British Steel

Lord Redwood Excerpts

Monday 20th July 2026 Lords Chamber

[Lord Leong (Lab)]

My Lords, the Government’s current view is that, given British Steel’s history of loss-making and its poor financial position, the commercial value of the business today is nil. However, compensation will not be decided by ministerial assertion. Regulations will be laid in the autumn to appoint an independent third-party valuer. That valuer will assess what compensation, if any, is owed and the Government will abide by that process.

[Lord Redwood (Con)]

On nationalisation, have the Government also taken responsibility for the historical debts and borrowings, pre-spring 2025, that the company incurred under Chinese owners? That is a very large historical debt that we should not have to share.

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[Lord Leong (Lab)]

My Lords, the Government recognise that some specialist grades of steel used in precision engineering, aerospace, defence and advanced manufacturing are not currently produced in the UK, or are not produced in the required quantity or to the required specification. The steel strategy aims to increase the proportion of UK demand met domestically, including for specialist needs, as my noble friend mentioned. British Steel’s new board will need to consider how the company supports a wider industrial strategy and the needs of downstream manufacturers.

[Lord Redwood (Con)]

Can I confirm that the Minister said yes when I asked whether the state is taking responsibility for all the historical debts and borrowings?

[Lord Leong (Lab)]

My Lords, I said in my previous answer that we will abide by the independent valuer’s final valuation.

Steel Industry (Nationalisation) Bill

Lord Redwood Excerpts

Report stage
Wednesday 8th July 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, in moving Amendment 1, I will speak to Amendments 7, 9 and 24 in my name.

In Committee, I noted the difficulty of phasing the exercise of the principal transfer powers and the need for scrutiny by Parliament—there is a dichotomy. At the heart of my concerns then was that Parliament would potentially be signing a blank cheque. On the other side, there may very well be a need to move swiftly in the event that a decision is made to nationalise a steel asset.

The first three amendments in my name in this group go some way to brokering this compromise. They offer two different routes of addressing the issue of the Secretary of State’s obligations regarding the financial cost of any intervention. Amendment 1 directs this attention to Clause 2 and inserts an obligation on the Secretary of State to take into account the impact on public finances before exercising the principal transfer. However, during Committee and subsequent discussions with the Minister, it became clear that the Government feel they have some legal reservations about any modification of Clause 2. Therefore, Amendments 7 and 9 seek a similar action but focus on Clauses 4 and 15 respectively instead.

Overall, of course, government decision-making relies on tests that must be conducted by accounting officers. I expect the Secretary of State would have the impact on public finances in his or her mind at all times, and I am sure there would be some Treasury Ministers leaning over that particular Secretary of State in the event that any decisions were made. However, by putting this responsibility in the Bill, it will be easier to hold the Secretary of State and the Government at the time to account on the value for money of any issue. In the event that the Minister feels constrained in accepting Amendment 1, I hope he will accept Amendments 7 and 9.

Amendment 24 addresses a different issue and returns to pension liabilities, which we debated in Committee. It is clear that, in the event the Government exercise the principal transfer power enabled by the Bill, the pensions of all ex and current workers of that asset become an important responsibility. This amendment is clear in its assertion that Parliament needs a view on these liabilities. If the Minister is unable to accept this amendment, I hope he will take the opportunity to clarify the Government’s approach to pensions from the Dispatch Box. I beg to move.

[Lord Redwood (Con)]

My Lords, I am grateful to the noble Lord, Lord Fox, for reminding us of the importance of contingent liabilities and the need for the Government to complete due diligence before any acquisition. He rightly says that in a hypothetical case—not British Steel Scunthorpe—it might be necessary to move quickly, and then there will have to be some trade-offs. But if we are talking about British Steel Scunthorpe, there is obviously no need to move quickly. The Government moved very quickly many months ago, and there can still be proper analysis. I would hope, indeed, that as Ministers and their chosen executives are now responsible for British Steel, while they do not own the assets, they would have done a lot of this very important preparatory work on discovering the contingent liabilities.

Where in Amendment 11, the contingent liabilities are mentioned by category, there is an omission which could be extremely important: liabilities to employees for past problems with safety and health, and—God forbid that this does not happen—for any liabilities that might follow now that the business is under the operation or control of Ministers and their chosen executives, if some safety or other health problem arose. Where people are running these very large, industrial businesses, with the obvious threats of a very powerful fire in the furnace and the dangers of extremely hot liquid steel being moved around, it is crucial that Ministers and their chosen executives have taken all the right decisions on making sure people have the right protective clothing, there are the right protocols, and there is an absolute segregation for the employees from the risks. There also needs to be an understanding of whether there have been any longer-term health risks from the atmosphere around the blast furnace or the intense heat of some working conditions.

If Ministers have not already done so, they need to take this very seriously. Whenever I was responsible for a big plant, my main nightmare was that something would go wrong on safety, and that would be unforgivable. I am not expecting the Government to give ground on these amendments, but it would reassure the House and the wider public if the Minister could tell us more about where they have got to, at least in general terms, with exposing the contingent liabilities on pensions, safety and employee health, as well as with the other financial matters mentioned clearly in these amendments.

[Lord Wigley (PC)]

My Lords, I am delighted to support the amendment put forward by the noble Lord, Lord Fox, and I agree with his earlier analysis. As it happens, I agree with a lot of what the noble Lord, Lord Redwood, said on this as well. Whereas there may be certain safeguards in Scunthorpe, there is considerable worry in somewhere like Port Talbot arising from some of the experiences we have had, which I referred to in Committee. I hope the Minister will be able to give some assurances on this.

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[Lord Redwood (Con)]

My Lords, there will be an issue with the public interest case, if and when we get to the full nationalisation of British Steel at Scunthorpe. Many of us are unclear as to whether the Government’s aim is to find a medium-term or longer-term solution to the problem of how to keep the two existing blast furnaces running and keep a basic steel-making capability in the United Kingdom, or whether their policy aim is still—as with the previous Government and as is the case in south Wales—to move to closing the blast furnace and opening an electric arc furnace in a new plant, which may be on that land or somewhere else.

If it is the latter, it will be much more difficult to establish the public interest case for the complete nationalisation and transfer of the blast furnaces, because that will end in tragedy for the people working there, so it will no longer be the case that the main purpose is to keep the jobs. It will not resolve the issue of the electric arc furnace, because that will need separate grant aid and might even be better on a different site. We need to know more about the phasing. In the case of south Wales, the blast furnaces were closed before the electric arc furnace was available. If they did the same again at Scunthorpe, there could even be a period when the United Kingdom will not be making any steel at all on those two works, given the transition plan.

It would be very helpful if the Minister, who will have to take this policy on, gave us a little more on the Government’s thinking about the duration of the investment in the blast furnaces, and whatever information he has about the state of those plants and the ability to maintain continuous production there, and on the Government’s intention in their net-zero strategy, which implies that steel would have to be made in a different way.

[Lord Fox (LD)]

My Lords, because this is Report, I will not repeat my Committee speech. Briefly, Clause 2 is unchanged and Clauses 4 and 15 have been amended along the lines that the previous groups suggested and begin to bring the rigour at the start of this process. The request made by the noble Lord, Lord Hunt, for information after the fact, if it has to be brought forward, seems reasonable, but on that basis I do not support the amendments as they stand.

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[Lord Sharpe of Epsom (Con)]

My Lords, these amendments stand in my name and that of my noble friend Lord Hunt of Wirral. As we stated in Committee, we cannot have a perpetual sunset clause. A sunset that can be extended indefinitely and for an unlimited period at a time is not a meaningful sunset at all.

