Steel Industry (Nationalisation) Bill

Lord Fox Excerpts

3rd reading
Monday 13th July 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, I agree with the Minister that the Bill is an important element in securing the future of the vital steel industry. It is, of course, a first step. There is an awful lot to do.

The Bill leaves your Lordships’ House in a better state than when it arrived. For example, it is now mandatory for overall costs of nationalisation to be taken into consideration by the Secretary of State when assessing the public interest; environmental legacy costs must be fully assessed by the valuer; there will be parliamentary debates and quarterly Written Ministerial Statements; the management of a business that is nationalised will be quizzed by Select Committees, and the steel council will better represent steel users.

Those are all important steps, and many are improvements on parliamentary accountability, which was the mission that we on these Benches set ourselves at the beginning of this debate. I echo the Minister in saying that that could not have been achieved without co-operation and debate.

I thank the Minister, his team and the departmental team for their openness, availability and flexibility. I thank the Minister in the Commons too for the time that he spent. I thank the noble Lords, Lord Sharpe and Lord Hunt, who remained, as ever, amiable debate company as we wended our way through the Bill. Finally, I thank Ulysse Abbate in the Lib Dem Whips’ Office, whose support has been superb.

As I said, the Bill has been materially changed. I hope that the Commons accept our changes and we do not have to see the Bill here again. It is a first step. I wish the Minister well in taking the next steps.

[Lord Sentamu (CB)]

My Lords, I apologise to the noble Lords, Lord Fox, Lord Hunt and Lord Sharpe. Their amendments were to this Bill and not to the trains Bill. Nevertheless, the point stands. The attendance was no greater than when it was debated in Grand Committee. I apologise and sincerely hope that they realise that I was so involved with both Bills that, in my enthusiasm, I erred. I am sorry.

Unpaid Carers

Lord Fox Excerpts

Wednesday 8th July 2026 Lords Chamber

[Lord Leong (Lab)]

I hear what the noble Lord says about national insurance, but let me say this. There is a moral imperative on employers to play their part in supporting unpaid carers. There are fantastic employers up and down this country that are doing fantastic things to support carers. I shall give an example: Centrica estimates savings of £1.5 million last year in reduced absence costs alone, achieved through support measures for unpaid carers, with further savings on retention. So these measures result in improved retention, better productivity and reduced absence from work.

[Lord Fox (LD)]

My Lords, when I was piloting the Carer’s Leave Bill 2023 through your Lordships’ House, Centrica was one of the companies I spoke to. Centrica and other companies were already doing phenomenal work, but we all agreed that the Bill was the first step for unpaid carers. The Act has now been in force for just over two years, and data on take-up is sketchy. At best, the Minister’s department puts take-up at 29% of those eligible, but other data says just 10%. We do not have to wait for a consultation. The barriers have been researched by the Minister’s department. The first barrier is that it is unpaid by nature: that is what we hope to change. But the second is awareness, or lack of awareness, by people who might benefit. The third barrier is fear from employers. Can the Minister tell your Lordships’ House what the Government are doing in order to take away those two important barriers—for people getting what little benefit they have already—before his consultation finishes its work?

Steel Industry (Nationalisation) Bill

Lord Fox Excerpts

Report stage
Wednesday 8th July 2026 Lords Chamber

Moved by

[Lord Fox]

1: Clause 2, page 1, line 13, at end insert “and,
(b) has had regard to the impact of exercising that power on the public finances.”Member’s explanatory statement
This amendment would add a new condition that the Secretary of State must consider before exercising principal transfer powers.

[Lord Fox (LD)]

My Lords, in moving Amendment 1, I will speak to Amendments 7, 9 and 24 in my name.

In Committee, I noted the difficulty of phasing the exercise of the principal transfer powers and the need for scrutiny by Parliament—there is a dichotomy. At the heart of my concerns then was that Parliament would potentially be signing a blank cheque. On the other side, there may very well be a need to move swiftly in the event that a decision is made to nationalise a steel asset.

The first three amendments in my name in this group go some way to brokering this compromise. They offer two different routes of addressing the issue of the Secretary of State’s obligations regarding the financial cost of any intervention. Amendment 1 directs this attention to Clause 2 and inserts an obligation on the Secretary of State to take into account the impact on public finances before exercising the principal transfer. However, during Committee and subsequent discussions with the Minister, it became clear that the Government feel they have some legal reservations about any modification of Clause 2. Therefore, Amendments 7 and 9 seek a similar action but focus on Clauses 4 and 15 respectively instead.

Overall, of course, government decision-making relies on tests that must be conducted by accounting officers. I expect the Secretary of State would have the impact on public finances in his or her mind at all times, and I am sure there would be some Treasury Ministers leaning over that particular Secretary of State in the event that any decisions were made. However, by putting this responsibility in the Bill, it will be easier to hold the Secretary of State and the Government at the time to account on the value for money of any issue. In the event that the Minister feels constrained in accepting Amendment 1, I hope he will accept Amendments 7 and 9.

Amendment 24 addresses a different issue and returns to pension liabilities, which we debated in Committee. It is clear that, in the event the Government exercise the principal transfer power enabled by the Bill, the pensions of all ex and current workers of that asset become an important responsibility. This amendment is clear in its assertion that Parliament needs a view on these liabilities. If the Minister is unable to accept this amendment, I hope he will take the opportunity to clarify the Government’s approach to pensions from the Dispatch Box. I beg to move.

[Lord Redwood (Con)]

My Lords, I am grateful to the noble Lord, Lord Fox, for reminding us of the importance of contingent liabilities and the need for the Government to complete due diligence before any acquisition. He rightly says that in a hypothetical case—not British Steel Scunthorpe—it might be necessary to move quickly, and then there will have to be some trade-offs. But if we are talking about British Steel Scunthorpe, there is obviously no need to move quickly. The Government moved very quickly many months ago, and there can still be proper analysis. I would hope, indeed, that as Ministers and their chosen executives are now responsible for British Steel, while they do not own the assets, they would have done a lot of this very important preparatory work on discovering the contingent liabilities.

Where in Amendment 11, the contingent liabilities are mentioned by category, there is an omission which could be extremely important: liabilities to employees for past problems with safety and health, and—God forbid that this does not happen—for any liabilities that might follow now that the business is under the operation or control of Ministers and their chosen executives, if some safety or other health problem arose. Where people are running these very large, industrial businesses, with the obvious threats of a very powerful fire in the furnace and the dangers of extremely hot liquid steel being moved around, it is crucial that Ministers and their chosen executives have taken all the right decisions on making sure people have the right protective clothing, there are the right protocols, and there is an absolute segregation for the employees from the risks. There also needs to be an understanding of whether there have been any longer-term health risks from the atmosphere around the blast furnace or the intense heat of some working conditions.

If Ministers have not already done so, they need to take this very seriously. Whenever I was responsible for a big plant, my main nightmare was that something would go wrong on safety, and that would be unforgivable. I am not expecting the Government to give ground on these amendments, but it would reassure the House and the wider public if the Minister could tell us more about where they have got to, at least in general terms, with exposing the contingent liabilities on pensions, safety and employee health, as well as with the other financial matters mentioned clearly in these amendments.

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

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

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

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

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

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

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

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

[Lord Fox (LD)]

My Lords, I thank noble Lords for their contributions to this debate. Before coming to the Minister’s words, I will pick up on the point made by the noble Lord, Lord Redwood, on health and safety. I turn his attention to Amendment 21, which returns to the issues of health and safety and environmental liabilities. Although his point does not need to be made again, the debate on that amendment is when the Minister can respond to it.

I thank the Minister for his response to Amendments 7 and 9; I believe that they will take scrutiny a step forward. His approach to accepting them is very heartening. It is therefore clear that, if we accept Amendments 7 and 9, we do not need Amendment 1.

On Amendment 24, I am reassured by the Minister’s comments on one particular steel asset. Although we do not expect it, in the event that the future Act is used for other assets, pensions may become an issue. Picking up on the point made by the noble Lord, Lord Wigley, particularly in Committee, there have been some missteps around employee pensions. It is very important that, whoever the Government of the day are, they do not make those missteps again and create the situation we have seen and on which the noble Lord commented.

On that basis, and in thanking the Minister for his acceptance of Amendments 7 and 9, I beg leave to withdraw Amendment 1.

Amendment 1 withdrawn.

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[Lord Redwood (Con)]

My Lords, there will be an issue with the public interest case, if and when we get to the full nationalisation of British Steel at Scunthorpe. Many of us are unclear as to whether the Government’s aim is to find a medium-term or longer-term solution to the problem of how to keep the two existing blast furnaces running and keep a basic steel-making capability in the United Kingdom, or whether their policy aim is still—as with the previous Government and as is the case in south Wales—to move to closing the blast furnace and opening an electric arc furnace in a new plant, which may be on that land or somewhere else.

If it is the latter, it will be much more difficult to establish the public interest case for the complete nationalisation and transfer of the blast furnaces, because that will end in tragedy for the people working there, so it will no longer be the case that the main purpose is to keep the jobs. It will not resolve the issue of the electric arc furnace, because that will need separate grant aid and might even be better on a different site. We need to know more about the phasing. In the case of south Wales, the blast furnaces were closed before the electric arc furnace was available. If they did the same again at Scunthorpe, there could even be a period when the United Kingdom will not be making any steel at all on those two works, given the transition plan.

It would be very helpful if the Minister, who will have to take this policy on, gave us a little more on the Government’s thinking about the duration of the investment in the blast furnaces, and whatever information he has about the state of those plants and the ability to maintain continuous production there, and on the Government’s intention in their net-zero strategy, which implies that steel would have to be made in a different way.

[Lord Fox (LD)]

My Lords, because this is Report, I will not repeat my Committee speech. Briefly, Clause 2 is unchanged and Clauses 4 and 15 have been amended along the lines that the previous groups suggested and begin to bring the rigour at the start of this process. The request made by the noble Lord, Lord Hunt, for information after the fact, if it has to be brought forward, seems reasonable, but on that basis I do not support the amendments as they stand.

[Lord Leong (Lab)]

My Lords, I am grateful for the contributions to this debate. Noble Lords have highlighted that the public interest test in Clause 2 is a vital part of the Bill and I very much agree. It is important that we get it right. Noble Lords have tabled several amendments to this clause and we have had fruitful discussions on them at previous stages, but I am happy to return to them.

Amendment 2, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would limit the public interest factors that could be considered by the Secretary of State to those explicitly set out in statute in Clause 2. As I have set out previously, the Government agree that these are likely to be the most pertinent issues in relation to an intervention in the steel sector. We have sought to strike a balance in the Bill between minimising the scope as far as possible and ensuring that we can adapt to evolving circumstances. That is why we think it is necessary to retain some flexibility to consider other factors that may be relevant to a particular case, which may be difficult to anticipate.

Let me be clear that the legal test in this clause places particular emphasis on the factors that are explicitly set out. Where the Government seek to rely on other factors, they will need to be satisfied that those factors mean that an exercise of the powers is necessary in the public interest. I therefore do not consider the amendment necessary and respectfully ask that it be withdrawn.

