Under the Order of the House of 21 May, we shall now move to the Committee of the whole House. I remind Members that in Committee they should not address the Chair as “Deputy Speaker”. Please use our names when addressing the Chair. “Madam Chair, “Chair” and “Madam Chairman” are also acceptable.
I beg to move amendment 7, page 34, line 15, at end insert—
“(5A) Compensation scheme regulations must include provision which specifies that payment of compensation may be made until any written estimate under section 54 (4A) is laid before Parliament.”
This amendment works with Amendments 8 and 9 so as to require regulations to specify that payment of compensation cannot be made until the Secretary of State has published a written estimate of the environmental liabilities of the steel undertaking, provided to them by the independent valuer.
With this it will be convenient to discuss the following:
Clauses 52 and 53 stand part.
Amendment 8, clause 54, page 35, line 25, leave out “may—
(a) require or permit”
and insert—
“must—
(a) require”.
See explanatory statement for Amendment 7.
Amendment 9, page 35, line 34, at end insert—
“(4A) The regulations must—
(a) provide that the independent valuer prepares and submits to the Secretary of State a written estimate of the environmental liabilities of that undertaking, including but not limited to—
(i) contamination of land, water or air attributable to the undertaking’s operations;
(ii) compliance with environmental obligations imposed by or under any enactment; and
(iii) remediation or restoration costs that are contingent or prospective;
(b) provide that the Secretary of State must publish and lay any written estimate provided under this subsection before Parliament.”
We heard throughout yesterday’s debate from Members across the Committee about the importance of steelmaking as a vital strategic sector in the UK, and no doubt we will hear about it again today. We rely on the sector for essential parts of our national infrastructure, for transport and for advanced manufacturing. Steelmaking and the industry more broadly create thousands of good jobs across the country, helping to power our economy and boost our local communities, and in increasingly uncertain times, it is essential to support our defence industry.
We on the Liberal Democrat Benches therefore broadly welcome this legislation as a temporary, emergency and targeted step aimed specifically at turning around British Steel before it can be returned to the private sector, and we note that it is in that spirit that British steel producers also support these measures. We need to see more ambition and clarity in the delivery of the steel strategy—for example, when it comes to boosting domestic production to meet 50% of domestic steel demand, further incentivising the use of British-made steel in the private sector and managing the transition to electric arc furnaces.
I wish to speak in favour of amendments 7, 8 and 9. These would strengthen the treatment of environmental liabilities in relation to the steel undertaking and ensure that they were explicitly identified and accounted for before compensation payments were made. They highlight the principle that the true financial position of an undertaking cannot be properly understood without a clear and transparent assessment of its environmental liabilities. By accepting the amendments, the legislation could work as a package to ensure that environmental liabilities were not only considered but formally assessed, published and laid before Parliament.
I am interested in what the hon. Member has had to say on amendment 6. She spoke specifically with regard to steel making. Has she also had representations about the impact of these tariffs on UK manufacturers who make things out of steel, as well as on steel stockholders? Is it her intention through the amendment to get further information on that, or is that not its purpose?
That is not the specific purpose of the amendment, but I am glad that the hon. Member has raised that point. I know that the Minister has heard about this issue on a number of occasions, throughout the debates on this Bill and during the urgent question last week in the Chamber. I would like to take this opportunity to reinforce the point that has been made on multiple occasions across this House about the tariff regime and the changes that are coming in. I have spoken to a number of manufacturers about the very real concerns right across the sector about the changes in tariffs. I know that the Minister is focused on that, but I am grateful to the hon. Member for giving us another opportunity to raise concerns with the Minister, which I know he has heard.
Amendment 5 would extend the Government’s reporting obligations to include progress on negotiations with the European Union—
Thank you for your guidance, Madam Chair. I will reframe my remarks slightly, because they relate to the intervention that I took.
Steel producers in the UK are heavily integrated into international supply chains, and continued access to frictionless or improved export arrangements is vital for sustaining jobs and production. From 1 July, the Government will limit tariff-free steel imports. Although in many ways that will support business, there is a lack of certainty about costs and the impact on downstream manufacturers is still opaque.
Perhaps I can give the hon. Lady a moment to gauge where she is in her notes while I take her back momentarily to amendment 7. She spoke about the importance of steel to our defence industry, which is therefore central to European security and to deterring the threat of Russian rearmament, but amendment 7 would produce significant procedural barriers and slow down our ability to use the Bill. Does she agree that such amendments risk causing serious impediments to supply-chain security, particularly for our defence industry?
