The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
The Government committed to updating Parliament on British Steel every four sitting weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
The Government’s priority remains to maintain the safe operation of the blast furnaces at British Steel. Government officials are continuing to provide on-site support in Scunthorpe, ensuring uninterrupted domestic steel production and monitoring the use of taxpayer funds.
On funding, the position remains that all Government funding for British Steel will be drawn from existing budgets, within the spending envelope set out at spring statement 2025. To date, we have provided approximately £484 million for working capital, covering items such as raw materials and salaries. This will be reflected in the Department for Business and Trade’s accounts for both 2025-26 and 2026-27.
Next steps
A strong steel sector is essential to supporting our national security, critical national infrastructure and highly skilled jobs in communities across the country. This Government’s steel strategy sets out our long-term plan to revitalise the UK steel sector, ensuring the competitiveness and viability of UK steelmaking to sustain 40-50% of domestic demand being met by domestic production and supporting key sectors including defence, construction and clean energy.
Today, the Government will introduce a Bill to provide a route for Government to bring steel companies or their operations into public ownership, provided the public interest test in the legislation is met. This will allow the Government to safeguard domestic steelmaking capability in line with the steel strategy. We do not take the decision to introduce the Bill lightly.
The Government have engaged in negotiations with the current owner of British Steel regarding a commercial sale, but it has not been possible to agree acceptable terms that would represent a responsible use of public money. We want to see British Steel play its part in in a revitalised steel sector, but it has not been possible to agree this under its current ownership.
Given the information currently available to us, the Government are strongly minded to use the powers in the Bill to bring British Steel into public ownership in the future, subject to the public interest being satisfied and taking into account all the relevant facts at that time.
Safeguarding the long-term future of Britain’s steel capability and capacity is in our national interest. The Government believe it is in the public interest to bring legislation that will give the Government the powers to nationalise British Steel. Bringing British Steel into national ownership would allow the Government to explore what future opportunities there may be for British Steel including to modernise the site, deliver a transition to decarbonised steelmaking at Scunthorpe, and provide stability for workers, suppliers and customers.
The Government recognise that securing the long-term future of the UK steel sector relies on both public and private investment for modernisation. Delivering the best outcomes for taxpayers has been, and will remain, a key priority for this Government.
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