Steel Industry (Nationalisation) Bill

Harriett Baldwin Excerpts

Committee of the whole House
Tuesday 9th June 2026 Commons Chamber

[The First Deputy Chairman]

I call the shadow Minister.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Yesterday we discussed amendments in which we sought to rein in some of the unfettered powers that the Secretary of State is taking for himself in this legislation. Today’s amendments are about trying to rein in the unfettered liability and financial risk that this legislation puts on the taxpayer.

For example, amendment 20 would allow the Secretary of State to provide financial assistance if the National Audit Office has concluded that it would secure value for money for taxpayers. The amendment is obviously about making it clear that these powers are not a blank cheque, that they must be constrained, justified and used only when strictly necessary. We cannot have industrial improvisation when the British taxpayer is being asked to pick up the bill. It is not fair that hard-working taxpayers should be forced to pay for a potential failure of Ministers who think they are able to defy the realities of this market.

Amendment 22 would cap the amount of financial assistance that could be provided to a steel undertaking to £1 million per worker over a five-year period. It would also fix the employee count at the point that support begins, with “employee” being defined by section 230 of the Employment Rights Act 1996. The amendment would ensure that financial assistance is targeted, proportionate and provides value for money. If the Government believe in this intervention, as they clearly do, they should be willing to set limits on it, because without such a cap we are simply asking taxpayers to sign up to an unlimited liability.

[Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)]

Would the shadow Minister consider that putting a limit on this, when the financial support would only be provided in an emergency, when absolutely necessary, might be unwise and might lead us to having to recall Parliament yet again to take the necessary action?

[Dame Harriett Baldwin]

I take issue with where the hon. Member is coming from on that, because by putting a sensible and finite limit on the amount per employee—and I will speak later to another amendment where we propose an overall limit—we are talking about the amount that has been set by the Chancellor through the spending review envelope. I do not think she really wants to say to the Committee that there should be completely unlimited budgets for this intervention. She herself would know that in any intervention we ought to go in with a wise idea about what is a reasonable spending limit.

Amendments 10 and 11 would increase the frequency with which Parliament is told about the amount that has been spent. Currently, as it is framed in the legislation, the Secretary of State must make a report to Parliament only every 12 months. We are suggesting in these amendments that reports about financial assistance should come every three months. We are talking about substantial and significant sums of public money, so we do not think that annual reporting would be sufficient. Quarterly reporting would ensure that Parliament can properly scrutinise how much money is being spent and how much is being done in closer to real time. It is essential that financial exposure is monitored closely and transparently. We do not want costs to escalate without people being able to notice them, and we want Ministers to remain accountable for public spending.

[Edward Argar (Melton and Syston) (Con)]

My hon. Friend and I have both been Ministers; we know that a written ministerial statement is not a complicated thing to do every three or four months or whatever it is. I struggle to see what reason there could be not to give Parliament that transparency, for the simple sake of a piece of paper tabled once every three months, to ensure that taxpayers’ interests are protected.

[Dame Harriett Baldwin]

My right hon. Friend is absolutely right, and I know the Minister to be an extremely reasonable man, so I am sure he will agree with our amendment.

New clause 12 would place a firm cap on the total financial assistance that can be provided under the Bill, limiting it to £2.5 billion. As I am sure the hon. Member for Motherwell, Wishaw and Carluke (Pamela Nash) and other Members know, that is the limit that has been set for the steel strategy, so to reach that limit would mean that this intervention used up the entire amount allocated to the overall steel strategy. The new clause would set the limit up to a specific date in 2029.

As our explanatory statement makes clear, the purpose is simple: to limit the total financial exposure under the Bill. At the moment, the way the Bill is phrased means that it is a completely open-ended financial commitment. We think that a cap of this nature, which would ensure that Ministers had to prioritise their spending decisions rather than continue to inject funds without clear limits or outcomes, is a very sensible thing to do, and I urge everyone to support it.

--- Later in debate ---

[Mr Perkins]

The hon. Lady is making a very important and interesting point. In the steel industry over recent years, we have seen foreign companies buying British firms, then closing them down and leaving us without this capability. Would anything in new clause 9 prevent that from happening again? Having forced the Government to seek this buyer, is there anything in it to stop that buyer coming in and just closing the business down, meaning we lose that sovereign capability?

[Dame Harriett Baldwin]

We are looking at a Bill that the Government’s own impact assessment says might have a bit of a “chilling effect” on inward investment into the sector. We should all want to have inward investment into our economy. If someone who we regard as an excellent owner of this business should come in and make an offer that is attractive to the Government, I absolutely think the Government should be prepared to take that seriously. We do not want this to be a permanent state of affairs; we want it to be a journey to a thriving steel sector, which may well involve investors coming in from overseas.

[Mr Perkins]

I think the hon. Lady is in the same place as the Government, in that they want to see an excellent private sector partner at the earliest opportunity. The point I was trying to make is that she would be compelling the Government, in new clause 9, to seek this provider, and we have seen what has sometimes happened previously. Is she saying that, ultimately, we must do whatever the market decides, or is she basically supporting the Government’s position that this sovereign capability must remain in the UK and that we will work with other partners, but they will not be able to shut down British steelmaking as they have done in the past? Will there be any provisos in the new clause?

