Steel Industry (Nationalisation) Bill

Lord Hunt of Wirral Excerpts

2nd reading
Tuesday 16th June 2026 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I start by congratulating the Minister on his appointment last Friday as Parliamentary Under-Secretary of State at the Department for Business and Trade. He has a long established and proven track record of success in business. I hope that his voice will be heard loud and clear within government. I wish him well and hope that he will emerge from our debates with his reputation enhanced.

At the outset of this debate, I make it clear that my party accepts that steel is a strategic industry. Steel helped to build our past and I agree with the Minister that it will shape our future. It matters to our national resilience, to our defence capability, to our manufacturing base, to our construction sector and to communities right across the country. Recognising the importance of steel is not, however, the same as accepting that nationalisation is the necessary answer. The central issue facing the sector is competitiveness, and the Government have still to set out a credible plan to address just that.

Last week, Al Carns, who was then Minister for the Armed Forces, resigned from the Government. He has since argued that energy policy has to be treated as a matter of security, but high energy costs are making British steel less competitive globally. The Government’s chosen path towards lower carbon production will dramatically increase the sector’s reliance on electricity and therefore require very substantial capital investment. The industry itself has warned that high electricity prices risk undermining its long-term plans to decarbonise. The Government acknowledge that steel is vital to national security. If that is the case, surely the energy policy upon which steel depends must also be judged through the lens of national security, resilience and industrial capability.

The Government came to office promising a £2.5 billion steel fund—a fund that was supposed to transform the sector, modernise production, support new technology and crowd in private investment. There is now a real risk that that money will be used not to transform British Steel but simply to plug the losses created by the Government’s failure to address the underlying causes of uncompetitiveness.

If hundreds of millions of pounds are being spent merely to keep British Steel operating day to day, and if still more liabilities are now to be brought on to the public balance sheet through nationalisation, how much of that £2.5 billion will be left for genuine transformation? How much will remain available to support new technologies, energy-efficiency improvements and the investment needed to secure the industry’s long-term future?

This leads to a more fundamental question: where does this end? Will British Steel, under public ownership, be expected eventually to stand on its own two feet, or will taxpayers be asked to fund operating losses year after year, while Ministers continue to promise that help is just around the corner? Before Parliament grants these powers, surely it is reasonable to ask what the end state is, what the exit strategy is and how the Government intend to measure success beyond simply writing more and larger cheques.

The Government’s impact assessment makes it clear that the costs of this Bill will be substantial. These costs include the possibility of capital injections, working capital support, operating costs if the company remains loss making, compensation, administrative overheads, and the expenditure inherent in establishing and running a government-owned company. So I ask the Minister what the Government’s estimate of the total cost is. Will Parliament be told that figure before the Bill receives Royal Assent?

We must also question the Government’s approach to ensuring environmentally friendly steel. Ministers have chosen a pathway that the industry warned will be more costly, more electricity-intensive and thus more difficult to finance. In the other place, the Secretary of State Peter Kyle said that

“the long-term future of the UK steel sector relies on public and private investment”.—[Official Report, Commons, 21/5/26; col. 787.]

If the Government’s preferred model drives up costs and makes the United Kingdom less attractive than competitor countries not operating under the same net-zero constraints, where is that private investment supposed to come from? Investors can choose where they deploy capital; if the Government make steel production more expensive, more regulated and more politically uncertain, they will look elsewhere.

The Government’s impact assessment of 13 May is clear and explicit about the risk to investment. I quote its paragraph 75:

“One potential impact is a chilling effect on investment as investors may perceive an increased risk of government intervention. This could increase uncertainty for investors and therefore deter future investment in the UK steel sector. If investors perceive these risks as material, they could further undermine the recovery of the sector, putting jobs and capabilities at risk”.


This is a remarkable admission from any Government.

