 13, 14 and 40. Standing in my name and that of my noble friend. First, may I thank the noble Lord, 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 eight and ten would apply that principle to the core Transfer powers regulations, transferring securities and regulations, transferring property rights and liabilities.

Now we do understand the noble Lord the minister's argument that in exceptional cases, powers may need to be exercised. Then, turning to amendment 40, I would ask the noble Lord, the Minister, for a clear assurance that a thorough impact assessment will be brought before both Houses of Parliament, after the various powers in this 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. Now 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, and I quote, 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 noble Lord. The Minister's providing some assurance on amendment 40 and on the Henry the Eighth Powers. I beg to move.
17:18
Lord Fox Portrait Lord Fox (Liberal Democrat)
-
-
Amendment proposed clause four, >> Amendment proposed clause four, page two. Line 30. Leave out

**** Possible New Speaker ****

negative and insert affirmative. Amendment to amendments 15 and 16 in my name. But first I speak in 16 in my name. But first I speak in support of amendments 12 and 13 in the names of Lord Sharpe and Hunt, which I have co-signed. These. Importantly, add necessary additional parliamentary control over continuing continuity obligations and property transfer regulations and we moved similar amendments in the Commons that failed to attract sufficient support there. Regarding amendment ten, the Minister has convinced me that the need to quickly transfer property rights transcends the necessity of moving to an affirmative form of of approval from a negative regulation, and that's why I have not co-signed amendment ten.

Turning to amendment 15 and 16, I've tabled these as it's important that Parliament must be kept informed once any nationalisation is effected. Amendment 15 creates a new clause, causing there to be a report on principal transfer powers from the point at which those principal transfer powers are exercised under the. Under the act, the Secretary of State must make a written statement to each House of Parliament setting out the progress and operation and the operational and financial performance of the steel undertaking in respect of which transfer power has been exercised.

The impact of this act, including. As far as it is impossible to. It is possible to assess its effects on the steel industry in the United Kingdom on employment and public finances. This duty continues until no steel undertaking remains in public ownership, and 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 that is affected by any nationalisation and subsequent changes. Now, I think it's a shame that the noble Lord MP wasn't with us during 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, the.

But also the whole of the United Kingdom. And I feel that the noble Lord MPs point is important, but if it's important for Northern Ireland, then it's important for the rest of the UK, and 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. Now, I won't repeat my speech at 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, and I hope he can elaborate some more.

The. In order for the government to avoid such issues as those that have been created by the steel tariffs.

**** Possible New Speaker ****

My Lord. There's no thank you. I rise just to draw attention, particularly to a part of amendment 16, which we have in this group, 16, which we have in this group, and I'm delighted to see the noble Lord Lord Fox has included the words industries that rely on the supply of steel, including the defence sector, because I think defence sector, because I think that is one of the themes that is running perhaps in the undergrowth, but behind very much of the
17:22
17:23
Lord Empey Portrait Lord Empey (Ulster Unionist Party)
-
-
be aware that Northern Ireland's situation is different insofar as situation is different insofar as for goods. It is covered by the Windsor framework and therefore EU Windsor framework and therefore EU quotas on steel obviously apply. quotas on steel obviously apply. But the issue, of course, is that we have the preposterous situation that we're having quotas, but we have steel flowing from one part of the United Kingdom to the other. So these two regimes are clashing. Now, the Minister and the other place indicated that HMRC is taking steps to confirm arrangements with the industry.

And bearing in mind this was happening perfectly at about 36 hours notice. So it was a huge challenge for businesses and so on to get their heads around that. It also went on to say that Her Majesty's Government will continue to provide guidance and support to traders, moving goods from Great Britain to Northern Ireland via the Trader Support Service. So another example of why we do not have a free internal market within the United Kingdom. So can I ask the Minister to confirm a has had both of these matters taken place, has HMRC taken the steps to confirm arrangements with industry? And secondly, does Her Majesty's Government continue? Is the Trader Support Service providing that guidance in invitation? Because it wasn't available last week and that is why this amendment.

So the other issue that is arising is, of course, a question of speciality steels, because the limited ability of the United Kingdom to produce them currently, and as some firms have, whose intention is to produce them, are not actually producing them. And if I could give the Minister an example of what our concerns are, if you, for instance, have a company that has a European company that has a branch, if you like, in our jurisdiction in Northern Ireland, if that company has access under its quota arrangements to speciality steel, say, for the defence sector that Lord Wigley mentioned, which is what's.

One particular issue is my mind, for instance, Harland and Wolff, if they are bidding for defence work, which will require a significant amount of speciality steels, those steels may not be be sociable within the United Kingdom. And our anxiety is therefore, that a competitiveness, price and other things could create difficulties. So given the fact that we cannot necessarily get the steels from within the United Kingdom, and I fully understand the rationale for the point of having quotas, because there's a huge surplus capacity throughout the rest of the world.

And we understand that that has to be managed. But can the Minister give an assurance that those steels can be available, that the quotas, whatever we say about having them in the first place, are adequate, under sufficient headroom to ensure that companies will not be will not be damaged or their competitiveness significantly damaged by the unavailability unavailability of those products from within the

**** Possible New Speaker ****

United Kingdom. My Lord, thank you. And I want to rise to support a Lord Empey in to rise to support a Lord Empey in the amendment, but also to to raise the issue that Lord Fox just raised the issue that Lord Fox just raised around the amendment. 15 unfortunately, that doesn't cover the specific circumstances of the specific circumstances of Northern Ireland, though, and I support amendment. 15, by the way. support amendment. 15, by the way. But a Lord MPs amendment goes further to give protection or hopefully protection to Northern Ireland and the.

The UK is introducing a new steel trade measure which was introduced from the 1st of July 2026. Sorry,

**** Possible New Speaker ****

This this bill does has nothing to do with steel tariffs. We've had several statements in your several statements in your Lordships House which have to do with steel tariffs. I'm happy to debate the effect of debate the effect of nationalisation on on on the Northern Irish market. And I I'm Northern Irish market. And I I'm happy to to to dispute that issue. However the issue of tariffs is not However the issue of tariffs is not covered in this legislation and I'm happy to have that debate.

