Steel Industry (Nationalisation) Bill

Baroness Donaghy Excerpts

2nd reading
Tuesday 16th June 2026 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I congratulate my noble friend Lord Leong, both on his ministerial appointment and on his opening speech. I also give full support to the Government for doing their best to protect and modernise a strategic industry that has suffered from past failures to adapt and from short-termism and lack of courage by successive Governments.

It was not the workers who let the side down or the communities who depended on them. These are tough jobs and tough people. My brother-in-law, Don, worked in the steel industry in Scunthorpe for most of his working life. I was there to celebrate his 90th birthday two years ago and he is still soldiering on. As I said, these are tough people.

We could spend a lot of time analysing how we got to this position, how much steel is stuck in the Strait of Hormuz, tariff imposition by the USA, and whether Europe is doing any better. We could pore over the comments by the Chinese Commerce Ministry when it called on our Government to

“respect the wishes of firms and market principles and avoid the abuse of administrative coercive measures”.

We could compare that with Chinese state aid and anti-competitiveness practices. We could score points on all of these things, together with overcapacity, cost and the complexity of the issues, but none of it would preserve a strategic industry or save a single job.

Clearly, issues such as parliamentary scrutiny, sunset clauses and regular reports to Parliament are important and can be discussed more thoroughly in Committee. This Bill is a signal that the Government are ready to act if it is in the public interest to do so. At present, we are not in control of our steel industry. We do not have sovereignty.

Why is the public interest not more closely defined in the Bill? I accept the explanation that we cannot forecast the circumstances. Will it be defence, national security or the construction, maintenance and operation of critical infrastructure in the United Kingdom? Which companies might be the first to impact on us? The noble Lord, Lord Bilimoria, asked this—quite understandably, given his connections with the Indian industries. Included in this must be where a steel company attempts to take a decision that might have a detrimental national implication, whatever the name of the company. I do not believe that any Minister would choose to be in this position today. There are no guarantees of success and no political kudos. It is about taking tough decisions to keep a national lifeline to try to protect our future security.

The Government recognise that blast furnace production will need to continue in the immediate future—I am sure they welcome the remarks by the previous speaker, the noble Lord, Lord Redwood, on that—and that a managed transition is vital to monitoring supply. They accept the need for public and private investment to modernise. That was repeated several times in the debate in the other place.

Opponents of the Bill have cited the cost of employees and energy. Workers in the UK earn an average of £40,000 a year and represent only 13% to 22% of total costs, depending on operating a primary basic oxygen furnace or a recycled electric arc furnace, so I argue that this is far from a labour-intensive industry. However, as has been said by previous speakers, energy costs are a different matter altogether and represent the highest in Europe.

I understand that the British industrial competitiveness scheme is being developed as part of the UK’s industrial strategy and could save a substantial amount in energy costs, but it is not due to be launched until April next year. Is there any chance that this could be brought forward? Does the Minister have any more information on the development of that policy? Germany, Spain and France have already intervened on energy costs in their steel industries. As we are now, we cannot provide long-term control or stability. We must safeguard supply chain resilience for defence, critical national infrastructure and major programmes, as stated in the impact assessment. The Government need to have the ability to respond quickly and effectively. I commend the Bill to the House.