The Government have also not properly addressed the wider trade risk. If British Steel is to be subject to constant and persistent subsidisation at the expense of the taxpayer, Ministers must explain how they intend to ensure that this remains compliant with the United Kingdom’s international obligations. Prolonged state support, if not carefully structured, could risk challenge under WTO subsidy rules and invite countervailing measures from trading partners. That would not be a theoretical concern; other countries could impose countervailing duties, raise disputes or just take other retaliatory action if they believe that UK steel is being unfairly subsidised.

Such action could not only harm British Steel itself but damage the wider UK steel sector and the downstream industries that rely on steel inputs, including automotive, aerospace, defence, construction and advanced manufacturing. Can the Minister therefore tell the House what assessment the Government have made of the WTO implications of the Bill and of any continuing public subsidy to British Steel? Have Ministers had any discussions with the World Trade Organization or major trading partners about the proposed structure of support? What conversations do they intend to have before any transfer into public ownership takes place?

On the issue of trade, I also raise the significant concerns expressed by stakeholders across industry about the Government’s steel strategy and, in particular, their tariff policy. The Government appear to have conducted a partial U-turn: it seems that we did not need to wait 12 months for a formal review for Ministers to discover that tariffs can be harmful—if only more than a century of economic history had already taught us that.

The first point is one of parliamentary accountability: any change to the Government’s steel tariff regime should be reported to Parliament first, so why are Members of both Houses having to learn through the media about possible changes? That is just not acceptable, and it gives the impression of a Government making up policy in response to headlines rather than setting out a coherent and properly examined trade strategy.

We have already seen the risks of retaliation. We have seen concerns in relation to the United States and questions raised on India, including the possible implications for the trade deal. We now read of concerns about the European Union, with reports that the Secretary of State has been to the EU to plead with it not to reduce tariff-free imports of British steel. What did the Government expect? If the UK chooses to escalate protectionist measures, it should not be surprised when trading partners respond in kind. Retaliation was not unforeseeable; it was predictable. We saw the European Union respond in precisely this way to President Trump’s tariffs. Did the Government really fail to assess that risk before introducing their own regime?

Countermeasures, reduced market access and increased uncertainty could all make it much harder for UK producers to export, and harder for investors to commit capital. At the same time, tariffs risk raising costs for downstream sectors that rely and depend on steel inputs —metal forming, automotive, aerospace, construction, defence and advanced manufacturing among them. These sectors are central to growth, productivity and investment. If tariffs increase their costs, reduce their competitiveness or force them to source elsewhere, the Government will have weakened the very industrial base they claim to be trying to strengthen.

I therefore ask the Minister: what assessment has been made of the impact of the steel tariff regime on downstream manufacturers? What assessment has been made of possible or likely retaliation by trading partners? Why should British businesses have confidence in a strategy that appears to protect one part of the supply chain by imposing costs and risks on so many others? We cannot just ignore the wider business climate the Government have created.

I am not going to go into detail about the Employment Rights Act 2025, but that will not stop me raising it, because it is making the business environment less competitive and less conducive to investment. Combined with those increased national insurance contributions, endless reporting requirements and carbon taxes, the Government are damaging the steel sector, along with every other sector of the UK economy. For a steel sector already operating under intense global pressure, these additional costs affect hiring, investment, margins, productivity and the ability of British steelmakers to compete. In the light of the importance to our national security, the steel sector may be a special case, but that does not mean it is immune to the effects of wider government policy.

Many questions remain to be answered. At this point, His Majesty’s Opposition are far from convinced that nationalisation is the best option, or even the so-called least worst option, but we are eager to hear some, or better still all, of those questions answered as the Bill progresses. Steel has shaped our nation’s history. The challenge now is to secure a future for the industry that is internationally competitive, financially sustainable and attractive to investors.

Working From Home (Home-based Working Committee Report)

Lord Hunt of Wirral Excerpts

Wednesday 10th June 2026 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I start by declaring my interest as a partner and practising solicitor with DAC Beachcroft.