Amendments 3 and 5, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would create procedural steps that would need to be fulfilled before the transfer powers are exercised. Amendment 3 would require the Secretary of State to commission an independent assessment of whether the public interest test has been met and for that assessment to be met prior to using the powers. Amendment 5 would require the Secretary of State to provide details of the criteria used to demonstrate the public interest. Both are difficult to reconcile with the likely circumstances under which the powers could be exercised. The Government will likely need to act at pace to deliver an effective transfer. However, the Government will commit to publishing a Written Ministerial Statement following an exercise of the principal transfer powers, which would include details of how the public interest test has been met. I hope that provides some reassurance to the noble Lords, even if we cannot meet the full ambition of their amendments.

Finally, Amendment 4, also tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require the Secretary of State to be satisfied that the exercise of the transfer powers would represent value for money for taxpayers. The Government are mindful of the potential costs that could be incurred in relation to the nationalisation of a steel company. This consideration is already taken into account in government decision-making under the usual public spending processes, as I have set out previously.

Additionally, as we discussed in the previous grouping, the Government are supportive of Amendments 7 and 9 from the noble Lord, Lord Fox, which would require the Secretary of State to consider costs prior to the exercise of the principal transfer of powers. These amendments go some way to addressing the concerns raised by the noble Lord Hunt, and I hope that will provide some reassurance.

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[Lord Redwood (Con)]

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

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

[Lord Fox (LD)]

My Lords, I am in slight confusion that I hope the Minister can clear up. My understanding of Amendment 6A is that it offers a one-term renewal of two years, meaning a four-year total for any sunset clause. I might have misheard what the noble Lord, Lord Sharpe, said. I am assuming that is what Amendment 6A is seeking to achieve.

If we are reassured by the Government’s assurances on their intention, in a sense we do not need this—but it is certainly helpful to have it. If my reading of Amendment 6A is correct and it moves it four years as a maximum, it will move it into the next Parliament, where the Liberal Democrat Government will take a view.

[Lord Leong (Lab)]

My Lords, I am very grateful to all noble Lords for their contributions. I will respond to the point from the noble Lord, Lord Redwood, on financial assistance when we cover financial assistance in the sixth group.

I am grateful for the points raised regarding the sunset provisions in Clause 3. The noble Lords, Lord Sharpe and Lord Hunt, have tabled an amendment that would limit any extension of the sunset period to two years. I have had helpful discussions with them on this matter. Throughout debates on this Bill, we have emphasised that the Government are strongly minded to use the powers in the Bill to nationalise British Steel, subject to the public interest test, and do not currently see a need to use them for other steel undertakings. However, the steel sector faces challenges that can be beyond the control of government or companies themselves. It is important that we reserve the possibility of intervening in this way if it is needed in the public interest.

The amendment from the noble Lords, Lord Sharpe and Lord Hunt, strikes a good balance, allowing the Government to preserve the powers if absolutely needed while limiting any extensions of those powers to a limited period and subjecting them to an affirmative parliamentary debate. We recognise the need for this level of scrutiny, and it is appropriate that any extension be limited to a short period only. I am therefore pleased to lend my support to the noble Lord’s amendment.

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Moved by

[Lord Fox]

7: Clause 4, page 2, line 29, at end insert—
“(3A) When deciding whether to make share transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making share transfer regulations under clause 4.

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[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to Amendments 8, 10, 12 to 14 and 40, standing in my name and that of my noble friend. I thank the Minister for working constructively with us on Amendments 12 and 13. It is vital that where the Bill confers regulation-making powers of real consequence, the default should be the affirmative procedure. Amendments 8 and 10 would apply that principle to the core transfer powers, regulations transferring securities, and regulations transferring property rights and liabilities. We understand the Minister’s argument that in exceptional cases powers may need to be exercised.

Turning to Amendment 40, I ask the Minister for a clear assurance that a thorough impact assessment will be brought before both Houses of Parliament after the various powers in the Bill have been used. Given the potential effect on taxpayers, workers, investment and the wider steel industry, they must assess whether these exceptional powers have delivered the outcomes claimed for them.

Finally, Amendment 14 would remove Clause 50. The Constitution Committee was clear that the broad power allowing the Secretary of State to modify the law in relation to a share or property transfer

“should either be removed or significantly tightened”.

That is a serious recommendation from an important committee of this House. The Government should either accept the committee’s recommendation or make much clearer in the Bill the limited circumstances in which such a power may be used. I look forward, therefore, to the Minister providing some assurance on Amendment 40 and on the Henry VIII powers. I beg to move.

[Lord Fox (LD)]

My Lords, I rise to speak to Amendments 15 and 16 in my name, but first I speak in support of Amendments 12 and 13 in the names of the noble Lords, Lord Sharpe and Lord Hunt, which I have co-signed. Importantly, these would add necessary additional parliamentary control over continuity obligations and property transfer regulations. We moved similar amendments in the Commons that failed to attract sufficient support there.

Regarding Amendment 10, the Minister has convinced me that the need to quickly transfer property rights transcends the necessity of moving to an affirmative form of approval from a negative regulation. That is why I have not co-signed Amendment 10.

I tabled Amendments 15 and 16 as it is important that Parliament must be kept informed once any nationalisation is effected. Amendment 15 would create a new clause causing there to be a report on principal transfer powers from the point at which those powers are exercised under the Act. It says that the Secretary of State must

“make a written statement to each House of Parliament setting out … the progress, and the operational and financial performance, of the steel undertaking in respect of which a transfer power has been exercised, and … the impact of this Act, including (so far as it is possible to assess) its effects on the steel industry in the United Kingdom, on employment and on the public finances”,

and that this duty

“continues until no steel undertaking remains in public ownership”.

I hope the Minister has something positive to say on this, which includes reflecting on how the communities and skills requirements are being met in whichever part of the UK is affected by any nationalisation and subsequent changes.

It is a shame that the noble Lord, Lord Empey, was not with us in Committee, because he would have participated in a debate on an amendment that was very similar to Amendment 15, which covers not only the territory of Northern Ireland but the whole of the United Kingdom. I feel that the noble Lord’s point is important, but if it is important for Northern Ireland then it is important for the rest of the UK. I think he will see that Amendment 15 seeks to bring that across our entire country.

Amendment 16 seeks to create a stakeholder advisory committee. I will not repeat my speech from Committee, but its aim is to have stronger input into the steel strategy from steel users. The Minister responded with news that the steel council may be augmented by additional new members. I hope he can elaborate some more on how the voice of steel users is reflected more effectively in order for the Government to avoid such issues as those that have been created by the steel tariffs.

[Lord Wigley (PC)]

My Lords, I draw attention to a part of Amendment 16. I am delighted to see that the noble Lord, Lord Fox, has included the words

“industries that rely on the supply of steel, including the defence sector”.

That is one of the themes that is running, perhaps in the undergrowth, behind much of the thinking on the Bill. We must have a steel industry that is capable of responding, and quickly, in an emergency to the needs of the defence industry. The model has to be developed with that in hand. That is why I very much welcome the fact that that is written in the amendment.

[Lord Elliott of Ballinamallard (UUP)]

My Lords, I support the amendment from my noble friend Lord Empey and will speak to the issue raised by the noble Lord, Lord Fox, in Amendment 15, which unfortunately does not cover the specific circumstances of Northern Ireland. I support Amendment 15, but my noble friend’s amendment goes further to, I hope, give protection to Northern Ireland.

The UK introduced a new steel trade measure on 1 July—

[Lord Fox (LD)]

I have a point of information. The Bill has nothing to do with steel tariffs. We have had several Statements on steel tariffs in your Lordships’ House, to which I do not think the noble Lord spoke. I am happy to debate the effect of nationalisation on the Northern Irish market and to dispute that issue. However, the issue of tariffs is not covered in this legislation.

[Lord Elliott of Ballinamallard (UUP)]

I recognise the noble Lord’s point about the tariffs, but the issue is that we need some protection, and my noble friend Lord Empey believes the only way to have that protection is through this amendment. There is no other mechanism for protection. We have had Statements and I have asked Written Questions, but the answers we have had are unsatisfactory. Why is it not reasonable to table an amendment to this legislation that could assist the processors and manufacturers in Northern Ireland?

Maybe the Minister will find another way of doing this. If he can then that would be extremely helpful to us, but we want to raise the issue and it is not beyond our reasoned power to do so. At the moment, there is no other way of doing that except through this legislation.

The tariffs are extremely important. We now have dual tariffs. We have not only EU tariffs, because we are part of the EU economic base, but UK tariffs. This is important in Northern Ireland, and we and our processors, fabricators and manufacturers will have to deal with it. It is unfair for the noble Lord to indicate that it is unreasonable for us to table this amendment—

[Lord Fox (LD)]

I am just confused, because the wording of Amendment 45 from the noble Lord, Lord Empey, asks for an impact assessment on the likely effects on Northern Ireland, and the wording of paragraph (b) of my proposed new clause in Amendment 15 asks for an impact assessment of the effects on the United Kingdom, which, of course, includes Northern Ireland. I wonder what Amendment 45 brings in addition that is not covered by Amendment 15. Thereafter, I will shut up.

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Moved by

[Lord Fox]

9: Clause 15, page 8, line 20, at end insert—
“(3A) When deciding whether to make property transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making property transfer regulations under clause 15.

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[Lord Leong (Lab)]

My Lords, I am pleased to introduce a set of amendments that the Government have tabled. I hope that we have demonstrated throughout this Bill’s passage a willingness to listen to and engage with the concerns raised by your Lordships and to consider potential solutions. In tabling these amendments, we seek to address the concerns raised by the noble Lord, Lord Fox, regarding the discretionary nature of the appointment of an independent valuer. I previously noted that the Government intend to appoint a valuer whenever the principal powers in the Bill are exercised. We therefore consider the noble Lord’s suggestion to make this mandatory reasonable.

Amendment 17 will therefore make the required change by ensuring that any compensation scheme regulations must provide for the appointment of an independent valuer. The amendments that follow to Clause 54 make minor consequential changes clarifying that the valuer’s role is to carry out valuations for the purposes of the regulations, which is a critical step in determining any amounts of compensation. I hope that these amendments demonstrate the Government’s constructive approach and that noble Lords will support them.

Turning to Amendments 20, 21 and 23 from the noble Lord, Lord Fox, I am grateful to him for his engagement over the past few weeks on this and other points. These amendments would ensure that compensation scheme regulations must require the independent valuer to take into account environmental and health and safety liabilities when assessing the value of the relevant steel undertaking. I refer also to the points made by the noble Lord, Lord Redwood, earlier. I have said during the Bill’s passage that the Government will seek to address concerns from noble Lords as far as possible.

