Steel Sector

Lord Sharpe of Epsom Excerpts

Thursday 23rd April 2026 Lords Chamber

Asked by

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what steps they are taking to incentivise investment in and strengthen the long-term competitiveness of the steel sector.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, steel is a vital component of the UK economy. That is why the Government have published their first ever steel strategy, underpinned by up to £2.5 billion of funding, to create stable, competitive conditions and to secure the long-term future of British steel-making. The strategy will attract investment to strengthen long-term competitiveness. It will also introduce a robust new trade measure to counter the damaging effects of global overcapacity, and reflect the importance of steel for critical national infrastructure and defence. It will also lower barriers to investment, through energy, grid and planning reforms, and mobilise demand for UK-made steel.

[Lord Sharpe of Epsom (Con)]

I thank the Minister for his Answer but, on that “robust” trade measure, can he say what proportion of UK steel imports of finished steel will be covered by the proposed reduced quotas and increased tariffs? Is it the intention to exclude Tata Steel and other finishing mills from import tariffs on their semi-finished feedstocks?

[Lord Stockwood (Lab)]

I am grateful to the noble Lord for the advanced sight of his follow-up question; I also commend the forensic, technical nature of the Question. The trade measure to which he refers covers 20 categories of steel, including all steel that is made in the UK. That includes bright bar, wire and stainless steel. Categories that were not covered in the steel safeguard are all now in scope. This means that the measure protects 100% of steel production domestically in the UK, whereas the steel safeguard protected only 96%. We engaged extensively with industry when developing this measure, and have sought to balance the need to protect the domestic steel-making industry while maintaining secure, reliable supply chains for downstream businesses. We will continue to engage closely with industry as we implement the measure, and we have committed to reviewing it in the next 12 months to ensure that it is entirely fit for purpose.

British Industrial Competitiveness Scheme

Lord Sharpe of Epsom Excerpts

Wednesday 22nd April 2026 Lords Chamber

Today’s announcement of our bigger, bolder scheme is proof positive of our commitment to backing British businesses for the long term. It sits alongside our continued focus on short-term impacts, on which we will not hesitate to act where needed. We will continue using our activist industrial strategy to create the right conditions for British firms to succeed and grow. We do so because we know that when the Government and enterprise work in partnership, we can make Britain stronger, wealthier and more resilient. I commend this Statement to the House”.

[Lord Sharpe of Epsom (Con)]

My Lords, the Minister will soon trumpet the British industrial competitiveness scheme as being very good for business. But, for all the rhetoric and self-congratulation, this policy will have no meaningful impact on the overwhelming majority of British businesses. By the Government’s own figures, around 99% of firms will see no benefit whatever. So while the Government speak grandly of intervention and support, the reality for most businesses—our small manufacturers, our family firms, pubs, farmers, retailers and countless others—is unchanged. They will go on facing the crippling costs that we heard about in the previous debate, with no help at all from this announcement. Even with the reliefs that have been announced, they are staggered, and the earliest will kick in only in April 2027.

What is the wider context in which this Statement must be judged? It is one not of support for enterprise but of cost, burden and damage inflicted by this Government on British industry. Employers have been hit by increased national insurance contributions. Businesses now face the additional costs of the Employment Rights Act, which, by their own admission, run into the billions, together with the further burden of expanded trade union access to workplaces. That is something many employers will regard, in practice, not as access but as a licence to raid workplaces, disrupt operations and undermine confidence. Having said that, we must acknowledge one delicious irony of the Employment Rights Act: the Prime Minister will be seeing the first high-profile victim of an uncapped unfair dismissal award, which we on these Benches warned about.

The Government will now seek to blame the war in the Middle East, but that explanation simply will not wash. Britain’s industrial electricity prices were already among the highest in Europe and around four times those in the United States—long before this latest crisis. These are not sudden or unforeseeable problems; they are the product of policy failure. They are the result of loading electricity bills with the cost of an energy system increasingly structured around subsidising intermittent renewables, managing grid constraints and paying for mechanisms such as contracts for difference. Those costs were there before the latest conflict, and industry has been warning about them for years.

In what sort of alternative reality does it make sense to have to come up with various schemes—this, the BICS, the supercharger package, the energy-intensive industries compensation scheme, the network charging compensation scheme and all the rest, all of which are of mind-bending complexity and designed to mitigate the effect of the Government’s own policies with taxpayers’ money?

Then we come to domestic energy production. At precisely the moment when Britain should have been strengthening resilience and insulating itself from geopolitical shocks, this Government have moved in the opposite direction. They have imposed a punitive 78% tax burden on North Sea oil and gas producers—a windfall tax on windfalls that, in many cases, simply do not exist. They have halted new licences at exactly the wrong moment, when domestic production is needed most to buffer Britain from volatility abroad. The Jackdaw gas field could provide 6% of Britain’s gas needs. As my noble friend Lord Moynihan noted in the previous debate, there is no case not to do this. The result is plain to see: jobs are being exported, gas is being imported, rigs are leaving, investment is frozen, and capital is fleeing to more stable and more welcoming jurisdictions. Hundreds if not thousands of skilled jobs are being lost and Britain is becoming more, not less, exposed.

The Government will soon blame the high international gas price, which is used to set the domestic electricity price two-thirds of the time. But, as any O-level student knows, increasing supply lowers prices. Will the Government therefore reverse the ban on these licences? Is not the simple truth that the Government have chosen to make this country more vulnerable to geopolitical shocks, including conflict in the Middle East, than it needed to be?

In the other place, the Secretary of State, Peter Kyle, said that this package would deliver for Britain’s manufacturing, but what have the Government done to British manufacturing? The manufacturing base has already been damaged by the Government’s disastrous steel strategy, which has raised the cost of both domestic and imported steel. That matters profoundly for sectors such as the automotive sector, where steel is not incidental but foundational. One cannot claim to back manufacturing on Monday while making core industrial inputs more expensive on Tuesday.

The Secretary of State also cited the support of the Society of Motor Manufacturers and Traders, but does the Minister accept that the motor industry is simultaneously being hit by other government policies that are doing real harm? The electric vehicle mandate is imposing enormous costs on manufacturers, and the industry itself has warned of a multi-billion-pound burden—around £6 billion by the SMMT’s own assessment.