I welcome the Minister’s engagement on this aspect of the Bill. The amendment would provide an important safeguard by ensuring that any extension of the principal transfer powers can be for no more than two years at a time. That would provide greater certainty for investors, greater assurance for taxpayers and a clearer expectation that these exceptional powers are not intended to become a permanent feature of the Government’s industrial policy. It is also important that we have a Government who are confident in their stated aim of securing private investment for British Steel so that it can thrive on a commercial basis. Regular parliamentary approval for any extension will help to ensure that Ministers continue to focus on that objective.

I thank the Government for recognising these concerns and for working constructively with us to ensure that this amendment can be accepted. I beg to move.

[Lord Redwood (Con)]

My Lords, two years is quite enough for these powers, and it is generous of my noble friend to suggest allowing another two-year extension. As I understand it, these steel matters are being considered under a £2.5 billion multiyear estimate, which was meant to be for the modernisation of the steel industry. When it was originally agreed, people had in mind that this was going to be grant aid for new electric arc furnaces and other such investments—not to pay continuous and high losses on an older technology plant that may not have the long future we would like.

To get into better order with the Treasury, the Government might want to have some self-imposed restraint on the duration of this. We have been led to believe that the rate of loss is at least £500 million a year on the two blast furnace activities that are currently under the Government’s control but not in their ownership. That would be a totally unacceptable continuing rate of loss and would eat into what should be modernisation money. That would mean they would get to the end of this Parliament with very little improvement to show.

[Lord Fox (LD)]

My Lords, I am in slight confusion that I hope the Minister can clear up. My understanding of Amendment 6A is that it offers a one-term renewal of two years, meaning a four-year total for any sunset clause. I might have misheard what the noble Lord, Lord Sharpe, said. I am assuming that is what Amendment 6A is seeking to achieve.

If we are reassured by the Government’s assurances on their intention, in a sense we do not need this—but it is certainly helpful to have it. If my reading of Amendment 6A is correct and it moves it four years as a maximum, it will move it into the next Parliament, where the Liberal Democrat Government will take a view.

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[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

My Lords, I think we have given the noble Lord a fair hearing. I ask him to bring his comments swiftly to a close so that we can get on with the business in hand today.

[Lord Redwood (Con)]

My Lords, I support my noble friends on the issue of the affirmative resolution. I think it is a superior device, given the importance of the matters that could be brought before us. I also fully support the idea of a proper impact assessment, which should of course include the impact on Northern Ireland, which may well be different because of the Windsor Framework—an arrangement which, in another life, I opposed very strongly.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions and for ensuring the ongoing scrutiny of any steel undertaking that is subject to the use of the powers in the Bill. Before turning to the amendments tabled by the noble Lord, Lord Fox, I will reflect on conversations I have had with noble Lords from across the House in recent weeks as we have sought to secure agreement on the drafting of the Bill.

The noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, have provided detailed feedback on and suggestions for how parliamentary scrutiny can and should continue following any acquisition. Following consideration of their feedback, I am pleased to confirm the following government commitments, which reflect the importance of transparency and parliamentary scrutiny.

I confirm that a debate will take place in both Houses on the steel strategy and the impact of the Bill, within 12 months after Royal Assent. Alongside this, the Secretary of State will lay a quarterly Written Ministerial Statement for at least the first year that a steel undertaking is in public ownership, reverting to a slower rate after that. Where a Minister considers it appropriate, the Written Ministerial Statement may provide an update on jobs, communities and other issues; I will detail this further in subsequent groups. As I have already set out, the Government will lay a Written Ministerial Statement following the acquisition of a company, setting out how the public interest test has been met.

In addition to these commitments on the impact of the Bill, I can confirm that, following any acquisition of a steel company, the company’s new chair would be able to attend a Select Committee to set out their plans for the publicly owned steel undertaking. I hope that that reassures the noble Lord, Lord Redwood. Alongside the chair’s attendance, the Government will write to Select Committees, including the Business and Trade Select Committee, with information following any acquisition, and subsequently on any future plans for any steel undertaking that falls within the scope of the Bill’s powers, and to respond to any specific requests from a Select Committee. I emphasise that it is for the Select Committees to set their agenda. If the Government, or the chair of a nationalised company, are asked to provide information and attend meetings, we will of course do so. These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out.

Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. This Act contains various reporting requirements that vary depending on the size of the entity. The Government will work closely with the company and, where necessary, if there are any material changes to the company’s circumstances outside the regular reporting cycle, the Government will be able to ask the company to produce an interim report on that particular issue.

Noble Lords have also raised a concern about ensuring that stakeholders are appropriately engaged in decision-making. I will provide further detail on this later, but I emphasise that the Steel Council will continue following the publication of the steel strategy. The council is made up of representatives from across the sector, and they would include a representative from any publicly owned steel company.

In addition to our continued engagement with the sector, I recognise the importance of ensuring that there are opportunities for Parliament to engage with the sector. I therefore confirm that the Government will convene an ad hoc round table on the future of the steel sector six months after Royal Assent. I hope that this series of commitments reassures noble Lords that the Government are committed to ensuring that Parliament can scrutinise any publicly owned steel undertaking where appropriate.

I thank the noble Lord, Lord Wigley, for his continued engagement with the Bill. I reassure him that Minister McDonald, the Minister for Industry, recently met with Minister Price from the Welsh Government, and my officials continue to engage with Welsh Government officials to try to secure a recommendation of legislative consent for agreement on the Bill. I am grateful to the noble Lord, Lord Wigley, for the discussions on these matters, and I hope to update the House on the outcome of these conversations at Third Reading.

I thank all noble Lords who have taken part in debates on Amendments 12 and 13, and particularly the noble Lords, Lord Sharpe and Lord Hunt, for their constructive engagement with me over the past few weeks. The Government respect the concerns that have been raised. Throughout the passage of the Bill, we have been clear that the Government are committed to as much transparency as possible with regard to the powers in the Bill. We have listened carefully to the cases made during our debates to date and have considered where it may be possible to amend the procedure for the power without harming the Government’s ability to carry out their objective under the Bill.

I am therefore delighted to confirm that the Government will support Amendments 12 and 13, which amend parliamentary procedure for continuity of obligations and enforcement powers. Under these amendments, the power to make regulations in relation to certain aspects of continuity obligations will change from the negative procedure to a draft affirmative procedure unless the Secretary of State considers the made-affirmative procedure necessary, and the power to make regulations on the enforcement of obligations will change from the negative to the made-affirmative procedure respectively. This compromise reflects your Lordships’ House at its best.

I shall address the other amendments in this group. Amendments 8 and 9, tabled by the noble Lords, Lord Sharpe and Lord Hunt, set out the opposition to the parliamentary procedure associated with the exercise of the share and property transfer powers in Clauses 4 and 15 respectively. While I recognise the magnitude of these powers, I must emphasise that any use of the principal transfer of powers would need to be exercised promptly to ensure operational and legal certainty. I cannot overstate the importance of this. In a scenario where the Government chose to use these powers, they would need to be exercised at pace in a commercially sensitive environment. The affirmative procedure would introduce significant delays to the transfer process and create a lack of clarity regarding ownership. This in turn would significantly affect the business, particularly supply chains and third-party contracts. This must be prevented.

Amendment 14 was tabled by the noble Lords, Lord Sharpe and Lord Hunt, and they have indicated their opposition to Clause 50 remaining part of the Bill. I am afraid that I have to disagree unequivocally in this case. I have previously set out that removing the clause would risk undermining the effectiveness of the Bill. The Bill confers powers that interact with the complex area of commercial company and insolvency law in a way that was not anticipated during the drafting of the legislation concerned. There will therefore be some tension in the way that the powers are applied. Clause 50 allows us to smooth over those challenges and avoid any unintended consequences or obstacles to a successful transfer.