We've had several statements in your Lordships' House which I don't

**** Possible New Speaker ****

think the noble Lord spoke in. I recognise the noble Lords

**** Possible New Speaker ****

I recognise the noble Lords indication of the tariffs, but the issue is here. We need some issue is here. We need some protection and Lord Empey seems or sees. The only way to have that sees. The only way to have that protection is to introduce this amendment. There is no other mechanism for protection. We have mechanism for protection. We have had the statements. I have asked a written questions, but the answers that we have got are unsatisfactory. So why would it not be reasonable to bring an amendment to this legislation here that can actually assist the producers or other processors and manufacturers in Northern Ireland? Now, maybe the Minister will find another way of doing so, and if he can, that is extremely helpful to us.

But we wanted to raise the issue, which is not without our reason, power to do that, because otherwise there is no other way of doing it except through this legislation at the moment. So the tariffs are extremely important simply because we have dual tariffs. Now, not only do we have the EEI tariffs because we're part of the EU economic base, but we also now have UK tariffs, which is important in Northern Ireland that we're going to have to deal with in our processors, fabricators and manufacturers have to deal with.

So I think it's unfair for the noble Lord to indicate that that it's unreasonable for us to bring this

**** Possible New Speaker ****

amendment now and have that debate. I'm just confused, because if

**** Possible New Speaker ****

I'm just confused, because if you look at the wording of 45, the noble Lord MPs, which asks for an noble Lord MPs, which asks for an impact assessment on on the likely effects on Northern Ireland, and you look at the wording of point B of amendment, which asks for an impact assessment on the effect on the United Kingdom, which of course includes the Northern Ireland. So I am wondering what. In addition, amendment 45 brings that is not covered by amendment 15, but I will shut up thereafter.
17:30
Lord Elliott of Ballinamallard Portrait Lord Elliott of Ballinamallard (Ulster Unionist Party)
-
-
Thank the noble, noble Lord for his intervention. But will he not his intervention. But will he not agree that we're in a different situation in Northern Ireland than they are in the rest of of GB, because we are under a double tariff, we're under a tariff from not only the the European Union but also the United Kingdom, which doesn't impact on those processors, fabricators and manufacturers in GB. So why is it not reasonable to ask for a special impact assessment in Northern Ireland? I think that's quite reasonable, and I'm very surprised that the noble Lord has indicated that he doesn't want that as surely if if he wants transparency, if he if he wants a reasonable outcome to this, then surely it's only reasonable that we would have that impact assessment.

Northern are happy to give way to the member if he. If he wants to argue and demonstrate why it's not reasonable that we would have that in Northern Ireland, because if you're a Northern Ireland fabricator like I have in my area in Northern Ireland, they're possibly going to have a double tariff now, one from the European Union, one from the United Kingdom. That is totally unfair and totally

**** Possible New Speaker ****

different. Given the noble Lord. Of fair hearing at this point,

**** Possible New Speaker ****

Of fair hearing at this point, could I ask him to bring his comments to a swift close so we can get on with the business in hand

**** Possible New Speaker ****

get on with the business in hand today here? OK. My Lords, I support my noble friends. On the issue of friends. On the issue of affirmative resolution, I think it's a superior device, given the importance of the matters that importance of the matters that could be brought before us. And 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 arrangement which in another life I oppose very strongly.

oppose very strongly.
17:31
17:32
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
Faulks, I would like to reflect on conversations I've had, I have had with noble Lords from across the House in recent weeks, as we have sought to secure agreement on the drafting of this Bill. The noble drafting of this Bill. The noble Lords, Lord Sharpe, Lord Hannett and Lord Fox have provided detailed feedback and suggestions on how feedback and suggestions on how parliamentary scrutiny can and should continue following any acquisition, following 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 can confirm that a debate will take place in both the House of Commons and the House of Lords on the steel Strategy and the impact of this 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 death, where a Minister considers it appropriate. The written ministerial statement may provide an update on jobs, communities and other issues, and I will detail this further in subsequent groups.

As I've 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 an acquisition or 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, and I hope that reassures the noble Lord, Lord Redwood.

Alongside the chair's attendance, the government will write to the 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 this bill. Powers and to respond to any specific request from a Select Committee. I wish to emphasise that it is for the Select committees to set their agenda. If the government or a chair of a nationalised company is asked to provide information and attend meetings, we will, of course, do so.

These commitments build on the statutory reporting requirements on financial assistance. In clause 59, the company's Annual Report and accounts and quarterly written ministerial statements, which I have set out, which I have already set out. Any nationalised steel undertaking would not be exempt from corporate reporting requirements set out in the Companies Act 2006. This act contains various reporting requirements, which 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 would be able to ask a company to produce an interim report on that particular issue.

My noble Lords have also raised a concern about ensuring stakeholders are appropriately engaged in decision making. I will provide further detail on this later, but I wish to 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 this 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 there are opportunities for Parliament to engage with the sector.

I can therefore confirm that the government will convene an ad hoc roundtable on the future of the steel sector, six months after Royal Assent. I hope this series of commitments reassures noble Lords that this government is committed to ensuring that Parliament can scrutinise any publicly owned steel undertaking, where appropriate. I just would like to thank the noble Lord Wigley for his continued engagement with this bill, and just to sort of reassure him that Minister McDonell, the Minister for industry, recently met with Minister Price from the Welsh Government, and my officials continue to engage with the Welsh Government officials to try to secure a recommendation of legislative consent for agreement on this Bill, though I am really grateful to the honourable recent discussion on these matters, and I hope to update the House on the outcome of this.

Conversations at Third Reading. My Lords, let me thank all noble Lords who took part in debates on this group of amendments which amendments 12 and 13 particularly noble Lords, Lord Sharpe and Lord hunt for the constructive engagement with me over the past few weeks. The government respects the concerns that have been raised throughout the passage. We have been clear that the government is committed to as much transparency as possible with regard to the powers in this 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 power without harming the government's ability to carry out its objective under this bill.

So I'm 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. My Lords, I will now address the other amendments in this group. Amendments eight and nine, tabled by the noble Lord Sharpe and noble Lord hunt have set out their opposition to the parliamentary procedure associated with the exercise of the share and property transfer powers in clause four and 15, respectively, respectively. While I recognise the magnitude of these powers, I must emphasise that any use of the principal transfer powers would need to be exercised promptly to ensure operational and legal certainty.

