Steel Industry

Lord Falconer of Thoroton Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Falconer of Thoroton (Lab)]

My Lords, it is an honour to follow the speech of the noble Baroness, Lady Redfern, which showed real understanding of the position. The facts are clear. Without intervention, Jingye will not commit to buying raw materials immediately. Those raw materials are required immediately to prevent the blast furnaces cooling down. If they cool down, permanent damage is done to the blast furnaces and they cannot be repaired. Then the plant is lost, and the consequence is that the United Kingdom ceases to have the ability to produce primary steel—that means steel not made with scrap metal but of the highest quality.

The Government are absolutely right to intervene and to try to solve this problem by negotiations. They have failed not because of their efforts, and they now intervene to save the steel plant at Scunthorpe and are right to do so. It is churlish of those opposite to say that they have left it too late. They have done all they can; now they move to save. While there are difficult questions about how you ensure steel production, there should be no real question that we should try to ensure that there is domestic steel production in this country.

I disagree with the noble Lords, Lord Kerr, Lord Moylan and Lord Hannan, that we should not have a domestic steel industry. I disagree as well with Kemi Badenoch, who was the Business Secretary in February 2023, who said that perhaps we should not have a domestic steel industry. That may explain why those opposite found it so difficult during the past few days to decide whether they supported this Bill—I am still at a loss to discover whether they do or not.

Steel is essential for the modern economy. It has no viable substitutes that can match its unique properties of strength, durability and versatility. It is critical, as an important element of almost all infrastructure and construction, and as an essential part of a broad range of manufacturing supply chains. As well as making the UK a clean energy superpower, steel is a fundamental component in activities such as the construction of wind turbines, manufacturing the next generation of electric or autonomous vehicles, and building the infrastructure needed to sustain our digital economy, particularly in advanced manufacturing, clean energy industries and defence. For example, it is estimated that offshore wind alone will require 25 million tonnes of steel. That represents a potential £21 billion market for UK steel.

The Government have committed to deliver 1.5 million homes over this Parliament. This, too, will accelerate the use of industrial construction and offer new demand for steel, providing opportunities to the industry. Then, of course, there is defence, as my noble friend Lord West of Spithead referred to. The Ministry of Defence is currently undertaking an independent strategic defence review, alongside the development of a defence industrial strategy. These will inform our understanding of future steel demand, which is bound to increase as defence expenditure increases.

The noble Lord, Lord Moylan, said that it was only assertion. The noble Lord, Lord Hannan, said we should rely on the foreign production of steel, which we should import. We should not. We should have our own domestic steel industry, and it may well be that it will have to be subsidised by the state to some extent. We should take that responsibility. As the noble Baroness, Lady Redfern, said in her impressive speech, we should save the town of Scunthorpe and make sure that there are jobs.