Steel Industry

Lord Davies of Gower Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Davies of Gower (Con)]

My Lords, I thank all noble Lords who have attended to contribute to this important debate, and I repeat thanks to all the House authorities who have allowed this to happen. The fact that Members of both Houses have been called in for an emergency Sitting reflects, in part, the way that this Government have managed this issue. Reports released earlier this week clearly show that serious questions over the delivery of coking coal were left outstanding following talks with the CEOs of Jingye and British Steel on Wednesday, and it was clear that they did not yield a deal. Indeed, British Steel released a statement on 27 March in which it said that

“the blast furnaces and steelmaking operations”

at Scunthorpe

“are no longer financially sustainable”.

Given this, I ask the Minister why the Government appear to have had no plan in place to manage these developments, given that they should have been able to anticipate the need to intervene to keep the furnaces in operation.

The actions taken by the Government to secure the raw materials needed to keep the furnaces in operation are, of course, necessary, and this is the right course of action in the short term, but the Bill demonstrates a complete and utter failure to act. This should never have been necessary in the first place. The mess we are in today is entirely of this Government’s making. If they had acted sooner and negotiated better, this entire debacle could have been avoided.

The Secretary of State in the other place said at the beginning of the Second Reading debate that the previous Government did not have a deal in place with British Steel. However, on 30 April last year, British Steel was granted planning permission to build an electric arc furnace at its Scunthorpe plant and a further furnace at Teesside. This represented £1.25 billion of investment in modernising steel production. The previous Government were taking action to safeguard and improve Britain’s steel industry.

As my noble friend Lady Laing said, the Government believe that specific measures for post-legislative scrutiny and review are not needed for the Bill. I am afraid that this response is wholly inadequate. It cannot possibly be true that the Government believe it unnecessary to include post-legislative scrutiny for a Bill passed in one day and of which noble Lords had had sight for only two hours before our debate commenced. We understand the urgency required today, but that cannot come to the detriment of proper and effective scrutiny of these wide-ranging powers after the Bill is passed.

To that end, my right honourable friend in the other place, the shadow Secretary of State, tabled amendments to permit the Secretary of State to be able to use the powers under Clause 2 for the period of only one year and to insert a sunset clause which would see the Act expire either after one year or six months after the issuing of a direction under Clause 2. These amendments are crucial to ensure that the provisions in the Bill are not open-ended powers. I urge the Minister to consider placing reasonable time limits on the Bill.

The experience of the workers and communities affected by the changes at Port Talbot demonstrates the importance of these decisions and how they are taken for the thousands of people who are directly involved with the production of steel. At this juncture, I take issue with the noble Baroness, Lady Brinton, who said that the Conservatives failed to support Port Talbot. In fact, it was the Conservative Government who agreed the half a billion pound investment in the electric arc furnace at Port Talbot, and millions of pounds more to support the workers and families. This was adopted by the current Government. I remind the noble Baroness that I represented the steel-workers and the community of Port Talbot in the National Assembly for Wales for a number of years. Indeed, many of them were my constituents when I was a Member of Parliament.

Can the Minister outline how the Government are engaging with the affected communities in both areas to provide support? Furthermore, can she confirm that she and her Government understand the importance of clarity and openness with communities as to their next steps in the medium and long term? Can she share those today?

To that end, it is important to press the Minister on how long the Government intend to continue this intervention in the operation of the steelworks. Can she also outline the discussions that the Government are having with commercial providers in their exploration of solutions that do not sign the taxpayer up to a sustained liability? Furthermore, what assessments have the Government made of the relative benefits and limitations of commercial solutions versus any proposed nationalisation?

It is imperative to remember that the acquisition of an organisation also involves picking up the tab for how that organisation has been operating. A full assessment of this needs to be performed as a matter of urgency, if it has not already been completed. Can the Minister provide any information on the cost to maintain blast furnaces beyond the immediate short term?

It is vital that decisions we make in this matter centre on supporting the national interest. It is important that the Government make choices pragmatically and responsibly. I therefore ask the Minister: what, if any, role has been played by trade unions in negotiations over the future of the Scunthorpe steelworks? Can the Minister assure the House that the Government’s next steps will be determined by the national interest and not by the unions?

The events of this week have affected the relationship between the UK and China, and I am aware that the Chinese Government actively attempted to transfer ownership of some raw materials to Jingye yesterday. Can the Minister provide any updates to the House on talks the Government have held with the Chinese Government on this issue? In addition, have these events led the Government to undertake a renewed assessment of the security and defence implications on our trading relations with China?

In closing, it is important to reiterate that the Government are proposing a very short-term, temporary measure that will not provide a stable solution to the problems we face. In the interests of the affected communities and, most importantly, the taxpayer, the Government must take their next steps sensibly, and we need to make sure that we do not see another panicked response like the one this weekend. To that end, can the Minister set out the next steps the Government are taking to support the operations of the Scunthorpe steelworks in the medium and long term, beyond the intervention that is being discussed today?

--- Later in debate ---

[Lord Davies of Gower (Con)]

Can I just point out to the Minister that I asked a number a questions that she has not answered? Will she look at the record and write to me?

[Baroness Jones of Whitchurch (Lab)]

I apologise to the noble Lord—he was speaking more quickly than I can write. I will endeavour to respond to the points that I have not been able to respond to so far.

Steel Industry (Special Measures) Bill

Lord Davies of Gower Excerpts

3rd reading
Saturday 12th April 2025 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, we are moving at pace, which is a good thing. I remain grateful to all noble Lords who have contributed to this process, in particular those who tabled amendments and those who have spoken in today’s debates.

The passing of this legislation is needed not just to protect British Steel and its 3,500 employees; it is needed to protect the future of the UK steel industry to forge the steel needed in our railways, homes and critical infrastructure. That is what is at stake here, which is why I am grateful to all those who have supported the Government in our action today. Our decision to protect UK steel-making now and long into the future is essential.

We know that events such as this are exceptionally rare, but the Government would never have requested a reconvening of Parliament were it not absolutely necessary. The emergency legislation introduced to this House means that the Government will now be able to order the iron ore, coal and other raw materials needed to keep the blast furnaces at Scunthorpe running.

I am grateful to everyone who has played a part in getting this legislation over the line. This includes noble Lords in this place, officials at the Department for Business and Trade, those in departments across government who have worked on the Bill, and the staff here on the estate who were called in at incredibly short notice. It is thanks to all those efforts that we can protect steel-making in this country now and for years to come. I beg to move.

[Lord Davies of Gower (Con)]

My Lords, I shall be very brief. I just want to say that this is a very important and necessary debate, and it is right that we have had it today to do everything we can to support our remaining steel industry. I have sadly witnessed the demise of this great industry in Wales, particularly south Wales. As I say, we must do all we can to protect Scunthorpe, and this emergency Bill is intended to do just that.

It has been a very good debate, with passion from all sides of your Lordships’ House. On behalf of His Majesty’s loyal Opposition, I thank all noble Lords for their contributions. In particular, I thank the Minister for her part in this. Without further ado, I wish noble Lords well for the rest of the recess and a particularly happy Easter.