Business Hiring Intentions

Lord Leong Excerpts

Tuesday 3rd November 2026 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of current business hiring intentions and their impact on the wider economy.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, the UK labour market and economy remain resilient despite geopolitical uncertainty. The UK had the joint fastest-growing economy in the G7 in the first half of 2026. All the labour market and ONS data show that there are 356,000 more people in work than a year ago, and the Business Insights and Conditions Survey shows that more than 80% of businesses intend to either maintain or increase their staff levels in October 2026.

[Lord Hunt of Wirral (Con)]

My Lords, the Office for Budget Responsibility has just concluded that the Employment Rights Act 2025 will have a negative economic effect—something that we on these Benches and all employers have been warning about for a very long time. Does the Minister agree with the OBR and, if so, what is he going to do about it?

[Lord Leong (Lab)]

My Lords, I say in the nicest possible way to the noble Lord and to noble Lords opposite that supporting business enterprise means combining a hard head with a soft heart. The Employment Rights Act strengthens provisions, protections and security for working people, but legislation can only set minimum standards. The law establishes the floor; good businesses should compete to raise the ceiling. No Act of Parliament can make an employer care about their staff. That comes from leadership, values and culture. In my experience, looking after your people is fundamental to business success. We respect the OBR’s independent judgment. It expects a negative economic impact, as the noble Lord has said, but finds no clear evidence that it would exceed 0.1% of potential output, so it has made no explicit forecast adjustment.

[Lord Fox (LD)]

My Lords, as the Minister is talking about hard edges to business, it is two years since the then Chancellor made a surprise increase in national insurance contributions for UK businesses. Can the Minister tell us how many more jobs there would have been if this had not been brought in? How many SMEs have gone to the wall as a result of this, tipping them over the edge, and how much investment has been deferred because of this measure?

[Lord Leong (Lab)]

My Lords, I recognise the pressures on employers. We took the difficult decision to stabilise the public finances and fund essential services, while increasing employment allowance to £10,500 to protect smaller businesses. We are also supporting recruitment through the youth jobs grant of up to £3,000 and apprenticeship hiring payments of £2,000. Our aim is to help businesses create opportunities and give young people the skills and experience to build lasting careers.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, does my noble friend agree that it is important to be positive about these matters and that the Employment Rights Act, along with today’s announcement about the potential SPS agreement, will underscore the importance of our food exports, our food industry and the many jobs in it, and the potential for new employment?

[Lord Leong (Lab)]

I totally agree with my noble friend. The labour market is changing, and the provisional ONS figures for the year to September 2026 show that the payroll has increased by 66,000 in administrative and support services, by 20,000 in education and by 19,000 in health and social care. The wholesale and retail sector lost 71,000, accommodation and food services lost 46,000 and manufacturing 32,000. We are backing investment into skills and sector jobs plans to help businesses recruit and people move into secure long-term employment.

[Lord Bilimoria (CB)]

My Lords, as chair of the International Chamber of Commerce in the UK and a former university chancellor, it saddens me that almost a million young people are not in education, employment or training. What are the Government doing to help university graduates get jobs? They are really struggling to find jobs at the moment and they deserve to get them.

[Lord Leong (Lab)]

My Lords, I fully accept that the labour market is failing too many graduates. Repeated rejection wastes talent and damages confidence. We are investing £7.8 million in university AI courses and graduate traineeships and our £20 million early careers jobs alliance helps employers maintain routes into work as technology changes. The digital and technologies jobs plan targets 20,000 entry-level jobs annually. Our responsibility is to turn those commitments into interviews, paid opportunities and lasting careers.

[Lord Leigh of Hurley (Con)]

My Lords, will the Minister take this opportunity to disassociate himself from the remarks of the Chief Secretary to the Treasury, who said that employers are not “working people”? Thousands of small businesses and employers like myself take great exception to this because it goes to the mindset and attitude of the Government.

[Lord Leong (Lab)]

Employers, employees and suppliers are part of the ecosystem, and we need to support the employers and suppliers as well. The way to tackle unemployment is by working with employers and looking at pathways into growing industries. Professional and business services firms have pledged to create 22,400 apprenticeships for young people under the age of 25 over the next five years. Construction aims to create 10,000 job opportunities each year, while digital and technology employers are targeting 20,000 entry-level jobs. These sector jobs plans will link investment to skills and recruitment, and our focus is on turning those commitments into lasting careers.

[Lord Spellar (Lab)]

My Lords, as we have just heard, there are a million youngsters who are not able to get into work. Many are university graduates, who then face the questions: “Have you got a degree? Have you got two years’ experience?”. How are they going to get two years’ experience if employers will not take them on? That is just one example of dysfunctionality in the labour market. What are the Government doing actively to engage with employers to get a rational labour market that will enable our youngsters to get into work at all levels of jobs?

[Lord Leong (Lab)]

My Lords, we are determined to tackle youth unemployment and look forward to receiving Alan Milburn’s recommendations. In addition, we have committed a further £2.5 billion to the youth guarantee and growth and skills levy, helping nearly 1 million young people aged 16 to 24 move into jobs, education and training. This will create 200,000 jobs, provide £3,000 for youth jobs grants and £2,000 in apprenticeship hiring payments and guarantee jobs for young people claiming universal credit who have been unemployed long term.

[Lord Harper (Con)]

My Lords, I am surprised that the Minister could not answer my noble friend Lord Leigh’s question, because the Chancellor slapped down the Chief Secretary for her ridiculous comments, and I am glad that he did. The Minister gave a good answer to the question from the noble Lord, Lord Spellar, about how to deal with the 1 million young people out of work. How does he think importing up to 80,000 young people from the European Union under the youth mobility scheme will help British young people get into work?

[Lord Leong (Lab)]

Settlement is based on contribution, not just on time served, as it was under the last Government. We have cut net migration to 82% below its peak under the last Government. We will not leave young British people behind, which is why we are investing an additional £2.5 billion, as I said in my previous answer, to support almost 1 million young people into education, employment and training.

[Baroness Uddin (Non-Afl)]

My Lords, is the Minister aware that yesterday an industry guide was published by UKAI which finds a distinct lack of progress in the promised advanced technology jobs, particularly for women in many inner-city areas? Will the Minister look at the report and its findings and consider meeting the group?

[Lord Leong (Lab)]

I have not had a chance to look at the report, but I definitely will. AI is automating repetitive tasks, and we take the risk to entry-level jobs seriously. The £20 million for the early careers job alliance that I mentioned earlier is helping employers redesign roles while maintaining routes into work. Through our AI skills boost, we aim to equip 10 million people with practical AI skills by 2030. Our priority is adoption that supports workers, improves productivity and opens opportunities. Technological progress must give young people a better future, not close the door.

Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026

Lord Leong Excerpts

Monday 2nd November 2026 Lords Chamber

Moved by

[Lord Leong]

That the draft Regulations laid before the House on 7 September be approved.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 28 October.

Motion agreed.

Small and Medium-sized Enterprises: AI Sector

Lord Leong Excerpts

Thursday 29th October 2026 Lords Chamber

[Lord Ranger of Northwood]

To ask His Majesty’s Government what assessment they have made of current business confidence among small and medium-sized enterprises in the AI sector and what actions they are taking to encourage investment.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, the Government’s core evidence is the AI sector study. The 2024 study found that SMEs make up 96% of UK AI firms, and nearly 90% of firms surveyed expected revenue growth within a year. To encourage investment, the sovereign AI fund, backed by up to £500 million, invests directly in British AI start-ups, alongside free compute through the AI research resource, Innovate UK’s £130 million growth catalyst, and a £100 million R&D procurement scheme.

[Lord Ranger of Northwood (Con)]

My Lords, I thank the Minister for the Answer and welcome the announcements in yesterday’s Budget in support of AI. Across a kaleidoscope of initiatives, the Government announced a total of about £600 million. To put that into context, JP Morgan advises that US hyperscalers driven by AI investment this year alone will invest $697 billion. There is a fundamental difference between investing in AI technology and enabling British businesses to benefit from it. That is where we need to focus. I declare my interest as a co-founder of the Business AI Alliance, a grouping of over 300 British AI tech SMEs that are searching for support from the Government. With the new programme for local funding on AI adoption worth £30 million and focused on Yorkshire, does the Minister recognise the risk of creating a two-tier AI economy where larger businesses and those in selected regions benefit while others fail?

[Lord Leong (Lab)]

My Lords, yesterday’s Budget announcement demonstrates our commitment to turning AI ambition into practical outcomes. Alongside the £700 million in wider AI investment, we are providing, as the noble Lord has mentioned, £30 million for locally led AI adoption partnerships, starting in Yorkshire, and £60 million for an AI pathway fund. These initiatives will help businesses overcome adoption barriers, build skills and improve productivity. Working alongside local leaders in the industry will ensure that funding delivers measurable benefits for British businesses across the country.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as an adviser to DLA Piper on AI policy and regulation. The Government talk of sovereign AI but continue to award their biggest data and tech contracts to US hyperscalers. What share of public AI procurement is intended to go to British SMEs under the new UK supplier definition?

[Lord Leong (Lab)]

I hear what the noble Lord, says but I say again that our £100 million R&D procurement scheme will help British start-ups develop innovative solutions to government challenges. We are making government a smarter, more accessible customer and creating procurement opportunities for smaller firms instead of favouring established suppliers. Through the sovereign AI fund, we are also supporting early start-up procurement, enabling innovative businesses to demonstrate that technologies generate revenue and attract private investment.

I encourage noble Lords to visit local university science and technology hubs and see innovative AI companies. I was up in Manchester yesterday and there I saw young people and exciting projects. Perhaps noble Lords could go out to university science parks and be encouraged by what is being developed in this country.

[Lord Walney (CB)]

My Lords, does the Minister agree that the Government’s support for, and adoption of, an open source AI framework could greatly reduce the barriers to entry for smaller firms and accelerate investment, particularly if this could be done in partnership with allied nations across the world?

[Lord Leong (Lab)]

I agree with the noble Lord. That is why the British Business Bank has £25.6 billion in financial capacity to support smarter and smaller businesses, including £4 billion in growth capital specifically for innovative research-intensive companies. The sovereign AI fund works alongside the bank, including co-investing in a company called Ineffable Intelligence, a London-based artificial intelligence research lab. Meanwhile, the National Wealth Fund, with £27.8 billion to deploy, is mobilising private investment in AI infrastructure, including a guaranteed £202 million to support various AI companies.

[Baroness Nargund (Lab)]

My Lords, I draw the House’s attention to my interests as set out in the register. I too welcome the investment in AI in yesterday’s Budget. AI presents a significant opportunity for businesses to innovate, attract investment and grow our economy. However, it also risks widening the existing gender gap in skills, pay, innovation, leadership and investment. Our own research found that 43% of young women entering the workforce are concerned that AI will replace them. We also know that only 2% of funding from venture capitalists has gone to all-female founding teams. Can the Minister say what steps the Government are taking, in partnership with businesses, to ensure that women have equal access to AI skills, AI-enabled employment, and opportunities for innovation, leadership and investment?

