Steel Industry (Special Measures) Act 2025

Lord Prior of Brampton Excerpts

Thursday 23rd October 2025 Lords Chamber

[Lord Prior of Brampton (Con)]

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

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

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

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

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

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

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

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

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

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