Steel Industry (Special Measures) Act 2025

Lord Hunt of Wirral Excerpts

Thursday 23rd October 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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