To move that this House takes note of His Majesty’s Government’s legislative proposals to ensure the continued operation of the steel industry in the light of the Steel Industry (Special Measures) Bill.
My Lords, the House has reconvened under exceptional circumstances, which merit an exceptional response from the Government. Our request to recall Parliament was not made lightly, and I am grateful to noble Lords on all sides of the House for being here today as the Government seek to pass this emergency legislation.
This legislation allows the Government to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. I reassure noble Lords that, given the exceptional nature of a recall, the Government thought it better to limit the powers in the Bill—which are still significant—rather than introduce more complex matters of property rights and public ownership at the same time. This is not about nationalisation. We are keeping all options under review, and we will of course return to Parliament for further scrutiny should the need arise.
As noble Lords will know, since taking office, the Government have been negotiating in good faith with British Steel’s owners, Jingye. We have sought to prevent the early closure of the two blast furnaces at the company’s Scunthorpe site, which Jingye has claimed are no longer financially viable. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel with sensible, common-sense conditions to protect the workforce and UK taxpayers, and to create a commercially viable company for the future. Jingye’s refusal to accept the deal on the table, and to accelerate the closure of the blast furnaces at Scunthorpe, has left us no other choice: we must now take control of the company’s blast furnaces.
Let there be no doubt: this Government will never hesitate to take action to protect this nation’s assets. We will not abandon the hard-working steel-making communities that have given so much to both our economy and country. Where vital industries are on the verge of collapse or where communities face devastation, we will always act in the national interest.
We do not accept the argument that steel-making has no future in the UK. As the Prime Minister asserted yesterday, our plan for change means that domestic demand for steel is set only to go up, not down. In the last few weeks alone, we have seen Heathrow Airport announce multi-billion-pound expansion plans requiring 400,000 tonnes of new steel. We have seen Universal Studios confirm that it will build Europe’s biggest theme park, and, where possible, it will use UK-made steel to make it. We need British steel for this and our critical infrastructure projects, from rail to renewable energy. We need it to keep Britain secure at home and strong abroad.
The legislation we are setting out today will also help end the uncertainty that has been hanging over British Steel’s Scunthorpe site for far too long. We know that rebuilding our steel industry brings its fair share of challenges, but we believe that they are worth facing and that we are more than prepared to overcome them. It is why we agreed a new deal with better protections for workers at Port Talbot within weeks of taking office, which will transform production and deliver a modern electric arc furnace. It is why we have delivered measures as part of the British industry supercharger to cut electricity costs for steel firms and bring prices more in line with international competitors.
My Lords, I begin by echoing the words of the Government Chief Whip: I thank all the staff of Parliament for their tremendous efforts in facilitating this recall today. It is no small task to bring us all together at short notice, and their dedication to the democratic process is deserving of recognition.
At its heart, this debate is about whether we have a steel sector in this country at all, and whether it is run in the national interest. Earlier today, the Government confirmed that they will take control of British Steel, following the collapse of negotiations with its Chinese owners. This is a pivotal moment, not just for the future of British steel-making but for the future of Britain’s industrial base itself.
Before I go any further, perhaps I may say that our thoughts today must be with the steel-workers, their families, their suppliers and the communities whose futures now hang in the balance. They deserve better than uncertainty and neglect, and they must certainly have a Government who are on their side.
This the first time that Parliament has been recalled to sit on a Saturday since I was sitting in the other place in 1982, after the Falklands war began. It is only the sixth occasion since the end of the Second World War—and for a Bill published just two hours ago. There has been no respect for Parliament whatever. I really must say that this is not the way in which to treat this precious institution.
The Bill itself grants far-reaching powers to the Secretary of State. The Government will argue that this is necessary because of the emergency we face. However, just now, in the other place, the Secretary of State said:
“I do not want these powers a minute more than necessary”.
