Lords speech ( tweaked in this written version from Hansard transcript)

I am  very grateful to the Minister for his honest account of this legislation. He made it very clear that it is very likely that the strong powers in this legislation will be used sometime soon fully to nationalise the Scunthorpe works. That makes it even more curious that the Government he represents have given us an impact assessment with no numbers in it at all. There is no account of what a nationalisation of the Scunthorpe works would look like, what impact it would have on the public budgets, what impact, as my noble friend Lord Hunt said, it would have on the £2.5 billion allocated for steel as a whole. There is no account of how it would be a transfer of money we thought had been allocated for capital investment and modernisation in creating something new to the purpose of paying losses on a very old plant whose future is very uncertain. During this debate and over the course of this Bill, I hope we can get some numbers from the Government.

When the emergency legislation went through a year ago,  both Houses of Parliament understood that the Government were not then in a position to produce numbers. At that point, in those debates in both Houses, strong voices said, “There must be a business plan; there must be budgets”. We were told at that stage that these would be forthcoming in relatively short order—but we await them. We still have a menu with no prices. We still have a lack of information about what the business plan of a nationalised Scunthorpe would look like. We have travelled for a year with a Scunthorpe that is run by the state and paid for by the state, but not owned by the state, making enormous losses. According  to the press, these have been running at £1.3 million a day. We were offered no explanation of how long this might go on, when those green shoots the Minister reports will actually translate into real cash.  How much steel does this plant needs to sell and at what kind of prices before it can have a positive margin or before it can maybe halve the negative margin which it has been running at for all too long? Indeed, we were told at the point when the state took on these mighty obligations that, under the previous Chinese owners, it had been losing about £700,000 a day. If the more recent press stories are right, the losses have clearly been considerably worse over the last year.

I understand that the Minister cannot firmly say they are definitely nationalising because they have put in this public interest test . They obviously have not yet applied the test to any project to nationalise which they are currently planning. Reading  how wide the public interest test allows the Government to be in order to satisfy themselves, I do not think it is any actual prevention of the nationalisation of Scunthorpe. I am sure they are quite clever enough to come up with a plan that is well within the details of the public interest test, widely drawn as it is in this piece of legislation, so I do not think that is a reason for failing to give us proper figures.

I think it would also be good, over the course of this Bill’s debates, if we could hear a more honest statement to the workforce of Scunthorpe . The Government say two different things. They tell the press and the rest of us—and we are very relieved to hear it—that they have saved the jobs. They also say the Government is wedded to a net-zero strategy, which says that all blast furnaces of the Scunthorpe type have to close—and they are the only two left—to be replaced by electric arc furnaces. Therefore, if that is still the plan, we need to be told that honestly, and the workforce needs to be told that. There  will be a very big reduction in the numbers of people working, should they switch from blast furnaces to electric arc furnaces in the case of Scunthorpe, as the Welsh steel industry discovered when the previous Government went on that journey, carried on by this Government, to replace those blast furnaces with electric arc furnaces.

Ministers should have a personal interest in wishing to get beneath the numbers and work out how much it is going to cost, because of pressures on public budgets and the need to assess this against alternative ways of spending the money. We read that, when the initial transfer of the liabilities and the running of the plant was made to the state, the senior civil servants apparently said to the Secretary of State and Ministers that they were not able at that point to sign off that this was value for money. They were not able to sign off that it was definitely going to be a policy that was going to work. They were not saying it definitely would not work: I think they were saying they did not have enough time and it would require a lot of very detailed work and consultation.

Ministers used their right to issue a direction to the Civil Service to say, “We think the public interest is such that this is urgent, and so we are going to ignore the absence of sign-off on value for money and on the efficacy of the policy because it is worth a shot and we, Ministers, will take responsibility”. I understand that. Having taken that responsibility, the Ministers are under more of a personal duty to come to this House and to the other place with proper budgets and proper business plans to show that there will be value for money as they go on this course. Indeed, I think we need a year’s audited statement on what has happened so far with all that money passing to a Chinese-owned business, which the state largely controls but where it does not own the assets.

