Steel Industry (Special Measures) Act 2025

Viscount Eccles Excerpts

Thursday 23rd October 2025 Lords Chamber

[Viscount Eccles (Con)]

My Lords, in welcoming the opening speech, my primary thought is, “What a difficult job you’ve taken on”. We have been battling with the strategy for the steel industry for rather a long time, we have not made a very good job of deciding what to do, and when we have decided what to do, in general we have not done it.

I will briefly touch on my credentials for talking about the steel industry. When I left Oxford, I became a premium apprentice on Teesside to a firm that made equipment for the steel industry and which had foundries. One of my first jobs was on the progress for the plate coming from the Consett Iron Company and going into the Bradwell boilers for one of our early power stations.

In 1956—a serious time—I was managing a steel foundry. It depended upon a variation of the Bessemer converter. We had a cupola—a very small blast furnace, if you like—and made two and a half tons of steel a day, which went into castings. The same firm had an electric arc furnace foundry in Thornaby which specialised in the making of castings for pumps and valves. That is a very important point. You cannot think about the steel industry unless you think about where the steel goes, to whom it goes and what they do. Then, quite a bit later, I was the chief executive—in those days we were called managing director—of the firm that built the Redcar blast furnace.

In 1970 I had a rather long lunch with the chief executive of the British Steel Corporation. We went to the Connaught hotel, because he liked steak and kidney pie, which was well known to be one of the Connaught’s real specialities. During that lunch, I put the case that there was no future for bulk steel-making in the United Kingdom. At that time, the British Steel Corporation’s plan was to increase it by about 50%. As a blast furnace builder—we built blast furnaces in Argentina, Australia and so on—my analysis was a market analysis. I understand about the politics and the worry about employment, but can say only that I was a victim of what happened to the steel industry. Indeed, I lost my job and had to change my career entirely to something with which I think the Minister is familiar: the Commonwealth Development Corporation.

When I think about the Minister’s task and what has been said about strategy, I have a bother: I do not think it is possible to have a successful strategy for bulk steel-making in the United Kingdom. We do not have the right iron ore or coking coal, and we are not in possession of any particular technological advantage. Frankly, an integrated steel industry is not difficult to manage and it is not difficult to get what comes out of it correct. The clever bit is in the businesses of the makers. In passing, I should say that we have sinter plants at Scunthorpe, which were built by my firm on Teesside during my time there.

I will suggest a few things, if I may. First, you cannot understand the future of steel in the United Kingdom unless you look very carefully at the people who use it. I offer one example: there is a vacuum melting electric arc furnace in the north of England that makes blanks for the blades of aircraft engines. They of course have to be made to the highest possible standard, with no faults and so on. They are clever, and I think it is worth having a close look at the people who use steel to do clever things. It is a pity that we do not have a big domestic machinery industry in this country that uses steel strip.

This takes me to my point about steel in this country: it is completely caught up in what is happening in our manufacturing industry. Without a clear understanding of what our industry and economy can use, we will not get very far. I am not much comforted by the thought that, if there were a third runway at Heathrow, it would absorb a great deal of steel. Quite honestly, my opening thought is, what is to stop us importing it from somebody who is—if I may use the word—dumping, which means selling their steel at a loss?

Going forward, we will have to take careful account of some of the things that we have decided in the past but which have not worked and that, in doing that, we face reality. Of course, we were in the business very early, from Abraham Darby onwards, and of course we had this amazing position. There has been reference to steel-making in India, and the firm I worked for was guilty—if that is the right word—of building blast furnaces in India, so it is not at all surprising that we are uncompetitive. One can obviously complain about the electricity price, and that is another subject, in a way, but the fact is that the basic geopolitical and raw material situation of the United Kingdom is not at all favourable to bulk steel-making.

There is one other point I want to make. There has been very little reference to scrap. I do not think it is possible to understand the position of the users of steel in this country unless you understand the contribution of scrap. There, we do have a slight comparative advantage, because we are an old economy and we produce a lot of scrap. When I was making castings with the Bessemer-type system, I was next door to a scrap merchant. We spent a lot of time trying to see how little pig iron we could use and how much scrap we could use. We had a lot of help. On Teesside, when there was a handsome young man in the latest sports car with a dizzy blonde next to him, we were inclined to say, “Well, he’s a scrap merchant’s son spending his father's money”. The position of scrap has not had nearly enough attention from the people who do the planning.

I conclude by saying that I hope the Minister finds that, in the department, she has people with the knowledge and of the quality who can really think through what has happened to us, why we are where we are and what is best done about it. I suspect that they will do a good job for her if they start at the bottom, not at the top.