Steel Industry (Nationalisation) Bill

Ashley Fox Excerpts

2nd reading
Thursday 21st May 2026 Commons Chamber

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

I will be very quick, because I know that colleagues are keen to get in. I am going to speak against the amendment and in support of the Bill for the simple reason that a speech such as the one we have just heard from the shadow Minister may have just about cut the mustard five or six years ago, but it certainly does not work today in a world of weaponised interdependence. It does not work in a world where President Trump is back in the White House or where President Xi is prosecuting the sixth five-year plan, as he is. The critical point in this debate, which the Secretary of State made very well, is that we must have a sovereign capability to make steel. In today’s world, we cannot afford to have a critical steelmaker like British Steel in the hands of a Chinese firm; we cannot, as Ronald Reagan once said, be innocents abroad in a world that is frankly no longer innocent.

Regardless of those remarks, there are a couple of areas where I think the shadow Minister made some important points. I want to stress that although the Secretary of State is proposing some perhaps welcome statism, he must not forget the statecraft that is needed to make a success of this Bill. There are six areas I would like him to respond to very briefly, and I hope we will be able to strike a cross-party consensus around them.

First, it is important that the Secretary of State wills the means and not simply the ends. We have, as the shadow Minister said, already spent a lot of money on this. The transition to electric arc furnaces that the Secretary of State is proposing is not cheap—it is extremely expensive. I think we are hoping that a lot of that money will come from the National Wealth Fund, but he does not control the National Wealth Fund or the allocations that it makes. The National Wealth Fund has not said anything about guaranteeing money for the kinds of ends that the Secretary of State has in mind, and the Government have declined to explain what will happen if steel projects are not funded by the National Wealth Fund. We therefore need a bit more clarity about where the investment resources for the Secretary of State’s plans are going to come from.

[Sir Ashley Fox (Bridgwater) (Con)]

Does the right hon. Gentleman agree that it is unlikely that the National Wealth Fund, or indeed anyone else, would wish to invest in British steelmaking while our electricity prices are so very high? Does he agree that there is no point in this Bill until we fix the electricity market in this country?

[Liam Byrne]

The hon. Gentleman makes an excellent point that I am about to come on to. My point, I suppose, is that there is a case for this Bill. I think it is actually quite important, and the powers that it confers are also important, but if we are to get value for money from it, there have to be five other components, which I will come on to now.

The second area is lower energy costs. The British industrial competitiveness scheme is welcome, but it does not come online until 2027. Steelmakers, like much of our manufacturing industry, are saying very clearly to the Business and Trade Committee that there is a widening gap between UK wholesale electricity prices and the prices of our peers in the wake of the Iran crisis. My question to the Minister is: what further targeted support will be available to energy-intensive industries before 2027? As the hon. Member for Bridgwater (Sir Ashley Fox) rightly points out, that is an essential component of the package.

The third area that the shadow Minister was right to highlight is the issue of tariffs. This is now an urgent issue. The Committee heard evidence this afternoon at our own roundtable about the need to refine the tariff structures that have been put in place. The key thing is that we get a better deal with the European Union, to which we export 80% of our steel. It is about to cut tariff-free quotas by 47%, double tariffs from 25% to 50%, and impose melt and pour requirements. Unless we can get a deal in place with the European Union before the end of July, I am afraid that many of the good intentions behind this Bill will be confounded.

The fourth area is procurement. We must ensure that there is a proper demand curve from the UK state for the things that British Steel makes. In the British economy, British state procurement makes up £1 in every £6. Right now, despite the excellent changes in the Procurement Act 2023, we do not have a sufficiently clear forward pipeline. That has to change, not least because when we talk to defence companies—which are, of course, patiently awaiting the defence investment plan—and defence contractors, they still tell us that the kind of steel that they need to make the things that keep this country safe are not made in this country. Ensuring that there are advanced market commitments alongside the defence equipment plan, along with the range of other big, long-term ambitions that I know the Secretary of State has, is very important.

The penultimate area I want to touch on is scrap supply. The Secretary of State has ultimately come to the conclusion—wisely, I suspect—that we should shift to electric arc furnaces, but that kind of industry model will work only if there is a healthy supply of scrap. I think that Ministers are being just a tiny bit too complacent about whether we have the plans in place to source all that scrap. I know that there is a roundtable proposed for later this month, but as part and parcel of ensuring that the steel strategy actually works, can we have, at the very least, a read-out for Parliament about what scrap supplies will be kept in our country, rather than exported?

The final point I wanted to flag is about consolidation. One of the virtues of this Bill is that it bestows on the Secretary of State the power to ensure that there is consolidation in the UK steel industry for the future needs of the economy. In particular, it should allow us to take assets that have gone to firms that are currently out of business, and to rationalise the industry in a way that makes sense. I would like to hear more about what the Secretary of State is proposing when it comes to consolidating the industry.

Ultimately, in the world that we are in, when there are so many visible hands in the global economy interfering with the free market in steel, we will have to have a stronger visible hand. That is what the Secretary of State is proposing through this Bill. There will be a lot more work to do in the Bill’s subsequent stages to satisfy the House that he has got right the statecraft package behind this measure of statism. I look forward to hearing some reassuring noises on that point when the Minister winds up.

