Steel Industry (Nationalisation) Bill

Lord Hunt of Wirral Excerpts

Committee stage
Wednesday 1st July 2026 Lords Chamber

Moved by

[Lord Hunt of Wirral]

21: After Clause 50, insert the following new clause—
“Duty to try to find a private sector purchaser for any nationalised steel undertakingWhere a steel undertaking has been subject to a principal transfer power under this Act, the Secretary of State must—(a) make all practicable efforts to find a private sector purchaser for the steel undertaking, and(b) lay a report before Parliament every six months which sets out progress made towards finding a private sector purchaser for the steel undertaking.”Member’s explanatory statement
This new clause would put a duty on the Secretary of State to seek a private sector buyer for any steel company that has been nationalised, and report to Parliament on progress made every six months.

[Lord Hunt of Wirral (Con)]

My Lords, Amendment 21, standing in my name and that of my noble friend Lord Sharpe of Epsom, would, ultimately, put into the Bill what the Government say is their objective. The then Secretary of State for Business and Trade said that the Government’s aspiration for British Steel was

“a co-investment agreement with a private sector partner to secure a long-term transformation”.—[Official Report, Commons, 12/4/25; col. 841.]

The future of British Steel cannot rest indefinitely on public ownership and continuing working capital injections, together with an open-ended commitment from the taxpayer. It must be a viable, competitive and investible business able to secure private capital for the investment and the transformation that it requires. Yet that objective does not appear in the Bill. There is no statutory duty on the Secretary of State to seek a private sector purchaser, no clear exit route from public ownership and no requirement to report to Parliament on progress. Without that discipline, there is a real risk that nationalisation becomes not just a temporary intervention to stabilise and restore business but an accumulating and indefinite cost to the taxpayer. If the Government are serious about a private sector-led future for British Steel, they should have no difficulty in accepting that duty.

Amendment 23 from the noble Lord, Lord Fox, is very important indeed. It goes to the heart of concerns raised throughout these debates, including by my noble friend Lord Redwood on the first day in Committee, that the Government need a genuine business strategy for steel. Where nationalisation is contemplated, there must be a strategy for skilled employment, retraining, reskilling and local economic renewal. Workers cannot be treated as an afterthought to a transfer of assets or as a balance sheet exercise. I look forward to hearing the Minister’s response. I beg to move.

[Lord Fox (LD)]

My Lords, Amendment 23 is in my name. I was very pleased to hear what the noble Lord, Lord Hunt, just said, because I had put in my notes that I feel that this is an important amendment. I hope it is pushing at an open door.

In the previous debate, on Monday, the noble Lord, Lord Wigley, spoke of the effect on local communities. I agreed then, and this amendment would put in place a requirement for a jobs and industrial transition strategy to follow once the Secretary of State has exercised the principal transfer power in respect of the steel undertaking. I emphasise that this would be post exercising that power.

This amendment calls for the strategy to be laid before Parliament within six months—sooner, I would hope—from the exercise of the transfer powers. This published strategy must set out the Government’s investment and transition plans to protect employment, deliver a skills and reskilling programme and, if necessary, redeployment opportunities, and deliver real economic renewal, while supporting resilience in communities that are dependent on that steel undertaking. I am happy to discuss with the Minister ways of achieving this objective, but this process is aimed at ensuring that there is an explicit plan to which Parliament will be able to hold the Government to account.

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[Lord Hunt of Wirral (Con)]

My Lords, the purpose of any debate in Committee is justified when the Minister responds by giving us the series of assurances that he has just done, and I warmly welcome his approach. He has clearly outlined that without a clear route towards private investment, this ownership, as I pointed out in moving the amendment, becomes an open-ended commitment. I thank my noble friend Lord Redwood and the noble Lord, Lord Fox, for their contributions, and I owe my good friend the noble Lord, Lord Wigley, an explanation, because this is very much a probing amendment. He is quite right that you can envisage various circumstances which are counterproductive, and that is why I warmly welcome the fact that the Minister has given such a clear commitment that there is no public ownership in perpetuity intended here. We are all determined to produce a plan which will last for generations to come and secure the future of our great steel industry, so I have no hesitation in seeking to withdraw the amendment.

Amendment 21 withdrawn.

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[Lord Leong (Lab)]

My Lords, just to update the Committee, we are 2-1 up.

