Steel Industry (Special Measures) Act 2025

Lord Hannan of Kingsclere Excerpts

Thursday 23rd October 2025 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, I add my voice to the swelling chorus, the paeans of praise, to the noble Baroness, Lady Lloyd. It is no small thing to make your maiden speech at that Dispatch Box, and I enjoyed the way she conjured the image of the subterranean River Effra, encased under all those tonnes of tarmac and concrete, flowing slowly beneath our feet, arched over by those visionary engineers in the Victorian era who incorporated it into the drainage and sewerage system of London.

Something else that is flowing, subterranean, through this debate is the assumption that government help is intrinsically virtuous and beneficial: the assumption that, if there is a problem, it is for politicians to fix it. People in this line of work have, I suppose, a very natural predilection to want to look useful. This can lead us into the fallacy of saying, “Here is a problem. It needs something done. Oh, there’s a something. Let’s do that”.

But when has nationalisation ever been a long-term solution to an industrial problem—not least in the case of steel? The nationalisation did not work in 1949; the nationalisation did not work in 1967. That was not because the people who were put in charge of British Steel were the wrong people, bad people, selfish people or lazy people. I mean, some of them presumably were, by the law of averages, but no more than anyone else. That was simply because a government bureaucrat does not have the same incentives as somebody who actually owns an enterprise. We have seen that dynamic play out again and again. It is extraordinary, in a way, that this needs saying. But, when we had that emergency debate on the legislation back in April, I think mine was the only voice, along with that of the noble Lord, Lord Kerr of Kinlochard, to make the case in principle against government intervention. I think there were two or three in the other place, and that was it.

Thirty years ago, it would have been assumed that things were better left to the private sector. That change in our assumptions, that vibe shift, goes a long way towards explaining why our growth as a country has slowed. The one thing the Government can do is get out of the way, by which I mean: stop legislating to give this country the most expensive industrial energy in the developed world. The reason why we have uncompetitive, energy-intensive industry—not just steel but AI and everything in between—is a series of needless choices we have made that have pushed up the cost of electricity. You may say that this is a price worth paying, that it is either that or lose the viability of the planet; but then, admit that that is the trade-off. Please do not look surprised when energy-using industries then have to shed productivity and employment.

Energy is not just one among many commodities; it is the vector of economic growth. The story of the rise of human civilisation is the story of the fall in energy prices as we moved from fire to kerosene to modern electricity, nuclear and all the rest of it. We have become the only civilisation ever to try to rip out a modern energy infrastructure and go back to something more expensive. Of course, there are consequences when you do that.

I have heard, I think, two arguments for government intervention—forgive me if I am missing anything; one was to do with jobs and the other with security. We are too late on the jobs one. As my noble friend Lord Prior said, we are dealing now with the residue of an industry, no longer with the great global leader it would have been. I hope that noble Lords will not think me ungallant if I point out that the noble Baroness, Lady Lloyd, the noble Lord, Lord Stockwood, and I are all about the same age. We did not grow up with the rhythm of the clangs and groans and hisses of steelworks: it was already gone in the 1970s. The big decline in productivity and employment happened in the 1970s as a result not of trade but of technological advance. That meant that more produce could be turned out by fewer workers. In the 1980s, there was an increase in steel production in this country but a continuing decrease in employment because of efficiencies and those technological gains.

This is something the whole world has seen. Please let us not hold out the false idea that we can somehow go back, if we wanted to, to the levels of employment that my old friend, the noble Lord, Lord Mohammed, was conjuring in his speech about growing up in Sheffield. That world is not going to be brought back. The challenge for a responsible Government is, what do we find as alternatives? How do we carry on moving up the production chain? How do we carry on specialising in what we do best as a country? Yes, if you want to, you can prop up jobs, at great cost to everyone else, but it is worth looking at the figures here. According to the House of Commons Library, there are 37,000 people employed in our steel industry—about 0.1% of our workforce. Let us put that number in context by looking at the numbers employed in steel-using industries, in the sectors that will be most impacted by tariffs or government interventions that serve to push up the price of their steel inputs. There are 95,000 people working in aerospace, 166,000 working in car production, 476,000 working in agriculture and the better part of 2 million working in housebuilding. These are all industries that use steel and whose interest is in having as low a price as possible.

