Steel Industry (Special Measures) Act 2025

Thursday 23rd October 2025 Lords Chamber

Motion to Take Note

12:20

Moved by

[Baroness Lloyd of Effra]

That this House takes note of the Steel Industry (Special Measures) Act 2025.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Lloyd of Effra) (Lab) (Maiden Speech)]

My Lords, it is an enormous honour to address your Lordships’ House for the first time, in introducing today’s debate on the future of the steel industry. I start by thanking all those who have welcomed me: the Garter King of Arms, the Clerk of the Parliaments, Black Rod, their excellent teams, and the doorkeepers, who have already had cause to gently shepherd me in the ways of the House for the misdemeanour of trying to take notes when I came in below the Bar to observe noble Lords at Oral Questions.

I have heard much about the civility and respect in this House, and these values are important to me—the principle of airing arguments and debating positions openly and without rancour. I thank my supporters last week—my noble friends the Leader of the House, Lady Smith of Basildon and Lady Armstrong of Hill Top—and the Front Bench team for their support, particularly my noble friends Lord Leong, Lord Collins of Highbury and the Chief Whip, my noble friend Lord Kennedy of Southwark. I pay tribute to my predecessor, my noble friend Lady Jones of Whitchurch, for her tireless work on enshrining rights for decent work and embedding online safety rules, among many other areas. I am stepping into very big shoes.

On the face of it, there is perhaps not much that links my journey to this place with the steel industry. Perhaps, though, the common thread is the importance of the public and private sectors working together, and the importance of ensuring that our economy is providing decent jobs for all. For almost two decades, I have worked in the private sector and in development finance, latterly with British International Investment, the UK’s development finance institution. We focused on the dual mandate of providing a return to the taxpayer with measurable development impact. The business’s finance in emerging markets spans major renewable infrastructure supporting the green transition, manufacturing, and bringing added value to modern methods of agriculture, all underpinned with high ESG standards.

I have had the pleasure of seeing what access to the internet can bring to women business owners in Nepal, the connectivity that upgraded port infrastructure can bring to businesses in Africa, and how wind farms in Pakistan can be protected against floods through resuscitation of mangroves, at the same time bringing back fishing stocks for local fishermen.

Much earlier in my career, I had the privilege of working for the former Prime Minister, now Sir Tony Blair. I was guided by many in this House, notably my noble friends Lady Hunter of Auchenreoch, Lord Wilson of Sedgefield and, later, Lady Morgan of Huyton. That taught me the importance of rooting positions in facts as well as political arguments, but also that strong teams are built on laughter and mutual support, as well as hard work.

When it came to choosing the title I would take on joining the House, I must admit that I struggled a little. I was born in the south of England and have family roots in Wales. I enjoy nature, hiking and the living world. I live in south London and, over the past years, I have learned more about its local history and the Great North Wood that is still a corridor between the parks of Brockwell, Sydenham woods and Crystal Palace. I was intrigued by the waves of development and gradual urbanisation. I wanted something that connected the living environment, history and the places I live, and the somewhat mythical River Effra came to mind. Its course traced many of the places I have walked with our dog and family and, though now enclosed, it feeds into the Thames close to my cycle route to work.

I extend a warm welcome to my noble friend Lord Stockwood, who will also give his maiden speech today. He brings extensive practical business experience to the House. Together, we serve a Government who recognise that a strong economy must rest on strong foundations, whether that is our defence capability, energy security or domestic steel capacity, which we are discussing today.

That is why, earlier this year, when the future of British Steel was in jeopardy, we took decisive action to support continued steel production at Scunthorpe. We said that we could not and would not let the fires in the blast furnaces be extinguished, and we protected the 2,700 employees whose jobs were at immediate risk: the steel-making communities whose future depends on British Steel’s success.

We have stayed true to our word. Since our intervention in April, we have worked tirelessly to secure raw materials and avoid the blast furnaces having to close prematurely due to insufficient supplies. We have made available roughly £270 million as working capital for British Steel. That predominantly covers raw materials, salaries and invoices from SMEs in the supply chain—in other words, essential expenditure. Keeping workers safe and protected is our number one priority: indeed, the Government have spent almost £4 million on safety-critical matters at British Steel since April. This expenditure will form part of the overall cost of the intervention and be included in the Department for Business and Trade’s accounts for 2025-26.

British Steel has been working hard to reverse declining production and, in recent months, the company, with government funding, has been hiring new staff, including apprentices, to ensure the safe and continued operation of the blast furnaces. Our focus now is on working with Jingye to find a pragmatic and realistic solution for the future of the company. Once that solution is found, we can terminate the directions issued to British Steel and make a statement on the need to retain or repeal the special measures Act. Our ambition is to secure the long-term viability of steel-making at Scunthorpe and, indeed, the UK steel sector as a whole.

That is why, over the past few months, we have been putting in the hard work to set this key industry up for long-term success. That very much includes the economic prosperity deal we secured with the United States. As a result of that deal, the UK is the only country in the world to benefit from a preferential 25% rate on steel and aluminium exports to the US. This gives companies such as British Steel a 25% advantage over the competition and it strengthens our reputation as a trusted supplier of high-quality steel and aluminium for global markets.

Of course, we know that one of the principal reasons why our steel industry has struggled these past few years is global excess capacity—countries choosing to flood the market with cheap steel in a bid to quash healthy competition. We are calling that practice out. Indeed, earlier this month I joined Ministers from partner countries at the global forum on steel excess capacity in South Africa. The UK has lobbied hard to develop a comprehensive framework for joint action to address global steel excess capacity by June next year, and that is something my ministerial counterparts have agreed to. We must continue to act multilaterally.

On 7 October, the European Commission proposed a new steel trade measure on imports to replace its current steel safeguard. It will need to take this proposal through its legislative processes and member states, and through engagement with the WTO and with its free trade agreement partners, including the UK. I wish to reassure Members of the House, the sector and steel communities that we are taking this matter extremely seriously and are determined to find a solution. We will always defend our critical steel industry and have already engaged the EU at ministerial and official level to understand the details of this proposal. It is vital that we protect trade flows between the UK and the EU, and we hope there is a way to work with our closest allies to address global challenges, rather than adding to our industry’s woes. We reserve the right to take any action in response to any changes to our trading relationships. The Minister for Industry spoke to representatives of the steel industry on 9 October to listen to their concerns, and reconfirmed that we will do everything in our power to support a resilient and forward-looking steel sector.

Closer to home, we have been creating the right conditions for the UK steel sector to thrive. We are reducing electricity costs for steel producers by increasing network charge discounts through the British industry supercharger. We are strengthening current steel safeguard measures to support our producers, while ensuring that the UK maintains a steady and reliable supply. We are fulfilling our promise to create a pipeline of big infrastructure projects, such as the third runway at Heathrow. This will demand at least 400,000 tonnes of steel, primarily to reinforce concrete beneath tarmac. That is eight times the amount of steel used in the Sydney Harbour Bridge.

I know the House will agree that, when construction firms are building roads, runways and railways here in Britain, they should make full use of British steel wherever they can. Indeed, that is why we have changed government procurement rules. Our new steel public procurement notice will ensure that UK-made steel is considered for all public projects, and we are building on this momentum. We intend to publish a new steel strategy for the UK. The industry will require investment, modernisation and decarbonisation in order to compete in the global economy.

To that end, we accept the need to look seriously at options for primary steel-making in the UK. Late last year, we asked independent experts from the Materials Processing Institute to conduct a review into the viability of future primary steel-making technologies. Their findings and recommendations will also be published soon. It goes without saying that we would want to retain this capability here in the UK, but we have to be realistic. There has to be a strong business case, with the private sector, not British taxpayers, leading the charge. Our steel strategy will cover this and the additional steps we intend to take in creating the pro-growth business environment for UK steel.

We do not underestimate the scale of the challenges facing the steel sector today—whether that is in costs, competition or climate change. We cannot promise to solve all these challenges overnight, but equally, this Government will never watch from the sidelines; we will always be on the pitch. We have shown that in our intervention at British Steel. We have shown it in the actions we are supporting with Speciality Steels UK, where we are supporting the official receiver to find the right buyer who can offer the right support for the workforce and the company. We have shown it too in the much-improved deal we have secured for workers at Port Talbot, a deal delivered alongside £500 million of investment from the Government to support the transition to a low-carbon electric arc furnace.

With a Government committed to fixing the foundations of our economy, we will ensure that our steel sector plays a vital role in Britain’s future. I beg to move.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

Congratulations to the noble Baroness on her maiden speech.

12:33

[Baroness Hunter of Auchenreoch (Lab)]

My Lords, I am delighted to be following our newly appointed Peer and Minister, my noble friend Lady Lloyd, and I am most grateful to the usual channels for allowing me to do so. It is quite something to be standing at the Dispatch Box to make one’s maiden speech, never having been a parliamentarian before, and to do it so skilfully and eloquently. My noble friend has had a stellar career to date, in a wide range of jobs here and overseas, where people co-operate, deals are made and business gets done. She will bring all that wealth of experience to her role in your Lordships’ House.

I was my noble friend’s—or even Lloydy’s, as she was then—first boss. She is one of our Guildford three, along with James Purnell and Tim Allan, close schoolfriends, ferociously intelligent, who from 1990 came at various periods in their university holidays to work in Tony Blair’s office as researchers. She joined us permanently in 1993 aged 23, and stayed the entire course, one of the most consequential individuals of the Blair Administration.

My noble friend can grasp and synthesise detail, conscious of the bigger picture. She is not noisy or showy, but firm and straight, clear and crisp. She still has the face of an angel, but she also has—I hope I can get away with it in this debate—balls of steel, the late Baroness McDonagh’s famous pre-requisite for success in politics. We have all been on the end of my noble friend’s withering look, including, many times, Tony Blair, who said of her that

“most of all she was so transparently honest and fair to everyone that she exerted a calming influence on the madhouse”.

She will very soon discover that this House is of a very different order from that one, as I learned in the British Steel debate on Saturday 12 April this year, when I was a very new Member of the House and when the commitment to today’s debate was made.

I was pleased then that the Government acted so decisively on what became a historic day. It was the first time I had been present for a debate in its entirety and, like me, my noble friend will come to appreciate the depth and spread of knowledge of noble Lords and the dignified and respectful nature of our exchanges. I advise my noble friend to listen to the many experienced people on all sides of the House. Some she may disagree with, but she will learn a lot from them, as they will surely learn from her.

My own contribution to this debate is not born from steel expertise, although I am familiar with the industry’s vital importance through my work at BP and Anglo American, and my association with Tata Steel when I was working at the Royal Academy of Engineering. I have declared these interests in the register.

The deal the Government struck with Tata over Port Talbot last year, as my noble friend said, involved £500 million of investment to support the transition to electric arc furnaces, better terms for workers, and £50 million of investment in the local community to help people learn new skills and support the supply chain. This has ensured the site’s long-term sustainability. My noble friend Lord Murphy will, in his own inimitable way, advocate much better for Port Talbot than I.

I was very pleased that the Act was passed with such strong cross-party support in April. I was proud that this House recognised the urgent need to safeguard national capability, as well as thousands of skilled jobs in Scunthorpe, the UK’s only remaining production capacity for making primary, or virgin, steel, which is essential for infrastructure, defence and energy projects. The Act extended beyond just saving the steelworks; it also began to set out a clear long term-vision for ensuring that the UK retains its sovereign capability. As many noble Lords have argued before, reliance on a volatile global supply would expose the UK to significant economic and security risks.

I commend the Government for standing up for UK steel-making and seeking a pragmatic commercial solution which supports decarbonisation, safeguards taxpayers’ interests and protects jobs—up to 34,000 direct jobs and 42,000 in the supply chain. I was cheered recently to read that British Steel is enrolling its first apprentices in over three years. As I have said, I have spent much of my working life in the engineering sphere and I will always advocate for it. Engineering is essential in steel production, and, in turn, steel is the backbone of civil engineering. The relationship is symbiotic. The steel industry is not just a supplier of raw material; it is a driver of engineering progress.

Regions with strong steel industries often become hubs of engineering excellence, fostering apprenticeships, innovation and advanced manufacturing. I used to do a talk in schools entitled “Naked in a Field” to highlight the prime importance of engineering. I could have said the same in relation to steel. Without either of them, there would be no buildings, bridges, skyscrapers, railways, wind turbines, pipelines, factories, machinery or tools.

Steel’s essential integration into every major engineering discipline makes it vital to national development, technological innovation and the transition to a sustainable future. Steel will be essential in the precision engineering of the new generation of small modular nuclear reactors, especially the reactor pressure vessel. The industry supports a highly skilled engineering workforce, including metallurgists; structural, mechanical, electrical and chemical engineers; mechanical designers; and process engineers. The Royal Academy of Engineering has in place R&D partnerships between academia, government and the steel sector.

I warmly welcome this Government’s commitment to supporting the future of our steel industry. Although I understand the phrase “considering all options” during this process of consultation, I urge Ministers to come forward sooner rather than later with their promised steel plan and its place in the Government’s 10-year industrial strategy. Many present and future engineering jobs depend on it.

I am looking forward to hearing from my noble friend Lord Stockwood, today’s other new Minister, also making his maiden speech from the Dispatch Box. I do not know how it works when a Minister closes a debate with his maiden speech, but in lieu of anyone following him to recognise his first outing, I warmly welcome my noble friend and know that he will be a tremendous asset to our House, as will my noble friend Lady Lloyd.

12:42

[Lord Hunt of Wirral (Con)]

My Lords, I rise swiftly to join the noble Baroness, Lady Hunter of Auchenreoch, in congratulating the noble Baroness, Lady Lloyd of Effra, on a magnificent maiden speech, if I am allowed to say that. I will return to the content in a few moments. It gives me an opportunity to join the noble Baroness in praising the Government Chief Whip for having agreed to this debate. It is important to remind ourselves of how this all happened and evolved.

