British Steel

Jeremy Lefroy Excerpts

Wednesday 22nd May 2019 Commons Chamber

[Greg Clark]

The sector deal was proposed in the industrial strategy. I am keen that there should be a sector deal in the steel industry, but the essence of a sector deal, as the hon. Gentleman knows from his work on the Business, Energy and Industrial Strategy Committee, is mutual investment by both sides. There is a good plan there, but one difficulty at the moment—British Steel is a good example of this—is that it has not been possible to see the investment coming in that is the hallmark of every sector deal. I very much want us to have that, and I hope that in talking to new partners we might have an opportunity for that sector deal to be completed, because in every sector deal we have the new investment that is required.

[Jeremy Lefroy (Stafford) (Con)]

I entirely support what my hon. Friends the Members for Middlesbrough South and East Cleveland (Mr Clarke) and for Brigg and Goole (Andrew Percy) have said about an innovative public-private approach to this. My right hon. Friend the Secretary of State talked in his statement about the accounting officer’s assessment, which said:

“It would be unlawful to provide a guarantee or loan”.

Will he confirm what the situation would be with regard to equity capital, in the context of a public-private partnership or other innovative solutions such as those that have been mentioned?

[Greg Clark]

I am grateful to my hon. Friend for that. As I said to colleagues, we should not allow any ideology to influence these decisions, but he is right to draw attention to the accounting officer’s opinion and advice on this, which includes an assessment that makes it clear that the option of whole or partial nationalisation of the company, temporary or permanent, does not change the assessment of legality. The reason for that is that it is a question not of the ownership but of the cash needs of the company. Whether a business is owned in the public sector or the private sector, the test of commerciality has to be met for the Government to put cash in; that applies whichever sector it is in. That is the legal test on which this hinges.