Many companies operating in heavy industries such as steel operate as normal with contingent liabilities. The precise cost associated with environmental liabilities would depend on many factors, including the extent to which land will be retained for future steel-making, kept safe or remediated for alternative light industrial use. None the less, we agree that the environmental and health and safety liabilities are likely to be an important part of any compensation determination and that this should be made clear in statute. I am therefore pleased to confirm that the Government will support these amendments, and I hope the House will support them too.

[Lord Fox (LD)]

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

[Lord Sharpe of Epsom (Con)]

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

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

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Moved by

[Lord Fox]

20: Clause 54, page 35, line 16, after “(3)” insert “, (4)(b)”
Member’s explanatory statement
This amendment is consequential on Lord Fox’s amendments to clause 54(4).

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Moved by

[Lord Fox]

23: Clause 54, page 35, line 34, at beginning insert “may”
Member’s explanatory statement
This amendment is consequential on Lord Fox’s other amendment to clause 54(4).

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[Lord Sentamu (CB)]

My Lords, I want to simply question Amendment 31. In Clause 58(2), there are many different ways in which the Government can provide assistance, such as

“by way of grant, loan, guarantee or indemnity … by the acquisition of shares or any other interest in, or securities of, a body corporate, … by the acquisition of any undertaking or of any assets … pursuant to a contract, or … by incurring expenditure for the benefit of the person assisted”.

I am one who believes that we should plan for the future and make sure we do not spend above our means. However, it seems to me that, in a Bill of this nature, putting a tag of £2.5 billion by the end of 15 August 2029 is a restricting element and it does not give me confidence that we are actually interested in nationalising steel.

There are so many unknowns. During the debate when we were all summoned by the Prime Minister to rescue the steel industry in Scunthorpe, it was quite clear that the books were not very encouraging—but this is a national asset, so what do you do? It seems to me that to put that amount in the Bill is almost legislating for failure. If, for example, it is £2.6 billion, not £2.5 billion, what would happen? Would the whole thing collapse? Putting figures in the Bill is not good for legislators. We have got the Exchequer and all kinds of other people for that. Let us not try to conduct this Report as if we are the Treasury—we are not. I urge the noble Lord, having flagged it up, to nevertheless withdraw his amendment. I would find it difficult to support.

I remember being in Birmingham when Rover collapsed. BMW announced that it would build the Mini there but left the other plant. The Government were being asked for only £600 million to keep the plant. They were already in agreement with China to sustain it, but, because of the laws around government support for businesses from the EU, the Government found that they could not, and the plant went.

I always respect the noble Lords, Lord Hunt and Lord Sharpe, because of their wisdom. However, if they do not mind me telling them this, as a Cross-Bencher rather than one of those rarefied Lords spiritual, I think that they are losing a little of what I have always taken them for—just no.

[Lord Fox (LD)]

My Lords, I welcome the noble and right reverend Lord’s descent from the spiritual to the temporal, and indeed the financial. His contribution is appreciated. I also welcome all those who have not had the joy of participating in the steel Bill debate so far.

Before I speak to Amendment 31, I am going to speak to Amendments 34 and 37, which are in my name. I am happy to say that the Minister pulled the rug from under my feet with respect to Amendment 34 when he spoke to a previous group of amendments. Amendment 34 seeks to promote a role for Select Committees going forward. I am happy to say that the Minister has taken that suggestion on board to a large extent. It is important that Select Committees are able to get under the bonnet of this, to look at the nature and amount of financial assistance, the beneficiaries of that financial assistance, the purpose and the effect of that financial assistance, and the conditions of repayment. I am happy to say that the points the noble and right reverend Lord made about the nature of any support were covered by previous comments.

Amendment 37 would insist on a report to outline the impact of financial assistance provided under Clause 58, with a focus on the short-term and long-term investibility of any nationalised steel undertaking. In tabling this amendment, I hope the Minister can put on record again what he told us in Committee about the long-term aim of the Government regarding returning these public assets into private hands. It would help your Lordships if the Minister were able to repeat that.

On Amendment 31, the Liberal Democrats in the Commons tabled an amendment to cap financial assistance, but we are now dealing with a different Bill. The Government have accepted Amendments 7 and 9, where value for money is accepted as a criterion in the Bill. We have inserted rigorous quarterly reporting. The noble Lord, Lord Redwood, will remember from two groups back that that amendment has been accepted and we will have quarterly reporting. As we have just said, we have ensured a role for Select Committees in scrutinising any nationalised industry, and we have implemented mandatory valuation of contingency liabilities. That Bill is not the Bill we are talking about.

I am persuaded that flexibility is required. The noble Lord, Lord Hunt, put in a spirited performance and, at one point, was possibly auditioning for the role of Chancellor—when he talked about magic money trees, I thought he was pushing his name forward to become the next Chancellor of the Exchequer. But then, he seemed to very freely talk about spending £2.5 billion here and £2.5 billion there. My worry is that his £2.5 billion would become a target, rather than the limit. Given the controls that we have put into the Bill, we will not be supporting Amendment 31.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions, and I thank the noble and right reverend Lord, Lord Sentamu, for his support.

Amendment 32, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would require that details of any proposed financial assistance under Clause 58 be provided to Parliament before the assistance can be granted. The noble Lord, Lord Fox, has raised the issue of parliamentary scrutiny in respect of this clause in Amendment 34, which would require detailed proposals to be put forward before Parliament for a 90-day period and allow the Select Committee to make recommendations which the Government must respond to before any assistance is forthcoming. I understand that these amendments address the concerns of all noble Lords about the potential to incur costs in relation to the powers in this Bill.

As I have noted previously, there is a framework of public-spending principles and governance, designed to ensure that public funds are well managed, and the Public Accounts Committee holds government to account in this respect. Where the Government use the powers in the Bill to transfer a steel undertaking into public ownership, costs may be incurred from day one and will need to be funded to maintain an ongoing operation. It is vital that a steel company that is running production continuously does not face disruption due to funding shortfalls. That is why these two amendments cannot be accepted by the Government, despite the good intentions behind them. As set out in Clause 59, we will provide annual reports to Parliament detailing the costs incurred under the financial assistance provided. A nationalised company will also need to publish an annual report and accounts, as the department does, so this information will be available in several places.

--- Later in debate ---

I therefore hope that the Minister will consider very carefully what the right structure will be for a steel industry owned in whole or in part by the Government, because it is a strange money-go-round to charge too much for energy and then have to give it back by way of grant, showing losses in the business you own.

[Lord Fox (LD)]

My Lords, we debated CBAM and the ETS in Committee, so I will not add to that debate, but I will ask a question of the proposers which I did not ask then: how is a steel business affected differently by CBAM or the ETS, whether it is publicly or privately owned? The answer is that it is not. The Bill is about the potential public ownership of steel. We will have to have a debate about CBAM and the ETS. The Liberal Democrats often talk about energy prices but not in the context of this Bill, because it is about whether a steel entity is in public or private ownership, and frankly, the CBAM will affect them the same way, no matter where that ownership lies.

[Lord Leong (Lab)]

My Lords, I thank noble Lords for their contributions to this debate on the emissions trading scheme and the carbon border adjustment mechanism, which I will refer to as CBAM, and their impacts on the steel sector.

Notably, these amendments seek to exempt a publicly owned steel undertaking from both these environmental measures, thereby undermining the level playing field that the noble Lord mentioned in the previous group. At the outset, I emphasise the Government’s commitment to their industrial decarbonisation policies and to moving towards a green, decarbonised steel sector. Although I appreciate that there may be differing views on this issue, these amendments would completely undermine the Government’s objectives for these measures.

These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out. Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. That Act contains various reporting requirements, which vary depending on the size of the entity. Where relevant or material, our Written Ministerial Statements may refer to any wider contextual or regulatory impacts. In addition, as previously mentioned, the Secretary of State would have the ability, if needed, to request an interim report on a particular issue.

Amendment 41 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the concern expressed by the noble Lord; however, I emphasise that CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It gives industry confidence to invest in the UK, knowing that its decarbonisation efforts will not be undermined. CBAM makes no exemptions for particular UK firms. Its intent is to target the problem of carbon leakage and ensure that highly traded, carbon-intensive goods from overseas, including steel, pay a comparable carbon price to that paid by UK manufacturers.

I understand the intention behind Amendment 42 and the desire to ensure that Parliament remains informed about the impact of carbon pricing policies on the steel sector. The Government are committed to supporting a competitive and sustainable steel industry while delivering our decarbonisation objectives. However, the UK emissions trading scheme and the carbon border adjustment mechanism are economywide policies designed to address carbon leakage and support the transition to net zero across industry as a whole, rather than for any particular company or ownership model.

The UK ETS Authority already keeps the operation of the scheme under review. The scheme contains statutory review mechanisms. The authority has committed to continued monitoring of both free allocation policy and the interaction between ETS and CBAM. The authority has also recently confirmed the extension of the UK ETS beyond 2030 and will continue to engage with industry and consult on future scheme design, ensuring that the impacts on affected sectors are properly considered. Given these existing review mechanisms, it is not necessary to create a separate statutory requirement for a particular transferred steel undertaking.

Amendment 43 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this imposes a cost on activities that have significant emissions. However, as with Amendment 41, accepting Amendment 43 would grant preferential treatment based on ownership and undermine a level playing field across the industry. The transition to low-carbon steel must be fair, credible and consistent across all operators, whether publicly or privately owned. I emphasise that the ETS includes targeted protections for energy-intensive, trade-exposed industries, including steel. Further protections will be introduced through CBAM from 2027.

The Government remain firmly committed to both a competitive steel sector and our decarbonisation objectives. Exempting a publicly owned steel undertaking from ETS or CBAM would create an uneven playing field, weaken the integrity of these schemes and undermine efforts to tackle carbon leakage. Steel producers, regardless of ownership, should operate within the same fair and consistent framework. I hope that my comments reassure noble Lords.

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[Lord Sharpe of Epsom (Con)]

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

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

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

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

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

[Lord Fox (LD)]

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

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

[Lord Leong (Lab)]

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

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

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

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

Register of Overseas Entities (Protection and Trusts) and Limited Liability Partnerships (Application of Company Law) (Amendment) Regulations 2026

Lord Fox Excerpts

Tuesday 30th June 2026 Grand Committee

[Lord Ashcombe (Con)]

My Lords, I welcome the opportunity to speak to these regulations, which form part of the ongoing work to strengthen and refine the register of overseas entities, a register introduced by the Conservative Government to bring greater transparency to overseas ownership of UK land and to protect our economy from illicit finance. The instrument before us makes targeted and practical improvements to ensure that the register continues to operate effectively, balancing transparency with the proper protection of personal and sensitive information. These are measured and proportionate adjustments that respond to operational experience and ensure that the system remains robust, fair and fit for purpose.

As the Minister has outlined, the purpose of the register is to increase transparency around the beneficial ownership of overseas entities that hold land in the United Kingdom and to strengthen the UK’s defence against illicit finance. The framework for the register, including the treatment of trust information, was designed to balance two important principles: first, transparency, to ensure that overseas ownership structures cannot be used to conceal criminal activity; and secondly, privacy and proportionality, particularly in relation to sensitive trust data and information involving minors.