I say to the noble Baroness, Lady Lloyd of Effra, that she has an impressive record of service and, in particular, a great deal of knowledge about the issues she will face in office. She has an unrivalled opportunity to bring substance to the promises made at the last election. I think everyone will wish her well in fulfilling the destiny that the noble Baroness, Lady Hunter of Auchenreoch, prophesied for her, although I am not sure that she will be happy with one or two of the other comments that the noble Baroness mentioned about her background, of which I was completely unaware. But I loved her tribute to the river network that London is proud to have. They will be raising a glass in the Effra in Brixton tonight to praise her outstanding contribution to this debate.

Going back to where we have come from, I say to the Government Chief Whip that, when we look back at what happened on that Saturday 12 April, when the noble Lord, Lord Fox, and I wound up a debate—I moved an amendment for a sunset clause and the noble Lord moved an amendment to have a debate in both Houses of Parliament—I praise the Government Chief Whip. The House of Lords was at its best that Saturday, responding so positively to the fact that we need this debate. I am just sad that the other place is not having what would have been—had the amendment of the noble Lord, Lord Fox, been accepted—a debate on this subject.

We really could not envisage that so little would have happened to bring about the steel strategy, referred to by the noble Baroness. In a way, this debate is not well timed—although we all thought it would be—because we have yet to receive the steel strategy. Where is it? It was referred to as a concept by the noble Baroness in her speech, but it is now over six months since we last debated the Steel Industry (Special Measures) Bill, which became an Act that very day. There have been six months of delay, drift and indecision, which I believe is a direct result of the Government’s inability to get a firm grip on a serious situation. So where is the plan?

We have been promised and promised again a comprehensive steel strategy, and yet we are still waiting. So let us briefly go through the timeline. In December 2024, the then Secretary of State for Business, Jonathan Reynolds, told us that the Government would publish a steel strategy by spring this year. It would, he said,

“look seriously at the options to improve steel capabilities across the whole supply chain, including for primary steelmaking in the UK”.—[Official Report, Commons, 11/9/24; col. 40WS.]

As a result, when we came to debate this emergency legislation on 12 April, we tabled that sunset clause, and we were told by the then Secretary of State that it was unnecessary. He said that

“I do not want these powers a minute longer than is necessary”.—[Official Report, Commons, 12/4/25; col. 841.]

Well, it is now October, and I must ask: when precisely will these powers cease to be necessary?

Between February and March this year, the Government ran a consultation on the strategy. By July, we were told that it would be published later this year. Then, in response to a Written Question on 4 September, the Government repeated the same refrain: “later in the year”. Here we are, deep into October, and no hint of any such strategy has emerged. We really need to see this strategy.

I understand from meetings we on these Benches have been holding with those affected that there was an opportunity last month for the new Secretary of State to chair the body that would evolve the steel strategy. But then, at the last moment, the meeting was postponed, and it has still to take place. I just say this: when the Conservative Party was in government, we demonstrated a clear and practical commitment to Britain’s steel industry, not through slogans or sound bites but through targeted investment and partnership. It was a Conservative Government who provided the £500 million grant to support the transition to electric arc furnace production at Port Talbot, already referred to by the two previous speakers. I believe that was a forward-looking measure designed to secure jobs and ensure that British Steel remains competitive in a constantly changing global marketplace.

The Government must surely recognise that nationalisation is simply not sustainable, especially in its current form. British Steel was losing around £700,000 every single day, and it is now the taxpayer who must shoulder that burden. According to Sky News, the cost of full nationalisation is estimated to be between £4 billion and £5 billion, an extraordinary sum by any measure. The Office for National Statistics has provided the first official assessment of the impact of this decision on public finances. Its analysis makes for grim reading. The ONS concluded that the move to nationalise British Steel will increase public sector net debt by approximately £600 million, with a further £900 million of financial pressure expected under the Government’s own preferred fiscal measure. Nationalisation is not a solution—it is a ruinously expensive illusion. It places an enormous burden on the public purse while offering no credible plan for long-term competitiveness in one of our strategic industries.

I hope that all sides of the House will agree that we want to have a strong industrial base in Britain. The strength of our industry determines the strength of our economy, our communities and indeed our nation, yet this Government’s approach since the election has shown a profound misunderstanding of what it truly means to build that strength. What the Government do is, I fear, as damaging as what they fail to do. A whole series of policies are combining to make the United Kingdom an increasingly unattractive and, frankly, unaffordable place to invest. I refer of course to the so-called job tax, the ill-conceived unemployment Bill, which we will return to next week—rejected almost universally by business—and the Government’s rigid ideological pursuit of net-zero targets, pursued without realism or regard for competitiveness.

UK Steel has stated that the UK steel industry has a hand tied behind its back as it faces electricity prices up to 25% higher than its European competitors, let alone its global counterparts. Uncompetitive power prices pose a threat to jobs and future investment and threaten to harm the Government’s own net-zero targets. Just three days ago, the United States ambassador to the United Kingdom, Warren Stephens, said he had told the Prime Minister directly that if the UK aspires to attract more foreign direct investment from the United States then we must lower our energy costs. He went on to say—and I quote him verbatim:

“When I meet with British business leaders—whether on AI, technology, agriculture, or manufacturing—the message is the same: high energy prices are holding back growth”.


We have already had reference to Sir Tony Blair, not a man who has always echoed the Conservative Party on economic matters, but today he has been quoted as urging the Government to scrap their arbitrary clean power targets—a moment of clarity that Ministers would do well to heed, in particular the noble Baroness.

We understand that there are global challenges, particularly given China’s approach of heavily subsidising its steel industry. We know that makes it difficult for British steel companies to compete. The imposition of tariffs by the European Union is also unhelpful. While we may recognise that some forms of state aid can incentivise private sector investment, Ministers must be cautious about introducing large subsidies, all paid for by the taxpayer. Subsidy, especially excessive and sustained subsidy, inevitably distorts markets and leads to misallocation of capital, as resources are lured towards the production of inherently uncompetitive goods and services.

We have already heard about the World Trade Organization. We need to know what further discussions have taken place with it since China’s trade policy review and the UK’s statement that,

“we call on China to rejoin international efforts to remove market-distorting subsidies which support excess capacity in steel making”.

We look forward to the maiden speech of the noble Lord, Lord Stockwood. What do the Government intend to do to exert greater pressure, through the WTO, to ensure that China addresses its harmful and distorting subsidies?

The foundation of a strong industrial base, whether in steel or any other vital sector, lies in lowering the cost of production and creating the conditions in which businesses can compete and thrive. The principal challenge of our age in steel production is a technological one, but the necessary new technologies are now emerging, and we must decide whether we want to be at the forefront of them. If we want steel production, be it new steel or recycled steel, to become greener, we shall need more electric power, lots and lots of it, and at a price that is truly competitive. That will require investment and a truly national effort. Unfortunately, this Government are wilfully making the UK increasingly unattractive for both domestic and foreign investment, threatening skilled jobs across the country.

Steel is essential not only for our infrastructure and economic development but for our national defence. I am so glad that there is some form of consensus now, across the parties, that this is a question not only of emerging technologies, subsidies and tariff policy but of steel security. The Government must create an economic environment in which the steel industry—indeed, all industries—can thrive, expand and flourish, not merely hunker down and survive. The forthcoming November Budget and the long-delayed steel strategy must contain concrete measures to reduce long-term energy costs, restore our competitiveness, and give British industry the stability and confidence that it so urgently needs.

12:57

[Lord Mohammed of Tinsley (LD)]

My Lords, I join the noble Baroness, Lady Hunter, and the noble Lord, Lord Hunt of Wirral, in welcoming the noble Baroness, Lady Lloyd of Effra, to her place in your Lordships’ House. We look forward to her continued public service. I also look forward to the maiden speech of the noble Lord, Lord Stockwood, in closing the debate. It is an important debate—and it is a privilege for me to contribute—on the six-month review of the Steel Industry (Special Measures) Act 2025, as requested by my colleague and noble friend Lord Fox.

For me, this is not just a matter of industrial policy—it is personal. I grew up in Sheffield, the steel city. My grandfather melted the ore, my uncle rolled the slab and my father worked the lines. The clang of metal, the heat of the furnaces and the pride of skilled labour shaped my childhood. Steel is not just an abstraction to me—it is part of my family history and story. That is why I feel so strongly that the United Kingdom must retain a viable resilient steel industry. As one respected industry leader reminded me earlier this week:

“We can import most of what we need, but doing so would make us vulnerable, waste the vast quantity of scrap metal we produce each year, and send the wrong signal about Britain’s commitment to manufacturing”.


The House of Lords Library briefing makes clear that this Act was born out of urgency. When British Steel at Scunthorpe was on the brink of collapse earlier this year, the Government stepped in with emergency powers to protect our last remaining blast-furnace capacity. Those powers allowed Ministers to direct operations, secure supply chains and prevent mass redundancies. It was an extraordinary step, but it was necessary. Losing that capability would have meant losing control of a foundation industry critical to our infrastructure, defence and energy transition. Six months on, it is right that we take stock.

The Government deserve credit for acting quickly. The immediate goal of keeping the furnaces operating and safeguarding jobs was achieved. Production at Scunthorpe continues, apprenticeships have been resumed and a supply contract with Network Rail has been secured. Support has also been evident elsewhere: in Wales, with Tata’s transition plans at Port Talbot; and in South Yorkshire, where Government ownership of Sheffield Forgemasters and the stabilisation of the Liberty Steel assets have provided a vital safety net. These steps have kept the industry alive, but survival alone is not enough. We now need a clear plan for recovery, competitiveness and long-term renewal.

The truth is that the UK steel industry remains fragile. For decades, successive Governments have allowed competitor nations to erode our manufacturing base. The global market is oversupplied, prices are weak and, as we have heard, energy costs are punishing—often 20% to 25% higher here than in France or Germany. At the same time, China has used steel production as an instrument of economic power, flooding world markets and depressing prices. British producers are fighting simply to stay afloat, unable to generate the profits needed to modernise and decarbonise.

We cannot allow that cycle of decline to continue. We must now focus on the right structure for a sustainable, competitive UK steel industry. I give an example of one resolution of the current distribution of manufacturing capability that could be possible: flat production centred at Port Talbot; long production anchored at Scunthorpe; and specialist and high-grade steel concentrated in South Yorkshire, building on the expertise of Sheffield Forgemasters and the wider cluster of firms in and around the city. This balanced configuration would make the best use of regional strengths and existing infrastructure while preserving critical national capabilities.

In my own region, there is a real chance to build a coherent future. The assets at Sheffield Forgemasters, Liberty Steel and other local producers could be aligned to optimise production and share investment in technology and skills. I therefore call on the Government to establish a South Yorkshire steel task force, bringing together industry experts, local authorities, trade unions and private investors. Its job should be to develop a plan for collaboration, modernisation and growth across the cluster. Something similar could also happen around Scunthorpe and in south Wales. We have the skills, the tradition and the engineering excellence; what we need is co-ordination and commitment.

As we look beyond stabilisation, there are three key priorities that must shape government policy: competitiveness, decarbonisation and the investment environment. I start with the first, competitiveness. The single greatest burden on UK steel-makers remains energy prices, as we heard earlier. Unless industrial electricity costs are brought in line with those of our European competitors, we will never achieve a level playing field. I call on the Government to act decisively, whether through long-term pricing agreements, industrial tariffs or other measures, to ensure that energy is affordable and predictable. This is essential if the industry is to plan investment and attract private capital.

I move on to decarbonisation. Steel amounts to around 13% of the UK’s manufacturing emissions. Transitioning to cleaner processes is non- negotiable, but that shift—from blast furnaces to electric-arc furnaces and, ultimately, to hydrogen-based steel-making—requires huge upfront investment. Government support must therefore be sustained and strategic: capital grants, tax incentives and partnerships that enable the sector to innovate rather than retreat. Britain should lead the world in low-carbon steel, not watch others do it first.

In terms of investment and ownership, once stability is achieved, it is right that most of the industry should return to private ownership, with the exception of Sheffield Forgemasters, whose defence role justifies continued public ownership. However, no private investor will commit funds unless they have confidence in the policy environment. That means predictable regulations, fair trade policy, access to affordable energy and an unequivocal government signal that steel-making in Britain has a long-term future.

We must not forget the people and communities behind these furnaces. When steelworks close, it is not only a plant that closes, but a community that unravels. I know that from my own experiences, as my father lost his job in the Sheffield steel industry in the 1980s. The Government should learn from past mistakes and ensure that regional regeneration, retraining and skills investment are embedded in every stage of this transition. South Yorkshire, in particular, can become a centre for advanced and green steel technology, combining our historic expertise with the jobs of the future.

The United Kingdom produces millions of tonnes of scrap steel each year, yet we export much of it only to import finished steel back. That makes little economic or environmental sense. A modernised steel sector could turn that scrap into high-value products here at home, supporting a circular economy and reducing our dependence on volatile international markets. Retaining steel-making capability is also a matter of national resilience. From railways and shipbuilding to wind turbines and defence equipment, steel remains the silent foundation of modern life. Even if it is not made of steel, steel has almost certainly been used in its making.

The Steel Industry (Special Measures) Act gives significant powers to Ministers, including the ability to direct private operators and, in extremis, take control of assets. These powers were justified in an emergency, but they must remain temporary, transparent and proportionate. We must now move from emergency intervention to strategic renewal, from crisis management to confidence building. The respected industry leader whom I quoted at the start concluded that:

“Stabilising the UK steel industry is essential, but unless the wider environment allows manufacturers to compete globally, we will find ourselves back in crisis again”.


