Bill to give Government powers to nationalise steel industry clears Lords hurdle

New laws that give the Government power to nationalise parts of the steel industry have cleared their latest hurdle in the House of Lords.

The Steel Industry (Nationalisation) Bill passed committee stage in the upper chamber, as peers raised concerns about the industry being run on a blank cheque, and about whether parliamentary approval would be needed to bring it into public ownership.

Once it is passed, ministers could use the new law to bring British Steel into public ownership.

Last year, Parliament passed special powers allowing the Government to direct British Steel operations in Scunthorpe, North Lincolnshire.

This stopped its owner Jingye from closing blast furnaces. However, the company remained privately owned.

It is thought the Government previously tried to negotiate with British Steel’s owners on a commercial sale, but failed to strike a deal.

The debate was briefly interrupted by news about England’s World Cup game, as industry minister Lord Leong informed colleagues they had taken the lead and Harry Kane had scored.

Conservative shadow business minister Lord Sharpe of Epsom proposed a change to the law that would limit the amount of money spent on the steel industry to £2.5 billion until August 2029.

Lord Sharpe said: “We understand the need for urgent support, but the Government’s stated objective is not permanent public subsidy, it is a viable, competitive private-sector led future for British steel.”

He added: “In the other place it was rightly argued that if the Government believes in this intervention, they should be willing to set limits on it. Without such limits, taxpayers are simply being asked to sign up to an unlimited liability.”

Lord Leong rejected the need for the amendment, and replied: “Imposing a fixed cap of any kind on financial assistance would risk constraining the Government’s ability to respond effectively to evolving circumstances.

“It could ultimately undermine the very objectives the Bill is designed to achieve, which is, namely, the protection of our domestic capability in a strategically vital sector.

“The Bill contains proportionate and robust measures to ensure transparency and accountability in the provision of financial assistance.”

Meanwhile, Liberal Democrat business spokesperson Lord Fox put forward a suggested change that any financial support must be approved by the House of Commons and House of Lords.

Lord Fox also proposed that funding could not be provided until 90 days after information had been given to select committees about the package.

He said: “This amendment proposes that the select committee should look at the details and nature of the amount of financial assistance, the intended beneficiary or beneficiaries of financial assistance, the expected purpose and effect of that financial assistance, any conditions, repayments, arrangements, guarantees, indemnities or other liabilities attached to the financial assistance.”

However Lord Leong said the amendments would create delays which could pose threats to the industries that any financial package would be there to save.

He added that the Government had already been open about costs incurred in supporting British Steel in Scunthorpe.

He said: “I would respectfully suggest that these amendments are not realistic, given that financial assistance may need to be provided immediately following a transfer.

“It is unlikely that there will be time for parliamentary scrutiny envisaged by this amendment without imposing significant risk to the continued operation of the steel undertaking.”

The Bill will now be further considered by the House of Lords at report stage, which will see amendments voted on. It will then return to the Commons for approval.