Since the register came into force, operational experience has highlighted several areas where the legislation could be improved to ensure that the system functions as intended. These include: first, the requirement to provide the name of the trust when applying for trust information, which in some cases risked revealing personal or sensitive details; secondly, the rules governing access to trust information where minors are involved, which were found to be overly restrictive; and thirdly, the administrative burden placed on individuals seeking to remove their home address from the public register, even where Companies House could verify the information internally.

The regulations before the Grand Committee today are intended to address these practical issues. They refine the balance between transparency and privacy; ensure that sensitive information, particularly relating to children, is handled appropriately; and streamline processes where the register already has the means to verify information. Taken together, these amendments represent a continuation of the work begun when the register was created, strengthening its operation, improving its accuracy and ensuring that it remains a robust tool within the UK’s wider economic crime framework.

[Lord Fox (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Ashcombe, for the first time, I think. I welcome him to the wonderful world of economic crime. We are history-makers today, in that this is the first 11 am Tuesday session. It is a welcome change to the way in which we do business, making constructive use of the time we have. I look forward to lots of 11 am sessions going forward.

As both noble Lords have said, tackling economic crime and financial security are vital for the economy. I was one of the people who worked on the two economic crime Bills brought forward by the previous Administration. There was a collective effort by all parties in the House to try to deal with some of the most pernicious elements of the economic crime going on in our country.

As the Minister said, the register of overseas entities is an important step in improving beneficial ownership transparency, and we welcome any measures that make it work better in practice. As both speakers said, there are three elements to this statutory instrument. The first is to make trust information held on the register of overseas entities easier to access by removing the requirement to provide a trust name, as the Minister said, and allowing disclosure of non-minor information, even when a trust includes children. There was quite a lot of debate on this during the passage of the Bill, and this measure gets the balance right, I think, based on my rather sketchy memory of that debate.

The second element seeks to simplify the process, removing residential addresses from the public register. This is an important service for people who feel threatened or have an element of public life, but it will be important that Companies House applies the evidence properly and does not allow people to remove themselves from the register for non-real or suspicious reasons. At some point it would be useful to get a written response explaining what processes would be required to ensure that this streamlined process is not used by criminals or people seeking to hide their identity.

The third element is the temporary removal of the recently introduced LLP address-reporting requirement. The Minister said that it was prematurely introduced and that Companies House systems need to be upgraded in order to process this information. This causes some concern. The temporary removal of the LLP address-reporting requirement is worrying. The stated reason is that the systems are not yet ready, but it raises a broader question in my mind, which we referred to a lot during debates on the legislation, about the pace and resourcing of the change process going on in Companies House.

Identity verification for company directors became a legal requirement only in November 2025, and Lib Dem colleagues had previously raised concerns about the readiness and security of the One Login platform underpinning these checks. The Government have to set out a clear timetable, which I hope will binding, about when these LLP reporting requirements will be reinstated, and ensure that Companies House receives the investment and support it needs to deliver the reforms that Parliament has already passed.

During the various discussions on the two economic crime Bills, we had updates from Companies House on the transformation it would need to undergo to be able to take on the new responsibilities that the Bills, now Acts, were placing on its shoulders. It was clear that the organisation had a huge cultural change requirement. Of course, some increased resources were made available, but it is a bit concerning that this cultural change might have paused or stalled. Perhaps it is time for interested parties to have an update from Companies House, either in person or virtually, on both its general upgrading of capabilities and the progress of the One Login process.

More broadly, the register of overseas entities is only as effective as its enforcement. We Lib Dems have long called for properly funded enforcement agencies to hold financial criminals accountable—they have huge resources at their disposal—and for the UK to work hard to close further economic crime loopholes that allow corrupt money to flow through British property and company structures. We also reiterate our call—we would never miss the opportunity to do so—for British Overseas Territories to meet the same transparency standards as the UK mainland.

Steel Industry (Nationalisation) Bill

Lord Fox Excerpts

Committee stage
Monday 29th June 2026 Lords Chamber

[Lord Redwood (Con)]

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

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

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

[Lord Fox (LD)]

My Lords, I thank the Minister, his team, the department and the two experts who came all the way from Coventry in 35-degree temperatures to educate the noble Lord, Lord Hampton, and me on the technology of steel. It has been very co-operative and I thank them.

I am slightly confused by how narrowing these words are: “of or including” versus “predominantly”. What is predominantly? Is it 60:40? Is it 55? I do not know. You have to look upon it with the body language of the Government. The Government have shown no tendency to go on a nationalisation rampage through all businesses that have ever touched a piece of steel. It is very clearly focused in one area, as the noble Lord, Lord Redwood, alluded to. Also, I remind noble Lords that there is a sunset clause in here which closes it after two years. So the talk of subsequent Governments does not have particular purchase and I am much more relaxed than the noble Lord, Lord Sharpe, on this.

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

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

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

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

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

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

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I hope the Government will look favourably on the need for some financial reporting, maybe quarterly, and the need to have constructed a business plan for their own concerns and interests. They should be able to share at least the general outline of that plan with the wider public to give some reassurance that the intervention to date was well based and that any successful purchase of the assets or compensated acquisition of the assets from the current owner was also in the best interests and provided value for money.

[Lord Fox (LD)]

My Lords, one of the things that the briefing from the high value catapult team confirmed is the enormous difficulty there will be in creating a viable business from what His Majesty’s Government intend to take control of in Scunthorpe. There is the age of its blast furnace, the potential cost of any replacement of a blast furnace, the expense of conversion to an electric arc furnace—if that is what is intended—and the hugely competitive landscape of the global steel markets. These are just the headlines of the complexity, but the choices go beyond blast furnace or arc furnace.

If investment is found to install a new electric arc furnace, what will it produce? Will it aim to produce the full range of steels that we need—longs, flats, rebar—or will it specialise in particular steels that perhaps are more strategic and less easy to source? If it goes down the specialisation route, the UK will probably need access to much more direct reduced iron, or DRI. It is likely that this would have to be imported, and these would be very high CO₂ emission imports from most countries, because making our own DRI would need a whole new bit of kit which is very pricey. Choices and making the right calls will determine whether Scunthorpe has a long-term future and what that future looks like. It will determine whether it is indeed an investable prospect and whether it can attract the private sector.

When the Government begin—assuming this Bill becomes an Act—to use the terms of the Act to take ownership of this plant, that will change the focus of these choices. Of course, there will be a new board and management to run the plant, but the cost of the choices will rest with UK taxpayers, at least at first. We will be providing the capital. As we have heard, we have already made available £555 million in working capital, but clearly these sums could increase massively at scale. It is the scale of risk that the Government are taking on that is guiding my approach and our approach, because this Bill needs more scrutiny from Parliament at all levels. From these Benches, we will be pushing those buttons.

These three amendments start at least to open up that point around accountability. I am a bit intrigued because while I do not always agree with the noble Lord, Lord Hunt, he is normally internally consistent. However, the noble Lord started out by saying there should be no expansion of the terms of Clause 2 and then put forward two pretty reasonable ones about growth and expanding the economy. I have one that I think the noble Lord, Lord Redwood, would agree with, which is cost. We should have a clear understanding of the cost before the public interest test. I completely disagree with Amendment 2 because there needs to be a broader discussion around “public interest”. We need to understand the numbers around it, otherwise we do not know whether it is interesting to the public. I do not agree with Amendment 2. I have some sympathy with the other two amendments, and I am sure we will talk more about public interest tests as we deal with other groups.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Hunt, Lord Redwood and Lord Fox, and the noble and right reverend Lord, Lord Sentamu, for their contributions to this group. There are several amendments to the articulation of the public interest test in Clause 2. This is a key clause in the Bill; it is a necessary safeguard to ensure that the powers are used proportionately in response to a clear need.

Amendment 2 would limit the public interest factors that the Secretary of State may consider to those set out in the Bill. The Government agree that the three factors of national security, critical national infrastructure and support for the economy are likely to be the most relevant to the steel sector. Accordingly, the current approach ensures that they are given particular weight when assessing whether to pursue an intervention. However, circumstances may arise in which a case for intervention may not be clearly made on the basis of these three factors, yet it would clearly be in the public interest to take action. It is therefore pragmatic to build some flexibility into the Bill to address this issue.

I turn to Amendment 3. It has been suggested that the third public interest factor should refer specifically to

“economic growth and international competitiveness”,

rather than “supporting the economy”. With respect, this is a distinction without a meaningful difference. It is largely a matter of drafting rather than substance. The phrase “supporting the economy” is deliberately broad. It clearly encompasses economic growth and international competitiveness but also recognises that the economy is more than growth figures alone. It includes strengthening economic resilience, protecting strategically important industries, supporting employment, safeguarding supply chains, encouraging investment and ensuring the long-term productive capacity of the United Kingdom. By contrast, narrowing the text to

“economic growth and international competitiveness”

could unintentionally exclude other legitimate public interest considerations that any responsible Government should be able to take into account.

There may be circumstances where intervention is necessary to preserve critical industrial capability or economic resilience, even where the immediate effect on growth or competitiveness is less direct. The Government’s intention is to provide Ministers with a sufficiently broad framework to consider the full range of economic factors that may arise. The existing wording achieves precisely that: it is flexible, comprehensive and future-proofed, while fully capturing the objectives that the amendment seeks to emphasise. For those reasons, I do not believe that the amendment would improve the Bill. The Government believe that protecting our sovereign capability in what is a foundational sector for the economy will help to underpin our resilience and leave us less exposed to volatile international trading conditions. The Government therefore cannot support the amendment.

I turn to the amendments tabled by the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, and by the noble Lord, Lord Fox. In different ways, all three noble Lords seek to require the Secretary of State to consider value for money or the impact on the public finances before exercising the principal transfer powers.

[Lord Fox (LD)]

My amendment?

[Lord Leong (Lab)]

I am referring to the noble Lord’s later amendment.

I fully agree with the principle that taxpayers’ money must be spent wisely. Any decision to bring a steel undertaking into public ownership would be among the most significant interventions that a Government could make. Such a decision should never be taken lightly, and it would not be. However, these amendments seek to place into statute an obligation that already exists as a fundamental principle of government. Every significant spending decision is subject to the rigorous disciplines of managing public money—as stated by the noble Lord, Lord Hunt—Treasury approval where appropriate, and the established accounting officer framework. Ministers are already required to demonstrate that public money is being used properly, proportionately and with due regard to value for money.

The question, therefore, is not whether value for money should be considered—it absolutely should—but whether it is necessary to restate an existing, well-established constitutional obligation in the Bill. I do not believe it is. Doing so would add no new safeguard, create no new accountability and impose no duty that does not already exist. More importantly, this legislation is intended to ensure that, where a vital national interest is at stake, the Government can act decisively. Decisions of this nature will always involve weighing immediate fiscal costs against the far greater economic and strategic costs of inaction. The loss of sovereign steel-making capability, thousands of skilled jobs and critical supply chains, and industrial resilience could ultimately impose a far greater burden on the taxpayer than timely intervention would. The Government will continue to ensure that every decision made under the Bill is subject to the highest standards of financial discipline and accountability. Those safeguards already exist; they are robust and will continue to apply.