That warning must be heeded. We cannot keep repeating the same cycle of decline, rescue and retreat.

Steel built this nation, its bridges, its railways, its factories and its ships. It gave dignity and purpose to places such as Sheffield, Scunthorpe and Port Talbot. It can also help build the low-carbon, high-tech Britain of the future, if we choose to back it. So let us turn this six-month review into a new beginning. Let us give our steel communities the stability, investment and respect that they deserve.

13:06

[Lord Bilimoria (CB)]

My Lords, at the outset of this debate on the Steel Industry (Special Measures) Act, I congratulate the Minister, the noble Baroness, Lady Lloyd, on her excellent maiden speech, and I look forward to the maiden speech of the noble Lord, Lord Stockwood.

I chair the Manufacturing Commission. Manufacturing used to make up 30% of GDP in the UK in the 1970s and now it makes up less than 10%. Yet the UK, with less than 1% of the world’s population, is the 11th largest manufacturer in the world in absolute terms—and it is high-quality manufacturing. When you think of manufacturing, steel is of course as large and heavy-scale manufacturing as you can get.

I come from the smallest minority community in the world: the Zoroastrian Parsis. There are just 100,000 of us in the world. We came as refugees from what is today Iran, in Persia, over a thousand years ago and settled in India, a country that gave us refuge. There are now just over 50,000 Parsis in India and 5,000 here in the UK. The Parsis have excelled in just about every field, including in industry. The most famous industrialist in India, I would say, is Jamsetji Tata, the founder of the Tata company. The Tata Iron and Steel Company was founded by Jamsetji Tata and established by Sir Dorabji Tata in 1907. It started producing steel in 1912. When this idea was put forward, a British official said,

“I will eat every pound of steel rail they succeed in making”.


Well, he certainly ate his words. Today, Tata, as a group, is valued at over $500 billion, one of the largest conglomerates not only in India but in the world. Of course, here in the UK, it is the owner of Tata Steel and Jaguar Land Rover.

We have a situation in the UK where the steel industry, as previous speakers have said, has struggled to be competitive with all the headwinds against it: tariff uncertainty; high energy costs; the decarbonisation challenges; and China. Let us get this into context: China dominates global supply of steel; 54% of steel in the world is produced by China, while the UK produces 5.6 million tonnes, or 0.3% of the world’s total. We have to get this in context.

There is a surplus of steel in the world, which has pushed down steel prices. On the other hand, energy prices rocketed after Putin’s invasion of Ukraine in 2022, which took place during my tenure as president of the CBI. I am now chair of the International Chamber of Commerce here in the UK and regional co-ordinator for Europe, and we are witnessing trade wars. The ICC, the largest business organisation in the world, with trade as its focus, is at the heart of the tariff and trade challenges that we face.

Here in the UK, right up front we have the 25% tariff on all steel imports. Our normal tariff is at 10%. Please note that that is five times higher than our tariff was with the United States, which was just 2% either way. It is completely irrelevant for us to have any tariff increases at all with the United States, because we have £60 billion of exports and £58 billion of imports from the United States in goods: that is balanced. In services, we have £130 billion of exports and about £50 billion of imports. We have a services surplus, but there are no tariffs on services. As it is, it is unfair for us to impose any tariffs at all, but there we have it—the 10% baseline and the 25% on steel. That 25% has been increased to 50%. Where do we stand on that? I ask the Minister to say whether we are going to be at 25%. We were told we were maybe going to be at 0% and then, with President Trump’s visit over here, we were hopeful that that 0% would be clarified. What is our tariff with the United States of America going to be?

Of course, the other point is that manufacturing steel is such an energy intensive operation and our energy costs, sadly, are some of the highest in the world, certainly the highest in Europe. We pay 25% more for energy than our competitors in France and Germany. We can quantify this in various ways but it is millions of pounds more. On top of that, we have decarbonisation. Steel, because of its processing, is a significant contributor to greenhouse gases. It is responsible for over 13% of UK greenhouse gases emitted from manufacturing and 2.2% of the UK’s greenhouse gases in total, yet the steel industry is only 0.1% of UK GDP. Decarbonisation is, of course, a priority; the steel industry is trying to do it and is playing an important role, because the steel produced is used in renewable energy infrastructure manufacturing—wind turbines and solar panels.

The blast furnaces at Scunthorpe were the only remaining virgin steel plants left in the UK. The electric arc furnace method produces much lower carbon emissions, but that depends on what source of electricity it uses. Many issues were raised when the Act went through Parliament. Reform UK, on the one hand, called for an immediate nationalisation of the British steel industry. The Opposition called for a sunset clause. Does the Minister consider that a sunset clause might be required? But the emergency measures were taken and the steel industry was saved. As for parliamentary scrutiny, we now get a report every four weeks. Will we have some sort of annual review of this procedure? The good news is that British Steel is seeking to enrol apprentices over the next three years, which is excellent. The cost to the taxpayer is now almost £200 million, but we have saved something and, of course, all the SMEs in the supply chain have also benefited.

Noble Lords before me have spoken about the steel strategy. Can the Minister confirm when exactly we will get the steel strategy? It was meant to be this year; will it be early next year? We have had our industrial strategy, which is great news and excellent, and we hope that this will establish a clear, long-term vision and how we will achieve it, and identify gaps, capabilities and investment decisions. We are all looking forward to it.

The BBC claims that the UK Government are in favour of merging all UK steel-makers into one organisation and not in favour of nationalising that entity. Can the Minister give any clarification on that rumour that has been circulated?

The Act that we are debating has prevented the closure of the Scunthorpe plant, which employs 2,700 workers. The Tata Steel plant at Port Talbot is a great example of partnership between government and business, with a £1.25 billion pound investment, of which the Government have given a £500 million grant. It is moving to an electric arc furnace, which will replace the blast furnace. This will reduce emissions—estimates are by up to 90%, certainly by 70%. It will secure 5,000 direct and supply chain jobs and will align steel production with net-zero objectives, but there will be temporary job losses. I urge the Minister to assure us that every help will be given in this transition period so that any temporary job losses are avoided.

On the extra energy costs, is there anything the Government can do to help our steel industry be more competitive? Then, of course, there is the challenge of the European Union, which I will come to in a short while. With an output of 6.9 million tonnes, 33,000 jobs and £2.5 billion in GVA, tariffs are a huge issue, but I make a point about the public/private partnership once again, and the subsidies. There are pros and cons in this, and the con is reliance on subsidies. Can the steel industry be self-sufficient without having to rely on subsidies? The European Commission is proposing a 47% cut in the tariff-free quotas. Will the UK be included in these tariff-free quotas? That would be a huge problem.

On steel clusters, the regional impact in Wales, in Yorkshire and the Midlands, and regional regeneration and training, we must avoid any transition causing local unemployment at all costs. British Steel and the Community union launched a “Save Steel, Buy British” campaign, seeking a level playing field, and the British Metals Recycling Association has its export flexibility and circular economy report. This is very important, because the UK metals recycling sector, just referred to, contributes £9 billion to GVA and supports 2,000 businesses and 15,000 direct jobs. It generates 11 million tonnes of ferrous scrap, but the UK consumes only 2.6 million tonnes; the rest is exported. Can we maintain export flexibility? At the moment, there are bans to certain countries. Can we create a supportive environment for this sector, which is vital to our steel industry?

The Minister, in her excellent maiden speech, spoke about Heathrow, as of course did the noble Baroness, Lady Hunter, in her excellent tribute—I pay tribute to her tribute, which was very good. The Minister mentioned the Heathrow third runway, which will require, according to my memory, 400,000 tonnes of steel: it should be British steel being used. What is going to happen about Heathrow? I remember sitting next to Sir Howard Davies when his commission recommended a third runway at Heathrow Airport. Correct me if I am wrong, but that was over a decade ago. We still have not decided which option to go for. I declare my interest: Surinder Arora is a close friend of mine and one of the country’s great entrepreneurs. He has put forward an option, Heathrow has put forward an option; let us make a choice and get that runway built as soon as possible.

Look at Gatwick, which now has a second runway. I always said we should not have either Heathrow or Gatwick; we should have both. I am delighted that the Government have done that. Let us make the decision with Heathrow as well. When I was in India just now with the Prime Minister, the announcement was made, on the day that we were in Mumbai, that India is opening its new Mumbai terminal for 90 million passengers a year, in addition to the terminal it already has. Go to Dubai Airport: that is what we are competing with. This is the greatest city in the world; we should have the best airport transport in the world.

The EU is the biggest customer of UK steel: 78% of all our steel goes to the EU. We must address this issue of tariffs. Again, I ask the Minister to clarify that. On one hand the steel-makers in the EU are very happy, but the automakers are very worried because the tariffs are going to cause their prices to go up and cause inflation.

To conclude, I will make one point about Tata Steel. Everyone talks about Port Talbot, but Tata Steel is all over the country: in Hartlepool, in Sheffield, in Corby, in Imperial College, in north England, east England, Swansea—everywhere. It is very important to make the point that the steel industry is not just one or two places; it affects the whole United Kingdom. It is one of the most important industries to our country, and I am delighted that the Government are giving it top priority.

13:19

[Lord Murphy of Torfaen (Lab)]

My Lords, I begin by paying tribute to my noble friend Lady Lloyd, who gave a very elegant but very modest speech. I know from my experience in Tony Blair’s Government that she played a pivotal role in the machinery of government and all the successes of that Government. I wish her well and remind her that it is extremely unusual to make a maiden speech from the Dispatch Box. I am sure she will do a great job in the position she now holds. I also look forward to the speech of my noble friend Lord Stockwood at the end of this important debate on steel. He too has had a distinguished career, in business, and I am sure he will do a great job in the position he now holds as well.

My life has been mixed up in steel for nearly 70-odd years. My great-grandfather came from Ireland to work in the steel industry in my constituency of Torfaen, which was instrumental in developing the Bessemer process for steel-making. We had a steelworks, Panteg, which made great stainless steel, linked as it was to Sheffield. For 15-odd years, I taught in the college at Ebbw Vale, which relied almost exclusively on the steel industry and the people who worked in it. When that great steelworks in Ebbw Vale closed, the whole community was blighted and devastated. I will come in a few moments to Port Talbot, whose community relies so heavily on steel. In north and south Wales, coal and steel were our communities. It is not simply an issue of economics but of how the whole country of Wales was dependent on these industries for employment. Now we have Tata in Port Talbot, Llanwern and Trostre—just three, with some smaller ones elsewhere. In comparison with many years ago, it is very different.

Back in 2001, when I was Secretary of State for Wales, I and Stephen Byers, who was then the Trade and Industry Secretary, tried to save lots of that steel industry from the cuts made by what was then Corus. We partly failed but partly succeeded. The point is that this was the state trying to help what is in many ways our greatest industry—not very successfully, but we did our bit and managed to keep the industry going.

I was very interested to hear the remarks of the noble Lord, Lord Hunt of Wirral. Over 30 years ago, I shadowed him when he held the job of Secretary of State for Wales. He will know how important steel is to the Welsh economy and community. He rightly referred to the contributions that his Government made before the general election—half a billion pounds towards investment in Port Talbot and the conversion to electric arc. I and others welcomed that. I would have preferred the blast furnaces to stay open, but Tata had made its decision and started closing them on the very day the general election was called. However, I think the future of Port Talbot is safe in a different way; eventually, 5,000 jobs will come with the development of the electric arc furnace and the rest of it.

The other point, which has been very well made, is that it is about not just the physical business of the industry—the plant itself—but what happens to the people who have been displaced in Port Talbot as a consequence of the change of direction. I am glad to say that this Government and the Welsh Government are putting together proposals, I think of over £80 million, to ensure that people are retrained and there are new jobs and businesses. This transition from what was then to what is to be in Port Talbot is considerable. Incidentally, I have some sympathy with the points made by the noble Lord, Lord Hunt, about the cost of energy. However important it is for our environment, it is causing us grave difficulties in the competitive world market.

The position in Port Talbot, Llanwern and Trostre has changed in the last few weeks. At one time, when the plants closed for Christmas, they did so for two weeks. They are now closing for five weeks. That has meant a reduction of some 65% in the income of those who rely on the steel industry in those towns. That is very unfortunate and is largely a result of two things. Despite the fact that we will benefit with regard to the tariffs from the United States, the effect worldwide has meant that China, Vietnam and other countries have dumped their steel into our country. This has an obvious adverse effect on our old steel industry. Coupled with that is the very bad decision of the European Union to impose a 50% tariff on steel from this country. The combination of both those things has resulted in the reduction of the workforce working over Christmas in Port Talbot.

What is to be done? The Government have a significant task to try to ensure that we can avoid the dumping of steel in our country. If that involves income tariffs, so be it. There should also be considerable negotiations with the European Union on whether it can reduce that 50% tariff to help save our jobs in the steel industry. I am sure my noble friend will do that, and I know that my constituency successor, the right honourable Nick Thomas-Symonds, the Paymaster-General, who has duties with regard to our relationship with the European Union, is pursuing it as well. There is a lot to be done and negotiated, and a lot relies upon it. No great country, least of all one that is a member of the G7, can be without a great steel industry. It therefore has to be saved. No part of our country is more affected than the country and the constituency that I come from, in Wales.

13:27

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I join other noble Lords in extending a warm welcome to the noble Baroness, Lady Lloyd of Effra, particularly given her Welsh heritage, and to the noble Lord, Lord Stockwood. It is never easy coming straight on to the Front Bench in the Lords, but I congratulate her on an excellent maiden speech and look forward to hearing more of her contributions.