So where is the sunset clause in this Bill? How can we be assured that these extraordinary powers will not be abused or extended indefinitely? The Government have to make clear the precise timeframe for these powers and, more importantly, they must demonstrate how they intend to ensure that public and Parliament are not left in the dark once this emergency has passed.
My Lords, from these Benches, I too thank all the staff who have come in. We are very grateful to them, not just for giving their time but for taking care under the special circumstances which have complicated today.
The urgent and serious position that this country now faces means that emergency action must be taken, and it makes complete sense to recall both Houses of Parliament, but this must be the start of a serious plan for the sustainable future of domestic steel production. The circumstances requiring these measures have been known for some time, and it is clear from the diplomatic language of government statements in the last 48 hours that the word “forthright”, when used in the context of government negotiations with the Chinese company Jingye, is doing a great deal of heavy lifting, so it is good that the Minister has outlined some of that detail this morning. It explains the nature of the urgent crisis.
However, it is worth noting that this is not a recent problem—not even one of a few months, as just suggested by the noble Lord, Lord Hunt of Wirral. Ever since privatisation, which these Benches do not oppose in principle—nor, by the way, are we against nationalisation as a last resort—there has been a disregard for the impact of the repeated change of ownership of our state infrastructure companies. That may have been less important at the time,but other changes in global manufacturing and trading patterns should have been a warning signal—especially to past Conservative Governments. I say to the noble Lord, Lord Hunt of Wirral, that it is worth reminding ourselves that a past Conservative Government sold British Steel for £1. Then there were the consequences of the extra trade barriers as a result of Brexit, scrapping the industrial strategy council and allowing the sale of steel plant to a Chinese firm which, it is now clear, is not negotiating in good faith.
The entry of foreign state-owned enterprises into the British economy and infrastructure means that a number of other Governments now own all or part of key UK infrastructure, sometimes leaving us vulnerable. In today’s Financial Times, Ewan Gibbs says that the UK is
First, the Government are absolutely correct to intervene. Like the noble Baroness, Lady Brinton, I have personal experience of the devastation that is wrought on communities by the closure of steel industries. Some noble Lords may remember that we once had a steel industry in Scotland, with 7,000 jobs in Ravenscraig itself and more than 20,000 jobs in the ancillary plants. I can testify to the absolute devastation of communities, individuals, workers and families from the 1980s onwards. The Government are undoubtedly correct to intervene on social grounds alone.
Secondly, whatever the Government do, there will be no free pass for the workforce. Let no one think that this is an easy way out. From my experience, I have seen steel-workers meet the challenges that these circumstances pose by getting rid of restrictive practices, increasing productivity, increasing efficiency and so on. In the case of Ravenscraig, it probably extended the life of the steelworks by 10 years or more. I hope that the workforce in Scunthorpe responds positively and constructively to the efforts of the Government intervening.
Thirdly, the Government are right to emphasise the crucial role of blast furnaces. This is not a mere technicality. These blast furnaces are designed to operate continuously, to maintain the high temperatures and reactions that are necessary in quality steel. Turned off prematurely, they will effectively lower production, decrease quality, increase slag and possibly render the whole edifice unworkable. A shutdown would force the entire steelworks, which relies on the furnaces’ molten iron, to cease operations altogether. Therefore, it is crucial—though it seems a technical point—that the Government are projecting and focusing on the question of the blast furnaces.
Fourthly, there is a matter of wider national and strategic importance. I was surprised by the spokesman from the Opposition Benches, who seems to have forgotten that it was the previous Government who sold this industry to the Chinese. We are constantly told, not least by the party opposite, that there is no firewall between the Chinese Government and Chinese industry. Did it never occur to anyone in the last Government that, in a competitive world, it may be in the interests of the Chinese Government to purchase British Steel and then close down the industry? If that was not considered then there was a gross omission of responsibility by the previous Government.
My Lords, it is fair to say that the steel industry has been in special measures for some time. The noble Lord has just referred to the acquisition that was made in 2020. Indeed, the last Government made sure that Scunthorpe did not close, and there was only one private investor prepared to invest in British Steel. I am conscious that the last Government nationalised another steel producer, Sheffield Forgemasters, again recognising how important that was to the needs of national security.