I cannot overstate the importance of this. In this scenario where the government chooses 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, tabled by the noble Lord Sharpe and noble Lord hunt, have indicated that opposition to clause 50 remaining part of the bill in the amendment 14.

I am afraid that I have to disagree in that unequivocally in this case. I have previously set out that removing this 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 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 it is, when its potential use is quite abstract at this stage. It is, by its nature, intended to deal with unforeseen circumstances in non-consensual, highly atypical transfer scenario. And I would 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 we plan to use it in this way, but merely to illustrate it illustrate its potential utility. It is also worth me repeating that the power can only be used to ensure that the transfer of power can be exercised effectively. It could not be used outside the context of nationalising a still undertaking to change or amend other laws. The use of power will be subject to the draft affirmative procedure, except in particular circumstances that justify proceeding or on a made affirmative basis.

I hope this provides some comfort regarding this issue. Now I move on to amendment five, which also table tabled by the noble Lord Fox, which would require the Secretary of State to provide quarterly written statements to Parliament updating on the progress of the nationalised steel undertaking and the broader impact of the steel of the Bill. I would like to thank the noble Lord for our discussions on this point, and I recognise the appetite for further parliamentary scrutiny of the approach to a National steel nationalised undertaking.

As I have already set out to the House, I can confirm that the government will commit to provide quarterly written statement 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 speak now to amendment 16, and also thank the noble Lord Fox for its 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 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 also pleased to confirm that we will shortly be inviting the UK Metals Council to join the Steel Council, which will ensure the views of downstream users can be fed into engagement and discussions.

However, as I previously set out, any decision to exercise, the transfer of powers would need to be made at significant speed. This amendment would delay the exercise of the transfer of powers, creating additional risks to the business viability and ongoing operations and uncertainty over ownership. In addition, there are commercially sensitive sensitivities associated with any decision to exercise the transfer of powers, making it extremely difficult to consult in advance of a decision. While I cannot accept the noble Lord Faulks amendment, I would like to 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've 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, development and investment and skills. As I've already said, having considered Lord Faulks amendments, I can confirm that the government will convene an ad hoc parliamentary roundtable on the future of the steel sector six months after Royal Assent.

I hope this reassures the House that the government regards stakeholder engagement as critical to to the revitalisation of the steel sector. Noble Lord Sharpe and noble Lord hunt have tabled amendment 40, which requires the Secretary of State to publish an impact assessment of the operation and effect of the Bill within two years of Royal Assent. I think this is a straight. I think this is straightforward for me to address, as the government has 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, a review. I can also reassure my noble, 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 also consider any further impacts in a Post-implementation review. As I've already set out, the government will ensure that a debate on the steel strategy and the impact of this bill takes place in both houses the House of Commons and the House of Lords within 12 months of Royal Assent.

This reflects our commitment to ensuring that Parliament parliamentarians remain well informed about our plans for the steel sector. Now let me turn to amendment 45, tabled by Lord MP. And I just would like to say that I'm only covering on the point about impact assessment, and I will not touch on any of the tariffs or quotas that is mentioned, together with the contributions from Lord Elliott. And now, if noble Lord would like me, I can write separately, but I'm not going to go into those details in my speech here.

So amendment 45, tabled by Lord MP MP, would require the Secretary of State to publish an impact assessment of the likely effects of the proposed exercise of a power on Northern Ireland. I would like to thank Lord MP for his engagement with this Bill, and I would like to reassure him that any use of the bill's transfer powers will require an impact assessment. If the use of the transfer powers affected Northern Ireland, or indeed Wales or Scotland, the effects will be captured in the impact assessment as appropriate.

As I've already noted, where relevant, the government would consider further impacts during a post-implementation review. Finally, my Lord, I would like to thank all noble Lords from across the House for their commitment to ensuring that parliamentarians have the appropriate powers to scrutinise this bill, and I hope my comments reassure all noble Lords. OK.
17:47
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
-
-
My Lords, this has been a very important debate and I would like important debate and I would like to pay tribute to the noble Lord, the Minister. His approach to this the Minister. His approach to this bill has been exemplary. We may disagree and we do disagree, but what I would like to say to the noble Lord, the Minister is he has set an example which it will be difficult to follow for his ministerial colleagues, because he has listened, cared deeply about all the points we've raised, and I'm sure I speak for the noble Lord Fox, as well as my noble friend and friends across the house.

We have been not only listened to, but the noble Lord. The Minister has responded in positive terms and where he has not been able to agree, he has explained why he cannot agree, and I think I do thank the noble Lord Lord Wigley for making sure we don't forget that vitally important Welsh dimension. And my noble friend Lord Redwood, always scrutinising the public expenditure side of this bill. But I also say to the noble Lord Lord Fox that with him I believe we have now received from the noble Lord the Minister a series of comprehensive assurances which, particularly on the impact assessment, which will enable us to proceed in a positive way.

Now, I just say to the noble Lord, Lord MP, and the noble Lord, Lord Elliot of Ballinamallard, that they have raised issues which don't, as the noble Lord Fox pointed out, don't fall directly, but they do fall within the impact assessment. And that is why it was important that those points were raised. Now, the noble Lord, the Minister, will argue that there is a case for a Henry the Eighth power in an emergency bill of this kind. And I have to say, we remain concerned about the breadth of clause 50 and the precedent it may set, but I'm very grateful for the engagement given in this debate, and I thank the noble Lord, the Minister.

In the meantime, I beg leave to withdraw the amendment number eight.

**** Possible New Speaker ****

Is it. Your Lordship's pleasure. That amendment eight be withdrawn?

**** Possible New Speaker ****

Amendment by. Leave. Withdrawn. Amendment nine Lord Fox move formally. The question is Fox move formally. The question is that amendment nine be agreed to. As many of that opinion say, content but not content. The content but not content. The contents have it. Amendment ten Lord Hunt of Wirral not moved. Lord Hunt of Wirral not moved. Moved. Amendment 11. Lord Sharpe of Epsom not moved. Amendments 13, 12 and 13 move formally. En bloc. The question is that amendments 12 and 13 be agreed to.

