Steel Industry (Nationalisation) Bill

Lord Hunt of Wirral Excerpts

Report stage
Wednesday 8th July 2026 Lords Chamber

Moved by

[Lord Hunt of Wirral]

2: Clause 2, page 1, line 14, leave out “includes (but is not limited to)” and insert “means”
Member’s explanatory statement
This amendment would limit the public interest test to the areas set out in paragraphs (a) to (c).

[Lord Hunt of Wirral (Con)]

My Lords, I will speak to Amendments 2, 3, 4 and 5 standing in my name and that of my noble friend Lord Sharpe of Epsom. I have no wish to repeat at length the arguments made in Committee, but I feel that the Government should be clearer about the public interest test that lies at the heart of these powers.

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[Lord Leong (Lab)]

My Lords, I am grateful for the contributions to this debate. Noble Lords have highlighted that the public interest test in Clause 2 is a vital part of the Bill and I very much agree. It is important that we get it right. Noble Lords have tabled several amendments to this clause and we have had fruitful discussions on them at previous stages, but I am happy to return to them.

Amendment 2, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would limit the public interest factors that could be considered by the Secretary of State to those explicitly set out in statute in Clause 2. As I have set out previously, the Government agree that these are likely to be the most pertinent issues in relation to an intervention in the steel sector. We have sought to strike a balance in the Bill between minimising the scope as far as possible and ensuring that we can adapt to evolving circumstances. That is why we think it is necessary to retain some flexibility to consider other factors that may be relevant to a particular case, which may be difficult to anticipate.

Let me be clear that the legal test in this clause places particular emphasis on the factors that are explicitly set out. Where the Government seek to rely on other factors, they will need to be satisfied that those factors mean that an exercise of the powers is necessary in the public interest. I therefore do not consider the amendment necessary and respectfully ask that it be withdrawn.

Amendments 3 and 5, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would create procedural steps that would need to be fulfilled before the transfer powers are exercised. Amendment 3 would require the Secretary of State to commission an independent assessment of whether the public interest test has been met and for that assessment to be met prior to using the powers. Amendment 5 would require the Secretary of State to provide details of the criteria used to demonstrate the public interest. Both are difficult to reconcile with the likely circumstances under which the powers could be exercised. The Government will likely need to act at pace to deliver an effective transfer. However, the Government will commit to publishing a Written Ministerial Statement following an exercise of the principal transfer powers, which would include details of how the public interest test has been met. I hope that provides some reassurance to the noble Lords, even if we cannot meet the full ambition of their amendments.

Finally, Amendment 4, also tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require the Secretary of State to be satisfied that the exercise of the transfer powers would represent value for money for taxpayers. The Government are mindful of the potential costs that could be incurred in relation to the nationalisation of a steel company. This consideration is already taken into account in government decision-making under the usual public spending processes, as I have set out previously.

Additionally, as we discussed in the previous grouping, the Government are supportive of Amendments 7 and 9 from the noble Lord, Lord Fox, which would require the Secretary of State to consider costs prior to the exercise of the principal transfer of powers. These amendments go some way to addressing the concerns raised by the noble Lord Hunt, and I hope that will provide some reassurance.

[Lord Hunt of Wirral (Con)]

My Lords, I am grateful to my noble friend Lord Redwood and the noble Lord, Lord Fox, for their comments. I am grateful indeed to the Minister for his reassurances and the commitment that he has given, which meet many of the concerns I expressed earlier. In those circumstances, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

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Moved by

[Lord Hunt of Wirral]

8: Clause 4, page 2, line 30, leave out “negative” and insert “affirmative”
Member’s explanatory statement
This amendment would require regulations transferring securities of a steel undertaking to be subject to the affirmative procedure.

[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to Amendments 8, 10, 12 to 14 and 40, standing in my name and that of my noble friend. I thank the Minister for working constructively with us on Amendments 12 and 13. It is vital that where the Bill confers regulation-making powers of real consequence, the default should be the affirmative procedure. Amendments 8 and 10 would apply that principle to the core transfer powers, regulations transferring securities, and regulations transferring property rights and liabilities. We understand the Minister’s argument that in exceptional cases powers may need to be exercised.

Turning to Amendment 40, I ask the Minister for a clear assurance that a thorough impact assessment will be brought before both Houses of Parliament after the various powers in the Bill have been used. Given the potential effect on taxpayers, workers, investment and the wider steel industry, they must assess whether these exceptional powers have delivered the outcomes claimed for them.

Finally, Amendment 14 would remove Clause 50. The Constitution Committee was clear that the broad power allowing the Secretary of State to modify the law in relation to a share or property transfer

“should either be removed or significantly tightened”.