[Lord Leong (Lab)]

I am very proud to co-chair a women in industry taskforce. I work with women leaders every day to encourage them to start their businesses, especially in tech. I am sure my noble friend will appreciate and welcome yesterday’s Budget, in which the Chancellor said that he will work with the Women in Tech Taskforce to find ways that women founders can access available finance. If we empowered women in tech in the same way as men, it would generate £300 billion for the economy. We must support women tech founders.

[Lord Sharpe of Epsom (Con)]

My Lords, I have a nice, short question: AI investors have told the Government that energy costs are the barrier to investment here, so can the Minister say why yesterday’s Budget found room to cut tariffs on gherkins but not cut the energy costs holding back our AI capacity?

[Lord Leong (Lab)]

Perhaps the noble Lord should read the entire Red Book. We are supporting AI companies in many ways. As far as data centres are concerned, we are ensuring that our national grid is linked up to them. At the same time, we are supporting the entire AI ecosystem, in every aspect of a company within that system. There is a lot more to do, and we are doing it.

[Lord Fox (LD)]

My Lords, back in 2017, the Made Smarter Review identified that a major impediment to SMEs adopting the then-available technology was the management’s expertise and knowledge, particularly around digital issues. Putting his Small Business Minister hat on, can the Minister tell your Lordships’ House what the Government are doing to enable those small businesses that could grow using AI to get the expertise they need to do so?

[Lord Leong (Lab)]

As Minister for Small Businesses, I spend every day talking to businesses of all sizes, including small AI start-ups. We must ensure that small companies have access to finance to start their business. At the same time, we need to encourage young people to take up AI skills. We are committed to training 10 million young people in AI skills and, so far, 2.2 million have completed programmes.

[Lord Patel (CB)]

My Lords, I commend the Government for their investment in Isambard 1 computing at Bristol University, which I gather has now had approaches from several hundred SMEs to use its computing power, which is one of the fastest processors globally. What plans do the Government now have to install Isambard 2, which I understand Bristol University would welcome and would increase even further the United Kingdom’s compute power?

[Lord Leong (Lab)]

The noble Lord is right. We have to invest not only in compute power but in quantum. The Government have set up their programme whereby they will mobilise investment through the sovereign AI fund to invest in some of the supercomputers across the country.

[Lord Kirkhope of Harrogate (Con)]

My Lords, it is not just a matter of government resources. Many enterprising businesses are now coming into this field. I welcome the work going on in Yorkshire at present, to which the Minister referred. Surely, though, this is to do with even greater encouragement by government of those who are investing, to try to make that sure academia is heavily involved and that all the businesses that are raring to go to develop and innovate in AI are able to do so with full government encouragement.

[Lord Leong (Lab)]

The Government are absolutely encouraging universities and academics to support the Government’s programme on AI. As I said in answer to an earlier question, I have spent the last couple of weeks visiting various universities and science and technology hubs. All of us should really welcome the exciting start-ups being set up at these university science parks. The UK is not short of innovators and we have a pipeline. We will likely see some of our innovators be unicorn companies.

Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026

Lord Leong Excerpts

Wednesday 28th October 2026 Grand Committee

Moved by

[Lord Leong]

That the Grand Committee do consider the Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, this instrument was laid on 7 September 2026. I acknowledge and thank the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee for their work in scrutinising these regulations.

This instrument delivers one of the Government’s flagship commitments of the industrial strategy: the British industrial competitiveness scheme. BICS is a central part of our drive to engineer the reindustrialisation of Great Britain. BICS will address the persistent competitiveness challenges facing British manufacturers by reducing electricity costs for eligible businesses. It will drive investment and economic growth in strategically important sectors across Great Britain. BICS is expected to cut electricity costs by up to 25%, or £40 per megawatt hour, for over 10,000 manufacturing businesses. It will support frontier manufacturing industries within the IS-8 sectors and foundational manufacturing industries, which provide key inputs to their supply chains. This includes eligible businesses in the automotive, aerospace, clean energy industry, life sciences, chemicals and steel sectors and more.

For too long, British industries have faced some of the highest industrial electricity prices in Europe due to a combination of structural factors and policy costs. Eligible businesses will begin receiving support from April 2027, when they will be exempt from paying the indirect cost of the renewables obligation and the feed-in tariffs, and receive a further exemption on their capacity market costs from October 2027 onwards. Eligible businesses will also receive an additional payment in 2027 related to the amount they would have received had the scheme been in operation in 2026. The policy costs are paid for by the electricity suppliers, who typically charge them to their domestic and non-domestic customers via their electricity bills.

This instrument implements the renewable obligation and the capacity market exemptions, and it enables the renewable obligation level for the 2027-28 obligation period to be revised in light of BICS. It also provides for how the level of discount for the BICS eligibility criteria will be calculated and other elements of scheme design. An instrument to exempt eligible businesses from the indirect cost of the FIT—the feed-in tariffs—will also be made.

In conclusion, BICS will support British manufacturing businesses to be more internationally competitive by reducing electricity costs to support and drive investment and economic growth across Great Britain. I beg to move.

[Lord Fuller (Con)]

My Lords, we discussed this scheme in the Chamber some months ago, so I will not repeat all the points here or be so churlish not to recognise that any help for the materials economy that employs so many people—especially the chemical industry, which in turn produces the raw materials that other manufacturers can use for their output—is all to be welcomed.

However, the problem is that the sums of money we are talking about here are insufficient to make a real difference. They are no substitute for reducing energy costs, so that we at least stand a chance of competing in the global race. Of course, the industry is on its knees, suffering the highest energy costs in the western world. A relatively small number of businesses will benefit from BICS, leaving tens of thousands to fend for themselves and continue to pay for the feed-in tariffs, renewables obligations and capacity market obligations. If we just stopped all these well-meaning but counterproductive regulatory layers, we would not need BICS, which does not even start until next year.

With gas prices 12 times higher than the US NOLA benchmark, and TTF gas—upon which ammonia and other raw materials are produced—at €90 per megawatt hour, the need for help is now. Instead, only today, the Government announced a consultation on extending CBAM to refinery products, which will just drive up the cost of industrial raw materials even more. We will never get rich by erecting a high-tariff wall around our economy to keep everyone else out. We do not need more policy money-go-rounds like BICS; we just need energy costs that are comparable with those of our competitors. I hope only that the businesses that stand to benefit from this measure will be around to receive it on 1 April. Until then, we and they will just have to hold our breath.

--- Later in debate ---

[Lord Blencathra (Con)]

My noble friend makes a very good point. We seem to be getting a lot of duplicitous statements and comments about Rosebank. We have one of the biggest oil and gas fields in our history, sitting out there off the Shetland Islands. We should be using it. There is no moral sense in trying to import gas from around the world and not using our own supplies. It does not add any more to global warming whatever. We should be using it and I look forward soon to hearing what the Government’s decision on Rosebank will be. If we can announce a huge oilfield in the Falkland Islands, why is it morally wrong to announce an oilfield in our own territorial waters? No doubt one day we might be importing our own oil from the Falkland Islands.

The impact assessment, as I said, claims that it is part of the Government’s package for reindustrialisation. I am concerned that it is not reindustrialisation; it continues to stop it and it continues to be deindustrialisation. If these facts were recognised by the Government, why stop at businesses that fulfil a strategic criterion? Surely, competitiveness is a general good. Would not every business benefit from lower costs or higher efficiency? Would it not be more prudent, instead of arbitrarily determining which manufacturing businesses are worthy of being competitive, for the Government to allow free and fair competition for them all?

Given that the Government acknowledge that carbon taxes and subsidies add costs and reduce competitiveness, this instrument represents an opportunity for them to begin the process of removing them. They need not stop at renewables obligation contracts. The ETS, CBAM and the carbon price support all represent additional costs and a choice.

The United Kingdom represents 0.8% of world CO₂ emissions. China produces 33%, USA 15%, India 8% and Russia 5%. So it is economic madness to sacrifice British industry and consumers on the altar of saving the world when the British contribution makes no difference whatever. The Conservative Party recognised this early on in this Parliament. It seems that the Government are now coming around. I hope they will now act speedily.

[Lord Leong (Lab)]

My Lords, first, let me say a big thank you to all noble Lords for their contributions. I am grateful for some support across the Committee on this instrument. BICS is designed to address Britain’s long-standing competitiveness challenges by reducing electricity prices for British manufacturing businesses.

Let me address some of the questions posed by noble Lords—first, that made by the noble Baroness, Lady McIntosh, about the scheme and funding. I can confirm that any residual costs not covered by the energy system savings will be funded by the Exchequer. At the same time, exchequer funding will be delivered via the Low Carbon Contracts Company, which will reduce contract for difference charges for all domestic and non-domestic electricity suppliers from April 2027 to offset the costs of BICS not already covered by the energy system savings.

Let me address the point that the noble Earl, Lord Russell, and the noble Lord, Lord Fuller, made about hospitality and SMEs. First, BICS is targeted at manufacturing in the IS-8 sectors and foundational manufacturing industries that provide key inputs to the IS-8 sectors. At this point, I remind the noble Lord, Lord Blencathra, that it was this Government who published an industrial strategy to identify the eight sectors that are important for this country. Can I also remind the noble Lord that, when they were in government, I do not remember the last Conservative Government publishing any industrial strategy on this?

The eligibility criteria for BICS are designed to maximise impact against the objectives of the industrial strategy—namely, driving economic growth and investment benefits while keeping within the agreed cost envelope to avoid increasing costs for ineligible businesses and other energy users. We will continue to engage with those sectors that are currently not eligible for the scheme on any challenges that they face with higher energy costs. If firms miss the 30 November deadline, they will still be eligible to apply for the scheme next year; we have been engaging quite extensively with business to support its implementation.

Let me address the point from the noble Lord, Lord Fuller, on the various schemes. We have the supercharger scheme, which currently supports approximately 550 electricity-intensive industries, whereas BICS can support more than 10,000 businesses across a wider range of sectors that operate at a lower electricity intensity. So the supercharger is for high electricity-intensive industries, while BICS is for lower electricity-intensive industries. Business may benefit from both schemes where they meet the relevant eligibility criteria, but they cannot receive relief twice for the same activity.

BICS is designed to be accessible to all businesses. We expect a large proportion of the businesses that are eligible for BICS to be SMEs. BICS sits alongside our clean energy superpower mission. The long-term plan is to boost energy security and reduce our exposure to fossil fuel price shocks by building clean, home-grown energy. BICS supports businesses with immediate electricity costs and challenges by helping to free up investment that can be used to incentivise and enable the transition to electrification and decarbonisation in the long term.

Let me address the point about Jackdaw. I am sure that the noble Lord opposite will agree with and welcome the decision that we made on 21 October, when the North Sea Transition Authority granted consent for the Jackdaw project following the Energy Secretary’s agreement. This means that gas from the pre-existing North Sea project will start to supply homes and businesses across the country from the end of October 2026. As far as Rosebank is concerned, that decision is subject to a live regulatory process, and it would be inappropriate for me to comment on any individual cases at this stage. A decision on the granting —or not—of consent for the Rosebank project will be taken in due course, and there is no fixed timeline for a decision. It is imperative that all material is properly considered so that a robust decision can be taken.

