Steel Industry (Nationalisation) Bill

Lord Sharpe of Epsom Excerpts

2nd reading
Tuesday 16th June 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general approval of the Minister’s promotion. I wish him well and I am delighted to face-off somebody who has considerable business experience.

I am grateful to all noble Lords who have contributed to this important debate. It is always a pleasure to follow the noble Lord, Lord Fox, who, when talking about hubris, was slightly selective with his times. The steel industry has had systemic issues for a couple of decades—and there was a Liberal Democrat Business Secretary for at least five of those years. Apart from that, I agreed with much of what he said.

There was a great deal of agreement in the House about the general strategic importance of steel, which is welcome. British Steel matters to Scunthorpe, jobs, rail, construction, manufacturing, defence and our national resilience more generally, as many others have noted. We do not deny that the Government may have had to act in April 2025 to prevent an immediate and disorderly closure of the blast furnaces, but the central question remains, and it runs through the debate. It is not whether steel matters; it is whether nationalisation is a serious strategy for making British Steel viable. On that question, the Government have still not provided convincing answers.

As my noble friend Lady Noakes noted, nationalisation, we were told, was not the Government’s original plan. When the emergency Steel Industry (Special Measures) Bill was brought before Parliament last year, the then Secretary of State, Jonathan Reynolds, told the Commons that:

“The Bill does not transfer ownership to the Government”.


He said that the Government’s aspiration remained

“a co-investment agreement with a private sector partner to secure a long-term transformation”.—[Official Report, Commons, 12/4/25; cols. 840, 841.]

I have absolutely no doubt that the Minister will say that private investment remains the goal—indeed, the Minister in the other place, Chris McDonald, said as much in a Written Statement—but where is the plan to achieve it? Where is the timetable? Where is the private partner? Where is the route back to commercial viability?

The noble Baroness, Lady O’Grady, referred to the halcyon days of the 1970s—when state ownership worked so well that I have clear recollections of doing my homework by candlelight. In the 1970s, when the Labour Government last ran British Steel, the taxpayer was forced to carry staggering losses. We worry that the danger now is that we will repeat the same mistake, by not solving the underlying problem but moving it from the company’s balance sheet to the public balance sheet.

The central barrier is not ownership; the central barrier is competitiveness. Every speaker in the debate referred to high energy costs. It is the cost of doing business now more generally in Britain. It is the regulatory and taxation environment that makes heavy industry harder here than it is in competitor countries. Yet the Secretary of State for Energy Security and Net Zero appears more interested in driving forward an ideological net-zero agenda than in bringing industrial energy prices down dramatically. I cannot help thinking that, with his messianic zeal, he is doing more damage to the Government’s growth agenda than anyone else in Britain. Instead of cutting bills and taxes, abolishing the UK carbon border adjustment mechanism and giving energy-intensive industries a fighting chance, the Government seem preoccupied with regulating ever more aspects of economic life, from factories to household heating products.

We recognise that there has been a long-standing and serious problem with Jingye. We also recognise that there may now be legal proceedings. I do not ask the Minister to prejudice the Government’s position in litigation, but there are matters on which the House is entitled to clarity. Can the Minister confirm whether Jingye has asserted that, from 12 April 2025, the date on which the Government assumed control of British Steel, neither Jingye nor any company in the Jingye Group has any continuing obligation to British Steel? Can the Minister confirm whether Jingye intends to disaggregate British Steel from Jingye Steel (UK) Holding Ltd and remove assets, liabilities and other British Steel-related items from its own balance sheet? If that is correct, what is the Government’s assessment of the solvency position of British Steel itself?

If British Steel is continuing to trade only because the Government, directly or indirectly, are underpinning its working capital, does the Minister accept that this raises serious questions about the public accounts treatment of the support advanced since April 2025? Does it still make sense to treat that support as recoverable debt if the company cannot repay it without further taxpayer support? Do the Government now accept that, if British Steel continues to trade, the taxpayer may have to assume responsibility not merely for the working capital but for accumulated non-cash losses, balance sheet liabilities and forward obligations?

Will the Minister address the reported intercompany debt position? Jingye has been reported as quantifying outstanding British Steel debt to different Jingye counter- parties at hundreds of millions of pounds. If the Government acquire all the shares in British Steel and the company is not placed into insolvent liquidation, will the Government become responsible for those liabilities? Will the taxpayer be assuming the full built-up losses since 12 April 2025, losing the prospect of clawing back earlier support, and taking responsibility for future liabilities, including the eventual decommissioning of the blast furnaces?

In opening, the Minister talked about the premature closure of the blast furnaces, which the Steel Industry (Special Measures) Act was supposed to prevent. Have the Government commissioned a study of how much life the blast furnaces have left in them? It is important to ask that question and to know the answer, because it will have a material impact on the decommissioning costs, as and when they arise.

Can the Minister confirm whether our maths is correct on this? The National Audit Office has said that support for British Steel is expected to reach £615 million by June 2026, while Jingye is reportedly seeking compensation of more than £1 billion. Once potential compensation, operating support, working capital, administrative costs and future capital investment are taken together, is the taxpayer exposure now approaching £2 billion or potentially even higher? If that figure is wrong, will the Minister set out the Government’s current estimate of the total cost to the taxpayer, including any liabilities that may come on to the government balance sheet on day one of nationalisation? If the assets—a couple of 70 year-old blast furnaces—offset the liabilities, as the noble Lord, Lord Sikka, thinks likely, I have a couple of hats that I will eat.

As my noble friend Lord Hunt of Wirral set out so clearly, the Government came to office promising a £2.5 billion steel fund—a fund that was supposed to transform the sector, modernise production, support new technology and crowd in private investment. Yet there is now a real risk that this money will be consumed not by transformation but by rescue, as my noble friend Lord Redwood pointed out. Money that should have been used to modernise the sector, lower energy costs, support new technology and bring in private capital may instead be used simply to keep one loss-making business afloat. That leads to the question that has been asked repeatedly in this debate: where does this end? Will British Steel, under public ownership, be expected eventually to stand on its own two feet, or will taxpayers be asked year after year to fund operating losses, while Ministers promise that a solution is just around the corner?

The Bill says that the Secretary of State may exercise transfer powers only where he considers it necessary in the public interest. The noble Lords, Lord Sikka and Lord Fox, asked some good questions on what the public interest is and how it is defined. I look forward to the Minister’s answers to those. The Government say that public interest will include considerations of national security, the economy and critical infrastructure, but could Ministers be any more vague when they refer to the “economic interests” of the United Kingdom? Will taxpayer funding be limited or capped, or are Ministers asking Parliament to approve an open-ended commitment? Will the Government be required to show that they have made every reasonable effort to secure private sector investment before nationalisation proceeds?

It was uncomfortable and somewhat ironic to witness representatives of the Chinese ownership and the Chinese Communist Party lecturing the United Kingdom about abiding by market principles—although I note that the noble Baroness, Lady Donaghy, pointed out the irony of that as well. However, the Government must consider the signal that they are sending to international investors. If Ministers seize control, fail to secure a commercial settlement and then proceed to nationalisation without a clear compensation, exit or investment plan, how does that make Britain look to the next investor who is considering committing capital to a strategic industry here?

We also cannot ignore the wider business climate that the Government have created. As my noble friend Lord Hunt and others have made clear, the elephant in the room is the Employment Rights Act 2025. I know that Ministers are tired of hearing about it, but we are not going to stop raising it because it is helping to make the business environment less competitive and less investible. Combined with the increase in national insurance contributions, endless reporting requirements and carbon taxes, the Government are piling costs upon costs and burden upon burden on the very industries that they claim to want to support. For a steel sector that is already operating under intense global pressure, those additional costs are not abstract. They affect hiring, investment, margins, productivity and the ability of British steel-makers to compete. At precisely the moment when steel needs flexibility, lower costs and greater productivity, the Government are increasing the cost of hiring and handing still more leverage to trade unions.

It is no surprise that the unions have called for steel nationalisation. The concern is that the Government have given in to them. How will Ministers ensure that a national security asset is not left at the mercy of industrial action? The Government have removed important strike safeguards. What protections will exist to ensure continuity of supply for defence, infrastructure and critical manufacturing if British Steel is brought into public ownership? Are we seriously to place a strategic industrial asset under state control and then leave it vulnerable to the same union pressure that the Government have chosen to empower elsewhere?

The Government have had more than enough time to tackle the underlying problems—uncompetitive energy prices, rising employment costs, higher national insurance, excessive regulation, the burdens of the Employment Rights Act and the net-zero policy that too often ignores the realities of energy-intensive industry. The steel sector has been operating on a tight margin for years. Nationalisation does not make any of those problems disappear.

In closing, can I ask the Minister to answer the central questions: what is the total expected cost to the taxpayer? What is the plan for private investment? What is the timetable for restoring commercial viability? What is the exit strategy? What measures will the Government take to reduce the costs that made British Steel uncompetitive in the first place? Without answers to those questions, this Bill is not a serious strategy for steel; it is a costly exercise in papering over the cracks with nationalisation. We urge the Government to come forward with a serious plan—one that lowers costs, attracts investment, protects taxpayers and secures the long-term future of the British steel industry.

Steel Industry (Nationalisation) Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Monday 29th June 2026 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

1: Clause 1, page 1, line 6, leave out “of or including” and insert “predominantly of”
Member’s explanatory statement
This amendment seeks to narrow the definition of a steel undertaking so that it had to be a business consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel.

[Lord Sharpe of Epsom (Con)]

My Lords, Amendment 1, in my name and that of my noble friend Lord Hunt of Wirral, is very simple. It seeks to confine the powers in this Bill to genuine steel businesses. Those are undertakings consisting predominantly of the manufacture or processing of steel—or iron for the purposes of steel manufacture.

