Steel Industry (Nationalisation) Bill

Lord Fox Excerpts

Committee stage
Wednesday 1st July 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

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

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

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

[Lord Fox (LD)]

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

[Noble Lords]

It is.

[Lord Fox (LD)]

Unfortunately, the proposer failed to mention it in his speech. I signed it merely because I wanted to indicate that the contingent liabilities are an important part of the Bill as we discuss it. However, the main issues within this group are those that I will discuss later, in group 4. In that respect, I am going to keep my powder dry.

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

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

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

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

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

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

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

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

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

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[Lord Hunt of Wirral (Con)]

My Lords, Amendment 21, standing in my name and that of my noble friend Lord Sharpe of Epsom, would, ultimately, put into the Bill what the Government say is their objective. The then Secretary of State for Business and Trade said that the Government’s aspiration for British Steel was

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

The future of British Steel cannot rest indefinitely on public ownership and continuing working capital injections, together with an open-ended commitment from the taxpayer. It must be a viable, competitive and investible business able to secure private capital for the investment and the transformation that it requires. Yet that objective does not appear in the Bill. There is no statutory duty on the Secretary of State to seek a private sector purchaser, no clear exit route from public ownership and no requirement to report to Parliament on progress. Without that discipline, there is a real risk that nationalisation becomes not just a temporary intervention to stabilise and restore business but an accumulating and indefinite cost to the taxpayer. If the Government are serious about a private sector-led future for British Steel, they should have no difficulty in accepting that duty.

Amendment 23 from the noble Lord, Lord Fox, is very important indeed. It goes to the heart of concerns raised throughout these debates, including by my noble friend Lord Redwood on the first day in Committee, that the Government need a genuine business strategy for steel. Where nationalisation is contemplated, there must be a strategy for skilled employment, retraining, reskilling and local economic renewal. Workers cannot be treated as an afterthought to a transfer of assets or as a balance sheet exercise. I look forward to hearing the Minister’s response. I beg to move.

[Lord Fox (LD)]

My Lords, Amendment 23 is in my name. I was very pleased to hear what the noble Lord, Lord Hunt, just said, because I had put in my notes that I feel that this is an important amendment. I hope it is pushing at an open door.

In the previous debate, on Monday, the noble Lord, Lord Wigley, spoke of the effect on local communities. I agreed then, and this amendment would put in place a requirement for a jobs and industrial transition strategy to follow once the Secretary of State has exercised the principal transfer power in respect of the steel undertaking. I emphasise that this would be post exercising that power.

This amendment calls for the strategy to be laid before Parliament within six months—sooner, I would hope—from the exercise of the transfer powers. This published strategy must set out the Government’s investment and transition plans to protect employment, deliver a skills and reskilling programme and, if necessary, redeployment opportunities, and deliver real economic renewal, while supporting resilience in communities that are dependent on that steel undertaking. I am happy to discuss with the Minister ways of achieving this objective, but this process is aimed at ensuring that there is an explicit plan to which Parliament will be able to hold the Government to account.

[Lord Redwood (Con)]

My Lords, these are indeed important amendments. It is a tragedy what has been happening to our steel industry in this country. It suffered considerable decline under the last Government thanks to very high energy prices and decarbonisation, which turned out to be disruptive. In the last full year of the Conservatives, we were down to 5.6 million tonnes of manufactured steel—around half our requirement.

There has now been a further very big collapse, such that our output last year was, I think, around half of that in 2023—around 2.5 million tonnes—and we are heading for an even smaller output this year unless the business plan is provided, kicks in and starts to do something to help the ailing Scunthorpe business that we are talking about. I think we are united in our belief that this is not what we want from our steel industry. It means that we have a chronic dependence—in the last year, 7.1 million tonnes—on imported steel and we are heading to a position where we import practically all our steel. I fear we will discover that, unless we do something about electricity prices, even when electric arc production starts to kick in on a bit of a bigger scale, it will be very difficult to sell that steel at a profit because the electricity costs are unrealistic and uncompetitive, as well as the general carbon taxes and carbon costs, which have been adversely affecting the blast furnaces.

Given our common interest in saving jobs and having a better steel sector, I again urge the Government to provide that plan and that thought-through work, which should be shared without commercial secrets with the wider public and both Houses of Parliament. This would give us some confidence that there is a way out of this very deep tunnel that we are going down to producing less and less steel of our own.

The Government have clearly introduced very penal tariffs on importing steel from non-EU sources, with the 50% increase in tariff. They hope that that will change the situation but, because they have relaxed the quotas for the EU, I suspect that we are still extremely vulnerable to EU import competition at a time when our industry is not properly competitive. They will find that the tariffs will not protect the diminishing British steel industry, but that the much bigger and somewhat stronger steel-using industries in the United Kingdom will be very gravely affected, because more than half our imported steel may well have to come from sources that attract tariffs. That will be very penal and, therefore, will reduce the amount of steel-using activity that we can undertake.

I urge the Government to take some of these points seriously. I am glad that two sensible amendments have been put forward to concentrate this debate.

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Moved by

[Lord Fox]

22: After Clause 50, insert the following new Clause—
“Stakeholder Advisory Committee(1) The Secretary of State must establish a Stakeholder Advisory Committee to provide advice on the exercise of principal transfer powers under this Act (“the Committee”).(2) The Secretary of State must ensure that the membership of the Committee includes representation from stakeholders, including but not limited to—(a) industries that rely on the supply of steel, including the defence sector and critical national infrastructure,(b) representatives of the workforce of the steel undertaking, and(c) local authorities for the areas in which the steel undertaking operates.(3) The Secretary of State must consult, and have regard to the advice of, the Committee before making a determination that the exercise of a principal transfer power is necessary in the public interest under section 2.”Member's explanatory statement
This new clause requires the Secretary of State to establish a stakeholder advisory committee. The Secretary of State would be required to seek the committee’s advice before making a determination that the exercise of a principal transfer power under the Act was in the public interest.

[Lord Fox (LD)]

My Lords, I move Amendment 22 in my name, but just briefly, with your Lordships’ indulgence, let me first respond to the Minister’s response to Amendment 23. I think he is quite right that it is up to the management of the company to set its own course, but that course will have wider implications than simply the company itself. It will have implications on the community in which that company is located, and that is something the Government, local government, and indeed the Welsh Government if appropriate, have to be concerned about. That was very much part of the point I was bringing forward. There might be another way of doing this, and perhaps we can discuss it when we get to a later group, but I am pleased to hear the Minister’s relatively positive response.

Turning to Amendment 22, in a sense the purpose of this follows on from Amendment 23 and keys into some of what the noble Lord, Lord Redwood, was talking about just now. An area not covered to date is the need for the wider supply chain to have an explicit voice in what is going on here. We should remember that there are about 400,000 employees working in the steel-using community and about 40,000 in the steel production capacity, so this is a 10 times bigger part of our national wealth and we need to make sure that there is a place for steel users and producers to have a voice within the strategic decision-making going forward.

I believe the Government have a steel board, but it is not clear to me how the steel-users community feeds into that steel board. In what we have seen in the setting of tariffs, users seem to have a somewhat second-class status within the decision-making process. This amendment envisions the creation of a statutory stakeholder advisory committee, which would make sure that those producers are well represented in the decisions that Government make concerning the industry on things like tariffs. Union and community interests and those kinds of things should also be included.

I am very flexible about the approach taken to do this, but I feel there needs to be a formalised, statutory approach. We have seen with respect to the proposed tariffs that users are falling behind producers on the Government’s agenda. This amendment is there to ensure that users have a formal voice. Trade associations do a great job, but in the end Secretaries of State can and do ignore them on a regular basis. This amendment is there to add a voice for the manufacturers in any debate. I beg to move.

[Lord Redwood (Con)]

My Lords, I welcome the intent behind Amendment 22. We should not be careless about the interests of the steel-using industries. Many years ago, I was responsible for Darlington & Simpson Rolling Mills. In those days, that was a profitable and successful business, but the price of raw material was critical to that type of operation. I was very interested to learn from noble Lord, Lord Fox, that he thinks that there are 10 times as many people involved; that may well be an underestimate. When I was trying to do some research on this, I identified a number of sectors where steel use is an important part of cost, and I came up with about £200 billion of business activity in those areas, excluding construction, which is obviously the main steel user in the country. That was many times the amount of turnover we are talking about in trying to protect maybe 2 million tonnes of steel production in this country from our own resources. Both in setting the tariffs and in setting the plans, and in the details of any future nationalisation, we need to have fuller recognition than we have had so far of the legitimate interests and concerns of the steel-using industries.