The strategy put out for consultation less than two months ago recognises that primary steel is still important, but the end is nigh for this blast furnace way of producing it. I am concerned that, on the one hand, we now seem to be in a temporary situation: let us recognise that the technology is not around the corner; it will be a long time before we are able to produce primary steel in a more environmentally friendly way. At the same time, it is concerning that Scunthorpe is close to its life end. I want to understand from the Minister whether she has asked the HSE for its view on the lifetime of these assets and the cost of repair. I am not suggesting that the Government should shy away from seeking to extend its life, but it is important to understand the amount of money being invested.
The other issue is the supply of coke. As has just been explained, that is the only way that steel can be produced with a blast furnace today. Yet, within a week of taking office, the Government decided to pull out of the legal case concerning the coke mine in Cumbria. I would like to understand from the Government whether they will revisit this, recognising that, at the moment, they are trying to source coal from around the world.
Thinking further about the issues with the Bill, the sunset clause has already been mentioned. With candour to the House, I can see these powers probably being used for at least 10 years. In taking charge of effectively nationalising British Steel, the Government have made a commercial decision. On Clause 7, I therefore want to clarify the following: while the regulations will not be available and will be done by negative resolution, is it the Minister’s expectation that there will be a 100% reimbursement to the owners of British Steel?
My Lords, it is difficult—in fact, almost impossible—to appear more gracious than the noble Lord, Lord Hunt of Wirral, but for once, I think I can. I thought it was extremely good of the Minister to get us a letter this morning explaining what we are up to here and including the draft of the Bill. I am grateful for that—and that is the only bit of my speech that she will like. I ask her four questions.
First, what is so special about steel? Why does she say in her letter that
“UK-made steel is critical to the country for jobs, for economic growth and our national security”
and that “domestic steel production” is “a crucial national capability”? Let us take aluminium: it is now more strategic, in a sense, given its conductivity and its use in computers as well as aeroplanes and vehicles. We used to have an aluminium industry in this country; we now have one tiny smelter left in Scotland. The largest user of electricity in Britain was the big smelter in Wales, and we had a smelter in Northumberland, close to the coal industry up there. We have closed them all and have one tiny little one left. We are happy to live off imported aluminium coming from countries where they have bauxite and where they have cheap electricity, such as Canada. We do not feel that we need, for strategic reasons, to have an aluminium industry. Why steel?
Secondly, how will we ensure that this Bill—which must pass, I accept—does not deter other potential inward investors? These powers are, as the noble Baroness, Lady Brinton, has said, extremely draconian. I was a director of a company developing an LNG plant in Russia. The techniques the Russians used to take control were much more subtle than this sledgehammer of a Bill. How will we ensure that there is not a deterrent effect from these draconian powers that we are giving the Secretary of State?
My Lords, I rise to totally support the Government and to congratulate them on their draft Bill. I think the actions of the Government have changed the tone of the debate. The role of government is being redefined. There is an acceptance that government is in the business of involvement in industry, where it is necessary. I suspect that, in coming to the conclusions, some sacred cows within government have been, if not slaughtered, certainly put under some new pressures.
There is much debate about jobs. If the initiative that is being taken was about jobs and jobs alone, I am afraid I would be less sure. I suspect that, as a jobs exercise, we would discover the cost per job saved to be rather high, and that rather high price would be a bad precedent. But I support the strategic case. It is impossible to imagine a period in our history since the Second World War where the world has been more unstable. I remember the Cuban crisis—I was a student at the time. It was dodgy, but it was clear, in a sense, that men—and it was men in those days—of a serious conscience would at the end of the day find a solution, and they did. That is not at all clear now. We have all sorts of unstable characters in the mix and we could be a victim of that instability.