The Government’s rhetoric is one thing, but the reality is quite another. They speak of backing British industry while, in practice, they are crushing parts of our industrial base under the combined weight of energy costs, regulation, mandates and taxation. Will the Government consider abolishing, or at least relaxing, the EV mandate to give much-needed relief to the British automotive sector?

Yes, we welcome the announcement that the carbon price support will be removed from April 2028, but if the Government now accept that this burden damages competitiveness, why on earth are they waiting until 2028? Why must British industry continue to suffer for another two years before any relief is given? British industry needs lower costs, a competitive tax regime and a Government who stop making this country harder in which to invest, to manufacture and to do business.

[Baroness Kramer (LD)]

My Lords, this debate picks up from the Oral Question earlier on the IMF, which warned that the global economy is losing momentum as a result of the Iran war, with the UK expected to be the hardest hit of the G7 economies. The Government need to rethink in the shadow of war, not just to watch and wait.

That brings me to BICS. We welcome plans to bring down some of the highest energy prices in the world, and we are pleased that BICS, which benefits 10,000 of the most energy-intensive businesses, will also provide a one-off payment to cover this year. However, the money will not actually come until next year, so when will those businesses, all of which have to plan ahead and need to know the details—indeed, many are negotiating a whole variety of contracts as we speak—find out exactly what they will get, including which benefits and when they will come?

Many other businesses are threatened by rising costs here and now. I am not clear that the Government have recognised the acute energy cost problems for food businesses and agribusinesses, which not only will have a huge impact on the cost of living of ordinary people but, as we are now starting to hear from some reports, might even lead in certain areas to food shortages. Surely this is a call to action, so what action can we expect?

Frankly, many SMEs, the backbone of our communities, are on the brink from many kinds of pressures, as the Government will be very much aware. SMEs are exposed to a deregulated energy market, with very little support to face it. There is widespread concern about a lack of competition, which has the effect of locking them out of good deals by which they can price energy more effectively. SMEs with more than 50 employees do not even have access to the Energy Ombudsman. The hospitality industry is an extreme case right now and, frankly, it is pretty desperate. Will the Government at the very least instruct the CMA to open an urgent investigation into the state of competition in the energy retail market for hospitality? Will they find some quick solutions for all the areas I have covered? We cannot afford for these industries to endure any more stress and potentially curtail or curb their business.

Of course SMEs need to achieve energy efficiency, but we all know that means upfront costs. Will the Government set up an energy security bank as a mechanism to provide SMEs with low-cost finance so that they can invest in energy tech? They can then repay that finance because of the savings they make, so it would be a sensible and appropriate way to generate a circle of financing. With that, we would need a real overhaul of the business rates system. At the moment, firms are penalised if they invest in productive energy saving investments made on their premises. This is surely the opposite of what the Government want. Will they take action on these fronts quickly?

Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026

Lord Sharpe of Epsom Excerpts

Tuesday 21st April 2026 Lords Chamber

[Viscount Thurso (LD)]

My Lords, I declare my interests as president of the Tourism Society of the United Kingdom, and all the other things I am involved in within the hospitality industry—none of which now, sadly, is remunerated. I congratulate the Minister on underlining the importance of the hospitality and tourism industry to the United Kingdom. Certainly, I believe that it is one of our great growth industries and has tremendous potential for the future.

We are supportive of these proposals, which are broadly very sensible. The travel industry and the whole way in which people book their holidays have changed dramatically in my working lifetime and particularly over the last 15 or 20 years. The 2018 regulations were an attempt to corral some of the worst practices that were going on, with the development of the internet in particular. That they have been reviewed and considered and these proposals have been brought forward is indeed welcome. Getting rid of the two types of linked package, type A and type B, with type A going into the full package and type B disappearing, will be very welcome to many SMEs in particular. Frankly, my own little business in Scotland, that was probably in B, will be a beneficiary of that.

I have spoken to as many people in the industry as I can, and there is broadly a great welcome. I ask the Minister to keep a close eye on the implementation. I am glad that the year has gone in to give people time to make the necessary changes. There are some concerns about costs. The cost to business over 10 years, which is estimated at £98 million but offset by gains of £117 million, falls on slightly different people, so there are winners and losers in this. Broadly speaking, that is not a huge factor, but I think we should keep an eye on where the costs are just to make sure that we have got that right. I ask the Minister to continue to consult with the industry, both on the implementation of these regulations and what might be done to improve them in future. With that, I welcome their introduction.

[Lord Sharpe of Epsom (Con)]

My Lords, I follow the noble Viscount in agreeing that the consultation needs to be ongoing, and I will come back to that theme in a second. It is important that the Government reduce the administrative burden as well as protecting consumers, and this legislation attempts to do so. The Government say that the purpose of the package travel framework is to give consumers appropriate protections while also supporting growth, innovation and collaboration in the travel sector.

Therefore, there are parts of this instrument that we support. The removal of the confusing linked travel arrangements category and the clarification of rights around redress from third parties respond to genuine problems. The Government say that the present framework creates confusion for consumers and unnecessary complexity for businesses, and that stronger, clearer rules can support confidence and demand. But the real question for the House is whether the Government have listened carefully enough to what businesses told them in the consultation—a point I will come back to.

The Government’s own consultation response says:

“Stakeholders consistently highlighted the disproportionate compensatory obligations the regulations place on travel operators … especially in relation to being the compensator of last resort”.


It also records concern about the interaction between ATOL and the package travel regulations for firms selling both flight and non-flight products.

First, on domestic packages, the Government found that 65% of respondents supported exempting UK-only packages without passenger transport from the regulations. Accommodation providers and leisure businesses said the current rules can discourage them from offering simple bundled products. Some said the legal and insurance responsibilities attached to packaging up a stay with an activity or voucher act as a deterrent, especially for smaller operators, but the Government have ultimately decided not to proceed.

My first question to the Minister is this: if the Government accept that many domestic tourism businesses are being discouraged from innovating, what practical alternative are they offering those firms today? If they will not legislate in this area, how exactly will they help smaller domestic operators to bring new products to market?