I hope that Ministers will see that we are also interested in a report and audit on where we are at already. Although we have not nationalised British Steel and do not own the assets, we are otherwise completely responsible for the people who do those jobs and their families, for the safety and success of the production processes of those two ageing blast furnaces, and for that part of what remains of the British steel industry, so I think we are probably owed a bit more consultation and plan already.

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[Lord Leong (Lab)]

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

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

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

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

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

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

[Lord Fox (LD)]

I thank noble Lords for their contributions to this short debate. It was stark that when the Minister went through his long list of parties that the Minister at the other end consults with, the vast majority of the ones that the noble Lord, Lord Redwood, and I were discussing came under the “other stakeholders” category, so it is encouraging that the UK Metals Council will be invited.

I take the point about the nature of preconditions for any activity, and I understand the Minister’s reaction to that, but the purpose of the amendment was to make the point that users are underrepresented as it stands. We can wait and see whether adding the UK Metals Council is sufficient to reweight that, but I hope the Minister can go away and perhaps come back to us with a statement as to how users will become central to the Government’s philosophy in making plans, rather than being just another stakeholder, which is where they currently seem to be. Leaving that to one side, I beg leave to withdraw the amendment.

Amendment 22 withdrawn.

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Moved by

[Lord Fox]

24: Clause 52, page 34, line 15, at end insert—
“(5A) Compensation scheme regulations must include provision which specifies that payment of compensation may not be made until any written estimate under section 54(4A) is laid before Parliament.”Member’s explanatory statement
This amendment and others in the name of Lord Fox require that payment of compensation cannot be made until the Secretary of State has published a written estimate of the environmental liabilities of the steel undertaking, provided to them by the independent valuer.

[Lord Fox (LD)]

My Lords, I will also speak to Amendments 25 to 28, 39 and 45, all in my name—I think I must have gone slightly mad at the time.

As promised when we touched on the contingent liabilities earlier, this group homes in on how such liabilities affect possible compensation in the event of nationalisation. As I set out at Second Reading, the possible environmental liabilities and future remediation costs for a site as large as Scunthorpe, let us say, are potentially huge. Scunthorpe has been there for a long time and is a very big site. The site has also employed a lot of people for a long time, and their pensions and any contingent liabilities should be fully understood by Parliament, as we discussed in the debate on the previous group.

Those contingent liabilities are likely to majorly impact the current and future valuation and sustainability of any steel undertaking. The current draft has evaluating the environmental liability as a voluntary exercise and the pension liability seems to have been ignored, but I take on board what the Minister has just said and perhaps withdraw that sense, as some elements seem to be covered.

Amendments 24 to 27 together would require that the payment of compensation could not be made until the Secretary of State had published a written estimate of the environmental liabilities of the steel undertaking provided to them by an independent valuer. Amendment 28 would require that the payment of compensation could not be made until the Secretary of State had published a written estimate of the pensions liabilities of the steel undertaking provided to them by an independent valuer.

Amendment 39 would require the Government to report on the compensation paid under any compensation scheme regulations made under Clause 52. Finally, Amendment 45 seeks to place a limit on financial assistance and compensation without additional parliamentary approval. This proposed new clause would prevent the Secretary of State paying more than £500 million—which I point out is quite a lot of money—in financial assistance and compensation under the Bill unless the House of Commons passes a resolution authorising them to do so. In this way, we would ensure that there was no blank cheque.

I am happy to approach these issues in other ways, as long as the material objective of this group of amendments is achieved. I beg to move.

[Lord Redwood (Con)]

My Lords, I am glad that the noble Lord, Lord Fox, has raised this; it was also something that I mentioned in our previous debates. In my experience of old industrial sites, the land under and around the plant is often heavily polluted and may contain toxic substances. Clearly, the Government need a report on that and would need to consider it not only when considering any possible compensation to a previous owner but as part of the costings of the whole project. Sooner or later, that land will have to be cleaned and if there is any current risk to water courses, it might be sooner rather than later that action would need to be taken. I trust that will all be properly investigated and has been properly investigated where we have already taken operational and financial responsibility for the plant in the case of Scunthorpe.

On other liabilities which can occur in these situations, which probably should be mentioned for the sake of completeness, it is a good idea to find out about current and retired staff to see whether any long-term health issues have arisen which can be attributed in any way to the processes they have been handling and the working conditions they have been in. Those, too, need sensitive treatment and can, if something has gone wrong, amount to significant sums of money.

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[Lord Leong (Lab)]

I will have to write to the noble Lord, because I do not have specific information on that particular pension scheme.

[Lord Fox (LD)]

My Lords, I thank noble Lords for their contributions—particularly the noble Lord, Lord Wigley, who was saying what I was thinking, but he said it with authority: he understands the issue for those workers quite viscerally. It was in my mind that some level of protection or safeguard needs to be there. I thank the Minister for his very thorough answers. They are so thorough that I will have to spend some time with Hansard, reading them through, to find out how much comfort there is in there. His comments regarding Amendment 25 were certainly encouraging, and I hope we can come to some sort of agreement. On the others, I will have to come back him later, but, with those comments, I beg leave to withdraw Amendment 24.

Amendment 24 withdrawn.

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[Lord Sharpe of Epsom (Con)]

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

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

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

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

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

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

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

[Lord Fox (LD)]

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

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

[Lord Redwood (Con)]

My Lords, I am grateful to the two noble Lords on the Front Bench for setting out this challenge to the Government. When you have a company in loss that is really struggling, there is an absolute requirement for accurate, speedy and regular financial reporting. Many years ago, I was a chairman with a large group of industrial companies reporting to me. I am pleased to say that none of the subsidiaries reported anything like the losses or the cash haemorrhage of British Steel, and we could not have afforded such a thing. I remember that if I or the chief executive saw one of our subsidiaries in danger of going into loss or dipping into bad performance, it would be put on to monthly reporting and quite often weekly reporting. That was not just because we wanted to know the bad news early but because it started a conversation between us, and other senior directors and executives, and the leading executives of the ailing subsidiary around how they could generate more cash and revenue, win more business and reduce costs in the meantime. If there was no immediate prospect of increasing the revenues, they needed to reduce the cash outflow.

My advice to Ministers, who took responsibility for British Steel many months ago, is that they should be seeing that kind of information, because it is now their responsibility. They decided to undertake this action without advice on value for money, so they need to have that sort of detailed information in front of them. They or their representatives also need that informed conversation with the people they have entrusted with running this business to find out why, as I understand it, the numbers are still not going in the right direction. You need that information weekly, and certainly monthly, because these things accumulate. The National Audit Office has led us to believe that the losses in this business have already accumulated to £642 million.

The description that the Government have offered help with working capital is true, but I do not think it is the whole story. As I understand it, there is a massive trading loss, and taxpayers—through Ministers and the Treasury—are having to pay trading losses. That means the Government are both subsidising the customer, who is getting it too cheaply, and paying for costs that the business needs to meet, which the customer is not going to pay for. In addition, the Government may need to provide additional working capital to provide for the work in progress and the stocks and raw materials for the next bit of production. I would regard the loss as a different category from the provision of additional working capital to keep the business running, and I would be much more worried about the loss.

From my business experience with industry, my conclusion is that cash is the king. By all means look at the P&L—that will give you an indication—but a business has to generate more cash than it spends. Otherwise, it goes bankrupt. That is the fundamental discipline that Ministers, through their chosen representatives, need to impose on this business. They need to see the cash line of outflow starting to reduce—otherwise, they need a fundamental rethink of policy.

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Moved by

[Lord Fox]

36A: Clause 58, page 39, line 7, at end insert—
“(1A) Financial assistance under subsection (1) must be provided through regulations, specifying—(a) the financial assistance proposed to be provided, and(b) the estimated cost to public funds of that assistance.(1B) Regulations under subsection (1A) are subject to the affirmative procedure.”Member’s explanatory statement
This amendment requires financial assistance under Clause 58 to be approved by a resolution of both Houses of Parliament before it may be provided.

[Lord Fox (LD)]

My Lords, I thought it would be helpful, on this group, to bring together the necessary levels of scrutiny about which I have spoken on various other groups in various different ways. In moving Amendment 36A, I will speak to my Amendments 38 and 41A.

As prefaced on the previous group, Amendment 36A would require financial assistance under Clause 58 to be approved by a resolution of both Houses of Parliament before it may be provided. By amending Clause 58, financial assistance under the relevant subsection would have to be provided through regulations specifying the financial assistance proposed to be provided and the estimated cost to public funds of that assistance. These regulations would be subject to the affirmative procedure.

The Minister got his revenge in early on the previous group, because Amendment 38 outlines a mechanism by which parliamentary scrutiny of the public interest test and nationalisation could work. I propose a new clause after Clause 58 that would prevent financial assistance being provided until 90 days after information about the package of financial assistance has been made available to a Select Committee of the House of Commons or the House of Lords.