The speech of the noble Baroness was welcome in its acknowledgement of modern methods of agriculture and green forms of energy generation, but it was rather at odds with the thrust of this Act, which pre-dates her introduction. The Steel Industry (Special Measures) Act 2025 has been presented to us as a lifeline—a bold intervention to protect jobs and revitalise Britain’s steel sector. Of course I applaud the efforts to preserve those 2,700 jobs and help keep those blast furnaces alight, but beneath its polished language lies a policy that risks entrenching inefficiency, draining public funds and stifling innovation.

I begin by acknowledging the immense contribution of our steel workers—particularly those in south Wales, who have endured enormous uncertainty. I particularly enjoyed the contribution of the noble Lord, Lord Murphy of Torfaen, who emphasised the contribution of steel to the communities of south Wales. My father ran the steelworks in Cardiff, so its importance has particular relevance to me. I visited Port Talbot’s site in the summer, but I got the impression there that the £80 million grant that we agreed for retraining is not yet being spent.

The recent decision by Tata Steel to extend its Christmas shutdown across the Port Talbot, Trostre and Llanwern sites, to which the noble Lord, Lord Murphy, has already alluded, is to be regretted. It will have devastating consequences. In some cases, steel-workers’ pay may be down to 65% of normal earnings, leaving families struggling at precisely the time of year when they need money for heating and for Christmas.

Let me be clear. Steel is vital to our economy: it builds our bridges, powers our industries and anchors communities across the nation. The question before us is not whether steel matters but whether this Act truly serves the future of British steel-making. Instead of investing in modernisation and sustainability, the Act prioritises short-term subsidies that prop up outdated plants and practices. Billions in taxpayers’ money is being redirected to cover corporate losses, without demanding real reform. Where are the binding conditions for green transition, digital efficiency or fair competition? None are adequately defined. We are, instead, pouring funds into a model that competes on volume rather than value.

I am proud of the previous Conservative Government’s commitment to low-carbon steel-making, with the plan for an electric arc furnace at Port Talbot, a £1.25 billion project part-funded by a £500 million Conservative Government grant, and I am grateful to the noble Lord, Lord Bilimoria, for acknowledging this. It is a crucial step towards low-carbon steel-making, with the potential to cut emissions by up to 90%, and to sustain 5,000 Welsh jobs and many more in the supply chain. One day, of course, I hope that the electricity on the site will be generated by nuclear power. Only the Conservative Government had the foresight to enable all this to happen. It is to be genuinely hoped that the current Labour Government will have similar foresight in their upcoming siting policy for new nuclear advanced technologies, which could be very relevant to Port Talbot.

Further, this legislation dangerously centralises decision-making in Whitehall. By granting extraordinary powers to the Secretary of State to override environmental and labour standards “in the national interest,” it sidelines local communities and weakens accountability. Steel towns such as Scunthorpe deserve consultation, not merely patronage.

This is not industrial strategy; it is industrial nostalgia. Britain cannot build its manufacturing strength by reviving a 20th-century model in a 21st-century economy. Without a clear path towards low-carbon steel production, research partnerships and fair international trade policy, the Act will leave us less competitive, not more secure. We should instead be channelling more funds into innovation: electrified blast furnaces, circular recycling systems and collaborative regional hubs that link industry with universities. That is how we build resilience, not through subsidies that delay the inevitable reckoning with global change.

Patriotism is not blind loyalty to failing structures; it is the courage to reform them. We must craft policy that supports both innovation and inclusion. The Steel Industry (Special Measures) Act 2025 does neither. Let us reject complacency, demand accountability and champion a truly modern industrial strategy. It is time to replace crisis management with the vision to move from reactive measures to a durable and just transition for British Steel that delivers not only for today’s jobs but for tomorrow’s generations.

13:32

[Lord Liddle (Lab)]

I join in the general congratulations of the House to the noble Baroness, Lady Lloyd, on her new appointment and what was an excellent maiden speech. I have known Liz for some 30 years. I remember her coming as a bright young thing—she is still a bright young thing, of course—to our house in Kennington for a great party, with a lot of the young people who were part of the Blair and Brown project and eagerly preparing for that Government. I worked for seven and a half years in No. 10 Downing Street as a special adviser. For quite a lot of them I was sitting opposite the noble Baroness, Lady Lloyd, when she was working on international development questions and I was working on Europe and defence. She has got a great background and I am sure she is going to be a tremendous success in this House.

I look forward to the maiden speech of the noble Lord, Lord Stockwood. He is a successful businessman who has been a great philanthropist. The one thing I know about him—at least, I hope I am right—is that he has a great attachment to the town of Grimsby. I have been to Grimsby only once. The reason I went there was because I have a great attachment to its former Member of Parliament, the right honourable Tony Crosland. I went to Grimsby for the only time in my life to celebrate the 50th anniversary of the publication of his The Future of Socialism, at which Ed Miliband was the guest lecturer. Anyone with associations with Grimsby, a community that has suffered from the loss of its main industry in deep-sea fishing a long time ago, will know the commitment of the noble Lord, Lord Stockwood, to community development there—one of our young MPs, Keir Mather, told me all about it. He is an excellent addition to our House.

On the subject of this debate, steel is a sovereign capability that we have to retain. I would like to see a public/private partnership developed, but if the only way of retaining this sovereign capability is public ownership then I would be prepared, in exceptional circumstances, to support that. I am not a passionate public ownership man by nature, but I think this would be essential.

Several Members have talked about the need for a plan for steel and I agree—I like the idea of plans—but it is extremely difficult to do that at the moment because of the global crisis in which steel is inevitably wrapped up. It is not just a crisis to do with the steel industry; like the car industry, it is to do with manufacturing. It is the outcome of the tariff war in the world that President Trump has engaged in, with very high tariffs on exports to the United States for some countries, particularly China. We have, in any event, a surplus capacity of steel in the world. I remember that when the European Community faced this problem some 30 or 40 years ago, there was the Davignon plan, which was quite successful in reducing overcapacity. But whereas we could have a Davignon plan for Europe, I somehow doubt we could have one for the world that is likely to have much chance of success. What is happening is that people are imposing tariffs in Europe because they fear a flood of imports which could have gone to the United States coming to Europe—particularly in steel but also in wider industrial sectors.

I consulted Community, the trade union of the steel industry, and it sent me a briefing on what is now going on. I will read out what it said, so that everybody is clear:

“The new measures proposed by the EC would halve the overall quotas and double the import tariffs on steel outside of these quotas to 50%. In addition, the EC plans stricter traceability requirements to specifically target those countries that are producing too much steel and undercutting EU producers”,


which may be a problem. It goes on:

“These measures will significantly reduce the UK’s access to the single market”,


which is, I emphasise,

“by far our largest export market for steel, accounting for almost 80% of exports”.

That puts in context the success of the bilateral agreement that we made with the United States. That addresses part of our export problem, but this is the central question as far as steel exports are concerned. It goes on to say:

“This will undercut UK businesses and cause further damage to our steel industry”.


We have the potential situation in Britain where we are pouring in millions of pounds in support of a steel industry that finds its global markets severely blocked. That is not a very sensible position; we have to find some way through this.

Obviously, the best thing to do is to negotiate a good arrangement with the EU. Having worked in Brussels for three years of my life and got to know intimately the tough types who run EU trade policy and who put the interests of the Union before everything else—quite properly—I suggest that they will say, “Unless you adopt the same measures as we are adopting, of 50% tariffs on imports from the rest of the world, why should we make any change in our policy?” Therefore, what do our Ministers see as the perspective for these discussions with the European Union? How do they see them going?

I make one other point, which perhaps people would expect me to make, given my background. It seems to me that we face what is potentially an economic emergency on tariffs. Why do we not just think about rejoining the European customs union? It is the most obvious thing to do to protect our position. I know we are very proud of the trade agreements that we have negotiated, but I would like to see a cost-benefit analysis carried out in the next month or two about whether the benefits of an independent trade policy outweigh the losses we risk suffering, of which steel is a prime example, by not being members of the EU customs union.

13:42

[Lord Prior of Brampton (Con)]

My Lords, I rise with some trepidation, looking across at the new Minister, as we know that she not only has the face of an angel but has balls of steel. I could apply both of those descriptions to the noble Baroness, Lady Hunter, as well. I thought the Minister made a wonderful maiden speech, so I congratulate her. She has a very tough decision to make in her current role.

I draw attention to the noble Lords, Lord Mohammed and Lord Murphy, because I worked in the British steel industry for 10 years during the 1980s. I have been at Panteg, Ebbw Vale, Port Talbot and, of course, Tinsley Park and many of the mills in and around South Yorkshire. The steel industry has a huge emotional pull. It employed many hundreds of thousands of people; it was one of our great industries for several hundred years. We have come to a pretty pass today, if we are being honest. We are talking about the residue of a once-great industry.

As I have listened to the debate today, I have thought that it is a bit like Groundhog Day. We had all the problems of dumping steel back in the 1980s. We had the Japanese producing quality steel, taking all the steel going into the North Sea. We had Port Talbot that could not hit the quality standards for the Ford Motor Company at the time. We had the problems of Llanwern and Ravenscraig, two steel plants put in exactly the wrong place for political reasons. All these issues that we are talking about today were present back in the 1980s as well.

Therefore, I ask the Minister not only to think about the viability of the works at Scunthorpe but to look at Port Talbot. Is the hot mill competitive today? I am not sure that it is. All the money that should have gone into the Port Talbot hot mill went into the Hoogovens plant in Holland for many years. Is it viable that we should be producing hot rolled coil at Port Talbot and shipping it up to north Wales into the coating plants at Shotton? That is 250 kilometres. It probably amounts to £10, £20 or £30 per tonne, or something like that. In the world competition that we are in, these are big issues.

At Rotherham and Stocksbridge, Liberty Steel is totally undercapitalised. Are we putting the investment into those plants? One of the tragedies of British steel in the old days was that we were the inventors of continuous casting yet the slowest in Europe to adapt and use it.

At Scunthorpe, it seems to me that we are putting all our eggs into the electric arc bucket. Can we produce the right quality of steel from electric arc furnaces? Do we need to have primary steel production in the UK? I do not actually know the answer to those questions, but I hope that in the plan that is produced, we will have those answers.

It is no good the Minister saying that we will build a third runway and have all these construction projects; if we are setting up Scunthorpe to produce rebar, we can forget it. There is no competitive advantage to producing low-grade, low-quality steel for reinforcing bar. If there is a future for the British steel industry, it has to be in higher-quality special steels. It may be that rail is one of those products, but, again, I would like to receive confirmation that, if we move to electric-arc steel, we can produce the qualities required for high-speed rail.

Underlying all of this—we cannot escape this—is energy prices. If our industrial electricity prices are at least 25% higher than those of Germany and France and if they cost four times more than American and Chinese electricity, we cannot compete with them. We cannot pour more taxpayer money into the steel industry if we do not give the industry a chance of being competitive.

The Government therefore have some very important trade-offs to make. We all want green steel and to reduce carbon emissions. But what is more important: growth and employment or reducing carbon emissions? It is not always as obvious a trade-off as that. Nevertheless, the Government are committed to growth—rightly, in my view, because only by getting economic growth will we have any choices in the future—but if we are consistently making choices that will limit our steel industry and all the steel intensive industries that are its customers, we will have to reap some very tough decisions in terms of employment.

I have a huge emotional attachment to the steel industry, but we have to look again, very carefully, at the decision to carry on pouring more money into Scunthorpe—I think it has been £270 million so far—without a clear plan and strategy for the future that encompasses not just Scunthorpe but the whole of the steel industry.

13:48

[Baroness Smith of Llanfaes (PC)]

My Lords, it is a pleasure to follow the noble Lord, Lord Prior; my late father also worked in Port Talbot in the 1980s, when it was under British Steel.

I congratulate the Minister, the noble Baroness, Lady Lloyd, on her maiden speech. She noted her family roots in Wales, so I look forward to hearing more about her links to Wales. It is always good to have more voices here wanting to stand up for Wales, so I say, “Croeso i ti”. I also look forward to the maiden speech of the other Minister, the noble Lord, Lord Stockwood, at the end of the debate. I look forward to both of their future contributions as Ministers.

Parliament was recalled earlier this year to fast-track the passage of this legislation. The Government acted with commendable urgency to safeguard jobs at British Steel in Scunthorpe. That is what good government should do: act swiftly and decisively to protect people’s jobs. We have also heard of new jobs, in the form of apprentices, that have been created.

I am glad for the people of Scunthorpe—they deserved that protection—but I cannot ignore the painful contrast with what has happened in Port Talbot, where 2,800 jobs have disappeared, similar to the number saved in Scunthorpe but without an equivalent intervention from the Government. This is nothing short of a betrayal. The loss extends far beyond those direct jobs. For every worker on site, three contractors were employed. There were the cafés, the suppliers and the small businesses that formed part of the steel-working community. That was pointed out perfectly by the noble Lord, Lord Murphy, who observed that these industries literally create those communities in Wales, and once removed we lose those communities.

The people of Port Talbot have the right to ask: why were our jobs not worth fighting for? Why was our community left behind while another was rescued? Port Talbot was not a minor player. It was the largest steelworks in the United Kingdom, producing millions of tonnes of steel each year. Yet the first blast furnace was shut down on 5 July 2024, and the second on 30 September. From car doors and bonnets to Heinz cans and the coins in our pockets, we have all relied on the steel made in Port Talbot. When you speak to those who have worked there and the wider community, there is immense pride in that—pride in their contribution to both the everyday and the extraordinary, from the cans on our shelves to the stadiums that stand proudly across the UK. As was highlighted by many noble Lords, many opportunities exist in the future to build wind turbines and support defence.