As for security, listening to the debate in this Chamber and outside you would sometimes think that we and China were the only two steel-producing countries in the world and that we need to protect ourselves against a massive influx of goods from a country that is a security threat and is dumping. Noble Lords may be surprised to learn that China is not one of our top 10 overseas suppliers. Our biggest suppliers are Spain, Germany and Belgium. Our fastest-growing suppliers, proportionately, are India, Vietnam and Turkey.

Actually, it is no bad thing that we are diversifying away from the European Union, given how unreliable a trading partner it has just shown itself to be with this threatened 50% tariff on our steel. I am not sure that it will actually go through with a 50% tariff on our steel. My guess is that it is part of its negotiating position in advance of the renegotiation of the TCA. It will be delighted by the response of the noble Lord, Lord Liddle, which is precisely what the threat was designed to elicit, and indeed by the ecstatic ululations from my noble friend Lord Deben, who is no longer in his place. At the very least, I think this is part of trying to get a better deal on fisheries and whatever, but, of course, what it would really like is for us to throw away our independent trading policy and, as the noble Lord, Lord Liddle suggests, join its customs union and subject ourselves to all of the greater tariffs from other countries.

We benefit as both an importer and an exporter. We benefit from having bigger markets. In raw figures, we export £4.8 billion-worth of steel every year, and we import £7.4 billion. By and large, we are exporting the more high-grade stuff and importing the cheaper stuff, but we benefit both ways around. It is better for us to have cheaper inputs and, of course, it is good for us to have the revenue. None of that will be assisted if we try to close ourselves off and become more autarkic. You do not become a more secure country by trying to produce everything yourself. You become a more secure country by having the widest possible diversity of suppliers, so that you are not vulnerable to a local shock or disruption, which might as easily happen on your own territory as anywhere else.

The thing that is really making us insecure is the squeezing of the private sector, the squeezing of the revenue-generating bit of our economy to fund the revenue-consuming bit of our economy, not least by measures such as this one that leave taxpayers on the hook for loss-making industry. The change in the size of the British state since the Guildford three were in Tony Blair’s office is extraordinary. Then, 34p in the pound was spent by the Government; now it is 45p in the pound. That is why we are not succeeding economically in the way that we used to, and until we address that, until we begin to reverse that imbalance, we are not going to be able to release the creative genius of our people.

I will leave noble Lords with this thought. We are not the experts here. There may be all sorts of people with experience in the steel industry, but that does not give them the same proximity and expertise that actual ownership and involvement in the industry does. If a bunch of people from Scunthorpe or Port Talbot or any of the other steelworks came here and said, “Here’s how you should change the composition of the House of Lords, here’s the time of day that you should have your committee meetings, and here are a few changes that we would suggest you make in the protocols of how you do debates”, we would no doubt thank them politely for their input, but we would maintain, quite correctly, that we are the experts here. Please let us have the modesty to accept that the same is true the other way around.

Steel Industry

Lord Hannan of Kingsclere Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, the question posed by the noble Lord, Lord Kerr of Kinlochard, and then repeated by my noble friend Lord Moylan hangs in the air of your Lordships’ Chamber, brooding and unanswered: what is the justification for having a permanent, open-ended commitment to subsidise domestic production? We have heard a perfectly reasonable case that we need lots of steel and security of supply. I agree with that, but the way to have security of supply, whether of steel or anything else, is to source from the widest possible variety of sources so that you are not subject to a localised shock or disruption, which might as easily happen in your own territory as anywhere else.