It would be good as well to be updated on where the Government have got to in negotiating with the Chinese owners. I think it is tragic that we have not had a deal with the Chinese owners. Maybe it is the fault of the Chinese; I understand that there are two sides in any negotiation. When  I looked from the outside, just using public sources, at what was on offer when the state moved in a year ago, I sketched what the state could sayto the Chinese owners. “We will take full responsibility for the workforce and their future payments, so we save you all the redundancy payments you would have had to make if you had carried out your closure”. The  state would take on the land and buildings in the state that they were in, probably with many environmental obligations and costs of clean-up, and that would have been another relief for the Chinese authorities of the company, because otherwise they could be liable for having to clean up the site after they had closed it.

In return, the Government should have said, “You definitely keep all the debts you have incurred during your unsuccessful period of management, and the value of your share and your land and plant we would put at £1 to complete the transaction”. Some people thought I was being a bit generous there, but I think that was the shape of a deal that one might have been talking about. According to press comment, the Government have been thinking about £100 million of compensation for the liabilities that they are absorbing to also obtain the plant and the land in its current state.

We read in the press that the Chinese say that, no, they want £1 billion for this transfer of the freehold and the shares, which would seem to me to be extremely excessive in the circumstances. I would fully support the Government pushing back very hard on that and, if necessary, defending themselves in court if they cannot get a deal. But it would be in everybody’s interest if a deal could be reached. Getting to that deal would be helped if we had a published statement of the likely business plan for an enterprise now in public control and maybe soon to be in public ownership. That would also help create a mood for the negotiations with the Chinese.

I fear that that business plan, certainly for the last year and probably for the next year or so, would produce an awful lot of red ink. It would be the background to explaining to the Chinese why the idea that they might walk away with £100 million or £1 billion is for the birds. They have presided over a heavily loss-making business and they were unable to find a way to make it work, so they were thinking of incurring massive costs of closure as the alternative to carrying on with a very high rate of losses.

Like all the other speakers in this debate, I think we want a proud steel industry again in Britain, as we were used to having over many decades. I also think there is a case for keeping a virgin steel manufacturing capability, as well as a lot of electric arc recycling steel capability. That would require a study of how much longer one could carry on with these two blast furnaces, which the state will probably own quite soon. What sort of deep or long-term maintenance schedule is needed if it is thought that they can carry on, because these are quite ageing plants? That would perhaps be a better option than having to think about how to find an investor who wants to establish new virgin steel-making capability in our country.

What is very clear in the wider debate of the Minister and the Shadow Minister’s opening remarks is that we will not have that opportunity—through inward investment, or domestically financed investment, or City financing through private equity, or new equity issued through the AIM market, or whatever—of steel-making capability in this country as long as our energy prices are sky high.

We heard unfavourable comparisons in a previous good speech with European competitors, but, of course, they are not the main threat. Asia and America have energy prices considerably lower. In the case of the United States of America—a first-world competitor in many fields, with a much stronger economy than the European one—its electricity prices are one-quarter of the prices that industry in Britain has to pay before any subsidy.

The Government are following a bizarre policy towards energy. They put on massive carbon and emissions taxes, and all sorts of other taxes if we dare to produce any of the energy ourselves, or else we have to pay other people’s heavy oil and gas taxes as we import so much. Then they realise that this produces energy prices that mean the loss of jobs and the mass closure of industry. We have seen refineries and bits of the oil industry go, we have seen petrochemicals go, and we have seen a lot of our steel industry and a lot of our ceramics industry go.

So then they say, “Why don’t we offer a little bit back by way of subsidy to discount the very expensive energy prices we’ve got with these very high taxes imposed on the energy?” This is a very bad way of doing it: you get the worst of all possible worlds. You deter investment because the energy prices are too high. You do not give enough back in subsidy to make the businesses competitive, so they still close. You are left with a situation where you are deindustrialising, so your import bill for goods goes through the roof. Your import bill for energy also goes through the roof because of the bad mistakes made in the energy policy. That is why the UK is struggling so much.

So I plead with Ministers, for their own sakes, to do some sums: find some numbers, work out what the business case will look like, interrogate your managers, find out what you need to do to help them to sell more steel. Unless you can sell more Scunthorpe steel, there is no point pumping money in; you will not end up saving the jobs. And please tell your workforce whether you are serious about saving these jobs and really want to carry on with blast furnaces, or whether your net-zero preoccupations mean that their jobs are doomed anyway.