Under the Steel Industry (Special Measures) Act, the legislation we are discussing today, the Government hold the power to intervene even after assets have ceased operation. The Act extends to England and Wales. The capacity to act existed; only the will to act was missing. The decision to exclude Welsh steel from the benefits of this legislation was a choice made by this Government—and a deeply political one. I have no doubt that, when the Minister responds at the end of the debate, we shall once again hear that it was too late to save the jobs at Port Talbot, but that is simply not true. When the new Government took office, one blast furnace was still operating; the other had only just been shut down. There was still time to intervene. The need was urgent and the refusal to act is indefensible. The new deal involving £500 million, which was mentioned in the opening remarks, predates this Government, but we are still no clearer on the material difference that it will make.

In April, my Plaid Cymru colleagues in the other place tabled an amendment to extend the Bill’s provisions to Wales; that amendment was rejected. In doing so, the Government made a conscious political decision to extend protection to one part of the United Kingdom but not to another. That rejection speaks volumes: it shows that the powers being used to safeguard jobs in England could and should have been used to protect the steel industry in Wales. All that unfolds among a wider storm that was illustrated in the Minister’s opening remarks and by the noble Lord, Lord Bilimoria, who is no longer in his place.

I also want to ask the Minister directly about the steel strategy; many noble Lords have mentioned that we have been waiting six months and it has yet to be published. On that strategy, will the Government consider a place-based approach to the £2.5 billion steel fund, ensuring that key Welsh sites—Port Talbot, Shotton, Llanwern and Trostre—receive a fair and proportionate share of investment? This is not simply a matter of industrial policy; it is a question of justice and of balance, and really of fairness.

We must also reflect, with regret, on the decisions taken not only here in Westminster but in Cardiff Bay. The Welsh Labour Government once dismissed Plaid Cymru’s call for nationalisation of Port Talbot as a “pipe dream”, yet we now witness in effect the nationalisation of British steel in Scunthorpe. What was dismissed as fantasy in Wales has become a reality in England, and I am glad the Government made that decision here. So I must ask: why was that same courage not shown when Welsh steelworkers needed it most?

The future of British steel cannot be determined by postcode. The people of Port Talbot, and of Sheffield, and across the UK are no less valuable than the people of Scunthorpe. If the Government can intervene to save jobs in Lincolnshire, they should and must do so across the United Kingdom, and of course in Wales.

This legislation may be a stopgap but the choices it exposes will have lasting consequences for people and communities. With the steel strategy, the Government now have an opportunity to turn a new page: to set out clearly how the steel fund will be used, to confirm how much will be invested in Wales and to deliver parity—in funding and in policy. We are not asking for favouritism for Wales; we are asking for fairness and for a level playing field, and that the steelworkers of Wales receive the same support and respect as their counterparts in England.

As the people of Caerphilly go to the polls today, they, like so many across Wales, are watching what this Government do. They see how decisions made here in Westminster and in Cardiff Bay are shaping their futures. Next May, when Wales elects a new Government to the Senedd, the people will deliver their verdict—on who stood with them when their steelworks fell silent. The people of Wales are not powerless; they will be heard, and they will remember. Diolch yn fawr.

13:56

[Viscount Eccles (Con)]

My Lords, in welcoming the opening speech, my primary thought is, “What a difficult job you’ve taken on”. We have been battling with the strategy for the steel industry for rather a long time, we have not made a very good job of deciding what to do, and when we have decided what to do, in general we have not done it.

I will briefly touch on my credentials for talking about the steel industry. When I left Oxford, I became a premium apprentice on Teesside to a firm that made equipment for the steel industry and which had foundries. One of my first jobs was on the progress for the plate coming from the Consett Iron Company and going into the Bradwell boilers for one of our early power stations.

In 1956—a serious time—I was managing a steel foundry. It depended upon a variation of the Bessemer converter. We had a cupola—a very small blast furnace, if you like—and made two and a half tons of steel a day, which went into castings. The same firm had an electric arc furnace foundry in Thornaby which specialised in the making of castings for pumps and valves. That is a very important point. You cannot think about the steel industry unless you think about where the steel goes, to whom it goes and what they do. Then, quite a bit later, I was the chief executive—in those days we were called managing director—of the firm that built the Redcar blast furnace.

In 1970 I had a rather long lunch with the chief executive of the British Steel Corporation. We went to the Connaught hotel, because he liked steak and kidney pie, which was well known to be one of the Connaught’s real specialities. During that lunch, I put the case that there was no future for bulk steel-making in the United Kingdom. At that time, the British Steel Corporation’s plan was to increase it by about 50%. As a blast furnace builder—we built blast furnaces in Argentina, Australia and so on—my analysis was a market analysis. I understand about the politics and the worry about employment, but can say only that I was a victim of what happened to the steel industry. Indeed, I lost my job and had to change my career entirely to something with which I think the Minister is familiar: the Commonwealth Development Corporation.

When I think about the Minister’s task and what has been said about strategy, I have a bother: I do not think it is possible to have a successful strategy for bulk steel-making in the United Kingdom. We do not have the right iron ore or coking coal, and we are not in possession of any particular technological advantage. Frankly, an integrated steel industry is not difficult to manage and it is not difficult to get what comes out of it correct. The clever bit is in the businesses of the makers. In passing, I should say that we have sinter plants at Scunthorpe, which were built by my firm on Teesside during my time there.

I will suggest a few things, if I may. First, you cannot understand the future of steel in the United Kingdom unless you look very carefully at the people who use it. I offer one example: there is a vacuum melting electric arc furnace in the north of England that makes blanks for the blades of aircraft engines. They of course have to be made to the highest possible standard, with no faults and so on. They are clever, and I think it is worth having a close look at the people who use steel to do clever things. It is a pity that we do not have a big domestic machinery industry in this country that uses steel strip.

This takes me to my point about steel in this country: it is completely caught up in what is happening in our manufacturing industry. Without a clear understanding of what our industry and economy can use, we will not get very far. I am not much comforted by the thought that, if there were a third runway at Heathrow, it would absorb a great deal of steel. Quite honestly, my opening thought is, what is to stop us importing it from somebody who is—if I may use the word—dumping, which means selling their steel at a loss?

Going forward, we will have to take careful account of some of the things that we have decided in the past but which have not worked and that, in doing that, we face reality. Of course, we were in the business very early, from Abraham Darby onwards, and of course we had this amazing position. There has been reference to steel-making in India, and the firm I worked for was guilty—if that is the right word—of building blast furnaces in India, so it is not at all surprising that we are uncompetitive. One can obviously complain about the electricity price, and that is another subject, in a way, but the fact is that the basic geopolitical and raw material situation of the United Kingdom is not at all favourable to bulk steel-making.

There is one other point I want to make. There has been very little reference to scrap. I do not think it is possible to understand the position of the users of steel in this country unless you understand the contribution of scrap. There, we do have a slight comparative advantage, because we are an old economy and we produce a lot of scrap. When I was making castings with the Bessemer-type system, I was next door to a scrap merchant. We spent a lot of time trying to see how little pig iron we could use and how much scrap we could use. We had a lot of help. On Teesside, when there was a handsome young man in the latest sports car with a dizzy blonde next to him, we were inclined to say, “Well, he’s a scrap merchant’s son spending his father's money”. The position of scrap has not had nearly enough attention from the people who do the planning.

I conclude by saying that I hope the Minister finds that, in the department, she has people with the knowledge and of the quality who can really think through what has happened to us, why we are where we are and what is best done about it. I suspect that they will do a good job for her if they start at the bottom, not at the top.

14:07

[Lord Hannan of Kingsclere (Con)]

My Lords, I add my voice to the swelling chorus, the paeans of praise, to the noble Baroness, Lady Lloyd. It is no small thing to make your maiden speech at that Dispatch Box, and I enjoyed the way she conjured the image of the subterranean River Effra, encased under all those tonnes of tarmac and concrete, flowing slowly beneath our feet, arched over by those visionary engineers in the Victorian era who incorporated it into the drainage and sewerage system of London.

Something else that is flowing, subterranean, through this debate is the assumption that government help is intrinsically virtuous and beneficial: the assumption that, if there is a problem, it is for politicians to fix it. People in this line of work have, I suppose, a very natural predilection to want to look useful. This can lead us into the fallacy of saying, “Here is a problem. It needs something done. Oh, there’s a something. Let’s do that”.

But when has nationalisation ever been a long-term solution to an industrial problem—not least in the case of steel? The nationalisation did not work in 1949; the nationalisation did not work in 1967. That was not because the people who were put in charge of British Steel were the wrong people, bad people, selfish people or lazy people. I mean, some of them presumably were, by the law of averages, but no more than anyone else. That was simply because a government bureaucrat does not have the same incentives as somebody who actually owns an enterprise. We have seen that dynamic play out again and again. It is extraordinary, in a way, that this needs saying. But, when we had that emergency debate on the legislation back in April, I think mine was the only voice, along with that of the noble Lord, Lord Kerr of Kinlochard, to make the case in principle against government intervention. I think there were two or three in the other place, and that was it.

Thirty years ago, it would have been assumed that things were better left to the private sector. That change in our assumptions, that vibe shift, goes a long way towards explaining why our growth as a country has slowed. The one thing the Government can do is get out of the way, by which I mean: stop legislating to give this country the most expensive industrial energy in the developed world. The reason why we have uncompetitive, energy-intensive industry—not just steel but AI and everything in between—is a series of needless choices we have made that have pushed up the cost of electricity. You may say that this is a price worth paying, that it is either that or lose the viability of the planet; but then, admit that that is the trade-off. Please do not look surprised when energy-using industries then have to shed productivity and employment.

Energy is not just one among many commodities; it is the vector of economic growth. The story of the rise of human civilisation is the story of the fall in energy prices as we moved from fire to kerosene to modern electricity, nuclear and all the rest of it. We have become the only civilisation ever to try to rip out a modern energy infrastructure and go back to something more expensive. Of course, there are consequences when you do that.

I have heard, I think, two arguments for government intervention—forgive me if I am missing anything; one was to do with jobs and the other with security. We are too late on the jobs one. As my noble friend Lord Prior said, we are dealing now with the residue of an industry, no longer with the great global leader it would have been. I hope that noble Lords will not think me ungallant if I point out that the noble Baroness, Lady Lloyd, the noble Lord, Lord Stockwood, and I are all about the same age. We did not grow up with the rhythm of the clangs and groans and hisses of steelworks: it was already gone in the 1970s. The big decline in productivity and employment happened in the 1970s as a result not of trade but of technological advance. That meant that more produce could be turned out by fewer workers. In the 1980s, there was an increase in steel production in this country but a continuing decrease in employment because of efficiencies and those technological gains.

This is something the whole world has seen. Please let us not hold out the false idea that we can somehow go back, if we wanted to, to the levels of employment that my old friend, the noble Lord, Lord Mohammed, was conjuring in his speech about growing up in Sheffield. That world is not going to be brought back. The challenge for a responsible Government is, what do we find as alternatives? How do we carry on moving up the production chain? How do we carry on specialising in what we do best as a country? Yes, if you want to, you can prop up jobs, at great cost to everyone else, but it is worth looking at the figures here. According to the House of Commons Library, there are 37,000 people employed in our steel industry—about 0.1% of our workforce. Let us put that number in context by looking at the numbers employed in steel-using industries, in the sectors that will be most impacted by tariffs or government interventions that serve to push up the price of their steel inputs. There are 95,000 people working in aerospace, 166,000 working in car production, 476,000 working in agriculture and the better part of 2 million working in housebuilding. These are all industries that use steel and whose interest is in having as low a price as possible.

As for security, listening to the debate in this Chamber and outside you would sometimes think that we and China were the only two steel-producing countries in the world and that we need to protect ourselves against a massive influx of goods from a country that is a security threat and is dumping. Noble Lords may be surprised to learn that China is not one of our top 10 overseas suppliers. Our biggest suppliers are Spain, Germany and Belgium. Our fastest-growing suppliers, proportionately, are India, Vietnam and Turkey.

Actually, it is no bad thing that we are diversifying away from the European Union, given how unreliable a trading partner it has just shown itself to be with this threatened 50% tariff on our steel. I am not sure that it will actually go through with a 50% tariff on our steel. My guess is that it is part of its negotiating position in advance of the renegotiation of the TCA. It will be delighted by the response of the noble Lord, Lord Liddle, which is precisely what the threat was designed to elicit, and indeed by the ecstatic ululations from my noble friend Lord Deben, who is no longer in his place. At the very least, I think this is part of trying to get a better deal on fisheries and whatever, but, of course, what it would really like is for us to throw away our independent trading policy and, as the noble Lord, Lord Liddle suggests, join its customs union and subject ourselves to all of the greater tariffs from other countries.

We benefit as both an importer and an exporter. We benefit from having bigger markets. In raw figures, we export £4.8 billion-worth of steel every year, and we import £7.4 billion. By and large, we are exporting the more high-grade stuff and importing the cheaper stuff, but we benefit both ways around. It is better for us to have cheaper inputs and, of course, it is good for us to have the revenue. None of that will be assisted if we try to close ourselves off and become more autarkic. You do not become a more secure country by trying to produce everything yourself. You become a more secure country by having the widest possible diversity of suppliers, so that you are not vulnerable to a local shock or disruption, which might as easily happen on your own territory as anywhere else.

The thing that is really making us insecure is the squeezing of the private sector, the squeezing of the revenue-generating bit of our economy to fund the revenue-consuming bit of our economy, not least by measures such as this one that leave taxpayers on the hook for loss-making industry. The change in the size of the British state since the Guildford three were in Tony Blair’s office is extraordinary. Then, 34p in the pound was spent by the Government; now it is 45p in the pound. That is why we are not succeeding economically in the way that we used to, and until we address that, until we begin to reverse that imbalance, we are not going to be able to release the creative genius of our people.