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[Lord Wigley (PC)]

My Lords, I beg to move Amendment 4 standing in my name and to speak to Amendment 36, which is also in my name and which is grouped with it—as is Amendment 29 in the name of the noble lord, Lord Fox, and Amendments 30, 31, 43, 44 and 46 in the names of the noble Lords, Lord Sharpe and Lord Hunt.

I quote Amendment 4, just to bring it to everyone's mind. It would add, at the end of line 20 on page 1, a new subsection:

“(d) supporting the local economy of any steel-making location which may be adversely affected by this Act”.

I would have thought that those words would commend themselves very much to this House. All these amendments have to do with the impact of the Bill when enacted—an impact which may be so significant to various aspects of the economy, and indeed on the communities which may benefit or may suffer directly or indirectly from this legislation. I shall look forward to hearing the Opposition Front Bench when they speak, particularly on Amendment 43, on the possible impact of this Bill when enacted on inward investment—a subject close to my heart, as the noble Lord, Lord Hunt, will recall, from prior incarnations. But I digress. Amendment 4 in my name would specifically impose a duty on the Secretary of State, in relation to his responsibilities regarding the public interest, to broaden that responsibility to include, via the proposed new subsection (d),

“supporting the local economy of any steel-making location which may be adversely affected by this Act”.


I have deliberately drawn this new subsection widely and not confined it to Wales, as I know from our experiences in Wales how badly steel-making communities across these islands can be hit when steel-making is ended or run down, wherever those communities may be located. I saw this with my own eyes when I was living in Merthyr Tydfil in the 1970s, at the time of the rundown of the steel manufacturing in nearby Ebbw Vale. The economic decline of the Blaenau Gwent area has been staggering, as the noble Lord, Lord Murphy, mentioned in the Second Reading debate of this Bill. It is now amongst the poorest areas, economically speaking, not only in Wales but throughout Britain. Decisions arising from the operation of this Bill, when enacted, could have far-reaching consequences for communities that have depended on steel in the past, and which may be facing dire consequences of specific and deliberate action undertaken by the Government through this Act. A duty surely lies on us to help safeguard those communities.

There will inevitably be winners and losers as a result of actions taken under this legislation. Hard-working, skilled industrial communities may be undermined through no fault of their own. Indeed, the decisions taken by the UK Government may be, in some regards, for the good of the industrial base of these islands, but do not tell me that, to an unemployed skilled steel-worker in Margam or Shotton or Llanwern—or, for that matter, in Teesside or Sheffield or Doncaster—this does not matter. If the actions of the Government in consolidating steel-making in a limited number of locations has that knock-on effect, then the Government surely have a responsibility to support those local economies hard hit. I cannot believe that a Labour Government will not readily acknowledge this. I invite them to accept Amendment 4 or at least to undertake to return with their own amendment on Report to secure the objectives I have outlined.

Amendment 36 in my name is also in this group. It would provide a vehicle, via Clause 58, whereby the financial aid outlined in Amendment 4 could be channelled through local authorities in steel-making areas hard hit by this Bill so that they were compensated for the adverse effects on local communities arising from the exercise of the powers in the Bill relating to steel-making in their area. As I stated at Second Reading, I support the objectives of this Bill but, with all the good will in the world, there will inevitably be losers as well as winners. As such far-reaching changes will be triggered by Act of Parliament, surely it behoves Parliament to safeguard those who may be adversely hit as a direct consequence. I beg to move.

[Lord Fox (LD)]

My Lords, this is a mixed bag of amendments. I will speak primarily to Amendment 29 in my name but also to some of the others.

Amendment 29 highlights the potentially distorting effects that CBAM—the carbon border adjustment mechanism—would have on various elements of the steel industry, from supplier to steel user. On the one hand, if applied fairly, CBAM could and should deal with the currently distorting global steel market, whereby Chinese steel, with a high carbon investment, is competing unfairly with greener steel in Europe and the United Kingdom. So far, so good, but the effects of CBAM on other steel users and manufacturers could, if applied wrongly, be very detrimental. That is why the international picture, particularly our future agreement with the EU, will be so important in ensuring that manufacturers do not have one hand tied behind their back.

The way that CBAM interacts with tariffs, which has not been discussed terribly much, is important and issues around energy costs have been put in this group, but in truth CBAM, the EU and energy costs fall outside—or at least at the very edges of—the scope of this Bill. However, Amendments 4 and 36 in the name of the noble Lord, Lord Wigley, and Amendment 44 from the noble Lords, Lord Sharpe and Lord Hunt, are front and centre within it. Tata, for example, is making considerable investments on its own account and should not be disadvantaged by any publicly owned business. Similarly, the communities in which the industry is located are vital and must be a key part of decision-making.

The nature of the amendments in this group is almost a snapshot, whereas in reality it will be a long-term issue. That is why, later in Committee, I have proposed a stakeholder advisory committee in Amendment 22 and an explicit role for Select Committees in Amendment 38. This will be an ongoing issue and we will need ongoing parliamentary review of it. While I support elements of this group and the intentions within it, I think the heavy work will be done in a different way going forward.

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[Lord Redwood (Con)]

I am very glad that my noble friend raised the issue of an impact assessment, because if the Government press ahead with the acquisition of British Steel under the legislation, that could be the first opportunity we have for a realistic impact assessment. Yet, the taxpayer has been responsible for the losses in working capital and investment funds for over a year now, with the lack of clear reporting that we have commented on before.

We have an impact assessment for this piece of legislation. Understandably, it says that there are not any costs or benefits to report, because there is not a transaction. These are enabling powers, which would enable the Government to undertake and complete a transaction. But it would only be at that point that officials tasked with the difficult question “What is the impact?” would be able to come up with some numbers, because we would then presumably have some visibility on the cost of acquisition, if any, the operating costs and working capital costs that will go forward. That would be very helpful, in connection with the difficult investment at Scunthorpe, where, as we heard earlier, the NAO reported that there has already probably been £642 million of taxpayer expenditure up to the current month, with a very high run rate going forwards. So, I hope that the Government will offer us reassurance—if not a new clause in the Bill—to say that there will have to be a proper and timely impact assessment.

That, too, would clearly require proper due diligence, which I trust has been under way, now that the Government are responsible for the business. We would need to know that there had been a proper study of Anne and Bess, the two blast furnaces, which were either built or last substantially modified in the early 1950s. These are ageing assets. They have had deep maintenance in this century, but we would need a condition statement on that, so that the Government are reassured that however long they think they can run these blast furnaces for is feasible in terms of the condition of the plant. In order to sustain the employment for the next month, year or whatever it may be, we would need to know that there will not be major maintenance required or no question of having to cool the furnaces down, because that is a dangerous and expensive process and would raise issues about how easy it would be to spend enough money to reinstate these particular assets.

Of course, it would also require proper reporting to the Government—not supplying all the detail to us, but proper reporting on market prospects and how the steel product produced at Scunthorpe is perceived, and what the market opportunities, in general terms, might be and other supporting documents. It will require a serious impact statement, for the benefit of democratic accountability. More importantly, that would prove that the Government have done their homework, because the Government should not be taking on a plant like this unless they have a condition report, a marketing report, a proper cost examination and so forth, which I and my noble friends have been referring to.

[Lord Fox (LD)]

My Lords, I do not want to be the bringer of bad news to the noble Lord, Lord Redwood, but I suspect that it is pretty clear that the condition of the blast furnaces is poor and whatever happens, either to reinstate them to the level that would take them forward or to invest in electric arc, will take a lot of money. That is the point that we are focusing in on, and that is why we are focusing in on the public interest test. We have not yet gotten past Clause 2 yet, because this is the crunch.

I have a group of amendments in the next group, so I will reserve almost everything I have to say. The noble Lord, Lord Hunt, has already disobeyed his Amendment 2, because we are seeking to broaden the scope of the public interest test. With respect to the noble and right reverend Lord, Lord Sentamu, there is such a number of issues that have to be addressed within the particular field of potential investment that the public interest really requires focus. I will leave it at that for this group and then come back to these in the next group.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Redwood, Lord Fox and Lord Hunt, for their contributions.

The noble Lords, Lord Hunt and Lord Sharpe, tabled Amendments 5, 6, and 42 to provide for an independent person to assess the public interest. Further amendments tabled by the noble Lords would require the Government to publish both the criteria used to assess the public interest and their assessment on how those criteria are met, before exercising the principal transfer power. Amendment 42 would require an impact assessment to be published before any intervention or the exercise of any power under the Bill. As these amendments deal with similar issues, I will address them together.

I start by saying that I understand and sympathise with the desire for the greatest parliamentary and stakeholder scrutiny of a decision to intervene under the powers in the Bill. Stakeholder engagement is a key part of the Government’s policy approach to the sector, with Ministers regularly meeting key industry groups and representatives through the steel council and other forums. The Government have published an impact assessment alongside the Bill, explaining how the public interest test will be considered. A further impact assessment will be published alongside any secondary legislation exercising the transfer of power.

The framework for decisions to intervene will stem from what has been included in Clause 2, with regard to the three public interest factors. There is no attempt on our part to obfuscate or hide the criteria that will be applied in practice. The Government will not only consider whether a steel undertaking is engaged in activity that serves the public interest; they will also consider whether the activity is at risk of not receiving government intervention.

The Government cannot support these amendments as each would create additional hurdles and process pre-intervention. In the kinds of situations that the Bill envisages, speed will be crucial. Likewise, commercial and market sensitivities mean that swift action will, in most circumstances, be necessary to avoid uncertainty.

None the less, I am aware that there are strongly held concerns about this issue, and I can confirm that the Government will consider options for Parliament to scrutinise decisions taken either at the time of or after the exercise of the transfer of powers ahead of Report stage. I hope that this offers some reassurance to noble Lords, and I look forward to continuing further conversations with the noble Lord, Lord Fox, ahead of Report. With that, I ask that the amendment be withdrawn.

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Moved by

[Lord Fox]

7: Clause 2, page 1, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power unless they have laid a statement before both Houses of Parliament explaining their reasons for concluding that it is necessary to exercise the power in the public interest.”Member's explanatory statement
This amendment would require the Secretary of State to lay a statement before Parliament explaining their reasons for concluding that it is necessary to exercise a principal transfer power in the national interest, before exercising that power.

[Lord Fox (LD)]

My Lords, I shall speak also to Amendments 10 and 11 in my name.

Agreement appears to have broken out. The noble Lord, Lord Hunt, the Minister and I all agree that the wording of Clause 2 is central to how we move forward. I always suspected that the public interest test element would be the hardest bit to resolve in this Bill. We are beginning to see that this might be true.