I take the Minister’s point about timing, but this is a useful probing amendment to look at the role of Select Committees going forward in the scrutiny of this. I hope the Minister will have something broader to say if he continues to shoot down the principle of the timing of this intervention. This amendment proposes that the Select Committee should look at

“details of the nature and amount of the financial assistance … the intended beneficiary or beneficiaries of the financial assistance … the expected purpose and effect of the financial assistance … any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and … any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal”.

Whether this is before or post hoc, the Select Committees —either of just the Commons, or of the Commons and the Lords—need to have this important investigation. Of course, any information that would be made public that might compromise national security, fiduciary duties or commercially sensitive issues would not be included. Going forward, it would be useful to hear from the Minister his understanding of how Select Committees will be involved.

I had hoped to persuade the Government to commit to an annual parliamentary debate on the steel industry—its strategy, the market and the state of nationalised businesses in the industry—both in the Commons and in the Lords. This would take place once a year, as long as there were still steel undertakings in public ownership. Perhaps we can discuss this, but Amendment 41A proposes an alternate approach to information sharing. It would require the Secretary of State to make a Written Ministerial Statement every three months on the progress of any nationalised steel undertaking.

During the during the passage of the Steel Industry (Special Measures) Act—SISMA—just before Easter last year, Ministers committed to a debate six months following Royal Assent on the use of direction-giving powers. That took place in October 2025. This was a commitment to a single occurrence, but SISMA also included a commitment to a monthly Written Ministerial Statement on the use of direction-giving powers. If British Steel were taken into public ownership, this commitment would fall away, replaced only by any commitments associated with this Bill.

To date, there are no provisions of anywhere near this level of information sharing within the Bill. So, without this amendment, as the cost to the taxpayer increases, the level of parliamentary scrutiny would actually decrease, creating less scrutiny for steel nationalisation than there is under SISMA. I accept that a monthly report may be unreasonable, and I know that the Minister has mused in our discussions about half-yearly reports, but I think quarterly would be a sensible interval, and that is what this amendment seeks to achieve. I do not think any Minister would be afraid of doing this because, as the noble Lord, Lord Sharpe, said on the previous group, a level of public understanding of what is going on—the difficulties, the struggles, the cost and the importance of the industry—is important. This is an opportunity to restate that, coming back to the point about what is happening in the communities, and with jobs and skills. We would expect that to be included in those quarterly reports. If we are not getting a debate every year, this would be a better response, in a way.

Taken together, these three amendments are designed to deliver a level of comfort: an affirmative process for assistance, a role for the Select Committees and a quarterly reporting mechanism. I beg to move.

[Lord Hunt of Wirral (Con)]

My Lords, this is a very important debate, and I thank the noble Lord, Lord Fox, for these amendments. It is not just a case of public understanding; I think the public would expect Parliament to hold the Government to account. In many ways, I hope we are pushing at an open door with these amendments. In an area potentially involving substantial financial assistance, the Government must be able to provide both Houses of Parliament with a clear indication of the estimated cost to public funds. Parliament must be able to scrutinise not only the principle of financial assistance but its scale, purpose, conditions and likely liabilities.

The proposed 90-day period in Amendment 38, which we have already debated, strikes a sensible balance. It would allow an expert Select Committee to examine the proposals and make recommendations, while preserving the Government’s ability to proceed once that scrutiny has taken place. The noble Lord, Lord Fox, seemed uncertain several times as to whether it should be a Select Committee of the House of Commons or of the House of Lords. I have always been a great believer in Joint Committees. Something of this importance requires both Houses of Parliament to scrutinise it, and the best way to do that is through our expert Select Committee process.

Parliament has enormous expertise which should be used in determining the appropriate level and form of support. That is particularly important where taxpayers may be exposed through grants, loans, guarantees or indemnities. I hope the Minister will be able to respond positively on how he intends to proceed.

[Lord Leong (Lab)]

My Lords, I am grateful for all the contributions in this group of amendments.

Amendment 38 in the name of the noble Lord, Lord Fox, would require the Secretary of State, before providing any financial assistance, to put forward a proposal to Parliament for doing so, setting out the underlying details. The amendment stipulates that a Select Committee would have 90 days to provide any recommendations on the proposal before it can proceed. I respectfully suggest that this amendment is not realistic, given that financial assistance may need to be provided immediately following a transfer. It is unlikely that there would be time for the parliamentary scrutiny envisaged by this amendment without imposing significant risk to the continued operation of the steel undertaking. I appreciate the noble Lord’s intention in tabling this amendment but, for the reasons I have outlined, I ask that he does not move it.

Amendment 36A would require the financial assistance power in Clause 58 to be exercised by regulations specifying the purpose and estimated costs. I understand the desire for further parliamentary scrutiny of the costs that might be incurred in relation to an intervention in a steel undertaking. The Government have been transparent about the costs incurred to date as a result of the intervention in British Steel under the special measures Act. Estimating future costs relating to nationalisation is more challenging because they would depend on decisions not yet taken about the future operation of a particular steel undertaking.

I hope I can provide reassurance by emphasising the extensive controls over expenditure that would apply by default. If these provisions are used, the Government would need to consider the potential range of costs and make the usual value-for-money tests under the accounting officer. These spending processes are subject to ongoing parliamentary scrutiny by the Public Accounts Committee. The Permanent Secretary to the Department for Business and Trade appeared before PAC last week to discuss steel.

As with Amendment 38, I am concerned that this amendment does not reflect the operational realities of a potential intervention. It is likely that there would be urgent and immediate pressures to draw down on the financial assistance spending power to maintain operations in a way that would not be conducive to the set-up of the secondary legislation process. However, I understand that the noble Lord would like us to go further in this respect, and I appreciate the constructive engagement we have had on this and other issues. I will of course consider whether anything more can be done to give him the reassurance he desires.

Amendment 41A, also tabled by the noble Lord, would require the Secretary of State to make a Written Ministerial Statement every three months on the progress of any publicly owned steel undertaking. I am sympathetic to this amendment and recognise Parliament’s interest in the Bill’s impact on the steel industry, employment and public finances. That is why the Bill requires the Government to produce an annual report on financial assistance under it and the company will publish its annual report and accounts. I do not think reporting every three months for as long as a steel undertaking remains in public ownership is necessary. However, the principle is sound and the noble Lord made some excellent points. I recognise that our current reporting commitments may not encompass the full scope of his amendments. I ask him not to move the amendment, and the Government will consider this further before Report.

[Lord Fox (LD)]

My Lords, I thank the Minister for his positive response on the last amendment, and I understand the nature of his concerns on the first two. All roads point back to Clause 2 and the public interest test, frankly, so perhaps we should have another discussion about that. However, on that basis, I beg leave to withdraw.

Amendment 36A withdrawn.

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[Lord Redwood (Con)]

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

[Lord Fox (LD)]

My Lords, I will be equally taciturn. I have spoken a lot about CBAM, and I do not intend to repeat it. It occurs to me that if the Government become a major owner of the steel industry, they might become more sympathetic to some of the arguments that the noble Lord, Lord Sharpe, has just advanced.

[Lord Leong (Lab)]

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

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

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

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

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

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

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, I will speak to Amendments 49 to 55 standing in my name and the name of my noble friend Lord Sharpe of Epsom. As we have just discussed, the explosion of environmental, social and governance—ESG—red tape has created a vast and complex web of rules, which force businesses to comply with political targets at a cost to investment, job creation and, above all, the competitiveness of Britain.

Admittedly, I should add a declaration of interest, as a practising solicitor in the City of London. This has undoubtedly created an explosion of work and therefore I should probably declare an interest. But I do not take any pride in the fact that ESG reporting requirements have become more and more burdensome and onerous.

This is why I am delighted to confirm that His Majesty’s Official Opposition have committed to repealing a number of ESG reporting requirements, including those addressed by this group of amendments, so that unnecessary business costs can be removed and businesses can focus on investing, growing and creating jobs. However, if the Government are going to nationalise a steel undertaking, in order to minimise the cost of its transition, attract private sector investment and reduce the burden on the taxpayer, they should at least disapply these regulations in respect of that undertaking. British Steel employs more than 4,000 people and is, therefore, likely to be caught by a number of these costly and burdensome requirements.

Amendment 49 would disapply the Companies Act strategic report requirements, which require quoted companies to include annual greenhouse gas emissions information and reporting on environmental impacts in directors’ reports. Amendment 50 would disapply greenhouse gas emissions and related environmental reporting requirements. Amendment 51 would exempt a nationalised steel undertaking from the energy savings opportunity scheme, which requires large companies, including those with more than 250 employees or turnover above the relevant threshold, to carry out energy audits every four years to identify energy efficiency opportunities.