En bloc as many of that opinion say, content contrary not content the contents have it. Amendment 14 Lord Hunt of Wirral not moved. Not moved. Not moved. Amendment 15 Lord Fox not moved. Amendment 16 Lord Fox not moved in. Clause 53. Amendment 17 Lord Leong.
17:50
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
I'm pleased to introduce a set >> I'm pleased to introduce a set of amendments that the government has tabled. I hope that we have demonstrated throughout this demonstrated throughout this passage a willingness to listen to and engage with the concerns raised by your Lordships regarding the Bill and to consider potential solutions in tabling these amendments. We are seeking to address. Raised by the noble Lord Lord Fox regarding this questioning nature of the appointment of an independent valuer. I previously noted that it is the government's intention to appoint a valuer whenever the principal powers in the bill are exercised.

We therefore consider that the noble Lord suggestion to make this mandatory are reasonable. Amendment 17, therefore, makes 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 to carry out valuations for the purposes of the regulations, which is a critical step in determining any amounts of compensation. I hope these amendments demonstrate the government's constructive approach and that noble Lords will support them.

Turning to amendments 2020 123, put forward by 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, and I'm sure I'm referring to the points made by the noble Lord, Lord Redwood. Earlier, I've said during the passage that the government will seek to address concerns from noble Lords as far as possible.

Now, many companies operating in heavy industries such as steel, operate as normal with contingent liabilities. The precise costs associated with environmental liabilities would depend on many factors, including the extent that land will be retained for future steel making, kept safe or remediated for alternative light industrial use. Nonetheless, 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.

So I'm therefore pleased to confirm that the government will support this amendment and hope the House will support them.

**** Possible New Speaker ****

Amendment proposed. Clause 53, page 34. Line 26. Leave out from regulations to buy in line 27 and Insert must provide for any valuation for the purposes of the

**** Possible New Speaker ****

regulations to be carried out. Goes to the Deputy Speaker and I

**** Possible New Speaker ****

Goes to the Deputy Speaker and I was. My enthusiasm to embrace the. The positivity from the Minister got got the better of me. My Lords,
17:54
17:54
17:55
17:56
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
Amendment 17 move formally, the question is that amendment 17 be agreed to as many of that content. If you're not content, the contents have it. Amendments 18 and 19 move formally. En bloc En bloc. The question is that amendments 18 and 19 be agreed to. En bloc as many of them have been will say, content not content. Their contents have it. Amendments 20 and 21 Lord Fox formally, formally. The question is that amendments 20 and 21 be agreed to En bloc many of that opinion say

**** Possible New Speaker ****

content not content, the contents have it. Amendment 22 Lord Leong move formally. Formally.

**** Possible New Speaker ****

Formally. The question is that amendment 22 be agreed to. As many of that opinion will say, content not opinion will say, content not content. The contents have it. Amendment 23 Lord Fox more formally, Amendment 23 Lord Fox more formally, question is that amendment 23 be agreed to? So many of them will say agreed to? So many of them will say content not content. The contents have it. amendment 24 Lord Fox not moved moved amendments 25 to 30 move formally En bloc formally.

En bloc. The question is that amendments 25 to 30 be agreed to. En bloc so many of them have been will say, content, not content, their contents have it in clause 58, amendment 31 Lord Hunt of Wirral.

**** Possible New Speaker ****

I rise to move amendment 31 together with amendments 32, 33, 35 together with amendments 32, 33, 35 and 36 standing in my name, and that of my noble friend, and also that of my noble friend, and also to support the similar sentiments and approach expressed in amendment and approach expressed in amendment 37. Of course, I don't wish to repeat the arguments made in repeat the arguments made in committee, but on these benches we remain gravely concerned by the open ended cost to the taxpayer, which this bill potentially permits.

The government has already announced £2.5 billion of taxpayer funding for the steel sector. That is the figure Ministers have chosen to present as a demonstration of their commitment to rebuilding and modernising British Steel and the
17:59
18:01
Lord Redwood Portrait Lord Redwood (Conservative)
-
-
Amendment proposed clause 58, page 39. Line five. After assistance, insert the words is printed on the bottom of this.

**** Possible New Speaker ****

printed on the bottom of this. My Lords, my noble friend has raised once again this crucial and raised once again this crucial and fundamental point, and I think it is of great importance and of help to the government in. When I've had in past 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've always found it was an essential discipline. First of all to institute very frequent reporting because you need to signal to the executives actually undertaking the day to day work that the financial state of the company is at risk, and they need to give greater priority to this, and you need to help them get clarity over why the cash is draining out of the business.

Now, this business, British Steel, which is under the operational control of the government, is draining cash, we believe, at 500 million a year. This is a phenomenal rate of loss, which is going to have an obvious impact on the public accounts. When we know government money is scarce and there are many other priorities, and we need to know rather more about why it's 500 million. I mean, is there any residual investment programme left? Because that would be the first thing to go when you're trying to say save cash, are they still committing money to raw material stocks because they clearly shouldn't be allowing more material stocks? Do they have a very large stock of finished product which they're not able to sell sell? In which case, what is the plan for trying to move that stock on, and what is the reality of what is the price level they're going to get for that stock? Because obviously stock is a mixture of volume and value.

And you've got to try and maximise the cash you can get for the stock you've got before you would normally go on to produce more. But this this plant has this particular problem that you have to keep on producing, even if you're not able to sell enough of the product at a sensible price. And obviously, you would expect regular reporting, certainly to the chief executive appointed by Ministers. But I would have thought the the Minister, with day to day responsibility for this, to know what is going on and on the trading accounts, because a lot of the cash going out may be maybe trading losses.

You would want to see an urgent plan for selling more and for economising on costs wherever you can, whether that may be bought in materials or the productivity of labour, or the other overhead costs of the business is incurring. And what I haven't felt during these debates so far is I haven't felt the government urgency about this financial problem. And every pound that goes out of the door on losses at a steel maker you're responsible for is a pound that cannot be spent on the new and better industry that you really need in order to, to take the country forward.