Secondly, on insolvency protection, the Government say that trust providers supported allowing organisers to combine trust protection with bonding and that 57% of respondents said that greater flexibility would help businesses meet their obligations, but the same response also makes it clear that industry fears piecemeal reform. Businesses warned that more flexibility without clearer trust account rules, stronger insurance obligations and better oversight could actually weaken protection and widen the gap between regulatory intent and industrial reality. My second question to the Minister is: what work is the department doing to address the broader structural problems that businesses have identified on insolvency protection, rather than leaving them unresolved, and what timetable is there for that work?

Thirdly, on redress and refunds from third parties, the move to create a 14-day period for refunds of cancelled services and clarify that there is a right to redress is welcome, as far as it goes. However, there are ongoing difficulties with enforceability, especially against overseas suppliers, so my third question is: what use is a strengthened right to redress if a small or medium-sized organiser still cannot enforce it effectively against a supplier overseas, and what support enforcement mechanisms will the Government put in place?

Fourthly, on other tourist services, the consultation exposed a real problem for many smaller businesses. The Government found that 55% of respondents wanted the “significant proportion” test removed. This test is used to decide whether an added tourist service, such as an excursion, spa treatment or event ticket, is valuable enough compared with the rest of the booking to make the whole arrangement a regulated package holiday. A modest add-on can become a significant proportion simply because the room rate is low, drawing smaller firms into regulation more easily than larger ones selling the same product. So my fourth question is: what further work will the department do with industry to produce a clearer and fairer test for other tourist services, particularly for smaller operators who say the present rules can work against them?

There is a further concern that we feel Ministers have not properly answered. Under the Government’s approach, firms may no longer be fully in control of when they are selling a package. The industry’s concern is that package status could be triggered not by a deliberate commercial decision of the operator but by the behaviour of the consumer during a single online journey. That matters because full package status brings with it major legal obligations including insolvency protection, organiser liability, refund obligations and, of course, wider compliance costs. The gateway concepts on which this reform depends—the “single visit” and “facilitates”—remain undefined in legislation. Businesses are being asked to accept materially greater liability, while the key terms determining when that liability arises are still unclear.

That lack of clarity creates a risk of unintended package organisers. Hotels offering add-ons, airlines selling accommodation or car hire through third-party plug-ins, and banks, supermarkets or white-label distributors that host travel products may all find themselves pulled into package organiser status without ever having consciously chosen to enter that market. The Government say that these reforms will make the rules clearer for consumers and support compliant businesses, but many in the industry fear the opposite: that it will mean more uncertainty for firms, more complexity in compliance systems and more scope for accidental liability. Can the Minister confirm that her department will publish statutory or regulatory guidance defining “single visit” and “facilitates” before any commencement date takes effect, so that operators at least have legal certainty about the scope of the new package definition?

There is one final question that I feel obliged to ask, because the Act under which this regulation is being made, namely the Retained EU Law (Revocation and Reform) Act 2023, actually expires in June this year. What replaces it? That is a question which my noble friend Lord Moylan asked during a debate on a transport SI recently, and to which the Government have yet to provide a satisfactory answer. Could the Minister have another go now, please?

We will not oppose these regulations today. However, I hope that the Minister can answer the questions I have raised.

[Baroness Lloyd of Effra (Lab)]

My Lords, I thank noble Lords for their contributions to this debate on the Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026, and for underlining the importance of the sector. I also thank the noble Viscount, Lord Thurso, and the noble Lord, Lord Sharpe, for welcoming the measures we are putting forward today to simplify the rules. We will keep a close eye on implementation.

--- Later in debate ---

To conclude, I think we all agree that this is a very important sector, and that the package travel amendments being made today will bring simplification so that more holidays can be taken by consumers. These reforms will strengthen the sector, ensuring that consumers continue to benefit from strong protections, as well as clarifying obligations, easing burdens on business and, in turn, supporting a healthy and thriving economy.

[Lord Sharpe of Epsom (Con)]

I welcome the Minister’s commitment to talk to the industry more about these regulations, but can she commit to listening to what they have to say? The reason I mention that is that the option to absorb LTA(A) into the package definition was never presented to the industry as a specific, serious or preferred option—the closest it came was as one of four multiple-choice questions. It is very important that the industry be listened to when it is airing its concerns, particularly about single visit and facilitation. I ask that of the Minister, and I apologise for delaying her.

[Baroness Lloyd of Effra (Lab)]

Yes, we will.

UK Steel Strategy

Lord Sharpe of Epsom Excerpts

Monday 23rd March 2026 Lords Chamber

Britain needs a steel industry for our national security, economic security and national interest. We need to ensure that Britain remains an internationally competitive steel-making nation not just because our past was built on steel, but because our future depends on it. I commend this Statement to the House”.

[Lord Sharpe of Epsom (Con)]

My Lords, only last year Ministers were forced to rush through the Steel Industry (Special Measures) Act, which was an emergency nationalisation of British Steel in an industry that they had helped to destabilise. That Act told us everything we need to know—socialists must seize the means of production because they are utterly incapable of creating, maintaining or managing it. Unfortunately, this strategy is a testament to that.

Since the intervention at British Steel, the National Audit Office has now reported on the actual cost. The taxpayer has been paying £1.28 million to British Steel every single day. This strategy was meant to be published last year but has been delayed many times because the Government have said that they needed to get it right. What they needed, it appears, was time to construct a protectionist nightmare—a scheme that throws up tariff walls of potentially up to 50% and showers subsidies on a narrow set of domestic producers, while leaving the downstream industries that depend on affordable steel to fend for themselves.

The Government tell us that this strategy is necessary because British steel producers face crippling energy costs and unsustainable labour costs. Whose fault is that? This Government have driven energy costs higher through the contradictions of their own net-zero agenda. This Government have loaded employers with higher national insurance contributions and the cumulative regulatory burden and costs of the Employment Rights Act. They now arrive with subsidies, presenting themselves as the saviours of the very sector they have helped to cripple.

We have seen this pattern before. It is the logic of the youth jobs subsidy: the Government manufacture hostile conditions then spend taxpayers’ money papering over the consequences of their own failure while the underlying damage festers untouched. It is always the taxpayer who must bear the full weight of this Government’s incompetence. Even after subsidy, the UK’s energy prices in the steel sector will be almost two and a half times those of the US, 15% above France and 25% above Germany. There was no mention at all of any Asian producers in the steel strategy. I wonder why.