I will leave noble Lords with this thought. We are not the experts here. There may be all sorts of people with experience in the steel industry, but that does not give them the same proximity and expertise that actual ownership and involvement in the industry does. If a bunch of people from Scunthorpe or Port Talbot or any of the other steelworks came here and said, “Here’s how you should change the composition of the House of Lords, here’s the time of day that you should have your committee meetings, and here are a few changes that we would suggest you make in the protocols of how you do debates”, we would no doubt thank them politely for their input, but we would maintain, quite correctly, that we are the experts here. Please let us have the modesty to accept that the same is true the other way around.

14:18

[Lord Rook (Lab)]

My Lords, it is always a privilege to rise in this House, and it is a particular honour to contribute in a debate comprising the excellent maiden speech of my noble friend Lady Lloyd of Effra. I know all noble Lords will look forward with me to her contribution to this House and, in the context of this debate, to witnessing her expert and steely-eyed focus on the importance of business and work to our country, economy and communities.

My speech will also echo some of the views expressed about community by others in your Lordships’ House. I am particularly grateful to the noble Lord, Lord Mohammed, for his early remarks on the importance of this for our communities, and to the noble Baroness, Lady Smith of Llanfaes. I suspect that my view may be different from that of the noble Lord, Lord Hannan, and that it will resonate less with what he has just said. However, I do not see this as a step backwards; I see it as a step forward into a world where businesses do not have to pick just one thing over another, but can prioritise profit, purpose, people and planet.

For too long, many of the towns and communities that built this country and led the world’s first Industrial Revolution have felt that government no longer works for them. We can debate the causes of that malaise but the effects are plain to see: mistrust of once-trusted institutions, declining faith in politicians and public servants, a growing attraction to the easy make-believe certainties of populism, and increasing social conflict and division. Too many people feel that policy has been designed for the haves—those with wealth, connections and capital—and not for the have-nots. The result is a sense of abandonment. In places where once work gave meaning and stability, and built bonds of trust between people who now feel forgotten, the very heart of the nation’s industrial life has been allowed to erode. Today’s debate on the British steel industry begs the question: can government once again serve those who built and sustained our industrial heartlands?

In Scunthorpe, as in other communities, steel is more than an employer; it is the economic and civic heart of the community. As the honourable Sir Nic Dakin, a Member in the other place, said:

“The … management and workforce … in Scunthorpe have been heroic. Our steelmakers are the finest in the world”.


As his neighbour, the honourable Martin Vickers, observed:

“When such industries decline … people feel cut off from their heritage, their culture and so much more”.


These are not only economic facts; they are social truths. When an industry such as steel falters, it is not just jobs that go: schools weaken, small businesses close, civic pride fades and social fabric frays. What follows is the hollowing-out of community life, the very problem we see in too many towns today.

At this point, I want to welcome my noble friend Lord Stockwood to this House. I recall, a few years ago, a friend telling me that they had been to an amazing meeting at Grimsby Town Football Club. I wondered whether a sentence like that had ever been uttered before, but apparently it was true, as my noble friend had gathered people from across the community to plan their town’s renewal. The Our Future initiative he helped to found, which now reaches well beyond Grimsby, is an example of what genuine regeneration looks like: enterprise, pride and collaboration together. This is exactly the approach we need in times like these. I welcome my noble friend and, if his maiden speech is any good, I may be prepared to forgive him for the fact that Grimsby knocked my team out of the FA Cup earlier this year.

At a time when our nation wrestles with division and distrust, the condition of places such as Scunthorpe is not a side issue. It is a test of whether we still believe in the social purpose of work and business. If we allow industrial decline to continue, we not only lose capacity but a sense of belief and belonging in our communities and our country. We make our country less secure and less competitive. We weaken the bonds that hold us together. That is why British Steel matters. It is not only an act of economic management; it is an act of social repair. By intervening to protect the blast furnaces and preserve our primary steel-making capability, the Government are saying to working people: “We see you. We value you. We will invest in your future”.

Steel should sit at the centre of a broader strategy linking infrastructure, national security, housing, rail and renewable energy to local employment and long-term investment, as we have heard many times already in this debate. The commitment of up to £2.5 billion to rebuild our steel industry is significant. It tells the people of Scunthorpe and beyond that their work is not second-class but central to our future as an economy and a society. Allowing steel capacity to vanish would be not only an economic failure but a moral one. Once those blast furnaces close, the skills and confidence of a community go with them, and they are not easily rebuilt.

Of course, the powers in this Act are exceptional and must be used with care. A decision borne of good stewardship by the Government will clearly need careful scrutiny in the future. But the principle is clear: protecting jobs means protecting communities; safeguarding industry means safeguarding civic life. Pursued with care and consistency, this legislation forms a wider covenant between government and community—a promise not to abandon the towns that built our prosperity but to walk with them into a new age. Renewal will certainly require partnership between public investment and private enterprise. Most of all, it will require the work, sweat and passion of local people who are proud of their town and determined to create a brighter future for their children.

This Act sets a moral direction for our industrial policy. It makes the statement that no community should be written off and no citizen deemed expendable. Looking to the future, we must speak to the fear in our old industrial towns that the next revolution—the digital revolution and the power of AI—will again pass them by. The truth is the opposite: we need steel —British steel—to power the future as much as we did to build the past. From wind turbines and electric vehicles to data centres, rail and clean energy, steel strengthens our national resilience and security, our energy security and the future of our economy.

Our steel-producing communities are not relics of a vanished age. They have a proud place in our history and a vital role in our future. They can once again stand at the heart of national renewal, powering the next generation of British industry with skill, pride and purpose. For that reason, I support the Government’s commitment to British Steel and to the many communities around the country who are working to create a future worth living.

14:25

[Lord Jamieson (Con)]

My Lords, I congratulate the noble Baroness, Lady Lloyd of Effra, on her excellent maiden speech and I look forward to that of the noble Lord, Lord Stockwood, who has the difficult task of pulling together the various strands of this debate into a coherent strategy. I declare my interests as having worked at British Steel, being sponsored by it through university in the early 1980s. I was on the shop floor; my noble friend was in the boardroom at the time. Our paths did not cross. I am also in receipt of a rather small pension from British Steel, which I do not think would be classed as a financial interest.

During that time at British Steel, I was privileged to visit so many UK steel plants—Llanwern, Scunthorpe and all the Sheffield plants, which was where I was based —as well as having the opportunity to visit steel mills in Germany. There was a big contrast between them.

The issues facing the UK steel industry were already clear in the early 1980s. Although the Government had sought to modernise the steel industry in the late 1950s and 1970s, many of these decisions were short term and failed to be truly strategic. The noble Baroness, Lady Smith of Llanfaes, talked about Port Talbot, which was rebuilt in 1959 and was the largest steel producer in Europe, employing more than 20,000 people. But since that time, it has not had the investment or the modernisation it was due. My noble friend Lord Prior gave the example of steel having to be shipped from there to another place in Wales, and back. That is not an integrated steel plant, and it is not how you end up being world class.

In the late 1950s, a political decision was made to invest in two steel plants, Ravenscraig and Llanwern, because the Government could not decide where they wanted a single world-class steel plant. At the same time, the Dutch invested in Hoogovens in IJmuiden, and they built the plant that should have been built in either Llanwern or Ravenscraig, rather than splitting the two in half. That plant in Holland is still producing 7 million tonnes and still a world-class plant, whereas Llanwern and Ravenscraig have both been shut. Decisions made 30 or 40 years ago can have fundamental long-term impacts.

In 1979, a single blast furnace was built on Teesside, as my noble friend pointed out—he was building it. It was the largest in Europe, the most modern, the best and so forth. Unfortunately, the rest of the investment did not happen. You cannot run an effective, integrated steel plant on a single blast furnace. You cannot run it unless you have the full mix of hot-rolling mills, cold-rolling mills, rod mills and so forth. Again, that blast furnace shut in 2015. I refer to this history because it illustrates a point: for steel-making, you need world-class plants, and you need to think long term.

As I said, I spent most of my working time in the Sheffield area, where steel-making was based on electric arc furnaces, which, according to this debate and others, is the future. I agree. Sheffield has a great heritage in steel-making, being the place where the original Bessemer process was first commercialised. When I was there, the steelworks in the Sheffield area—Stocksbridge, Rotherham, Tinsley and Templeborough—were leading European producers of special steels from electric arc furnaces. This was and should have been a highly competitive position. These were added-value steels, there was deep knowledge and skills in the area, and an ample supply of raw material from the UK—scrap steel. These were well-managed operations, which were going through technological change as they moved away from the traditional rolling, bloom casting and billet casting to continuous casting, which is a substantial reduction in cost, as we moved away from the old electrical management systems of transistors and so forth to digital and automation of the processes.

That is a big change and one of the issues was that not enough was done. Since I left, very little has been done to improve those plants, which is why a number of them were shut. That was about investment and, to be slightly controversial, it was also about a workforce reluctant to embrace the fact that if you invest in this new technology, a continuous casting billet machine, for example, takes far fewer employees than a number of rolling mills. It needs to be embraced. One of the interesting things when I went to Europe and the German mills was the greater willingness of the workforce and unions to think long-term. It was not about securing jobs for today; it was about securing maybe fewer jobs but for the long term.

As my noble friend Lord Hunt and others have mentioned, the big issue in the UK is the cost of energy. It is the Achilles heel of the industry. As my noble friend Lord Hannan has pointed out, we may choose to have a more hands-off approach, but if we do not have cheap energy we will not have a steel industry; it is as simple as that. Energy can make up 50% of the costs of an electric arc furnace plant. When you are paying 25% more than Europe and probably double than in China, you are simply not competitive. I give as an example the fact that in the 1970s the UK produced nearly 30 million tonnes of steel and China produced about 20 million tonnes. Today, we produce just over 5 million tonnes, which is less than that single site in Holland, and China produces over 1 billion tonnes. Importing steel from China is not about addressing climate change. Manufacturing in the UK is much better for climate change than having it made in China.

The purpose of this debate is to talk about a long-term strategy for the steel industry and hence I gave a bit of background. If we are to have a successful steel industry in the UK, we need to take this seriously. We can have world-class plants, and I sympathise with the comments of the noble Lord, Lord Mohammed of Tinsley, about the tripartite industry based on Port Talbot, Sheffield and Scunthorpe. But to do this we need a proper strategy. Temporary life support does not work; it just ends up costing the Government money and the problem remains. The fundamental one is low energy costs. If we do not have this, we do not have a steel industry.

We also need modern, well-invested in plants that are world-class. That may be done by the private sector; it may be done with government helping to support some of those changes. It was very interesting to look at the Port Talbot plant. It is great that we have investment in a single, very large, efficient electric arc furnace. But it is not long-term competitive to have just one. You end up with the same issues they had on Ravenscraig. You need two and you need a proper integrated plant. I am not saying how we should get there or whether the Government should do that investment. But if you do not have that strategy, you will not have a long-term plant.

Finally, the Government need to create the right environment. Yes, it is about energy and having the right tax system that encourages investment and does not penalise employing people. They need to be robust when it comes to looking at tariffs. If we are going to successfully export specialist steels, we need a tariff system that does not penalise us. If we are going to demand very high standards in terms of climate and the environment of our steelworkers, we cannot be importing steel from someone else who pays no attention to those standards. That is about the environment.

I look forward to hearing what the Minister has to say. I hope those have been some helpful pointers.

14:34

[Lord Fox (LD)]

My Lords, there may be far fewer of us here today than there were in April, but the concentration of steel expertise was raised accordingly. That caused me to have to reach back in my own experience to at least try to come up with something. I worked largely for the users of steel, but in my last corporate role I worked for a company that owned an electric arc furnace in the United States to produce powder metallurgy from used cars. Standing in front of an arc as the electricity goes into the crucible, you can viscerally feel that power that is used to melt scrap metal; it is quite an experience, and it puts in context what these much larger arcs must be doing.

I congratulate the noble Baroness, Lady Lloyd, on her maiden speech. There were moments later on when I felt like I was gatecrashing a reunion but, leaving that to one side, I look forward to her role going forward in your Lordships’ House.

I was also delighted to be on the Benches when my noble friend Lord Mohammed made his speech because he established a point at the beginning: of course there are mills and plants, and there are supply chains, but they all lead to communities, which lead to families and people. That is why I turn to the noble Lord, Lord Hannan, and say: yes, we must be careful about nostalgia, but we have to remember where this industry has come from, what it has meant and what we have to do to try to make sure that its people can come along with whatever the future strategy is. I was grateful that the noble Lord, Lord Mohammed, put us in that position.

We have this debate today because of the amendment that we pushed for during the original passing of the Bill, and I hope it will bring some scrutiny. To that end, I will probe quite a few of the issues, and I hope the noble Lord, Lord Stockwood, will have the chance to answer every one of my questions and to give his maiden speech. But, if he is unable to do so, I hope that the people sitting in the Box behind him will be able to respond in due course.

As we have heard, there is plenty to discuss and there are plenty of questions to ask. A lot has happened since that debate in April, but some things have not happened. The blast furnaces in Scunthorpe were not shut down, which is a very good thing, and we should applaud that process. Then, in July, the US President did not double tariffs to 50%; that left the UK at 25%—but, of course, subject to future whim as yet unknown. These days, that seems like a win, but given that less than a 10th of our steel exports are to the USA, it is very much less significant than what may or may not be happening with our relationship with the European Union.