What an interesting debate this has been. I congratulate the noble Baroness, Lady Scott of Needham Market. I have served with her on committees before. She has great skill, and this report is a testament to her success. It is also a fact that so many of the members of her committee have contributed to the debate, which does not often happen—and it has been of great advantage. It has also been marvellous to hear from my noble friend Lord Sharma about how it all started around the time that he was in the Cabinet. That gave the whole debate a degree of context.

I very much welcome the report and the opportunity it provides to examine, as my noble friend Lord Monks pointed out right at the start of the debate, one of the most important shifts in working practice of the modern era. He is quite right to highlight the fact that we are now facing further shifts through AI, and I found his speech very valuable.

I will begin with what should be the foundational principle underpinning our approach: the Government have to take a step back and allow private sector employers to determine the working practices they believe are best for their businesses and their workforce, whether that is full time, fully remote or some hybrid arrangements in between.

As my noble friend Lady Bottomley of Nettlestone pointed out, the role of the chief people officer has become so important. It was good to hear a number of views about flexible working, although I say to the noble Lord, Lord Brooke of Alverthorpe—whom I call my noble friend—that I hope that his idea of Parliament working from home full-time is not to be taken too seriously. I also enjoyed the revelations from the noble Lord, Hampton, on some of his practices in the past.

It has been an entertaining and interesting debate, but I will try to join other speakers in looking at the whole picture. Across the length and breadth of this country, different approaches work for different sectors, firms and communities. Employers have had to adapt, often at pace and at significant cost, particularly since the pandemic turned working life on its head almost overnight. What the report rightly recognises—and what the Government should take to heart—is that there is no one-size-fits-all answer. Employer flexibility is what matters most, and it should be remembered that businesses operating in a free market have every incentive to create the most productive workforce they can. They do not need the Government to tell them how to arrange their own affairs.

I worry that the Government seemed to have moved in the opposite direction. Through the Employment Rights Act 2025, Ministers have introduced a strengthened right to flexible working, making it considerably more difficult for employers to introduce that concept. This provision is expected to come into force in 2027, subject to consultation, yet the Government have confirmed—as the noble Baroness, Lady Scott of Needham Market, pointed out in her introductory speech—that the legislation does not intend to provide a definition of “reasonableness”. One must ask: what precisely is the point? If the threshold test is “reasonableness” but Parliament declines to define what “reasonable” means, all we have done is transfer the question from the employer’s boardroom to the employment tribunal. We have not resolved it; we have simply moved the uncertainty—and at considerable cost to businesses and to a tribunal system already operating under severe strain, as many have pointed out. The report warns of the prospect of “years of litigation”, if the legislation is not defined clearly and effectively. That is not a fringe concern raised by business lobby groups; it has been raised by the Select Committee itself.

It is worth reminding the Chamber what currently exists in the ACAS code of practice. An employer may reject a flexible working request but only on one of eight specified grounds, including

“the burden of additional costs … an inability to reorganise work amongst existing staff … an inability to recruit additional staff … a detrimental impact on quality … a detrimental impact on performance … a detrimental effect on ability to meet customer demand … insufficient work available for the periods the employee proposes to work … planned structural changes to the employer’s business”.

These are not arbitrary barriers erected to frustrate workers—far from it; they are carefully calibrated, operationally grounded reasons that reflect the genuine commercial judgments an employer must be able to make. Why are the Government seeking to erode that flexibility? What evidence exists that the current framework is insufficient to protect workers who have a legitimate case?

My noble friends Lady Manzoor and Lady Bottomley turned to productivity. Considering what effect any future changes in legislation will have on productivity must surely be a central priority for any Government serious about growth. The picture the report paints is—to put it mildly—inconclusive. Boosting productivity across the labour market is one of the great challenges of our time, but there is insufficient data. As the eminent scientist, the noble Baroness, Lady Watkins of Tavistock, asked: where is the data? Why do we not have sufficient grounds on which to base our judgments? The ONS already admits that there is insufficient data, so we look to the Minister to make sure that we have the necessary data.

