Steel Industry

Lord Kerr of Kinlochard Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

My Lords, it is difficult—in fact, almost impossible—to appear more gracious than the noble Lord, Lord Hunt of Wirral, but for once, I think I can. I thought it was extremely good of the Minister to get us a letter this morning explaining what we are up to here and including the draft of the Bill. I am grateful for that—and that is the only bit of my speech that she will like. I ask her four questions.

First, what is so special about steel? Why does she say in her letter that

“UK-made steel is critical to the country for jobs, for economic growth and our national security”


and that “domestic steel production” is “a crucial national capability”? Let us take aluminium: it is now more strategic, in a sense, given its conductivity and its use in computers as well as aeroplanes and vehicles. We used to have an aluminium industry in this country; we now have one tiny smelter left in Scotland. The largest user of electricity in Britain was the big smelter in Wales, and we had a smelter in Northumberland, close to the coal industry up there. We have closed them all and have one tiny little one left. We are happy to live off imported aluminium coming from countries where they have bauxite and where they have cheap electricity, such as Canada. We do not feel that we need, for strategic reasons, to have an aluminium industry. Why steel?

Secondly, how will we ensure that this Bill—which must pass, I accept—does not deter other potential inward investors? These powers are, as the noble Baroness, Lady Brinton, has said, extremely draconian. I was a director of a company developing an LNG plant in Russia. The techniques the Russians used to take control were much more subtle than this sledgehammer of a Bill. How will we ensure that there is not a deterrent effect from these draconian powers that we are giving the Secretary of State?

Thirdly, where is the wider public interest in all this? The Minister says in her letter that the Bill is

“a proportionate and necessary intervention … in the wider public interest”.

I understand the community interest in Scunthorpe. I understand that argument. I understand the wider public interest in the water industry and in trying to stop the pollution of our rivers and beaches and the diversion of resources into dividends for Australians, but I do not understand the wider public interest in distinguishing steel from, say, aluminium and maintaining a perpetual subsidy. That is what I think we will get: a perpetual subsidy for as long as we insist on having a domestic primary steel industry.

What is the end game? That is my last question to the Minister. How does she see it coming to an end? In 1982, as the noble Lord, Lord Hunt, recalled, the Commons met over the Falklands. I had to go to see the Prime Minister that morning to get her to agree to the seizure of the Argentine gold held in the Bank of England. I thought it was my duty to inform her that there was much more British capital investment in Argentina and we would undoubtedly see it seized in retaliation. The ratio was about five to one. She dismissed the point with contumely. She said, “Now is hardly the time to be thinking about details like that, is it?” I feel that we need to think about the end game. In her case, the end game was obvious: she was going to take back the Falklands, and she did. How are we going to handle this down the line? British companies have failed to make a go at commercial primary steel production in Britain. A Dutch company failed to make a go. Two successive Indian companies have failed to make a go. Here we have a Chinese company failing to make a go of it. Will the Secretary of State, when using his powers to nationalise—this clearly ends in nationalisation, but not today, I agree—do any better? Why should we expect him to do better? It seems to me that, so long as we go on believing that we have an absolute requirement to maintain a primary steel industry, we are condemned to perpetually supporting it financially. So, my last question to the Minister is: what is the end game?