Defence: British Steel

Lord Sterling of Plaistow Excerpts

Tuesday 30th April 2019 Lords Chamber

[Earl Howe]

The noble Lord is absolutely right to point out that the UK steel industry has faced major challenges over the past three to four years, in particular from international competition and high infrastructure costs. Those challenges continue. But steel is one of this country’s foundation industries, which is why we have supported the sector in a variety of ways. As it is an energy-intensive industry, we have made provision to support any additional costs incurred by carbon-reduction policies; we have the industrial strategy challenge fund; we are reviewing business rates; and we were instrumental in securing antidumping measures through the EU. Also, wherever possible, across government we attempt to buy British when it comes to steel.

[Lord Sterling of Plaistow (Con)]

My Lords, in 2014 I commissioned a special document from the London colleges in connection with the value of defence procurement being sovereign and not overseas. The suggestion I read on Monday—that these three ships will be designated supply ships and therefore should be open to competition—is to my mind complete nonsense. In practice, they are supply ships going into action and have to be armed. Four of the countries of Europe, including France, are building very similar ships, which are designated as warships. It is absolutely ridiculous to consider otherwise. Also, it supports the view on steel, because some 100,000 tonnes of steel is involved. Further to that, it leads to jobs and, on the education side, continues the drumbeat that we need to build up the manufacturing companies. Will the Government re-examine this issue? This is another example of the Treasury being in love with cost and not value for money.

[Earl Howe]

My Lords, I am afraid I cannot entirely agree with my noble friend. It is undoubtedly true that the Armed Forces benefit from the UK acquiring military capability from an open market. Competitive procurement ensures that we drive innovation and efficiency into our industrial base. UK suppliers’ drive to be competitive in their home market will ultimately secure their prosperity, not only in the UK context but in the global marketplace as well.