Amendment 52 would disapply the energy and carbon reporting requirements which apply to large companies and limited liability partnerships. Amendment 53 would remove executive pay ratio reporting requirements. These require certain companies to report chief executive pay against median, lower-quartile and upper-quartile employee pay, with the figures subject to audit. Amendment 54 would disapply forest-risk commodity due diligence and reporting requirements. These would require businesses using certain commodities to conduct supply chain due diligence and publish annual reports. Finally, Amendment 55 would disapply climate-related financial disclosure requirements. These require companies and LLPs to report how their boards oversee climate risks, the impact of climate change on strategy, and the metrics and targets used to assess those risks.

None of these requirements reduces electricity costs, secures orders, improves productivity or makes British Steel more competitive, yet each requires additional reporting, auditing and compliance costs on a business which the Government may have taken into public ownership at substantial expense to taxpayers. I therefore say to the Minister that, if the Government are serious about making a nationalised steel undertaking viable, investable and capable of returning to the private sector, they should focus on reducing unnecessary burdens and allowing management to concentrate on commercial recovery, investment, modernisation and jobs. I beg to move.

[Lord Fox (LD)]

My Lords, I was planning to say nothing and I will say little more than nothing. I have a question for the noble Lord, Lord Hunt, which he can answer when he gives his response to the Minister. Can he remind me when most, if not all, of these measures were brought on to the statute book?

[Lord Leong (Lab)]

My Lords, the noble Lords, Lord Sharpe and Lord Hunt, have tabled a number of amendments regarding the deregulation of the steel sector. These amendments focus on three core areas of regulation: industrial action, environmental regulations and reporting, and company reporting.

I recognise the concern from noble Lords that any publicly owned steel undertaking will face a significant array of reporting requirements. That is true, and the Government believe that these are necessary to ensure that any publicly owned company operates in a similar way to its privately owned counterparts. Any publicly owned steel undertaking must protect its workers’ rights, fulfil its environmental obligations and transparently report on its progress.

At the outset, I make the general point that a company under public ownership is ordinarily treated as a public corporation—that is, it is run as a private company with an independent board of directors, operating under broad strategic direction from Government Ministers. It is right, therefore, that such a company is subject to the regulatory frameworks within which any similar private company operates. I also emphasise to noble Lords that amendments seeking to level the playing field within the steel industry are inconsistent with that position. Instead, the amendments in this section seek to give preferential treatment to publicly owned steel undertakings.

I will now address the amendments directly. I believe that Amendments 50 to 52, 54 and 55 are intended to address the noble Lord’s concern that the Government’s industrial decarbonisation policies could impose additional costs and burdens on publicly owned steel undertakings. In summary, these amendments seek to exempt publicly owned steel undertakings from a number of statutory requirements, including greenhouse gas reporting, the energy savings opportunity scheme, energy and carbon reporting, forest-risk commodity due diligence, and climate-related financial disclosures. Although I recognise the noble Lord’s concern that there is a range of requirements on the steel sector with regard to environmental reporting, I cannot support these amendments.

The reporting requirements the Opposition have identified are integral to this Government’s commitments to decarbonising our industries. Our steel strategy set out a vision for a move towards green, decarbonised steel production. We are committed to supporting the sector in achieving those objectives, as evidenced by the £500 million of funding to Tata Steel for the development of its electric arc furnace in Port Talbot.

A public steel company, no more than any other steel company, should not be exempt from these important transparency requirements. Accepting these amendments would undermine the intent of the Government’s industrial decarbonisation policies, creating an unfair system for other domestic steel producers. The Government are committed to revitalising the entire UK’s steel industry, not only the companies in public ownership. Alongside this, the Government believe that these requirements are critical to industrial decarbonisation and to meeting net zero.

Finally, I will address Amendments 49 and 53 together, as both seek to exempt a publicly owned steel undertaking from existing corporate reporting requirements. Amendment 49 would disapply the strategic reporting requirements under Chapter 4A of the Companies Act 2006, while Amendment 53 would remove the requirement to publish information on executive pay ratios.

I recognise that the purpose of these amendments is to reduce the administrative burden on a publicly owned company. However, the Government do not believe that public ownership should entail lower standards of transparency or accountability. Indeed, if a steel undertaking is brought into public ownership, there is an even greater expectation that it should operate openly and be subject to appropriate public scrutiny. That is why the Government expect any publicly owned steel undertaking to comply with the standard reporting obligations that apply to comparable public corporations. Its annual report and accounts should provide Parliament, taxpayers, employees and the wider public with a clear and comprehensive overview of the company’s financial position, operational performance, governance and remuneration arrangements.

Transparency is not merely a regulatory requirement; it is an essential part of maintaining public confidence. It supports effective parliamentary scrutiny, promotes sound corporate governance and demonstrates that public assets are managed responsibly. It also serves a practical commercial function. Should the company seek external finance, strategic partners, or, in due course, a return to private ownership, prospective investors and creditors will rightly expect access to robust, reliable and consistent corporate reporting. Maintaining those standards will enhance rather than diminish the company’s long-term prospects.

For all these reasons, the Government believe that a publicly owned steel undertaking should be held to the same high standards of openness and disclosure as comparable public corporations. Public ownership should set the bar for transparency, not lower it. I therefore hope I have explained why the Government cannot support these amendments, and I respectfully invite the noble Lord to withdraw the amendment.

Hong Kong Economic and Trade Office

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Monday 22nd June 2026 Lords Chamber

[Lord Hanson of Flint (Lab)]

With due respect to the noble Lord, we will take action, where required, against the Chinese authorities. We assess that China poses a significant threat in a number of areas, from cyber attacks to foreign interference, espionage targeting our democratic institutions and transnational repression, as mentioned by my noble friend Lady Hayter and the noble Lord, Lord Alton of Liverpool. We are also alive to the fact that there are common areas of interest with the Chinese Government on the international stage. China still presents the UK with opportunities as the world’s second-largest economy and the UK’s current third-largest trading partner. It is not inconsistent to challenge at the same time as examining where British interests lie as a whole.

[Lord Fox (LD)]

My Lords—

[Lord Garnier (Con)]

My Lords—

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

We will hear from the Lib Dem Benches then the Conservative Benches.

[Lord Fox (LD)]

My Lords, as the noble Baroness said, Peter Wai was a UK Border Force officer and a special constable, but it has also been reported that he was a director of a private security company. A third defendant, Matthew Trickett, who died before the trial, was an immigration officer and a director of a different security company. It seems to me that it is a conflict of interest to be both an immigration officer and running a private security company. Can the Minister explain what is now going on to make sure that we do not have these conflicts of interest in our important Border Force employees?

[Lord Hanson of Flint (Lab)]

The noble Lord has mentioned an important point. The former Security Minister, my right honourable friend Dan Jarvis—who held the post until he was appointed Defence Secretary a couple of weeks ago—commissioned Home Office officials to undertake a thorough examination of whether there is a case for further regulation of the sector under the Private Security Industry Act. Those working in private investigation do important work, but their specialist skill sets make them attractive targets for foreign states to exploit.

As I mentioned, we have bolstered our robust security vetting regime, which will protect assets and information as a top priority for government, and we have commissioned Sir Adrian Fulford to undertake a review of the vetting issues. I await his recommendations; it is important we have consideration of those things. I say again that eight- and 10-year sentences show that the National Security Act is working and that there are significant penalties for those who dare cross the legitimate line of their employment.

Steel Import Restrictions

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Tuesday 2nd June 2026 Lords Chamber

[Lord Leong (Lab)]

My Lords, first, we use tariffs only as a last resort, and only in circumstances where we have no other choice. Without action, we risk losing domestic steel-making capability, which would mean that we could not mean critical infrastructure and defence needs without relying fully on imports. Furthermore, as I am sure the noble Lord knows, we are not the only country that has tariffs: the EU has tariffs, Canada has tariffs and the US has tariffs.

On the point about whisky, we have signed a legal treaty with India that underpins the trade deal, and the liberalisation of whisky is a clear part of that. We will adhere to that and support the Scottish Whisky Association to ensure that India meets its obligation.

[Lord Fox (LD)]

My Lords, as the Minister will no doubt realise, tariffs are double-edged. The businesses that use steel that is not being manufactured in this country are in danger of having to pay higher prices for that steel, unless the Government are subtler than seems to be the case to date. Can the Minister undertake forthwith to make sure that the steel catalogue is thoroughly reviewed and that no steel that cannot be made in the United Kingdom would come under any tariff at all?

[Lord Leong (Lab)]

The noble Lord is absolutely right. We recall that the quota currently in place stands at 60%. For most countries, we have not achieved 60%: it is only when we exceed that 60% that that tariff of 50% comes in. Furthermore, we import most of our steel from the EU; 70% of our steel imports are from overseas and 60% from the EU, while India contributes only 5% of the market.