That is a serious recommendation from an important committee of this House. The Government should either accept the committee’s recommendation or make much clearer in the Bill the limited circumstances in which such a power may be used. I look forward, therefore, to the Minister providing some assurance on Amendment 40 and on the Henry VIII powers. I beg to move.

[Lord Fox (LD)]

My Lords, I rise to speak to Amendments 15 and 16 in my name, but first I speak in support of Amendments 12 and 13 in the names of the noble Lords, Lord Sharpe and Lord Hunt, which I have co-signed. Importantly, these would add necessary additional parliamentary control over continuity obligations and property transfer regulations. We moved similar amendments in the Commons that failed to attract sufficient support there.

Regarding Amendment 10, the Minister has convinced me that the need to quickly transfer property rights transcends the necessity of moving to an affirmative form of approval from a negative regulation. That is why I have not co-signed Amendment 10.

I tabled Amendments 15 and 16 as it is important that Parliament must be kept informed once any nationalisation is effected. Amendment 15 would create a new clause causing there to be a report on principal transfer powers from the point at which those powers are exercised under the Act. It says that the Secretary of State must

“make a written statement to each House of Parliament setting out … the progress, and the operational and financial performance, of the steel undertaking in respect of which a transfer power has been exercised, and … the impact of this Act, including (so far as it is possible to assess) its effects on the steel industry in the United Kingdom, on employment and on the public finances”,

and that this duty

“continues until no steel undertaking remains in public ownership”.

I hope the Minister has something positive to say on this, which includes reflecting on how the communities and skills requirements are being met in whichever part of the UK is affected by any nationalisation and subsequent changes.

It is a shame that the noble Lord, Lord Empey, was not with us in Committee, because he would have participated in a debate on an amendment that was very similar to Amendment 15, which covers not only the territory of Northern Ireland but the whole of the United Kingdom. I feel that the noble Lord’s point is important, but if it is important for Northern Ireland then it is important for the rest of the UK. I think he will see that Amendment 15 seeks to bring that across our entire country.

Amendment 16 seeks to create a stakeholder advisory committee. I will not repeat my speech from Committee, but its aim is to have stronger input into the steel strategy from steel users. The Minister responded with news that the steel council may be augmented by additional new members. I hope he can elaborate some more on how the voice of steel users is reflected more effectively in order for the Government to avoid such issues as those that have been created by the steel tariffs.

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Finally, I thank all noble Lords across the House for their commitment to ensuring that parliamentarians have the appropriate powers to scrutinise the Bill. I hope my comments reassure all noble Lords.

[Lord Hunt of Wirral (Con)]

My Lords, this has been an important debate. I pay tribute to the Minister. His approach to the Bill has been exemplary. We may disagree, and we do disagree, but the Minister has set an example that will be difficult for his ministerial colleagues to follow. He has listened and cared deeply about all the points we have raised. I am sure I speak for the noble Lord, Lord Fox, as well as for my noble friend and friends across the House, when I say that the Minister has not only listened to us but responded in positive terms, and, where he has not been able to agree, he has explained why he cannot agree.

I thank the noble Lord, Lord Wigley, for making sure that we do not forget the vitally important Welsh dimension. I thank my noble friend Lord Redwood for always scrutinising the public expenditure side of the Bill.

I say to the noble Lord, Lord Fox, that, with him, I believe we have now received from the Minister a series of comprehensive assurances, particularly on the impact assessment, which will enable us to proceed in a positive way.

The noble Lords, Lord Empey and Lord Elliott of Ballinamallard, have raised issues that—as the noble Lord, Lord Fox, pointed out—do not fall directly within scope, but they do fall within the impact assessment. That is why it was important that those points were raised.

The Minister will argue that there is a case for a Henry VIII power in an emergency Bill of this kind. We remain concerned about the breadth of Clause 50 and the precedent it may set, but I am grateful to the Minister for his engagement with this debate, and I thank him. In the meantime, I beg leave to withdraw Amendment 8.

Amendment 8 withdrawn.

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Moved by

[Lord Hunt of Wirral]

31: Clause 58, page 39, line 5, after “assistance” insert “of a total value of no more than £2.5 billion in the period ending on 15 August 2029”
Member’s explanatory statement
This amendment would limit the financial assistance that can be provided under the Act.

[Lord Hunt of Wirral (Con)]

My Lords, in moving Amendment 31 I will also speak to Amendments 32, 33, 35 and 36 standing in my name and that of my noble friend. I support the similar sentiments and approach expressed in Amendment 37.