Now, I'm not blaming the Minister. He is being exemplary in his conduct and his helpfulness, and I'm sure he wants, as we all do, a good outcome to this. But in those conversations within the ministerial offices, I think it would be good if a Minister in the other place, for example, could make more statements which showed that there was a a plan and a determination to rescue this industry that we we all wish to rescue. And in this group of amendments, there is talk about quarterly reporting.

Well, this is a big enterprise in terms of people and scale of loss, and it is quite common now in the public sector for quarterly reporting to be quite normal. And it is a good discipline even for the most profitable businesses in the world, that they they do quarterly reporting because people like to make sure that the trends are still good and that the managers are in charge of it. So I just thought quarterly reporting was the bare minimum. But if it was somebody's day to day responsibility, you would obviously need rather more frequent reporting than that.

But I think the public deserves quarterly reporting from this industry, which it now has a substantial operational stake in. So I would urge the Minister to think about more regular public clarity, and I hope that they do have this very detailed, short term, regular reporting going on, and 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, because if they don't control the outflow of cash, it will end in tears and redundancies.
18:06
Lord Sentamu Portrait Lord Sentamu (Crossbench)
-
-
My Lord, I stand to simply question amendment 31. When you question amendment 31. When you look at paragraph two are of look at paragraph two are of section 58, there are many different ways in which the government is trying to look for assistance by way of grant, loan guarantee or indemnity, acquisition of shares or any other interest securities body corporate by the acquisition of any undertaking of any of the assets pursuant to the contract by incurring expenditure to the benefit of the person assisted.

It seems to me that in a Bill of this nature, to put a tag called a 2.5 billion by the end of 13th of August 2029, I'm one of those who says, yes, we must plan for the future. We must make sure that we do not spend above our means, but sometimes to do this kind of restricting element, I just find it doesn't give me confidence that actually we're interested in nationalising steel. Because yes, there are so many unknowns, but the debate in.

When we are all summoned by the Prime Minister in order to rescue rescue this steel industry in Scunthorpe, it was quite clear that the place and the books are not very encouraging. But this is a

**** Possible New Speaker ****

national asset. What do you do? So it seems to me that to put

**** Possible New Speaker ****

So it seems to me that to put that on the face of the bill is almost saying we are legislating almost saying we are legislating for failure. Because if if, for for failure. Because if if, for example, it is 2.6 billion, not 2.5, what will. The whole thing will collapse. So I think putting collapse. So I think putting figures in here is not the sort of thing I think is good for legislators, because if you've got the Exchequer, we've got all kinds of people.

And it seems to me, let's not try and turn this Report stage as if we are at the Treasury. We are not. And therefore I would urge that the noble Lord, having flagged it up, will nevertheless withdraw his amendment, because I would find it quite, very difficult. I remember being in Birmingham and and actually Rover cars. They had had BMW, they took the mini, but we left the other plant and the government was only being asked 600,000 millions in order to keep the plant.

They were already in agreement with China in order to to sustain it. But because of the laws about government supporting our businesses from the EU, the government found itself. It couldn't. And the. The plant went. So for me, please, my Lords, I always respect Lord Sharpe Lord hunt because of their reasonableness. But for me, if you don't mind me telling you as a little a little comer, as a, as a, as crossbencher, instead of being on those other rarefied roads, spiritual.

I just want to say, no, you're not losing a little bit of what I've always taken you for this this this thing is. No, no.
18:09
Lord Fox Portrait Lord Fox (Liberal Democrat)
-
-
But my Lords, I welcome the the >> But my Lords, I welcome the the the the right Reverend prelates dissent from the spiritual to the to the temporal and indeed the to the temporal and indeed the financial. And his contribution is appreciated. And I welcome all those who haven't had the joy of those who haven't had the joy of participating in the steel steel Bill debate so far. My time. Before I speak to amendment 31, I'm going to speak to amendments 34 and 37, which are in my name, and I'm happy to say that the.

The noble Lord. The Minister pulled the rug from under my feet with respect to amendment 34, when he spoke to a previous group of amendments in in amendment 34, I was seeking to promote a role for the select committees going forward, and I'm happy to say that the Minister has taken on board the. To a large extent that that suggestion. I do think it's important that that select committees are able to get under the bonnet of this to to look at the nature and the amount of financial assistance, really to the point that's been raised.

The the beneficiaries of that financial assistance, the purpose and the effect of that financial assistance and conditions of repayment, and the points that the noble, the right reverend Prelate made about the nature of, of, of any support. But I'm happy to say that that was that was very much, I think, covered by the previous comments. Amendment 37 insists on a report to outline the impact of financial assistance provided under section 58, with a focus on the short and long term investability of any nationalised steel undertaking.

Now, in tabling this amendment, I'm hoping the Minister can put on record again what he told and committee regarding the long term aim of the government regarding of returning these public assets into private hands, and I think it will help your Lordships if the Minister is able to repeat that on amendment 31. The Liberal Democrats in the Commons tabled an amendment to cap financial assistance, but I would point out that we were dealing with that bill. We're now dealing with a different bill.

The government has accepted amendments seven and nine, where we are, where, where, where value for money is accepted on the face of the bill as a as a criterion, we have inserted rigorous quarterly reporting for the noble Lord Redwood will remember two groups back. That amendment has been accepted and we will have quarterly reporting. We. We've, as we've just said, created ensured a role for select committees in scrutinising any nationalised industry. And we've implemented mandatory valuation of contingency liabilities.

So that bill is not the bill we're talking about. And I am persuaded that flexibility is required. I did I did think the noble Lord, Lord hunt, put in a spirited performance and at one point was possibly auditioning for the role of Chancellor, which may well be when he talks about magic money trees, I. I did think that he was he. 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 actually his 2.5 billion becomes a target rather than a limit. And so I think given the controls, given the elements that we put into the bill, we will

**** Possible New Speaker ****

not be supporting amendment 31. My Lords. Firstly, let me thank all members for their contribution. all members for their contribution. And thank the noble Lord for for And thank the noble Lord for for his support as well. Let me turn to amendment 32. In the name of noble Lord Sharpe and noble Lord hunt. Now, this amendment would require that details of any proposed financial assistance under clause financial assistance under clause 58 be provided to Parliament before the assistance can be granted, and the noble Lord Fox is also raised.