RMT Strikes: Impact on Businesses

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Tuesday 28th April 2026 Lords Chamber

[Baroness Blake of Leeds (Lab)]

In answering, I thank my noble friend for all the work he has done in this area; he probably understands more than anyone just how important it is to bring parties together. He raises absolutely critical points. We have to bring benefit from collaboration, and I think we have the right building blocks in place to make sure there is the respect due between different parties to make sure that we can move forward positively.

[Lord Fox (LD)]

My Lords, part of the noble Lord’s Question alludes to the frailty of British high streets. I am sure that, in her travels as a Minister, she is visiting lots of high streets and seeing shuttered restaurants, empty shops and boarded-up pubs. This kind of hit from the strikes is the final straw for many of these businesses. She may not be able to control the unions, but which of these other policies can she control? There is the huge rise in employer NIC, the huge rise in business rates, the hike in employment costs and the most expensive energy costs in Europe. Does she recognise that there is work to be done, not just on strikes but on preserving and saving our high streets? This Government have to act now to do that.

[Baroness Blake of Leeds (Lab)]

I did wonder when I saw this Question if it would result in the question that the noble Lord asks. As a former local government leader as well, I am absolutely aware that the problem with high streets is not a recent phenomenon but goes back years, and we have to do everything we can. There are some real innovative schemes coming together to support businesses, but I go back to the point that strikes are not helpful in this scenario, and that is why we are determined to improve industrial relations as we move forward.

Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026

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Wednesday 25th February 2026 Grand Committee

I am honorary president of National Energy Action, which advises the Government on the warm home discount, and I would have preferred it to have stayed at £350 to help those most in fuel poverty, rather than it to have been reduced and spread more thinly to the £150 it now is. I am grateful for the opportunity to have raised those issues.

[Lord Fox (LD)]

My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, who is forensic in her detail. I should say that she has somewhat mixed her drinks with this measure and other things, but this measure and her comments indicate that the energy market in this country, which this Government inherited from their predecessor, is broken, in essence, and is not working properly.

While we are talking about this particular statutory instrument, it would be useful to have an indication from the Minister that the Government understand the malfunctioning way that energy works for both and consumers, and for him to undertake a process whereby the whole thing is properly reviewed. It is quite clear that there are many pushes and pulls, puts and takes, within our energy market: some are to do with green energy and some of them not; and some are to do with the way that the overall energy cost is assessed based on a floating gas price, rather than the actual cost of the energy being generated. It would help for the Minister to indicate, on behalf of the Government, that he understands that a proper root and branch review of the way in which the energy market is structured is long overdue. I do not blame the Government for what it is now, but I would blame them if they just sat on their hands without doing something about it.

Measures to bring down some of the highest industrial energy prices in the world—if not the highest—obviously come as welcome news to those businesses that have received them. Energy-intensive industries, as the Minister said, such as steel, chemicals, glass, ceramics and brickmaking, as the noble Baroness mentioned, face much higher energy costs than competitors overseas. They really are competing with not just one arm tied behind their backs but most of their limbs. They cannot pass on these prices because of the international market in which they operate. It is welcome that these EII businesses have been recognised, but we are concerned about the lack of support for other businesses across our manufacturing and energy use sector, which includes consumer businesses and the high street.

It is not just EII businesses that are facing an energy cost crisis; it is right across business. If we look in particular at small businesses, energy can be a high proportion of their total costs. They are the backbone of our economy and the heart of local communities. They create many of the jobs on which those communities rely, but they are struggling with uncertainties and changes around the cost of energy on top of the other costs that the Government have decided to put on those businesses, such as NIC costs and the change in the business rates system.

This is all part of a huge burden that all businesses are suffering, but SMEs are proportionately suffering more. They are exposed to the energy market with little support after the previous Government’s decision to slash energy bill support for businesses by an average of 85% when they replaced their energy bill relief scheme with the energy bills discount scheme, which itself ended in 2024. We estimate that 3.1 million SMEs saw a total bill increase of £7.6 billion when the initial energy bill relief scheme ended. That is a huge burden that the sector had to take during the previous Government’s oversight.

We welcome Ofgem’s announcement in December 2024 on enabling SMEs with up to 50 employees to use the Energy Ombudsman to challenge unfair energy rises and charges.

[The Deputy Chairman of Committees (Lord Geddes) (Con)]

I hate to interrupt the noble Lord but a Division has been called—

[Lord Fox (LD)]

I have literally three words and then I will sit down. What about the ones with more than 50 employees? That is just the start of the problems that we have in our energy market.

[The Deputy Chairman of Committees (Lord Geddes) (Con)]

That is most considerate of the noble Lord. A Division has been called in the Chamber; the Grand Committee stands adjourned until 5.02 pm.

--- Later in debate ---

[Lord Leong (Lab)]

Well, it is one of the arguments, I will accept that. At the same time, I accept the point that this is a policy decision that was taken. But the mission is to make Britain a clean energy superpower, whereby we will reduce this dependency by transitioning to a diverse energy system based on renewables and nuclear.

At the end of the day, we also need to address—as the noble Baroness, Lady McIntosh, asked—the cost to consumers. The Government will continue to fund the NCC scheme through the EII support levy, which is charged on all licensed electricity suppliers to Great Britain, as the noble Baroness mentioned. To offset this, the Government will bear down costs across the energy system to ensure that domestic and non-domestic energy consumers do not see a net increase in their electricity bills as a result of the uplift of the NCC scheme. We are also taking action to reduce costs across the energy system, helping to ensure that the British industry supercharger and the British industrial competitiveness scheme are delivered in line with our wider priority of providing affordable power for businesses and households. The Government’s clean energy superpower mission sets out a long-term plan to strengthen energy security and reduce electricity prices by expanding clean energy and improving interconnections with EU markets.

The noble Lord, Lord Fox, asked about the broken energy market. This is precisely why the Government have the clean energy superpower mission, which is, as I have just said, to strengthen energy security and reduce electricity bills by expanding clean energy and improving the interconnection with EU markets. The noble Lord, Lord Fox, also made a point about other businesses. The supercharger is currently targeted at the EIIs most prone to carbon leakage. However, the Government will undertake a review of the eligibility criteria for the supercharger this year—we are undergoing a review of the various sectors.

[Lord Fox (LD)]

I thank the noble Lord for his response. The supercharger is in itself a good thing, but unless it is combined with a real understanding of the financial mechanisms by which the market is organised, it will not deliver energy at a price that will be less than our competitors around the world. So there is a second part; it is not just the generation and the distribution but the financial engineering behind that which will make it work.

On the second point on other businesses, I am very glad that the Government are having a review, but could they hurry up? If you sit down with any manufacturing business, anywhere in the country—not the ones that are benefiting from this scheme but those that are not—it will list energy costs as its number one or number two major concern. If this review does not get on with it, some of those businesses—hopefully not too many—will not be there to benefit from whatever the review comes up with.

[Lord Sharpe of Epsom (Con)]

Before the Minister comes back in, can I add to the noble Lord’s question? Of course, it is not just the manufacturing businesses that we are interested in; we need to attract data centres, which have enormous power requirements. That is partly for sovereign security reasons, as regards how we maintain our own data and the integrity of that data. What is being done to attract those businesses here? What sort of financial mechanisms are in place? Are there any plans to expand this sort of scheme to businesses that are not yet located here but that we so urgently need?

Retail and Hospitality Sector

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Thursday 22nd January 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, it was a delight to hear the four maiden speeches from the noble Baronesses, Lady Dacres and Lady Shah, and the noble Lords, Lord Forbes and Lord John, who bring really meaningful experience to your Lordships’ House. I want to empathise with the noble Lord, Lord Forbes: I was in exactly the same position with my father 10 years ago.

This has been an interesting but somewhat predictable debate. I expected all the issues that came out, and mostly from the people who I expected to give them, but it has been an important debate because it was an opportunity to air the pressures facing Britain’s high streets. Some of those pressures are historical—Covid, Brexit and things like that—and some are general and local, such as those brought up by the noble Lord, Lord Empey, such as parking, the overall environment, the variety on the high street and the presence of anchor stores. But some of the pressures can be laid at the door of the current Government.

Noble Lords talked about raising employers’ NICs, which has undoubtedly had a catastrophic effect on employment in businesses. Retail and hospitality are very people-centred and are among the businesses worst hit by this rise. Lib Dems oppose this and we would scrap it. Energy costs have hit some sectors of the high street particularly hard, and hospitality is very much hit by the increase. We do not think that the Government have demonstrated the necessary practical understanding of what that has done to those businesses.