As drafted, the definition catches any business which merely includes steel-making as part of its operations. That is a very broad formulation. It could, in principle, sweep up a diversified business in which steel was only a minor part of what it does. Businesses with a limited connection to steel production should not face uncertainty about whether it falls within the reach of these nationalisation powers.

When this point was pressed in the other place, the Secretary of State was asked whether a business with only 1% of its operations in steel would be caught by Clause 1. He did not say that it would not be. However, a statement of intent is not a limit on the face of the Bill, and future Governments are not bound by the assurances of this one. The Government say that these powers are intended for British Steel, and British Steel is obviously and predominantly a steel business. Therefore, this amendment should create no difficulty for that purpose. If the Government’s intention is genuinely not to use these powers against businesses with only a peripheral connection to steel, they should have no difficulty in accepting this amendment. I beg to move.

[Lord Redwood (Con)]

My Lords, I fully support this amendment and hope that it will tease out from the Minister a little more about what the underlying purpose of the general legislation is, as I am not too enamoured of this becoming a fully nationalised industry with the ability to acquire all sorts of other steel interests.

I felt that the Government’s policy arose out of the circumstances of British Steel at Scunthorpe and the question of blast furnace-produced steel, where we are down to our last two blast furnaces. I did not think that the intention was to build an electric arc furnace set of businesses when progress has already been made in establishing these in the private sector and where there are plans in certain cases for government grant aid to achieve an electric arc steel additional business by that combination of subsidy assistance and private capital.

I hope that the Government will accept this quite substantial narrowing of such a broad piece of legislation, because there are many with general interests in steel whom we would not like to get caught up in this. I would also like clarification on whether there is any possibility that the Government might want to build a nationalised electric arc steel set of businesses. This would be an expensive and difficult proposition.

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

My Lords, I thank all noble Lords for their constructive engagement in advance of Committee, and for all the amendments and valuable contributions that they will make during it.

Amendment 1 in the names of the noble Lords, Lord Sharpe and Lord Hunt, seeks to introduce a narrow definition of a “steel undertaking”. I fully understand the purpose of the amendment, but the Government have no desire for these powers to extend beyond what is necessary. They are exceptional powers for exceptional circumstances and should be exercised only where Parliament intends.

I respectfully suggest that the amendment would not provide greater certainty; instead, it risks introducing greater ambiguity into the Bill. The proposed test, that a business must be “predominantly” involved in steel, immediately raises difficult questions, as alluded to by the noble Lord, Lord Fox, on how “predominantly” is measured. Is it turnover, assets, employees, production, profit or some combination of these? The amendment provides no answer. That uncertainty would inevitably invite legal challenge, precisely when swift and decisive action may be required. Businesses with significant steel operations could argue that they fall outside the definition, because steel is not their primary activity. Equally, complex corporate structures could be organised to make the test easier to avoid altogether. In seeking to narrow the definition, the amendment risks creating loopholes that undermine the legislation’s very purpose. The Government’s drafting avoids these difficulties; it provides a clear and workable definition that gives legal certainty, while ensuring that powers are used only when genuinely needed to protect the public interest.

For those reasons, while I appreciate the spirit in which the amendment was tabled, I cannot agree that it improves the Bill. I know this is not what the noble Lords intended and I can accept that the current drafting is broad, but this definition follows closely that used in the Steel Industry (Special Measures) Act and it ensures that there can be no disputes about its meaning. In practice, we do not expect many companies to fall within the current definition, so the amendment would have minimal effect.

I will repeat the Government’s position expressed throughout the Bill’s passage so far: we are strongly minded to use the powers to acquire British Steel if it is in the public interest to do so, and we do not have any plans to acquire any other steel undertakings. It is therefore very unlikely that this would be used for any other company, let alone one that is engaged primarily in non-steel activity. I hope this helps clarify the matter and respectfully request that the amendment is withdrawn.

[Lord Sharpe of Epsom (Con)]

I am grateful to all noble Lords who have spoken. It was remiss of me not also to thank the Minister and his team for their extensive engagement on the Bill.

This amendment is simple. I am afraid that I do not agree with the Minister’s comments or those from the noble Lord, Lord Fox. This is very straightforward. In fact, I refer noble Lords to the Merriam-Webster dictionary, which says that the word “predominantly”, in formal or technical usage, can denote a precise majority, such as more than 50%, or an even higher threshold, such as 60% to 80%, depending on jurisdiction. I am not an expert on which jurisdiction we are in, but it clearly means north of 50%. The way the Bill is written, as I pointed out, could allow for as little as 1%.

I have listened to the Minister’s objections to the wording of the amendment and am very happy to work on tightening it up, if he thinks that would help. The amendment is simple: it would confine the powers in the Bill to genuine steel businesses—that is, undertakings

“consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel”.

I think that answers most of the Minister’s objections, which, frankly, if they are relevant to my wording, are also relevant to the wording currently in the Bill, so I do not really believe in the ambiguity argument.

Businesses with a limited connection to steel production should not face uncertainty about whether they fall within the reach of these nationalisation powers. The present drafting does not provide that reassurance; it permits powers to apply to an undertaking that merely includes steel-making or related iron production, as I have already pointed out. I will not press the amendment for now, but I would like further discussions with the Minister, if he is amenable, to see whether we can find a way to tighten up the language so that it both suits the Government’s purposes and makes it clearer for all those undertakings that we are discussing. For now, I beg leave to withdraw.

Amendment 1 withdrawn.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to Amendments 30, 31, 43, 44 and 46 standing in my name and that of my noble friend Lord Hunt of Wirral. I thank the noble Lords, Lord Wigley—who I thought made a very powerful case—and Lord Fox, for their previous speeches.

Amendment 30 goes to the valuation of a steel undertaking and the need for that valuation to reflect the real commercial environment in which the undertaking will operate. That environment is not fixed; it is being shaped directly by government policy and, in particular, by the new steel trade measure coming into effect from 1 July. Only days ago, the Government changed the detail of that policy, relaxing the original proposals somewhat, with tariff-free quota reductions pulled back from the level first proposed. We will no doubt discuss that in more detail when the Statement is taken tomorrow, and I do not intend to rehearse that debate now.

However, the fact is that the Government’s choices on trade policy will have a material effect on the commercial position, and therefore the value of any steel undertaking. A tighter quota and a higher above-quota tariff will limit import competition. The way quotas are set will affect downstream industries, supply chains, customer relationships and the availability of particular steel products. The Government cannot, on the one hand, present their trade policy as central to the future of UK steel and, on the other hand, resist any requirement for that policy to be factored into what a steel undertaking is actually worth.

The need for clarity is made more acute by the uncertainty of recent weeks. Businesses have been trying to understand what the new quota levels will be, how quickly quotas may be exhausted, which products will be covered and what the practical effect will be for producers and steel-consuming industries alike. Do the Government accept that the new steel trade measure will affect the value of steel undertakings? If so, why should the independent valuer not be required to consider it?

On Amendment 31, electricity costs are among the central determinants of the viability, competitiveness and future value of steel. The position facing British industry is stark. The United Kingdom has had some of the highest industrial electricity prices in the developed world. UK industrial users pay substantially more than competitors in France and Germany, and—on the most widely cited international comparison—around four times as much as businesses in the United States.

For steel-makers, the gap remains significant. That is particularly serious as the sector moves towards more electricity-intensive production methods, including electric arc furnaces. A business may have the workforce, the plant, the orders and the ambition to modernise, but it cannot compete indefinitely if one of its principal inputs costs materially more than it does for its overseas competitors. These costs, I am afraid, reflect recent policy choices by the Government. The fact that the Government provided some limited relief from network charges to eligible energy-intensive industries rather demonstrates the point.

The Government now say that further measures will bring prices closer to those in competitor countries, but closer is not the same as competitive—and nor is a future scheme with questions of timing and eligibility still to be resolved an adequate basis on which to value a business today. This amendment would require the valuer to consider the prices paid by UK steel producers, the disparity with comparator countries and the effect of any support intended to reduce energy costs, including both the costs after existing reliefs and the risk that relief may be time-limited, incomplete or dependent on eligibility. It should also include a clear comparison with major competitor countries.

Is the Government’s objective genuine parity in industrial electricity prices with our principal competitors? If not, what continuing cost disadvantage do the Government consider acceptable for a strategic trade-exposed industry? How will the valuer assess the effect of support, which is prospective rather than guaranteed, particularly where broader measures are not expected to operate fully until 2027? The Government’s own impact assessment accepts the seriousness of this problem. It states that energy costs threaten the sector’s long-term viability and its ability to compete. It also acknowledges that UK steel producers face higher electricity prices than comparable countries, and that contributes to the uncompetitive production costs and pressure on margins.

On Amendment 43, as we raised at Second Reading, the Government’s impact assessment recognises the risk of a chilling effect on investment if businesses and investors perceive a greater risk of state intervention—a point very well made by my noble friend Lord Redwood in the last group. The United Kingdom has long depended on its reputation as a stable, predictable and rules-based place in which to invest. The risk is greater in the current climate. Steel businesses are already dealing with high electricity costs, rapidly changing trade policy and significant regulatory burdens. Adding an open-ended power of nationalisation can only increase the sense of risk for those considering whether to invest in the United Kingdom. If the Government are confident that their actions will strengthen confidence and attract private capital, they should have nothing to fear from transparency.

Amendment 44 addresses a basic point of fairness. If the Government take a steel undertaking into public ownership, that business must not receive selective advantages which place comparable privately owned steel businesses at an artificial disadvantage. Without this safeguard, there is a clear risk of distortion through subsidies, preferential access to public contracts, more favourable regulatory treatment or other support unavailable to private companies. The Minister in the other place stressed the need for flexibility and for the Government to act quickly, but flexibility need not mean unfairness. It is entirely possible to support a strategic undertaking in exceptional circumstances while maintaining a level playing field for the wider sector.