[Dame Harriett Baldwin]

The hon. Gentleman seems to be conflating two issues. Last year, when the emergency legislation was introduced and Parliament was recalled on a Saturday for the first time since the Falklands war, we did not stand in its way, but what we are asking for in the new clause is for Parliament to be kept informed. Let us agree that we all want to be kept informed about how the discussions are going and to find out what the Government are thinking about their exit plan. I made the point yesterday about the public interest test that it is very unclear whether, once the Secretary of State determines that it is in the public interest for this particular site to be owned by the taxpayer, there will ever be the potential for it to change to different state.

[Richard Tice]

The shadow Minister seems to be implying that, essentially, the business should be up for sale at any moment, almost at any price. It is incredibly destabilising for any business and its employees to suffer that uncertainty. What is required is a period of stability and investment, with a strong vision. She previously made comments about relying on auditors at the National Audit Office to make a strategic judgment about what is in the sovereign national interest. With the greatest of respect to auditors, it is experienced businesspeople—including the Minister—who understand the industry and who can make a much stronger judgment about what is required to retain primary steelmaking in this country, with that sovereign capability, than a bunch of auditors.

[Dame Harriett Baldwin]

I actually think the hon. Gentleman is also agreeing with me on this point. I yield to no one in my admiration for the Minister and his expertise in this industry, but I heard the hon. Gentleman say that he too thinks that it will take business nous and investment into this business to bring it back to a state where it is making money. I also heard him say that he would therefore not object to hearing a report to Parliament every six months about the progress being made, so I look forward to him supporting this amendment in the Lobby later. We want our Ministers to actively work towards returning the business to private ownership, so we want to hear in Parliament about that ongoing progress and to be able to hold Ministers accountable and ask them questions on exactly that from time to time.

New clause 10 would require the Secretary of State to report to Parliament every six months on the impact that nationalising steel undertakings has had on inward investment into the UK. I mentioned earlier that the Government’s own impact assessment worries about the potential for a “chilling effect” where Government are taking assets into public ownership in the way that this Bill allows. During its history, the UK has very much relied on being seen as a stable and predictable environment for inward investment. Expropriating and nationalising private businesses sets a precedent that could deter future investors, not just in the steel sector but across the wider economy. The new clause would ensure that Parliament received a regular, transparent analysis of how these interventions were affecting investor confidence and capital flows into the UK economy. We all hope that they would not be adversely affected, but we would want Parliament to know, and this new clause would ensure that any damage to our reputation was identified, understood and addressed early.

New clause 11 would prevent the Secretary of State from using the powers in the Bill to grant any selective advantages through state resources that could distort competition. It would ensure that nationalised steel undertakings were not unfairly advantaged over privately owned ones. Without this safeguard, there is a real risk that nationalised entities could receive preferential treatment, whether through subsidies, contracts or regulatory advantage, undermining fair competition within the domestic steel sector. If private firms believe they will be placed at a disadvantage compared with state-owned competitors, that risks deterring further investment in UK steel and related supply chains.

To conclude, these amendments are about bringing discipline, transparency and balance to a Bill that, as drafted, risks being too broad, too costly and too unconstrained. They would ensure that any intervention was properly assessed, carefully limited and consistently scrutinised, while protecting taxpayers, competition and investor confidence. If the Government are serious about supporting the steel industry, they should also be serious about accountability, value for money and a credible long-term plan, and these amendments are designed to deliver exactly that.

[Cat Eccles (Stourbridge) (Lab)]

It is a huge pleasure to speak in a debate on a Bill to nationalise British Steel, reversing one of the many mistakes of the Thatcher Government in the 1980s. I will speak against new clause 9, in the name of the hon. Member for West Worcestershire (Dame Harriett Baldwin), which would seek a private buyer for the nationalised British Steel company.

It is absolutely right that the Government are taking action to nationalise British Steel and set out a clear strategy to strengthen domestic production. While the strategy will safeguard our steelmaking capability, we must recognise the realities facing the downstream steel sector, which has been impacted by having to compete with the unfair terms of international markets and by being consistently starved of investment. Many such businesses, including those in my constituency, depend on imported grades and products that the UK simply does not produce and that are regularly used in our defence force, the automotive industry and construction.

I also oppose new clause 11, which would require the Government to create a level playing field between nationally owned and private sector businesses. While I support in principle the use of quotas and tariffs to back British Steel, we must avoid unintended consequences for the downstream industry. Sudden or poorly calibrated changes risk undermining downstream firms. These businesses are vital in constituencies such as mine, and supporting domestic production must not come at the expense of the wider steel ecosystem. I have discussed these matters extensively with the Minister on several occasions, and I look forward to welcoming him to Stourbridge in the coming weeks to meet a local steel company.