On net zero, the Government cannot have it both ways. They have banned new domestic coking coal production in the name of environmental responsibility, but the United Kingdom now imports coking coal from abroad: 47% comes from the United States and 38% from the European Union. We are not, therefore, reducing emissions. We are offshoring them, and paying a premium to do so, while simultaneously claiming to be building a strong domestic primary steel industry on the very raw material that we have made it illegal to produce ourselves.

We are told that this strategy is a response to global overcapacity and that the world is awash with cheap foreign steel, undercutting our producers at every turn. I invite the Government to explain precisely what they mean, because some might recognise what they describe as overcapacity as competitive pricing. Cheap steel is not a threat to the British economy; it is a benefit to it. Lower input costs for our manufacturers, our construction firms and our aerospace and automotive sectors mean that those businesses can invest, grow and employ more people.

The Government propose to eliminate that benefit artificially in order to protect a narrow band of domestic producers, and the bill, as ever, falls to the taxpayer. We have already seen £377 million consumed by the emergency nationalisation of British Steel in under a year. Now, the Government are announcing another £2.5 billion. The consequences of this decision will be felt most immediately by the industries that depend on steel as an input. Consider, for example, the automotive sector. There is, on average, 900 kilograms of steel in every vehicle manufactured in this country. The sector supports over 150,000 jobs and is already under severe pressure. When President Trump imposed 25% tariffs on passenger vehicles, UK car exports to the United States fell 55.4% year on year.

Construction tells a similar story. It is the largest single consumer of steel in the United Kingdom, accounting for about 53% of all domestic steel demand, and it is already suffering its fourth consecutive quarter of falling output. I ask the Minister directly: have the Government assessed the cost that these tariffs will impose on the construction sector? If they have, that assessment is conspicuously absent from the strategy.

There is a deeper contradiction that the Government must answer. They offer two arguments for these tariffs. The first is overcapacity: too much foreign steel flooding the market, creating supply so abundant that it undercuts our producers at every turn. The second is national security: we are dangerously exposed to unstable foreign supply and cannot afford dependence on it. But these two arguments cannot coexist: if the world is drowning in cheap steel then supply is, by definition, abundant; if foreign supply is genuinely precarious and could be disrupted then the overcapacity does not exist. Which is it? Is there too much steel in the world, or too little? Until the Government can answer that question honestly, this strategy has no coherent foundation whatever.

The national security argument also deserves further scrutiny on its own terms. The Government’s own data reveals that direct defence procurement requires around 36,000 tonnes of steel per year. Total domestic steel demand runs between 9 million and 11 million tonnes. Defence procurement represents less than 1% of total demand. The notion that we require up to 50% import tariffs and billions in state subsidy to secure that supply is a protectionist canard. Genuine strategic resilience is achieved through diversification—sourcing from the widest possible range of allies and partners. A supply chain built across allied democracies will be far more resistant to even the most radical geopolitical events.

If the Government wish to understand how world-class industries are built, they need look no further than some of our own. Financial services, life sciences and Scotch whisky between them are worth tens of billions in exports and, in many cases, are the envy of the world. Not one of them was built through the protectionism of the state. They were built through open markets, accumulated capital and the freedom to compete.

The Government have set a target of 50% steel production. Can the Minister commit today to providing the House with regular updates on progress toward that target? Will the Government tell us what the exit strategy from public subsidy is and when private sector investment is expected to replace it? What does the future of British steel-making actually look like, and who will build it? Any new entrant to the British steel market today will still face high and rising electricity costs, banned domestic coking coal, import quotas raising the cost of scrap metal inputs and a market dominated by subsidised incumbents with the full backing of the state.

This side of the House is not indifferent to the communities whose livelihoods depend on steel, nor to the genuine strategic importance of manufacturing in this country. But we do British industry no favours by raising input costs for every sector that depends on steel, and we do this country no favours by abandoning the open, competitive, capital-generating approach that made us a strong economy in exchange for a protectionism that serves the few at the expense of the many.

[Lord Fox (LD)]

My Lords, I thank the Minister for the Statement and welcome that there is a strategy here, although, as the noble Lord, Lord Sharpe, said, we were expecting it for some time. However, given what is happening in the world, reading this document conjures the image of someone trying to put up a tent in a howling blizzard, and at the heart of the blizzard are the energy market ructions caused by the Iran conflict.

The UK’s industrial energy costs were already at least twice those of the EU and four times those of the USA. The noble Lord, Lord Sharpe, and I have different multiples, but they are all very large. It is not clear to me whether these distortions that are already there in the UK energy pricing system will increase the gap as a result of the Iran issue as it bites. I doubt the gaps will narrow.

As the strategy sets out, the British industry supercharger scheme helps those companies that benefit from it. However, the steel industry comprises very many businesses, large and small, that do not qualify for the supercharger, although some may qualify for the British industrial competitiveness scheme—BICS. Can the Minister say how many steel-related businesses will benefit from BICS? However, BICS does not kick in until 2027. Given what is happening internationally, will the Minister undertake to speak with her Treasury colleagues about bringing forward the implementation of BICS? In any case, we should note that while the supercharger scheme exempts recipients from network charges, BICS does not, and those network charges are set to increase by a staggering 60%.

These are just a few of the reasons why, unless the Government revisit the energy costs issue, the steel strategy will quite simply be blown away.

Among the more eye-catching and concerning parts of the strategy are the new trade measures to introduce tariff-rate quotas and the possibility of, in future, raising most favoured nation—MFN—applied tariffs to 50%. Late last year, the Trade Remedies Authority ran its rule over imports of rebar from Vietnam and made recommendations to the Secretary of State. This was an entirely appropriate use of that body; indeed, it is what the body was created to do. Having worked on the Trade Act, which established the TRA, at the start of this decade, I see that it clearly has an important role, particularly given the wider scope of the potential actions set out in the strategy. But I do not see any reference in the strategy to the role of the TRA. Have the Government asked the TRA for its recommendations? When could we expect its report? It seems inappropriate to act without that authority.

