UK Steel Strategy

Lord Mohammed of Tinsley Excerpts

Monday 23rd March 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

The noble Baroness is right that there is a strong emphasis on the importance of scrap steel. The move to using some of the electric arc furnaces will increase the demand for that scrap steel in our supply chain. Our move towards the aim of getting the domestic market share back to 50% will drive much more demand for domestic scrap steel.

[Lord Mohammed of Tinsley (LD)]

My Lords, I add my voice to the comments that were made by the right reverend Prelate, the former Bishop of Sheffield—I remember him well and his commitment to the city—particularly on the issues around the Company of Cutlers. Its members are a tough bunch but they are fair—sometimes they speak truth to power, and often that is what is required. I will follow up on the points raised by my noble friend Lord Fox, particularly on the current turmoil in the energy market with the ongoing conflicts, first, in Ukraine and, more recently, in the Middle East. I suspect that he has been speaking to many people across the steel sector and not only in Sheffield, but I will stick to Sheffield and Stocksbridge.

There is a point to be made about the cost of energy. I understand that large energy-intensive businesses can hedge energy prices over a longer period, but a number of smaller businesses, including those with limited credit available to them, are really suffering now, leading to vulnerability and volatility as energy prices are paid either a day ahead or in the short term. I will give the Minister an example. I spoke to a steel contractor over the weekend which had an order that it was preparing for last week. All the materials and energy costs were factored in at the time and it was just about to make a profit, but after the Israeli attack on the Iranian gas field and then the Iranian attack on Qatar its gas price went up by 30%, because it did not have a great credit rating. From making a potential small profit, it is now going to incur a loss. These organisations are desperately looking for help right now—not in 2027. Can the Minister say what the Government are doing, particularly now, to help small and medium-sized businesses, or those with issues with their credit rating?

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[Baroness Lloyd of Effra (Lab)]

We are still in discussions with much of the sector, explaining what the precise tariffs mean across different sub-sectors, and we are gaining feedback following the publication. We continue to work across many sub-sectors and business areas on implementing the trade measure ahead of 1 July, and we will consider what information we further publish following those consultations.

[Lord Mohammed of Tinsley (LD)]

My Lords, given the extra time, can I just pose another question? Given that defence supply chains already receive special treatment in procurement and export controls, I wonder whether the Government would consider also extending that to energy policy.

I will give some examples: the right reverend Prelate will know exactly where I am going to come from. I live in Tinsley. Just down the road from me is the Meadowhall shopping centre, and just around the corner from there is Sheffield Forgemasters, where many members of my family worked from the 1970s and 1980s onwards. At the moment, when it comes to energy pricing, both those two—the commercial shopping centre and the steelworks—get priority in terms of the level. However, I want to push the Minister on whether the Government would consider prioritising defence, just as they do with other elements of defence, given that Sheffield Forgemasters and others will be working on that. If I was to speak to a couple of my steel contacts in the city, would the Minister consider an offer of a meeting, possibly on Zoom, to be able to go through some of these more technical issues with her and the department, rather than trying to do it from the Dispatch Box in your Lordships’ House?

[Baroness Lloyd of Effra (Lab)]

I thank the noble Lord. I will be happy to meet with the industry representatives he talks about and to explore this in more detail. As he knows, we have changed the steel procurement guidance more generally, updating it to ensure that UK-made steel is regularly considered in public projects, and we are requiring procurers to consult a digital catalogue of UK-made steel products. But, specifically in the realm of defence, I would be very happy to take that further with the noble Lord.