BICS will benefit more than 10,000 manufacturing businesses in high-growth and strategic sectors, make them more internationally competitive, and drive investment and economic growth across Great Britain. The scheme will be reviewed in 2030 to assess its continued effectiveness in supporting the competitiveness of the British manufacturing industry.

Motion agreed.

British Steel Business Plan

Lord Leong Excerpts

Monday 26th October 2026 Lords Chamber

[Lord Redwood]

To ask His Majesty’s Government when they will publish a business plan for British Steel.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, on 16 July the Government took decisive action to nationalise British Steel, safeguarding our sovereign steel-making capability and skilled jobs. In September, we appointed Alan Lovell, an experienced business turnaround specialist, as chair. He and a new board are developing a credible transformation plan to secure British Steel’s long-term competitiveness and commercial sustainability. Key decisions are expected in the coming months and we anticipate publishing the plan once it has been agreed.

[Lord Redwood (Con)]

I am grateful to the Minister. When will the two ageing blast furnaces need to shut down for deep maintenance? What progress has been made with the development of plans for an electric arc furnace?

[Lord Leong (Lab)]

My Lords, maintaining safe and reliable blast furnace operations is an immediate priority. However, decisions on major maintenance and necessary shutdowns will be guided by detailed engineering assessments and operational requirements. The new board is also assessing future steel-making technologies, including electric arc furnaces, as part of its transformation plan. No final investment decision has been announced. Our priority is to preserve sovereign steel-making capability while securing a commercially viable, competitive and sustainable future for British Steel.

[Lord Fox (LD)]

My Lords, the noble Lord is right to ask this Question because a huge amount of public money is going out to British Steel every day. It does not take a report or a plan to improve what the business is doing. Things can be done day to day. It is important for your Lordships to understand what is happening now and how it is happening. It would behove the Minister to put a detailed report before your Lordships’ House so that we can assess the progress and the thinking behind British Steel.

[Lord Leong (Lab)]

My Lords, the Government stepped in to preserve this strategic steel-making capacity, but taxpayer support cannot substitute for commercial viability indefinitely. Britain needs its own steel industry to support defence, manufacturing, infrastructure, economic security and skilled jobs. As I said previously, the new board under Alan Lovell must set out a credible plan to profitability, with clear investment priorities, operational improvements and measurable milestones, and we will publish his plan in due course.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, after years of uncertainty, underinvestment and unfair competition, steelworkers and their communities will welcome this Government’s strategy and action. However, will my noble friend consider strengthening the procurement framework to include private companies that receive government support—in the form of government grants, subsidies or loans—so that every penny of taxpayers’ money, where possible, is used to protect jobs?

[Lord Leong (Lab)]

My noble friend is absolutely right. I will support her point in ensuring that our businesses have a fair chance in procuring anything that is up for procurement by British Steel. We must ensure that our businesses up and down the country have a fair chance of securing those contracts.

[Lord Lamont of Lerwick (Con)]

My Lords, we all understand the wish and the need to protect jobs at Scunthorpe, but given that there are many more people employed in steel-using industries than in the steel production industry, was it wise for the Government to try to boost British Steel by introducing protectionist measures, reducing quotas and increasing tariffs on products that are widely used by the wider economy in this country? Is it not extraordinary, as the Public Accounts Committee pointed out, that some of the tariffs apply to goods that are not and could not be manufactured in this country and, of necessity, have to be imported? How does that help jobs?

[Lord Leong (Lab)]

My Lords, I say again that we must support British steel-making while protecting the thousands of businesses that rely on competitively priced steel. Tariffs, CBAM and emissions policies should be proportionate, carefully calibrated and mindful of downstream manufacturers. Equally, taxpayer investment must ensure commercial sustainability and not permanent subsidy.

[Lord Cryer (Lab)]

My Lords, contrary to what has just been said, could my noble friend say something more about how the Government can strengthen British Steel’s position with regard to the flood of very cheap imports coming into the country at the moment that are threatening British jobs?

[Lord Leong (Lab)]

My noble friend is absolutely right. British steel-makers must compete on a fair and level playing field, but we must recognise the serious challenges created by global overcapacity, unfair subsidies and artificially cheap imports. The Government will use all appropriate trade remedies in line with our international obligations to protect British industry from unfair competition. Strengthening domestic demand through infrastructure, investment and procurement opportunities is equally important. Our ambition is therefore very clear. British Steel should have every opportunity to compete, invest and succeed.

[Lord Watts (Lab)]

My Lords, is it not the case that we had 14 years of no action by the last Tory Government, while it has taken this Government a few months to get a credible plan together? Is it not a bit ironic that a party that did nothing for 14 years should criticise us?

[Lord Leong (Lab)]

I thank my noble friend for that. Again, a strong steel sector is essential for our economic growth, national security and supporting highly skilled jobs right across the country. In March, we published the UK’s first ever steel strategy, a long-term plan to stabilise and rebuild the sector, attract new investment and position the UK as a world leader in clean, modern steel production.

[Lord Hunt of Wirral (Con)]

My Lords, our national debt has now exceeded £3 trillion. While this is happening, as the noble Lord, Lord Fox, pointed out, the Government have spent, on the Minister’s own admission, £671 million of taxpayers’ money on British Steel, yet there is still no credible published plan to make the company financially sustainable. Will he please answer my noble friend Lord Lamont’s question? The Government have imposed a 50% tariff above sharply reduced steel quotas, putting jobs in our downstream steel-using industries at risk. My question is simple: when will the Government finally produce a serious, costed plan for British Steel that protects both the taxpayer and jobs across the whole steel supply chain?

[Lord Leong (Lab)]

First, to correct the noble Lord, the Government have provided £751 million since April 2025 in working capital to support British Steel. That funding has allowed British Steel to continue its operation right across its sites and to maintain steel production and supplies to customers. As I said earlier, we have appointed Alan Lovell as chair. I am sure the noble Lord will agree that he and his board of directors, who are known for their turnaround specialism, will produce a plan in due course, which, hopefully, will address the noble Lord’s question.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the UK exports 8 million tonnes of scrap steel every year, which is about 75% of the scrap steel generated in the country. Most of that goes to countries with far lower environmental standards than ours. Does the Minister agree that that figure should be reduced to zero as far as possible—for many reasons, such as jobs, environment and ensuring that we have the steel we need?

[Lord Leong (Lab)]

Let me address the point head-on. We have to reconcile the need to maintain primary steel-making with maintaining our net-zero commitment. The move to cleaner steel-making presents a significant opportunity for British industry, but it must be commercially realistic and protect our strategic capabilities. We want Britain to remain a steel-making nation, producing the steel needed for infrastructure, manufacturing and clean energy in the future.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I want to correct the record for the noble Lord opposite, who suggested that the Conservative Party did very little to help the steel industry. In fact, we put £500 million into the Port Talbot steelworks, enabling it to transition to an electric arc furnace. I would also like to correct the noble Baroness, Lady Bennett of Manor Castle, because that electric arc furnace will reuse second-hand steel in order to preserve the steel industry for this country.

[Lord Leong (Lab)]

I do not think that I said that the Conservatives did not support British Steel. I said that we have published our first-ever steel strategy, providing a long-term plan to stabilise and rebuild the sector so that we can attract inward investment and position the UK as a world leader in clean, modern steel production.

Commercial Payments Bill [HL]

Lord Leong Excerpts

Report stage
Tuesday 15th September 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, I feel a great wave of consensus flowing over me. I will speak to Amendment 8 in my name. As we discussed before the Recess, much of the consultation process proposed a 45-day limit, yet the Bill offers no easy route from the 60 days it proposes to a shorter timeframe. My amendment would require the Secretary of State, within five years, either to lay draft legislation reducing the maximum payment period for private purchasers from 60 to 45 days, or to explain to Parliament why not.

The Minister’s reaction and response to this issue have been typical of the very strong consensus that we have been able to build. I echo the words of the noble Lord, Lord Sharpe, that both the Minister and his team have been extremely helpful in this. That is why I am delighted to note that government Amendment 15 and the various consequentials lock in very much what I was looking for, including—as the noble Lord, Lord Sharpe, mentioned—the need for consultation within five years, with a view to shortening the payment period. This government amendment is an excellent response to my Amendment 8, thereby making my amendment unneeded.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, prior to introducing the government amendments, I wish to express my personal thanks for the positive engagement across the House, and particularly to the noble Lords, Lord Hunt and Lord Sharpe, on the Opposition Front Bench, and the noble Lord, Lord Fox, and the Liberal Democrats for their very thoughtful scrutiny of the Bill.

The Bill builds upon the important reforms that were enacted by the previous Conservative Government. The provisions in the Bill have been drafted following extensive consultation with businesses, with more than 850 responses to our consultation, which was undertaken between 31 July and 23 October 2025. We have brought forward a Bill that reflects that consultation.

Our decision to impose stricter maximum payment terms of 60 days received support from 66% of consultation respondents. This is a significant strengthening of current law. No longer will large businesses be able to impose payment terms of over 60 days upon their suppliers. The question remains whether 60 days should be the end of that journey. We have heard loud and clear from smaller businesses that the Government should consider reducing maximum payment terms to 45 days or even 30 days. I have listened carefully to all noble Lords across the House encouraging us to go further on this. I am pleased to say that the Government have tabled amendments to provide a power that may be used in future to reduce the maximum payment terms.

These amendments allow the Government to consult on whether payment periods should be reduced, ensuring that any future decisions are informed by evidence and experience of how the new measures are operating in practice. Furthermore, the Government will not use this power to reduce maximum payment terms for at least five years. I hope noble Lords will agree that this is a sensible change and a balanced approach, maintaining the payment periods consulted on and included in the Bill, providing stability and certainty while businesses adapt to the new reality of 60-day maximum payment terms, and ensuring that there is a clear route to go further in future if the evidence supports it.

I turn to the amendments tabled by other noble Lords. In response to Amendment 2, increasing the maximum payment term for public authorities beyond 30 days would undermine the Procurement Act 2023 and delay payment to suppliers. In response to Amendment 4, increasing the maximum period for non-public authority purchasers beyond 60 days would delay payments to suppliers and move away from the position consulted upon with strong levels of support.

Regarding Amendments 3 and 6, national ownership does not by itself determine the applicable payment regime. Under the Bill, a nationalised body that meets the definition of a “public authority” will be subject to a 30-day maximum payment period. A nationalised body that does not meet that definition will be subject to the 60-day maximum payment period that applies to other purchasers. I recognise the intention and ambition of the noble Lord, Lord Fox, in Amendment 8 to reduce maximum payment terms.

On Amendment 19, the Bill takes important steps by introducing clarity and consistency around payment terms, building on the reforms introduced by the previous Conservative Administration. We are not aware of public holidays being raised as a concern by any businesses or stakeholders during last year’s extensive public consultation.

Amendment 1 is already covered by the Bill. We are setting out clearly the trigger points that can be agreed to start the clock on payment and the implied term if payment is not explicitly made.