I am sympathetic to the fact that it is difficult to justify a power of this nature when its potential use is quite abstract at this stage. By its nature, it is intended to deal with unforeseen circumstances in non-consensual, highly atypical transfer scenarios, and I remind noble Lords that it was necessary in the Banking Act context as well. As an example, the power could be used to modify or disapply certain corporate laws, such as disapplying shareholder voting or approval requirements to prevent any delay to the transfer. That is not to say that we plan to use it in this way but merely to illustrate its potential utility. It is worth repeating that the power can be used only to ensure that the transfer of power can be exercised effectively. It cannot be used outside the context of nationalising a steel undertaking to change or amend other laws. The use of the power will be subject to the draft affirmative procedure except in particular circumstances that justify proceeding on a “made affirmative” basis. I hope that this provides some comfort regarding the issue.

Amendment 5, also tabled by the noble Lord, Lord Fox, would require the Secretary of State to provide quarterly Written Ministerial Statements to Parliament updating on the progress of the nationalised steel undertaking and the broader impact of the Bill. I thank the noble Lord for our discussions on this point, and I recognise the appetite for further parliamentary scrutiny of the approach to a nationalised undertaking. As I have already set out to the House, I can confirm that the Government will commit to provide quarterly Written Ministerial Statements to Parliament for at least the first year of a steel undertaking in public ownership. This reflects the Government’s commitment to ensuring that Parliament is appropriately informed about the progress of any publicly owned steel undertaking.

I turn to Amendment 16, and thank the noble Lord, Lord Fox, for his continued discussions on stakeholder engagement throughout the passage of this Bill. This includes the amendment he has tabled, which would require consultation with the stakeholder advisory committee on whether an intervention was in the public interest before exercising the powers in the Bill. I believe that the noble Lord and I agree that stakeholder engagement is critical to supporting the Government’s vision for the future of the steel industry and to ensuring appropriate scrutiny. As previously mentioned, I am pleased to confirm that we will shortly be inviting the UK Metals Council to join the Steel Council, which will ensure that the views of downstream users can be fed into engagement and discussions.

However, as I previously set out, any decision to exercise the transfer powers would need to be made at significant speed. The amendment would delay the exercise of the transfer powers, creating additional risks to the business viability and ongoing operations and uncertainty over ownership. In addition, there are commercial sensitivities associated with any decision to exercise the transfer powers, making it extremely difficult to consult in advance of a decision. While I cannot accept the amendment tabled by the noble Lord, Lord Fox, I will reflect on the range of ongoing engagement that Ministers and officials from my department undertake with industry and stakeholders.

A notable forum for engagement is the Steel Council, which I have already confirmed will continue following publication of the steel strategy. The council will support the delivery of the strategy by providing evidence and feedback on evolving or emerging policies that affect the sector’s competitiveness, and by providing strategic oversight of the working groups on research and development, investment and skills. Having considered the amendments tabled by the noble Lord, Lord Fox, I can confirm that the Government will convene an ad hoc parliamentary round table on the future of the steel sector six months after Royal Assent. I hope this reassures the House that the Government regard stakeholder engagement as critical to the revitalisation of the steel sector.

The noble Lords, Lord Sharpe and Lord Hunt, have tabled Amendment 40, which would require the Secretary of State to publish an impact assessment of the operation and effect of the Bill within two years of Royal Assent. This is straightforward for me to address. As the Government have already published an impact assessment for the Bill, in line with our Better Regulation Framework requirements, further impacts will be assessed as part of a post-implementation process or review. I reassure noble Lords that if the powers under the Bill are exercised, we will publish further impact assessments to accompany any transfer regulations. Following this, the Government will consider any further impacts in the post-implementation review. As I have already set out, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent. This reflects our commitment to ensuring that parliamentarians remain well informed about our plans for the steel sector.

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[Lord Sharpe of Epsom (Con)]

My Lords, I echo my noble friend Lord Hunt’s comments on the previous group. I thank the Minister for his engagement, and the Minister and the noble Lord, Lord Fox, for their amendments in this group. Amendment 17 is very welcome. It ensures that compensation regulations must provide for valuations to be carried out by an independent valuer rather than leaving that as an optional feature of the scheme.

I also welcome the Government’s work with opposition parties to ensure that relevant liabilities are properly reflected in the valuation process. In particular, Amendment 21 ensures that environmental and health and safety liabilities must be taken into account, as my noble friend Lord Redwood powerfully articulated on an earlier group.

[Lord Redwood (Con)]

My Lords, I too welcome this from the Government. I think they will find it very helpful because, should we move on to the full acquisition of British Steel at Scunthorpe, there remain, as I understand it, financial issues outstanding with the current Chinese owners. It will be very important to have an accurate and full account of all these long, deep-rooted and sometimes very expensive liabilities to provide some counter to what we read in the press is their rather extravagant idea of how much they ought to be paid.

[Lord Leong (Lab)]

I thank all noble Lords for their support. I want to share with noble Lords that the issue of health and safety is definitely a priority. At British Steel there has been a clear improvement in health and safety standards since the introduction of the special measures Act last year. This will remain a central priority going forward. Indeed, since the passage of the Act we have already spent some £8.1 million on essential improvements in this area, so we do take health and safety seriously and it is a priority for the Government.

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The Government have not explained from where further funding would be drawn. As must surely have dawned on this Government by now, there is no magical money tree. All decisions, in particular decisions on public expenditure, have consequences and opportunity costs. Would the money come from departmental budgets, the Treasury, the National Wealth Fund, or a further allocation which has not yet been disclosed to Parliament? Amendment 31 would cap financial assistance at £2.5 billion until August 2029. If Ministers believe they are going to need more than that, they should explain why and how much. I beg to move.

[Lord Redwood (Con)]

My Lords, I am so glad my noble friend has raised once again this crucial and fundamental point. It is of great importance and of help to the Government.

When I have in the past had some responsibility for trying to recover the financial position of the odd distressed company—although nothing nearly as distressed as British Steel at Scunthorpe—I have always found it was an essential discipline to first of all institute very frequent reporting, because you need to signal to the executives undertaking the day-to-day work that the financial state of the company is at risk and that they need to give great priority to this. You need to help them get clarity over why cash is draining out of the business. This business, British Steel, which is under the operational control of the Government, is draining cash, we believe, at £500 million a year. That is a phenomenal rate of loss, which is going to have an obvious impact on the public accounts, at a time when we know that government money is scarce and there are many other priorities. We need to know rather more about why it is £500 million.

Is there any residual investment programme left? That would be the first thing to go when you are trying to save cash. Is it still committing money to raw material stocks? It clearly should not be allowing more material stocks. Does it have a very large stock of finished product which it is not able to sell? If that is the case, what is the plan for trying to move that stock on? What is the reality of the price level it is going to get for that stock? Obviously, stock is a mixture of volume and value, and you have to try to maximise the cash you can get for the stock you have got before you would normally go on to produce more. This plant has the particular problem that it has to keep producing, even if it is not able to sell enough of the product at a sensible price. You would expect regular reporting, certainly to the chief executive appointed by Ministers, but I would have thought that the Minister with day-to-day responsibility for this would know what is going on, and on the trading accounts, because a lot of the cash going out may be trading losses. You would want to see an urgent plan for selling more and economising on costs wherever you can, whether that is bought-in materials, the productivity of labour or other overhead costs that the business is incurring.

During the debates so far, I have not felt the Government’s urgency around this financial problem. Every pound that goes out of the door on losses that you are responsible for as a steel-maker is a pound that cannot be spent on the new and better industry that you really need in order to take the country forward. I am not blaming the Minister, who has been exemplary in his conduct and helpfulness—I am sure he wants, as we all do, a good outcome to this—but in those conversations within ministerial offices, it would be good if a Minister in the other place, for example, could make more Statements which showed that there was a plan and a determination to rescue this industry that we all wish to rescue.

