My Lords, I find these instruments very worrying, because they seem to be part of a pattern that the nationalised British Steel will not be properly accountable and will not provide decent information for the taxpayers’ representatives now funding the operation. We all wish every success in saving jobs and maintaining the basic steel-making capacity in this country, but I fear that this vehicle is not going about it in the right way.
We are not learning about what we are actually buying for the huge sums of money that are currently being put into it, with no proper budget line and no proper business plan to explain the expenditure. We learn in the scrutiny committee’s report that, in the first year or so, it was £555 million, so it is eating into the budget line for investment support in new steel-making activities. I think this is how it is being funded by the Treasury—when presumably all or most of that has nothing to do with capital spending but has everything to do with operating losses. Much of it is based around the non-competitiveness of UK energy prices and the phenomenal cost of burning fossil fuels in blast furnaces with carbon taxes and the other net-zero impedimenta. These are gradually deindustrialising very large areas of British activity, and would have deindustrialised us completely from basic steel-making if the Government had not stepped in, in this rather clumsy way, to route very large subsidies into a business that cannot conceivably compete at its current cost levels.
It would be timely if the Minister could update this Committee, and therefore the wider Parliament, on where we are getting to on the losses to date, as the last figures relate to the summer and the monthly losses were obviously very considerable since then. Is there any sign of the monthly losses coming down at all, or are we to assume that it will be £500 million or so a year every year?
It would be very good if the Minister could tell us what the plans are for these two blast furnaces. They are extremely old. I do not know whether they are both steel-producing or what maintenance schedule they have to be on, but, at some point, they will obviously need fundamental maintenance. Will that be put into the budget plans? Alternatively, will the nationalised industry carry on with the plans that the previous Government—and, I think, this Government at the beginning—were trying to negotiate with the Chinese owners. It was a case of switching over from blast furnace-basic steel-making to an electric arc furnace arrangement for recycled steel. That would clearly come with the loss of a lot of jobs, because they are far less job intensive, and would mean the termination of our country’s ability to make primary steel in the traditional way. Sometimes, you need primary steel to provide the additives and special steels that are more difficult to produce from recycled steel. Therefore, Parliament deserves to know more about the long-term plans.
Capital expenditure for an electric arc furnace would be very considerable and would need to have its own budget line, but it would be a more legitimate drawdown of the monies in the current overall budget for steel modernisation, out of which this seems to be funded. The Government wish to drop the idea of quarterly reporting of the financial figures. If a business in the private sector were losing this much money, quarterly reporting would be a bare minimum—you would want it to be monthly. The executives would want weekly reporting because this is a terrifying rate of loss, which implies that it is unsustainable. I would have thought the unions and workforce would be very interested as well, because I cannot see how the current operation represents a way of saving these jobs. At some point, there will be a crisis because of the lack of competitiveness and the very high level of cash burn, which would force the Government into a change of mind.
I am concerned at the wide-ranging and sweeping legal powers that the second statutory instrument wishes to take. There would be many companies trading in the private sector that would love to have friends at court who could suddenly suspend or remove all kinds of legal obligations upon them. Rightly, the Government will probably not do that, so why do they think it is reasonable to suspend important legal obligations on a company because it happens to be nationalised? The idea that you should not consult over TUPE when transferring people’s jobs seems particularly strange, because I would have thought that many employees in the union there would have welcomed the nationalisation. Why do they have to be told that they no longer have the normal rights to consultation on what could be quite important changes to the contracts they are operating under?
More worrying still is the idea that no senior official—doing this as a day job and liaising carefully with the board and the company—and no Minister designing the steel policy should be deemed to be a shadow director. Surely, they would be able to influence, to control or to order the company, because he or she who controls the money controls the business. This business really only has one important customer, which is the British Government, who are supplying these monumental sums of cash to keep the jobs going and to keep the blast furnaces operating, if possible.
Of course, Ministers and senior officials are, in practice, making crucial decisions that will dominate board discussions. If they are determined to suspend company law in relation to those activities, because they are Ministers and senior officials, there should be even more of an obligation on them to come regularly to the Commons and Lords to report on the progress they have been making. We need to apply the kind of scrutiny to them that would otherwise have been applied by company law and in normal board discussions by directors who genuinely have the power to determine the future of their company. The directors who the Government appoint will not determine the future of this company; the big decisions will be taken by the Government. Its very future is entirely dependent on the Government continuing to put very large sums of money into it.
We should also ask why the Freedom of Information Act will not apply. Again, it leads to suspicion that the Government think the results, performance and plans of this company will be so bad that they should not be revealed to the taxpaying public who pay for them. I would be a little more reassured if, in return for taking this big power—removing freedom of information inquiries from this expenditure of money in this very important company—we were told that there would be more regular and frank reporting through Parliament and directly to the public by normal company information. We could then be reassured that the Government are not trying to avoid all kinds of accountability.