Downstream companies have expressed legitimate concerns about the present proposals. I sincerely thank the Minister for engaging with me and them on these issues, but can he confirm whether, in cases where particular steel grades are not currently produced domestically, including zero-carbon grades, the Government intend to allow exemptions from the proposed tariff and quota regime? The most recent stance is that tariffs and quotas will be reviewed in 12 months’ time, but I really fear that that will be too late for some businesses. Will he consider transitional arrangements at the very least to offer some stability to the downstream industry?

I will also speak against new clause 12, which would limit the financial assistance that can be provided under the Bill. While supporting British Steel, we cannot ignore the climate crisis. Our steel industry must be driven towards green, decarbonised production. On that point, the steel strategy states an ambition to transition to carbon-neutral steel production with electric arc furnaces when market conditions allow. It is worth noting that SSAB in my constituency, which is part-owned by the Swedish Government, imports zero-carbon steel from Sweden, where such steel—its only by-product is water—has been produced using electric arc furnaces since the 1980s.

Following the Government’s introduction of an investment debt rule in 2024, I encourage the Minister to consider what further flexibility there could be to use a similar investment method to enable the transition away from coal-based steel production. I hope that he will reflect on those points and continue to engage well with the industry. With the right decisions, I believe that we can secure a competitive, resilient and low-carbon steel sector for the future.

--- Later in debate ---

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I think it has been clear throughout these two days of debate that none of us in the House underestimates the importance of the steel industry to our national economy, to our industrial resilience, and to the communities whose livelihoods depend on it. We can all agree that steel matters, and that steel jobs matter. However, we also believe that the responsible stewardship of taxpayers’ money matters, and despite the eloquent way in which the Secretary of State expressed his views on the Bill, we see it much more as a chaotic and unplanned intervention. It is not the product of a clear steel industrial strategy, but the product of a failure to negotiate a better outcome. The negotiated outcome was a possibility; the Secretary of State even went to China to try to achieve it.

It is the failure to address the root causes of the industry’s difficulties that has brought us to where we are today. The Bill could also be described as the steel industry blank cheque Bill, because it fails to protect the public purse from potentially vast and open-ended liabilities. Nationalisation does not solve the underlying issue that is making domestic steel production unprofitable. The higher employment costs, higher energy costs, planning issues, carbon pricing, regulation and levies associated with the Government’s net zero policies continue to weigh heavily on the sector, and the Bill does nothing to resolve those pressures. Instead, it transfers them wholesale on to the taxpayer.

We should reflect on how we came to this point. Not long ago, the Government told the House that they did not want to nationalise British Steel—indeed, that was presented as a last resort to be avoided—and yet here we are, because the Government have failed to negotiate an alternative. We see once again that when this Government negotiate, it is the taxpayer who picks up the bill. Since the intervention began last year, on that historic Saturday, the cost has already run to more than £1.3 million every single day. That is a bill for the taxpayer that will only become larger with this legislation. The Bill exposes the public finances to further liabilities—contingent liabilities, not only substantial but, alarmingly, potentially unlimited in terms of both their scale and their duration. This is a Government getting a blank cheque forever.

[Richard Tice]

The root cause of why we have the Bill is that the previous Conservative Government sold this business to Jingye in 2019. Another root cause is net zero, which was introduced by the Conservative Government. Surely what the Conservative party should do is show some humility about why we are here and support the Bill.

[Dame Harriett Baldwin]

Surely what the hon. Member should do is welcome the fact that our party is under new and outstanding leadership. We believe that politicians should not be in the business of running commercial enterprises, but I can see that that is the political position of the Reform party. The risks of inefficiency, political interference and poor capital allocation are very well known.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

The hon. Lady is right to say that her party is under new leadership, but what did that leadership think about the decision to sell British Steel to Jingye? What did the leadership think of the net zero policies that the hon. Lady blames for the current situation? What did the Leader of the Opposition think of them when she was in government, and what did she do to oppose them?

[Dame Harriett Baldwin]

It is a bit rich to be lectured on support for party leadership from someone on the Labour Benches, so I will move on swiftly.

This Bill sets a precedent. Indeed, the Government’s own impact assessment says that expropriating assets in this way risks undermining the investor confidence that we need at this precise moment, when the UK needs to attract inward investment into strategic industries.

Throughout our Committee considerations, we have sought to improve this legislation to introduce better transparency for Parliament, to limit liability and to ensure proper parliamentary oversight. I thank my team, the team of Clerks, the whipping team and you, Madam Deputy Speaker. Throughout this process, our amendments were responsible safeguards; they were designed to protect the taxpayer and to impose discipline on the Government. Their rejection only reinforces our concern that Ministers are unwilling to confront the full implications of their own policy.

As we come to Third Reading, the choice is clear. This Bill risks enormous cost, offers insufficient answers, and sends troubling signals about the UK as a place to do business. We cannot support it in its current form. We will not vote against its Third Reading today, but for the sake of the taxpayer, the health of the steel sector and the credibility of industrial policy in this country, we cannot support it either.