On Amendment 46, if we accept the Government’s central argument that British Steel is critical national infrastructure and that domestic steel production is essential to our national security and without it we cannot build our Navy, jets or submarines, they must accept the logic of what follows from that argument: you cannot declare something critical to national security then leave it defenceless. Amendment 46 states that, where the Secretary of State has exercised a principal transfer power where steel has been brought into public ownership precisely because it is in the public interest, the Secretary of State must have the power to prevent industrial action destroying the very thing that public ownership was meant to protect.

We have seen what happens when Governments are all too timid to act. We have watched the railways held to ransom by the RMT, and we have seen it in healthcare where the former Health Secretary himself felt compelled to call out what he described as “cartel-like behaviour”. The Government have made themselves more vulnerable still. The Employment Rights Act 2025 stripped away strike safeguards that existed for a good reason. The ballot thresholds are gone: the Government unlocked the door and then expressed surprise when it was pushed open.

If a steel undertaking is nationalised in the name of national security and a trade union then calls a strike that shuts down production, what will the Secretary of State do? Will he stand at the Dispatch Box and explain that our defence supply chains have been severed because he did not want to upset the unions? Do the Government seriously want domestic steel production halted because a union decides the moment of public ownership is the moment to press its advantage?

The Government cannot have it both ways: they cannot argue that steel is so vital to this country that it must be brought into public ownership and simultaneously argue that, once it is in public ownership, it should be just as exposed to industrial disruption as any other business. The whole point of this public interest test, if it means anything at all, is that some things matter too much to be left to the ordinary run of commercial risk. Industrial action that threatens critical national infrastructure is precisely such a risk.

I invite the Minister to tell the House that the Government have considered the risk. I invite him to explain what powers the Secretary of State would have on the day a strike is called at a nationalised British Steel to keep the blast furnaces lit. If he cannot answer that question satisfactorily, this amendment provides exactly the answer that is needed.

[Lord Redwood (Con)]

My Lords, I am grateful to my noble friend for raising the crucial issue of electricity prices. As the strategy is to convert more and more to electric arc furnaces, the price of electricity becomes the critical variant in determining how successful those businesses will be, how competitive their prices will be and whether they will generate cash and profit to reward those who ventured in them, or whether there will be problems for those businesses, just as there are problems in the British Steel carbon-based system through its blast furnaces. I hope the Minister can give us a little more background by way of reassurance, given that the steel strategy has been, and is still to be, based on electricity as the prime source of energy. There needs to be a policy that will consistently deliver competitive electricity prices because the current prices, without specific and targeted subsidy intervention, are way out of sync with the electricity prices in the more competitive world of our major competitor countries.

It is very important that this group of amendments raises the issue of tariffs. Of course, anybody valuing the assets that might be acquired under this legislation, or valuing what we already have by way of control and operating responsibility, will need to look at the impact of tariffs. It is a good idea to stress this because these are a very major change to the background for the conduct of steel businesses in this country, and we cannot be sure exactly what the impact is going to be. We have two types of impact arriving around the same time. There is the carbon border adjustment mechanism, which is, in effect, a fairly universal tariff based on the carbon content of imported material, which is clearly going to apply substantially to this industry. Then there are the specific tariffs which the Government have announced to come shortly, which target competitive steel coming into Britain with a very large increase in tariff and a rather low protected quota so that there will definitely be a substantial increase in cost for import.

You could argue, as I presume the Government do, that this is completely benign for our steel industry because it means that the combination of the immediate tariff and the soon to come CBAM tariff will make imported steel so much less competitive, and will therefore help reduce the pressures on our existing electric arc furnaces in the private sector and the two blast furnaces now, in effect, under the control—but not in the ownership—of the public sector. There will be some relief, as the policy intends. However, there can be other consequences which a valuer would have to take into account.

For example, the higher the cost of imported steel, the more difficult it will be for those many companies and industries that use and add value to steel in our wider steel-using industry. There will be limited scope for all users of imported steel to find exactly the right specifications of steel, and the right availability and pricing, from the rather limited-scale industry that the United Kingdom now has as a steel producer. There could well be financial difficulties, reductions in turnover and activity, or the collapse of steel-using businesses in the United Kingdom that face these very high tariff impositions on their main raw material. If they acquire more by way of import than at home and they cannot immediately substitute, you could have the paradoxical effect that the tariff designed to protect the British industry lost orders to the British industry as well as to the exporting industry from abroad. You could well have businesses here collapse—those that are substantial steel users but can no longer carry on the business efficiently to sustain their limited purchases from the UK, because of the cost of the expensive imports.

This needs careful policy examination. I am glad that the Government had one rethink about the tariff quota arrangements for this, but they probably need to do a bit more homework about the balance between the rather larger turnover at risk in steel-using businesses in the United Kingdom and the rather too small turnover available in steel production. They therefore probably need to consult a bit more widely over the medium- to longer-term impact on steel demand from domestic as well as imported sources.

I am interested in the proposals on impact on the economies, but I am not quite sure what is in mind and how it would work out. It is quite right, as the noble Lord, Lord Wigley, said, that there will have been impacts from previous closures or redundancies, and there could be future bad impacts as steel plants become more productive and need less labour, or as the final conversion is made from blast furnaces to electric arc, when there would clearly be a substantial loss of employment. There will need to be assistance and help for those who lose their jobs or have lost them in the past but still have not been able to retrain or find good alternative employment. One needs rather more by way of detail, and I am not quite sure that this Bill is the right place to do that, because it relates to a series of other government initiatives, funds and programmes that are more generally available. However, the noble Lord, Lord Wigley, might be right that they need to be improved. That is a subject for another conversation on another day.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the noble Lord, Lord Fox, for bringing forward these amendments. As he has observed, there are similarities with some amendments of ours and we are happy to work together to clarify them. He could also have said that Parliament will be acting at speed tomorrow on the National Security (State Threats) Bill from the noble Lord, Lord Hanson—so it can be done.

We have already raised significant concerns about the breadth of the public interest test in Clause 2. The amendments in this group go directly to those concerns. The noble Lord is quite right that, before such exceptional powers are used, Parliament should be told why nationalisation is considered necessary. It is also right that the Government should have to consider the effect on the public finances and whether the undertaking has any credible short-term and long-term prospect of being investable. A business may be capable of being kept open in the short term, but that is not the same as being viable, competitive or capable of attracting the investment needed for its future. The public interest also cannot be assessed without proper regard to the liabilities and continuing costs that may fall on taxpayers.

The Government’s approach so far has relied heavily on broad discretion and ministerial assurance. These noble Lord’s amendments would introduce greater transparency, discipline and realism into that process. For those reasons, we support them.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Fox and Lord Sharpe, for their contributions. I also thank the noble Lord, Lord Fox, for his constructive engagement over the past few weeks. I understand that he is trying to support the steel sector and the Bill while ensuring value for money, which is the Government’s objective as well.

Amendment 10 would require the Secretary of State to take into account the impact on the public finances when applying the public interest test. Of course, any decision to nationalise a steel undertaking should not be taken lightly, given the significant costs that could be incurred. However, the principle of securing value for money for the taxpayer is already well established and embedded in government decision-making, as I said on an earlier group. Any decision to exercise the powers in the Bill is subject to the usual Managing Public Money governance and the framework of accounting officer checks, which includes consideration of the impact on the public finances. I therefore respectfully suggest that incorporating the amendment into statute would not serve any particular purpose, but we are mindful of ensuring that costs associated with the Bill are well managed.

The noble Lord, Lord Fox, also proposes, in Amendment 11, that the Secretary of State should take into account the short-term and long-term investability of a steel undertaking when considering whether to intervene in the public interest. I understand the sentiment behind the amendment, but I do not think that investability should directly inform the public interest test.

If a steel undertaking is an investible prospect in the short term, it is unlikely that there would be a case for government intervention, as the need could be met by the private sector. The intention behind the Bill is not to crowd out private investment but to act where private ownership has failed. Whether a steel undertaking is investible in the longer term is highly speculative, so I do not think it would be particularly helpful for it to form part of the statutory framework for the decision. By intervening, the Government would hope to turn a steel undertaking that is not investible into something that may become investible. To the extent that this is what the noble Lord hopes to achieve, we share his ambition, but I do not think that the amendment is workable.

Amendment 7 would prevent the Secretary of State exercising the principal transfer powers until a statement explaining how the public interest test is met has been provided to Parliament. I am sympathetic to the desire for greater parliamentary and stakeholder scrutiny of any decision to intervene under the powers in the Bill.

As I said previously, the Government have published an impact assessment alongside the Bill, explaining how the public interest test will be considered. Any further impact assessment would be published alongside any secondary legislation exercising the transfer powers. The framework for the decision to intervene will stem from the three public interest factors included in Clause 2. The Government will consider not only whether a steel undertaking is engaged in activity that serves the public interest but whether that activity is at risk without government intervention.

The Government cannot support this amendment, as it would create additional hurdles and processes pre-intervention. In the kinds of situations that the Bill envisages, speed will be crucial, as I said previously. Likewise, commercial and market sensitivities mean that swift action will, in most circumstances, be necessary to avoid uncertainty; I take note of what noble Lords said about speed. None the less, I am aware that there are strongly held concerns about this issue and I confirm that, ahead of Report, the Government will consider options for Parliament to scrutinise decisions taken either at the time of or after the exercise of the transfer powers. I hope that this of some reassurance to the noble Lord and ask that his amendment be withdrawn.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

12: Clause 3, page 2, line 10, leave out subsections (3) to (5)
Member’s explanatory statement
This amendment seeks to prevent the Secretary of State extending the sunset of the principal transfer powers.

