British Steel: Completion of Sale

Alok Sharma Excerpts

Tuesday 10th March 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

On Monday 9 March, Jingye Group, a Chinese steelmaker, formally completed its purchase of British Steel Limited from the official receiver, securing more than 3,200 highly skilled jobs in the UK.

Jingye has acquired British Steel’s steelworks at Scunthorpe, Skinningrove and on Teesside, as well as subsidiary businesses TSP Engineering and FN Steel in the Netherlands.

On 22 May last year British Steel entered compulsory liquidation. The court appointed official receiver took control of the company and together with special manager, EY, was responsible for running an independent sales process.

Upon entering liquidation an indemnity was provided by Government which enabled British Steel to continue to trade, and staff to continue to be employed. During this time the Government worked closely with the official receiver, special managers and all interested parties to support the sales process.

Securing a positive outcome for British Steel would not have been possible without the considerable efforts and commitment of Jingye, the official receiver, special managers, employees and trade unions.

The British Steel Support Group, set up by the right hon. Member for Tunbridge Wells (Greg Clark) and maintained by the right hon. Member for South Northamptonshire (Andrea Leadsom) also played an important role in supporting the sales process. The group comprised of Members from across the House of Commons, local political leaders, local enterprise partnerships, trade union representatives, British Steel management, and representatives from Make UK and the Federation of Small Businesses.

The sale protects thousands of highly skilled jobs and secures steelmaking operations at British Steel’s sites in Yorkshire and the Humber and the North East. Jingye has outlined ambitious plans for the business, pledging investment of £1.2 billion to modernise sites and improve energy efficiency and environmental performance.

While more than 3,200 jobs have been secured, around 450 staff have, sadly, not be retained. The number of employees was negotiated with the trade unions alongside the new terms and conditions. The Government are offering their full support for those affected, mobilising the Rapid Response Service and National Careers Service to give immediate on the ground support and advice. This service will help those affected to transition into other employment or take on new training opportunities.

More broadly, the Government are committed to working with businesses and local government to grow and modernise the economy of the Humber area. Over the long term we will need industry in the Humber area to make a major contribution to national net zero and energy supply goals. We will shortly be publishing our local industrial strategy for the Humber which will reflect these ambitions.

We look forward to working with the new management team at British Steel to ensure that the company can realise its full potential. This sale is a vote of confidence in the UK steel industry. Britain and the world will continue to need high-quality steel, and British steel is among the best in the world.

[HCWS154]