Regarding Amendment 5, the Government believe that the Bill is clear. For the purposes of whether a payment has been made on time and when interest on late payment will start, payment will be considered made at the point that funds have been received by the supplier. On both Amendments 1 and 5, the Small Business Commissioner will provide advice and information on compliance with legal obligations on these points. On Amendment 10, I outlined in Committee how the removal of this exemption would place UK businesses at a competitive disadvantage.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, this amendment touches on very much the same point as my noble friend Lord Holmes of Richmond’s Amendment 6 in the first group. The principle that payments should be considered as such only when received by the supplier underpins several of the amendments that we on this side of the House have brought back from Committee. As such, His Majesty’s loyal Opposition support this amendment, as we did in Committee. I do not think that a payment should fall under a different regime from direct payments simply because it is made online and happens to travel through an intermediary. Similarly, ensuring the prompt forwarding of payments by intermediaries is an integral part of promoting good payment practices. This amendment aims to do that, and I warmly commend the speech of the noble Lord, Lord Fox. I join him in hoping that the Minister can confirm that these issues have been considered and addressed.

[Lord Leong (Lab)]

My Lords, I am grateful to the noble Lord, Lord Fox, for Amendment 7 and thank him for it. I recognise that it was tabled in a constructive spirit, and I thank him once again for the engagement we have had on this matter, both in person and by correspondence. The Government share his aims of ensuring that suppliers are paid promptly, payment processes are clear and purchasers cannot use contractual mechanisms to delay payment unjustly. I entirely agree that, when a small business sells through a platform or marketplace, the money due to that business should not be held unnecessarily.

I want to be absolutely clear that the use of intermediaries does not affect a supplier’s right to be paid within 60 days. Chapter 1 of Part 1 ensures that, for business-to-business contracts for the supply of goods or services, the maximum payment time is 60 days. If payment is more than 60 days overdue, the purchaser is in breach of contract and liable to pay interest. The use of an intermediary does not alter this position.

I reassure all noble Lords that persistent attempts to circumvent the maximum payment terms through intermediaries constitute poor payment practice. Under Clause 19, this constitutes grounds for the Small Business Commissioner to investigate and potentially levy a financial penalty on larger businesses that persistently engage in this practice. Under Clause 18, the commissioner will also be able to adjudicate payment disputes where a larger business owes money to a small business, including where the debt arises from the use of an intermediary.

The Bill addresses late business-to-business payments. It is not intended to regulate broader business relationships such as those between retailers using agents to sell goods to consumers or between a platform or marketplace and others when the platform or marketplace is holding, processing or transmitting funds between them. Those are subject to separate regulation. The contracts through which the majority of small businesses trade on online marketplaces are either business-to-consumer or consumer-to-consumer contracts and are subject to consumer legislation. These contracts were outside the scope of our impact assessment and our public consultation.

As tabled, the amendment would therefore not address the issue raised by the noble Lord, Lord Fox. Tackling the issue of late payments outside a business-to-business context would move the Bill into a completely different area of regulation and would require the establishment of a new statutory regime for online marketplaces and payment intermediaries. This would cut across existing legislation, rather than maintaining the Bill’s core focus on commercial payment practices between suppliers and purchasers.

The amendment would also interfere with existing commercial models that operate in the interests of the relevant parties and serve legitimate purpose. For example, where most intermediaries operate a system in which payments are pooled in a small business account and are drawn down by the small business on a regular basis, the amendment would mean that each individual sale, however small, would have to be remitted directly to the small business, significantly increasing transaction numbers and costs and reducing the flexibility of the operating model. Another example is payment providers holding funds for more than seven days to allow for fraud checks or other compliance requirements. The amendment would increase small businesses’ exposure to fraud and undermine the regulatory and legal framework governing payment providers.

However, I understand and share the noble Lord’s concerns about withholding funds from small businesses. I am therefore happy to ask the Small Business Commissioner to review this issue with a view to developing guidance for small businesses so that they understand how the Bill applies to trading activity on online marketplaces. This can build on the guidance that the commissioner produced last year to help small businesses understand why their accounts may be frozen or funds withheld and how they can take action to avoid this. This included a 10-point pledge to online marketplaces and payment providers which was signed and promoted by several major companies. As the Minister for Small Business, I commit to examining how the Government can further support small businesses in addressing this issue faced by those who use online platforms, including engaging with other government departments and regulators where they have responsibility.

For those reasons, and given the commitments that I have made, I respectfully ask the noble Lord, Lord Fox, to withdraw Amendment 7.

[Lord Fox (LD)]

I thank the noble Lord, Lord Hunt, for his support for this amendment. One point of consternation or otherwise is that I would suggest that the supplier-marketplace relationship is a B2B relationship, not a B2C one. I am not sure where the argument that I am somehow pushing this to a different sort of relationship came from, but I will set that to one side and mull on it later.

I thank the Minister for the latter part of his speech and his undertakings to focus the SBC on this issue and to ensure that his department looks at ways of making sure that small businesses understand their rights. That is really the point. The way in which the first part of his speech was set out made it clear that there are all sorts of rights for small businesses in this, but I am not sure that small businesses are necessarily aware of those rights or how they can go about exercising them and being sure that it is not a time-consuming, overwhelming process. It would be useful to hear from the Minister—and perhaps the Small Business Commissioner, as time goes by—how small businesses will be engaged to make sure that they are fighting on an even footing with the marketplaces, many of which are, let us face it, absolutely huge and very difficult organisations to take on. It can be difficult even to find the right person to speak to in them to start with.

I thank the Minister for the work that he will do in future, and I beg leave to withdraw Amendment 7.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, the noble Lords, Lord Hunt and Lord Sharpe, were right to raise the issue of definitions in Committee. Rather than simply echo them, I decided to add something to the debate through Amendment 35, which sets out something of the Tower of Babel that exists around definitions. Subsection (2) of the new clause proposed in Amendment 35 gives examples of the many phrases and words that are used in a variety of different contexts. Proposed new subsection (3) identifies seven Acts—not the six that the noble Lord, Lord Sharpe, came up with; we managed to find another one—where these phrases are prevalent but not necessarily synonymous. Proposed new subsection (4) really sets out what we are looking for the Minister to do, which is work out to what extent the definitions in proposed new subsection (2) differ from those in subsection (3).

There is a compliance cost to businesses in these differing definitions, because they have to make different decisions for different legislative frameworks. The extent to which this gives rise to uncertainty and undermines the law, and the effect it will have on the functions of the Small Business Commissioner, are just some of the things that should be taken on board by the Government to bring a state of order to what has been an organic process of legislation following legislation and definition following definition. To help the Minister’s new constituency of small businesses in particular, now is the time to bring these things under control and bring definitions into order.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords for Amendments 11, 12, 13, 14, 35 and 46. I recognise the concerns raised by the noble Lords, Lord Sharpe and Lord Fox, in Committee regarding the number of existing definitions of company sizes on the statute book and their desire for clear and consistent definitions to avoid confusion for businesses. I would like to reassure noble Lords that our intention is to use the company size thresholds set out in the Companies Act 2006 and the Enterprise Act 2016 as the basis for defining company size in the Bill.

However, it is important that we consult with businesses and industry experts to ensure that these definitions are appropriate for the purposes of this Bill. That consultation may indicate that, for the purposes of the Bill, company-size definitions should be revised or simplified. Any modifications to existing definitions will be made only when necessary.

For example, we may choose to simplify definitions to make it easier for businesses to use exemptions, while still using existing definitions as the basis. We may find through consultation that different parts of the legislation require different definitions to ensure precision and effectiveness. For example, we might be required to simplify the size definitions for the purposes of the Small Business Commissioner’s powers, so that they are based solely on headcount. We should not constrain ourselves by introducing rigid definitions now, as this could make the powers and protections afforded by the Bill more difficult for businesses to understand and administer than is necessary.

I also do not consider it necessary to delay the Bill’s commencement pending a further statutory review of definitions used across a range of legislation. The Government are already committed to consulting on any regulations made under these powers and to taking into account relevant existing definitions when developing them. The delegated power in Section 2E will be subject to consultation and parliamentary approval under the affirmative procedure, giving your Lordships’ House the opportunity to vote on the regulations before they are introduced.

In conclusion, the definition of business sizes will be set out in secondary legislation. These regulations will be informed by consultation to ensure that they are appropriate. The Government intend to use the existing definitions as the basis for this Bill and will keep definitions as simple and effective as possible.

I also commit that, before making any regulations in this area, the Government will have regard to the definitions in the Companies Act 2006, the Small Business, Enterprise and Employment Act 2015 and the Enterprise Act 2016. I also commit to meeting up with the noble Lord, Lord Sharpe, to look into these definitions going forward. For these reasons, I respectfully ask that Amendment 11 be withdrawn and that noble Lords do not move the remaining amendments in the group.

[Lord Sharpe of Epsom (Con)]

My Lords, again I am grateful to the Minister for his very comprehensive response. I am also grateful to the noble Lord, Lord Fox, for explaining his Amendment 35 and for digging out yet another example of an Act that governs the definitions of small business. Might I suggest to the Minister that, during this consultation, they include a question on how the nature of small business has evolved in the last 10 years? Obviously, there has been a spectacular explosion in e-commerce and other things, which will have a material impact on the types of definition we are talking about.

As I outlined in my opening speech, the current landscape of definition is unnecessarily convoluted—expensively so, as the noble Lord, Lord Fox, pointed out. However, I recognise that this Bill is not necessarily the best vehicle for driving through that reform. I appreciate the Minister’s response on this issue. I will absolutely take him up on his offer of further talks on how we might improve a bit of a messy picture. I think I also heard him say that he is quite keen to find another legislative vehicle where we can address this in the future—if I am making that up, I am sure that he will correct the record.

I beg leave to withdraw my amendment.

--- Later in debate ---

Moved by

[Lord Leong]

15: After Clause 3, insert the following new Clause—
“Powers to shorten payment termsAfter section 2E of the CPILPA 1998 (inserted by section 3), insert—“2F Powers to shorten payment terms(1) The Secretary of State may by regulations substitute the number of days for the time being specified in sections 2B(2)(a) and 2D(3)(a).(2) Regulations under subsection (1)— (a) may not specify a number of days higher than 30;(b) must specify the same number of days in sections 2B(2)(a) and 2D(3)(a).(3) The Secretary of State may by regulations substitute the number of days for the time being specified in sections 2B(2)(b) and 2D(3)(b).(4) Regulations under subsection (3)—(a) may not specify a number of days higher than 60;(b) must specify the same number of days in sections 2B(2)(b) and 2D(3)(b).(5) The Secretary of State may by regulations substitute the number of days for the time being specified in section 2B(5), but the regulations may not specify a number of days higher than 30.(6) The Secretary of State may by regulations substitute the number of days for the time being specified in section 2C(3), but the regulations may not specify a number of days higher than 30.(7) The Secretary of State must, within the required period, consult such persons as the Secretary of State considers appropriate about whether to make regulations under subsections (1), (3), (5) and (6) and the number of days that might be specified in such regulations.(8) In subsection (7) “the required period” means the period of five years beginning with the day on which sections 2B and 2D come into force (or, if they come into force on different days, the later of those days).””Member’s explanatory statement
This new clause enables the Secretary of State to make regulations to shorten the payment periods set out in various provisions of the Bill.