When peace breaks out, demand for steel will escalate. The world is in a destructive state: in war zone after war zone there will be a requirement for reconstruction, infrastructure, growth and repair. The demand for steel will escalate in these circumstances. Defence spending will require much more specialist steels. Supply is uncertain, both in areas of specialism and overall. It is wholly credible that the world could run out of steel and, if steel fails, the results for this country would be catastrophic. I believe the Government should press on with this legislation, and I accept the point made by my noble friend Lord Reid that, in the longer term, it will almost certainly lead to nationalisation.
My Lords, it takes only a few minutes to see why British Steel is in dreadful trouble and chaos, and why we are where we are today. First, its costs are very uncompetitive indeed, especially the cost of electric power, as my noble friend Lord Hunt pointed out in his excellent opening speech. We have some of the highest energy costs for industry in the entire world—so we are told. Secondly, there is this premature and badly planned rush to go green—in all industries, not just steel—with various levies and additional costs at every point, and the cutting out of gas and coke, as we have heard, and all other cheaper alternatives.
We have to ask why electricity costs are so crushingly high that they are having this effect on our economy and the whole of our steel industry, including the giant Scunthorpe plant. It is a big plant by our standards. We are fed stuff about costs being linked to the world gas price. We are big importers of gas nowadays, but this is the sort of marginal-cost economic argument that, frankly, could be swiftly corrected. There has been talk about blame, and that applies obviously to the previous Government as well as this Government.
But again, world gas prices are falling quite fast right now and there is plenty of gas available throughout the world, both through pipelines from Norway and elsewhere and from LNG galore—although Mr Trump may put a stop to that, because most of it comes from shale gas in the United States. So, no, the exceptionally high price does not come from that, really. It comes from the fact that we have drifted as a nation into the most extravagant and costly patterns of electricity generation possible. The planned massive increase in reliance on renewables will therefore mean massive reliance when the wind around the UK does not blow—about 3,000 hours a year: slightly under one-third—mainly on new gas-fired plants, which we are sensibly looking at now, and new nuclear, preferably small, attractive to the private sector and built on time, to ensure that we continue to get a first-world, reliable, affordable power supply at a vastly higher level than hitherto, which we need in a modern industrial state.
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It is why we have simplified public procurement, aligning it with our industrial strategy, which is putting UK firms, including those in the steel industry, in the best possible position to bid for and win public contracts. It is why we launched a consultation on our steel strategy as part of an effort to work with industry on overcoming difficult issues, such as high electricity costs and unfair trading practices, so that we can protect the UK’s industrial heartlands.
It is why we have taken the decision today to safeguard British Steel. Britain is a steel-making country. Steel-making has been fundamental to Britain’s industrial strength, security and identity as a global power. Today’s legislation will help ensure that we can retain that steel-making capability here in the UK, both now and for many years to come, and I urge the House to support it. I beg to move.
The choice before Ministers should never have become this stark. Faced with the collapse of British Steel, the Government had little option but to intervene. Let us be clear: nationalisation is not a triumph but a last resort made necessary by failure. Without it, Britain would indeed have become the only G7 country without primary steel-making capacity. However, today’s events are not simply the result of forces beyond the Government’s control. The truth is that nationalisation must be a platform for urgent and permanent modernisation, not a short-term bailout or a delaying tactic. Without decisive action, Britain’s steel industry will wither under the combined pressures of global competition, green regulation and technological change.
It is essential that we consider the effect and impact of green targets, which have placed immense strain on our industries. The policies driving us towards net zero by 2050 have hit our industries hard, especially energy-intensive sectors such as steel. Energy costs in the UK are now the highest in Europe, and four times those in the United States, and the current trajectory of green regulation is making it harder, not easier, for our industries to compete internationally.
We just need to ensure that our environmental goals do not come at the cost of our industrial base. The Government must urgently review their net-zero policies to ensure that they support, and do not strangle, British industry. If we do not strike the right balance, we will continue to see industries such as steel driven offshore, taking with them not only jobs and investment but the very emissions targets we champion. We cannot allow this to happen.