I am grateful to the hon. Gentleman, not least for underlining the real importance of the steel industry to our defence industry and the heightened importance of sustaining our defence industry, and all the companies and the jobs associated with it, in this time of heightened global instability. Liberal Democrat Members certainly believe that support for our defence industry is paramount at this time, but it is important that Parliament gets the opportunity to scrutinise all the costs associated with the proposed undertaking should the Government choose to exercise the powers in the Bill. That is the purpose of amendment 7.
Clause 52 will give the Secretary of State broad powers to establish compensation arrangements linked to the exercise of transfer powers, including transfers of shares, property rights and liabilities. Amendment 4 would require the Government to report not only on the existence of compensation schemes under the clause, but on the compensation actually paid under those schemes.
My new clause 6 would strengthen parliamentary scrutiny of any future financial assistance. It would require, before any assistance is provided, the Secretary of State to lay a detailed proposal before Parliament, setting out the nature and amount of assistance and the intended beneficiaries, the purpose and expected effect, and any associated conditions, including repayment terms, guarantees, indemnities or other liabilities.
In a similar vein, new clause 4, in my name, would introduce parliamentary oversight, and compel the Government to bring forward a resolution for any expenditure by the Secretary of State under part 2 that exceeds £500 million, which is roughly equivalent to the annual cost of keeping the Scunthorpe plant running, based on the publicly available figures. The clause reflects the principle that, where significant public funds are being committed, there should be clear parliamentary control and oversight of the overall financial exposure. By setting a defined limit, it would ensure that expenditure does not escalate beyond what has been explicitly agreed by Parliament without further democratic approval. The measure is designed to ensure a balance between enabling necessary intervention and maintaining proper oversight of the total level of public expenditure involved. I urge hon. Members to vote in favour of the new clause.
(ii) the Carbon Border Adjustment Mechanism, as set out by Part 5 of the Finance Act 2026 on the value of a steel undertaking.”
This amendment would require consideration of external tariffs and the implementation of the Carbon Border Adjustment Mechanism, when conducting a valuation of the Steel undertaking.
Clauses 54 to 57 stand part.
Amendment 20, clause 58, page 39, line 7, at end insert—
“(1A) The Secretary of State may only provide financial assistance under this section if they are satisfied that financial assistance will secure value for money.”
This amendment would only allow the Secretary of State to provide financial assistance if the NAO had concluded that it would secure value for money for taxpayers.
Amendment 22, page 39, line 8, at end insert—
“(1A) The Secretary of State may not in any five-year period provide financial assistance under this section of an amount that exceeds £1 million per employee of the steel undertaking.
(1B) The number of employees of a steel undertaking for the purpose of subsection (1A) is the number of persons employed on the date the financial assistance was first provided.
(1C) ‘employee’ has the meaning given by section 230 (Employees, workers etc.) of the Employment Rights Act 1996.”
This amendment would cap the amount of financial assistance that could be provided to a steel undertaking to £1 million per worker over 5 years.
Amendment 24, page 39, line 24, at end insert—
“(4A) Financial assistance under this section may not include funding provided by the National Wealth Fund.”
This amendment prevents money from the National Wealth Fund being used to provide financial assistance under this Act.
Clause 58 stand part.
Amendment 4, clause 59, page 39, line 29, insert at end “and,
(b) compensation paid under any compensation scheme regulations made under section 52.”
This amendment requires the Government to report on the compensation paid under any compensation scheme regulations made under section 52.
Amendment 10, page 39, line 31, leave out “12” and insert “3”
This amendment together with Amendment 14 would increase the frequency with which the Secretary of State must make reports about financial assistance to every three months.
Amendment 11, page 39, line 33, leave out “12” and insert “3”
See explanatory note for Amendment 13.
Clauses 59 and 60 stand part.
New clause 6—Parliamentary scrutiny of Financial Assistance—
“(1) Before providing any assistance under section 58, the Secretary of State must lay a proposal for providing the financial assistance (‘the proposal’) before Parliament.
(2) No financial assistance may be provided under section 58 unless the proposal has been laid before Parliament.
(3) If, within the period of 90 days after the proposal has been laid, a select committee of the House of Commons makes any recommendations with regard to the proposal, the Secretary of State must lay before Parliament a statement setting out the Secretary of State’s response to the recommendations before providing any financial assistance.
(4) The proposal must include—
(a) details of the nature and amount of the financial assistance,
(b) the intended beneficiary or beneficiaries of the financial assistance,
(c) the expected purpose and effect of the financial assistance,
(d) any conditions, repayment arrangements, guarantees, indemnities or other liabilities attaching to the financial assistance, and
(e) any other information the Secretary of State believes it is necessary for the Committee to have in order to complete its consideration of the proposal, subject to the restrictions in subsection (3).