[Lord Hunt of Wirral (Con)]

It was Harry Kane.

[Lord Leong (Lab)]

Harry Kane, thank you.

The noble Lord, Lord Fox, has several amendments in relation to the compensation provisions in the Bill. I appreciate his careful attention to detail, which is a key aspect of this Bill, and will respond to the points raised in order. I will preface these points by noting that, if introduced, compensation regulations will be subject to the affirmative procedure, thereby providing opportunities for parliamentary scrutiny.

Amendment 27 is on the approach to environmental liabilities in the compensation process. The noble Lord, Lord Fox, has indicated that this would prevent the payment of compensation until the independent valuer has delivered to the Secretary of State a written estimate of the environmental liabilities of the steel undertaking in question and the Secretary of State has published that estimate and laid it before Parliament.

It is important that the independence of the valuation process is maintained. It is not appropriate for the inputs to the valuation exercise to be disclosed before the valuer reaches their determination. This may risk exposing the independent valuer to undue pressure while they are still deliberating on an outcome, thereby undermining the independence and fairness of the compensation scheme. None the less, the Government would have the power to direct the independent valuer to consider environmental liabilities in their determinations of compensation. We also intend to allow the final compensation determinations to be made public, including any consideration of environmental liabilities carried out. There is an opportunity for further parliamentary scrutiny, as the compensation scheme regulations will be subject to the affirmative procedure, allowing all Members to debate the specific framework set at that stage.

Amendment 24 would prevent the payment of compensation until an estimate of liabilities arising from the environmental and health and safety matters under Clause 54(4) is provided to Parliament. An important principle of the compensation process is that it is assessed independently to ensure that affected parties are treated fairly. The proposed amendment would begin to erode this independence by making the payment of compensation contingent on parliamentary scrutiny of one of the factors that would inform the outcome. It is therefore not feasible to proceed with the proposed amendment. As a general point, compensation scheme regulations would require the independent valuer to consider environmental liabilities as part of the assessment. Additionally, in the event that a steel company is nationalised, we would expect it to publish an annual report setting out its financial position, including any liabilities.

I now turn to Amendment 28. The noble Lord has tabled a similar amendment that would require the Secretary of State to publish an estimate of the pension liabilities of the relevant steel undertaking before compensation is paid. I understand the concerns the noble Lord has about taking on unknown liabilities and putting undue pressure on the public balance sheet. If the Government decide to nationalise British Steel, subject to the public interest test, I can reassure the noble Lord that the Government would not be taking on a large contingent pension liability. The company’s pension scheme is a defined contribution scheme with a pot funded by contributions made by the employees and the company over time. In other cases, the pension scheme may be based on different arrangements, but we have built flexibility into the Bill to address these circumstances on a case-by-case basis.

The pension power in Clause 44 allows us to adapt to regulatory changes, standardise terms and adjust contribution minimums. Where necessary, it also allows for consideration of a fair division of pension liabilities between the transferor company and the government corporation. This follows the approach in the Banking Act. Where relevant, pension liabilities will form only part of the picture in the valuation exercise, and publishing them in isolation without the wider context would not be helpful. As I have already mentioned, following nationalisation we would expect contingent liabilities to be included in the company’s annual reporting.

I am more sympathetic to the noble Lord’s Amendment 25, which would require that the compensation regulations provide for the appointment of an independent valuer in all cases to determine compensation. The current wording makes it discretionary whether an independent valuer is involved in any given case. In practice, it is very likely that the Government will consider it fair to provide for an independent valuer to be established in compensation scheme regulations to consider any compensation for a transferor. The clause is currently discretionary because there could be situations where independent valuation is not required. For example, where the Government and the transferor agree on a sum, it would be unnecessary for the legislation to require that an independent valuer be engaged. However, I will reflect further on the noble Lord’s points and consider how I expect to return to this on Report.

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[Lord Fox (LD)]

My Lords, I thought it would be helpful, on this group, to bring together the necessary levels of scrutiny about which I have spoken on various other groups in various different ways. In moving Amendment 36A, I will speak to my Amendments 38 and 41A.

As prefaced on the previous group, Amendment 36A would require financial assistance under Clause 58 to be approved by a resolution of both Houses of Parliament before it may be provided. By amending Clause 58, financial assistance under the relevant subsection would have to be provided through regulations specifying the financial assistance proposed to be provided and the estimated cost to public funds of that assistance. These regulations would be subject to the affirmative procedure.