As we have heard, the EU’s 50-50 proposal would be pretty devastating to half of the 80% of our exports that go there. This was announced in October and, as we have heard, it is subject to approval from member states, the Parliament and WTO negotiations. It would cut quotas from the UK into the EU by half and create a new 50% tariff applied to all imports above that slashed quota. That would leave tariff-free exports at 18.3 million tonnes for the UK—a 47% reduction from 2024.

I of course associate myself with the cry from the noble Lord, Lord Liddle, for us to join a customs union, but, leaving that to one side, I was interested when the Minister said that, in the event that such a thing happened, the Government would take any necessary action. I wonder what legal framework the Government will apply to take any such action. The EU has trade defence instruments, but we do not have the same instruments—we chose not to adopt those post Brexit. So our relationship with trade retaliation and the WTO, and our stated aim to maintain international law, is quite a compromised position. I would be interested to hear from the Government how such retaliation measures could be justified within international law.

Turning back to the US, can I ask whether the Government are still working on their stated aim of securing 0% US steel tariffs, which was paraded at one point during the various discussions? Nothing has surfaced. Is this now officially dead?

When we look at this sector—we have heard about the various elements—it really is a sad tale, in many senses, of a sector in decline: of a rescue and sale, and re-rescue and further decline, in a series of downward steps to leave us in the position we are in now, with a very small steel industry, as we have just heard. Essentially, all our steelmakers face a huge challenge, and most if not all are being propped up by the Government. In response to the suggestion of the noble Lord, Lord Hannan, that we kick those props down and see what happens, I think we know what would happen if the Government did not act as they are and had not acted as they did.

On the future ownership structure, we heard from the Government—from Jonathan Reynolds—that they would like a sector partner going forward. Yet with honourable exceptions such as Tata, past experience has shown that the sort of businesses willing to take on the mantle of a partner are often ones that fail to come up with the capital model or to do what needs to be done. That will be a challenge for our new Investment Minister, and it would be useful to understand how he and his department will go about finding that sector partner and where they might look.

All this begs a question that each of you in many ways has probed: what is the future purpose of steel in Britain, and what will the strategy seek to make happen to deliver that future shape? The Government closed their consultation more than six months ago but have yet to present any outputs relating to strategy. June’s industrial strategy and the corresponding August advanced manufacturing sector plan referenced steel as an important industry but committed only to a future steel strategy. That provides no certainty or clarity for a sector that desperately needs things to cling on to.

I think there is, on paper, a Steel Council. Can the Minister tell us how many times it has met, whether it has reviewed a draft of the steel strategy and whether it has approved the strategy? Where will the strategy be signed off: by the Secretary of State, the Prime Minister or the Treasury? More than that, when it is eventually launched, how will the strategy be implemented? It is in implementation of strategy that we find so many shortfalls.

With steel we have seen something interesting: there was necessary frenetic activity in the run-up to the Government stepping in. There were dramatic tales of actions taken under the cover of darkness, if not by Johnny Reynolds then by some of his colleagues, to secure the future of the blast furnace. That is great—but there has not been much of a narrative since then. What is actually happening?

Moving on, I have more questions. Where are the Government in their negotiations with Jingye? The Minister painted a slightly rosy picture of their relationship with Jingye, which I find interesting and perhaps hard to understand. In my understanding, Jingye is seeking many hundreds of millions of pounds in compensation for what the Government have done. Have they ruled out handing any public money to Jingye, or is it just a matter of how much and when? If they agree to pay it any money, where will that money come from? Will it come from the steel rescue plan or from a separate Treasury fund? That steel rescue money is already in demand. As we have heard, £500 million has gone to Tata towards the installation of the electric arc furnaces, but in Scunthorpe costs are being incurred too. As the Minister said, £270 million has been provided, ostensibly for working capital and things such as raw material. But there will be ongoing costs, and it would be helpful to understand, given that the £270 million is a downpayment, the likely monthly ongoing cost that will be drawing down from the steel fund.

Looking forward, having saved the furnaces, the Government need to determine how that can ever be cost effective. That really relates to much of what we have heard already. In September 2024, Jonathan Reynolds told the House of Commons that the Government’s preferred option was a transition plan in Scunthorpe to more electric arc furnaces. If they started now, we would not have an arc furnace there until 2030. How is the blast furnace to arc furnace transition in Scunthorpe ever to be financed, and indeed be financeable?

In the short term, internal markets have been identified for the product in Scunthorpe, but most of those markets are things that have not happened, are not happening and may happen some time into the future. The whole structure of the market for Scunthorpe is not there. Given that the cost of Chinese and other steel is substantially cheaper for most of the sort of steel that has been identified for Scunthorpe, again, how do the Government square the circle on costs while maintaining what they want to do?

I will not go into energy costs, because your Lordships have done it so well, except to say that there are ways of reducing the cost of electricity by delinking it from the cost of gas—our leader, Ed Davey, has been very clear and detailed on that. That would be a start for the industry.

The steel industry has stood as a great pillar of British industrial strength, but we have had historical decline, policy drift, mismanagement, bad commercial marriages and external market pressures, which have put us, frankly, at the point of near-extinction. Perhaps it is the best of all possible worlds, unless we understand what the optimal activity is and what the optimal scale for that activity is across the country. That is what we are waiting for in the strategy. We have to decide what we are going to do, and it certainly is not doing everything everywhere. I ask the Ministers to take on board the absolute necessity to be focused in what we do.

This is an important industry; it is one that we value, but one that we need to target and focus. It is quite clear that we cannot remain where we are now. We need to know where we are going—and very soon.

14:47

[Lord Sharpe of Epsom (Con)]

My Lords, before I begin, I also add to the general praise for the noble Baroness, Lady Lloyd of Effra, for her excellent maiden speech, and I wish the noble Lord, Lord Stockwood, the very best for his, while also welcoming both to the House. As the noble Lord, Lord Stockwood, will not be followed, I take this opportunity to say how welcome it is to have someone with his business experience join the Labour Benches.

This has been a wide-ranging and extremely interesting debate. The one theme that is very clear and has come from pretty much all speakers across the House is the lack of the strategy. I think the noble Lord, Lord Fox, just summed that up rather well. The first of the questions that I therefore add to the long list from the noble Lord, Lord Fox is: can we please have a date for the strategy? When can we expect it, and when can we expect to discuss it?

In starting, I echo the words of my noble friend Lord Hunt of Wirral, and indeed several other noble Lords. The Government’s handling of the steel industry has, to put it mildly, been deeply unsatisfactory. The events of six months ago must not be allowed to repeat themselves. Your Lordships’ House was offered little clarity as Ministers rushed through emergency powers—powers granted, as my noble friend reminded us, without a sunset clause. As a result, we have no indication whatever of when or if this Act will be repealed, in spite of ministerial assurances at the time. Instead, the saying that “nothing is so permanent as a temporary government programme” seems to hang rather ominously over us. I therefore ask the Minister to tell the House precisely when the Government intend to bring this legislation to an end.

The agreement reached by the previous Conservative Government with Tata Steel in relation to Port Talbot should have provided this Government with a clear and successful template for transition. It is a partnership model that combined industrial realism with long-term vision, with a keen eye on steel security. Yet by all accounts the current Administration have not followed that example. Indications suggest that the key sticking point in the Government’s continuation of the negotiations, originally initiated under the previous Government, has been an insistence that the existing loss-making basic oxygen furnace operations be maintained throughout the transition phase. This is an approach that defies both commercial logic and fiscal responsibility, as my noble friend Lady Bloomfield of Hinton Waldrist highlighted.

I ask the Minister, specifically in relation to the events leading up to 27 March 2025, what proposal did the Government put to British Steel? What counterproposal did the company make in response? What contingency planning, if any, was undertaken to address the possibility of a breakdown in negotiations? It is now evident that Ministers were woefully unprepared for the outcome that followed.

We have to revisit the Government’s narrative concerning Jingye’s responsibilities. A proper under- standing of British Steel’s position is essential if that narrative is not to descend into distortion. During the first four years of Jingye’s ownership of British Steel, from late 2020 to late 2023, the Government’s operating losses and capital investments required injections of some £811 million in loans and equity, almost all of which were provided, in cash, by Jingye itself. The solvency of the business was wholly dependent on that continuing support. By the end of 2024, it is probable that British Steel’s combined intercompany debt, equity and assets exceeded £1 billion.

It is simply not realistic to expect any private enterprise to provide indefinite cash support to a loss-making operation of that scale. Jingye quite reasonably sought to restructure its business model to place it on a sounder financial footing, as any responsible company would, provided that it acted lawfully and with due regard to its other obligations. But instead of engaging constructively, the Government chose to declare a national emergency and seized effective control of the company, locking its directors out of their own plants and records, while simultaneously requiring them to retain their statutory and common-law duties to the company. That is an extraordinary and troubling position. It represents a clear violation of private property rights. British Steel and its directors had, until that moment, acted entirely within the law, yet they were treated as though they were the problem rather than the victim of government failure. As my noble friend Lord Hannan of Kingsclere argued so persuasively, we know where that inevitably ends.

It would not be the first time that a Labour Government have sought to blame private enterprise for the failures of the state, but here we are. The pattern is familiar: mismanagement, intervention and then the scapegoating of those who have invested, worked and strived to keep a British industry alive. Does the Minister accept that such an action represents a serious breach of private property rights? What precedent does this set for other foreign investors considering the United Kingdom?

The Official Opposition have made the point in your Lordships’ House and the other place numerous times since the Government took office that their energy policy is leading to skyrocketing electricity prices. We have heard a good deal about that around the Chamber today, including most persuasively from my noble friends Lord Jamieson and Lord Prior of Brampton. Britain and Europe are deindustrialising, largely because of high electricity prices—it is simply much cheaper to make things abroad. Meanwhile, exporting production in this fashion almost certainly makes global CO₂ emissions worse than if we made them at home. It looks very much as if we have a situation—which could only be created by a Labour Government—where the net zero-policy undermines net zero.

Having said that Europe is deindustrialising, it must also be said that it is streets ahead of us as regards steel. The EU steel and metals action plan aims at securing commercially viable melted and poured steel, partly through developing an effective carbon border adjustment mechanism which will help ensure competitive energy supply and cost. Are the Government looking at this as a possible model, without necessarily resorting to the suggestions of the noble Lord, Lord Liddle?

Recently, my noble friend Lord Hunt and I—this will please my noble friend Lord Eccles—met the British Metals Recycling Association, an organisation founded in 1919 that contributes over £9 billion in gross value added to the UK economy annually and supports more than 15,000 direct jobs across 2,000 businesses. It made plain to us its grave concern that the Government may consider pursuing restrictions on the export of recycled metals under the mistaken belief that this might somehow strengthen domestic steel production.

The evidence shows the opposite. Independent research conducted for the BMRA by the Centre for Regional Economic and Social Research at Sheffield Hallam University concludes that even modest constraints on exports would cause billions of pounds in lost economic value and tens of thousands of jobs to disappear over the next five years. A 50% export quota alone would, it estimates, result in a £4 billion loss in GVA and more than 23,000 full-time equivalent jobs lost. A total ban on exports to Turkey, which is our single largest market for recycled metal, would remove over £2 billion in value and jeopardise almost 7,000 jobs.

But the economic cost is only part of the story. The environmental consequences would be equally perverse. Restricting exports would not increase the recycling of metal in Britain; it would reduce it, by undermining the financial viability of recyclers who depend on global competition to sustain fair prices. It would mean less investment in cleaner, higher-grade feedstock and in the advanced sorting and quality systems essential for the production of low-carbon electric arc furnace steel. Indeed, the BMRA has warned, quite credibly, that if the sector’s viability were threatened, the unintended consequence could be an increase in things such as fly-tipping as end-of-life vehicles and electrical goods are dumped rather than recycled. Without access to international markets, the recycling industry cannot survive, let alone flourish and invest in the emerging technology that will make British steel greener and which, of course, is so necessary to the new electric arc furnaces.

The Government recently announced stronger trade safeguards on steel imports, claiming these measures will protect British jobs and rebuild our industrial strength. However, such a measure would have ramifications for the pound sterling and, as we know from experience, trading partners may respond with their own restrictions on UK exports, as evidenced, and as has been discussed by a number of noble Lords, by the EU recently announcing it will reduce tariff-free quotas on imported steel and hike tariffs from 25% to 50% on any excess imports. I look forward to the Minister’s answers to the questions from the noble Lord, Lord Murphy of Torfaen, on this subject.

This, in turn, will reduce access to global markets and lower overall trade volumes. By sheltering less competitive industries, we risk diverting labour, capital and energy away from high-value sectors such as aerospace, pharmaceuticals and renewables, ultimately weakening productivity and long-term economic growth. Steel is a vital input for industries such as construction, automotive and energy infrastructure, so higher steel prices would increase costs, reduce competitiveness and even push some firms to relocate. As always, protection for one sector can become a tax on many others, and protectionism and subsidies carry costs.

I conclude by asking a few very specific questions of the Government. Have they considered the potential impact of these safeguards on the competitiveness of other UK export industries? Have they assessed how higher domestic steel prices might affect downstream sectors, such as construction and manufacturing? What analysis has been done on possible retaliation from trading partners and the effect on UK exporters? Can the Minister confirm that the Government are considering, or will consider, the concerns outlined by the metal recycling association about export restrictions in the forthcoming steel strategy?

I move to a few broader questions. In his recent visit to China, did the new Secretary of State, Peter Kyle, talk to Jingye? If not, why not? If yes, can the Minister outline what was discussed? I may have misheard, but I will ask this anyway: I believe the noble Baroness, Lady Lloyd, said in her the opening speech that the rules have been changed so that British-made steel must be “considered” in public procurement. Can I probe a little more what “considered” means in practice? If it meant preferred, that would potentially leave us falling foul of WTO rules, but if it just means being considered, was it not being considered in public procurement anyway?

