Steel Industry

Baroness Brinton Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Baroness Brinton (LD)]

My Lords, from these Benches, I too thank all the staff who have come in. We are very grateful to them, not just for giving their time but for taking care under the special circumstances which have complicated today.

The urgent and serious position that this country now faces means that emergency action must be taken, and it makes complete sense to recall both Houses of Parliament, but this must be the start of a serious plan for the sustainable future of domestic steel production. The circumstances requiring these measures have been known for some time, and it is clear from the diplomatic language of government statements in the last 48 hours that the word “forthright”, when used in the context of government negotiations with the Chinese company Jingye, is doing a great deal of heavy lifting, so it is good that the Minister has outlined some of that detail this morning. It explains the nature of the urgent crisis.

However, it is worth noting that this is not a recent problem—not even one of a few months, as just suggested by the noble Lord, Lord Hunt of Wirral. Ever since privatisation, which these Benches do not oppose in principle—nor, by the way, are we against nationalisation as a last resort—there has been a disregard for the impact of the repeated change of ownership of our state infrastructure companies. That may have been less important at the time,but other changes in global manufacturing and trading patterns should have been a warning signal—especially to past Conservative Governments. I say to the noble Lord, Lord Hunt of Wirral, that it is worth reminding ourselves that a past Conservative Government sold British Steel for £1. Then there were the consequences of the extra trade barriers as a result of Brexit, scrapping the industrial strategy council and allowing the sale of steel plant to a Chinese firm which, it is now clear, is not negotiating in good faith.

The entry of foreign state-owned enterprises into the British economy and infrastructure means that a number of other Governments now own all or part of key UK infrastructure, sometimes leaving us vulnerable. In today’s Financial Times, Ewan Gibbs says that the UK is

“an outlier in Europe, where the state still often owns important industries”.

President Trump’s tariff wars mean that all other nations are now reviewing their ability to maintain their own infrastructure in the light of tariffs, and the Government are right to do so at a time when our steel industry is already in crisis. We start from a weaker position than those countries because we do not own our own infrastructure. Can the Minister say, as we increase defence spending for the existential threats facing the UK, Europe and, of course, Ukraine, whether the Chinese company’s threat to remove manufacturing back to China acceptable? Is it not a clear security threat?

Before I turn to the Bill, it is really important to focus on the broader issue of the possible closure of the Scunthorpe works. This Government promised that they would deliver on the promises made by the previous Conservative Government, which were woefully underdelivered, to strengthen communities in the north of England. The Scunthorpe community is like many other steel communities, such as Port Talbot and others in the past, with centres in south Wales, Teesside and Scotland. I remember Corby in the 1970s and, visiting it 20 years later, I saw a community utterly broken by steel closure. Our thoughts at the moment are very much with the workers, people and community of Scunthorpe.

The Scunthorpe works employ 2,700 staff, as well as others in the local, national and international supply chain. The consequences of a possible closure of the works would be severe for them and for the entire community. The Bill talks about compensation for a steel undertaking but it is totally silent on the support for workers and the community in the event of a disruption or, worse, closure. Are there any plans for support for the community during this period of uncertainty? What happens if negotiations do not work?

Only last autumn, we saw from the Port Talbot experience the effect on a community of closing down one furnace before its successor—a much greener one, of course—is even fully planned, let alone being built. Can the Minister say why, last autumn, the Government did not do what they are doing today, after the previous Government failed to support and save Port Talbot? What help are they providing for the Port Talbot community with new skills and enterprises?

In Clauses 3 and 4 of the Bill, the Secretary of State is taking extraordinary powers to himself. Given the urgency, that is understandable. However, we on these Benches say that the Government need to understand that they have to communicate with Parliament, through Statements and debates, on the use of these extraordinary Henry VIII powers as it happens. Will the Government undertake to do this? As with when the Conservative Government took such powers to themselves in 2020, at the start of the Covid pandemic, they should remember that post-event openness is vital; otherwise, the trust put in their hands by all parts of Parliament will be lost.

In Clause 3—

“Breach of directions: power to take control of assets”—


subsection (2) says that:

“The Secretary of State may do anything for the purpose”


set out. Anything? That is certainly sweeping. I hope that the Government will keep Parliament abreast of any such powers taken.

Clause 4, on offences, creates very serious crimes either for the steel undertaking or for individuals associated with it, and includes such terms as “connivance”, which I am not sure I have seen defined in criminal law before. Has the Secretary of State for the Ministry of Justice, the Attorney-General, been consulted on the creation of these new crimes?

Clause 7 deals with the compensation scheme. Although I accept that there needs to be such a scheme, as and when that happens, will the Government please undertake to publish the full details? The behaviour of Jingye, as outlined by the Minister, means that the public need to know the cost of compensation.

We on these Benches are concerned about the lack of a sunset clause. We hope that there is still time for the Government to consider adding one in Committee.

We support the Bill as it appears, given the concerns that we have. The crisis must override those, and we will support the Government in its deliverance.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thought I had answered that point. The Bill, as it stands here, is to deal with one emergency. As we know, it is a volatile sector and we might need to use those powers at other times. We will use them judiciously and with care, and, as I keep saying, we will continue to update the House as to the use of those powers. We do not feel that a sunset clause is necessary or desirable in this Bill. To clarify, my general comment to the noble Lord was that we would continue to engage with the Lords committees to make sure that they are fully updated with progress going forward.

In concluding this debate, I convey my thanks to all noble Lords for their thoughtful contributions and for helping us to pass this legislation so that we can retain steel-making capacity in the UK—for British workers’ security, for British industry’s future and for the future of British Steel workers and their families. That is our priority and that is how we intend to go forward.

[Baroness Brinton (LD)]

The Minister did not respond to my specific question about ensuring that the amount of any compensation paid under the terms of the Bill would be absolutely clear and stated to the public and to Parliament.

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness makes a reasonable point. I am sure that we can accommodate that and make sure that that information is available.