The Minister got his revenge in early on the previous group, because Amendment 38 outlines a mechanism by which parliamentary scrutiny of the public interest test and nationalisation could work. I propose a new clause after Clause 58 that would prevent financial assistance being provided until 90 days after information about the package of financial assistance has been made available to a Select Committee of the House of Commons or the House of Lords.

I take the Minister’s point about timing, but this is a useful probing amendment to look at the role of Select Committees going forward in the scrutiny of this. I hope the Minister will have something broader to say if he continues to shoot down the principle of the timing of this intervention. This amendment proposes that the Select Committee should look at

“details of the nature and amount of the financial assistance … the intended beneficiary or beneficiaries of the financial assistance … the expected purpose and effect of the financial assistance … any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and … any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal”.

Whether this is before or post hoc, the Select Committees —either of just the Commons, or of the Commons and the Lords—need to have this important investigation. Of course, any information that would be made public that might compromise national security, fiduciary duties or commercially sensitive issues would not be included. Going forward, it would be useful to hear from the Minister his understanding of how Select Committees will be involved.

I had hoped to persuade the Government to commit to an annual parliamentary debate on the steel industry—its strategy, the market and the state of nationalised businesses in the industry—both in the Commons and in the Lords. This would take place once a year, as long as there were still steel undertakings in public ownership. Perhaps we can discuss this, but Amendment 41A proposes an alternate approach to information sharing. It would require the Secretary of State to make a Written Ministerial Statement every three months on the progress of any nationalised steel undertaking.

During the during the passage of the Steel Industry (Special Measures) Act—SISMA—just before Easter last year, Ministers committed to a debate six months following Royal Assent on the use of direction-giving powers. That took place in October 2025. This was a commitment to a single occurrence, but SISMA also included a commitment to a monthly Written Ministerial Statement on the use of direction-giving powers. If British Steel were taken into public ownership, this commitment would fall away, replaced only by any commitments associated with this Bill.

To date, there are no provisions of anywhere near this level of information sharing within the Bill. So, without this amendment, as the cost to the taxpayer increases, the level of parliamentary scrutiny would actually decrease, creating less scrutiny for steel nationalisation than there is under SISMA. I accept that a monthly report may be unreasonable, and I know that the Minister has mused in our discussions about half-yearly reports, but I think quarterly would be a sensible interval, and that is what this amendment seeks to achieve. I do not think any Minister would be afraid of doing this because, as the noble Lord, Lord Sharpe, said on the previous group, a level of public understanding of what is going on—the difficulties, the struggles, the cost and the importance of the industry—is important. This is an opportunity to restate that, coming back to the point about what is happening in the communities, and with jobs and skills. We would expect that to be included in those quarterly reports. If we are not getting a debate every year, this would be a better response, in a way.

Taken together, these three amendments are designed to deliver a level of comfort: an affirmative process for assistance, a role for the Select Committees and a quarterly reporting mechanism. I beg to move.

[Lord Hunt of Wirral (Con)]

My Lords, this is a very important debate, and I thank the noble Lord, Lord Fox, for these amendments. It is not just a case of public understanding; I think the public would expect Parliament to hold the Government to account. In many ways, I hope we are pushing at an open door with these amendments. In an area potentially involving substantial financial assistance, the Government must be able to provide both Houses of Parliament with a clear indication of the estimated cost to public funds. Parliament must be able to scrutinise not only the principle of financial assistance but its scale, purpose, conditions and likely liabilities.

The proposed 90-day period in Amendment 38, which we have already debated, strikes a sensible balance. It would allow an expert Select Committee to examine the proposals and make recommendations, while preserving the Government’s ability to proceed once that scrutiny has taken place. The noble Lord, Lord Fox, seemed uncertain several times as to whether it should be a Select Committee of the House of Commons or of the House of Lords. I have always been a great believer in Joint Committees. Something of this importance requires both Houses of Parliament to scrutinise it, and the best way to do that is through our expert Select Committee process.

Parliament has enormous expertise which should be used in determining the appropriate level and form of support. That is particularly important where taxpayers may be exposed through grants, loans, guarantees or indemnities. I hope the Minister will be able to respond positively on how he intends to proceed.