--- Later in debate ---

Moved by

[Lord Leong]

16: Clause 4, page 9, line 4, leave out “2E” and insert “2F”
Member’s explanatory statement
This amendment is consequential on my proposed new clause.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, Amendments 20, 21 and 33 in my name and those of my noble friends Lord Sharpe of Epsom and Lord Leigh of Hurley have been brought back from Committee to address our concerns about special administration regimes and payment practices.

I begin by acknowledging that the Minister did reassure us that the terms of this Bill will apply to companies that are required to continue supplying SARs following their being placed into administration, as Amendment 20 probes. Similarly, I acknowledge that the report on the interaction between insolvency moratoria and payment practices that Amendment 33 seeks to mandate may be unnecessary given this fact. We have, however, retabled these amendments as they lend themselves to my arguments surrounding Amendment 21. When this amendment was discussed in Committee, the Minister stated that it would

“cut across the established insolvency framework. Providing preferential treatment to one group of suppliers would disadvantage other creditors and undermine the purpose of the existing insolvency regime”.—[Official Report, 21/7/26; col. 1070.]

We do not agree with this argument. The very acceptance of Amendment 20 that suppliers to SARs will fall under this Bill implies a recognition that there is something unique about this set of businesses. Indeed, the entire reason we are having this debate is that Section 233 of the Insolvency Act 1986 makes it illegal to withhold supplies to an SAR on the condition of the payment of arrears. It would not be preferential treatment to offer to them what the Bill offers to every other business—the ability to recoup funds owed but not paid. That would place those firms on an equal footing with other creditors, given that they currently have less ability to ensure payment of arrears.

Amendment 21 is proportional in that a cap could be set by the Secretary of State and the payment could not be of sums subject to genuine disputes. This Bill is designed to ensure fair and timely payment practices. This amendment seeks to ensure just that for a set of firms that currently have no means of recouping owed sums. I look forward to the Minister’s response and, in the meantime, I beg to move.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Hunt of Wirral and Lord Sharpe of Epsom, and the noble Lord, Lord Leigh of Hurley, who is not in his place today, for Amendments 20, 21 and 23. I am really grateful to both noble Lords for our recent meeting covering these points, and I hope that the follow-up information which my officials provided has been helpful. I am also grateful to the Insolvency Service for its expertise in supporting our position.

The Bill does not seek to alter the existing statutory framework on insolvency. Regarding Amendment 20, I would first like to clarify the position of suppliers providing goods or services after a company enters a special administration regime. Clause 1 inserts new Section 2B into the Commercial Payments and Interest on Late Payment Act 1998, applying maximum payment terms to relevant payments under contracts within the scope of the legislation. The Bill does not exclude supplies made to companies in special administration. There is an important distinction between pre-appointment and post-appointment debts. Post-appointment supplies remain subject to the Bill where they are otherwise within scope. Payment obligations and statutory interest may continue to apply or accrue. Recovery and enforcement remain subject to any relevant insolvency moratorium and the wider insolvency rules.

By contrast, debts relating to supplies made before the appointment are in a different position. They remain pre-insolvency claims and are dealt with under the established insolvency framework. The Bill is not intended retrospectively to alter their status or priority.

The Government do not consider that entry into a special administration regime should of itself result in a purchaser being treated as a public authority for payment term purposes. Companies in special administration remain commercial entities operating within statutory rules. Special administrators are independent court-appointed officeholders, with statutory duties to manage the businesses within those rules. Applying public authority payment requirements solely because a company has entered special administration could have operational repercussions—for example, by exacerbating cash-flow pressures. Nor do we consider that the Bill should determine whether liabilities are to be treated as expenses of a special administration. Amendment 20 would make qualifying post-appointment sums, including statutory interest, expenses of the special administration. Amendment 21 would similarly elevate certified pre-appointment sums. These would be substantive changes to the treatment and priority of liabilities, potentially affecting other creditors. Such questions are matters for the insolvency framework.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, there are no amendments in my name in this group, but I will speak very briefly on Amendment 24, which, as we heard, seeks to remove the ban on retention, with the very worthy aim of helping ensure that resident-owned or resident-run blocks of homes can police work done on the grounds of safety. On the face of it, that sounds like a worthy idea. I am concerned that it opens a can of worms, and my instinct is that there has to be a better way of ensuring that the work is done properly. Perhaps it is the noble Lord’s idea of escrow, which I believe could, if mutually agreed, be possible.

There is a danger of watering down the retention ban if we were to accept the noble Lord’s ideas. The definition of “safety defect remediation work” could be broad, or it could be very narrow. I have had briefings from a number of different organisations which have been contradictory to each other, so I am passing the buck to the Minister to explain how he is going to solve the very worthy issue that the noble Lord, Lord Sharpe, has identified, which is resident-run or resident-owned properties, while not prising open the lid of the can of worms.

[Lord Leong (Lab)]

My Lords, first, I thank the noble Lords, Lord Sharpe and Lord Hunt, for the amendments in this group.

I will take Amendment 22 first. I reassure the noble Lords that the Bill does not prevent parties in any sector, including construction firms, making use of payment arrangements through a bank or an escrow provider to facilitate the transfer of funds. The important distinction is between a third party facilitating payment of money that is due and a third party holding back that money as security for the supplier’s performance. The former remains permitted, the latter could amount to a retention and would therefore fall within the prohibition. Therefore, Amendment 22 is unnecessary.

The Government’s view, shared by many in the industry, is that construction should move away from cash retentions and towards modern, more secure and equitable forms of surety. We know that there are alternative forms of surety, including performance and retention bonds, already available in the UK which can mitigate risks for clients and firms. There are also alternatives used in other countries, such as warranty bonds, which are very common in Europe and are available in the UK. We will be working with surety providers to ensure that a range of alternatives is available when the ban comes into force.

In relation to Amendment 23, I reassure noble Lords that the Bill does not prescribe when stages or milestones must occur or prevent parties from agreeing interim valuations and payments. It regulates the period within which an amount must be paid once that payment becomes due. Genuine staged and interim payment arrangements will therefore remain entirely permissible. However, describing a withholding of money for work already completed and where payment is due as a staged payment would not prevent it falling within the prohibition on retention if, in substance, the money was being retained as security for the performance of contractual obligations.

The right for firms to be paid in staged payments on projects lasting more than 45 days is already enshrined in Section 107(2) of the Housing Grants, Construction and Regeneration Act 1996. The Bill does not amend, qualify or undermine that right. Therefore, this amendment is unnecessary. In implementing the provisions of the Bill, the Government will engage directly and closely with construction industry clients, specialist providers and representatives of smaller firms to provide guidance that legitimate payment arrangements can continue while preventing contractual devices being used to recreate cash retentions under another name.

On Amendment 24, we recognise the understandable intention that resident-led and resident-owned companies should have assurance that building work is completed properly and of high quality, and that defects are remedied without additional costs falling on leaseholders. We do not believe that retentions ensure this. To agree to this amendment would create a broad exemption for construction contracts entered into by resident management and right-to-manage companies. That would leave firms working on those buildings exposed to the risks associated with cash retentions. It could also create uncertainty where different ownership and management structures exist within the same building or development.

In addition, the process required by the Building Safety Act 2022 for delivering work on high-risk building places an emphasis on safety and quality. It includes numerous gateways, information requirements and independent reviews of the building. If clients and firms in their supply chain are meeting the requirements of the Act, there should be no need to deduct retentions. As Dame Judith Hackitt has noted, retentions are ineffective and undermine the effectiveness of the supply chain, which is why alternatives are required. For this legislation to be effective, it must incentivise the industry and its clients to end the practice of cash retentions and to adopt alternative forms of surety, together with improved quality management.

Finally, I address the request made by a number of noble Lords in Committee for further information about the work to develop alternatives to retention. The Construction Leadership Council has now appointed a new industry lead for this area, and we will be increasing our engagement with stakeholders across the industry in relation to alternative forms of surety and quality improvement from September. This will give us plenty of time to address those issues in advance of the introduction of the proposed ban.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, we are all very grateful to the noble Lord, Lord Fox, for moving his amendment. Before I speak to this group, I once again thank the Minister for his engagement. We entered this part of the Bill with some apprehensions, not least regarding the funding of the Small Business Commissioner’s office. It is perhaps too soon to say that all those concerns have been quelled, but I appreciate the time that the Minister, the Small Business Commissioner herself and her team have taken to try to address the questions that we have all put forward.

I begin by addressing the amendments to which I and my noble friend Lord Sharpe of Epsom have added our names, namely those in the name of my noble friend Lord Leigh of Hurley. Amendments 28 and 29 aim to bring some transparency to the Office of the Small Business Commissioner by requiring written reasons for declining to adjudicate a dispute, and by requiring the definition of a sufficient number of occasions to trigger an investigation into payment practices.

On the latter point, I accept the Government’s reasoning that a numerical definition does not sufficiently account for the scale of different poor payment practices. However, I hope that the Minister can therefore confirm that there will be some framework on which these decisions to investigate will be based.

I hope that the Minister will be able to outline the Government’s position on the former point—written reasons for declining to adjudicate a dispute. I understand that discretion and disclosure are considerations, so perhaps a middle ground that requires the informing of decisions to decline, without necessarily including the reasons for doing so, would be acceptable.

My concerns remain about putting a time limit on resolving disputes, as Amendment 27 would do. Although disputes should of course be addressed in a timely manner, the fact is that different disputes will require different resources and be of vastly different scales. An arbitrary time period risks rushing the commissioner’s office or forcing it to prioritise, or perhaps even to accept trade-offs. We do not believe that the benefits of a 60-day limit off-set those risks.

Finally, I am grateful to the Minister for providing us with a briefing beforehand on some of the previous funding of the Small Business Commissioner’s office and the Government’s plans for the future. We are satisfied that these have been modelled on the best predictions possible. I am sure your Lordships’ House would be grateful if the Minister could outline some of that data when he comes to reply to this debate—certainly at the Dispatch Box at some stage. I finish by asking whether there is a way to scrutinise the commissioner’s funding in the future. As I have said, we are satisfied with the predictions, but they are still only predictions. I am sure that there will be an internal review process into the effectiveness of these reforms, but this House deserves the opportunity to have some input into that process, so I look forward to hearing the Minister’s response.

[Lord Leong (Lab)]

My Lords, once again, I thank the noble Lord, Lord Fox, for Amendments 27 and 34, and the noble Lord, Lord Leigh, who is not in this place, and the noble Lords, Lord Hunt and Lord Sharpe, for Amendments 28 and 29. First, I recognise the constructive spirit in which these amendments have been tabled and the shared objective of ensuring that the Small Business Commissioner’s new functions are timely, transparent and effective.

I agree that payment disputes should be resolved as quickly and efficiently as possible. In line with the construction adjudication scheme, we are considering whether a 28-day limit for the adjudicator to reach a decision, extendable where necessary, would be appropriate. I believe that noble Lords would agree that this time is sensible and reasonable. We will consult on this to ensure the final approach is informed by evidence and stakeholder views. Time limits will be set out in regulations subject to Parliament’s approval. This approach will give businesses confidence that payment disputes will be resolved quickly and efficiently, while maintaining flexibility to refine time limits in the light of feedback and operational experience.