Let us remember that, just a few months ago, Ed Miliband banned coal and coke production in the UK and boasted about sending a signal to the world. Yet today, as we heard in the other place, the Government are going around the world with a begging bowl, trying to find enough coal to keep the last blast furnaces running. Could British Steel survive today if access to coal was not artificially restricted? Possibly, but we are in this mess because decisions such as this have been made in pursuit of political point-scoring by this Government, with no thought for the long-term health of our core industries.
How is it possible that no one in the Government saw this crisis coming? How could they have been so unprepared? The warning signs have been flashing for months: ageing infrastructure, soaring energy prices and growing global competition. We debated in this Chamber just a short time ago the fact that there had been no serious contingency planning, as yet no coherent industrial strategy and certainly no sense of urgency. Instead, the Government are now scrambling to nationalise British Steel as a last resort. That is not leadership; it is crisis management at its worst.
On 31 March, the Minister stated that
“we will be producing a steel strategy very soon”.—[Official Report, 31/3/25; col. 18.]
Following the events of the last 24 hours, and now that the Government have found time to lay an emergency Bill, it is surely time for them to publish an emergency steel strategy too. Where is it? The Secretary of State in the other place just referred to quotations from the steel strategy, so it must exist in draft. Should this House not be given a copy? Steel-workers and their families, and the taxpayer, need more than vague assurances—they need clear timelines—so when will this strategy be published? Will it commit to the urgent modernisation that our steel sector desperately needs? Will it address the crippling energy costs faced by our steel-makers? Will it set a clear and credible path to return British Steel to private ownership?
We have to learn from industry. The last time steel was nationalised, back in the 1960s, the results were disastrous. I will cite figures from Hansard. Grants and loans to the British Steel Corporation between 1967 and 31 March 1980 totalled £4,925 million, and the net total loss for BSC since 1967 has been £1,552 million. Rather than revitalising the industry, nationalisation led to bureaucratic inefficiencies, losses, a decline in productivity and widespread industrial action.
The Government’s approach to the steel sector is compounded by the broader challenges they face and are imposing on employers right across the country. The Government increased employers’ national insurance contributions and they are rushing through the unemployment Bill, which, in its current form, will add further strain to the already fragile labour market. It is difficult to see how these measures align with any credible strategy to attract private investment. Surely the Minister must acknowledge that the Government’s policies have made it more difficult to deliver the investment that the steel industry so desperately needs. If they are serious about a future where British Steel is returned to private hands, they must urgently reconsider their policies. We agree that uncertainty has to end, so will the Government confirm today that, should nationalisation be pursued, it will be only a temporary measure? Will they clearly set out the timeline for that transition to private ownership?
We cannot afford to hear again the standard vagueness of “all options are on the table”. This does not provide the certainty that workers, who deserve clarity about their future, need. It does not provide certainty for the taxpayer, who is now footing the bill. Which brings me to my final point: can the Minister tell us what estimate the Government have reached of the cost of nationalisation to the taxpayer? This is not leadership; this is not planning; this is a crisis, and one that should never have been allowed to happen in the first place.
“an outlier in Europe, where the state still often owns important industries”.
President Trump’s tariff wars mean that all other nations are now reviewing their ability to maintain their own infrastructure in the light of tariffs, and the Government are right to do so at a time when our steel industry is already in crisis. We start from a weaker position than those countries because we do not own our own infrastructure. Can the Minister say, as we increase defence spending for the existential threats facing the UK, Europe and, of course, Ukraine, whether the Chinese company’s threat to remove manufacturing back to China acceptable? Is it not a clear security threat?
Before I turn to the Bill, it is really important to focus on the broader issue of the possible closure of the Scunthorpe works. This Government promised that they would deliver on the promises made by the previous Conservative Government, which were woefully underdelivered, to strengthen communities in the north of England. The Scunthorpe community is like many other steel communities, such as Port Talbot and others in the past, with centres in south Wales, Teesside and Scotland. I remember Corby in the 1970s and, visiting it 20 years later, I saw a community utterly broken by steel closure. Our thoughts at the moment are very much with the workers, people and community of Scunthorpe.