It would be good to know from the Minister when the finances of this group will be regularised with a normal budget line, which we can see in the Red Book and Budget Statements. I do not think that they can go on for much longer saying this is just part of a general steel package designed for something else. We need an honest line in the Budgets so that we can see that it is being properly financed and is part of the Budget settlement.
It would also be good to hear something about the cost of energy, because this is a major reason why the losses are so huge. Will they be benefiting from the recycling of government money? The Government take money off businesses through carbon taxes and then give some of it back through the so-called supercharger that we have heard about this afternoon in the Chamber. This is a very unsatisfactory way of doing it. It increases the administrative costs. Instead of just taking the tax off, you have to ask to get some of the tax back. Can we know something about how much of the tax they will get back so that can help us form a judgment as to how competitive this might become?
Above all, we need to know from the Minister when there will be a proper government plan—or a proper company plan approved and directed by the Government—that meets the requirements of this legislation. It says that they are charged with the duty of making a competitive and sustainable industry. Those two words are very interesting. Does “sustainable” mean that they definitely have to close the blast furnaces on the grounds that they do not meet net-zero standards? “Competitive” implies moving into breaking even, if not into profit. We are so far away from that that it would be extremely good to have a deadline or timetable for the first plan, and the knowledge that the Commons and Lords will have an opportunity to debate that plan. Given that very large sums of money are being discussed, that a very important number of jobs are at risk—if the finances are not gripped, those jobs will eventually go— it is surely good order for a Government to be open and transparent in their dealings about such an important national industry.
October 14, 2026
where is the steel coming from to make our new submarines? and their reactors?
October 14, 2026
Sheffield forgemasters is already nationalised apparently, but cannot make steel from raw materials.
October 14, 2026
@iain gill – France and Germany in the main
October 14, 2026
Sheffield forgemasters was nationalised by a Conservative government by the way…
October 14, 2026
All sensible stuff JR but this appalling enemies of the people government will take little or no notice. But we might get £2 bus fares, EU realignment and a beer at the football perhaps.
How come this net zero government are perfectly happily with oil extraction in the Falklands and buying oil and gas in every day that others extract but not with UK extraction? It is their net zero policies that are killing UK industry, farming, chemicals, the economy, steel, our ability to compete… well done!
October 14, 2026
Gove’s climate advisor Greta seems to have moved on from climate alarmism, via Gaza to now supporting the French riots.
October 14, 2026
Former spy chief on Radio 4 ‘Today’ programme was desperate to claim how much better it was for the UK to be in the EU.
He could not say that Russia swung the Brexit vote. So he just said they were very happy we were now outside of it.
Establishment hopes we rejoin.
October 14, 2026
“so why do they think it is reasonable to suspend important legal obligations on a company because it happens to be nationalised?”
Well they always slope the pitch and rig the market in favour of unfair state sector competition and activity. As with schools, housing, planning, the BoE, the BBC, rail, buses, the NHS… you often have to pay for the state sector ones even if you never use them and then pay again for the ones you do use.
October 14, 2026
Plus energy market rigging, care home market rigging, universities and the soft loans, bank lending, roads v. Rail, employment, properly letting… all is rigged to subvert real competition. Through the tax, subsidy systems, planning, licensing, restrictive laws and endless red tape.
October 14, 2026
big tax discounts for foreign workers to undercut locals
October 16, 2026
+1
October 14, 2026
Lord Redwood’s charitable attitude to the shower that, regrettably, constitutes the Government, is too much. These socialists and communists deserve no sympathy at all and they have no excuses. Incredibly, they believe that the failures of socialism are always the fault of others. They do not believe they should be accountable to anyone, least of all the people of Britain. Australia’s former PM, Paul Keating, even though he was himself Labor Leader, had the right word for such people: “scumbags”.
There could be a strategic case for subsidising uncompetitive steel-making were it part of a coherent overall strategy for the independence and defence of Britain. It should not be difficult for a maritime state dependent on the seas for 90-95% of its trade to formulate such a national strategy. It takes a socialist to fail in such basic requirements. Instead they look to globalist organisations to realise the absurd and unrealisable dream of a worldwide socialist order – the “Socialist International” – whilst relieving themselves of any national responsibility for what actually happens inside their own country.
October 14, 2026
Another swipe at nationalised steel today, I see. Let’s have some balance. A postal service that works, and delivers mail when it’s supposed to, is vital to this country too. But since privatisation Royal Mail has been fined by Ofcom again and again for missing its delivery targets. How about our host takes on that issue. How about calling out the appalling mismanagement and price-gouging of privatised utility Thames Water? Or is gross incompetence and exploitation OK when (foreign) shareholders are coining it in?
Reply I concentrate on nationalised industries but we the taxpayers have to pick up huge bills for their mistakes and because Ministers can change them if they could be bothered.
October 14, 2026
Parliament privatised Royal Mail and Thames Water. There too, we are picking up huge bills for your mistakes.