SMEs—which, of course, many pubs are—in particular are exposed to a deregulated energy market with little support after the previous Conservative Government’s decision to slash the energy bill support for businesses by an average of 85% when they replaced the energy bill relief scheme with the energy bills discount scheme, which itself ended in March 2024. We estimate that 3.1 million SMEs saw a total bill increase of £7.6 billion when the initial energy bill relief scheme ended. That is a huge benefit.

A couple of Peers decided to relitigate elements of the Employment Rights Act, and I am delighted that they did. Since the noble Lord, Lord Young, trooped out his greatest hit, I am afraid I will have to bring mine out. During the debate, I felt the phrase “banter ban” to be entirely revealing. Since time immemorial, the phrase, “It was only a piece of banter”, has been used to justify homophobia, racism and misogyny, and I think it is a very revealing choice of words.

The noble Baroness, Lady Jones, was more subtle in her relitigation. I take issue with some of the points that she made, and the noble Lord, Lord Sharpe, will no doubt fail to resist that temptation. However, I note that she is correct in that there is still an awful lot of consultation and, of course, of secondary legislation to come. I reiterate another of my greatest hits: when the noble Lord, Lord Sharpe, stands up and brings this issue to the fore, I hope that he can persuade his Front Bench to engage in meaningful debate on secondary legislation—which means jeopardy that that secondary legislation will be voted down. Until His Majesty’s loyal Opposition meaningfully make that threat, the Government are on a pass. That is done for the day.

For retail, the competition from online sales has continued to mount. Over the past 15 years, we have seen internet shopping increase its market share by five times to around a quarter of all sales. It is clear that although some high street businesses also practice online trading, they cannot compete with the global concerns supplied from out-of-town fulfilment centres. There have been government claims of levelling the playing field between their two retail models, but there is no such levelling.

Here, we come to the bit about non-domestic rates. I know that the Treasury has been busy, but I find completely incredible the recent claims that the Chancellor was surprised by the effect of the changes she is making to business rates on retail and hospitality. This time last year, some of us were debating the then Non-Domestic Rating (Multipliers and Private Schools) Bill, which is now an Act. During the stages of that Bill, my noble friend Lady Pinnock, the noble Earl, Lord Lytton, on the Cross Benches, and I spoke at length of the twin effects of the scaling back of the Covid relief and the future valuation, which was, at that time, not available. We noted that the phasing would not eliminate the sharp jump in rates. We launched a wider critique of the structure and effect of business rates, arguing that the Government’s proposals on multipliers were poorly targeted and risked damaging public services and regional fairness, rather than delivering a genuinely fairer system for high streets.

My noble friend Lady Pinnock repeatedly criticised the lack of an impact assessment, saying that the Committee on the Bill was “debating in the dark” about a combined effect of the new higher multipliers and the withdrawal of the Covid-era reliefs. She argued that the Government’s claim to be creating a fairer system was not being met because the Act relies solely on rateable value rather than genuinely targeting online distribution warehouses, despite all that rhetoric about an Amazon tax. She was able to cite an Amazon warehouse near her home which is levied at about £25 per square metre, versus a local shop in the town just nearby which is at 10 times that, at £250 per square metre.

That said, without a root-and-branch change in the way that valuations are done, business rates will continue to penalise high streets and advantage large out-of-town operators. The noble Earl, Lord Lytton, with all his expertise, added further valuation data to that argument, which the Government and the Minister simply ignored.

Above all, we criticised the absence of a meaningful impact assessment and the absence of new valuations. It is clear that, without these, the ministerial comments at the time were plain nonsense; the Minister was reading out wild guesses and wishful thinking from the Dispatch Box. However, by the time the Chancellor stood up this autumn, that information was available, so either her comments at the time of the Budget were seeking to deceive us or she had allowed herself to be deceived. Either way, the new business rates will be a hammer blow for many high street businesses, where rates are often more than rent, as we heard, and the Chancellor should and could have been aware of that when she made her announcement.

There is, of course, a need for holistic reform of business rates. The Liberal Democrats have proposed a commercial landowner levy, but in the short term we also propose to lower the retail, hospitality and leisure multiplier by the full 20 pence permitted under the legislation recently passed by the Government, as opposed to the 5 pence reduction that the Government have implemented. Also in the short term, to further stem the haemorrhaging of businesses, we would cut VAT from 20% to 15% for hospitality, accommodation and attractions, and we set out details of that before the Budget.

Meanwhile, Parliament needs full details of the Government’s proposed U-turn on what exactly the rates will be and who will be paying what. Businesses need to know what they are facing; they need to be aware of the kinds of changes that are coming down the track. I have to say that the responses on Tuesday to the Question before your Lordships’ House were completely inadequate.

If there is to be a recovery in our economy, it will come from a turnaround in consumer confidence. For that confidence to materialise, we need vibrant and successful high streets where people go to buy things and enjoy flourishing hospitality. There is a big danger that that will not be available and that we are moving in the wrong direction. There is much to be done, and I look forward to the Minister’s response to this debate.

--- Later in debate ---

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, it is my privilege to respond on behalf of His Majesty’s Government. I am grateful to the noble Baroness, Lady Monckton of Dallington Forest, for securing this debate. I thank all noble Lords for their thoughtful, informed and passionate contributions on a subject of real importance to our economy and to communities across the United Kingdom. I will endeavour to answer all questions. If I do not, I will go through Hansard and write to all noble Lords, and I will place a copy of the letter in the Library.

I congratulate my noble friends Lady Dacres of Lewisham, Lord Forbes of Newcastle, Lord John of Southwark and Lady Shah on their excellent maiden speeches. They bring a vast amount of knowledge and insight in local government, regeneration, science, computing, law, education, arts and culture. I look forward to working with them and listening to their contributions in this House going forward.

I should also declare an interest. When I was much younger, I harboured ambitions of opening a nightclub —we called them discotheques in those days. In truth, however, I spent far more time boogying on the dance floor than on any serious business planning, and that, I fear, was the end of my nightclub venture. It might have been a brilliant idea, because it gave me the opportunity to set up various businesses, and I became a sort of serial entrepreneur before I joined the Front Bench.

More seriously, I have many friends and relatives working in hospitality, tourism and retail, owning restaurants, wine bars and shops. Through them, I see at first hand the pressures these sectors face every single day: rising costs, staffing challenges and the constant need to adapt. That personal experience informs my appreciation of just how demanding, and how important, these businesses are.

This debate resonates particularly with the noble Baroness, Lady Monckton, and I pay tribute to her remarkable charity, Team Domenica, and to its inspiring new establishment, the North Star in Brighton. This pub is a powerful testimony—an example of social enterprise in action. It supports young adults with learning disabilities and autism through vocational training in hospitality, while fostering inclusion, confidence and opportunity within the community. That it was delivered despite some well-publicised cautionary advice from one Jeremy Clarkson speaks volumes about the noble Baroness’s determination and vision.

Retail and hospitality are far more than economic sectors. They are part of what might be called the everyday economy. They are woven into daily life, shaping how people work, shop, meet and socialise. They anchor our high streets and town centres, provided first jobs and flexible work to many noble Lords—including me —and offer routes into long-term employment and management for those who wish to build a career within them. They also play a vital role in the character and vitality of our towns, cities, seaside communities and villages.

I note here the contribution made by the noble Lord, Lord Young, on Section 21. I do not need to say any more. The noble Lord, Lord Fox, has said everything I needed to say. I was a victim of a bit of banter, but it was nothing more than racist comments; I will just park it there.

A successful high street is rarely just about shops. It is about cafés, pubs, services, culture and places where people feel welcome and connected. Retail and hospitality sit at the heart of that mix. To summarise their impact briefly, in 2024 the retail sector produced something like £115 billion in gross value added, representing 4.4% of UK output, and by September 2025 it supported about 2.8 million jobs. The hospitality sector generated £51.3 billion, about 2% of total economic output, and supported approximately 2.1 million jobs.

While these figures are significant, they tell only part of the story. The true importance of these industries is in their functions as local employers, community centres and catalysts for footfall, investment and civic pride. The Government are clear-eyed about the pressures that retail and hospitality face. In recent years these sectors have weathered an extraordinary series of shocks: the pandemic, supply chain disruption, rising energy costs, inflation, labour shortages and profound changes in consumer behaviour. Government policy cannot remove all these challenges, but it can provide stability, reduce unnecessary burdens and help businesses plan, invest and adapt for the long term.

