Steel Industry

Lord Reid of Cardowan Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Reid of Cardowan (Lab)]

My Lords, I will make five simple points.

First, the Government are absolutely correct to intervene. Like the noble Baroness, Lady Brinton, I have personal experience of the devastation that is wrought on communities by the closure of steel industries. Some noble Lords may remember that we once had a steel industry in Scotland, with 7,000 jobs in Ravenscraig itself and more than 20,000 jobs in the ancillary plants. I can testify to the absolute devastation of communities, individuals, workers and families from the 1980s onwards. The Government are undoubtedly correct to intervene on social grounds alone.

Secondly, whatever the Government do, there will be no free pass for the workforce. Let no one think that this is an easy way out. From my experience, I have seen steel-workers meet the challenges that these circumstances pose by getting rid of restrictive practices, increasing productivity, increasing efficiency and so on. In the case of Ravenscraig, it probably extended the life of the steelworks by 10 years or more. I hope that the workforce in Scunthorpe responds positively and constructively to the efforts of the Government intervening.

Thirdly, the Government are right to emphasise the crucial role of blast furnaces. This is not a mere technicality. These blast furnaces are designed to operate continuously, to maintain the high temperatures and reactions that are necessary in quality steel. Turned off prematurely, they will effectively lower production, decrease quality, increase slag and possibly render the whole edifice unworkable. A shutdown would force the entire steelworks, which relies on the furnaces’ molten iron, to cease operations altogether. Therefore, it is crucial—though it seems a technical point—that the Government are projecting and focusing on the question of the blast furnaces.

Fourthly, there is a matter of wider national and strategic importance. I was surprised by the spokesman from the Opposition Benches, who seems to have forgotten that it was the previous Government who sold this industry to the Chinese. We are constantly told, not least by the party opposite, that there is no firewall between the Chinese Government and Chinese industry. Did it never occur to anyone in the last Government that, in a competitive world, it may be in the interests of the Chinese Government to purchase British Steel and then close down the industry? If that was not considered then there was a gross omission of responsibility by the previous Government.

Fifthly, the potential loss of virgin steel-making capacity in the UK, which has not been mentioned, would be very serious. With the closure of the blast furnaces at Port Talbot, the only virgin steel-making, or primary steel-making, is in Scunthorpe. Should that close, the UK would be the only G20 country that does not produce its own virgin steel. For the uninitiated, virgin steel, also known as basic oxygen steel-making, is primarily used in industries that require high-quality steel for various applications, including construction, manufacturing, defence and transportation. It is produced from iron ore and coke, using a blast furnace process, which takes us back to the importance of that. Being the only G20 country that does not produce its own virgin steel raises immense questions around national security and whether virgin steel production should be retained as a sovereign capability. In my opinion, it should be.

It is therefore right that the Government explore every avenue to ensure that the social, economic, employment and national security implications of the present situation are addressed. Not to do so would be a dereliction of duty to the country as a whole. The Government deserve our support in what is a necessary national endeavour.