Where is the latest four-weekly report? I think the last one was delivered at the very beginning of September, and we are now seven weeks away from then. Finally, I reiterate, we need a strategy and then all these questions would, we hope, go away.

14:59

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab) (Maiden Speech)]

My Lords, I am pleased to respond for the Government and I am grateful to my noble friend Lady Lloyd for initiating this debate. Based on the comments, it seems I am the only one who has not worked with her in a previous life, so I look forward to working alongside her in both the Department for Business and Trade and this House over the coming months.

I begin by thanking my noble friends Lord Glasman and Lord Kennedy for the generous introduction to the House and recognising the warmth and generosity of spirit with which my fellow Members and staff have welcomed me. It is the greatest honour of my life to take my seat among you. Honour is the right word because I know that, from where I come from, there are very few people who get to sit with noble Lords. As was mentioned, I grew up in Grimsby, after the Cod Wars of the 1970s. It was an industrial town like so many others and, as happened to so much in that generation, globalisation and international politics created unforeseen consequences for the town that I love.

My mum and my grandmother raised me and my three brothers alone. It is a strange synchronicity that she passed three years ago and it is her birthday today, which I only found out when my brother texted me this morning. Growing up, I never knew my dad. We grew up in a council house and, while we did not go hungry, there was a constant stream of red late-payment reminders coming through our letterbox. I remember often feeling cold and seeing frost on the inside of our windows in winter—in fact, I am still paranoid about the thermostat in my own home today, which drives my family mental.

Knowing what I know now, I realise these circumstances do not often lead to prosperity, yet here I am among noble Lords in the House of Lords. If noble Lords will indulge me briefly, I think it is important for me to pay tribute to the support that got me here today: my mother and grandmother, who in challenging circumstances always did their best for us; my three brothers, for keeping me grounded and connected to the town that I love; my wife and children for their love, laughter and security, which allowed me to go out in the world and be myself; importantly, the innumerable people who took a chance on me and backed me to succeed; and, finally, our welfare state, without which I would not be on this earth, let alone in this House.

It is because of those people and institutions—and, let us be honest, a little bit of luck as well—I was able to succeed in business, taking my life and career from the docks in Grimsby to call centres, eventually to the world of entrepreneurship, and even today I own a stake in my boyhood club, Grimsby Town FC. Incidentally, it gave me the previous greatest honour of my life when we beat Manchester United, which the noble Lord, Lord Rook, mentioned—I know the noble Lord, Lord Lamont, a fellow Grimsby Town fan, will appreciate that.

It is very fitting for me personally to be giving my maiden speech in a debate about steel. Just half an hour away from Grimsby lies Scunthorpe—our great football rivals, not least because of our similarities. We are both industrial towns but, while Grimsby’s economy struggled for decades to weather the shift in geopolitics and trade dynamics, Scunthorpe has a chance now to succeed, thanks to this Government’s intervention—not only Scunthorpe, but the region, which, thanks to the incredible work being done locally, is poised to capitalise on the opportunity of the clean-energy transition and the investment and good jobs that this transition will create. I understand our accomplishments are not a cure-all. There is still much work to do to ensure a bright future for our steel industry, but had we not undertaken those steps six months ago, the road ahead would look very different.

I had the privilege to be in the room in Scunthorpe with friends and the PM on the day the announcement was made, and the community was given a lifeline and a chance to begin their own renewal. If the people of those steel towns need hope for the future, they should look no further than Grimsby, which has begun its own renewal, at the centre of the nation’s offshore wind industry, which is bringing in good, well-paying jobs and raising living standards in the town. If there is one lesson from Grimsby’s renewal, it is this: progress is possible, but only when people come together, shoulder to shoulder, to play their part.

Before I come on to the comments about the steel industry in this debate, it would be remiss of me in my new role as Minister for Investment not to respond to the comments from the noble Lord, Lord Hunt, about disincentivising foreign direct investment. The recent evidence demonstrates that, even in the eight weeks I have been in the role, the UK investment environment is thriving. We are committed to a 10-year industrial strategy as a party. As an entrepreneur, I believe that we are in a situation for turnaround. We have a clear plan, we recognise the problem and now we need to execute. I am happy to have a follow-up conversation with the noble Lord on that matter, but it would be remiss of me not to mention that before I start.

I now turn to some specific points made in the debate. I want to start by recognising all the personal connections in the comments of those who spoke, particularly the noble Lords, Lord Mohammed and Lord Prior, and the noble Baroness, Lady Bloomfield, whose parents worked in the industry. As this is my first time addressing this House, I trust noble Lords will forgive me for oversights or questions unanswered. I appreciate the noble Lords, Lord Fox and Lord Sharpe, giving me the opportunity to reply to detailed questions in writing, which I will take them up on, so thank you for that.

As for when the steel strategy is coming, and the delay to the September steel council, raised by the noble Baronesses, Lady Hunter and Lady Smith, the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria, Lord Liddle and Lord Prior, and the noble Viscount, Lord Eccles, the Government are very clear that there is a future for steel-making in this country. That is why we intervened in April to keep Scunthorpe’s blast furnaces lit. The company is now hard at work to secure the future of British Steel.

This will not be without its challenges. Noble Lords will recall that Jingye acquired British Steel in 2010 at a time when the business was already in distress. Since then, it has faced persistent difficulty in market conditions, and regrettably, the company has not yet succeeded in returning the business to profitability. I support the comments recognising the incredible work of the management in this intervening and difficult period.

The support for British Steel has been mentioned. Although no long-term decisions have been made and taken in respect of the Scunthorpe site, I reassure the House that discussions with the owner are ongoing, and our policy and strategy work continues at pace to develop the optimal approach. This Government remain steadfast in their commitment to economic growth in north Lincolnshire.

For the avoidance of doubt, British Steel belongs to Jingye. The actions taken by His Majesty’s Government to date, including under those provisions of the special measures Act, do not constitute nationalisation. Rather, they represent a temporary, targeted intervention, designed to ensure the uninterrupted production of British steel.

That said, we have been very clear that securing the long-term future of steel-making in Scunthorpe will require significant investment. Such investment will support modernisation and decarbonisation, protect skilled jobs and safeguard the interests of the taxpayer.

On the question raised by the noble Lords, Lord Hunt and Lord Mohammed, on the sunset clause and the future of the special measures Act, noble Lords will recall that during the emergency debates on the special measures Bill, there were calls for a sunset clause in the proposed legislation to limit the duration of the Government’s powers to intervene in the steel industry. I recognise the ongoing desire for clarity regarding the future of the Steel Industry (Special Measures) Act.

As promised, the Government have been updating both Houses regularly on the powers in the Act and how they are being used. I further assure the House that once directions to British Steel are terminated, we will update Parliament on the repeal of the special measures Act.

On Tata Steel, raised by the noble Lords, Lord Hunt, Lord Bilimoria and Lord Murphy, and the noble Baronesses, Lady Bloomfield and Lady Smith, the decision to close the blast furnaces at Port Talbot was a commercial one, taken by Tata Steel in January 2024 under the previous Conservative Administration. By the time this Government took office, the process was already well advanced. Noble Lords will be aware that the first furnace ceased operations in June 2024 and the second followed in September.

However, we negotiated an improved deal with Tata after just 10 weeks in office, with better support and protections for workers, including the most generous voluntary redundancy package Tata has ever offered. We have since fully allocated the UK Government’s £80 million contribution to the Tata Steel/Port Talbot Transition Board to help people learn new skills, support the supply chain and protect people’s mental health. That this funding has been delivered in under a year is a testament to this Government’s commitment to the community impacted by Tata Steel’s UK transition to greener steel-making.

The electric arc furnace’s groundbreaking in July and the start of the work on the new pickle line in September are pivotal milestones demonstrating practical delivery of this complex project. These developments not only secure the future of steel production in Port Talbot but position the UK at the forefront of sustainable industrial transformation. At this point I would like to recognise the noble Baroness, Lady Smith, for her passion about her community and for her questions, which I deeply appreciate.

The topic of industrial energy prices came up often, raised by the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria, Lord Murphy and Lord Hannan. Since the 2010s, these prices have risen by more than 50% in the UK. Today, UK industrial energy costs are approximately 30% higher than those in Germany, 50% higher than those in France and more than four times those of the most competitive states in the United States.

Energy-intensive industries, including foundational sectors such as steel and metals production in Port Talbot and Scunthorpe, and vital industries such as glass, cement, steel and chemicals, are the backbone of our manufacturing economy. Due to their high-grade electricity usage, these sectors are particularly sensitive to increases in electricity prices. They employ around 400,000 workers and contributed £30 billion in gross added value in 2019, representing 1.5% of our national economy.

These businesses are indispensable to maintaining a resilient manufacturing base across the UK, which is why the Government provide relief to over 500 companies in these industries, supporting them with increasing industrial electricity prices due to the increased renewable policy costs. We do this through two key mechanisms: the British industry supercharger and the EII compensation scheme. These programmes ensure that our energy policy does not deter investment or production in the United Kingdom. They keep electricity prices competitive compared with international competitors and ensure that thousands of British jobs are safeguarded.

As part of our modern industrial strategy—

[Lord Fox (LD)]

My Lords—

[Lord Stockwood (Lab)]

I am aware that there are many questions; I guarantee that we will respond to them in full in writing.

As part of our modern industrial strategy, the Government have proposed deepening the support provided by our British industry supercharger by increasing the level of network charging compensation from 60% to 90% by 2026. We have consulted on this proposal and will respond in more detail in due course. This Government remain steadfast in their commitment to ensure that our energy-intensive industries are not disadvantaged by our transition to net zero. We will continue to support these sectors, which are vital not only to our economy but to our national resilience and prosperity.

I turn to the questions about global excess capacity and market-distorting practices by China, raised by the noble Lords, Lord Hunt, Lord Mohammed, Lord Bilimoria and Lord Liddle. As my noble friend Lady Lloyd of Effra set out in her remarks, we are calling out the practice of some countries that are choosing to flood the market with cheap steel in a bid to quash healthy competition. She joined Ministers from partner countries at the global forum on steel excess capacity in South Africa earlier this month, and the UK has lobbied hard to develop a comprehensive framework for joint action to redress global steel excess capacity by June of next year. The noble Lord, Lord Hunt, asked specifically about discussions with the WTO, and the UK regularly challenges China’s market-distorting practices during bilateral meetings, at the WTO’s subsidies committee and in other settings.

I turn to the topic of EU and US tariffs, raised by the noble Lords, Lord Bilimoria, Lord Murphy and Lord Liddle. The Government want to do everything they can to mitigate the impacts of tariffs raised by international partners. The UK will always defend its critical steel industry where required, and we will continue to explore stronger trade measures to protect UK steel producers from unfair behaviours.

On the recent announcement by the EU on proposed new steel trade measures on imports to replace the current steel safeguard, we are in close contact with the European Commission to understand the details of this proposal. This decision was not targeted to the UK but would be highly concerning for many steel producers and their workers, so we have been meeting with the steel industry to understand its impacts. As ever, this Government are committed to defending our critical steel industry.

Moreover, thanks to the strength of the UK-US partnership, the UK remains the only country to benefit from a preferential 25% tariff on steel and aluminium on all our exports to the US, avoiding the global tariff of 50%. That has reinforced the UK’s position as a trusted source of high-quality steel and aluminium. We have already committed up to £2.5 billion of investment, including through the National Wealth Fund, to rebuild the steel industry and continue to explore stronger trade measures to protect UK steel producers.

The UK has a robust trade defence system in place, including the UK’s existing steel safeguard measures. While the UK steel safeguard will expire in June 2026, in line with the WTO rules, we held a call for evidence from 26 June to 7 August to gather stakeholder views on the future policy options, and we are keeping all options under review to defend our critical industry. As set out in the trade strategy, the international trading landscape has rapidly changed, and we are sharpening our toolkit to respond to these increased threats.

To some of the points that the noble Lord, Lord Fox, made—I will have to write to him personally on many of them—I concur with his views on the fact that our families and communities should be at the heart of this debate. I remind the House that at present there are proposals and that we will not be drawn on the UK’s response to EU tariffs, but we will continue to take a cool-headed approach.

The UK Steel Council has met on three occasions, in January, April and July, and the next meeting is scheduled for 4 November.

On the question of our relationship with Jingye, the Government are engaged in a constructive dialogue with Jingye, in line with our commitment to a pragmatic commercial solution.

In closing, I just want to reiterate my thanks to all noble Lords who spoke in today’s debate. I want to convey my appreciation for their valuable contribution of insights and thank them for their generosity in allowing me to give written responses to many of the questions, particularly those asked at the end. I guarantee that we will provide written answers to anything I have missed.

My noble friend Lady Lloyd and I have set out the Government’s long-term vision for a strong, resilient, productive steel industry in this country that is primed for long-term success, driving growth in the communities that depend on our steel industry and help build it—the same communities that I spoke about in my opening remarks. The Government want them to feel and see the benefits of our plan for change and the decade of national renewal that we promised, and I look forward to working with noble Lords in that ambition.

Motion agreed.

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

My Lords, before the House adjourns, I congratulate my noble friend Lord Stockwood on a truly excellent maiden speech. I was honoured to have been one of his supporters when he came into the House only a week ago. He has had an extensive and successful business career and will be of great benefit to the Government in the important work he will now do as Minister for Investment. He has achieved much in his business career, but, as he said, being the chair of Grimsby Town Football Club when they beat Manchester United 12-11 on penalties, knocking them out of the Carabao Cup, was a momentous day for him and everyone living in Great Grimsby. I watched my noble friend give many TV interviews the following day. I wish him well in his new role and I look forward to hearing from him many more times in the future.