[Lord Sharpe of Epsom (Con)]

My Lords, I hope that this outbreak of agreement means that the Government will accept my Amendment 12. The Government have repeatedly spoken of a long-term plan for steel—securing private investment, increasing domestic production, safeguarding jobs and creating a viable future for the industry. Against that background, Clause 3 comes as something of a surprise. Earlier, the noble Lord, Lord Fox, indicated that he was somewhat reassured by its presence, but I suspect that its actual terms have escaped his usual vulpine scrutiny. A sunset clause is intended to place a clear limit on exceptional powers, but the Bill allows the Secretary of State to substitute, by regulations, a different period for the two-year limit.

Subsection (4) makes it clear that this can be done more than once. Therefore, in practice, the powers could be extended again and again, which gives no reassurance at all. Two years could become five years, 10 years or longer. That is not a meaningful sunset clause; it is a potentially perpetual sunset clause. It is an indefinitely renewable power.

What does that say about the Government’s confidence in their own ability to secure a viable private sector-led future for British Steel? If Ministers genuinely expect these powers to be exceptional and temporary, why do they require the ability to extend them without any stated final limit? This goes directly to the concerns raised throughout our debates—the risk of open-ended liabilities for taxpayers, uncertainty for investors and a lack of clarity about the Government’s intended endpoint.

The Constitution Committee of your Lordships’ House has considered this point and has been unequivocal. It said:

“The use of delegated powers to bypass sunset clauses undermines their purpose, and sets an unusual and unwelcome precedent”.


It recommended either that the final period of extension be set out in the Bill or that there should be a statutory time limit each time the power is used. This would not prevent the Government seeking additional time when there is a compelling case, but it would require Ministers to return to Parliament with a clear final boundary rather than retaining power capable of perpetual renewal.

Will the Minister accept the Constitution Committee’s recommendations and bring forward amendments before Report? Will the Government set a final limit on these powers and demonstrate that they have genuine confidence in securing a thriving, investible and private sector-led future for British Steel? I beg to move.

[Lord Fox (LD)]

My Lords, I see the point that the noble Lord, Lord Sharpe, has made, and I commend him for getting past this amendment before 9.21 pm, which is of course sunset.

[Lord Leong (Lab)]

I thank the noble Lord, Lord Sharpe, for his contribution. I note the Constitution Committee’s comments on this clause in its recently published report on the Bill. The inclusion of the sunset provision demonstrates the Government’s commitment to ensuring that powers remain on the statute book for as long as necessary to serve their purpose. Ultimately, we want to see the domestic steel sector return to a more sustainable and stable state in which government intervention is unnecessary.

As we have said, we do not currently see another use case beyond the possibility of British Steel. Therefore, we hope that noble Lords get their wish and there is no need to extend the sunset period. However, the current geopolitical landscape creates a volatile backdrop for this sector, making it difficult to anticipate what may transpire in the coming months and years. We have therefore built in some flexibility to extend or shorten the two-year sunset timetable if circumstances change. We consider this a reasonable precaution to take.

The drafting ensures that there will be full parliamentary scrutiny of any change to the sunset period through the affirmative procedure, meaning that parliamentarians will be able to test and debate any regulations brought by the Government to extend the sunset period. We anticipate needing to use this extension power only in extenuating circumstances. I therefore request that the amendment be withdrawn.

[Lord Sharpe of Epsom (Con)]

My Lords, that was a very brief debate, and I am grateful to the Minister for his response, but I am afraid I remain unconvinced. The Government say they want to secure a sustainable private sector-led future for British Steel. But a power capable of being extended repeatedly without any final statutory limit sends exactly the opposite signal. It risks making investors more, not less, cautious about committing capital to the sector. There must be a reasonable period that the Minister can identify and put in the Bill. If the Government genuinely regard these as exceptional and temporary powers, they should be willing to set out a clear limit.

The noble Lord cannot realistically blame external circumstances. There are always external circumstances. This has fallen foul of the Constitution Committee for very clear reasons, which it has set out. Speaking personally and from experience, I think it is unwise to fall foul of the Constitution Committee.

We urge the Government to take seriously the recommendation of the committee and either specify the final extension period in the Bill or impose a statutory limit on each extension. I think we will have to return to this matter at a later stage, but for now I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Steel Industry (Nationalisation) Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Wednesday 1st July 2026 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

16: Clause 44, page 28, line 16, at end insert—
“(3A) On the day on which this Act is passed, the Secretary of State must lay before Parliament a consultation document on the proposed exercise of the powers under this section.(3B) The consultation document must invite representations from—(a) every steel undertaking affected by the provisions of this Act,(b) trustees or managers of any pension scheme in respect of which such an undertaking, or a group company of such an undertaking, is or was an employer,(c) persons appearing to the Secretary of State to represent members and other beneficiaries of such schemes,(d) trade unions representing employees of such undertakings,(e) the Pensions Regulator, and(f) the Pension Protection Fund.(3C) Before making regulations containing provision by virtue of this section, the Secretary of State must have regard to the interests of members and other beneficiaries of affected pension schemes, including the protection of accrued rights and the security of benefits.”Member’s explanatory statement
This amendment requires the Secretary of State to lay a consultation document before Parliament on the day the Act is passed, consult affected steel undertakings and pension stakeholders, and have regard to scheme members’ and beneficiaries’ interests before exercising the pension powers.

[Lord Sharpe of Epsom (Con)]

My Lords, my apologies: I was asleep at the wheel, much like the England defence. I rise to speak to Amendments 16 and 17 in my name and that of my noble friend Lord Hunt of Wirral.

I thank the Minister for his letter on Clause 44 and for meeting us to discuss the Bill and the ways in which it may be improved. I welcome his confirmation that the Government’s intention is for workers’ pension benefits to remain unchanged, but where the Bill gives the Secretary of State powers to modify or apportion pension rights and liabilities, transfer accrued rights between schemes, and amend scheme terms, workers and pensioners need more than an assurance of present intent. They need a clear legal safeguard, which my Amendment 17 would provide. It would ensure that regulations made under Clause 44 could not reduce the value of accrued pension rights or benefits, nor make the terms on which benefits accrue less favourable in future.

Amendment 16 addresses consultation and engagement. It would require the Government to consult affected undertakings, pension trustees and managers, scheme members and beneficiaries, trade unions, the Pensions Regulator and the Pension Protection Fund, and to have regard to the interests of members and beneficiaries, including the protection of accrued rights and the security of benefits. The Minister suggested that full consultation before the use of these powers may not be realistic where urgent action is required. We understand the need to avoid delay where a transfer must take place swiftly, but urgency cannot mean that pension stakeholders are simply bypassed. If consultation cannot practically take place before a transfer, will the Minister commit to a prompt and meaningful consultation afterwards, and in any event before any further pension regulations are made? Will he also confirm that the Government will engage formally with the Pensions Regulator, the Pension Protection Fund, trustees, scheme members and their representatives, so that any necessary arrangements are made to protect members’ accrued rights and the long-term security of their benefits? I beg to move.

[Lord Fox (LD)]

My Lords, I, too, am confused, because I thought Amendment 20 was in this group.

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

My Lords, before I start, I am sure all noble Lords want to join me in wishing the England team the very best for the rest of the match this afternoon.

First, let me thank the noble Lord, Lord Sharpe, for his contribution and his amendments. Amendment 20, in the name of the noble Lord, Lord Fox, would require the Government to provide a statement to Parliament outlining the value of contingent liabilities and the steps they would take to minimise taxpayer exposure to them before an intervention. As I have set out previously, the Government are somewhat constrained in the procedural steps they can take before exercising the power in the Bill. This is why the transfer powers are exercisable by regulations subject to a negative procedure. We will likely be operating in a fast-moving commercial environment where intervention needs to be done at pace, and negative procedure transfer regulations do not require prior parliamentary approval before they take legal effect.

It is not appropriate to publish details of a private company’s contingent liabilities prior to nationalisation. If a steel undertaking is brought into the public sector, its financial position will rightly be subject to parliamentary scrutiny, including the publication of its annual report and accounts. Of course, the Government will take steps to minimise taxpayers’ exposure to liabilities wherever possible. Any decision to exercise the transfer powers will be subject to the usual principles of Managing Public Money and government approval processes.

Amendment 17, tabled by the noble Lord, Lord Sharpe, seeks to prevent any pension regulations from reducing accrued pension rights or benefits or worsening future pension terms. I thank the noble Lord for his amendment and understand his concerns that the Bill may adversely affect pension rights, benefits or terms for employees. I reassure the noble Lord that any use of these powers would be considered on a case-by-case basis, with the primary objective of ensuring alignment across pensions. These powers give the Government the flexibility to achieve this. Any changes to the terms would likely be due to regulatory changes where pension terms may need to be standardised or contributions adjusted. The Government would seek to consult regulators, unions and employees, where possible, on any future changes.

Amendment 16 seeks to require the Secretary of State to consult with affected steel undertakings and affected pension stakeholders before exercising the pension powers. To address the concerns raised by the noble Lord, Lord Sharpe, perhaps it would be useful to set out the Government’s intent behind Clause 44. Clause 44 is essential for managing the consequences of a transfer for pension schemes and for employees’ rights under a pension scheme. It enables the Government to make provision for pension schemes where the steel undertaking is or was an employer.

These powers are necessary and give the Government flexibility on a case-by-case basis to make suitable provision for pensions during the transfer. For example, the provision would enable the Government to modify terms in the event of regulatory changes where pension terms may need to be standardised upon transfer or contribution minimums adjusted. It also gives the Government flexibility on a case-by-case basis, if needed, to consider a fair division of pension liabilities between the transferer and transferee in complex transfers.