Another element ran through the debate. I had the opportunity to bring forward employment legislation—it was 42 years ago, so I am sorry to raise it. I introduced a scheme called Access to Work, which we have touched on several times in this debate. With that scheme, we sought to make it possible for people with a disability—people from various backgrounds—to have the necessary equipment to enable them to work alongside people who did not have any disability. In many ways, the question that we are now asking and that this report highlights is: what are we going to do to meet the challenges not only of flexible working but of artificial intelligence? How will we make sure that young people today have the opportunities they need?

My noble friend Lord Fink raised the question of young people. Can the Minister think through the need for solutions to be found by the Government? Mr Milburn will produce his report later this year. Now with over 1 million people not in education, employment or training, there are serious problems ahead if we are to give opportunities right across the field, in particular to young people. I hope that the Minister will do more than the Government did in their very brief response to the report. I also hope that she will be able to bring us up to date with what the Government said in paragraph 9 of their response; namely, that they

“will take forward a number of priority actions, including strengthening cross-government research and analysis efforts, and exploring how best to target information and advice to line managers”.

What does all that mean? That was several weeks ago, so what has happened since? It also states that they will

“establish a more structured, official-led stakeholder group”.

Has that group now been established? If so, can the Minister give us a full report on what has been achieved so far? This report requires a much more detailed response.

If there is a case for this Select Committee to continue, it has been made. I am sorry to say this to all its members present, but I think that this work is so valuable that it needs to continue. In the meantime, we look forward to hearing from the Minister.

King’s Speech

Lord Hunt of Wirral Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, is a great pleasure to follow the noble Lord, Lord Barber of Chittlehampton, given his background as head of the Prime Minister’s policy unit under Tony Blair. Also, if I might, I will commend to colleagues his book, entitled Instruction to Deliver, which sets out very much the message he was giving about outcomes.

I refer back to the comment by the noble Lord, Lord Fox, about the steel industry, because the National Audit Office—he will know the importance of that institution—has produced a very detailed report. Rather like the noble Lord, I found the announcement that the Government now seek the power to nationalise British Steel to be fascinating—although perhaps not surprising, because it should be seen for what it is: not the emergence of a plan but the admission that a plan has already failed.

A year ago, Ministers came to Parliament—and we all arrived here on a Saturday, specially—to provide the emergency powers needed to prevent the imminent closure of the blast furnaces at Scunthorpe. We were told that this was a temporary intervention, that constructive discussions with Jingye were continuing, that the taxpayer’s support was recoverable, and that there was a route to a commercial solution. I do not know whether this features in the book, but I am reminded of Milton Friedman’s observation that there is nothing so permanent as a temporary government programme. Well, after all that, we are back precisely where the Government insisted on that day that we were not going: nationalisation anyway. The question for Ministers is simple: what has been bought for the money already spent?

The National Audit Office, releasing its investigation into the Government’s intervention in British Steel’s Scunthorpe site, revealed that, by 31 January this year, the department had spent £377 million on this and that costs were expected to exceed £642 million by June. That means £1.3 million to £1.4 million every single day. The NAO further observed that

“DBT intervened without a clear exit strategy”

and warned that the intervention has not stabilised the company’s finances, that there is no clear end date, and that spending could exceed £1.5 billion by 2028 before transformation costs, compensation to Jingye, or exit costs are even considered. This is not a rounding error, nor a bridging loan, nor a prudent investment patiently awaiting a return. It is a daily call on the taxpayer to keep alive a business that Ministers have still not shown can be made viable.