That is exactly where we are with steel. There is no foreign country that accounts for more than 15% of our total imports—not our total use, our total imports. It is an extremely comfortable position. There is a very widespread view, I think, outside this Chamber that we are somehow dependent on China or other unfriendly autocracies. We heard it from the noble Baroness, Lady Drake, a moment ago, but which countries actually are our chief suppliers? The first is Germany, the second is Spain, the third is the Netherlands and the fourth is Belgium. If, in some bizarre world, we were blockaded by the EU, we would still be able to import from Algeria, Turkey, Vietnam and South Korea before we got to China, which accounts for only 7% of our imports. We need to be realistic about the numbers.

If, for whatever reason, we decide that, despite that, we must have some kind of domestic production capacity at whatever cost then the easiest way to ensure that is to make our industries competitive by no longer imposing on them the most expensive energy costs in the developed world. We seem to have forgotten that actions have consequences. We pass resolutions and laws, we make decisions that make us feel warm and comfortable about net zero, such as not allowing the coking coal mine in Cumbria to be opened, and then we wonder at the consequences. If we want to have a domestic steel capacity, the way to do it is not to burden the producers and, indeed, our taxpayers with the costs of this policy and to be honest about the realism of deferring it.

I close by saying that we are again about to take a decision that will have consequences, which will be a repeat of a policy that has never, ever worked: the nationalisation of steel, which fails every time. It is like that scene of Homer Simpson constantly trying to grab his beer can from some electric wires and electrocuting himself each time and going back to it. In 1949 and in 1967, nationalisation led to disinvestment and maladministration, to political rather than economic decisions and, in the end, not only to the failure of the industry but to taxpayers being left on the hook, as it will this time, to the tune of £700,000 a day in this case.

“… the Dog returns to his Vomit and the Sow returns to her Mire,

And the burnt Fool’s bandaged finger goes wabbling back to the Fire”.

Employment Rights Bill

Lord Hannan of Kingsclere Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, what a privilege to follow the fourth of those four outstanding maiden speeches. I reassure the noble Baroness, Lady Hazarika, that I echo her sense that the humanity and dignity of the noble Baroness, Lady Berger, in the face of extraordinary provocation, was an inspiration not only to the many people who uphold the best and most decent tendencies in the Labour Party, but to everyone in this country who values tolerance, religious pluralism, civility in public discourse and the supremacy of parliamentary life. I hope I will not destroy her credibility when I say that of all the people in the independent group, she was the only one I was secretly rooting for during that bizarre moment in our political life.

What a pleasure, also, to follow my noble friend Lady Cash—my friend of three and a half decades. I remember seeing a picture of my noble friend in the Observer, in about 2009, with the most extraordinary array of lefty lawyers, including, if memory serves, the noble Baronesses, Lady Chakrabarti and Lady Kennedy of the Shaws. They were making this great defence of liberty, and that has been her core belief throughout her political career. It was very apt that, when she stood for another place, she fought in Westminster, the constituency of both JS Mill and of John Wilkes. If there is one precept that this country has developed and exported, and contributed thereby to the happiness of humanity, it is personal autonomy.

My real privilege, however, is in following and welcoming my noble friend Lord Young. He is a one-man advertisement for the hereditary principle. It is an unfashionable cause to be making at a time like this. He did not mention that his father was a Labour peer. You would have got it, if you were listening between the lines. His father was best known for writing a book on meritocracy, which he was against. My noble friend has had a career that tests the outer limits of what we understand by meritocracy. Right from the start, he got into Oxford on the basis of having received an acceptance letter in error. They posted it by mistake, even though he failed to make the grade. He then successfully argued that they had a moral obligation to take him anyway. He went on to have this extraordinary career, which I can only describe as cinematic—in the literal sense, in that a film was made in 2008 of my noble friend’s life; he was played by Simon Pegg. The only other person I can think of who has had a biopic before he was elected to anything is the current Vice-President of the United States. But I will not push that resemblance.