(5) The proposal may not include information which, if it were made public, may damage—
(a) national security;
(b) fiduciary duties; or
(c) commercially sensitive interests.”
This new clause prevents financial assistance being provided until 90 days after information about the package of financial assistance being made available to a Select Committee of the House of Commons for its consideration.
New clause 12—Financial assistance: limit—
“Financial assistance of a total value of no more than £2.5 billion may be provided under section 58 of this Act before 15 August 2029.”
This new clause would limit the financial assistance that can be provided under the Act.
New clause 13—Financial assistance: England and Wales—
“Where financial assistance is provided to steel undertakings in England under section 58 of this Act, an equivalent to the total amount of financial assistance provided to steel undertakings in England must be made available to steel undertakings in Wales.”
This new clause requires equivalent funding to be provided to steel undertakings in Wales compared to those in England.
Clauses 61 to 64 stand part.
New clause 7—Impact assessments—
“Before exercising any power under this Act, the Secretary of State must publish an impact assessment on the proposed exercise of that power.”
This new clause would require an impact assessment to be published before the Secretary of State exercised any of the powers under the Act.
New clause 4—Limit on expenditure on financial assistance and compensation—
“(1) The total amount of compensation paid by the Secretary of State under Part 2 and financial assistance paid under section 58 is limited to—
(a) £500m, or
(b) an amount so authorised by resolution of the House of Commons, whichever is higher.”
This new clause prevents the Secretary of State from paying more than £500m in financial assistance and compensation under the Act, unless the House of Commons passes a resolution authorising them to do so.
New clause 9—Duty to try to find a private sector purchaser for any nationalised steel undertaking—
“Where a steel undertaking has been subject to the principal transfer power under this Act, the Secretary of State must—
(a) make all practicable efforts to find a private sector purchaser for the steel undertaking; and
(b) lay a report before Parliament every six months which sets out progress made towards finding a private sector purchaser for the steel undertaking.”
This new clause would put a duty on the Secretary of State to seek a private sector buyer for any steel company that has been nationalised, and report to Parliament on progress made every six months.
New clause 10—Report on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom—
“Within six months of the passing of this Act and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”
This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.
New clause 11—State aids—
“The Secretary of State must not exercise the powers in this Act so as to grant any advantage through state resources on a selective basis to any organisations that could potentially distort competition and trade, including any advantage that might be granted to steel undertakings subject to a transfer power over comparable privately-owned steel undertakings in the United Kingdom.”
This new clause would require the Secretary of State to maintain a level playing-field between nationally owned and privately owned steel businesses.
In particular, the amendments would require an independent valuer to prepare a written estimate of the environmental liabilities associated with the undertaking, including contamination of land, water or air; compliance with environmental obligations; and current and future remediation or restoration costs. That would ensure that the full environmental cost of the undertaking’s operation was properly captured, including liabilities that might not yet have crystallised but were none the less foreseeable. Crucially, the amendments would link the process to the timing of compensation payments, specifying that compensation could not be paid until the environmental liabilities estimate had been produced and presented, and ensuring that taxpayers were not left to pick up the bill for any environmental damage caused by the company’s previous owners.
Furthermore, I wish to speak in favour of amendment 6. This amendment would require that when carrying out a valuation of the steel undertaking, consideration was explicitly given to the impact of external tariffs and the carbon border adjustment mechanism. It reflects the reality that the value of a steel business is not determined solely by its internal operations and that it is also significantly influenced by international trade conditions and environmental policy frameworks.
The previous Conservative Government oversaw a string of near collapses and interim last-minute packages. They scrapped the industrial strategy, which is so vital to our manufacturers, and they erected new trade barriers, making it harder for our steel producers to do business with their biggest export market across the channel. This legislation should be much more ambitious on an improved agreement with the EU for steel exports. Given the international nature of the steel market and the growing importance of carbon-related border adjustments, it is reasonable that these factors should be explicitly included in valuation methodologies. Amendment 6 would help to ensure that any valuation was not artificially insulated from key external drivers of cost and competitiveness. It would also provide a more accurate basis for decision making.
Steel is a valuable sector with far-reaching benefits across the UK for critical infrastructure projects, defence and the future of renewable energy. The steel industry is vital to so many of the UK’s national strategic priorities. The Liberal Democrats support the Government’s pace and urgency in taking action to assist the steel industry, but there is a significant need for greater transparency and accountability relating to how these measures will be exercised. There is potential in the Bill to improve training opportunities for steel exports, and I urge Ministers to consider our proposals on that matter.