In the case of British Steel, if, after Royal Assent, the Government decided that nationalising British Steel was necessary in the public interest, this power would not be required. To the best of our knowledge, British Steel has a defined contribution scheme, so there is nothing to transfer or leave behind.

In relation to the requirement to consult before exercising these powers, I reassure the noble Lord that, wherever possible, the Government would seek to consult with regulators. However, a statutory duty to consult could delay the transfer of the pension schemes, causing uncertainty and concern among employees. That is exactly what the Government are trying to avoid. For those reasons, I do not consider this amendment necessary and ask for it to be withdrawn.

[Lord Sharpe of Epsom (Con)]

I am grateful to the Minister for his answers and to the noble Lord, Lord Fox, for correctly pointing out that I neglected to mention Amendment 20 on contingent liabilities. We will come back to that.

As regards Amendments 16 and 17, I am grateful for the Minister’s commitments, particularly on consultations where possible. Perhaps we could explore in another forum what potentially that will mean in practice. People’s pensions are their future and their security. It is vital that the Government ensure that workers’ pension rights are properly protected—I have no doubt at all that the Minister agrees with that—and that the relevant experts, regulators and representatives are fully consulted as these powers are exercised. We are merely trying to explore how that is done. I look forward to picking up that subject again in the future. For the present, I beg leave to withdraw Amendment 16.

Amendment 16 withdrawn.

--- Later in debate ---

[Lord Wigley (PC)]

My Lords, I am delighted to support the amendment moved by the noble Lord, Lord Fox, and to be following the noble Lord, Lord Redwood. I am sorry the noble Lord, Lord Hunt, is not in his place at the moment, but both he and the noble Lord, Lord Redwood, will be very familiar with a project that took place in north-west Wales 40 to 50 years ago now—the construction of the pumped-storage scheme at Llanberis by the CEGB. The reason that is relevant is that, in the very early days of that project, the CEGB was wise enough to pull together trade union leadership and the local authorities in a regular meeting to review issues that were arising. Over the 10-year period of the construction of that exciting project, only about a week was lost due to industrial difficulties. The company, the CEGB, was working with the workforce and the local community, and problems were sorted before they boiled up to triggering strikes and all the rest. It is motivated self-interest to have such an approach to bring in these forces: with good leadership coming from the company involved and, yes, from central government but also from local government and from the trade unions within the company involved, so many problems can be overcome before they cause difficulties and boil up to something that they do not need to be. I believe such an approach should appeal to the Government, and I am very glad to support the amendment.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Fox, for this amendment. He is quite right to point out that decisions about the future of a steel undertaking affect a wide range of sectors that rely on secure domestic supply, including defence, construction, advanced manufacturing and critical national infrastructure.

National security has, rightly, featured prominently throughout our debates. If the Government are relying on that argument to justify the exercise of these exceptional powers, it is surely right that those with responsibility for defence and critical infrastructure should have a voice in the wider policy discussion. The number of workers potentially affected in the broader and wider supply chain, as cited by both the noble Lord, Lord Fox, and my noble friend Lord Redwood, is staggering.

It is difficult to argue that the steel-using community is really being consulted, as the noble Lord, Lord Fox, pointed out; that is certainly true of the representations we are getting from members of that community. I urge the Government on this occasion to have a careful think about what this amendment is trying to achieve. It recognises, as the noble Lord, Lord Wigley, has pointed out, the importance of the workforce and of local communities. Workers, their representatives and local authorities will understand better than most the consequences of a transfer for jobs, skills, supply chains and of course the local economy. It is difficult to see how the Government can judge properly what is in the public interest without hearing from the workers, communities, industries and strategic sectors most affected by the decision. I look forward to hearing the Minister’s response.

[Lord Leong (Lab)]

My Lords, I am pleased to inform noble Lords that we have equalised—so come on, England!

I thank the noble Lords, Lord Redwood, Lord Wigley and Lord Sharpe, for their contributions. I am grateful to the noble Lord, Lord Fox, for tabling Amendment 22, which would require the Secretary of State to consult a stakeholder advisory committee before determining whether an intervention under the Bill was in the public interest. I fully understand the motivation behind the amendment. Decisions of this significance should be informed by expert views, and I have considerable sympathy for the desire for strong parliamentary and stakeholder engagement.

However, as I said in relation to earlier amendments, the Government cannot support a statutory precondition of this nature. The powers in the Bill are intended for exceptional circumstances in which events may be moving quickly and decisive action is required. Introducing a mandatory consultation process before intervention could delay action at precisely the moment when speed is essential to protect jobs, safeguard strategic capability and secure the future of a steel undertaking. In some cases, a delay could undermine the very purpose of the intervention.

Nor do I believe that establishing a statutory advisory committee is necessary to ensure that the Government receive expert advice. My ministerial colleague, Minister McDonald, regularly maintains contact and extensive engagement with the sector through a wide range of established forums. This includes the steel council, the steel council working groups, the metals circularity group and a programme of industry round tables. Alongside those formal structures, Ministers and officials regularly meet with steel producers, downstream users, trade associations, trade unions, recyclers and other stakeholders throughout the supply chain. These relationships provide the Government with a detailed understanding of the opportunities and challenges facing the sector and ensure that policy is informed by those with direct operational experience.

I am also pleased to inform the Committee that we will shortly be inviting the UK Metals Council, which I understand is the largest downstream user group, to join the steel council, so we are reaching out to downstream users too. This will strengthen the representation of downstream users and ensure that their perspectives are fully reflected in future discussions about the sector.

The Government firmly believe that sustained engagement with industry is essential to delivering our steel strategy, but there is an important distinction between ongoing engagement and creating a statutory procedural hurdle that could impede timely intervention when the national interest requires it. For those reasons, while I fully recognise the amendment’s intent, I do not believe it would improve the Bill and I therefore respectfully request that the noble Lord withdraw it.

--- Later in debate ---

[Lord Wigley (PC)]

My Lords, I want to speak briefly to Amendment 28, which deals with pension liabilities of the undertaking that has gone into state ownership. Some noble Lords will remember in our pensions Bill debates that we had the example of Allied Steel and Wire, where employees, who had been given all sorts of promises that they would be safeguarded, feel that they have been very badly let down. If the shadow of Allied Steel and Wire is to find its way to Scunthorpe, or any of the other locations where these questions may arise, the failure to safeguard the interests of those pensioners will militate against employees wanting to accept the course being taken by the Government unless provisions are written into the Bill of the sort provided by Amendment 28. There may be other ways of doing it, but certainly these assurances need to be given.

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the noble Lord, Lord Fox, for tabling these amendments, which raise an important point of principle. Where the Government are taking a steel undertaking into public ownership, the environmental, pension and other contingent liabilities which may fall on the taxpayer should be clear to Parliament and, of course, to the public. The Minister in the other place suggested that further disclosure was unnecessary because the Government already had a reasonably good understanding of the potential liabilities and that the independent valuer would take them into account, but that is not the same as ensuring that Parliament can see the likely costs before compensation is paid and further public money is committed.

I was very taken with my noble friend Lord Redwood’s comments about the environmental impact. From memory—and I might have this date wrong—I think the oldest of the blast furnaces dates back to 1939, so it is inconceivable that that site is not contaminated in some way, which we probably do not have any accurate historical records for.

I have also recalled the reason why I was a bit lukewarm on my own Amendment 20. I hate to say this, and I hope I never have to admit it again, but it is rather because I preferred Amendment 27 from the noble Lord, Lord Fox—a shocking admission to have to make.

Environmental remediation, pension obligations and historic liabilities can amount to very substantial sums. The Government are using taxpayers’ money, and Parliament should be able to scrutinise the liabilities assumed alongside the compensation and support provided. For those reasons, the amendments make a valuable contribution to transparency and accountability, and I look forward to the Minister’s response.

[Lord Leong (Lab)]

My Lords, just to update the Committee, we are 2-1 up.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

32: Clause 58, page 39, line 5, after “assistance” insert “of a total value of no more than £2.5 billion in the period ending on 15 August 2029”
Member’s explanatory statement
This amendment seeks to limit the financial assistance that can be provided under the Act.

[Lord Sharpe of Epsom (Con)]

My Lords, in moving this amendment, I will speak to Amendments 33 to 35, 40 and 41 standing in my name and that of my noble friend Lord Hunt of Wirral. These amendments address a basic question: if the Government are to provide financial assistance under these powers, what limit is there on the liability being placed on taxpayers? I heard what the Minister had to say in the previous group, but I will carry on regardless and probe a little further.

Clause 58 permits financial assistance in an exceptionally broad range of forms. This could be grants, loans, guarantees, indemnities, the acquisition of shares or assets, contractual payments or other expenditure. It is additional to any other funding powers available to Ministers. Yet the Bill contains no overall financial ceiling, no requirement for advanced detail to Parliament and no explicit statutory value-for-money test.

We understand the need for urgent support, but the Government’s stated objective is not permanent public subsidy but a viable, competitive, private sector led future for British Steel. That requires a business capable of attracting investors with capital, commercial expertise and a long-term commitment. To achieve that, public support must be disciplined, transparent and as limited as is consistent with the securing of the strategic objective. Otherwise, the Government risk creating a perverse incentive: a prospective purchaser may conclude that it need operate the business efficiently enough only to maintain access to public support, rather than to establish a genuinely sustainable commercial future. This would be an indefinitely subsidised business model, with the taxpayer carrying the risk.

Amendment 32 would place a £2.5 billion limit on financial assistance until August 2029. That figure reflects the Government’s own stated steel funding envelope in the steel strategy. Amendment 33 would provide a further test of proportionality by limiting assistance over five years to £1 million per employee. It is intended to ensure that support is targeted at transformation and viability, rather than becoming a substitute for a credible business plan.