I do not wish to repeat the arguments made in Committee, but on these Benches we remain gravely concerned by the open-ended cost to the taxpayer that the Bill potentially permits. The Government have already announced £2.5 billion of taxpayer funding for the steel sector. That is the figure that Ministers have chosen to present as a demonstration of their commitment to rebuilding and modernising British Steel and the steel sector. Yet in this Bill they seek an unlimited power to provide financial assistance with no statutory ceiling whatever. I believe this is bad economics, bad politics and, unless some clarity is forthcoming, quite possibly bad faith too. If £2.5 billion is not enough, how much is? Is there any maximum figure at all that Ministers are prepared to put before us and then stand behind?

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To conclude, I hope I have been able to reassure noble Lords on the amendments in this group, which I will not support.

[Lord Hunt of Wirral (Con)]

My Lords, I am very grateful to the Minister, in particular for those additional comments. I and my noble friend Lord Sharpe—as well as, I believe, the noble Lord, Lord Fox—have been reassured by how the Minister has termed the positive future that we all want to see. However, as my noble friend Lord Redwood pointed out, the Government have still not provided Parliament with a clear limit on the potential exposure facing taxpayers. I do not know whether the Minister has any aspiration to become a Treasury Minister. To become one, you have to believe in caps—there is no other way to become a Treasury Minister.

I say to the noble and right reverend Lord, Lord Sentamu, that the Government just have to come to Parliament. If they require more money, they should ask Parliament for more money. At the moment, they have said that £2.5 billion is necessary. If there is a need for more money, it is perfectly open to the Government to come to Parliament and ask for it. Without a clear limit, there is a real risk that the cost could run into tens of billions of pounds.

[Lord Sentamu (CB)]

Therefore, if they can come to Parliament to ask for it, do not put the limit in the Bill. That is what the noble Lord seeks to do in his Amendment 31.

[Lord Hunt of Wirral (Con)]

If the noble and right reverend Lord does not support this amendment, it will be unnecessary for the Government to come and ask for more money. It is only when there is a cap that the Government have to be accountable to Parliament. For the reasons I have outlined, and because taxpayers should never be asked to sign a blank cheque, I wish to test the opinion of the House.

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

My Lords, before we divide the House, I need to inform the House that there have been intermittent network issues on the estate. Because of the small risk that this may cause temporary disruption to the pass readers and the Division system, I have agreed with the usual channels to extend the time for Divisions from eight to 10 minutes.

I ask all noble Lords to ensure they firmly tap their pass on the pass reader. If in doubt, they should tap their pass a second time. The system will only record a vote once. If we all remember that beep means you have voted and no beep means no vote, we will all be fine.

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Moved by

[Lord Hunt of Wirral]

41: After Clause 60, insert the following new Clause—
“Exemption of iron and steel carbon border adjustment mechanism goods(1) Section 143 of the Finance Act 2026 (charge to carbon border adjustment mechanism) does not apply to emissions embodied in a CBAM good which is an iron and steel good for the purposes of Schedule 16 to that Act where the good is imported by a transferred steel undertaking for use in connection with the carrying on of its business.(2) In subsection (1), “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 exempt iron and steel CBAM goods imported for use by a steel undertaking brought into public ownership under this Act from the carbon border adjustment mechanism.

[Lord Hunt of Wirral (Con)]

My Lords, I will also speak to Amendments 42 and 43 standing in my name and that of my noble friend.

As we stated in Committee, the carbon border adjustment mechanism and emissions trading scheme will have a material effect on the domestic steel sector. The Government will no doubt argue that the CBAM and ETS are necessary to meet their net-zero objectives and that they will not harm British industry. We may have significant disagreements on that point. However, what cannot be disputed is that these measures will affect steel undertakings in this country. The question is whether that effect will be positive or negative on costs, production, exports and international competitiveness.

In Committee, Ministers suggested that the business environment, including the ETS and CBAM, would be relevant to valuation. But that is not the same as a clear assessment of the practical effect of these policies on the future of domestic steel-making. I therefore invite the Minister to confirm that the future impact assessment to which the Government have referred will include a full assessment of the effects of the CBAM and ETS on the domestic steel sector.

If the Government are right that these measures will protect industry, support investment and improve competitiveness, they should have no difficulty at all in providing that assurance. If, however, that assessment shows that these measures are damaging production, exports, investment or competitiveness, that would also give the Government the evidence needed to change course, and that is why I wish to move this amendment. I beg to move.