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Moved by

[Lord Hunt of Wirral]

49: After Clause 60, insert the following new Clause—
“Strategic reports: transferred steel undertakings(1) Chapter 4A (strategic report) of the Companies Act 2006 does not apply in relation to a company carrying on a transferred steel undertaking.(2) In this section, “transferred steel undertaking” means a steel undertaking in respect of which the Secretary of State has exercised a principal transfer power.”Member’s explanatory statement
This new Clause would disapply strategic report requirements for companies carrying on transferred steel undertakings.

[Lord Hunt of Wirral (Con)]

My Lords, I will speak to Amendments 49 to 55 standing in my name and the name of my noble friend Lord Sharpe of Epsom. As we have just discussed, the explosion of environmental, social and governance—ESG—red tape has created a vast and complex web of rules, which force businesses to comply with political targets at a cost to investment, job creation and, above all, the competitiveness of Britain.

Admittedly, I should add a declaration of interest, as a practising solicitor in the City of London. This has undoubtedly created an explosion of work and therefore I should probably declare an interest. But I do not take any pride in the fact that ESG reporting requirements have become more and more burdensome and onerous.

This is why I am delighted to confirm that His Majesty’s Official Opposition have committed to repealing a number of ESG reporting requirements, including those addressed by this group of amendments, so that unnecessary business costs can be removed and businesses can focus on investing, growing and creating jobs. However, if the Government are going to nationalise a steel undertaking, in order to minimise the cost of its transition, attract private sector investment and reduce the burden on the taxpayer, they should at least disapply these regulations in respect of that undertaking. British Steel employs more than 4,000 people and is, therefore, likely to be caught by a number of these costly and burdensome requirements.

Amendment 49 would disapply the Companies Act strategic report requirements, which require quoted companies to include annual greenhouse gas emissions information and reporting on environmental impacts in directors’ reports. Amendment 50 would disapply greenhouse gas emissions and related environmental reporting requirements. Amendment 51 would exempt a nationalised steel undertaking from the energy savings opportunity scheme, which requires large companies, including those with more than 250 employees or turnover above the relevant threshold, to carry out energy audits every four years to identify energy efficiency opportunities.

Amendment 52 would disapply the energy and carbon reporting requirements which apply to large companies and limited liability partnerships. Amendment 53 would remove executive pay ratio reporting requirements. These require certain companies to report chief executive pay against median, lower-quartile and upper-quartile employee pay, with the figures subject to audit. Amendment 54 would disapply forest-risk commodity due diligence and reporting requirements. These would require businesses using certain commodities to conduct supply chain due diligence and publish annual reports. Finally, Amendment 55 would disapply climate-related financial disclosure requirements. These require companies and LLPs to report how their boards oversee climate risks, the impact of climate change on strategy, and the metrics and targets used to assess those risks.

None of these requirements reduces electricity costs, secures orders, improves productivity or makes British Steel more competitive, yet each requires additional reporting, auditing and compliance costs on a business which the Government may have taken into public ownership at substantial expense to taxpayers. I therefore say to the Minister that, if the Government are serious about making a nationalised steel undertaking viable, investable and capable of returning to the private sector, they should focus on reducing unnecessary burdens and allowing management to concentrate on commercial recovery, investment, modernisation and jobs. I beg to move.

[Lord Fox (LD)]

My Lords, I was planning to say nothing and I will say little more than nothing. I have a question for the noble Lord, Lord Hunt, which he can answer when he gives his response to the Minister. Can he remind me when most, if not all, of these measures were brought on to the statute book?

[Lord Leong (Lab)]

My Lords, the noble Lords, Lord Sharpe and Lord Hunt, have tabled a number of amendments regarding the deregulation of the steel sector. These amendments focus on three core areas of regulation: industrial action, environmental regulations and reporting, and company reporting.

I recognise the concern from noble Lords that any publicly owned steel undertaking will face a significant array of reporting requirements. That is true, and the Government believe that these are necessary to ensure that any publicly owned company operates in a similar way to its privately owned counterparts. Any publicly owned steel undertaking must protect its workers’ rights, fulfil its environmental obligations and transparently report on its progress.

At the outset, I make the general point that a company under public ownership is ordinarily treated as a public corporation—that is, it is run as a private company with an independent board of directors, operating under broad strategic direction from Government Ministers. It is right, therefore, that such a company is subject to the regulatory frameworks within which any similar private company operates. I also emphasise to noble Lords that amendments seeking to level the playing field within the steel industry are inconsistent with that position. Instead, the amendments in this section seek to give preferential treatment to publicly owned steel undertakings.