Next, in his answer to questions in the Commons, the Secretary of State confirmed that there has been discussion with his EU counterparts and that the discussion would continue when they meet at the WTO. Can the Minister confirm that for the purposes of these discussions, steel’s treatment in the TCA—the trade and co-operation agreement with the EU—is equivalent to its treatment in an FTA; in other words, from a WTO perspective, is the TCA equal to an FTA? Furthermore, can the Minister say how, for the purposes of these discussions, the Government are treating the MoU with the USA regarding steel? I assume it does not have the status of an FTA, so how will this modify what we can legally do under the WTO with the United States?

I turn to the local impact of this strategy, which means that there remain question marks for a lot of our communities. My honourable friend in the Commons, David Chadwick MP, spoke very forcefully about the importance of steel to Wales and its economy. He also reinforced the need for faster action in ensuring that the electricity used, for example, to power the arc furnaces is green energy. I strongly commend his comments.

In geographical terms, I would like to highlight the South Yorkshire area, including Sheffield, where there is a host of important steel businesses. It is not just down to the headline firms; there are many other important businesses further down the supply chain that make up this vital steel ecosystem. These kinds of ecosystems are echoed all over the country. The Statement says the defence growth deal will be established in five areas, including South Yorkshire, as part of the defence industrial strategy. Can the Minister tell us when full details will be published? When will a defence growth deal be operational?

To support the effectiveness of a growth deal, a colleague of mine from Sheffield Council, with a strong steel background, suggests that a defence manufacturing supply chain database be built to include the hundreds of thousands of smaller tier 2 and tier 3 suppliers that are critical to our sovereign capability. In this way, the whole sector can be explicitly brought into the realm of the defence growth deal. Noble Lords will be surprised, I think, to know that there is no such survey and no such data available.

I was able to see how the Aerospace Growth Partnership worked effectively with its supply chain, and perhaps the Minister might like to look at how that operated and try to put the same principles into practice for steel. We on these Benches share the Government’s ambitions for a robust and growing steel sector, and we believe that this strategy makes some steps in the right direction. However, the already significant headwinds just got a whole lot worse. That is why success will depend on further action on energy, clarity on tariffs and a truly inclusive growth strategy.

Industry and Exports (Financial Assistance) Bill

Lord Sharpe of Epsom Excerpts

2nd reading & 3rd reading & Order of Commitment discharged
Thursday 12th March 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, it is pleasure to follow the Minister, and I look forward to sharing some wisdom and expertise—at least I hope so.

I am grateful to the Minister for his introduction and for the opportunity to respond on behalf of these Benches. I say at the outset that we do not oppose the Bill. Updating financial limits that have sat unchanged for decades is both sensible and necessary as a piece of housekeeping. We recognise the importance of ensuring that the Government retain the tools to support British industry and exporters, where that support is genuinely warranted—the Minister gave some very good examples of that.

However, I will use this occasion to raise some broader concerns—not about the Bill in isolation but about what it may mean for the direction of the Government’s industrial policy more widely. The question we must ask is not merely whether the Government can provide financial assistance to industry but whether the cumulative effect of doing so—repeatedly, expansively and as a matter of instinct—risks becoming a substitute for the structural reforms that our economy needs.

Subsidisation has a seductive logic; it is visible and feels like action, and the Minister just called it transformational. However, we on these Benches believe that when the state steps in to cushion risk, it does not eliminate that risk; it merely transfers it to the taxpayer, while simultaneously distorting the market signals on which businesses depend to allocate capital efficiently. The Government should recognise that the misallocation of resources that follows is not always immediately apparent, but its effects compound over time.

The most powerful industrial policy this Government could pursue is one measured not in billions of pounds of guarantees and grants but in the burdens lifted from the shoulders of British businesses. We urge the Government to focus their energies there. Energy costs—in particular, the weight of environmental levies on businesses’ electricity bills—remain a serious competitive disadvantage for British industry. Unnecessary reporting requirements consume the time and attention of managers who ought to be focused on growth. I must mention the Employment Rights Act, which the Government’s own figures suggest will impose over £1 billion in administrative costs on business—a figure that, as businesses have warned, is widely regarded as a considerable underestimate. These are the frictions that erode competitiveness quietly and relentlessly, and no amount of export finance can compensate for them. Also, as we discussed in a Question earlier this week, they impact the quantity of foreign direct investment.

I will make a more fundamental point about risk. There is a tendency in industrial policy debates to treat risk as an enemy to be neutralised, yet risk is not merely a problem but a productive signal. It is the prospect of return that draws private capital towards genuinely promising ventures. When the state steps in to underwrite commercial risk too broadly or too readily, it does not simply help good projects that the market overlooked but sustains projects that the market had rationally declined to back. We should be cautious about inadvertently engineering away the discipline that risk imposes, because that discipline is part of what makes markets work. I appreciate that this was all debated in another place, but will the Minister explain the balance that he expects to see between private capital and UK Export Finance funding and how he expects this to work in practice?

That said, we are not dogmatic. We recognise that there are strategic sectors of the economy—the Minister highlighted some—where there is a case for targeted support, and that in some cases government has an instrumental role to play in getting exports over the line. We recognise that we live in a world of intensifying geopolitical competition. The rise of China as an industrial and technological power, the fragility of supply chains that was exposed so brutally during the pandemic, and the imperative of maintaining domestic capability in defence and critical technologies create a legitimate case for a limited role for government. We do not dispute that. What we dispute is the notion that broad, expansive subsidisation should always be the appropriate or default instrument and that it can substitute for the competitive fundamentals that underpin long-term industrial strength. A strong domestic industrial base is built on competitive energy, minimal regulations, a tax system that rewards investment and a labour market that gives businesses the flexibility to grow. Financial assistance of the kind that this Bill enables should sit atop those foundations and should not be deployed in their absence.

This Bill had its Second Reading in another place on 23 February. During a debate on my honourable friend Dame Harriett Baldwin’s eminently sensible and reasonable amendment relating to reporting requirements for UK Export Finance in relation to the steel industry, the Minister there argued that it was unnecessary because the steel strategy would be published in due course—I am sure the Minister knows what is coming. The steel strategy was originally promised last year. Without reopening the entire debate, but with costs mounting daily at British Steel—up to £370 million already according to a recent letter from the Minister’s colleague, the noble Baroness, Lady Lloyd, which I think is almost certainly a dramatic understatement, by the way—I ask the Minister to be more specific. When will we see the steel strategy?