The Scunthorpe works employ 2,700 staff, as well as others in the local, national and international supply chain. The consequences of a possible closure of the works would be severe for them and for the entire community. The Bill talks about compensation for a steel undertaking but it is totally silent on the support for workers and the community in the event of a disruption or, worse, closure. Are there any plans for support for the community during this period of uncertainty? What happens if negotiations do not work?
Only last autumn, we saw from the Port Talbot experience the effect on a community of closing down one furnace before its successor—a much greener one, of course—is even fully planned, let alone being built. Can the Minister say why, last autumn, the Government did not do what they are doing today, after the previous Government failed to support and save Port Talbot? What help are they providing for the Port Talbot community with new skills and enterprises?
In Clauses 3 and 4 of the Bill, the Secretary of State is taking extraordinary powers to himself. Given the urgency, that is understandable. However, we on these Benches say that the Government need to understand that they have to communicate with Parliament, through Statements and debates, on the use of these extraordinary Henry VIII powers as it happens. Will the Government undertake to do this? As with when the Conservative Government took such powers to themselves in 2020, at the start of the Covid pandemic, they should remember that post-event openness is vital; otherwise, the trust put in their hands by all parts of Parliament will be lost.
In Clause 3—
“Breach of directions: power to take control of assets”—
subsection (2) says that:
“The Secretary of State may do anything for the purpose”
set out. Anything? That is certainly sweeping. I hope that the Government will keep Parliament abreast of any such powers taken.
Clause 4, on offences, creates very serious crimes either for the steel undertaking or for individuals associated with it, and includes such terms as “connivance”, which I am not sure I have seen defined in criminal law before. Has the Secretary of State for the Ministry of Justice, the Attorney-General, been consulted on the creation of these new crimes?
Clause 7 deals with the compensation scheme. Although I accept that there needs to be such a scheme, as and when that happens, will the Government please undertake to publish the full details? The behaviour of Jingye, as outlined by the Minister, means that the public need to know the cost of compensation.
We on these Benches are concerned about the lack of a sunset clause. We hope that there is still time for the Government to consider adding one in Committee.
We support the Bill as it appears, given the concerns that we have. The crisis must override those, and we will support the Government in its deliverance.
Fifthly, the potential loss of virgin steel-making capacity in the UK, which has not been mentioned, would be very serious. With the closure of the blast furnaces at Port Talbot, the only virgin steel-making, or primary steel-making, is in Scunthorpe. Should that close, the UK would be the only G20 country that does not produce its own virgin steel. For the uninitiated, virgin steel, also known as basic oxygen steel-making, is primarily used in industries that require high-quality steel for various applications, including construction, manufacturing, defence and transportation. It is produced from iron ore and coke, using a blast furnace process, which takes us back to the importance of that. Being the only G20 country that does not produce its own virgin steel raises immense questions around national security and whether virgin steel production should be retained as a sovereign capability. In my opinion, it should be.
It is therefore right that the Government explore every avenue to ensure that the social, economic, employment and national security implications of the present situation are addressed. Not to do so would be a dereliction of duty to the country as a whole. The Government deserve our support in what is a necessary national endeavour.