The issue of parliamentary scrutiny in respect of this clause in
18:13
Lord Leong Portrait Lord Leong, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
-
-
amendment 34, which would require detailed proposals to be put forward before Parliament for a 90 forward before Parliament for a 90 day period and allow the Select Committee to make recommendations which the government must respond which the government must respond to before any assistance is forthcoming. My Lords, I understand that these amendments address the that these amendments address the concerns of all noble Lords about the potential to incur costs in relation to the powers in this Bill. 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 uses the powers in the Bill to transfer a still undertaking into public ownership, costs may incur 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 government. Despite the good intentions behind them. As set out in clause 59 of the Bill, 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 now. Amendment 31, tabled by the noble Lord Sharpe and hunt would cap financial assistance under clause 58 at £2.5 billion for the period until August 2029.

My Lords, I do not think a cap would be helpful at this stage where the government exercises the transfer of powers to nationalise a steel undertaking. Our objective would be to stabilise the business and make operational improvements. We would work closely with this leadership team on its long term future, with the aim of revitalising the business and returning it to commercial viability. Viability. This will require significant government investment. Imposing an arbitrary cap in the Bill would only constrain the government's ability to deliver effectively on its policy objectives.

A cap is also a blunt instrument. It does not ensure that money is well spent, which I understand to be more to be the more pressing concern of the noble Lords. Amendment 33, also tabled by the noble Lord Sharpe and Lord hunt, will require the Secretary of State to be satisfied that any financial assistance would provide value for money before it was provided. I have already made the point that value for money considerations are embedded in government decision making. I would add that, as we have discussed in a separate group, the government is prepared to include a duty on the Secretary of State to consider costs when deciding whether to exercise the principle transfer of powers.

I think that duty helps to offer something similar to this amendment, and I do not think this is necessary. In addition, the amendments 35 and 36. Also in the name names are Lord Sharpe and Lord Hunt and Amendment 37 in the name of Lord Fox address the reporting provisions in clause 59. Amendments 35 and 36 would require the Secretary of State to provide quarterly reports to Parliament on financial assistance provided under the Bill. I have separately noted the government's commitment to provide quarterly written ministerial statements to Parliament, updating on progress in relation to any exercise of the principle transfer of powers.

I can confirm that this would include an update on costs, which I think aligns with the intention of this amendment, and I hope provides some reassurance to noble Lords. Amendment 37 would require the reporting to consider the impact of the financial assistance provided on the short and long term investability of the steel undertaking. I share the noble Lords ambition to ensure that public money put into a steel undertaking would be used to improve its commercial position. If I have said previously, and I'm more than happy to state that it is not the government's intent to retain a nationalised steel company on the public balance sheet indefinitely.

Where the powers in the bill are exercised, they will be with a view to consider how a positive future can be achieved, including whether there are future opportunities for private investment once a business has been turned around. So, my Lords, I do not think the reporting mechanism in clause 59 is the right place to reflect this ambition, but it is right that it would form part of the thinking for both government and a nationalised company. We will look at how that is best communicated to Parliament.

So, my Lords, I'll conclude and say that I hope I've been able to reassure noble Lords on on the amendments in this group, which I will not be

**** Possible New Speaker ****

supporting. My Lords, I'm very grateful to the noble Lord, the Minister in the noble Lord, the Minister in particular for those additional particular for those additional comments he made. And I do know the noble Lord Fox, and I and my noble friend will be reassured about the friend will be reassured about the way he is termed the positive
18:19
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
-
-
way he is termed the positive future that we all want to see. But as my noble friend Lord Redwood pointed out, the government has still not provided Parliament with a clear limit on the potential exposure facing taxpayers. Now, I don't know whether the noble Lord, the Minister, has any aspiration to become a Treasury Minister, to become a Treasury Minister, you have to believe in caps. There is no other way in which you can become a Treasury Minister. And I have to say the to the noble and right Reverend Lord Lord Sentamu.

That the government just has to come to Parliament. If they require more money, they should ask Parliament for more money. At the moment, they've said 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

**** Possible New Speaker ****

of billions of pounds. Therefore, if they can come to Parliament to ask for it, don't put the limiter in the bill which you have done in section 31.

**** Possible New Speaker ****

have done in section 31. But if the.

**** Possible New Speaker ****

If the noble and Right reverend Lord doesn't support this amendment, there will be. It will be unnecessary for the government to come and ask for more money. It's only when you have a cap that the government has to be accountable to Parliament, and for the reasons I've outlined, and because taxpayers should never be asked to sign a blank cheque, I wish to test

**** Possible New Speaker ****

the opinion of the House. The question is that amendment

**** Possible New Speaker ****

The question is that amendment 31 be agreed to. As many as of that opinion will say content. To the contrary, not content.

**** Possible New Speaker ****

contrary, not content. Not content. My Lords. Before we actually divide the

**** Possible New Speaker ****

Before we actually divide the House, I need to inform the House. There have been intermittent network issues on the estate network issues on the estate because of the small risk. This may cause temporary disruption to the past readers and the division system. I've agreed with the usual channels to extend the time for divisions from 8 to 10 minutes. I would also ask all noble Lords to ensure they firmly tap their past on the past. Reader. If in doubt, tap your past a second time.

This is the only. Record your vote once and we all remember. Beep means you have voted and no beep means no

**** Possible New Speaker ****

vote. We'll all be fine. My Lords, my Lords, the question

**** Possible New Speaker ****

My Lords, my Lords, the question will be decided by a division. I will inform the House when voting will inform the House when voting
18:22
18:36
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Conservative)
-
-
My Lords, I rise to speak to amendments. 38 and 39 standing in amendments. 38 and 39 standing in my name, and that of my noble friend Lord Hunt of Wirral. On amendment 38 I hope the Minister amendment 38 I hope 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 and turning to amendment 39 in committee, the Minister gave assurances 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 today. Could the Minister 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? And could he also confirm that Ministers are satisfied that the proposed support will comply with the World Trade Organisation's subsidy rules? I look forward to

**** Possible New Speaker ****

the Minister's response and beg to move. Amendment proposed after clause 60. Insert the following new clause 60. Insert the following new clause as printed on the marshals list.