It is worth heeding the very wise words of President Reagan, who once said that the nine most terrifying words in the English language are, “I’m from the Government and I’m here to help”. We will continue to press the Government on whether their industrial strategy is truly oriented towards building competitive strength or risks drifting towards a model of managed dependency where the taxpayer bears the risk, the market loses its discipline and British businesses are, in the longer run, no stronger for it.

Foreign Direct Investment

Lord Sharpe of Epsom Excerpts

Tuesday 10th March 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, a report from the CBI and Energy UK found that 40% of firms have reduced investment because of high electricity costs, going back to a question that was just asked. Does the Minister accept that funding contracts for difference—subsidies through electricity bills—is making Britain more expensive and that key industrial sectors are becoming increasingly unattractive for investment, both foreign and domestic?

[Lord Stockwood (Lab)]

It is undeniable that there is a challenge in trying to get the balance between the energy sovereignty that I previously mentioned and the need to make us attractive in the short term. This Government are taking practical steps to reduce barriers, including targeted regulatory simplification, faster grid connections, planning reforms and action on energy costs. The energy-intensive industries exemption scheme provides 85% relief on electricity policy costs for eligible energy-intensive industries. The British industrial competitiveness scheme makes eligible firms exempt from green energy levies, and 7,000 companies come under that scheme. Trying to balance our need for sovereignty and attractiveness for investment is something to which we give careful consideration day by day.

Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026

Lord Sharpe of Epsom Excerpts

Wednesday 25th February 2026 Grand Committee

[Lord Fox (LD)]

My Lords, I am grateful to the Minister for his introduction, which was very clear, and to the noble Lord, Lord Stevenson, who asked some of the questions I was going to ask, which is good. I too worked on the Digital Markets, Competition and Consumers Act 2024. It seems longer ago than 2024, and it took a bit of dredging up to come back to this.

In general, we welcome the idea of strengthening the ADR process and how that might then get more people to use it, rather than go into more lengthy disputes —we can talk about that at the end. In the past, as we hear, there was a voluntary registration system, and it would be interesting to hear about the number of practitioners—it would be useful to know the scale—who will need to be registered. Of those, how many were already registered? Do the ones who are currently registered, having volunteered to register, have to reregister themselves and go through another process? What is the scale of the number of dispute resolution operations that will have to be registered? What is the actual process of registration? Is it, “Fill in this online form and you get your registration certificate over the internet”, or are there four-day visits from 15 inspectors—or is it somewhere between that and Ofsted? There is no sense of the scale of what getting registered will mean or indeed of what the cost of getting registered will be.

We need some sense of the scale of the task that the CTSI will have to undertake, which then raises the question: does the CTSI have the capacity to pick this job up? There will be a big fat bulge of people needing to be dealt with at the front end of this. What happens in the meantime? If I were a currently registered or unregistered practitioner and I put my application into the CTSI, would I not then be able to trade until such time as I had my registration, or is there a grace period through which I could continue to operate until the CTSI had sufficient resources to deal with my case? How does the conveyor belt work and will the CTSI have sufficient capacity to handle what will be a really heavy workload at the front, which will obviously then tail off?

The Minister talked about monitoring, which is an interesting concept. What is the CTSI? It is a group of people. How will they monitor these cases? What data will they use? How will they monitor the process? Will they require certain documentation from their registrants on a regular basis? Will a reregistration process be required after five years, three years or whatever? The monitoring is an important element, but it is not clear to me whether the CTSI has experience in any of this kind of process. It is not an organisation that I know and I do not wish to cast aspersions on it—I am not—but I wonder about it, because it is being thrust into a whole new set of operations.

Will there be a process that can be led, which puts together a register of what these businesses are and promotes that register so that people who are in dispute have somewhere to go? Frankly, if I was in dispute, I would not know off the top of my head that there was an ADR process or where to go to get sufficient help with it. Who has accountability for promoting the process and getting people to use it? Obviously, it is preferable to clogging up the courts with endless cases. As is often the case, in principle this is great but the practice is still a bit mysterious, so I would welcome some answers to those questions.

[Lord Sharpe of Epsom (Con)]

My Lords, I was not involved in the 2024 Act, so—to no doubt universal relief—I shall be very brief. As the Minister explained, the statutory instruments implement Chapter 4 of the Digital Markets, Competition and Consumers Act 2024, by replacing the voluntary accreditation system for alternative dispute resolution providers with a mandatory framework. It grants the Chartered Trading Standards Institute the powers necessary to accredit, monitor and, where necessary, sanction ADR providers and it introduces reporting requirements to ensure transparency and accountability.

I am interested in the answers that I am sure the Minister has ready for the noble Lord, Lord Fox, who raised some interesting practical points. I am also extremely interested to hear what a “durable medium” is.

[Lord Fox (LD)]

It is carved in stone.

[Lord Sharpe of Epsom (Con)]

Paper is not that durable in fire or water, so are we talking stone tablets, or vellum, perhaps? I am very curious to know the answer to the question from the noble Lord, Lord Stevenson.

Obviously, alternative dispute resolution plays an important role in enabling consumers to resolve disputes quickly and without recourse to the courts, so a clear and enforceable accreditation framework should strengthen confidence in that system. On that basis, His Majesty’s loyal Opposition are happy to support these instruments.

Land Covenants: Supermarket Chains

Lord Sharpe of Epsom Excerpts

Wednesday 4th February 2026 Lords Chamber

[Lord Stockwood (Lab)]

The CMA has a broad primary and competition regulatory framework. It is equipped with the powers to investigate and to act against anti-competitive conduct. On the specific question about the digital Bill, I will have to consult with colleagues and come back to the noble Lord; I am not familiar with it.

[Lord Sharpe of Epsom (Con)]

My Lords, we all recognise the importance of competition, not just for economic growth but for the competitive pressure that keeps prices low for consumers. As the Minister has acknowledged, it is obviously not fair that some large retailers operate under different rules. At the same time, however, the fairness test fails when one considers this Government’s business rate policies. Does the Minister think it is fair that business rates will rise by 115% on hotels over three years but only 4% on supermarkets?