Several noble Lords mentioned business rates, which rightfully featured prominently in this debate. We recognise that the current system places a disproportionate burden on many high-street businesses, which is why we are continuing its reform in line with our manifesto commitment to protect the high street. From April 2026, we will introduce permanently lower tax rates for eligible retail, hospitality and leisure properties, benefiting more than 750,000 ratepayers. A higher multiplier will apply to the most valuable properties, affecting around 1% of premises, helping to fund this relief in a fair and sustainable way. In addition, we have announced a £4.3 billion support package over the next three years to protect ratepayers facing bill increases following revaluation. These measures are designed to ease pressure where it is felt most acutely, while ensuring local services remain properly funded.

On top of the support package announced at the Budget, the Chancellor also commissioned work to look at what more can be done to support pubs. Further details will be announced in the coming days. Treasury Ministers have met with a range of stakeholders to discuss business rates before and since the Budget, including the British Beer & Pub Association and UKHospitality. Many noble Lords have spoken with real feeling about the future of pubs.

[Lord Fox (LD)]

I thank the Minister. In outlining the changes in the rate system, the Minister is talking about the process. Could he perhaps talk about the outcome, which, when conjoined with the reduction and removal of Covid relief, leaves many businesses—indeed, most businesses—paying more, not less, business rates? Will he at least acknowledge that from the Dispatch Box?

[Lord Leong (Lab)]

I thank the noble Lord. I am coming to the part of my speech that addresses some of the noble Lord’s concerns.

Many noble Lords have obviously spoken with real passion about the future of pubs, including me, and understandably so. Pub closures are always painful, and each one represents the loss of a place where people meet, talk and feel part of something local. Around 2,000 pubs in England and Wales have closed permanently over the last five years. That is a matter of genuine concern, although it reflects a long-term trend that pre-dates recent changes to national insurance, the minimum wage or business rates. Much of this reflects changes in how people live and socialise. People are drinking less often, particularly young adults, including my 19 year-old daughter, with a growing interest in low and no-alcohol options. The pandemic accelerated shifts towards home-based socialising, remote working and more food and experience-led venues.

Costs do matter, and the Government continue to provide targeted support, including specific help for community pubs. The future of pubs depends not only on managing costs but on being supported to adapt to changing habits and expectations. Our approach reflects that reality. Following the establishment of the Licensing Taskforce last April, we published the National Licensing Policy Framework in November. This was co-created with industry councils and various trade associations.

The Government work closely with the Hospitality Sector Council to improve the productivity and reliance of hospitality businesses by co-creating solutions to issues impacting business performance. Likewise, the Retail Sector Council is also undertaking to support growth, working very closely with government on sustainability and the circular economy. High streets, international trading and cybercrime are the main areas of focus. It sets out a vision for a simpler, more consistent and pro-growth regime that reduces bureaucracy, supports investment and promotes cultural and community life. We will build on this work through further planning reforms to help hospitality and high-street businesses grow and adapt.

Alongside regulatory reform, we are also providing targeted support. The Government have introduced a £1.5 million hospitality support scheme, including £440,000 to help rural pubs diversify as community hubs delivered with Pub is The Hub. This initiative is only the start. The Government are committed to supporting pubs and further announcements will be made very soon. This has already unlocked more than 40 previously stalled projects, generating jobs and new services. Industry research suggests that every £1 invested generates more than £8 in social value, as my noble friend Lord Rook said.

The noble Baroness, Lady Neville-Rolfe, made a point about drink-driving. One in six road safety casualties involves drink-driving. I can share with the noble Baroness that the Government are consulting on lowering the limit, which is currently the highest in Europe. In 2014 an academic study showed no impact from the reduction of the limit in Scotland.

It is also right to recall the scale of support provided to hospitality and leisure during the pandemic. These sectors were, rightfully, among the largest beneficiaries of emergency intervention, including furlough, business rates relief, grants, VAT reductions, government-backed loans and measures such as Eat Out to Help Out. That support helped many businesses survive an unprecedented shock.

Since then many parts of the sector have seen a recovery in output and revenues, though I readily accept that this experience is not uniform and that pressures remain acute for some businesses. Emergency support was, by its nature, time-limited and designed to help businesses through an extraordinary period rather than to replace the need for long-term sustainability. The Government will continue to engage constructively and to support growth through skills, investment and proportionate regulation, as businesses move forward on a sustainable footing.

Labour and skills are central to the success of these sectors. I recognise the concerns expressed about changes to the national minimum wage and the national living wage—but I can say to the noble Lord, Lord Hannan, that we are not the highest. Countries with higher minimum wages include Luxembourg, Australia and the Netherlands. Working people have borne the brunt of the cost of living crisis, and it is right that pay reflects living costs, productivity and wider economic conditions. In setting wage rates, the Government rely on the independent expertise of the Low Pay Commission, which my noble friend Lord Hannett mentioned, balancing fairness for workers with the need for businesses to grow and employ.

Concerns have also been raised about the Employment Rights Act. I take this opportunity to thank my noble friend Lady Jones of Whitchurch, who was the Minister who took that Act through this House. My department consults daily with businesses in all sectors and trade associations on implementing the Act. There will be further consultation on parts of the Act, and further announcements will be made in due course.

Economic growth is our foremost priority, but growth cannot be built on insecure or unpredictable work. By strengthening employment protections we are improving stability for workers and employers alike, and supporting a modern, productive economy. These reforms sit alongside our wider commitments to skills development, tackling economic inactivity, accelerating construction and delivering a modern industrial strategy. Together they form part of our long-term plan for national renewal.

I want to address directly the concerns raised in this debate, including by noble Lords who take a different view from that of the Government. I recognise that the pressures that many businesses face, particularly smaller operators, are immediate and personal. Policy choices, even when carefully designed, can feel very different on the ground, and that is why the scrutiny of this House matters. I welcome that scrutiny. Where noble Lords have raised concerns about costs, regulation or the cumulative impact of change, I want to be clear that the Government are listening.

We do not claim that the system is perfect, nor that there are no difficult trade-offs. Our task is to strike a balance between supporting growth, protecting workers, maintaining public finances and enabling businesses to plan with confidence. Retail and hospitality succeed when high streets succeed. Through the Pride in Place programme we are investing £5 billion across 339 communities to renew high streets and centres.

The noble Lord, Lord Borwick, who is elegantly suited this afternoon, talked about retail crime, as did the noble Lord, Lord Sharpe. The Government are committed to restoring visible and responsive neighbourhood policing, with 3,000 additional officers in neighbourhood policing roles by the spring of 2026 and 13,000 by the end of this Parliament. We are also ensuring that the right powers are in place. In the Crime and Policing Bill, we have brought forward a new offence of assaulting a retail worker, to protect the hard-working and dedicated staff who work in stores. We are removing the legislation that makes shop theft of and below £200 a summary-only offence, sending a clear message that any level of theft is illegal and will be taken seriously. But funding alone is not enough, which is why we remain committed to ongoing engagement with local authorities, trade bodies, businesses and workers, so that policy remains grounded in lived experience.

The noble Baronesses, Lady Monckton and Lady Neville-Rolfe, asked about the visitor levy. The precise design and scope of the power for the levy is still under development. The Government have published a consultation, which will run until 18 February 2026, to ensure that the public and businesses can shape the design of this power.

Retail and hospitality are not just engines of economic activity but places of connection, opportunity and shared experience. They matter deeply to communities across the country, and they matter to this Government. Through targeted support, community investment and proportionate reform, we are determined to work with these sectors as they adapt to a changing world. We may not agree on every point, but I hope all noble Lords will recognise our commitment to engagement, stability and long-term renewal. I thank all noble Lords once again for contributing to this important debate. I owe the noble Lord, Lord Fox, an explanation about business rates, so I will write to him.

Fair Work Agency: Small and Micro Businesses

Lord Fox Excerpts

Wednesday 17th December 2025 Lords Chamber

[Lord Leong (Lab)]

My noble friend is right draw attention to this matter, on which she has long been a thoughtful voice. In 2024, the Low Pay Commission estimated that some 20% of workers paid at or around the wage floor were underpaid the minimum wage. Analysis conducted by the Resolution Foundation suggests that 900,000 UK workers per year have their holiday pay withheld, worth some £2.1 billion. A similar analysis published by the Trades Union Congress estimated that 2 million workers do not receive their holiday pay and entitlements amounting to more than £3 billion per year, and 1.8 million workers do not even receive a pay slip. My noble friend is absolutely right. We need to crack down on these shambolic practices, and the Fair Work Agency will address them.

[Lord Fox (LD)]

The Minister has already said that this new body will involve existing bodies, many pointing in opposite directions in their reporting. The Gangmasters and Labour Abuse Authority points to the Home Office, the Director of Labour Market Enforcement points elsewhere, and there will be bits of Treasury in there. This will not be a simple exercise in creating a new organisation. During the passage of the Bill, my Amendment 277 sought a full review of the process for this before the enactment of the Bill. The then Minister declined but undertook to do extensive consultation. Can the Minister confirm that that consultation will still happen? Can he give your Lordships’ House some idea of when the statutory instruments required to enact this organisation will come? When are the Government expecting it to be fully operational?