Steel Industry (Nationalisation) Bill

Ashley Fox Excerpts

Committee of the whole House
Monday 8th June 2026 Commons Chamber

[Chris McDonald]

Let me address that point. It is helpful for us to think about the potential options. There is agreement across the Committee that we want a successful and thriving steel industry, and the Government have made some serious financial commitments. We have committed £500 million to support the transformation of the plant in Port Talbot, which has attracted another £500 million of private sector investment. We have committed £2.5 billion through our steel strategy and an additional £400 million to support the Forgemasters operation, which is successfully under public ownership.

We have to think about the potential options. Given that the Government have put that money on the table and are seeking private sector partners to work with for all our steel plants, the alternative would be the closure and the loss of those facilities. This comes down to a judgment as to whether we think the UK is capable of having a successful, profitable and investable private sector industry.

It is the Government’s view that it is possible for the UK to have that, not least when we compare ourselves with similar advanced economies in Europe—we are not necessarily comparing ourselves with low-cost economies around the world—but it is a matter of ensuring that we have the right business environment to enable that to happen, and it is clearly incumbent on Government to arrange policy in that way. I think our steel strategy, in particular, and our trade measures provide that response, which is what gives us confidence that we have the resources to do that.

[Sir Ashley Fox (Bridgwater) (Con)]

Will the Minister give way?

[Chris McDonald]

If the hon. Gentleman does not mind, I will take the second intervention from my hon. Friend the Member for Rotherham, and then I will give way to him.

[Chris McDonald]

The supply chain is incredibly important. My hon. Friend is right about the jobs and the economic value in the supply chain; my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) also referenced the supply chain, and particularly how its needs relate to the measures in the Bill.

A number of the proposed amendments to the Bill would ultimately slow down the ability of the Secretary of State to make decisions—that point was also made by the hon. Member for Boston and Skegness. If the Secretary of State cannot act swiftly, there is a risk of greater uncertainty among employees and commercial partners in the supply chain, as my hon. Friend the Member for Newton Aycliffe and Spennymoor rightly said. That can have real-world consequences for businesses that rely on trade finance or other forms of working capital support, as a lack of confidence can rapidly turn into business closures. While some of those amendments are well-meaning—I am speaking particularly about amendments 2, 3, 18 and 19—they would fundamentally interfere with the speed and operational ability of the Secretary of State under the legislation and reduce legal certainty.

[Sir Ashley Fox]

Does the Minister believe that the Government’s current energy strategy is consistent with a successful British steel industry, or does he envisage that energy strategy having to change in order to lower industrial electricity prices?

[Chris McDonald]

I am pleased that the hon. Gentleman has raised that question, because it was mentioned by a number of Members during the debate. To go back to the point about having a business environment that creates a profitable and investable steel industry, energy is clearly part of that. Some of the changes that the Government have already made—increasing the rebate on the supercharger from 60% to 90%, or the British industrial competitiveness scheme, which will support some of the downstream industry—will be particularly helpful in supporting not only the steel industry but other parts of heavy industry between now and 2030, which is when the Government’s clean power mission will come fully online. We anticipate that at that point, we will have not only clean energy, but secure and lower-cost energy.

If we consider the timescale of some of the investments in steel companies that we are talking about—not only multiple-year investments in order to commission, but multiple-decade investments beyond that—we can see that we have a pathway on energy that will enable us to get from now to 2030 and beyond. The Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), who is not currently in his place, was concerned about this issue as well. He was also concerned that the UK has the highest energy prices in Europe, but we do not currently, and it is certainly our plan to ensure that our energy prices for industry are competitive with Europe in future.

Returning to the amendments that have been tabled, there was quite a lot of discussion about the sunset clause in the Bill. There were a number of objections to it, but the case for its continuation was made extremely well by my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer). As it stands today, the Government have no intention of extending the sunset period, but we recognise that we are living through particularly volatile times. There is geopolitical and economic uncertainty, which is likely to have a bearing on the steel sector in ways that it is difficult for us to see at the moment. As such, our view is that it is simply pragmatic to include this level of flexibility in the Bill, and of course, regulations made under that clause would be subject to the affirmative procedure.

It is important that I address some of the concerns of the hon. Member for Caerfyrddin (Ann Davies), who spoke with great passion and commitment about the importance of the steel industry throughout the whole of Wales. There is often considerable discussion of Port Talbot in this House, but as she rightly set out, there are also steelworks in Llanwern, Cardiff, Newport, Trostre and Shotton—I hope I have remembered all of them—that deserve recognition and investment.

I could not disagree more, however, that this Government have treated the Welsh steel industry unfairly, or not in an equitable way, compared with the steel industry elsewhere in the UK. The steel industry in Wales is the only part of the industry that has a ringfenced fund—£500 million for Port Talbot. The hon. Lady said that that has been spent with no benefit to the local community, but I frankly cannot agree with that. That £500 million has enabled Port Talbot to invest an additional £500 million in a transformation of that steelworks that will secure steel production at that site and the future of the south Wales steel industry for decades to come. It is a significant investment in the local community.

I know that the hon. Lady, like me, would have preferred for that transition in south Wales to have happened without the hard stop between the closure of the blast furnaces and the restart of the electric arc furnace, and I support Tata Steel’s view on the installation of its electric arc furnace. However, the decision to close was taken before the general election, and my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds)—the former Secretary of State, who is now Chief Whip—was able to intervene at that point and get a much better deal for the workers at Port Talbot and the community there than the previous Government did. I share the hon. Lady’s frustration and concern, but we need to be clear about where the indifference to the blast furnace closures in Port Talbot was. It was not with this Government; it was with the then Conservative Government.