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[Lord Leong (Lab)]

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

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

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

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

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

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

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

[Lord Fox (LD)]

My Lords, I thank the noble Lord, Lord Sharpe, for his support for these amendments and I was pleased to hear the closing part of the Minister’s statement. We all want the costs of any nationalisation to be well managed; we are looking for those costs to be well understood in advance of any commitment by the Government on behalf of the people of this country. We look forward to those discussions and I beg leave to withdraw Amendment 7.

Amendment 7 withdrawn.

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[Lord Wigley (PC)]

My Lords, the amendment proposes inserting a new subsection (2A), which provides that:

“In assessing the ‘public interest’”—


which is the whole dimension underpinning the Bill—

“in regard to the exercise of transfer powers relating to a steel undertaking located in Wales, the Secretary of State must consult the First Minister of Wales before exercising such principal transfer powers”.

This is surely basic common sense, since many, if not most, of the responsibilities impacted by such transfers in Wales rest with Senedd Cymru. These powers include economic development, town and country planning, roads, education and training, and the environment. Each one of these may, and almost certainly will, be impacted by the consequences of transfer decisions.

To those who argue that responsibility to co-operate already exists, I say that, if that responsibility is spelled out in the Bill, it would trigger an earlier and more thorough approach. Otherwise, it would be so easy to treat such dialogue and mutual action as an afterthought when it should be a cast-iron statutory requirement.

This brings me to the associated Amendment 19. Clause 50 provides powers to the Secretary of State

“to modify law in connection with … property transfers”.

Clause 50(3) is very serious as it provides for retrospective legislation. This should always trigger alarm bells, in whatever context it arises. As many of the legislative responsibilities that might be impacted by this are fully devolved to Senedd Cymru, any such regulations must be made only with the prior agreement of Senedd Cymru. This must be included in the Bill, otherwise it would be open to a Pandora’s box of utter chaos.

Amendment 19 specifically provides a route to avoid such consequences by requiring the prior agreement of Senedd Cymru to any such regulations that involve devolved powers. Including this in the Bill would avoid misunderstanding and unhelpful polarisation, so I beg to move Amendment 9 and would like to hear the Minister’s response to both it and Amendment 19.

[Lord Fox (LD)]

I will be very brief and speak with some support for the noble Lord, Lord Wigley. As far as I can tell, the Bill does not require legislative consent from either Cardiff or Edinburgh. Perhaps the Minister could confirm that. If it does not, the principle set out by the noble Lord, for both Wales and Scotland—I know that there may be industrial differences, but the two things apply—would be very important. I look forward to hearing what the Minister says in that regard.

[Lord Hunt of Wirral (Con)]

My Lords, I very much echo what the noble Lord, Lord Fox, has just said, and I thank the noble Lord, Lord Wigley, for his amendments, which raise very important points. There are considerable concerns about what is happening at steel plants in Wales and the consequences for the workers, their families and the much wider community. It is right that, where these powers may affect a Welsh steel undertaking or devolved responsibilities, Wales should be properly involved. I urge the Minister to respond positively to the concerns so rightly raised by the noble Lord.

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[Lord Sharpe of Epsom (Con)]

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

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

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

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

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


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

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

[Lord Fox (LD)]

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

[Lord Leong (Lab)]

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

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

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

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Amendment 18 concerns enforcement. Clause 45 permits regulations on the enforcement of obligations under share or property transfer regulations. The regulations may confer jurisdiction on a court or tribunal. Again, the Government say that this is necessary to ensure that obligations can be enforced from the moment of transfer, but the fact that enforcement may involve courts or tribunals makes scrutiny more important, not less, and therefore it should be subject to the affirmative procedure. I beg to move.

[Lord Fox (LD)]

My Lords, I have to say I was a bit grumpy when the Conservative Party tabled these amendments that we had tabled in the Commons, but in retrospect I am very pleased. No joking—that was a tour de force from the noble Lord, Lord Hunt. This is his specialist area, and that was his best speech on Henry VIII that I have heard. All the points were points that I would have made except that I am not good enough to have made them, so in that respect I am glad that he was the person proposing this, rather than I. The only thing that stops the noble Lord from being risen to the pantheon is that, having won affirmative powers, he and his colleagues never actually exercise them through fatal Motions. Frankly, that is the only flaw in what we have just heard.

I countersigned Amendments 13 to 15 and 18 but my pen ran out when we got to Clause 50 stand part. All the points that the noble Lord made are valid. I hope the Government are able to take on board both what he said and what your Lordships’ committees have said about the shortcomings in this draft.

[Lord Leong (Lab)]

My Lords, before I turn to the amendments in this group, I thank the members of the Select Committee on the Constitution for their report on the Bill, which relates to this grouping. The report recommended that in Clause 47 the provisions for dispute settlement should be set out more fully in the Bill. The approach to drafting here is in line with existing precedent under the Banking Act 2009 and reflects the approach taken for similar powers, such as enforcement powers. We think it is appropriate to provide for dispute settlement on a case-by-case basis through regulations.

Noble Lords have tabled a number of amendments relating to parliamentary scrutiny of and procedure on the transfer regulations. In particular, the noble Lords, Lord Sharpe and Lord Hunt, have tabled amendments which would change the parliamentary procedure for the principal share and property transfer powers, continuity obligations and enforcement powers from negative to affirmative. I understand the concern expressed by the noble Lords. From the outset, I reassure all noble Lords that the Government take parliamentary scrutiny extremely seriously. For that reason, we have ensured that a number of substantial powers in the Bill, such as the compensation and tax powers, are subject to the affirmative procedure. However, the Government consider that changes to the procedure for transferring powers would adversely affect the Government’s ability to effect a smooth transfer where necessary in the public interest.

Steel is fundamental to the UK’s industrial base and our national resilience, making it critical to secure supply. Any delays, especially in a non-consensual transfer, would prevent the transfer from taking place, particularly if the transferer was unco-operative. I draw noble Lords’ attention to the recently published report from the Delegated Powers and Regulatory Reform Committee, which did not raise any cause for concern about these powers, including the level of parliamentary scrutiny attached.

To set out the necessity for the negative procedure for these powers, I will discuss them in turn. I will address Amendments 13 and 14 together as they seek to amend the procedures for the share and property transfer powers respectively. It is important that the principal transfer powers can be exercised with speed and operational and legal certainty. The Government expect that, if these powers were exercised, it would be in a fast-moving, commercially sensitive situation. The affirmative procedure would introduce a substantial delay, creating a vacuum in ownership. Such uncertainty would significantly affect the business, particularly the supply chains and third-party contracts.

Amendment 15 seeks to amend the procedure for continuity obligations. The continuity obligations in the Bill are essential to ensure that the company continues to operate as normal following the transfer, minimising disruption and maintaining operations at the steel undertaking. This is achieved by imposing obligations on residual steel undertakings and their group companies to ensure that all services and facilities required by the transferred business continue to operate as normal. Any changes to the procedure would affect the effectiveness of the transfer. The Government’s primary objective with this provision is to ensure a smooth transfer of ownership. As I have set out, it is imperative that there be no delay to any transfer of a steel undertaking into public ownership.

Amendment 18, in the name of the noble Lord, Lord Sharpe, aims to amend the procedure for enforcement regulation. Clause 45 gives the Secretary of State the power to make provision in regulations for the enforcement of obligations under the share and property transfer regulations. As with the other amendments, if the Government consider it necessary to enforce obligations, they must do so at pace. Any delay in using these powers risks interrupting the transfer process and reducing its effectiveness.

For those reasons, the Government do not consider these amendments necessary. However, I have reflected on the argument made by the noble Lord, Lord Hunt. While it is critical that the Government are able to preserve their ability to enforce as necessary, there is a reasonable rationale for further parliamentary scrutiny. I cannot accept this amendment but I will consider this issue further, ahead of Report.

The noble Lords, Lord Sharpe and Lord Hunt, have given notice indicating their intention to oppose Clause 50 standing part of the Bill. That would remove the modification power in Clause 50. This power is not taken lightly, but it is a necessary measure to ensure that the transfer powers under the Bill can be used effectively. The clause has precedent because the same power was used in the Banking Act 2009 to resolve complex companies in the financial sector. Given that the transfer powers would be used only in circumstances where a public interest test was met, it is crucial that the Government have the necessary tools to ensure that any such transfers can be implemented effectively to deliver the intended outcome.

The powers in Part 1 of the Bill interact with commercial, company and insolvency law. This is the law that normally governs the consensual acquisition of companies or of their businesses. The legislative environment is therefore varied and complex and, because general legislation was not designed with compulsory transfers in mind, as the Bill envisages, there will be some tension between applying the Bill’s powers to a steel undertaking and the highly complex private law that it will inevitably cut across. The clause therefore provides a necessary power to modify other laws that may ordinarily interact with a transaction of this nature in order to integrate the Bill’s powers into the existing legislative and commercial landscape.

The use of the modification power is limited to the purpose of enabling the transfer powers to be used effectively. It is not a general power to amend legislation; it is targeted and limited. It cannot be used in isolation from the use of powers in respect of a particular steel undertaking to amend or disapply laws, and it cannot be used to amend the Bill—or Act—itself. In the absence of these powers, there is a real and significant risk that the Secretary of State could not fully and effectively implement a transfer. This could result in an ineffective or incomplete transfer to public ownership, affecting a company’s ability to continue operation. If a smooth transfer is not achieved, the public interest aims could be undermined.

I turn to the potential retrospective effect of the power. The Bill permits it to be applied retrospectively but does not require it. Preserving the possibility of applying this power retrospectively anticipates circumstances in which the transfer powers may need to be exercised at pace and in which there may be limits on the ability to conduct the level of due diligence necessary to support acquisition. Similarly, it may not be possible to identify all legislative interactions in the transfer scenario before making a transfer. This may mean that any secondary legislation made under the transfer powers may not fully affect the transfer that was intended. In such circumstances, it would be necessary to address this through the modification power, with the modification backdated to the time of transfer. The use of the power will be subject to the affirmative procedure unless there are particular circumstances that justify the Secretary of State proceeding on an affirmative basis, likely due to time pressures.

I hope that I have provided some clarity on the need to include the provision, and its retrospective effect. For these reasons, I respectfully ask that the amendment be withdrawn.

[Lord Fox (LD)]

On a number of occasions, the Minister has painted a picture of a breathless process, where all the organs of government have to operate at breakneck speed. Taking the Government at face value, we are talking largely about a particular asset that we have been talking about for around 15 months, since the discussion at Easter last year. At some point, perhaps not at the Dispatch Box but when we are having our meetings, the Minister will explain why there is this predisposition to putting everything in place to have things moving at the speed of light when, in reality, they have been moving relatively slowly.

Employment Tribunal (Extension of Time Limits) (Miscellaneous Amendments and Transitional Provisions) Regulations 2026

Lord Fox Excerpts

Tuesday 23rd June 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, I am grateful to the noble Lord, Lord Hunt, for getting the old team together. I was missing the Employment Rights Bill, which had been such an important part of my life, so it is always good to get a refresh.