Amendment 34 would require a detailed statement to Parliament before assistance is provided. Parliament should know the amount, form and recipient of support, its intended purpose and expected effect, and any conditions, repayment arrangements, guarantees, indemnities or other liabilities attached to it. That is particularly important where exposure may not appear as a simple cash grant. Guarantees and indemnities may create significant liabilities that only crystallise later. Taxpayers should not be asked to accept those risks without clear disclosure.

Amendment 35 would ensure that the Secretary of State is satisfied that financial assistance represents value for money. Value for money does not just mean ignoring strategic capability, national security, skilled employment or supply chain resilience. Ministers must weigh those against the costs, the liabilities, the alternatives and the likelihood that support will lead to a competitive business capable of standing on its own feet. In the other place, it was rightly argued that, if the Government believe in this intervention, they should be willing to set limits on it. Without such limits, taxpayers are simply being asked to sign up to an unlimited liability. The Government have already been providing working capital support and have been in discussion with potential private sector partners. Therefore, they should now have a clearer understanding of the likely financial assistance required, the risks involved and the route to a sustainable outcome.

I turn to Amendments 40 and 41. The Government have been providing monthly updates on working capital being provided to British Steel since the passing of the Steel Industry (Special Measures) Act 2025, which is welcome. It should be the same for financial assistance if British Steel, or indeed any steel undertaking, is nationalised. I beg to move.

[Lord Fox (LD)]

My Lords, Amendment 37 is in my name. This amendment covers concerns regarding the level of financial assistance but also focuses on the relationship between the United Kingdom and the EU. I think we covered this in a previous group on Monday, so I am not opening up that, but I have some contributions that I hope are helpful to the noble Lord, Lord Sharpe. I am still reeling from his bombshell on the last group, but bear with me.

Clause 52(1)(a) says that the Secretary of State must make regulations for compensation. Clause 57 makes those regulations subject to the affirmative procedure. However, Clauses 58 and 59, on financial assistance, do not have such requirements to make affirmative regulations. It seems that there is an asymmetry here. If the Government are prepared to use the affirmative procedure for the compensation process then why is there not an affirmative process for the financial assistance process? If the Minister was prepared to give ground on that then many of the discussions that the noble Lord, Lord Sharpe, wishes to have about financial assistance would be had during the discussion of the affirmative resolution. That is a helpful and, indeed, balanced way of dealing with this issue.

--- Later in debate ---

I hope I have been able to provide your Lordships with sufficient reassurance on this matter. I ask that the amendment be withdrawn.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to the Minister for his response, and I agree with him that the focus must be on operational challenges. But I think the Minister will have agreed very much with what my noble friend Lord Redwood said about cash flow. The Minister is a businessman and will know exactly what my noble friend was talking about. Therefore, the focus should not be solely on operational challenges; there obviously also has to be a very keen focus on the cash position. I would have thought that the transparency we are suggesting would aid the Government in that.

If one month is not right, as per Amendment 40, I am happy to have a conversation about what might be. But we think that 12 months is far too long a gap between reports. Far be it from me to help the Government in this regard, but I would have thought that it would minimise the potential for political shocks if there was a more of an ongoing dialogue with the British public about the state of play in any entity that is nationalised, as opposed to one-off bombshells on an annual basis—but I will leave that for the Government to ponder.

I am grateful to the noble Lord, Lord Fox, for his helpful comments about asymmetry—he is correct. I believe the Government’s heart may be in the right place on all this. We want to see growth, we want to see investment, and we want to secure jobs in the steel sector, but we are ultimately talking about taxpayers’ money. That is why we think there must be clear limits and proper discipline around this financial assistance. Support should not be simply open-ended with no clear ceiling, no transparent statements of exposure and no statutory tests of value for money. We would welcome further discussions with the Minister on how the Bill can better reflect those safeguards but, for the present, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

47: After Clause 60, insert the following new Clause—
“Exemption of iron and steel carbon border adjustment mechanism goods(1) Section 143 of the Finance Act 2026 (charge to carbon border adjustment mechanism) does not apply to emissions embodied in a CBAM good which is an iron and steel good for the purposes of Schedule 16 to that Act where the good is imported by a transferred steel undertaking for use in connection with the carrying on of its business.(2) In subsection (1), “transferred steel undertaking” means a steel undertaking in respect of which the Secretary of State has exercised a principal transfer power.”Member's explanatory statement
This amendment would exempt iron and steel CBAM goods imported for use by a steel undertaking brought into public ownership under this Act from the carbon border adjustment mechanism.

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to Amendments 47 and 48 in my name and that of my noble friend Lord Hunt of Wirral. These amendments address two costs which bear directly on the viability and competitiveness of a transferred steel undertaking: the carbon border adjustment mechanism and the United Kingdom emissions trading scheme.

Amendment 47 would exempt a transferred steel undertaking from the carbon border adjustment mechanism in respect of iron and steel goods imported for use in its business. Amendment 48 would disapply the United Kingdom emissions trading scheme in relation to installations forming part of such an undertaking. These amendments go to a wider question which has run throughout our debates: whether the Government’s approach will genuinely secure steel-making in this country or simply add further costs to an industry already exposed to intense international competition.

The Government’s impact assessment on the free allocation review makes the point. It accepts that reducing free allocations increases businesses’ exposure to carbon costs. It accepts that energy-intensive industries producing globally traded commodities are particularly vulnerable because they cannot simply pass those costs on to consumers. It also recognises the danger of carbon leakage—production, investment, jobs and emissions moving overseas, rather than emissions genuinely being reduced. The assessment says that the traded carbon price could be approximately £25 per tonne lower by 2030 if free allocations do not fall in line with the industry cap.

This is a policy choice, and it has consequences for industry. The steel sector has warned of the effect of reducing free allocations. It has described the proposed changes as an “earthquake moment”. The Government must listen to that warning. CBAM can affect imports into the domestic market; it does not protect a United Kingdom producer competing in export markets. Moreover, higher costs can be passed down the supply chain to downstream manufacturers, reducing their competitiveness and risking the relocation of activity and jobs abroad.

We have now seen the Government introduce new trade measures with substantial tariffs and lower quota volumes. The Minister in the other place, Chris Bryant, said:

“We are determined to make sure that we have a proper steel production industry in the UK, and that means that we have to take some tough measures”.—[Official Report, Commons, 30/6/26; col. 767.]


But thus far the tough measures appear to fall on downstream manufacturers and therefore, inevitably, on British consumers. The Government cannot impose new trade barriers and costs on those who use steel while also increasing carbon costs for domestic producers, and then claim to have solved the competitiveness problem. When will they get tough on the ideological net-zero policies which are imposing substantial costs on the steel industry?

The Government need to make a clearer choice. Do they want a steel sector which can compete, invest and employ people in the United Kingdom, or do they want to continue a policy framework which makes domestic production more expensive and pushes activity overseas? This is particularly important as they pursue electric arc furnace production. If they want greener steel, they must ensure that the electricity required to make it is available at a competitive price. It is no good requiring industry to electrify while maintaining a policy environment in which power and carbon costs make that transition commercially unviable.

The Government should not use nationalisation to shield themselves from the consequences of their own industrial and environmental policies. They should instead create the conditions in which steel can be produced competitively in Britain, with lower energy costs, realistic carbon policy and a serious commitment to preventing industrial activity leaving our shores. I beg to move.

[Lord Redwood (Con)]

My Lords, I support my noble friend. I have also referred to this in past interventions, so I need not say very much. Looking at the tragedy of the British steel industry under successive government policies, there is no doubt about it: the very high energy costs, carbon taxes, emission trading arrangements and CBAM coming in are the main reasons why we are not competitive and we have had this colossal collapse. If the Government will not accept that, they will never have a successful steel industry.

[Lord Leong (Lab)]

My Lords, I am grateful to the noble Lords, Lord Sharpe and Lord Hunt, for their thoughtful amendments on the UK emissions trading scheme and the carbon border adjustment mechanism and their impact on the steel sector.

A common theme across these amendments is the proposal that a publicly owned steel undertaking should be exempt from one or both of these measures. I understand the concerns that have been raised about the sector’s competitiveness and the costs faced by steel producers. However, I must be clear that the Government cannot support this approach. We remain firmly committed to industrial decarbonisation and to securing a competitive, sustainable and low-carbon future for the UK steel industry. The UK cannot build a resilient steel sector by exempting it from the very policies designed to support the transition to cleaner production and to create a level playing field against higher-carbon imports.

The UK emissions trading scheme and the carbon border adjustment mechanism are complementary policies. Together, they encourage investment in cleaner production, while ensuring that UK producers are not undercut by imports from countries with lower environmental standards. Exempting a publicly owned steel undertaking from these measures would not only undermine those objectives but create an uneven regulatory framework within the UK steel sector. With this in mind, I will turn to the amendments tabled by the noble Lords, Lord Sharpe and Lord Hunt.

Amendment 47 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the noble Lords’ concern that CBAM will increase the cost of imported products for steel undertakings. However, I emphasise that the CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It will give industry the confidence to invest in the UK, knowing that its decarbonisation efforts will not be undermined. CBAM makes no exemptions for particular UK firms. Its intent is to target the problem of carbon leakage and ensure that highly traded carbon-intensive goods from overseas, including steel, pay a comparable carbon price to that paid by UK manufacturers.

Amendment 48 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this also imposes a cost on activities that have significant emissions. However, as with Amendment 47, accepting Amendment 48 would provide preferential treatment based on ownership and undermine a level playing field across the industry. The transition to low-carbon steel must be fair, credible and consistent across all operators, whether publicly or privately owned.

I emphasise that the ETS includes targeted protections for energy-intensive, trade-exposed industries, including steel. Further protections will be introduced through CBAM from 2027. It is for these reasons that I cannot support these amendments and ask that they not be pressed.

