Steel Industry (Special Measures) Act 2025

Lord Mohammed of Tinsley Excerpts

Thursday 23rd October 2025 Lords Chamber

[Lord Mohammed of Tinsley (LD)]

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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


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

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