In this group of amendments, there is talk of quarterly reporting. That is a big enterprise in terms of people and scale of loss. Quarterly reporting is quite common and normal now in the public quoted sector. It is a good discipline, even for the most profitable businesses in the world, because people like to make sure the trends are still good and the managers are in charge of it. I would have thought that quarterly reporting was the bare minimum, and if it was somebody’s day-to-day responsibility then they would obviously need rather more frequent reporting than that.

The public deserve quarterly reporting from this industry, which they now have a substantial operational stake in. I urge the Minister to think about more regular public clarity. I hope that such detailed, short-term regular reporting is going on. It would be good to get some good news out of the Government that they are applying the right kind of financial disciplines to control the outflow of cash. If they do not control the outflow of cash, it will end in tears and redundancies.

[Lord Sentamu (CB)]

My Lords, I want to simply question Amendment 31. In Clause 58(2), there are many different ways in which the Government can provide assistance, such as

“by way of grant, loan, guarantee or indemnity … by the acquisition of shares or any other interest in, or securities of, a body corporate, … by the acquisition of any undertaking or of any assets … pursuant to a contract, or … by incurring expenditure for the benefit of the person assisted”.

I am one who believes that we should plan for the future and make sure we do not spend above our means. However, it seems to me that, in a Bill of this nature, putting a tag of £2.5 billion by the end of 15 August 2029 is a restricting element and it does not give me confidence that we are actually interested in nationalising steel.

There are so many unknowns. During the debate when we were all summoned by the Prime Minister to rescue the steel industry in Scunthorpe, it was quite clear that the books were not very encouraging—but this is a national asset, so what do you do? It seems to me that to put that amount in the Bill is almost legislating for failure. If, for example, it is £2.6 billion, not £2.5 billion, what would happen? Would the whole thing collapse? Putting figures in the Bill is not good for legislators. We have got the Exchequer and all kinds of other people for that. Let us not try to conduct this Report as if we are the Treasury—we are not. I urge the noble Lord, having flagged it up, to nevertheless withdraw his amendment. I would find it difficult to support.

I remember being in Birmingham when Rover collapsed. BMW announced that it would build the Mini there but left the other plant. The Government were being asked for only £600 million to keep the plant. They were already in agreement with China to sustain it, but, because of the laws around government support for businesses from the EU, the Government found that they could not, and the plant went.

I always respect the noble Lords, Lord Hunt and Lord Sharpe, because of their wisdom. However, if they do not mind me telling them this, as a Cross-Bencher rather than one of those rarefied Lords spiritual, I think that they are losing a little of what I have always taken them for—just no.

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[Lord Hunt of Wirral (Con)]

My Lords, I will also speak to Amendments 42 and 43 standing in my name and that of my noble friend.

As we stated in Committee, the carbon border adjustment mechanism and emissions trading scheme will have a material effect on the domestic steel sector. The Government will no doubt argue that the CBAM and ETS are necessary to meet their net-zero objectives and that they will not harm British industry. We may have significant disagreements on that point. However, what cannot be disputed is that these measures will affect steel undertakings in this country. The question is whether that effect will be positive or negative on costs, production, exports and international competitiveness.

In Committee, Ministers suggested that the business environment, including the ETS and CBAM, would be relevant to valuation. But that is not the same as a clear assessment of the practical effect of these policies on the future of domestic steel-making. I therefore invite the Minister to confirm that the future impact assessment to which the Government have referred will include a full assessment of the effects of the CBAM and ETS on the domestic steel sector.

If the Government are right that these measures will protect industry, support investment and improve competitiveness, they should have no difficulty at all in providing that assurance. If, however, that assessment shows that these measures are damaging production, exports, investment or competitiveness, that would also give the Government the evidence needed to change course, and that is why I wish to move this amendment. I beg to move.

[Lord Redwood (Con)]

My Lords, I am very grateful that my noble friend has raised this important point. We would probably not be having these big debates about steel nationalisation if the United Kingdom in recent years had had competitive energy pricing, and if it had not gone in for carbon pricing and carbon taxes that can have an adverse bearing on energy-using industries. However, we are where we are, and so my noble friend is right to ask the Minister to give some reassurances. We seem to be involved in overtaxing carbon and then having to subsidise those businesses that suffer as a result.

Of course, the CBAM is an EU-designed scheme which we are copying, to try to offset the impact that very high carbon and energy costs have on domestic economies and industries, by imposing a similar tax or tariff on the imported goods from countries that do not impose such carbon taxes and carbon additions to the energy they are using in industrial plant. That does help in some way for the domestic steel-producing industry; it becomes a problem for the domestic steel-using industry where it is having to import steel beyond the tariff-free quota provided under the CBAM. We note that the tariff-free quota is skewed to favour European producers, rather than other producers around the world who might be otherwise cheaper or more advantageous.

Steel Industry (Nationalisation) Bill

Lord Redwood Excerpts

Committee stage
Monday 29th June 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, Amendment 1, in my name and that of my noble friend Lord Hunt of Wirral, is very simple. It seeks to confine the powers in this Bill to genuine steel businesses. Those are undertakings consisting predominantly of the manufacture or processing of steel—or iron for the purposes of steel manufacture.

As drafted, the definition catches any business which merely includes steel-making as part of its operations. That is a very broad formulation. It could, in principle, sweep up a diversified business in which steel was only a minor part of what it does. Businesses with a limited connection to steel production should not face uncertainty about whether it falls within the reach of these nationalisation powers.

When this point was pressed in the other place, the Secretary of State was asked whether a business with only 1% of its operations in steel would be caught by Clause 1. He did not say that it would not be. However, a statement of intent is not a limit on the face of the Bill, and future Governments are not bound by the assurances of this one. The Government say that these powers are intended for British Steel, and British Steel is obviously and predominantly a steel business. Therefore, this amendment should create no difficulty for that purpose. If the Government’s intention is genuinely not to use these powers against businesses with only a peripheral connection to steel, they should have no difficulty in accepting this amendment. I beg to move.

[Lord Redwood (Con)]

My Lords, I fully support this amendment and hope that it will tease out from the Minister a little more about what the underlying purpose of the general legislation is, as I am not too enamoured of this becoming a fully nationalised industry with the ability to acquire all sorts of other steel interests.

I felt that the Government’s policy arose out of the circumstances of British Steel at Scunthorpe and the question of blast furnace-produced steel, where we are down to our last two blast furnaces. I did not think that the intention was to build an electric arc furnace set of businesses when progress has already been made in establishing these in the private sector and where there are plans in certain cases for government grant aid to achieve an electric arc steel additional business by that combination of subsidy assistance and private capital.

I hope that the Government will accept this quite substantial narrowing of such a broad piece of legislation, because there are many with general interests in steel whom we would not like to get caught up in this. I would also like clarification on whether there is any possibility that the Government might want to build a nationalised electric arc steel set of businesses. This would be an expensive and difficult proposition.

[Lord Fox (LD)]

My Lords, I thank the Minister, his team, the department and the two experts who came all the way from Coventry in 35-degree temperatures to educate the noble Lord, Lord Hampton, and me on the technology of steel. It has been very co-operative and I thank them.

I am slightly confused by how narrowing these words are: “of or including” versus “predominantly”. What is predominantly? Is it 60:40? Is it 55? I do not know. You have to look upon it with the body language of the Government. The Government have shown no tendency to go on a nationalisation rampage through all businesses that have ever touched a piece of steel. It is very clearly focused in one area, as the noble Lord, Lord Redwood, alluded to. Also, I remind noble Lords that there is a sunset clause in here which closes it after two years. So the talk of subsequent Governments does not have particular purchase and I am much more relaxed than the noble Lord, Lord Sharpe, on this.