[Lord Sharpe of Epsom (Con)]

I am very grateful to the Minister, but I have to admit that I am very disappointed in his response, and I wonder if he is a bit disappointed in the response that he had to give. It seems to me that you can either have decarbonisation or have a competitive steel industry, but at this precise moment in time you cannot have both; at this precise moment in time, they are mutually exclusive. That is not to say that we should not pursue net zero in the future—of course, we should—but this is a particularly exposed industry at a particularly critical time.

Steel Industry (Nationalisation) Bill

Lord Sharpe of Epsom Excerpts

Report stage
Wednesday 8th July 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

I rise to speak to Amendment 11 in my name and that of my noble friend Lord Hunt of Wirral. It is vital, as we have said throughout our consideration of this Bill, that there is clarity about the liabilities which may be acquired when the Government exercise a principal transfer power. That is particularly important in relation to environmental liabilities. Steelworks are substantial and long-standing industrial sites and any environmental liabilities associated with the transfer could represent a significant future cost to the taxpayer.

I am very grateful to the noble Lord, Lord Fox, for his amendments in this group, which rightly focus on the need to consider the public finances. We have consistently raised the issue of the costs associated with share and property transfers and pension liabilities when compensation is assessed. I thank the Minister and the Government for their engagement on these amendments, and I look forward to hearing what the Minister has to say and hope that at least some of these amendments will be accepted.

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

My Lords, before turning to the amendments before us, I begin by placing on record my sincere thanks to the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for the constructive and collegiate way in which they have engaged throughout the passage of this Bill. We have not agreed on every point, but their contributions have been thoughtful, serious and rooted in a shared recognition of the importance of the UK steel industry. I am grateful for the time they have taken to meet with me to test the Government’s position and, for raising their concerns in such a fair and friendly spirit.

Responding to the points raised in this group, I will speak first to Amendments 7 and 9 in the name of the noble Lord, Lord Fox. Over the course of this Bill’s passage, I have had ongoing and constructive conversations with the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, about the cost of nationalisation and the importance of parliamentary scrutiny. The noble Lords and I agreed that the Government must consider the costs of any nationalisation before exercising the powers. As I have stated to this House previously, existing public spending governance controls provide for this, with cost and value-for-money considerations embedded in the Managing Public Money principles and the well-established process of accounting officer tests.

However, the noble Lords have sought a statutory requirement on the face of this Bill. Through our conversations, I have been persuaded by their arguments, and I am pleased to say that the Government will support the amendment of the noble Lord, Lord Fox, which requires the Secretary of State to consider costs before exercising the share or property transfer powers in Clauses 4 and 15. We hope the House will agree. Our agreement on this issue reflects the commitment of noble Lords to ensure that this Bill is as comprehensive and effective as possible. It is an excellent representation of this House’s ability to work collaboratively, and I thank the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, for their engagement on this issue.

The noble Lord, Lord Fox, has also put forward Amendment 1, which would require the Secretary of State to have regard to the public finances when considering exercising the principal transfer powers. Given that the purpose of this amendment is achieved through Amendments 7 and 9, I do not think this is necessary in addition.

The noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, have tabled Amendment 11, which would require the Government to provide a statement to Parliament outlining the value of contingent liabilities associated with a steel undertaking, and the steps taken to minimise taxpayer exposure to them, prior to an intervention. As I have set out previously, I have concerns about creating additional hurdles that must be cleared prior to the exercise of the transfer powers, given the likely need to act at pace. There is also a practical difficulty in publishing the details of a private company’s financial information prior to a nationalisation. None the less, the Government share the desire of the noble Lords to minimise the taxpayer’s exposure to liabilities as far as possible, and that will inform our decision-making. If a steel undertaking is nationalised, we would expect its annual report to include details of its liabilities, where relevant. We will discuss liabilities again in later groups today, and I look forward to that discussion. I hope that that helps to clarify the matter and provides the noble Lords and the rest of your Lordships’ House with sufficient reassurance.

Amendment 24, tabled by the noble Lord, Lord Fox, requires that where the Government have exercised the transfer powers, the independent valuer must prepare a written estimate of a steel undertaking’s pension liabilities and provide that to the Secretary of State, who should then publish the estimate before Parliament. Pension liabilities will of course differ for different companies. If the Government were to decide that it was in the public interest to nationalise British Steel, I reassure noble Lords that our understanding is that there would not be significant pension liabilities, as the company has a defined contribution scheme and so pensions would be funded from an existing pot. In cases where pension liabilities are relevant to the value of a steel undertaking that is subject to the powers under the Bill, the independent valuer should consider that as part of their assessment. None the less, publishing this in isolation would be unhelpful without the full context. The Government have already committed to publishing the outcome of any compensation scheme. Therefore, I do not consider this amendment necessary.

I hope I have been able to reassure noble Lords, even though there are amendments in this group that I do not support.

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Moved by

[Lord Sharpe of Epsom]

6: Clause 3, page 2, line 11, leave out from “regulations” to end of line 12 and insert “extend that period for a further period not exceeding two years beginning with the end of that period.”
Member’s explanatory statement
This amendment would retain the ability for the Secretary of State to extend the principal transfer powers, but only in increments of up to two years at a time and only with the approval of both Houses under the affirmative procedure.

[Lord Sharpe of Epsom (Con)]

My Lords, these amendments stand in my name and that of my noble friend Lord Hunt of Wirral. As we stated in Committee, we cannot have a perpetual sunset clause. A sunset that can be extended indefinitely and for an unlimited period at a time is not a meaningful sunset at all.

I welcome the Minister’s engagement on this aspect of the Bill. The amendment would provide an important safeguard by ensuring that any extension of the principal transfer powers can be for no more than two years at a time. That would provide greater certainty for investors, greater assurance for taxpayers and a clearer expectation that these exceptional powers are not intended to become a permanent feature of the Government’s industrial policy. It is also important that we have a Government who are confident in their stated aim of securing private investment for British Steel so that it can thrive on a commercial basis. Regular parliamentary approval for any extension will help to ensure that Ministers continue to focus on that objective.

I thank the Government for recognising these concerns and for working constructively with us to ensure that this amendment can be accepted. I beg to move.

[Lord Redwood (Con)]

My Lords, two years is quite enough for these powers, and it is generous of my noble friend to suggest allowing another two-year extension. As I understand it, these steel matters are being considered under a £2.5 billion multiyear estimate, which was meant to be for the modernisation of the steel industry. When it was originally agreed, people had in mind that this was going to be grant aid for new electric arc furnaces and other such investments—not to pay continuous and high losses on an older technology plant that may not have the long future we would like.

To get into better order with the Treasury, the Government might want to have some self-imposed restraint on the duration of this. We have been led to believe that the rate of loss is at least £500 million a year on the two blast furnace activities that are currently under the Government’s control but not in their ownership. That would be a totally unacceptable continuing rate of loss and would eat into what should be modernisation money. That would mean they would get to the end of this Parliament with very little improvement to show.

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Moved by

[Lord Sharpe of Epsom]

6A: Clause 3, page 2, line 13, at end insert “, but may not be exercised so as to substitute a period that ends more than 2 years after the end of the period for the time being specified in subsection (1).”
Member’s explanatory statement
This amendment would provide that, where the Secretary of State extends the period during which a principal transfer power may be exercised, the extension may not be for more than two years.

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Moved by

[Lord Sharpe of Epsom]

12: Clause 39, page 25, line 32, leave out “the negative procedure” and insert “—
(a) the affirmative procedure, or(b) if the Secretary of State thinks it necessary to make regulations without using the affirmative procedure, the made affirmative procedure.”Member’s explanatory statement
This amendment would upgrade, from negative to affirmative or in some cases made affirmative (see clause 61), the procedure for regulations about consideration and terms for the performance of continuity obligations (see clauses 33 to 38).

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Moved by

[Lord Sharpe of Epsom]

13: Clause 45, page 28, line 37, leave out “negative” and insert “made affirmative”
Member’s explanatory statement
This amendment would upgrade, from negative to made affirmative (see clause 61), the procedure for regulations about the enforcement of obligations under share transfer or property transfer regulations.

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[Lord Fox (LD)]

My Lords, that was a very positive response from the Minister, and I thank him and his team for really listening to what we have been saying. Amendment 17 is an important step forward and I am pleased that he has tabled it. Amendment 21, as the Minister pointed out, makes something that might happen mandatory, taking on board fully the issues raised on another group by the noble Lord, Lord Redwood, and absolutely taking on board the issues I raised in Committee. I thank the Minister for his enthusiasm and look forward to this being added to the Bill.

[Lord Sharpe of Epsom (Con)]

My Lords, I echo my noble friend Lord Hunt’s comments on the previous group. I thank the Minister for his engagement, and the Minister and the noble Lord, Lord Fox, for their amendments in this group. Amendment 17 is very welcome. It ensures that compensation regulations must provide for valuations to be carried out by an independent valuer rather than leaving that as an optional feature of the scheme.

I also welcome the Government’s work with opposition parties to ensure that relevant liabilities are properly reflected in the valuation process. In particular, Amendment 21 ensures that environmental and health and safety liabilities must be taken into account, as my noble friend Lord Redwood powerfully articulated on an earlier group.

[Lord Redwood (Con)]

My Lords, I too welcome this from the Government. I think they will find it very helpful because, should we move on to the full acquisition of British Steel at Scunthorpe, there remain, as I understand it, financial issues outstanding with the current Chinese owners. It will be very important to have an accurate and full account of all these long, deep-rooted and sometimes very expensive liabilities to provide some counter to what we read in the press is their rather extravagant idea of how much they ought to be paid.