[Lord Stockwood (Lab)]

Taking a broad perspective on the question, I came into government to support the pro-business agenda. What the Government are trying to enact is the ability to stabilise the economy based on fiscal rules, to create an investment environment that is investable from all parts of the market, and then, importantly, to look at regulation to enforce that fairness and sense of competitive tension. The Government are committed to reforming the business rates regime, and that work has already begun. At the Budget, the Chancellor announced a permanent 5p cut in the business rates multiplier for over 750,000 retail, hospitality and leisure properties, which is also funded by the higher tax rate for the most expensive 1% of properties. We continue to take feedback to try to create the right fiscal conditions for businesses to be able to thrive.

Hospitality Businesses

Lord Sharpe of Epsom Excerpts

Tuesday 27th January 2026 Lords Chamber

Asked by

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what steps they are taking to support hospitality businesses.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, hospitality businesses are fundamental to the life of our communities. As such, we are introducing permanently lower business rates for eligible retail, hospitality and leisure businesses, and a £4.3 billion support package over three years to shield rate payers from bill increases following the revaluation. In addition, the Chancellor announced earlier today that every pub and live music venue will receive 50% off their new business rates on top of this support, and bills will be frozen for two years. Moving forward, we will review the valuation methodology for pubs and hotels as well.

[Lord Sharpe of Epsom (Con)]

My Lords, the Government’s announcements are welcome, as far as they go, and will provide some short-term relief to three out of four pubs, but in three years’ time, when the discounts and the freeze end, bills will still rise by 76%. Also, there was nothing for hotels beyond a review of valuation methodology, despite the fact that hotels’ rates will rise by 115% over three years. Why do the Government not just apply the 20p discount that is allowed in legislation across the entire hospitality sector, instead of the current 5p? That proposal has the virtue of being much simpler and cleaner than endless reviews and freezes. Why is this relief restricted to three years, and when will the review of hotel rates be delivered?

[Lord Stockwood (Lab)]

Business rate reform has been on the agenda for the last number of Parliaments and this Government have taken it on. Since I came into government six months ago, I have been proud that our overall objectives have been about stability in our economy, bringing down inflation—it is on target for next year—and making sure that consumers have more money that they can spend in the hospitality industry. Alongside that, the review of overall business rates and the commitment of £4.3 billion mean that over a third of businesses will pay no business rates, over half of ratepayers will see no increases and 23% will see their bills going down. This is funded by targeting those with higher rateable values. Overall, while the main thing is bringing stability to the economy and bringing inflation down to make sure that consumers are spending, reform of revaluation is increasingly important as well.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 16th December 2025 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

At end insert “, and do propose Amendment 120U as an amendment to Commons Amendment 120G, in lieu of Amendment 120N, and Amendments 120V to 120Y as amendments to Commons Amendment 120H, in lieu of Amendments 120P to 120S—

120U: Leave out subsection (3) and insert—
“(3) In section 124 (limit of compensatory award etc.), for subsection (1ZA) substitute—
“(1ZA) The amount specified in this subsection is £118,223.
(1ZB) Within three months of the day on which the Employment Rights Act 2025 is passed, the Secretary of State must conduct an impact assessment of the change to the limit specified in subsection (1ZA) made by that Act in order to assess whether the limit specified in subsection (1ZA) is the appropriate amount.
(1ZC) An impact assessment under subsection (1ZB) must consider the effect of the change to that limit on—
(a) the ability of claimants to obtain fair compensation,
(b) the operation and capacity of employment tribunals,
(c) the willingness of parties to settle claims without recourse to a tribunal, and
(d) public sector employers and public expenditure.
(1ZD) An impact assessment under subsection (1ZB) must include a consultation with—
(a) employers’ organisations,
(b) trade unions,
(c) organisations representing employment law practitioners, and
(d) such other persons as the Secretary of State considers appropriate.””

--- Later in debate ---

120Y: Leave out paragraphs 2 to 5”

[Lord Sharpe of Epsom (Con)]

My Lords, as the Minister has just said, yesterday a letter was sent to Members of the House by six major business organisations, setting out precisely what many of us said in the Chamber last week. That letter makes one thing abundantly clear: the Government did misrepresent when they claimed that the abolition of both compensation caps was agreed between businesses and the trade unions.

The agreement—I choose that word carefully—was to remove the 52-week salary cap while retaining and increasing the overall monetary cap, which is currently just over £118,000. That was the compromise that was understood by the business community, but the Government have now chosen not only to abandon that agreement but to misrepresent it to the House. To prove that point, I will quote from the same letter from the six business organisations, which states:

“Unfortunately, we have not been able to reach a compromise that satisfies both the unions’ request for removal of the cash cap and our position of retaining it while raising the overall limit”.


This is made all the more serious by the Government compounding the error by behaving unconstitutionally. The removal of the compensation cap was introduced at ping-pong, having been debated at no previous stage of this Bill, neither in your Lordships’ House nor in another place. This House exists to scrutinise legislation, not to rubber-stamp late-stage surprises, still less ones accompanied by misleading assurances.

Let me be clear about the Conservative Motion that is tabled in my name. It reflects precisely the agreement that business groups believed they had reached with the Government: the removal of the 52-week cap, coupled with the retention and review of the overall monetary limit. There is no credible reason that the Minister can give for the Government to not accept it.

The Motion also provides for a formal review and proper consultation. I remind the House that, when the cap was increased under the Labour Government in 1999, that change followed consultation. When the coalition Government introduced a 52-week gross salary cap in 2015, the same approach was taken. There is no reason whatever why the Government should not proceed in the same careful, evidence-based manner again.

It is the Government’s choice, and theirs alone, to delay this legislation by introducing an entirely new issue at this final stage and then attempting to justify it on the basis of an agreement that did not exist. It is also wholly wrong for the TUC, the Minister in another place and others to attack hereditary Peers for doing precisely what they, like all noble Lords, are here to do: scrutinise legislation. It is also worth noting that the criticism of hereditary Peers was unfairly universal. No thanks were offered to at least one Liberal Democrat hereditary Peer who backed the Government.

If the 65 Labour Peers who were absent last week had attended, the Government would have likely prevailed. However, I rather suspect that some of them might have developed cold feet once they realised that they were being asked to support multimillion-pound payouts to water bosses and failed senior executives in financial institutions. Perhaps absence in this case was a mercy.