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[Lord Sentamu (CB)]

My Lords, Amendment 2 would replace

“includes (but is not limited to)”

with the word “means” so that we knew what we were describing. The worry is that leaving it as it is could create a public interest so large that there was a mission creep that I do not think should be in the Bill, which is trying to nationalise steel. We need to be slightly more economical in the words we are using, so that we need not fear that on another day, if another public interest was being taken into account, the definition would prove far too loose. The word “means” does the job: we know exactly what one is talking about, and it lists the three elements. The noble Lord, Lord Hunt, wanted to include two other areas but, for me, limiting it to those three objects seems to be where we should stop. The word “means” would stop mission creep.

[Lord Redwood (Con)]

My Lords, I welcome these three amendments. Amendment 2 is a necessary slight curtailment but would still leave the Government with enormous scope, given how wide-ranging the three cited reasons for public interest intervention are. Like my noble friend, I cannot think of any other reason why they might want to do this that could not be adequately covered by the wide-ranging proposals in the existing text.

I agree that it would be a good idea to change the language through Amendment 3 to stress that intervention should, in the longer term, be interested in economic growth, profitability and successful investment. Surely the Government do not want a lame-duck investment that costs a large sum of money for a limited period of time but then they have to disappoint all those people who thought that it was going to be kept going for a rather longer period or that it might break through to profitability and success. If I had to choose between the three amendments, I hope my noble friend would particularly press Amendment 8 on value for money, which sums it all up.

At Second Reading, in looking at the general legislation, we had some discussions asking: what is the medium and longer-term future of blast furnace steel? As I think we have agreed across the House, at Second Reading and now, the main reason for the previous emergency legislation and this legislation is the temporary cessation of closure of two very important blast furnaces, which are our last blast furnace-making capabilities in the country. But I believe—I would love to have the Government either confirm or deny this—that it is still their medium to longer-term intention to close all blast furnaces in this country, as previous Governments have been doing, and to transfer to electric arc steel-making, preferably with private finance and successful competitive private sector businesses doing that work. In the previous exchanges, I think the Minister signalled that the Government do not wish to build a nationalised electric arc business with these powers, although for understandable reasons they have to be general and will most likely be exercised in the case of the blast furnaces. It would be helpful to workers and taxpayers if there were greater clarity over the time period for keeping these blast furnaces open, and whether there are any limits on the costs that the Government are prepared to run, so that people can make proper plans concerning their jobs and their futures in this important steel industry, and so that taxpayers could have some reassurance.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to Amendments 30, 31, 43, 44 and 46 standing in my name and that of my noble friend Lord Hunt of Wirral. I thank the noble Lords, Lord Wigley—who I thought made a very powerful case—and Lord Fox, for their previous speeches.

Amendment 30 goes to the valuation of a steel undertaking and the need for that valuation to reflect the real commercial environment in which the undertaking will operate. That environment is not fixed; it is being shaped directly by government policy and, in particular, by the new steel trade measure coming into effect from 1 July. Only days ago, the Government changed the detail of that policy, relaxing the original proposals somewhat, with tariff-free quota reductions pulled back from the level first proposed. We will no doubt discuss that in more detail when the Statement is taken tomorrow, and I do not intend to rehearse that debate now.

However, the fact is that the Government’s choices on trade policy will have a material effect on the commercial position, and therefore the value of any steel undertaking. A tighter quota and a higher above-quota tariff will limit import competition. The way quotas are set will affect downstream industries, supply chains, customer relationships and the availability of particular steel products. The Government cannot, on the one hand, present their trade policy as central to the future of UK steel and, on the other hand, resist any requirement for that policy to be factored into what a steel undertaking is actually worth.

The need for clarity is made more acute by the uncertainty of recent weeks. Businesses have been trying to understand what the new quota levels will be, how quickly quotas may be exhausted, which products will be covered and what the practical effect will be for producers and steel-consuming industries alike. Do the Government accept that the new steel trade measure will affect the value of steel undertakings? If so, why should the independent valuer not be required to consider it?

On Amendment 31, electricity costs are among the central determinants of the viability, competitiveness and future value of steel. The position facing British industry is stark. The United Kingdom has had some of the highest industrial electricity prices in the developed world. UK industrial users pay substantially more than competitors in France and Germany, and—on the most widely cited international comparison—around four times as much as businesses in the United States.

For steel-makers, the gap remains significant. That is particularly serious as the sector moves towards more electricity-intensive production methods, including electric arc furnaces. A business may have the workforce, the plant, the orders and the ambition to modernise, but it cannot compete indefinitely if one of its principal inputs costs materially more than it does for its overseas competitors. These costs, I am afraid, reflect recent policy choices by the Government. The fact that the Government provided some limited relief from network charges to eligible energy-intensive industries rather demonstrates the point.

The Government now say that further measures will bring prices closer to those in competitor countries, but closer is not the same as competitive—and nor is a future scheme with questions of timing and eligibility still to be resolved an adequate basis on which to value a business today. This amendment would require the valuer to consider the prices paid by UK steel producers, the disparity with comparator countries and the effect of any support intended to reduce energy costs, including both the costs after existing reliefs and the risk that relief may be time-limited, incomplete or dependent on eligibility. It should also include a clear comparison with major competitor countries.

Is the Government’s objective genuine parity in industrial electricity prices with our principal competitors? If not, what continuing cost disadvantage do the Government consider acceptable for a strategic trade-exposed industry? How will the valuer assess the effect of support, which is prospective rather than guaranteed, particularly where broader measures are not expected to operate fully until 2027? The Government’s own impact assessment accepts the seriousness of this problem. It states that energy costs threaten the sector’s long-term viability and its ability to compete. It also acknowledges that UK steel producers face higher electricity prices than comparable countries, and that contributes to the uncompetitive production costs and pressure on margins.

On Amendment 43, as we raised at Second Reading, the Government’s impact assessment recognises the risk of a chilling effect on investment if businesses and investors perceive a greater risk of state intervention—a point very well made by my noble friend Lord Redwood in the last group. The United Kingdom has long depended on its reputation as a stable, predictable and rules-based place in which to invest. The risk is greater in the current climate. Steel businesses are already dealing with high electricity costs, rapidly changing trade policy and significant regulatory burdens. Adding an open-ended power of nationalisation can only increase the sense of risk for those considering whether to invest in the United Kingdom. If the Government are confident that their actions will strengthen confidence and attract private capital, they should have nothing to fear from transparency.

Amendment 44 addresses a basic point of fairness. If the Government take a steel undertaking into public ownership, that business must not receive selective advantages which place comparable privately owned steel businesses at an artificial disadvantage. Without this safeguard, there is a clear risk of distortion through subsidies, preferential access to public contracts, more favourable regulatory treatment or other support unavailable to private companies. The Minister in the other place stressed the need for flexibility and for the Government to act quickly, but flexibility need not mean unfairness. It is entirely possible to support a strategic undertaking in exceptional circumstances while maintaining a level playing field for the wider sector.

On Amendment 46, if we accept the Government’s central argument that British Steel is critical national infrastructure and that domestic steel production is essential to our national security and without it we cannot build our Navy, jets or submarines, they must accept the logic of what follows from that argument: you cannot declare something critical to national security then leave it defenceless. Amendment 46 states that, where the Secretary of State has exercised a principal transfer power where steel has been brought into public ownership precisely because it is in the public interest, the Secretary of State must have the power to prevent industrial action destroying the very thing that public ownership was meant to protect.

We have seen what happens when Governments are all too timid to act. We have watched the railways held to ransom by the RMT, and we have seen it in healthcare where the former Health Secretary himself felt compelled to call out what he described as “cartel-like behaviour”. The Government have made themselves more vulnerable still. The Employment Rights Act 2025 stripped away strike safeguards that existed for a good reason. The ballot thresholds are gone: the Government unlocked the door and then expressed surprise when it was pushed open.