I will now address the amendments directly. I believe that Amendments 50 to 52, 54 and 55 are intended to address the noble Lord’s concern that the Government’s industrial decarbonisation policies could impose additional costs and burdens on publicly owned steel undertakings. In summary, these amendments seek to exempt publicly owned steel undertakings from a number of statutory requirements, including greenhouse gas reporting, the energy savings opportunity scheme, energy and carbon reporting, forest-risk commodity due diligence, and climate-related financial disclosures. Although I recognise the noble Lord’s concern that there is a range of requirements on the steel sector with regard to environmental reporting, I cannot support these amendments.

The reporting requirements the Opposition have identified are integral to this Government’s commitments to decarbonising our industries. Our steel strategy set out a vision for a move towards green, decarbonised steel production. We are committed to supporting the sector in achieving those objectives, as evidenced by the £500 million of funding to Tata Steel for the development of its electric arc furnace in Port Talbot.

A public steel company, no more than any other steel company, should not be exempt from these important transparency requirements. Accepting these amendments would undermine the intent of the Government’s industrial decarbonisation policies, creating an unfair system for other domestic steel producers. The Government are committed to revitalising the entire UK’s steel industry, not only the companies in public ownership. Alongside this, the Government believe that these requirements are critical to industrial decarbonisation and to meeting net zero.

Finally, I will address Amendments 49 and 53 together, as both seek to exempt a publicly owned steel undertaking from existing corporate reporting requirements. Amendment 49 would disapply the strategic reporting requirements under Chapter 4A of the Companies Act 2006, while Amendment 53 would remove the requirement to publish information on executive pay ratios.

I recognise that the purpose of these amendments is to reduce the administrative burden on a publicly owned company. However, the Government do not believe that public ownership should entail lower standards of transparency or accountability. Indeed, if a steel undertaking is brought into public ownership, there is an even greater expectation that it should operate openly and be subject to appropriate public scrutiny. That is why the Government expect any publicly owned steel undertaking to comply with the standard reporting obligations that apply to comparable public corporations. Its annual report and accounts should provide Parliament, taxpayers, employees and the wider public with a clear and comprehensive overview of the company’s financial position, operational performance, governance and remuneration arrangements.

Transparency is not merely a regulatory requirement; it is an essential part of maintaining public confidence. It supports effective parliamentary scrutiny, promotes sound corporate governance and demonstrates that public assets are managed responsibly. It also serves a practical commercial function. Should the company seek external finance, strategic partners, or, in due course, a return to private ownership, prospective investors and creditors will rightly expect access to robust, reliable and consistent corporate reporting. Maintaining those standards will enhance rather than diminish the company’s long-term prospects.

For all these reasons, the Government believe that a publicly owned steel undertaking should be held to the same high standards of openness and disclosure as comparable public corporations. Public ownership should set the bar for transparency, not lower it. I therefore hope I have explained why the Government cannot support these amendments, and I respectfully invite the noble Lord to withdraw the amendment.

[Lord Hunt of Wirral (Con)]

My Lords, I should first deal with the question raised by the noble Lord, Lord Fox, who perhaps sought to point the finger at me as a Minister for having introduced some of these requirements. I was indeed a Minister for 16 years, and I cannot recall having introduced any of these requirements at any stage. In fact, the Minister answered the noble Lord by pointing out that, under Tony Blair, the Companies Act 2006 started a process of requiring companies to include many of the things we are now debating and discussing. That is his answer. Perhaps when the noble Lord next gets to his feet—perhaps sometime next week—he might tell us what Vince Cable, who inherited all those requirements, did about minimising the burden on business.

Undoubtedly, at the present time, there is an overregulated regime facing the private sector, and in many ways, we are seeking to alleviate that burden as far as the new, nationalised steel industry is concerned, if the Government proceed down that road.

I remain concerned that the Government do not recognise the cumulative burden that these requirements place on an energy-intensive and strategically important industry. If Ministers are serious about restoring a nationalised steel undertaking to competitiveness and attracting private sector investment, they should be looking to reduce unnecessary compliance costs, not preserve them. No doubt we will return to these issues at a later stage. For the present, I beg leave to withdraw the amendment.

Amendment 49 withdrawn.