Over the weekend, the latest employment tribunal statistics were published. They are stark. There are now over 515,000 open cases, and that figure will rise, not fall, as a result of this decision. Why? Because well-resourced senior executives advised by the very best lawyers will now enter the system in greater numbers, clogging up tribunals, prolonging hearings and consuming judicial time. The inevitable consequence is that ordinary working people, many of whom have a legitimate and modest claim, will wait longer for justice or be denied it altogether.

This debate does not take place in a vacuum. Unemployment has risen again this month, as it has every month under this Government. Nearly 2 million people are now unemployed, this Christmas there will be 192,000 fewer in private sector payrolled employment than last Christmas, and young people are bearing the brunt. At a time when their futures are already being crushed by rising costs, weaker growth and dwindling opportunities, the Government choose to inject yet more uncertainty into the labour market. What on earth do Ministers think they are doing? Instead of encouraging job creation, they are creating incentives for litigation, delay and risk—precisely the opposite of what a fragile jobs market requires.

I say to the Liberal Democrats that it is a curious position to demand that water company bosses be dismissed while simultaneously supporting a policy that could hand such individuals eye-watering compensation. Something does not add up. What we are seeing instead is the Liberal Democrats choosing to form a coalition of chaos with the Government and abandoning British business, working people and the constitutional role of your Lordships’ House. In fact, according to data published by the Liberal Democrats themselves just last year, executives of water companies in England collected some £70 million in remuneration between 2021 and 2023, including nearly £41 million in bonuses. One is therefore entitled to ask why, in the space of a single week, their position appears to have shifted so dramatically. Perhaps the noble Lord, Lord Fox, can explain this sudden change of heart.

The Government have claimed that removing the compensation cap will not affect the level of awards. The Ministry of Justice’s own data shows that the median award of just under £7,000 is derived from just 650 tribunal awards. Yet each year there are many thousands of potential unfair dismissal claims, the overwhelming majority of which never reach the point of an award because they are settled long before they reach that stage. The reason those cases settle is the existence of a statutory maximum. The cap provides a known endpoint and encourages realism from both parties. Remove that ceiling and settlement becomes vastly more difficult. Claims run longer, positions harden and costs escalate—and tribunals, which are already overwhelmed, are left to pick up the pieces.

Even President Macron recognised that the absence of such a cap was harming French competitiveness and introduced one in 2017. It is a sorry state of affairs when France has something to teach a British Government about competitiveness. The only country in Europe without a statutory cap on unfair dismissal compensation is Luxembourg, which has a youth unemployment rate of 20%.

I have a few questions for the Minister. What conversations have Ministers had with the financial services sector, where concern about this change is profound? Will the promised impact assessment be serious, comprehensive and honest, and will it include the risk of opportunistic and speculative claims, the increased burden on the public sector and the likely cost to the taxpayer? The original Employment Rights Bill impact assessment was, frankly, inadequate—a fact recognised by the Regulatory Policy Committee, which issued a red rating. Will the Government now guarantee that the impact assessment on abolishing the compensation cap will not meet the same fate and that it will be detailed, rigorous and transparent? If it becomes clear, as many of us fear, that the removal of the cap leads to tribunal congestion, rising costs and injustice for ordinary workers, will the Government commit to reintroducing a cap, as President Macron did? Finally, will Ministers undertake to consult properly with employment law practitioners, the majority of whom oppose this decision, alongside businesses both large and small?

In conclusion, because of the Conservative Party a six-month qualifying period has been secured. However, that alone does not remedy the fundamental flaws of the Bill. The £5 billion cost remains. The costs of a raft of 1970s-style trade union reforms have not been properly identified, let alone accounted for, by the Government, and I repeat that all this is against a backdrop of rising unemployment. Let me be completely clear: the next Conservative Government will repeal every job-destroying, anti-business measure in this unemployment Bill. I beg to move.

[Lord Pannick (CB)]

My Lords, the noble Lord, Lord Sharpe, mentioned part of the letter written to the Business Secretary yesterday by six business groups including the CBI, the Federation of Small Businesses and the British Chambers of Commerce. What he did not mention is that the letter from those groups also said that

“now is the time for Parliament to pass the Bill”,

despite their concerns. That seems to be a much wiser approach than that adopted by the Conservative Front Bench—not least because Motion A1 raises no great issue of principle. It raises a request for an impact assessment.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

I thank the noble and right reverend Lord for his question. As I mentioned last week, the context here is Bill specific and the changes that have been proposed and have been put in terms of this tripartite agreement were in response to issues that had been raised in your Lordships’ House. We went away and convened a particular mode of operating, and we have brought it back as a Bill-specific package. As I also mentioned last week, there are many discussions in the House about how we want to take business forward. The Leader of the House has set that out very clearly. That is the way we intend to proceed more generally.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to all noble Lords who have spoken in this very brief debate. The noble Lord, Lord Pannick, is of course right—I did not quote that bit of the letter because the Minister did. The House generally does not like needless repetition, so I am following the rules.

I am very grateful to the Minister for those assurances, and I am somewhat reassured. I am grateful—correct me if I have any of this wrong—that the impact assessment will be published before commencement and will be public and transparent and include a dispute resolution mechanism, that the tripartite agreement will endure going forward in further discussions around the Bill, and that all stakeholders will be consulted widely. That is, in effect, what we were asking for. The simple fact of the matter, though, is that we on these Benches will continue to hold the Government to account on behalf of the wealth creators, the businesses, the employers and their workers in this country.

I have heard what has been said and will emphasise a point made by the noble Lord, Lord Vaux, which I should have made in my speech: we are particularly concerned about the impact of the entire Bill on small businesses. We will return to that theme unless their interests are very carefully protected going forward.

As to the comments by the noble Lord, Lord Fox, regarding the strategic position, I am not entirely sure what the strategic position is. But I am grateful for his comments.

I am also enormously grateful to all those on His Majesty’s Loyal Opposition’s Benches and the many on the Cross Benches who stuck to their principles. We have achieved a great deal and made a bad Bill marginally more palatable. I beg leave to withdraw Motion A1.

Motion A1 withdrawn.