If a steel undertaking is nationalised in the name of national security and a trade union then calls a strike that shuts down production, what will the Secretary of State do? Will he stand at the Dispatch Box and explain that our defence supply chains have been severed because he did not want to upset the unions? Do the Government seriously want domestic steel production halted because a union decides the moment of public ownership is the moment to press its advantage?

The Government cannot have it both ways: they cannot argue that steel is so vital to this country that it must be brought into public ownership and simultaneously argue that, once it is in public ownership, it should be just as exposed to industrial disruption as any other business. The whole point of this public interest test, if it means anything at all, is that some things matter too much to be left to the ordinary run of commercial risk. Industrial action that threatens critical national infrastructure is precisely such a risk.

I invite the Minister to tell the House that the Government have considered the risk. I invite him to explain what powers the Secretary of State would have on the day a strike is called at a nationalised British Steel to keep the blast furnaces lit. If he cannot answer that question satisfactorily, this amendment provides exactly the answer that is needed.

[Lord Redwood (Con)]

My Lords, I am grateful to my noble friend for raising the crucial issue of electricity prices. As the strategy is to convert more and more to electric arc furnaces, the price of electricity becomes the critical variant in determining how successful those businesses will be, how competitive their prices will be and whether they will generate cash and profit to reward those who ventured in them, or whether there will be problems for those businesses, just as there are problems in the British Steel carbon-based system through its blast furnaces. I hope the Minister can give us a little more background by way of reassurance, given that the steel strategy has been, and is still to be, based on electricity as the prime source of energy. There needs to be a policy that will consistently deliver competitive electricity prices because the current prices, without specific and targeted subsidy intervention, are way out of sync with the electricity prices in the more competitive world of our major competitor countries.

It is very important that this group of amendments raises the issue of tariffs. Of course, anybody valuing the assets that might be acquired under this legislation, or valuing what we already have by way of control and operating responsibility, will need to look at the impact of tariffs. It is a good idea to stress this because these are a very major change to the background for the conduct of steel businesses in this country, and we cannot be sure exactly what the impact is going to be. We have two types of impact arriving around the same time. There is the carbon border adjustment mechanism, which is, in effect, a fairly universal tariff based on the carbon content of imported material, which is clearly going to apply substantially to this industry. Then there are the specific tariffs which the Government have announced to come shortly, which target competitive steel coming into Britain with a very large increase in tariff and a rather low protected quota so that there will definitely be a substantial increase in cost for import.

You could argue, as I presume the Government do, that this is completely benign for our steel industry because it means that the combination of the immediate tariff and the soon to come CBAM tariff will make imported steel so much less competitive, and will therefore help reduce the pressures on our existing electric arc furnaces in the private sector and the two blast furnaces now, in effect, under the control—but not in the ownership—of the public sector. There will be some relief, as the policy intends. However, there can be other consequences which a valuer would have to take into account.

For example, the higher the cost of imported steel, the more difficult it will be for those many companies and industries that use and add value to steel in our wider steel-using industry. There will be limited scope for all users of imported steel to find exactly the right specifications of steel, and the right availability and pricing, from the rather limited-scale industry that the United Kingdom now has as a steel producer. There could well be financial difficulties, reductions in turnover and activity, or the collapse of steel-using businesses in the United Kingdom that face these very high tariff impositions on their main raw material. If they acquire more by way of import than at home and they cannot immediately substitute, you could have the paradoxical effect that the tariff designed to protect the British industry lost orders to the British industry as well as to the exporting industry from abroad. You could well have businesses here collapse—those that are substantial steel users but can no longer carry on the business efficiently to sustain their limited purchases from the UK, because of the cost of the expensive imports.

This needs careful policy examination. I am glad that the Government had one rethink about the tariff quota arrangements for this, but they probably need to do a bit more homework about the balance between the rather larger turnover at risk in steel-using businesses in the United Kingdom and the rather too small turnover available in steel production. They therefore probably need to consult a bit more widely over the medium- to longer-term impact on steel demand from domestic as well as imported sources.

I am interested in the proposals on impact on the economies, but I am not quite sure what is in mind and how it would work out. It is quite right, as the noble Lord, Lord Wigley, said, that there will have been impacts from previous closures or redundancies, and there could be future bad impacts as steel plants become more productive and need less labour, or as the final conversion is made from blast furnaces to electric arc, when there would clearly be a substantial loss of employment. There will need to be assistance and help for those who lose their jobs or have lost them in the past but still have not been able to retrain or find good alternative employment. One needs rather more by way of detail, and I am not quite sure that this Bill is the right place to do that, because it relates to a series of other government initiatives, funds and programmes that are more generally available. However, the noble Lord, Lord Wigley, might be right that they need to be improved. That is a subject for another conversation on another day.

--- Later in debate ---

The Government may say that they will act responsibly. I hope that they will. But the Bill will create lasting powers, and ministerial assurances are just not a substitute for statutory safeguards. The Bill, as we have said before, risks leaving taxpayers with an open-ended bill, and that is most unsatisfactory. I beg to move.

[Lord Redwood (Con)]

I am very glad that my noble friend raised the issue of an impact assessment, because if the Government press ahead with the acquisition of British Steel under the legislation, that could be the first opportunity we have for a realistic impact assessment. Yet, the taxpayer has been responsible for the losses in working capital and investment funds for over a year now, with the lack of clear reporting that we have commented on before.

We have an impact assessment for this piece of legislation. Understandably, it says that there are not any costs or benefits to report, because there is not a transaction. These are enabling powers, which would enable the Government to undertake and complete a transaction. But it would only be at that point that officials tasked with the difficult question “What is the impact?” would be able to come up with some numbers, because we would then presumably have some visibility on the cost of acquisition, if any, the operating costs and working capital costs that will go forward. That would be very helpful, in connection with the difficult investment at Scunthorpe, where, as we heard earlier, the NAO reported that there has already probably been £642 million of taxpayer expenditure up to the current month, with a very high run rate going forwards. So, I hope that the Government will offer us reassurance—if not a new clause in the Bill—to say that there will have to be a proper and timely impact assessment.

That, too, would clearly require proper due diligence, which I trust has been under way, now that the Government are responsible for the business. We would need to know that there had been a proper study of Anne and Bess, the two blast furnaces, which were either built or last substantially modified in the early 1950s. These are ageing assets. They have had deep maintenance in this century, but we would need a condition statement on that, so that the Government are reassured that however long they think they can run these blast furnaces for is feasible in terms of the condition of the plant. In order to sustain the employment for the next month, year or whatever it may be, we would need to know that there will not be major maintenance required or no question of having to cool the furnaces down, because that is a dangerous and expensive process and would raise issues about how easy it would be to spend enough money to reinstate these particular assets.

Of course, it would also require proper reporting to the Government—not supplying all the detail to us, but proper reporting on market prospects and how the steel product produced at Scunthorpe is perceived, and what the market opportunities, in general terms, might be and other supporting documents. It will require a serious impact statement, for the benefit of democratic accountability. More importantly, that would prove that the Government have done their homework, because the Government should not be taking on a plant like this unless they have a condition report, a marketing report, a proper cost examination and so forth, which I and my noble friends have been referring to.

[Lord Fox (LD)]

My Lords, I do not want to be the bringer of bad news to the noble Lord, Lord Redwood, but I suspect that it is pretty clear that the condition of the blast furnaces is poor and whatever happens, either to reinstate them to the level that would take them forward or to invest in electric arc, will take a lot of money. That is the point that we are focusing in on, and that is why we are focusing in on the public interest test. We have not yet gotten past Clause 2 yet, because this is the crunch.