October 14, 2026
They have no words, no ideas, and no money, a typical Socialist Labour Government which we have seen every time they gain power, always, but always they leave the Country financially worse off than when they took office.
Yet still people vote for them because they are promised something for nothing, and those numbers are growing !
Sadly we are know in the position of needing a Government with a HARD reset and dose of reality, where work, investment, saving, aspiration, and self help is actually encouraged and rewarded.
No soft words or policies, we have gone too far for too long on that score, we now need real action.
October 14, 2026
Another mess, but this is an old mess, and there are new messes happening right on our doorstep courtesy of Libdem Wokingham BC. Look at Barkham Solar Farm- no business plan, no customers, any future return dependent on extortionate electricity prices, and costs to local Council taxpayers increasing daily with interest rate increases on borrowings. Same time they whinge about the government cutting back their budget.
Similarly scandalous but people are happy to carry on voting for them, no matter the effect on Council tax.
October 14, 2026
This exposes the totally horrifying attitude of the Government towards company law, and by implication any law, when it does not suit the Government’s purposes. Is anyone else asking these vital questions, particularly in the House of Commons?
October 14, 2026
Lord Redwood, well said and very comprehensive. However on recent history do you really believe anyone in these to houses of government of power even comprehend or care about what you said? I don’t mean you personally, I mean the logical practical, common sense thrust of what you have said
On a sour note whether they comprehend or understand, their ideology says they don’t care they are on a different agenda of distruction
October 14, 2026
‘electric arc furnace arrangement for recycled steel’ steel that is as cheap as chips on the open market due to prolific subsidies elsewhere. It has little strategic value.
Specialist Steel for use by British Rail is currently coming from Germany, the more basic stuff from Scunthorpe
The UK Ministry of Defence (MoD) has confirmed that there are currently no domestic UK steel mills capable of manufacturing the specific high-strength grades required for submarine pressure hulls. So steel for the UK’s Submarine fleet is from France
What a sorry state!
October 14, 2026
The UK Parliaments policy on Steel has in recent years bean focused on supplying the Chinese and Indian government with UK Taxpayer money. That could even be seen as the UK taxpayer is subsiding steel production in those countries to ‘ensure’ UK Steel is uneconomic. It is 100% a one-way street, they do themselves permit reciprocity
Steel is strategic, it is needed for every UK citizen for their safety and security; it provides self-reliance and resilience. All the first duties of the UK’s Parliament and its Government, all the duties they ‘choose’ maliciously to neglect.
Why?
October 14, 2026
THE LOSSES AT THE UN OF OUR FREEDOMS CONTINUES!
This has nothing to do with health and everything to do with imposing total control on our rights to make our own decisions. But it’s worse than that. The WHO can now declare a medical emergency – at the drop of a hat, and our governments will force us to comply with anything the UN wants done.
October 14, 2026
Only the United States, Israel, and Argentina voted against this repressive UN Pandemic declaration and abuse of power.
https://www.thefocalpoints.com/p/breaking-153-nations-adopt-un-pandemic?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F158060fd-4ae1-466e-a911-9eed11153060_1254x1254.png&open=false
October 14, 2026
That assumes there are plans and the minister knows what is going on enough to influence the end game.
Labour would be quite happy to allow our steel making to slide into obscurity. After all with net-0 we won’t be allowed to use the required energy to create steel products, so its national decline suits labour. The only concern they have is that there will be hell to pay from the unions when the final decision is made and steel workers are made redundant – that’s why labour are using all the tricks up their sleeve to delay the final decision….. and *** the cost!
October 14, 2026
Underpinning this disaster is the cost of energy and unless this government addresses this issue urgently we will lose what’s left of our entire industrial capability. Primary steel making is vitality important, relying on imports will just not work. Yet again Net Zero ideology has resulted in an appallingly expensive situation. Making steel, cement, ammonia and plastics all require oil. I have no confidence this government and ministers have the knowledge, experience and determination to effectively finance and operationally manage a steel plant. Competency, judgement and wisdom is solely missing in parliament. What a mess.
October 14, 2026
The fact that you have to write this article is a damming indictment of this Labour Government. Why is there still no business plan or proper budget? What has the responsible Minister or Ministers been doing? How can such an important industry be left to drift, especially when it’s making huge losses?
We must have blast furnaces able to make virgin steel for the defence of the UK. But while the Government believes Net Zero is necessary, it will achieve nothing in reindustrialising the UK. Everyone knows cheap, reliable energy is essential for a prosperous economy. It is utter nonsense to suggest wind and solar can replace reliable gas and nuclear power stations! If they are cheaper, why do they require subsidies both to produce power and when they are not producing power? What an absolute shambles our governments/MPs have created!
October 14, 2026
Can’t quite believe that our esteemed leaders voted to remain in the ECHRs …..they’d probably vote soon to return to the EU