The recent Britain Unbound You Gov poll showed once again the people are more sensible than their government. 59% rejected the idea of surrendering some of our rights to self government to get better access to the single market, and only 27% supported it. A government in search of popularity should look at these findings and think again about its desperate wish to be loved by the EU.

Re set is one of the few “growth” policies they claim to have left.  Their blizzard of taxes and high energy costs has laid waste so much of our business and destroyed so many jobs, pricing young people out of work and closing industries as energy costs and business taxes  overwhelm them . They say that a Re set signing us  up to EU food laws and to the EU emission trading and carbon tax scheme will add a mere £9 bn or 0.3% to our economy by 2040, 15 years hence. Clearly no early wins there then to persuade a sceptical public. The truth is higher taxes and more laws will depress our growth further, not boost it. If the EU model made you rich the EU would not be languishing at half the US growth rate and half the US GDP per head as they are.

The UK paid a high price with delayed exit to secure tariff free trade with the EU. Our trade has not fallen as a result of Brexit, and remains heavily in deficit with the EU as it was when we were full members. The government does not seem to recognise that the EU trading system has delivered them a big surplus and their rules and taxes make it difficult for the UK to succeed as a goods  and food exporter to them. Boosting our imports from the EU in a new one sided arrangement will reduce our GDP by the amount of domestic UK production the extra imports  displace.

Re set will be all cost and little or no benefit. The EU sees the UK as weak and likely to give in on paying them  more money, on accepting more young people from the continent , on accepting more restrictive EU food rules and cementing in their high energy costs and taxes. As we are much more the customer than the supplier in this trade arrangement if anyone has to pay to play it should be the EU, not the UK. Why are our negotiators so weak or always on the EU’ side? Why do we end up with the extra bills, the extra laws and the extra tariffs? If this was a fair relationship genuinely wanting to promote more trade both ways the EU should copy some of our successes instead of trying to force us to do it all their way. In these negotiations the best word for the UK to use is No, as EU terms are totally unacceptable.

Why did the government watch 200 shadow tankers sail by, then take one over?

Is it going to take the oil cargo and sell it? Or will it let the ship go after a period of detention? Will it prosecute the owners, or take their vessel, or decide they have done nothing wrong after all?

Why does the government insist on peace negotiations everywhere but not Ukraine?

Why does it help Ukraine stay in the fight but not with allies do enough to help it win?

Why doesn’t the government see the need to create an iron dome defence against missiles and drones to protect our islands?

Why has it decommissioned six naval ships and kept so many at home and in maintenance?

What defences does it have against possible hostile Russian action against our pipes, cables, offshore windfarms?

Why does it have money for more bike lanes, steel and rail subsidies, more sicknotes for life for young  people, for more joblessness as its crazy net  zero and anti work taxes bite, but not more money to defend our islands?

My relatively new car developed bad noises so it needed to go in for repair. I was lent a replacement similar vehicle that was automatic, whilst mine has a 6 speed manual box.

The replacement was a bit newer and only had 7000 miles on the clock. I asked to be shown how the auto  gears worked. The handover man said the vehicle had just under half a tank of fuel so would go about 185 miles on that. I was amazed. My similar car does 375 miles on half a tank, or more  if I am  lucky in avoiding congestion and lots of road closures and red lights. Could being  automatic make that much difference?

The car’s history programme for fuel use said the car had only managed a little under 35 mpg over its life, compared to my vehicle’s 55. When I started driving the auto I saw the problems. The Car needed more  revs to get moving. The first two gear changes produced noise and lurch. You  needed  to use the brakes more as it is difficult to  use anticipation and the engine in a lower gear to slow the machine.

The gear choice by the vehicle misses out on driver anticipation. The car changed up to a higher gear just as you needed to decelerate to allow traffic to clear ahead. It did  not see the need to stay in a lower gear when the road starts to climb.