[Lord Leong (Lab)]

I thank the noble Lord for reminding us of his amendment in Committee. As far as I know, and I will obviously correct by way of a letter, the consultation is happening and statutory instruments—secondary legislation—will follow suit. We hope to get this up and running by April 2026.

Alleged Spying Case: Home Office Involvement

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Tuesday 21st October 2025 Lords Chamber

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

I am grateful to the noble Lord for his question. As he knows, the Security Minister made it clear last week, on 15 October, in Parliament that Ministers were informed after the DPP had made his decision and shortly before reporting restrictions were lifted. He came to the House straightaway to make a statement; self-evidently, I hope that answers the noble Lord’s point.

[Lord Fox (LD)]

My Lords, yesterday my noble friend Lady Tyler of Enfield asked about the personal safety of parliamentarians and campaigners, and their families, whose detailed information has been handed to China’s centre of power. In her answer, the noble Baroness, Lady Anderson of Stoke-on-Trent, acknowledged a duty of care and said:

“I know that direct conversations have happened”.—[Official Report, 20/10/25; col. 486.]


However, I know for a fact that for at least one very prominent human rights campaigner there have been no such conversations at all along these grounds. Given that he was left out, I worry about others. Can the Minister confirm that it is his department that is accountable for protecting people whose information has been leaked in this way? Whatever that answer is, can he undertake that the Government will absolutely ensure that these people are properly protected?

[Lord Hanson of Flint (Lab)]

I certainly give the noble Lord the assurance that this department takes extremely seriously the security of individuals whose personal circumstances have been brought into the public domain in a way which puts them under potential threat from any hostile force at all. I will certainly also take his comments back, and if he wishes to supply privately to me the name of any individual who he believes to be under threat, we will examine their individual circumstances. I hope that gives a reassurance to the noble Lord.

Companies (Directors’ Report) (Payment Reporting) Regulations 2025

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Wednesday 15th October 2025 Grand Committee

Overall, this legislation looks persuasive, but I very much doubt that it will change the power relations between SMEs and large companies. I hope the Minister will answer my questions.

[Lord Fox (LD)]

My Lords, I was surprised to hear the noble Lord, Lord Sikka, describe this SI as looking persuasive, as nothing he said prior to that indicated that that was how he felt. I will pick him up on one point on auditors, having been responsible for the content of dozens of annual reports at a corporate level: although the auditors may or may not have had a legal responsibility for directors’ reports and strategic reports, there is not a single directors’ report or strategic report for which I have been responsible where the auditors did not pick up and verify the points within. I am merely observing this; I do not think we need a debate on it because it is not relevant to the statutory instrument. It was just because the noble Lord brought it up.

Late payment remains a significant issue for UK businesses, as the Minister said—particularly small businesses but other businesses too. Our calculations show that, in 2024, small businesses were owed an average of £21,400 in late payments. This clearly has a significant effect on cash flow and it creates a real challenge.

Without cash flow, business viability is threatened and people are unable to invest in their businesses. Late payment undermines growth and drives some firms out of business. Some businesses use their suppliers’ balance sheets to fund their cash flow. We have seen notorious examples of this; for example, it seemed that Carillion’s entire business model was based on funding its activities through the cash flow of its supply chain. This sort of statutory instrument should be able to identify those operators effectively.

This legislation goes some way to strengthening transparency around how large companies pay suppliers. Here, I agree with the noble Lord, Lord Sikka: it is not a universal panacea but a small step, and we should be careful not to invest too much in this step. Businesses have been expected to report on a number of issues, such as their environmental performance and the number of women in particular roles, for many years, yet change at the corporate level has been very slow despite the transparency that was earned through legislation.

This SI should enable investors, auditors, shareholders and potential suppliers to get a better idea of what a company is about, as much thematically as definitively. If a company always files late numbers, that tells you something about how the business is managed; in some cases, one-off things may make that happen. As the Minister set out, though, there is more to be done. However, he did not mention the role of public procurement, which is vital to driving the right behaviours in business. I would like the Minister to talk about that and accept that the Government have a strong leadership role around public procurement and that there is still a lot of work to be done.

That said, taking into account its limited objectives, we support this statutory instrument.

[Lord Sharpe of Epsom (Con)]

My Lords, following on from the noble Lord, Lord Fox, so do we.

As the Minister rightly outlined, this instrument introduces new requirements for large companies to report annually, through their directors’ reports, on their supplier payment practices and performance. Although the content of these disclosures remains broadly in line with the existing reporting framework, the shift to include them in the directors’ report—alongside their existing publication on the government portal—is a notable development in terms of transparency and scrutiny.

We recognise the intent behind these regulations and support the objective of improving payment practices, particularly given the long-standing and well-documented impact of late payments on small businesses. At this point, I was going to take a detour into some statistics, but the noble Lord, Lord Fox, has shot my fox and quoted them already. We do have a few questions, though; they follow on from those asked by both of the previous speakers.

First, how will these new reporting obligations interact with enforcement? Transparency is important, but it must be coupled with accountability. Will the Government monitor compliance with these new requirements? Are there plans to review their impact in due course? I think I heard the Minister say that there is a plan to review these measures in due course; I would be grateful if he could confirm that.

Secondly, although the inclusion of this data in the directors’ report means that it will be seen by shareholders and auditors, does the Minister expect this alone to drive behavioural change? Beyond disclosure, what further steps are the Government considering to tackle poor payment practices where they persist?

Thirdly, we note that the instrument does not introduce changes to the underlying payment terms or practices; it merely brings reporting into a different format. Do the Government believe that there a risk that companies may comply in form but not necessarily in substance?

None the less, from these Benches, we continue to press for action to support small businesses and ensure that they are paid fairly and on time. On that, we share the ambitions of the noble Lords, Lord Fox and Lord Sikka. The problem of late payment is persistent, and while the measure may support transparency, it must not become a substitute for enforcement or cultural change. On that basis, we do not oppose these regulations. We urge the Government to treat them as part of a broader, ongoing effort to improve business practices and protect small suppliers.

--- Later in debate ---

[Lord Sikka (Lab)]

My Lords, may I take a few moments to respond to a couple of things that have been said?

[Lord Fox (LD)]

The Minister has sat down.

[Lord Leong (Lab)]

My noble friend must be very brief.

Jaguar Land Rover Cyberattack

Lord Fox Excerpts

Tuesday 14th October 2025 Lords Chamber

Asked by

[Lord Fox]

To ask His Majesty’s Government what lessons they have learned following the Jaguar Land Rover cyber attack.

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, the Jaguar Land Rover cyberattack has highlighted the vital need for robust cybersecurity across the UK’s economy, which is why today the Government have written to leading companies with advice on strengthening cyber defences using tools like the Cyber Essentials scheme and the Cyber Governance Code of Practice. We strongly recommend and encourage all companies to follow this guidance. We will also introduce very soon the cyber security and resilience Bill to raise cybersecurity standards in critical and essential services such as energy, water and the NHS.

[Lord Fox (LD)]

My Lords, with the indulgence of the House, let me say that this weekend I came back from the NATO Parliamentary Assembly, where there were heartfelt tributes to the work of my noble friend Lord Campbell of Pittenweem. He was held in very high esteem. It is one example of his dedication to defending our national interest.

One of the concerns of the NATO assembly was hybrid warfare. Attacks like that on JLR may come from nation states or they may come from individuals, but together they add up to a war on our economy that is costing billions of pounds. The National Cyber Security Centre chief executive Richard Horne said today

“Cyber security is now a matter of business survival and national resilience”.


As the Minister said, Minister Jarvis has written to large companies, but can he assure your Lordships’ House that the Government understand that information campaigns alone, like that which he has just described, are not effective? Can he tell the House that he realises that there needs to be a substantial change in gear, because attacks like the one we saw on JLR prove that what we are doing today just is not working?

[Lord Leong (Lab)]

My Lords, may I echo the words of the noble Lord about the late Lord Campbell? On behalf of the Government and this side of the House, I thank the late Lord Campbell for his public service to this country. He will be sorely missed in this House.

The National Cyber Security Centre has been working very closely with Jaguar Land Rover to provide support in relation to the incident. The NCSC response to the JLR incident is ongoing, but it is set to reduce as mediation takes place. Throughout the event, the NCSC has been capturing feedback to inform national and internal incident management practices. The NCSC will participate in a cross-government “lessons identified” process to review how best to improve the Government’s response, share information across partners and react to some of the unique pressures, such as those that the noble Lord mentioned. The NCSC would be happy to share aspects, depending on classification, of this process with noble Lords and other Ministers once it has been conducted.