**** Possible New Speaker ****

as printed on the marshals list. No Lord Stern. The amendments in this group addresses inward investment and a level playing investment and a level playing field. I wish to emphasise that the outset that this government is committed to ensuring that any committed to ensuring that any publicly owned steel undertaking is subject to the same requirements and standards as any privately
18:37
Lord Leong Portrait Lord Leong (Labour)
-
-
owned steel undertaking. Regarding amendment 38, this amendment, in the names of the noble Lords, Lord the names of the noble Lords, Lord Sharpe and Lord Hannett, will place a duty on the Secretary of State to report to Parliament on the impact report to Parliament on the impact of any nationalisation of steel undertaking on inward investment in undertaking on inward investment in the UK. I would like to reassure your Lordships that the government is committed to revitalising the is committed to revitalising the steel sector and to establishing an investable, competitive business environment.

To date, we have received positive feedback from industry on this 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 in any intervention would be to make the changes necessary to put the steel undertaking on a sure footing and, where possible, return it, return it to a position where it could attract private investment. As I've set out previously, any use of a transfer of powers would require an impact assessment.

This would set out the impact of nationalisation on the economy and, where appropriate, the government would undertake post-implementation reviews. As I've confirmed, the government will ensure that a debate on the steel strategy and the impact of this bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent. Turning to amendment 39 again in the name of noble Lords Lord Sharpe and Lord hunt, which 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 wish to state that any financial assistance would be time limited, targeted and proportionate to avoid market distortion. The provisions of any funding would comply with domestic and international subsidy control obligations. My Lords, I hope this reassures noble Lords that the government is committed to ensuring that any publicly owned steel undertakings are not unfairly

**** Possible New Speaker ****

advantaged. AM I grateful to the noble Lord, the Minister, for his remarks? It the Minister, for his remarks? It was particularly pleasing to hear that the government have received positive feedback from the industry, positive feedback from the industry, and it's not for now, but I was wondering if the Minister might be in a position to be a little bit more specific, and perhaps write to more specific, and perhaps write to noble Lords who've taken part in this debate outlining some of those positive comments.

I think it would help contextualise our future
18:40
18:41
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
-
-
>> My Lords, I rise to speak to amendments 41, 42 and 43 standing in my name, and that of my noble friend, as we stated in committee, the carbon border adjustment mechanism and the Emissions Trading Scheme will have a material effect on the domestic steel sector. The government will no doubt argue that CBAM and the 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, but 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. So may I please therefore, invite the noble Lord, the Minister, to confirm that the future impact assessment to which the government have referred will include a full assessment of the effects of CBAM and the ETS on the domestic steel sector.

If the government is 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

**** Possible New Speaker ****

is why I wish to move this amendment. I beg to. Amendment proposed after.

**** Possible New Speaker ****

Amendment proposed after. Clause 60. Insert the. Following new clause exemption of iron and steel carbon border of iron and steel carbon border adjustment mechanism goods as printed on the master list.

**** Possible New Speaker ****

My Lords, I'm very grateful my noble friend has raised this important point. We would probably not be having these big debates 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. But we are where we are. And so my noble friend is right to ask the Minister to give some reassurances.

And what we seem to be involved in is overtaxing carbon and then having to subsidise those businesses that suffer as a result. Now, of course, it's the case that when it comes to the CBAM, the CBAM is a EU designed scheme which we are copying to try and
18:44
Lord Redwood Portrait Lord Redwood (Conservative)
-
-
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 on the imported goods from countries that don't impose such countries that don't impose such carbon taxes and carbon additions to the energy they're using in industrial plant. And that does industrial plant. And that does help in some way for the domestic steel producing industry. It becomes a problem for the domestic steel using industry, where they're having to import steel beyond the tariff free quota provided under the CBAM.

And we note that the tariff free quota is skewed to favour European producers rather than other producers from around the world who might be otherwise cheaper or more advantageous. So I do hope the Minister will consider very carefully what the right structure is going to be for a steel industry owned, in whole or part by the government, because it is a strange money go round to charge too much for energy and then have to give it back by way of grant and showing losses in the business you own.



**** Possible New Speaker ****

My Lords. We we've debated CBAM and ETS at Committee stage, and I'm and ETS at Committee stage, and I'm not going to add to that debate, but I'm going to ask a question which I didn't ask of the proposers, which I didn't ask of the proposers, which is how is a business a steel business affected differently by business affected differently by CBAM or ETS, whether it is publicly owned or privately owned? The answer is it isn't. This bill is about the the potential public ownership of steel.

We will have to have a debate about CBAM, about ETS. We are continuing the Liberal Democrats, often talking about energy prices, but not in the context of this bill, because this bill is about whether a a steel entity is in public or private ownership. And frankly, CBAM will affect them the same way, no matter

**** Possible New Speaker ****

where that ownership lies. My Lord, let me thank all for their contributions to this debate on the emissions trading Scheme and the carbon border adjustment mechanism, which I'll refer to as CBAM from now on, and their impacts on the steel sector. Notably, this amendments seek to exempt a publicly owned steel undertaking from both of these environmental measures, thereby undermining the level playing field that the noble Lord, as stated in the. The. The previous group. At the outset, I wish to emphasise this government's commitment to its industrial decarbonisation policies and to moving towards a green and decarbonised steel sector.

Whilst I appreciate there may be different differing views on this issue, these amendments would completely undermine the government's objectives for these measures. These commitments build on a statutory reporting requirement on financial assistance in clause 59, the company's Annual Report and accounts, and the quarterly written ministerial statements, which have already set out any nationalised steel undertaking, would not be exempt from the corporate reporting and requirements as set out in the Companies Act 2006. This act contains various reporting requirements, which vary depending on the size of the entity, where relevant material are written.

Ministerial statements may refer to a wider contextual or regulatory impact. In addition, as previously mentioned, the Secretary of State would have the ability, if needed, to request an interim report on a particular issue. Turning to amendment 41, which seeks to exempt the publicly owned steel undertaking from CBAM, I understand the concern expressed by the noble Lord. However, I wish to emphasise that CBAM 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 the 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 comparative carbon price to that paid by UK manufacturers. My Lords, turning to amendment 47, I understand the intention behind this amendment and the desire to ensure that Parliament remains informed about the impact of carbon pricing policy on the steel sector.