On UK employment tribunal waiting times—a point that the noble Lord, Lord Hunt, touched on—a 2026 analysis based on published decisions estimated an average of about 17 months for unfair dismissal cases in England and Wales, and a slightly better 14 months in Scotland. In some cases, the BBC reports that claimants in England and Wales have had to wait much longer than that. Tribunal delays vary a lot by case type and whether a case is single or multiple. Simpler unfair dismissal cases are obviously faster than discrimination or whistleblower cases, which tend to have longer hearings and require more evidence.

There is also regional diversity. As I have pointed out, Scotland appears to be materially faster than England and Wales. Can the Minister explain why that is the case, and what Scotland is doing that is significantly better, although still taking longer than it should?

The noble Lord asked whether the system is resilient and able to sustain this change. It is fair to say that this does not look like a resilient system; it looks like a system that has been stretched to or beyond breaking point. I am very pleased to hear the Minister say that the joint task force is beginning to offer some measures —he did not go into details as to what those measures are. The noble Lord, Lord Hunt, talked about triage. Triage would be a sensible way of sifting cases and filing them in the right way to improve the workflow through the tribunals that we have. Has analysis of the current waiting list been done to identify the sticking points and how they might be relieved? Are some tribunals better than others? Is there a league table? What extra resources have already been allocated, and what can be allocated? The Minister said that the task force was working “at pace”—a phrase that we all know we should avoid. I am sure that it was accidental.

Overall, this regret amendment is less about the measures it is seeking to regret and more about concern about the tribunal. As the noble Lord, Lord Hunt, pointed out, we talked a lot about the tribunal during the passage of the Employment Rights Bill. At that time, I said that once a case goes to a tribunal, both the employer and the employee are already in a losing position. Justice delayed, and delayed a long time, is justice denied, both for the employer and for the employee. I hope the Minister can address the issues we have raised, which, I would say to your Lordships, have very little to do with the statutory instruments in front of us. The regret amendment is merely a device that the noble Lord, Lord Hunt, has deployed to make sure that we miss the football—I point out that the England team are still 0-0; I wish them the very best, and I wish the Minister speed in his response.

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[Lord Hunt of Wirral (Con)]

My Lords, I thank the noble Lord, Lord Fox. We are speaking, as we did several times during the passage of the Employment Rights Act, with one voice, and that voice tonight has met with a response from the Minister that still requires a whole range of actions to be taken. I join the noble Lord, Lord Fox, in recommending that everything possible should be done to resolve disputes at an earlier stage. This is the key, rather than overloading an already existing system that is creaking under pressure, although I know that tribunals are determined to try and meet the problems of overreliance and overcapacity.

I will say just two things about early resolution. I am troubled that discussions are taking place about the lack of resources for ACAS. ACAS could provide a great deal of opportunity for early resolution. I will also just say that I recall the noble Lord, Lord Fox, I think it was, or one of his colleagues, pressing for a review of Section 10, including the right to be accompanied at disciplinary and grievance hearings. Given the pressure on the employment tribunal system, does the Minister not agree—perhaps he might write to me about this—that better support for employees at an earlier stage might prevent some workplace disputes escalating unnecessarily? Will he at least indicate to us at some stage, perhaps in correspondence, how a review of that whole mechanism could proceed? There will be lots of opportunities, I hope, to resolve this.

[Lord Fox (LD)]

I was planning to write a letter on that very subject, because I felt that it was not necessarily due in this debate, so there is a letter heading in the Minister’s direction on the right to accompany. I appreciate the noble Lord raising that.

[Lord Hunt of Wirral (Con)]

That is another demonstration that the Opposition speak with one voice. It is now up to the Minister to answer, but in the meantime, I beg leave to withdraw the amendment.

Steel Tariffs

Lord Fox Excerpts

Thursday 18th June 2026 Lords Chamber

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

My Lords, I thank the noble Lord for that question. While calls for delay are totally understandable, our existing steel safeguard will expire and cannot be extended under WTO rules. Without replacement measures, the UK risks becoming a destination for diverted, subsidised steel, as other jurisdictions act. We have carefully designed the regime and we are consulting extensively with producers and downstream users. Ministers are considering changes based on downstream feedback. We will continue engaging with industry and finalise the measures ahead of implementation on 1 July.

[Lord Fox (LD)]

My Lords, in responding to the last point made by the noble Lord, today I forwarded to the Minister a very detailed list of the categorisations of steel that will not be available in the UK but which will be subject to tariffs, and I would appreciate a response on that. Further, he mentioned 1 July. Most of the steel under consideration is imported from the EU, and negotiations are under way with the EU around a mutual tariff system. It is unlikely that those negotiations will be concluded before 1 July. It makes no sense to implement a tariff regime and then come to an agreement with the EU which will necessarily change that regime, so will the Minister go back to his colleagues and suggest that no change is made to the UK tariff regime until the EU agreement has been concluded?

[Lord Leong (Lab)]

My Lords, I will address the noble Lord’s first point. Following extensive engagement with downstream importers, we have introduced a transitional arrangement, as the noble Lord knows, so that the new tariff will not apply to goods contracted before 14 March and imported between 1 July and 30 September of this year. Quotas will be administered quarterly, with unused allocations carried forward within a quota year to provide greater flexibility.

To address the point about the EU, the United Kingdom and the European Union share a unique trading relationship, with highly integrated steel supply chains that support jobs and industry on both sides. We are, as all noble Lords know, engaging closely with the European Commission to secure a solution that protects the vital EU-UK steel trade. While I cannot comment on live discussions, we have made it clear that restricting UK access to the EU market would disrupt supply chains, increase costs and harm businesses in both the UK and the EU.

Self-employed: Paternity Leave

Lord Fox Excerpts

Wednesday 20th May 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

I thank the noble Baroness for her advocacy for the importance of paternity leave and parental rights. We have already delivered real change through the Employment Rights Act. On 6 April, paternity leave and unpaid parental leave became day-one rights. Alongside these changes, we are undertaking this comprehensive review of the system to consider whether further reforms are required. We have engaged with a broad range of stakeholders, alongside evaluating other sources of evidence. We have received almost 1,500 responses to the call for evidence, and it is important that we consider these carefully before deciding what further reforms are required.

[Lord Fox (LD)]

My Lords, we thank the noble Baroness, Lady Penn, for bringing this question up; it is really important. However, it is not just about rights that do not exist; current rights and their take-up is also a really important issue, and I hope the review will look at that. According to the 2025 Unison parental leave survey, there was an 86.3% uptake of maternal leave but only a 31.8% uptake of paternal leave. Paternal leave is just as important—in fact, even more important—because fathers are an important influence. Will the review look at the take-up of existing rights, as well as developing rights of the sort the noble Baroness, Lady Penn, talked about?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right to draw attention to the importance of fathers and mothers, the whole family unit and kinship carers in nurturing families, and the role of families in our communities. The review is wide-ranging. It is considering all existing entitlements and is looking at the implications for economic growth, labour market participation, maternal health and the best start in life. I am sure it will also look at the uptake of existing measures as well as potential extensions to entitlements, on top of what is already in place.

Britain’s Battery Future Report

Lord Fox Excerpts

Monday 13th April 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

My noble friend is absolutely right to highlight the role of the south-west. Last week, the Secretary of State announced during a visit to Agratas in Somerset a £380 million government grant, which will support the construction of one of Europe’s largest gigafactories, notably built using 100% British steel. But if I get the chance, I would very much like to take up his suggestion.

[Lord Fox (LD)]

My Lords, notwithstanding the developments that the Minister just spoke of and her Answer to my noble friend’s Question, it is clear that significant elements of battery vehicles will not be made in this country in time for the 2027 review of the rules of origin requirements, nor will they be there to meet the “Made in Europe” requirements which are likely to come in. Can the Minister tell your Lordships’ House what the Government are doing in advance of those negotiations to make sure that British electric cars will be able to be sold in the European Union?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right to highlight the importance of the EU as the largest market for UK-manufactured cars. The EU remains the UK automotive sector’s largest trading partner. We are talking closely with the EU on all aspects of regulatory developments in respect of EU battery rules, the EU digital battery passport and the “Made in Europe” content rules, because we want to continue to press the EU to avoid any detrimental impact on the UK and EU’s automotive sectors, given the integrated UK-EU supply chains.

UK Steel Strategy

Lord Fox Excerpts

Monday 23rd March 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, only last year Ministers were forced to rush through the Steel Industry (Special Measures) Act, which was an emergency nationalisation of British Steel in an industry that they had helped to destabilise. That Act told us everything we need to know—socialists must seize the means of production because they are utterly incapable of creating, maintaining or managing it. Unfortunately, this strategy is a testament to that.

Since the intervention at British Steel, the National Audit Office has now reported on the actual cost. The taxpayer has been paying £1.28 million to British Steel every single day. This strategy was meant to be published last year but has been delayed many times because the Government have said that they needed to get it right. What they needed, it appears, was time to construct a protectionist nightmare—a scheme that throws up tariff walls of potentially up to 50% and showers subsidies on a narrow set of domestic producers, while leaving the downstream industries that depend on affordable steel to fend for themselves.

The Government tell us that this strategy is necessary because British steel producers face crippling energy costs and unsustainable labour costs. Whose fault is that? This Government have driven energy costs higher through the contradictions of their own net-zero agenda. This Government have loaded employers with higher national insurance contributions and the cumulative regulatory burden and costs of the Employment Rights Act. They now arrive with subsidies, presenting themselves as the saviours of the very sector they have helped to cripple.

We have seen this pattern before. It is the logic of the youth jobs subsidy: the Government manufacture hostile conditions then spend taxpayers’ money papering over the consequences of their own failure while the underlying damage festers untouched. It is always the taxpayer who must bear the full weight of this Government’s incompetence. Even after subsidy, the UK’s energy prices in the steel sector will be almost two and a half times those of the US, 15% above France and 25% above Germany. There was no mention at all of any Asian producers in the steel strategy. I wonder why.

On net zero, the Government cannot have it both ways. They have banned new domestic coking coal production in the name of environmental responsibility, but the United Kingdom now imports coking coal from abroad: 47% comes from the United States and 38% from the European Union. We are not, therefore, reducing emissions. We are offshoring them, and paying a premium to do so, while simultaneously claiming to be building a strong domestic primary steel industry on the very raw material that we have made it illegal to produce ourselves.

We are told that this strategy is a response to global overcapacity and that the world is awash with cheap foreign steel, undercutting our producers at every turn. I invite the Government to explain precisely what they mean, because some might recognise what they describe as overcapacity as competitive pricing. Cheap steel is not a threat to the British economy; it is a benefit to it. Lower input costs for our manufacturers, our construction firms and our aerospace and automotive sectors mean that those businesses can invest, grow and employ more people.