It looked as if the automatic could  do a lot better than 35 mpg. I soon got it up to a little over  50 mpg. It must just have been a succession of fuel hungry drivers. It looks as if the lack of control over gears will hit fuel economy by a few percent, not by the 35% that the clocked  comparison showed.

Such a pity in automatic mode it kept you in the dark about which gear it was in, and did not  want your advice based on road conditions. Trying to drive it on clutchless paddle shift did not work either as the car kept changing gears when it wanted.

The Uk does need to spend more on defence to modernise and make its forces more effective.It also needs to spend the budget better.

Under the current government we have hit a new low. 6 naval vessels decommissioned before there are any replacements . Most the rest of the fleet undergoing deep maintenance at the same time, or unavailable for duty owing to a shortage of money and bad planning.

The high costs of the Ajax military vehicle programme continue with too few working vehicles delivered. The government reviews the next generation fighter plane programme, delaying this multinational   collaboration with lack of enthusiasm and cash.It has the money to hire in a  new flotilla of boats to pick up illegal migrants at sea, but not the money for coastal patrol vessels to protect our undersea cables and pipes.

It has the money to pay  the salaries of 55,000 civil servants to direct the phantom navy and the tiny army, and to pay 1500 senior officers who  command desks in the absence of battalions and squadrons.

Meanwhile the Ukraine and Gulf wars show us how quickly warfare is changing. Where are our drones, ballistic missiles and robots to defend our islands and to intervene when our commerce and interests abroad are harmed? When will we replace all the munitions and weapons we have given Ukraine?

Outside Parliament they are digging ip the road to put in an expensive new cycle lane. They have just spent large sums on putting up ugly metal fences when there are already good defences against attacks. The government has money to subsidise companies bringing in foreign employees, when we need more jobs for UK citizens who have lost their jobs under this government. The government has plenty of money for net zero excesses.It puts  billions into HS 2 and hundreds of millions to subsidise a Chinese owned  steelworks. It grants thousands of sick notes for life to people with mild mental health conditions who would be better off working.

The government sees more public spending as the answer to every problem. They have created a destructive money go round, imposing unaffordable taxes on business, then having to pay some subsidy to stop too many going bust.

Starmer and Reeves have come badly unstuck over controlling defence spending, They now seem to be having the negotiation over more defence spend with the new Defence Secretary which they refused to have with the old one. Why?

Source: DWP benefits statistics

The main reason public finances in the UK have deteriorated so badly is the surge in benefit claims and payments. It has led to big pressure on the accounts and to  too much borrowing. As the state borrows more to pay more benefits so the interest burden of the state debt rises, intensifying the problems with paying the bills. The DWP confuses the State Retirement Pension which is of course a Contributory benefit, with the other non contributory ones.

The government needs to take the surge in benefit numbers and claims more seriously. I am one of the first to say of course we should pay tax to ensure that the seriously disabled and ill can have a decent home and life . This should not be extended to granting sick notes for life to people with mild mental disorders, where helping them into work could help with their recovery. This government has allowed a big rise in the numbers granted benefits with no requirement to seek work. They need to require more to seek employment and to give them the incentives and conditions that encourage successful pursuit of a job. They also need better business and tax policies to promote more vacancies.

The government needs to toughen its controls over our borders more. Too many low pay and no pay people have been allowed in and moved onto in work and out of work benefits. Too many dependents have then also been allowed in to be with the illegal arrivals who get permission to stay. There are still far too many illegal arrivals who are now allowed by this government to claim asylum after they arrive illegally, despite arriving from safe countries. Recruiting more from overseas to do low paid jobs also depresses wages, leaving more people needing benefit top up. This becomes a poverty go round.   This too is increasing the dependency ratio.

The combination of inviting in, allowing in and home growing too many people on low and no incomes is leading to a soaring benefit bill. The more people there are on benefits, the more this government puts up taxes on those who are not. The higher taxes then pushes the richest and most successful out of the country, worsening the ratio between taxpayers and recipients of benefits, More than half the nation now receives net benefits, placing an ever greater strain on those who do make a financial contribution to the state.