The Government recognise the importance of transparency, and I appreciate the sentiment behind Amendment 28. As a matter of principle, a small business should understand why the commissioner has declined to adjudicate a dispute. However, there may be occasions when disclosing the details of a referral to a larger business could harm commercial relationships or be otherwise inappropriate. As such, we believe such obligation should be subject to further consultation and addressed through regulations.

Regarding Amendment 29, I understand the desire for clarity on how the commissioner will assess repeated poor payment practice, but this is precisely the kind of judgment that should be informed by real experience and evidence and guided by statutory criteria that the commissioner must consider on a case-by-case basis. If we try to prescribe an arbitrary number for vastly different practices, we risk creating an inflexible model that fails in practice and undermines the commissioner’s ability to act.

On resourcing, I hear the concerns raised by noble Lords. I wholeheartedly agree that the provisions in this Bill will be effective only if properly enforced and that the resources available to the Small Business Commissioner are crucial to this aim. I reassure all noble Lords that the Office of the Small Business Commissioner is already being resourced for implementation, that I am the Minister responsible for the Small Business Commissioner and that I will ensure that it has the proper resources. I have recently facilitated a meeting between the commissioner and noble Lords to discuss preparation for the legislation coming into force. I can confirm that the commissioner’s budget has already received an initial 30% boost this financial year and that recruitment is under way for six new members of staff, bringing the existing team to 20. This has already allowed the office to begin building its capability ahead of the new enforcement powers in the Bill.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, as we come to the end of Report, I once again place on record my thanks to noble Lords on all sides of the House for their engagement with the passage of this Bill. Up to this point, we have had a very chummy time with a lot of cosy consensus, so noble Lords will be very pleased to know that I intend to introduce a note of disagreement on this amendment.

I begin by stating that I do not disagree with the premise of Amendment 30, in the names of the noble Lord, Lord Fox, and the Minister. Companies should ensure that they have good payment practices and that these are reported, and should be incentivised where necessary. I equally understand the reasoning behind giving the Small Business Commissioner the powers to both oversee and enforce the reporting of payment practices and performances. The office will have a closer knowledge of small business payment practices than regular departmental officials, so it makes sense that it is given this responsibility. The issue is therefore not one of principle but one of proportion.

Two other arms of the Government have the power to fine businesses based on global turnover rather than domestic turnover. They are the Competition and Markets Authority and the Information Commissioner’s Office. These bodies deal with some of the most important and wide-reaching areas of our economy: the former with the upkeep of fair and competitive markets, the latter with the protection of the public’s private information.

Those issues are far greater in scale and gravity than what Clause 24 and the new Section 3A will give the SBC—the Small Business Commissioner—powers over. These powers are not even dealing with payment practices; they are dealing with the reporting of payment practices. Yet the office will be able to fine companies 1%, without even the discretion to fine less than 1%, of global turnover. To His Majesty’s loyal Opposition, this seems disproportionate, to say the very least. We do not believe that this is the right vehicle to address the subject of the profit shifting that the noble Lord Fox mentioned.

One of the key concerns that we have heard from stakeholders during the passage of this Bill is that, while they support maximum payment terms, there will be a transition period to implement the technology and payment systems. This is particularly the case with large multinational corporations. These companies have incredibly complex systems that organise payments across borders, time zones and legal frameworks. It is not outside the realm of possibility that a business such as Amazon, for example, has some teething problems and fails to accurately report payment practices and performance within the UK.

The result would be that the commissioner, based on a failure to report practices within the United Kingdom, would have the power to fine Amazon based on its global turnover. That would equate to more than £700 million for a potential technological error or delay. I do not think that power reflects the duty that we are dealing with.

Lastly, there is the question of incentives. The Office of the Small Business Commissioner justifiably prides itself on saving more money for small businesses than it costs the taxpayer. If value for money is the justification for the office’s existence, its incentive is to use its powers to raise money in order to continue its operation. I am not accusing the SBC of this; I am simply reflecting on the perverse incentives that occur when an arm of government relies on action to justify its continued existence. I do not think, given these natural incentives exist, that we should give any arm of the state the power to tax multinational businesses based on their global turnover for actions within the United Kingdom. We should especially reflect on this when we are not even discussing payment practices; we are discussing the reporting of payment practices.

Given that this amendment has the support of the majority of the House, we will not oppose it, but I would like to place on record my, and indeed His Majesty’s loyal Opposition’s, concern about this measure. It would go some way to allaying my worries if the Minister could outline how many times a fine has been given under the existing Section 3, but I am still concerned that this is a disproportionate step that places far too much power in the hands of an ultimately unaccountable body. I look forward to the Minister’s response.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Fox, for his amendment regarding turnover and financial penalties. These amendments raise an important question about how turnover should be calculated for financial penalties under the payment reporting regime following an investigation by the SBC. I thank the noble Lord for the constructive discussions that we have had on this issue.

The Government agree that this issue merits proper debate. We want penalties to be meaningful and capable of driving compliance while ensuring that the approach is proportionate, relevant and workable for businesses in scope. The Government support the aim of the amendment, at this stage, to open up the debate on the appropriate basis for calculating turnover. However, I want to be clear that the Government have not reached a final view on the most appropriate approach. The Government will want to engage with businesses, business representatives and other interested parties before determining how turnover should be calculated for these purposes, including—given that the Bill addresses UK payment practices—whether it should be limited to UK turnover or extended more widely.

Further detail on how turnover is calculated will be provided in secondary legislation. That secondary legislation will be informed by a process of consultation to determine how turnover should be calculated. Additionally, that secondary legislation, which will be debated in Parliament, will allow the final position to be properly tested. This approach will ensure that the regime retains the flexibility required to operate effectively and proportionately.

On that basis, I once again thank the noble Lord, Lord Fox, for raising this important issue and for engaging positively with the Government. The Government support Amendments 30 to 32 and 43 to 45, to which I have added my name. Before I sit down, I once again thank all noble Lords, especially those from the Opposition Benches—the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, as well as the noble Lord, Lord Fox—for their thoughtful and constructive engagement throughout the passage of the Bill. It just shows that we can get things done if we work collaboratively.

Amendment 30 agreed

--- Later in debate ---

Moved by

[Lord Leong]

36: Clause 28, page 40, line 19, after “Act” insert “or regulations made under this Act”
Member’s explanatory statement
This amendment ensures that if the powers proposed by my new clause were exercised to change a payment period, the necessary consequential changes could be made to other statutory provisions.

--- Later in debate ---

Moved by

[Lord Leong]

37: Schedule 1, page 43, line 20, leave out “2F” and insert “2G”
Member’s explanatory statement
This amendment is consequential on my proposed new clause.

UK Automotive and Components Sector

Lord Leong Excerpts

Wednesday 9th September 2026 Lords Chamber

[Lord Spellar]

To ask His Majesty’s Government, in light of Jaguar Land Rover’s decision to cut 4,000 jobs over the next two years, what steps they are taking to support the UK’s automotive and components sector and its workforce.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation, Science and Trade (Lord Leong) (Lab)]

My Lords, we understand the anxiety that this announcement causes among workers, families and communities in the area where JLR is based. We are determined that Britain will remain a world-leading automotive nation. Our industrial strategy reduces electricity costs, commits £4 billion to DRIVE35 to advance manufacturing and research, and allocates £2 billion to boost electric vehicle demand. We are strengthening supplies through the DRIVE35 transformation programme and securing better access to markets in the EU and the United States, thereby protecting investment and jobs.

[Lord Spellar (Lab)]

I thank my noble friend the Minister for that Answer. He obviously recognises the importance of our auto components industry, which underpins our car assembly plants and is also a significant part of our exports and regional economies. He and the House will be aware of the significant impact of the hack at Jaguar Land Rover last year, which led to an overall drop in GDP but also had a much more significant effect on the West Midlands economy. So, with those current problems at JLR, which the Minister has identified, what are the Government doing to support the supply chains and the British car plants, and would not one measure be for public bodies to prioritise buying British vehicles built by British workers?

[Lord Leong (Lab)]

My Lords, my noble friend rightly reminds us that cyber attacks affect companies of all sizes, and this is a stark reminder that JLR is not only the manufacturer but also the anchor of the supply chain. We are working with JLR, lenders, local partners and suppliers to safeguard viable businesses, improve access to finance and strengthen cyber resilience. On procurement, we will use government purchasing power strategically to ensure that British manufacturers can compete fairly and that social value, resilient supply chains and UK capability are recognised in purchasing decisions.

[Lord Evans of Rainow (Con)]

My Lords, the Minister will be aware that the Chinese Government and their motor manufacturers are eyeing up the European car market, flooding it with millions of good-quality cars which are undercutting our own domestic market—an issue the noble Lord, Lord Spellar, addressed in his excellent Question. What assessment has the Minister made of the Chinese Government’s strategy of flooding the European car market, and is he aware that Volkswagen has closed down its state-of-the-art plant in Dresden?

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, we are closely monitoring the growing presence of Chinese electric and hybrid vehicles and are engaging directly with UK manufacturers. My loyalty lies with Range Rover: mine is almost five years old now, so I am waiting for the electric version to come on to the market. We have strengthened our trade remedies to respond more swiftly to evidence of harm, and the Trade Remedies Authority can investigate when industry brings forward credible evidence of what these Chinese cars are doing to the sector.

[Lord Stoneham of Droxford (LD)]

My Lords, the best support the Government could give to the car industry is to end the uncertainty in the European car market, which is hindering investment and could decimate our industry in the near future. Should we not be rejoining the single market and the customs union to provide a strong, countervailing force, with Canada, against Trump tariffs and unfair Chinese competition?

[Lord Leong (Lab)]

My Lords, our position is very clear: we are where we are and we are not joining the customs union. The Government will defend the interests of British manufacturers and our deeply integrated UK-EU automotive supply chains. Where the proposed IAA “Made in Europe” risks disadvantaging them, the Secretary of State and Trade Minister have raised our concerns directly with EU member states, their commissioners and MEPs. The proposal is not final, and we continue to work with the industry to assess its impact. Now is the time for like-minded partners to strengthen growth, resilience and economic stability.

[Lord Woodley (Lab)]

My Lords, Jaguar partly blames the ZEV mandate for these job cuts, a situation that I am glad to say the Government acknowledge with their current consultation aimed at reducing this mandate to protect up to 200,000 automotive jobs. However, do the Government regret the recent announcement that Jaguar is going to build the new Freelander—originally built in Halewood—in China, where Chery, whose sister company, Jaecoo, the top-selling Chinese brand in Britain, is making and selling Range Rover lookalikes for less than a third of the Range Rover price? Stealing the family silver is one thing; giving it away is another. How is that good for British jobs?

[Lord Leong (Lab)]

My Lords, the Government have no intention of intervening in individual business decisions. What Jaguar Land Rover decides and who its partners are is entirely the responsibility of Jaguar Land Rover. Having said that, we work very closely with JLR, the trade unions and local partners to ensure that no affected worker is left without support. We will continue working with unions, community leaders and the company itself to ensure that all workers will be treated fairly when the consultation happens, and that no worker will be left without support.