I have a group of amendments in the next group, so I will reserve almost everything I have to say. The noble Lord, Lord Hunt, has already disobeyed his Amendment 2, because we are seeking to broaden the scope of the public interest test. With respect to the noble and right reverend Lord, Lord Sentamu, there is such a number of issues that have to be addressed within the particular field of potential investment that the public interest really requires focus. I will leave it at that for this group and then come back to these in the next group.

Steel Tariffs

Lord Redwood Excerpts

Thursday 18th June 2026 Lords Chamber

[Lord Leong (Lab)]

I say to the noble Lord that the steel sector is a very important part of our industrial strategy. That is why the Government are taking steps to protect the steel industry. It is not just another commodity; it underpins everything we do, including in the defence, infrastructure, manufacturing and energy sectors. We are intervening to protect our domestic production and we are protecting jobs up and down the country; whether it is in the Midlands or elsewhere, we are doing what is required of a Government to protect jobs.

[Lord Redwood (Con)]

This is a very large increase in costs for steel processors, so what is the Government’s estimate of the job losses and business losses that are sure to follow such a comprehensive, large increase in a major cost to these businesses?

Royal Mail

Lord Redwood Excerpts

Monday 8th June 2026 Lords Chamber

[Lord Stockwood (Lab)]

I will have to refer this back to the Ofcom regulators. I had not prepared for a question on letterboxes, unfortunately, but I will write to the noble Lord giving him an update.

[Lord Redwood (Con)]

Is not the financial performance of Royal Mail so much better than that of the nationalised Post Office, with Royal Mail requiring no subsidy from taxpayers and the Post Office sending colossal bills for big losses and for damaging treatment of staff who require compensation?

[Lord Stockwood (Lab)]

These are early stages in the privatisation of Royal Mail. The new owner, EP Group, shows an encouraging commitment to improving the services and conditions of work for all employees, but it is too early to say. The Question was about performance of second-class and first-class mail, and that we can commit to. The investors are committed to an improvement programme to get us to where we need to be.

Steel Sector

Lord Redwood Excerpts

Thursday 23rd April 2026 Lords Chamber

[Lord Stockwood (Lab)]

The noble Lord raises a critical question around how we balance the national resilience of our steel industry with security concerns; that balance is paramount. We remain in conversation with the MoD about making sure that this does not have a prohibitive impact on its procurement and access to products. Equally, it is really important that we utilise the UK Government’s procurement processes to ensure that we are prioritising UK products and services to meet the demand of all our government departments. There are a number of initiatives working on procurement, but I agree that we need to make sure that that perverse incentive does not drive the wrong behaviours.

[Lord Redwood (Con)]

Will the Government make any payments to the Chinese owners of the Scunthorpe works, or take on any of their debts, bearing in mind that, to effect the transfer, there will be enormous continuing losses to the taxpayer?

[Lord Stockwood (Lab)]

The Government remain in positive and constructive conversations with Jingye. I know that the noble Lord would not expect me to comment on the specifics of that deal. All I can say is that we are hoping for a positive outcome. The real importance for us is ensuring that we have a steel industry that is fit for the future and for private investment. That is our target aim at the moment.

Foreign Direct Investment

Lord Redwood Excerpts

Tuesday 10th March 2026 Lords Chamber

[Lord Stockwood (Lab)]

What has been rewarding since I took this job on seven months ago is the ability to work with all the devolved nations, realising that every part of our country needs to benefit from the economic development that is coming through. We have members of our Office for Investment teams throughout the United Kingdom and the devolved nations, and I look forward to working with any partner that can encourage growth and innovation around our industrial strategy.

[Lord Redwood (Con)]

Banning investment in new diesel or petrol vehicles, putting on very high energy taxes and having very high energy prices are a massive turn off to large sectors of industry worldwide. Will the Government lift the bans and lower the taxes and then we will have much more investment?

[Lord Stockwood (Lab)]

If anything is clear from the past couple of weeks, it is that energy sovereignty and controlling our own destiny when it comes to energy is critical. The macro environment and geopolitics are regrettable and unfortunate. They bring pressures on our energy, but security and the commitment we have made to low-cost renewable energy for the long term is where this Government will stay the course. The call for new fossil fuel exploration misses the point somewhat, in that the near-term pressures that we are feeling will not be solved by new exploration licences in the near term. We are committed to the net-zero goals and renewable sovereign energy powers, and that is where we hold control and our own destiny.

UK Trade Performance

Lord Redwood Excerpts

Wednesday 1st May 2024 Commons Chamber

[Kemi Badenoch]

I thank the hon. Gentleman for his questions. I could see that it was very difficult for him to find things to pick at in the statement, so I broadly welcome some of what he said, which implied that the good news is true.

The hon. Gentleman started with the OBR. He picked that statistic very selectively. Of course exports fell during covid; exports overall have grown. Many Opposition Members will say, “Oh, it’s just services.” That is because they do not understand the UK economy. The UK economy is 80% services, so it is good that services exports are going up. That is what we mainly do in this country.

The hon. Gentleman asked about Stellantis, and talked about U-turns. I remind him that the whole House voted for the net zero by 2050 target. It happened under a previous Conservative Government, but with the consent of the whole House. When business talks, we listen. The Opposition criticised us for making the changes that Stellantis asked for, so why is he now raising those comments? The Transport Secretary, the Prime Minister and I had a discussion—we do have discussions—and we extended the zero-emission vehicle mandate to ensure that we were not imposing undue costs on people if they were not ready to take up electric vehicles. We listen; the Opposition do not. Look at their plans for net zero. I assure the hon. Gentleman that businesses are absolutely terrified about what Labour would do with its new green deal, and all the measures that would just put costs on businesses and consumers.

The hon. Gentleman asked about steel. I am afraid that I need to correct several points. We saved jobs in Port Talbot—8,000 jobs were going to be lost, and we saved 5,000. If we want a net zero transition, we will have to move to electric arc furnaces, which require fewer staff. The Opposition cannot blame the Government for that while demanding a transition to net zero. We saved 5,000 jobs in Port Talbot. We invested £500 million out of a total £2 billion investment made with Tata. It is wrong to say that the Government are not saving steel; we are the only ones who have a plan for steel. The Opposition have no plan. We have a great plan, which will transform and regenerate south Wales.

The other thing that the hon. Gentleman said that was incorrect was about us having no primary steel production. We still have British Steel in Scunthorpe. There may be changes in Port Talbot around moving to electric arc furnaces, but he needs to remember that even the steel production that we have there relies on imports. We do not have iron ore here, so I recommend that he gets a briefing on exactly what is going on with steel production in the UK.

On India, the hon. Gentleman is right that a deal was promised by Diwali under a previous Prime Minister, but as soon as I became Trade Secretary, I said in this House over and over that it is about the deal, not the day. We do not sign trade deals that will not make businesses happy. We are keen to ensure that whatever we do will do right by our farmers. The Opposition laughed when I paused the FTA discussions with Canada. That was because what the Canadians were offering was not going to be good. The industry there is complaining that the UK got too good a deal from the CPTPP, but the Opposition do not talk about that. We are negotiating great deals for this country. I am very proud of the work that my Ministers and my Department are doing. I thank the hon. Gentleman for his questions.

[Sir John Redwood (Wokingham) (Con)]

I am grateful for the statement. It is wonderful news on exports; it shows that all the pessimism at the time of the referendum was completely wrong. I fully support the approach of the Secretary of State in delaying the target for battery vehicles, because people are not buying them in enough quantities, but will she add to that by adopting the advice of Stellantis not to fine motor manufacturers here for producing good petrol and diesel cars before people are ready to buy electric ones, because that is putting off investors?