My speech on New Towns  ( PS I have always opposed high levels of inward migration and explained the costs and impact of high migration on housing. This speech is in the context of current government policy)

My Lords, in 2004 the Labour Government were struggling with a shortage of homes and rising housing costs, so I offered some published advice on how, for example, they could initiate the construction of a new garden city by the Thames. I provisionally called it Thames Reach—it was in the Ebbsfleet area—as an example of how it would be easier to get consent to something bold and visionary which included infrastructure and formed complete communities than to just keep on adding piecemeal to existing communities who often did not like the stresses and strains that could create. It did not appeal to the then Labour Government, but the incoming Conservative Government later took other advice and decided on

Ebbsfleet Garden City, and that is now well under way, with a development corporation to do it. I am very pleased they did it, and I think it is an example of what can be achieved.

Like others in this debate, I would like to see more passion, enthusiasm, urgency, force and development. The Government made a mighty promise to our country of 1.5 million houses in five years. The last Government were achieving around a million; they hit their targets. The Labour Opposition were quite right to say that they were not that stretching, and they came up with this stretching target. But I have got news for Ministers: two years in, they are miles off the pace. They will not even hit the pace of the outgoing Conservative Government. They need to make a big shift in what they are trying to achieve.

I would also like to hear more about how it can be based in some fine traditions of British development, and the formation of British communities. Someone I revere as one of our great entrepreneurial designers, Josiah Wedgwood, in some ways started it with above-average housing for the skilled workers that he recruited, trained, and wished to retain, in a village called Etruria. What a good idea to give them an improvement in living standards as part of the package.

That was carried on by other great entrepreneurs and rich families. Go and visit Bournville and Port Sunlight; are Ministers not proud of these? They were great achievements, with wonderful architecture, countryside in the development, people with gardens, sporting facilities that they could use, communal facilities that they could go and enjoy, a community that was built around a place of work that they were proud of, and that paid them decent wages and looked after them. This spread out more widely, as we have heard from others, in post-war developments, when you had the development of garden cities, with Welwyn and so forth taking off. So there is a tradition that we can build on, and the Government could show more passion, and a bit more continuity in British life, drawing on the things we can be proud of: how normal skilled workers got access to much better housing, started to live in communities and then went on to become owners, which is also extremely important for democratising capital and spreading wealth more widely.

The Government should also look at what works to break down resistance, because we have a paradox in public opinion in this country. The public think that we should build more houses, but most of the public do not think any of the houses should be built anywhere near them. I represented a constituency which always had one of the fastest rates of new house building foisted on it by successive Governments: the constituency of Wokingham. So successful was it that they kept having to break bits off from my constituency to form new ones, as we had so many people coming into the patch. I had to be the chief nimby, but you can see that I am not a nimby. We need to build houses. Construction is a great thing. But I did have to represent the perfectly genuine view that, if you took too many of our green fields and green gaps between settlements, you destroyed the community and changed the nature of the fabric of the local area. We were being asked to take too much, too quickly. 

I also shared the view that we were not getting access to the funds and projects for the infrastructure. We were inviting people in when there was not electricity, water, enough pipes to take the dirty water away, or enough drained land, so the new houses flooded almost as soon as people moved into them. It was a disgrace that we did not plan it properly.

So I urge the Government to put more emphasis on new cities and towns, to accept the conclusions of the report that you plan them in advance and, above all, that you put the facilities in first.

Yesterday in the Lords I raised the question of why the government taxes companies, institutions and people too much, then offers a bit back in subsidy, grants and benefits. This is destructive conduct leading  to less tax revenue and more public spending as businesses close or lose out and people lose jobs and income. There was of course no Ministerial answer.

High energy using businesses close or move into heavy losses and cut jobs thanks to carbon taxes. Steel collapses so taxpayers have to pay big subsidies to struggling producers whilst the Treasury rips them off with taxes.

The example we were discussing yesterday was Colleges of Further Education. They have to pay  VAT and higher National Insurance, so then the government has to find them more grant.

Government puts VAT on school fees at private schools, so then it has to find more money for state schools to pay for the extra  places needed as pupils are priced  out of the private sector.

Government imposes extra taxes on employing people, destroys many jobs,so has to increase its spending on benefits for more unemployed.

Please stop this  destructive merry go round that bloats the state and makes the country poorer. Higher taxes do great damage.