In paragraph 2.6 of its investigation, the NAO records:

“Advice provided by DBT officials to ministers on 28 March”


2025

“noted that there was ‘no affordable solution to maintain steel-making at Scunthorpe’ … the advice recommended that the government ‘not intervene to stop the company from making commercial decisions to close’. DBT told us that it had no budget or legal power to intervene at that time, and that there was no strong value for money case to do so, advising instead to focus on the impact on the local area and to support steelmaking elsewhere”.

Over the subsequent 14 months, apparent operating losses have doubled, while production levels have fallen further. What is the value-for-money justification today? Ministers will say, of course, that British Steel is strategically important, and no one disputes that steel matters—for defence, construction, rail, energy and manufacturing. The question is not whether steel matters but whether this Government have a credible plan to make steelmaking in Britain competitive, and at present I do not believe that they do.

Nor can this debate be separated from the Government’s new tariff regime. From July, the Government propose to cut tariff-free steel quotas by 60% and impose a 50% tariff above quota. Ministers describe that as protection for British steelmaking, but, for automotive, construction, aerospace and engineering businesses, it is a direct increase in input costs.

Think of the automotive manufacturer already under pressure from the Government’s EV mandate, the construction firm facing squeezed margins and higher material prices or the exporter using steel as an input. They are facing higher costs at home and fiercer competition abroad. All of them will inevitably pay the price, a high price, for a policy framed as saving jobs in one turn while quietly making jobs more expensive to sustain in many other places.

There is also a profound contradiction running through the Government’s position on energy and steel production more broadly. India, to cite one example, is driving a substantial share of the global rise in coal-based steel capacity, expanding output, expanding furnaces and expanding its competitive position in world markets. In contrast, this Government have banned domestic coking coal production, pushing domestic steel-makers towards more expensive alternatives, and then seemingly wonder why the taxpayer must step in to make the difference. The result is that we make domestic production more expensive, restrict cheaper imports and load the industry with additional regulatory costs, and then we present the bill to British industry.

When the noble Lord winds up this debate, can we please have a strategy for steel? The Government published one, but it does not have the long-term impact that we all want to see. Steel has been the backbone of this nation. It must be part of its future too, and it is about time that we had a clear strategy that takes us all further forward.

Statutory Instruments (Amendment) Bill [HL]

Lord Hunt of Wirral Excerpts

2nd reading
Friday 18th October 2024 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I first declare my interests as set out in the register; in particular, I have the honour to chair the Secondary Legislation Scrutiny Committee. I congratulate the noble Lord, Lord Thomas of Gresford, on putting forward this measure, and I have to tell him that I am favourably disposed to his Bill. I also congratulate him on the most enjoyable journey into the history which he has given the House.

However, I speak in a personal capacity; I do not seek to speak for the committee I chair or for the party of which I am a member. Before I joined the SLSC, I was aware there were serious shortcomings in far too much of the secondary legislation that continues to burgeon under Governments of every hue. I just had no idea how serious the problem was.

I agree with the noble Lord, Lord Thomas of Gresford: the system we have is anachronistic. Despite our best efforts and those of our excellent but small team of clerks, we struggle to cope, not only with the sheer volume of secondary legislation but with its all too frequent inadequacies.

The reasons why an instrument might fall short are set out in the terms of reference of the SLSC, in section 3. Despite repeated ministerial undertakings, inadequate explanatory material is the principal culprit—seemingly an endemic problem across almost every government department.

I am very proud of the work we do and of the absence of partisanship across the committee. However, if the ever-expanding reliance upon secondary legislation is now to be a fact of life, we can no longer rely on rules and conventions designed for an earlier era. Although we provide a useful service to the House in pointing out when an SI falls short on one of the grounds, it is frustrating that in response to that scrutiny this House can do no more than object in the form of a regret Motion. It would improve the quality of secondary legislation and the balance of power between the legislature and the Executive if there were a stronger mechanism for the House to object to an SI, while still falling short of rejecting it altogether. This is exactly what the noble Lord, Lord Thomas, is proposing. I congratulate him on his initiative and look forward very much indeed to hearing the Minister.