My noble friend then went on again and again to show that quirkiness, that independence of character and that courage that is, I think, one of our greatest virtues as a people. I mean no disrespect to our political system when I say that you can get to this Chamber by being careful and correct and conformist in your views. I know one or two people who have made it to the top in politics by waiting until everyone else has spoken before they express a view, by knowing how to nod sagely and talk slowly. No one would describe my noble friend in such terms.

The two particular causes with which he has been most recently associated—the Free Speech Union and the Critic, which began as an anti-lockdown campaign—showed extraordinary moral courage: not the simple courage which some people have and some do not but that readiness, that intellectual readiness, to be incredibly unpopular but to stand by a position that you know to be right. Personally, I have to say that, on the lockdown, I remember the days when people were accusing him of being a eugenicist and a mass murderer and all the rest of it, but with every day that has passed he has come to be more and more vindicated.

Turning to the Bill itself, I can be very brief. I am afraid I find that it contains absolutely no redeeming qualities whatever. I could go on at length about what is wrong with it, but I would be repeating many of the arguments that we have already heard, not least from my noble friends Lady Barran, Lady Coffey and Lady Noakes. I will focus on just one solitary provision, which is the rights from day one. I think we are in real danger in this nation of having more and more workers’ rights and fewer and fewer workers. Here is an unpopular truth that people very rarely like to admit and never really like to verbalise: the way of encouraging people to hire is to make it easier for them to fire. The way in which you encourage employers to take on more staff is to give them the reassurance that they are not going to be stuck with duds or embroiled in weeks and weeks of acrimony for the price of a second-class stamp or an email by somebody who they had then to remove from employment.

That has been the secret of our country’s success for some three decades. Whatever the world has thrown at us, including the global financial crisis and the pandemic, structural employment has always been higher here than in Europe because we have this relative flexibility in our labour market that means that we bounce back very quickly from downturns because companies are prepared to take people on. I think that is ceasing to be the case now. I speak as the father of two children who are just entering the workplace and I listen to what their friends are saying. If you speak to anyone of that age, there is a palpable freeze now, an uncertainty among employers, in anticipation of both this Bill and the related rise in national insurance. I have a fear that those 30 years of structurally low unemployment are about to come to an end.

Noble Lords will be able to look back at my words and laugh at me if I have got this wrong, but I suspect that we are at the beginning of what is going to be a sustained and secular rise in unemployment. As I say, I hope to heaven that I am mistaken about that, but, as Scotland’s national poet once said:

“An’ forward tho’ I cannot see,


I guess an’ fear!”

Tariffs: Canada and Mexico

Lord Hannan of Kingsclere Excerpts

Tuesday 4th March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, we are aware that the US has imposed a tariff on all Chinese goods. I reiterate that it is not for me to comment on another country’s bilateral trade relationships—that is a matter for the US—but we are of course aware of China’s retaliatory response. We respect China’s dialogue with the US and will not intervene. However, the Government are prepared to take any necessary action to mitigate the potential economic impact on our businesses and will continue to monitor the situation.

[Lord Hannan of Kingsclere (Con)]

My Lords, to return to the Minister’s first Answer, of course I am sensible that there are things that you do not say in public, but I hope that in private His Majesty’s Government are making it clear that we have an interest in free trade within North America. We are the largest investor in the US and we will be affected by US tariffs on every component part that will be hit by them. We also have an enduring interest in the prosperity of Canada. How can anyone in this country think of Canada without thinking of Vimy Ridge, Juno beach and a hundred other battlefields where it has stood alongside us? I hope we will make it very clear that free trade between the United States and Canada is a British national interest.

[Baroness Jones of Whitchurch (Lab)]

My Lords, Canada is a valued partner for the UK, including as a Commonwealth member state, and our shared ties are deep and historic, as noted by our respective Prime Ministers when they spoke on 5 February. Our trade relationship, which was worth more than £26 billion in the four quarters to the end of quarter 3 in 2024, supports jobs and businesses on both sides of the Atlantic. This is underpinned by our trade continuity agreement. These relationships are important and ongoing. We will continue these discussions and hope to further and deepen our ties with Canada in due course.