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Moved by

[Lord Sharpe of Epsom]

38: After Clause 60, insert the following new Clause—
“Report on the impact any nationalisation of steel undertakings has had on inward investment to the United KingdomWithin six months of the day on which this Act is passed and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”Member’s explanatory statement
This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to Amendments 38 and 39, standing in my name and that of my noble friend Lord Hunt of Wirral. On Amendment 38, I hope that the Minister can give a clear assurance that the future impact assessment will include an assessment of the effect of nationalisation on investment in the domestic steel sector.

On Amendment 39, the Minister gave assurances in Committee that financial assistance would comply with domestic and international subsidy control rules. I would be very grateful if he could put that reassurance more clearly on the record. Could he please confirm that the Government have assessed whether any proposed support could give rise to concerns under the domestic subsidy control regime, including any conversations that they have had with the Competition and Markets Authority? Could he also confirm that Ministers are satisfied that the proposed support will comply with the World Trade Organization’s subsidy rules? I look forward to the Minister’s response. I beg to move.

[Lord Leong (Lab)]

My Lords, the amendments in this group address inward investment and a level playing field. I emphasise at the outset that the Government are committed to ensuring that any publicly owned steel undertaking is subject to the same requirements and standards as any privately owned steel undertaking.

Amendment 38, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would place a duty on the Secretary of State to report to Parliament on the impact of any nationalisation of a steel undertaking on inward investment in the UK. I reassure your Lordships that the Government are committed to revitalising the steel sector and to establishing an investible and competitive business environment. To date, we have had positive feedback from industry on the Bill and the Government’s approach to nationalisation.

To be clear, public ownership is not an end in itself; it is a means of safeguarding our strategic domestic capability in exceptional circumstances. Our intention behind any intervention would be to make the changes necessary to put the steel undertaking on a sure footing and, where possible, return it to a position where it could attract private investment.

As I have set out previously, any use of the transfer powers would require an impact assessment. This would set out the impact of a nationalisation on the economy and, where appropriate, the Government would undertake post-implementation reviews. As I have confirmed, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent.

Amendment 39, again in the names of the noble Lords, Lord Sharpe and Lord Hunt, seeks to require the Secretary of State to maintain a level playing field between publicly and privately owned steel companies. I sympathise with the concern expressed by the noble Lords and want to make it clear that the governance and regulatory treatment of any nationalised steel company will seek to ensure a level playing field.

To emphasise this, I state that any financial assistance would be time-limited, targeted and proportionate to avoid market distortions. The provision of any funding would comply with domestic and international subsidy control obligations. I hope this reassures noble Lords that the Government are committed to ensuring that any publicly owned steel undertakings will not be unfairly advantaged.

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the Minister for his remarks. It was particularly pleasing to hear that the Government have received positive feedback from the industry. It is not for now, but I wondered whether the Minister might be in a position to be a little bit more specific and perhaps write to noble Lords who have taken part in the debate, outlining some of those positive comments. That would help to contextualise our future debates. I am also pleased, as we have discussed in earlier groups, that we will deal with post-implementation reviews and that there will be a debate within 12 months in both Houses. That is a very welcome development.

As regards Amendment 39, I listened to what the Minister said. I am particularly pleased that he assured us that the Government will seek to pursue a level playing field quite explicitly and to avoid market distortion. Those are incredibly important things for so many reasons, particularly when it comes to encouraging inward investment and ensuring that existing operations are not disadvantaged by anything that the Government do on behalf of the taxpayer. In the light of those assurances, I beg leave to withdraw my amendment.

Amendment 38 withdrawn.

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Moved by

[Lord Sharpe of Epsom]

44: After Clause 60, insert the following new Clause—
“Industrial action affecting a transferred steel undertaking(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State may prohibit or restrict industrial action affecting that undertaking if the Secretary of State considers that the industrial action creates, or is likely to create, a sufficient risk to the public interest in respect of which the principal transfer power was exercised.(2) An act done in contravention of a prohibition or restriction under subsection (1) is not protected by section 219 of the Trade Union and Labour Relations (Consolidation) Act 1992 (protection from certain tort liabilities).(3) Industrial action in contravention of a prohibition or restriction under subsection (1) is not protected industrial action for the purposes of section 238A (participation in official industrial action) of that Act.”Member’s explanatory statement
This amendment would enable the Secretary of State, following the exercise of a principal transfer power, to prohibit or restrict industrial action only where it creates a sufficient risk to the public interest grounds on which the steel undertaking was brought into public ownership.

[Lord Sharpe of Epsom (Con)]

My Lords, when we debated this amendment in Committee, the Minister suggested that it was somehow about industrial relations. It is not. This amendment is about our national security. The Prime Minister himself has warned the House and the country that we may face aggression from Putin’s war machine against a NATO ally before the decade is out. Let that sink in. It is not “if” but a real and growing risk, on our watch, in this decade.

What is the Government’s answer when it comes to the very steel from which we forge our warships and our defences? Their answer, apparently, is that production could grind to a halt whenever a strike is called—no matter the stakes, no matter the moment, no matter who benefits from Britain’s weakness. This amendment does not abolish the right to strike. Let no one on the Benches opposite pretend otherwise. It says something far narrower and far more reasonable: that, where the Secretary of State has taken a steel undertaking into public ownership precisely because of its importance to the public interest, industrial action which threatens that public interest cannot simply proceed as though nothing were at stake. Where the risk is sufficient and where the ground for public ownership was the public interest itself, the Secretary of State may act to protect it.

We are told again and again that this Bill is about safeguarding a strategic national asset. Very well, we accept those arguments—but let us mean them. You cannot claim with one hand that steel production is too vital to be left to the market and with the other hand leave that same production exposed to disruption whenever it suits a dispute wholly unconnected to the nation’s defence. You cannot have it both ways.

If a strike stopped the plates and the girders needed for a Royal Navy hull at the very moment that the Prime Minister’s own warning came to pass, would the Government stand by, hands tied by statute, and watch it happen? If the answer is no, the Government should accept this amendment today rather than legislate the problem into existence and hope it never arrives.

In an earlier group, the Minister used as a defence how difficult the industry is and the massive external pressures that it faces. This is an issue that is within the Government’s potential control. They should accept this amendment. We on these Benches are not afraid to say what needs to be said. In an uncertain and dangerous world, national security must remain a priority. I urge the Government, in the interests of national security, to accept this amendment. I beg to move.

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Sharpe, raises a serious issue. There was a moment when I thought I had passed through the looking glass. Your Lordships on that side of the House were sitting on this side, and those Lordships who were here were sitting on that side of the House. The only thing that broke me from that reverie, far from it being the noble Lord, Lord Sharpe, at the Dispatch Box, was the noble Lord, Lord Callanan. He was proposing the Strikes (Minimum Service Levels) Act 2023, with which the Government of the day sought to do exactly as the noble Lord, Lord Sharpe, seeks with this amendment.

I ask the noble Lord, Lord Sharpe, how many times that Act was applied. How effective was it? The issue that he raises is important. Of course the security of the country is important, but this is not the way to ensure the security of our country. Having a proper partnership with the workers in the industry is the way in which you secure the security of this country.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Fox, for those words. As this is the last group of amendments, I thank all noble Lords for their constructive approach to the scrutiny of this Bill. In particular, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for taking the time to meet me over the last few weeks. The way in which we have been able to collaborative to refine and improve the Bill truly shows your Lordships’ House at its very best.

Amendment 44 is in the names of the noble Lords, Lord Sharpe and Lord Hunt. Before I speak to it, I state that the Government take national security seriously; it is a priority. The amendment seeks to prohibit or restrict industrial action where there is a sufficient risk to the public interest grounds on which the steel undertaking is brought into public ownership. I understand that the intent of this provision is to ensure that any publicly owned steel undertaking can operate effectively without delay.

However, this is not the appropriate means to achieve this goal. I emphasise the absolute importance of workers’ rights. The steel workforce is the backbone of this industry. This Government are committed to protecting their rights and working with the trade unions and the workforce to ensure that operations are as effective and secure as possible. Noble Lords will know that I was closely involved in the delivery of the Employment Rights Act. Workers’ rights is an issue that is close to my heart. While political differences remain, we are not in the business of counterproductive approaches to industrial relations. As part of delivering the Employment Rights Act, our plan to make work pay, we are continuing to consult with businesses, trade unions and civil society to make sure we get the detail right. Several consultations are still live, including on reforms to zero-hours and similar contracts. This amendment is neither necessary nor appropriate to ensure that a publicly owned steel undertaking can operate effectively.

I hope I have convinced noble Lords of the reasons why the Government cannot support this amendment. I therefore respectfully ask that it be withdrawn.

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the Minister for his response and, in particular, for the recognition of the central importance of national security in this matter. That is very welcome, but recognition is not the same as resolve. If the Minister truly accepts the force of the argument, the surest way to demonstrate that is not warm words at the Dispatch Box but acceptance of the amendment. I gently say to him that he could have strengthened his own case considerably by doing just that.

I am grateful to the noble Lord, Lord Fox, for pointing out my party’s admirable consistency, which sometimes we are criticised for. I suggest that nothing in this amendment would prevent any sort of proper partnership—to use the noble Lord’s words—with the workforce, which of course we would approve of and endorse as a first and foremost. The simple fact of the matter is that this is a different set of circumstances. We are talking here about the national interest and national security. They are of fundamental importance as regards this entire Bill, and that is why we have proposed this amendment.

To finish there would be to finish on a slightly discordant note, and I do not wish to. I am enormously grateful to the Minister for all his engagement and for accepting so many of our arguments. We are very grateful for the reassurances we have received from the Dispatch Box and the acceptance of some of our amendments, and we wish the Minister well in his future endeavours. I beg leave to withdraw the amendment.

Amendment 44 withdrawn.