On thinking ahead, the steel strategy very clearly talks about the electric arc furnace. I am conscious that the Government had the deal in Port Talbot to make that transition, and I expect that they will want to make that transition in Scunthorpe in due course. However, there seems to be one part of the country where there is a site ready, with planning permission already granted and connections already sorted with the national grid and where there is already the political will locally, but it seems there is very clearly not the political will nationally. I am sorry: it feels, just because the voters of Teesside decided to vote for my noble friend Lord Houchen of High Leven, that, where there is an open deal to be done—it is my understanding from speaking to my noble friend that the owners of British Steel are keen to invest in Teesside—the Government have indicated that there is no way that they will help British Steel to do that. Thinking just about political back and forth is not—dare I say it—a grown-up way. We should be looking to the future, to have a comprehensive steel strategy, and to make sure that the political colour of who represents people locally does not matter or determine whether there will be good green electric arc furnaces producing steel in the future, which are necessary for the expansion of many industries. Living in Suffolk, not far away from the nuclear power station but also very close to where a significant number of wind farms are being or will be constructed, I am conscious that we need to try to increase the amount of production of those turbines onshore with green energy.
I am conscious that this Bill will sail through today and that the Act will be in place for a long time, but we need to make sure that, while steel is produced domestically, it covers all the sectors heading forward, as well as those that we are trying to rescue today.
Thirdly, where is the wider public interest in all this? The Minister says in her letter that the Bill is
“a proportionate and necessary intervention … in the wider public interest”.
I understand the community interest in Scunthorpe. I understand that argument. I understand the wider public interest in the water industry and in trying to stop the pollution of our rivers and beaches and the diversion of resources into dividends for Australians, but I do not understand the wider public interest in distinguishing steel from, say, aluminium and maintaining a perpetual subsidy. That is what I think we will get: a perpetual subsidy for as long as we insist on having a domestic primary steel industry.
What is the end game? That is my last question to the Minister. How does she see it coming to an end? In 1982, as the noble Lord, Lord Hunt, recalled, the Commons met over the Falklands. I had to go to see the Prime Minister that morning to get her to agree to the seizure of the Argentine gold held in the Bank of England. I thought it was my duty to inform her that there was much more British capital investment in Argentina and we would undoubtedly see it seized in retaliation. The ratio was about five to one. She dismissed the point with contumely. She said, “Now is hardly the time to be thinking about details like that, is it?” I feel that we need to think about the end game. In her case, the end game was obvious: she was going to take back the Falklands, and she did. How are we going to handle this down the line? British companies have failed to make a go at commercial primary steel production in Britain. A Dutch company failed to make a go. Two successive Indian companies have failed to make a go. Here we have a Chinese company failing to make a go of it. Will the Secretary of State, when using his powers to nationalise—this clearly ends in nationalisation, but not today, I agree—do any better? Why should we expect him to do better? It seems to me that, so long as we go on believing that we have an absolute requirement to maintain a primary steel industry, we are condemned to perpetually supporting it financially. So, my last question to the Minister is: what is the end game?
I would certainly encourage the Government to beware the concept of partnership. Partnership is an unusual phenomenon at the level of a steelworks. Both parties need the same objective. A private sector partner that has the size and capability to be a useful partner has got there through the good old-fashioned market objectives of maximising shareholder value. Rather sadly, in this day and age, that is short-term shareholder value. The state is entering a difficult process of maximising the public good. That is what it is there for and I strongly recommend that it does not try to do it in a confusing partnership situation.
In a few years it may be that cheaper hydrogen will help on this front, but, for the moment, there is no possible alternative to new gas-fired stations, which will have to be combined with carbon capture and storage facilities—one is being built and many more are needed—and new nuclear, which I hope will be small and attractive to private investors, in line with new technology and not in the white-elephant class, and a brand new transmission grid as well, at an estimated cost of £600 billion.
So no wonder our small steel-making sector—which, remember, is 0.3% of world production, as against China’s 54%—was going to be in severe trouble, and that, as the noble Lord, Lord Kerr, has just reminded us, will continue. Why? Because, whether Scunthorpe is saved or not, we will continue to import Chinese steel. Most products and services in the world have a Chinese component because most of the world is computerised and most computers have Chinese components of some kind, whether through services or actual production. I hope that the President of the United States understands this but, frankly, I do not think he does. Instead, I fear that he will lead us not to MAGA—Make America Great Again—but to Make America Small Again. That would be a tragedy that we must seek ourselves to help America recover from.