[Lord Hunt of Wirral (Con)]

My Lords, these job losses at Jaguar Land Rover are deeply concerning, and our thoughts are with the employees affected and their families. We on these Benches have repeatedly been warning the Government over the past two years that higher energy costs, damaging steel tariffs, the increase in employers’ national insurance contributions, and the Employment Rights Act are making it harder and more expensive to do business in Britain. With one of our most important manufacturers now cutting thousands of jobs, will our new Prime Minister start to overcome the damaging policies of his predecessor and restore Britain’s competitiveness? Otherwise, we will have more jobs and investment being driven overseas.

[Lord Leong (Lab)]

My Lords, with due respect to the noble Lord, I think that is a really simplistic point. The scale and speed of global transformation in this sector is being faced by every automotive manufacturer, not only in this country but elsewhere in the world. Manufacturers everywhere, and I mean everywhere globally, are responding to fierce competition now that new technologies and changing international trading conditions are in place. That is precisely why this Government have committed £2.5 billion to DRIVE35, providing long-term support for research, development, manufacturing and the transition to zero-emission vehicles. Our objective is to secure investment and high-value production here in Britain. I point out for the benefit of noble Lords that JLR has said it will seek voluntary departures wherever possible and still plans to invest £15 billion to £18 billion in this country. It has faith in this country, and I hope noble Lords across the aisle will also have faith in this country.

[Lord Birt (CB)]

My Lords, we would all wish Jaguar Land Rover to succeed, but does the Minister recognise that more than that of any other country in the G7, the UK economy is now overwhelmingly focused on high-value services, which give the economy nine times what the manufacturing sector currently does?

[Lord Leong (Lab)]

My Lords, the United Kingdom is a trading nation—we trade with every country across the world. We are doing free trade deals right across the globe, the recent one, obviously, being with India and with the Gulf countries. We are a trading nation, and we have to support our manufacturers and companies to trade seamlessly and easily throughout the world.

[Lord Beamish (Lab)]

My Lords, I begin by declaring an interest in that, like the Minister, I own a Jaguar Land Rover car. The Minister said that government procurement should be competitive, but in France or Germany, for example, no government Minister would get in a foreign-made car. What more can the Government do centrally on procurement, but also in insisting, for example, that local authorities and police forces buy British?

[Lord Leong (Lab)]

I assure my noble friend that in the Department for Business, Innovation, Science and Trade, all our ministerial cars are manufactured in the United Kingdom. I am sure that I speak for other departments as well.

Category 4 Steel Imports: Tariff-free Quotas

Lord Leong Excerpts

Wednesday 22nd July 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, before I respond to the noble Lord’s Question, I first want to say that in the last couple of weeks, we have been seeing each other across the Dispatch Box quite regularly, and it is arousing some suspicion from my wife.

I welcome the opportunity to respond to the noble Lord’s question. On 1 July 2026, the steel trade measure came into force, and I presented the details to this House on 30 June. The measure limits tariff-free steel imports, including for category 4, and reduces overall quota volumes by 51%, compared to the expired steel safeguard, to 3.2 million tonnes. Any imports above these levels will face a 50% tariff. The details of this measure have not changed since my Statement on 30 June.

[Lord Hunt of Wirral (Con)]

My Lords, we should not have had to read in the Financial Times earlier this week that the Government had made specific changes to the steel tariff regime for a particular country, India, following negotiations over one of the United Kingdom’s most important trade agreements. I welcome the opening words of the Minister, and I always enjoy exchanges with him in this Chamber. But Parliament should surely not be learning from the media that the Government have made specific changes to the steel tariff regime for any particular country following negotiations over one of the United Kingdom’s most important trade agreements.

The Ministerial Code is clear that major policy announcements should be made first to Parliament when Parliament is in session. Will the Minister explain why Parliament was not told the full details of any further India-related changes before the tariff regime came into force on 1 July, and will the Government now commit to making a Statement while your Lordships’ House is in session, setting out what changed, why it changed, and what assessment was made of the impact of these changes on domestic steel producers, downstream sectors, exporters, supply chains, investment and jobs?

[Lord Leong (Lab)]

My Lords, I will just say to the noble Lord that it was a pretty good try. First, there has been no change to India’s category 4 quota compared to the provisional quota published in April 2026. We did not negotiate quotas with any countries apart from our agreed outcome with the EU. We have been engaging with India on steel, as we have all our trading partners. Overall, quotas reflect the need to balance stronger protection for UK producers with continued access to critical inputs for downstream sectors and critical national infrastructure.

[Lord Mohammed of Tinsley (LD)]

My Lords, nearly 40,000 people are involved in steel production in this country. However, 400,000 people are involved in manufacturing as a byproduct from steel. It is really important that both sides of that industry are protected. My fear is that these tariffs may actually affect badly the manufacturing side of the industry; I seek reassurance from the Minister that this will not happen.

[Lord Leong (Lab)]

My Lords, first, employment impacts form part of the Government’s wider assessment when determining any future steel trade measures. Our objective is to protect jobs throughout the steel supply chain, both in primary steel production and among downstream manufacturers. We continue to engage closely with producers, manufacturers and trade bodies to monitor market conditions. Where evidence suggests unintended consequences, we will continue to review the operation of the regime to ensure it remains proportionate and effective.

[Lord Lamont of Lerwick (Con)]

My Lords, while there is a case for protection for speciality steels for sectors like the nuclear industry, surely the Government’s wider policy on quotas and tariffs is harmful to British industry as a whole. The awkward reality is that the domestic steel industry cannot supply the total demand in this country. Imports have to happen and account for 60% of production in this country. If we do not allow those imports into this country, free of tariffs and quotas, it penalises those who are making finished products, who have to compete with imports which are finished and do not bear this taxation at the border. This is deeply harmful to British industry.

[Lord Leong (Lab)]

I thank the noble Lord for the questions. I think I responded to the noble Lord on Monday on a particular Urgent Question on steel and addressed the tariff issue. However, I will address his point about imports. We have carried out a programme of extensive engagement with industry, as well as negotiations with the EU ahead of its own steel measure coming into effect. Some 74% of all imports by volume fall outside the scope of this measure and will not be subject to any tariffs. For other products, tariffs will only be due once quotas have been exhausted. We will continue to hear from businesses and closely monitor the impact of this measure. We will also review it after 12 months to ensure it remains effective and that the balance is right for both producers and downstream users.

[Lord Alton of Liverpool (CB)]

My Lords, I welcome what the Government did in protecting the steel industry in this country, but do we not need to do a lot more to develop our resilience and reduce our dependence? Was the danger here not of Chinese domination of the industry? The Government were right to act. In that context, will the Minister say what compensation has been paid to the Chinese regime? On the point made by the noble Lord, Lord Hunt, about learning things from the media, was the Times accurate when it reported that China had offered debt relief in return for a green light for its proposed mega-embassy in London?

[Lord Leong (Lab)]

I will first address the issue on British Steel, which I am sure is what the noble Lord is referring to. We took British Steel into public ownership immediately after we passed the Steel Industry (Nationalisation) Act. As it stands, under the Act, we will appoint an independent valuer to assess the compensation, if any, that is due. As far as we know, it is zero compensation and that is where it stands. As for his question on the Chinese embassy, I am not aware of that, but I will find out and write to him.

[Lord Wigley (PC)]

My Lords, the Minister will be aware, from our earlier discussion on the steel legislation that went through this House, of my concern relating to the availability of steel for defence purposes. Can he give an assurance that in considering these changes the Government have given full attention to the reliability and dependability of supplies for defence purposes, particularly in circumstances where the defence pressures may be different from our current peacetime ones?

[Lord Leong (Lab)]

I remember our exchanges across the Dispatch Box. As I said then, I will say now that we are mindful of the specialised steel used in any of the industries that require a speciality type of steel. We will monitor the usage but, as it stands, any steel that is not manufactured in this country—which is imported—is outside the scope of the tariff.

[Lord Hannan of Kingsclere (Non-Afl)]

My Lords, I am grateful to the Minister for his answers. He is always informative, courteous and diligent at that Dispatch Box. If it is true that we have, as reported, widened the quota for India, we have presumably done so on two very sensible grounds. The first is good relations with India. This is a really important trade deal, and we can hardly renege on it when the ink is barely dry. The second is that we want to boost our domestic economy and, as the noble Lord, Lord Lamont, says, we do not want to place British manufacturers at a relative disadvantage vis-à-vis the rest of the world by forcing up their input costs. Why does that apply only to India? Should we not take the same approach to our trading partners in the Trans-Pacific Partnership, the GCC, the European Union and elsewhere? Of course, the real answer is to cut energy costs but, until we get there, it does seem crazy that we are going down this Trumpian route of having these immensely high tariffs, which always serve to the detriment of the industries they are supposed to protect.

[Lord Leong (Lab)]

I thank the noble Lord for those kind words. We do not import steel only from India. In fact, the largest import of steel is actually from the EU, followed very closely by Vietnam, then India, and not forgetting South Korea. Those are the principal importers of steel into this country. As I said earlier, we have not changed the quotas as far as India is concerned. We continue to engage regularly with India and with Tata, which is owned by an Indian company, on the usage of steel in this country.

[The Earl of Effingham (Con)]

My Lords, following on from the noble Lord, Lord Hannan, why does the Minister think that the overwhelming majority of economists say that tariffs harm the economy?

[Lord Leong (Lab)]

I refer the noble Earl to other countries such as Canada and the USA, and to the EU. We are not the only country that has import tariffs. When a particular sector is impacted and it impacts on our domestic supply, it is right to have tariffs in place to protect the domestic sector, which in turn protects jobs and, I would hope, creates growth.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, government action on this in the workforce is extremely welcome, because for many years our domestic steel industry was threatened by the dumping of cheap Chinese steel. This action was motivated by trying to give our steel industry a chance to grow, to win and to provide the security and sovereignty this country deserves. Can my noble friend the Minister reassure us that he will keep under review the tariff regime and that he will maintain a strong engagement with trade unions, whose members have an interest across industries and jobs and want to see this policy work?

[Lord Leong (Lab)]

My noble friend is absolutely right. We currently review tariffs, and, as it stands, we are committed to reviewing them again at the end of the 12-month period. I state again that the quotas in place were informed by evidence and analysis of market conditions. Where steels products are not produced in sufficient quantities in the United Kingdom, mechanisms remain available to ensure that businesses can continue to access essential imports, while maintaining appropriate safeguards for the domestic industry.

[Baroness Lawlor (Con)]

I thank the Minister very much for answering questions on the Statement so fully. My understanding is that, under this round, imports of galvanised steel to the UK will triple. Some of the concerns have been about the impact on production here. As my noble friend Lord Lamont said, we need to fill the gaps in our industry. Does the Minister have any idea what impact this will have on our own steel industry and our capacity to grow it?