[Lord Redwood (Con)]

My Lords, I am very grateful that my noble friend has raised this important point. We would probably not be having these big debates about steel nationalisation if the United Kingdom in recent years had had competitive energy pricing, and if it had not gone in for carbon pricing and carbon taxes that can have an adverse bearing on energy-using industries. However, we are where we are, and so my noble friend is right to ask the Minister to give some reassurances. We seem to be involved in overtaxing carbon and then having to subsidise those businesses that suffer as a result.

Of course, the CBAM is an EU-designed scheme which we are copying, to try to offset the impact that very high carbon and energy costs have on domestic economies and industries, by imposing a similar tax or tariff on the imported goods from countries that do not impose such carbon taxes and carbon additions to the energy they are using in industrial plant. That does help in some way for the domestic steel-producing industry; it becomes a problem for the domestic steel-using industry where it is having to import steel beyond the tariff-free quota provided under the CBAM. We note that the tariff-free quota is skewed to favour European producers, rather than other producers around the world who might be otherwise cheaper or more advantageous.

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[Lord Leong (Lab)]

My Lords, I thank noble Lords for their contributions to this debate on the emissions trading scheme and the carbon border adjustment mechanism, which I will refer to as CBAM, and their impacts on the steel sector.

Notably, these amendments seek to exempt a publicly owned steel undertaking from both these environmental measures, thereby undermining the level playing field that the noble Lord mentioned in the previous group. At the outset, I emphasise the Government’s commitment to their industrial decarbonisation policies and to moving towards a green, decarbonised steel sector. Although I appreciate that there may be differing views on this issue, these amendments would completely undermine the Government’s objectives for these measures.

These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out. Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. That Act contains various reporting requirements, which vary depending on the size of the entity. Where relevant or material, our Written Ministerial Statements may refer to any wider contextual or regulatory impacts. In addition, as previously mentioned, the Secretary of State would have the ability, if needed, to request an interim report on a particular issue.

Amendment 41 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the concern expressed by the noble Lord; however, I emphasise that CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It gives industry confidence to invest in the UK, knowing that its decarbonisation efforts will not be undermined. CBAM makes no exemptions for particular UK firms. Its intent is to target the problem of carbon leakage and ensure that highly traded, carbon-intensive goods from overseas, including steel, pay a comparable carbon price to that paid by UK manufacturers.

I understand the intention behind Amendment 42 and the desire to ensure that Parliament remains informed about the impact of carbon pricing policies on the steel sector. The Government are committed to supporting a competitive and sustainable steel industry while delivering our decarbonisation objectives. However, the UK emissions trading scheme and the carbon border adjustment mechanism are economywide policies designed to address carbon leakage and support the transition to net zero across industry as a whole, rather than for any particular company or ownership model.

The UK ETS Authority already keeps the operation of the scheme under review. The scheme contains statutory review mechanisms. The authority has committed to continued monitoring of both free allocation policy and the interaction between ETS and CBAM. The authority has also recently confirmed the extension of the UK ETS beyond 2030 and will continue to engage with industry and consult on future scheme design, ensuring that the impacts on affected sectors are properly considered. Given these existing review mechanisms, it is not necessary to create a separate statutory requirement for a particular transferred steel undertaking.

Amendment 43 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this imposes a cost on activities that have significant emissions. However, as with Amendment 41, accepting Amendment 43 would grant preferential treatment based on ownership and undermine a level playing field across the industry. The transition to low-carbon steel must be fair, credible and consistent across all operators, whether publicly or privately owned. I emphasise that the ETS includes targeted protections for energy-intensive, trade-exposed industries, including steel. Further protections will be introduced through CBAM from 2027.

The Government remain firmly committed to both a competitive steel sector and our decarbonisation objectives. Exempting a publicly owned steel undertaking from ETS or CBAM would create an uneven playing field, weaken the integrity of these schemes and undermine efforts to tackle carbon leakage. Steel producers, regardless of ownership, should operate within the same fair and consistent framework. I hope that my comments reassure noble Lords.

[Lord Hunt of Wirral (Con)]

My Lords, I am very grateful to my noble friend Lord Redwood for highlighting the importance of ETS and CBAM. I say to the noble Lord, Lord Fox, that the British taxpayer has a right to know the effect of ETS and CBAM. I take his point that it would apply whether it was in the private or the public sector, but we are now dealing with a nationalised industry which is funded by the taxpayer, and the taxpayer has a right to know exactly what the effect of the UK ETS and CBAM will be on the costs, production, exports and competitiveness of the transferred steel undertakings.

However, I recognise that the Minister has done much to explain the method by which the Government are approaching this situation. We will keep it under careful scrutiny but, in the meantime, I beg leave to withdraw the amendment.

Amendment 41 withdrawn.