The Government propose to eliminate that benefit artificially in order to protect a narrow band of domestic producers, and the bill, as ever, falls to the taxpayer. We have already seen £377 million consumed by the emergency nationalisation of British Steel in under a year. Now, the Government are announcing another £2.5 billion. The consequences of this decision will be felt most immediately by the industries that depend on steel as an input. Consider, for example, the automotive sector. There is, on average, 900 kilograms of steel in every vehicle manufactured in this country. The sector supports over 150,000 jobs and is already under severe pressure. When President Trump imposed 25% tariffs on passenger vehicles, UK car exports to the United States fell 55.4% year on year.

Construction tells a similar story. It is the largest single consumer of steel in the United Kingdom, accounting for about 53% of all domestic steel demand, and it is already suffering its fourth consecutive quarter of falling output. I ask the Minister directly: have the Government assessed the cost that these tariffs will impose on the construction sector? If they have, that assessment is conspicuously absent from the strategy.

There is a deeper contradiction that the Government must answer. They offer two arguments for these tariffs. The first is overcapacity: too much foreign steel flooding the market, creating supply so abundant that it undercuts our producers at every turn. The second is national security: we are dangerously exposed to unstable foreign supply and cannot afford dependence on it. But these two arguments cannot coexist: if the world is drowning in cheap steel then supply is, by definition, abundant; if foreign supply is genuinely precarious and could be disrupted then the overcapacity does not exist. Which is it? Is there too much steel in the world, or too little? Until the Government can answer that question honestly, this strategy has no coherent foundation whatever.

The national security argument also deserves further scrutiny on its own terms. The Government’s own data reveals that direct defence procurement requires around 36,000 tonnes of steel per year. Total domestic steel demand runs between 9 million and 11 million tonnes. Defence procurement represents less than 1% of total demand. The notion that we require up to 50% import tariffs and billions in state subsidy to secure that supply is a protectionist canard. Genuine strategic resilience is achieved through diversification—sourcing from the widest possible range of allies and partners. A supply chain built across allied democracies will be far more resistant to even the most radical geopolitical events.

If the Government wish to understand how world-class industries are built, they need look no further than some of our own. Financial services, life sciences and Scotch whisky between them are worth tens of billions in exports and, in many cases, are the envy of the world. Not one of them was built through the protectionism of the state. They were built through open markets, accumulated capital and the freedom to compete.

The Government have set a target of 50% steel production. Can the Minister commit today to providing the House with regular updates on progress toward that target? Will the Government tell us what the exit strategy from public subsidy is and when private sector investment is expected to replace it? What does the future of British steel-making actually look like, and who will build it? Any new entrant to the British steel market today will still face high and rising electricity costs, banned domestic coking coal, import quotas raising the cost of scrap metal inputs and a market dominated by subsidised incumbents with the full backing of the state.

This side of the House is not indifferent to the communities whose livelihoods depend on steel, nor to the genuine strategic importance of manufacturing in this country. But we do British industry no favours by raising input costs for every sector that depends on steel, and we do this country no favours by abandoning the open, competitive, capital-generating approach that made us a strong economy in exchange for a protectionism that serves the few at the expense of the many.

[Lord Fox (LD)]

My Lords, I thank the Minister for the Statement and welcome that there is a strategy here, although, as the noble Lord, Lord Sharpe, said, we were expecting it for some time. However, given what is happening in the world, reading this document conjures the image of someone trying to put up a tent in a howling blizzard, and at the heart of the blizzard are the energy market ructions caused by the Iran conflict.

The UK’s industrial energy costs were already at least twice those of the EU and four times those of the USA. The noble Lord, Lord Sharpe, and I have different multiples, but they are all very large. It is not clear to me whether these distortions that are already there in the UK energy pricing system will increase the gap as a result of the Iran issue as it bites. I doubt the gaps will narrow.

As the strategy sets out, the British industry supercharger scheme helps those companies that benefit from it. However, the steel industry comprises very many businesses, large and small, that do not qualify for the supercharger, although some may qualify for the British industrial competitiveness scheme—BICS. Can the Minister say how many steel-related businesses will benefit from BICS? However, BICS does not kick in until 2027. Given what is happening internationally, will the Minister undertake to speak with her Treasury colleagues about bringing forward the implementation of BICS? In any case, we should note that while the supercharger scheme exempts recipients from network charges, BICS does not, and those network charges are set to increase by a staggering 60%.

These are just a few of the reasons why, unless the Government revisit the energy costs issue, the steel strategy will quite simply be blown away.

Among the more eye-catching and concerning parts of the strategy are the new trade measures to introduce tariff-rate quotas and the possibility of, in future, raising most favoured nation—MFN—applied tariffs to 50%. Late last year, the Trade Remedies Authority ran its rule over imports of rebar from Vietnam and made recommendations to the Secretary of State. This was an entirely appropriate use of that body; indeed, it is what the body was created to do. Having worked on the Trade Act, which established the TRA, at the start of this decade, I see that it clearly has an important role, particularly given the wider scope of the potential actions set out in the strategy. But I do not see any reference in the strategy to the role of the TRA. Have the Government asked the TRA for its recommendations? When could we expect its report? It seems inappropriate to act without that authority.

Next, in his answer to questions in the Commons, the Secretary of State confirmed that there has been discussion with his EU counterparts and that the discussion would continue when they meet at the WTO. Can the Minister confirm that for the purposes of these discussions, steel’s treatment in the TCA—the trade and co-operation agreement with the EU—is equivalent to its treatment in an FTA; in other words, from a WTO perspective, is the TCA equal to an FTA? Furthermore, can the Minister say how, for the purposes of these discussions, the Government are treating the MoU with the USA regarding steel? I assume it does not have the status of an FTA, so how will this modify what we can legally do under the WTO with the United States?

I turn to the local impact of this strategy, which means that there remain question marks for a lot of our communities. My honourable friend in the Commons, David Chadwick MP, spoke very forcefully about the importance of steel to Wales and its economy. He also reinforced the need for faster action in ensuring that the electricity used, for example, to power the arc furnaces is green energy. I strongly commend his comments.

In geographical terms, I would like to highlight the South Yorkshire area, including Sheffield, where there is a host of important steel businesses. It is not just down to the headline firms; there are many other important businesses further down the supply chain that make up this vital steel ecosystem. These kinds of ecosystems are echoed all over the country. The Statement says the defence growth deal will be established in five areas, including South Yorkshire, as part of the defence industrial strategy. Can the Minister tell us when full details will be published? When will a defence growth deal be operational?

To support the effectiveness of a growth deal, a colleague of mine from Sheffield Council, with a strong steel background, suggests that a defence manufacturing supply chain database be built to include the hundreds of thousands of smaller tier 2 and tier 3 suppliers that are critical to our sovereign capability. In this way, the whole sector can be explicitly brought into the realm of the defence growth deal. Noble Lords will be surprised, I think, to know that there is no such survey and no such data available.

I was able to see how the Aerospace Growth Partnership worked effectively with its supply chain, and perhaps the Minister might like to look at how that operated and try to put the same principles into practice for steel. We on these Benches share the Government’s ambitions for a robust and growing steel sector, and we believe that this strategy makes some steps in the right direction. However, the already significant headwinds just got a whole lot worse. That is why success will depend on further action on energy, clarity on tariffs and a truly inclusive growth strategy.

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

I thank noble Lords for their rich contributions. They have raised many matters that are covered in the steel strategy and are of vital importance to the future of steel-making and its centrality to the UK’s economic success.

This steel strategy is the first one to be set out. It explains the vision and sets out bold measures across the business environment, trade, electricity costs, carbon leakage and public procurement, and it is that which distinguishes it from what has gone before. We do not believe that, although the sector does face challenges, it is inevitable that it will decline. The steel strategy’s aim is to stabilise and rebuild our existing strategy, as the noble Lord opposite mentioned, with an aim to sustain 40% to 50% of domestic demand, which of course will be tracked over the coming years. We can see the benefit of moving with this vision to a greener, high-production steel model. Sheffield Forgemasters’ electric arc furnaces have the technical capability that we need to produce steel of the highest standards.

On the question of energy prices, businesses are naturally worried about the impact of the situation in the Middle East. The Prime Minister chaired a meeting of COBRA this afternoon and the Secretary of State is meeting business organisations to look at the impact on energy prices and the supply chain. We have a diverse and resilient energy system, but we are monitoring it extremely closely. If there is a lesson, it is that reducing dependence on externally produced fossil fuels and moving to clean, green, home-produced energy has to be the way of the future. That is exactly what we are doing with the clean energy mission to increase our energy security and reduce electricity bills over the long term.

However, as noble Lords have mentioned, there are measures in place right now, including the supercharger, the energy-intensive industries compensation scheme for steel producers and, as the noble Lord mentioned, the British industrial competitiveness scheme, which will reduce bills for other businesses in the sector more widely. As I mentioned, the Prime Minister, the Chancellor and the Secretary of State are looking very closely at what needs to be done in the current context so that our businesses can be supported through this tumultuous time.

On the question of the trade measure, it is designed to shield steel-making from the damaging effects of overcapacity. This is not something that is unique to the UK. The US, Canada and the EU all apply their own similar measures to tackle overcapacity. We want to do this so that the British steel industry contributes fully to Britain’s crucial national security and defence, and to shore up the UK’s resilience to global shocks. Without this action, the UK steel-making capability faces real jeopardy, leaving us reliant on overseas suppliers. We do not want to let that happen.

I stress that this measure follows the expiry of the UK steel safeguard measure on 30 June this year, but it is a different measure and it has been carefully calibrated, following engagement with downstream importers, to get the right balance between measures to support our domestic steel industry and ensuring that those who use steel in the national economy can manage their businesses well. Following engagement with those downstream importers, we are exploring a transitional arrangement under which the new tariff would not apply to goods under contracts agreed before 14 March and imported between 1 July and 30 September 2026. We are finalising those details to ensure it provides genuine support to firms facing unexpected costs, while still protecting the UK market from excessive imports. We will also review the measure after 12 months to ensure it remains effective.

On the question of how it fits with other international agreements, with regard to the TRA, this measure is distinct from the steel safeguard and is not a replacement. It is separate from trade remedies, such as the current safeguard, which it is the Trade Remedies Authority’s role to review, so the TRA does not have a role in reviewing the new measure. On the TCA, I say that the TCA is the same as an FTA in the eyes of the WTO. I fear I have not addressed all the questions, but I am sure I will come back to them shortly.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

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

[Lord Fox (LD)]

My Lords, the answer that the Minister gave me on the Trade Remedies Authority was a little confusing—or it confused me, anyway. Can she set out in some detail in writing why the TRA is not involved in this? When you look at the Vietnam case, it is exactly analogous, only much less significant than the case we are looking at now. If it was good for the Vietnam rebar, why is it not good for the much larger and more important issue that we are discussing here? Perhaps a detailed letter would be helpful.

[Baroness Lloyd of Effra (Lab)]

This measure is distinct from the steel safeguard. It is distinct from trade remedies, which is why it is not the role of the Trade Remedies Authority to review it, because the TRA does not have a role in reviewing this measure.