[Lord Leong (Lab)]

My Lords, as it stands, the Government fully recognise the importance of ensuring that businesses can obtain the materials they require. That is the principal objective for this category of steel. For noble Lords who do not know what category 4 galvanised steel is, it is the steel that is mainly used for generic purposes such as steel automotives. The revised quota system seeks to balance the needs of downstream users with the need to protect the UK steel industry from unfair trading practices. We have to bear in mind that there is an oversupply of steel in the market, but we have to protect it in order to protect our local manufacturers and downstream users.

[Lord Hunt of Wirral (Con)]

I am very grateful to the Minister. He is in effect saying that there were no changes. Therefore, can he share with the House, in a full statement before we rise, exactly what tariff-free quota changes were made for category 4 galvanised steel products? That should include the quota granted to India, the basis on which it was calculated, any consequential changes for other countries and the assessment made of the impact on domestic steel production. I think we are entitled to that statement, if he could make it in due course.

[Lord Leong (Lab)]

I will try to provide—I hope—a more robust and comprehensive response to the noble Lord. As I said earlier, there is no change to the quota on steel imported from India, as far as I am aware. On the assessment, we have laid two pieces of legislation setting out how this measure will impact different types of businesses. Bearing in mind that these measures just came in on 1 July—it has been only 21 days—we should give it some time before we see how it will impact the sector and industry. As I said, we constantly monitor the situation, and my ministerial colleagues have regular conversations with steel manufacturers and downstream users. I am really pleased that my colleague Chris McDonald has been reappointed as Minister of State—I congratulate him on that—and he has regular contact with the steel sector. We work very closely with the sector, and if there are any changes, we will address them accordingly.

Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026

Lord Leong Excerpts

Wednesday 22nd July 2026 Lords Chamber

Moved by

[Lord Leong]

That the draft Order laid before the House on 22 June be approved.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, I shall also speak to the accompanying Code of Practice on Electronic and Workplace Ballots for Statutory Trade Union Ballots. I also note the regret amendment tabled by the noble Lord, Lord Sharpe of Epsom, and I am glad of the opportunity to debate these important reforms. I will address the concerns raised by the noble Lord during my remarks.

This statutory instrument and the accompanying code of practice were laid before Parliament on 22 June 2026. This instrument has a clear and straightforward purpose. It modernises the statutory framework governing certain trade union ballots by allowing secure electronic voting and workplace ballots, while preserving the integrity, secrecy and independence that are fundamental to every statutory union ballot. Alongside these reforms, it makes a minor consequential amendment to Section 105 of the Employment Rights Act 1996 to ensure that the legislation remains consistent following the changes made by the Employment Rights Act 2025.

These are measured and practical reforms that update how statutory ballots may be conducted. They do not alter the legal framework governing industrial action or trade union democracy. The legislation governing statutory trade union ballots was developed in an era when postal voting presented the most practical way to conduct nationwide ballots. That is no longer the world in which we live. Today, people routinely undertake secure and sensitive transactions online. Yet, under the current law almost all statutory trade union ballots must still be conducted solely by post. That approach has not kept pace with the way people live or work; it can be slower, more expensive and more administratively burdensome than modern alternatives.

The Government made a clear commitment in their Make Work Pay manifesto to modernise statutory trade union ballots by allowing secure electronic voting and workplace ballots. This instrument delivers that commitment. It introduces three additional methods of voting for statutory trade union ballots, with the exception of statutory recognition and derecognition ballots, which will be addressed separately in 2027. First, it permits electronic voting, allowing eligible members to cast their votes securely online using personal authentication credentials. Electronic voting will be available only when a union member has provided a personal email address or telephone number to the union. This ensures that voting materials are issued through personal channels and remain outside employer-controlled or union-controlled workplace communication systems.

Secondly, the instrument permits hybrid voting. Under this model, members will receive their voting materials by post but may choose whether to return their vote electronically or by post. No one will be required to vote electronically if they prefer not to do so.

Thirdly, the instrument allows workplace voting for industrial action ballots. This option is available only when both the employer and trade union agree, and the ballot is conducted under the supervision of an independent scrutineer in a suitable secure workplace location. Workplace voting reflects the fact that industrial action ballots concern workplace issues, while maintaining the same statutory safeguards that apply to every other lawful ballot. None of these new methods is mandatory. Postal voting remains available. Trade unions will decide which lawful voting method best suits their membership. The purpose of these reforms is to extend choice, not remove it.

Alongside this instrument, the Government have laid a draft code of practice on electronic and workplace ballots. The code provides detailed practical guidance on how these new voting methods should operate in practice. It complements the legislation by setting clear expectations on accessibility, administration, security and transparency.

I now turn directly the amendment tabled by the noble Lord, Lord Sharpe. The amendment raises concerns about ballot integrity, cyber security, verification, auditability, resilience and the operation of workplace ballots. I want to be clear that this instrument does not make industrial action easier to authorise without safeguards. It does not weaken ballot integrity, or ignore cyber security, verification, auditability or resilience, and it does not ignore the position of employers on consent, operational disruption, cost, privacy or security. The use of independent scrutineers remains mandatory. Cyber security certification for electronic methods, secure voter authentication and ballot secrecy are mandatory. Far from weakening confidence, these reforms strengthen participation while preserving the safeguards that Parliament has long regarded as essential.

This instrument brings statutory trade union ballots into the 21st century. It modernises the methods of voting without changing the fundamental principles of trade union democracy. It preserves the integrity, independence and secrecy that are essential in every statutory ballot. These are balanced, proportionate and carefully designed reforms. They make participation more accessible while maintaining confidence in the legitimacy of statutory ballots. I therefore hope that noble Lords will support both the instrument and the accompanying code of practice. I beg to move.

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, I am very grateful for the support across the House, especially from the noble Lords, Lord Balfe and Lord Fox, for the Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026 and the Code of Practice on Electronic and Workplace Ballots for Statutory Trade Union Ballots. Today’s scrutiny and debate have been constructive and light-hearted, at some points. Noble Lords have raised interesting points on dispute resolution, workplace ballots and the next phases of delivery for the measure. They have also raised points on the 50% threshold, intimidation and dispute resolution, as I mentioned earlier. I will address these points briefly.

First, I will respond to the point raised by my noble friend Lady Jones of Whitchurch on dispute resolution. Industrial action should always be the last resort. It is costly for workers, employers and the wider public. That is why the Government are committed to a new era of partnership. We want employers, unions and government to work together, through co-operation, negotiation and meaningful engagement at workplace level. We intend to develop a new overarching industrial relations framework, working with stakeholders, such as employers and unions, to promote partnership, reduce conflict and support productivity and growth. That is a noble ambition.

I will now respond to the points raised by my noble friend Lady O’Grady. My noble friend and the noble Lord, Lord Sharpe, asked about the 50% threshold for industrial action ballots. To be clear, the order does not repeal that threshold, and the noble Lord, Lord Fox, also mentioned that. To commence Section 68 of the Employment Rights Act 2025, the Secretary of State must first lay a Statement before Parliament. This must set out how he has had regard to the impact of electronic and other non-postal voting methods on participation in industrial action ballots. The instrument delivers on our commitment to permit electronic and workplace balloting. The review of their impact on participation will then follow and inform the repeal of the 50% threshold.

My noble friend also asked about the use of workplace email addresses. Following implementation of the instrument, we plan to establish a senior oversight board, comprised of key stakeholders, to help assess how the new voting methods are working in practice and consider future enhancements, including the secure use of workplace email addresses. As it stands, we are not doing that now.

My noble friend also raised recognition and derecognition ballots. We are committed to extending electronic and hybrid voting to the Central Arbitration Committee-run recognition and derecognition ballots as part of phase 2 of delivery. We will deliver this as soon as practicable in the second half of 2027.

I will now turn to the various points raised by the noble Lord, Lord Sharpe. On workplace balloting, employers will not be forced to allow workplace voting. It can take place only where an employer agrees. Employers remain free to consider operational disruption, privacy, security and practical arrangements before giving that agreement. The union will continue to bear the cost of running the ballot itself, with no cost to the employer.

On the role of the responsible person, in practice this will be the trade union. That is because the union is best placed to understand its membership and communication methods when deciding the appropriate voting method or methods. It would not make sense to outsource this role to a third party, who will not have the information to make this determination.

I want to assure the noble Lord, Lord Sharpe, that this decision is not unfettered. The instrument sets out clear factors and criteria that must be applied before a voting method can be chosen. On cyber security, responsibility rests with the independent scrutineer. Scrutineers conducting electronic ballots must hold a valid Cyber Essentials Plus certificate for the networks and systems they use, and I have personal knowledge of how laborious it is to apply for the Cyber Essentials Plus certificate. It is something that one has to go through, and it is quite rigorous in its application. They are also responsible for operating the platform securely and ensuring that the legislative requirements are met. There will be extensive audit logging and monitoring throughout the ballot, and any security incident must be recorded. If the legislative requirements are not met, the union will not be able to rely on that ballot, and it must be rerun. I hope that provides reassurance to the noble Lord.

I want to be clear about what the order does: it steps away from the current bureaucratic and expensive requirements that all statutory union ballots must be held by post. It will bring the voting system for trade union ballots into the 21st century, and it delivers this change in a manner that ensures secure, secret and safe balloting. It will not, as we have heard today, weaken the safeguards relating to industrial action ballots. It will not weaken ballot integrity, and it will not leave questions of cyber security, verification, auditability, employer consent and costs unanswered.

Lastly, as I have already made clear, workplace voting can take place only where the employers agree. Employers remain able to consider operational disruptions, privacy, security and practical arrangements before giving that agreement. This is an overdue reform.

Before I conclude, I will touch on a couple of points raised by noble Lords. The noble Lord, Lord Sharpe, asked about organising a pilot. It is not necessary to pilot workplace balloting for statutory union ballots. The instrument is informed by detailed engagement with key stakeholders, including businesses, cyber security experts, unions and independent scrutineers, as well as public consultation on the draft code of practice on electronic and workplace ballots.

The noble Lord also asked about cost, and I did mention that there is no cost to the employer. The Government expect that individual unions will determine which voting arrangements best meet the operational needs and will bear the cost themselves.

The noble Lord also touched on the doctors’ strike. The Government will continue to engage closely with the BMA, ensuring that the NHS remains a place where doctors can develop rewarding and long-term careers. The Government are committed to building on the good progress that has already been made, cutting waiting lists and continuing to improve conditions for the staff who make their NHS work, in partnership with them.

The noble Lord, Lord Frost, made a point about pressure and intimidation. The Government fully recognise the importance of protecting members from any undue influence. That is why the statutory safeguards governing ballot conduct remain in place, regardless of the voting method. The company code of practice provides guidance on maintaining ballot secrecy and integrity, and independent scrutiny remains an important safeguard throughout the process. This legislation sets out clear safeguards and technical standards, ensuring the integrity and confidence of the ballot process while making it meaningfully easier and more convenient for working people to take part in the decisions that affect them.

I conclude by wishing all noble Lords who will not be here tomorrow a fantastic, restful Summer Recess.

Code of Practice on Electronic and Workplace Ballots for Statutory Trade Union Ballots

Lord Leong Excerpts

Wednesday 22nd July 2026 Lords Chamber

Moved by

[Lord Leong]

That the draft Code of Practice laid before the House on 22 June be approved.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.