The government is committed to supporting a competitive and sustainable steel industry while also delivering our decarbonisation objectives. However, the UK Emissions Trading Scheme and CBAM mechanisms are economy wide 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 operation of the scheme under review. The scheme contains statutory review mechanisms and the authority has committed to continuing monitoring of both free allocation policy and the interaction between ETS and CBAM.

The authority has also recently confirmed that the extension of UK ETS beyond 2030, and will continue to engage with industry and consult on future scheme designs, ensuring the impacts of affected sectors are properly considered. Given this existing review mechanism, we do not believe it is necessary to create a separate statutory requirement for particular transferred steel undertaking. Turning to amendment 43, which seeks to exempt the 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, like 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. My Lords, I wish to emphasise that the ETS includes targeted protections for energy intensive trade exposed industries, including steel. Further protections will be introduced through CBAM from 2027. My Lords, the government remains 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 framework within the same fair and consistent framework, and I hope my comments

**** Possible New Speaker ****

reassure noble Lords. My Lords, I am very grateful to

**** Possible New Speaker ****

My Lords, I am very grateful to my noble friend Lord Redwood for highlighting, as he did, the highlighting, as he did, the importance of ETS and CBAM. And I would just say to the noble Lord would just say to the noble Lord Lord Fox, I think the British taxpayer has a right to know. The 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 I think the taxpayer has a right to know
18:53
18:53
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Conservative)
-
-
Is it your Lordship's pleasure? This amendment be withdrawn. The amendment is by leave withdrawn. amendment is by leave withdrawn. Amendments 42 and 43. Lord Sharpe not moved. Amendment 44. Lord

**** Possible New Speaker ****

not moved. Amendment 44. Lord Sharpe of Epsom. My Lords, when we debated this amendment in committee, the amendment in committee, the Minister suggested that it is somehow about industrial relations. My Lord, it is not. This amendment is about our national security. The Prime Minister has himself warned the House that the country and the country that we may face aggression from Putins war machine against a NATO ally, before ally before the decade is out. Let that sink in, my Lords.

Not if, but a real and growing watch risk on our watch in this decade. And 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 very 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.

My Lords, 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 to the nation's defence. My Lords, you cannot have it both ways. So I ask the Minister, if a strike stopped the plates and the girders needed for a Royal naval 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, then the government should accept this amendment today, rather than legislate the problem into existence and hope it never arrives.

My Lords, in an earlier group, the noble Lord, 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. And my Lords, we on these benches are not afraid to say what needs to be said that in an uncertain and dangerous world, national security must remain a priority. So I urge the government that in the interests of national security,

**** Possible New Speaker ****

that they accept this amendment. And I beg to move. Hey. Yeah.

**** Possible New Speaker ****

Hey. Yeah. Amendment proposed after clause 60. Insert the following clause. Industrial action affecting a

**** Possible New Speaker ****

Industrial action affecting a transfer of steel undertaking as printed on the Marshalled List. My Lords, the noble Lord Sharpe

**** Possible New Speaker ****

My Lords, the noble 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 of the
18:56
Lord Fox Portrait Lord Fox (Liberal Democrat)
-
-
house, and those Lordships, those that were here were sat on that side of the house. The only thing side of the house. The only thing that broke me from that reverie, that far from it being the noble Lord Sharpe at the Dispatch Box, it was the noble Lord Callanan, and he was the noble Lord Callanan, and he was proposing the strike, the strikes, Minimum Service Levels Act strikes, Minimum Service Levels Act of two, 2023, in which the. The the government of the day sought to do government of the day sought to do exactly as the the the.

The noble Lord Sharpe sought to. Is seeking to do through this amendment, and I would ask the noble Lord Sharpe how many times was that applied? How effective was it? And the issue 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

**** Possible New Speaker ****

secure the security of this country. My Lords, I would like to thank all the Lords for their all the Lords for their contributions, and I thank Lord Fox for for those words, as this is the for for those words, as this is the last group of amendments we will discuss today. For basically, for all the constructive approach to all the constructive approach to the scrutiny of this bill. In particular, I would like to thank the noble Lord Lord Sharpe Lord the noble Lord Lord Sharpe Lord Hain and Lord Fox for taking the time to meet with me over the last few weeks.

My Lords, I believe that
18:58
Lord Leong Portrait Lord Leong (Labour)
-
-
the way in which we have been able to collaborate, to refine and improve the bill truly shows your improve the bill truly shows your Lordships House at its very best. Lordships House at its very best. My amendment 44 in the names of Lord Sharpe and Hunt, and before I speak further to it, I just want to state that the government takes national security seriously and it national security seriously and it is priority. The amendment seeks to prohibit or restrict industrial action where there is sufficient risk to the public interest, on the grounds that the steel undertaking is brought into public ownership.

I understand 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 wish to emphasise the absolute importance of workers rights. The steel workforce is the backbone of this industry, and this government is committed to protecting their rights and working with the trade unions and the workforce to ensure that the workforce, the operations, are as effective and secure as possible.

Of the Employment Rights Act. Worker's rights is an issue close to my heart. Whilst political differences remain, we're 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.

My Lords, my Lords, I hope I've convinced noble Lords of the reasons why the government cannot support this amendment, and I would therefore respectfully ask that this

**** Possible New Speaker ****

amendment be withdrawn. Well, my Lords, I'm very grateful to the Minister for his response and in particular, for the recognition of the central importance of national security in importance of national security in this matter. And that, my Lords, is very welcome. But recognition is not the same as resolve. So if the not the same as resolve. So if the Minister truly accepts the force of the argument, then the surest way to demonstrate that is not warm to demonstrate that is not warm words at the despatch box, but acceptance of the amendment.

And I would gently say to him that he could have strengthened his own case considerably by doing just that to the noble Lord, Lord Foxwell. I'm grateful to him for pointing out my party's admirable consistency, which sometimes we are
19:01
This debate has concluded
Return to start of debate - Return to top of page