[Kemi Badenoch]

I understand the point that my right hon. Friend makes. This is something that we have heard from some bodies in industry. The auto sector is giving us two different messages. Some people want us to bring the mandate forward and make the change faster; others want us to delay it. It is a very tricky balance. We understand the concerns. We do not want to put additional burdens on business, so he is right to make that point. I have made representations to the Transport Secretary, but this is his policy area, and he will make the ultimate decision.

Budget Resolutions

Lord Redwood Excerpts

Wednesday 6th March 2024 Commons Chamber

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests.

I am pleased that the Chancellor started by reminding the nation that, under Conservative leadership, Governments since 2010 have presided over the creation of 800 new jobs every day, every week, every month and every year, and have halved unemployment. The scourge of worklessness, which was inherited, has been banished. We now have the less worrying problem that we cannot get enough people to fill all the jobs, rather than the other way around of not having enough jobs for the people.

I am pleased that the Chancellor reminded the House that, in growth, we have outperformed all the major European nations, although I am sure he would agree with me that that is a feeble target to set ourselves; we are now free to do so much better. The question we need to ask is: why has the United States of America outperformed Europe so comprehensively for so long, and what can we learn?

The first thing we can learn from the United States is a better system of economic policy guidance and control. The requirements on the Federal Reserve Board, the US central bank, are a balanced mandate: not just 2% inflation, which is a necessary target that we share, but the promotion of growth and of growth in employment, so the board understands the trade-offs and can adjust policy accordingly. As our way of steering the economy, I would love us to get rid of fanciful, made-up figures by the OBR for five years’ time, which are always wrong, and to have two main aims: that 2% inflation target binding not merely on the Bank but on the whole Government, because Government have a big impact on prices and wages; and a 2% growth rate target, or a considerably higher growth rate than European countries have been achieving in the past decade. That is achievable if we take the right actions.

To do that, we need the Bank of England to work in sympathy with the Government’s policy. I remind the House that there is a dual mandate on the bond portfolio, the so-called APF or asset purchase facility. The Bank of England, having bought far too many bonds at ridiculously high prices on very low yields and run a very loose policy that gave us inflation, has now lurched too far the other way and is running too tight a policy, selling far too many bonds at much lower prices—prices it deliberately lowered in the market—and saddling us with losses. The Budget documents confirm that the accumulated losses paid so far, which taxpayers and the Treasury have to pay, amount to £49 billion since the thing flipped over in 2022. The last figure I saw was £34 billion, year to date—unaffordable and unnecessary, quite the wrong policy, meaning that we have less growth and a far bigger bill.

I am glad that the Government have decided to major on productivity in general, and in particular on public sector productivity. Some months ago, I stumbled across a well-concealed Office for National Statistics figure saying that in the three years since covid, we had lost 7.5% productivity in our public services. I did a quick back-of-the-envelope calculation, and that is roughly £30 billion, which means that it costs £30 billion more today to produce the same level and range of public service as it did before covid, as well as the many tens of billions more on top of that we had to pay because of all the inflation. It was a £30 billion hit.

The Government now more or less agree. The Chancellor has costed the loss in his figures at 6% rather than 7.5%, but he has said that he wants to eliminate a 5% productivity shortfall out of the 6%, and he costs that at £20 billion, which is exactly the same as my £30 billion for 7.5%. That is felicitous indeed. The issue is, how will they go about doing that?

I hear that the scheme for the NHS is elaborate expenditure on wide-ranging centralised computerisation—good luck with that—but I would not rely on that alone for my productivity package for the public services. We do not actually need new investment to get ourselves back to the productivity level we were at in 2019. We do not need to use all today’s wonderful artificial intelligence; we just need to use what we already had, which we had in 2019. It is about management, personnel and giving the personnel the right tasks. We have seen a huge increase in managerial and administrative positions, but far from managing things better, they are being managed less well.

We had a shocking case in the press recently, where an awful lot of managers were presiding over a prison that had gone wrong. They were not able to do the more important day-by-day things that were needed in order to resolve the problem. If we look at the huge expansion in the civil service and other public administration during the covid period, we will see a big increase not only in numbers, but in those who have been promoted up the grades for whatever reason. We need enough people for someone to supervise, however, and we do not need all supervisors, because they are often too posh to do the work. We need to manage things better, and that is the productivity challenge before us.

I also urge the Government to abolish UK Government Investments. It is a very expensive body that has a completely dreadful track record. It presided over the Post Office and did nothing to deal with the sub-postmasters; it presided over £1.4 billion-worth of accumulated losses, bankrupting the corporation; and it presides over Network Rail, and the whole rail industry, Network rail and High Speed 2 are absorbing £33 billion of public money this year. I do not think we are getting value for money for that.

My time is up. I urge the Government to redouble efforts on productivity, to understand that it is mainly about whom we hire and what we ask them to do, and to get rid of UKGI, and I ask Ministers to take responsibility for the dreadfully badly performing nationalised industries.

Post Office Horizon: Compensation and Legislation

Lord Redwood Excerpts

Monday 26th February 2024 Commons Chamber

[Kevin Hollinrake]

I thank the hon. Member for her collaborative comments. I am keen to work with her going forward, as we have every step of the way on this issue. I do not accept that we have made little progress. Let us be clear that 78% of all full claims that have been submitted have been settled—that is 2,700 claims that have been settled. Nor do I accept that there have been delays at every turn. That is not a correct characterisation of the situation.

With regard to our next steps, as I said, we expect the legislation to be tabled next month, which is as quickly as possible. I am working on this on very much a daily basis. On the differences between Post Office and CPS cases—those we are seeking to overturn with this legislation—and DWP cases, I think it is fair to say there was a different standard of evidence. Those DWP cases relied on evidence independent of Horizon such as the surveillance of suspects, collation and examination of cashed orders from stolen benefit books and girocheques, handwriting comparisons and witness statements. Those cases were very much not simply relying on Horizon evidence.

My engagement with the Lord Chancellor has been extensive, and our engagement with other stakeholders—including the hon. Member’s shadow Front-Bench colleagues—has also been extensive. We decided that was the right thing to do. Having said that, these are unprecedented steps. I think that again speaks to the fact that we are keen to make as much progress as possible, rather than as little.

The hon. Lady mentioned safeguards. The standard of evidence is critical to get to this point. It is fair to say that the trailblazing 555, who successfully took their case to the courts in the first place, set a high bar for anyone to emulate or replicate. We will be clear in the legislation that convictions will be overturned based on objective criteria, as another way to deal with this. That speaks to the hon. Lady’s last point on Capture, which I am very aware of and I have discussed with the right hon. Member for North Durham (Mr Jones) on several occasions, including immediately prior to this statement. We need to ensure that we have the right evidence base. I am happy to continue the dialogue on that, but it is important that we do not include cohorts where we do not have the evidence base, as we have for the cohorts that we have set out—where the CPS and the Post Office prosecuted cases. We are taking very serious measures to overturn the convictions. We should never resort to this kind of approach lightly.

[John Redwood (Wokingham) (Con)]

Will the Minister take UK Government Investments out of its role of controlling and supervising the Post Office? It has allowed these gross injustices to go on for too long, allowed the Post Office senior managers to rack up huge losses of £1,391 million to last March, with more to come this year, and given the executives bonuses for losing us that much money. It has left the Government with a great financial black hole. Would it not be better to change the Post Office management, to have it report directly to the Minister, and to make its No. 1 task giving justice to the sub-postmasters?

[Kevin Hollinrake]

I thank my right hon. Friend for his question. He and I have had serious conversations about the future of the Post Office, which I am keen to continue to engage on. The current UKGI representative who sits on the Post Office board is Lorna Gratton, for whom I have a great deal of time and respect. Clearly it is important that the inquiry does its work to determine who did what in the past. As we look to the future, there are different opinions on how the Post Office should be governed. I am happy to keep those discussions ongoing with my right hon. Friend.