(1 month ago)
Commons ChamberI would like to make a statement regarding the insolvency of Speciality Steel UK Ltd, which is part of the Liberty Steel Group. Hon. Members will have seen that the High Court granted a compulsory winding-up order against Liberty Speciality Steels on 21 August, and the company has now entered liquidation.
First and foremost, let me say this: the Government stand with the affected steelworkers in Rotherham, in Sheffield and in Wednesbury. We stand with their families and the communities, who will undoubtedly be worried at this difficult time. I would like to reassure them and all those employed by Liberty Speciality Steels that we are standing by with our rapid response teams to give immediate support on the ground if required, that we are working with the trade unions and the South Yorkshire Mayor, and that we are working with the councils and hon. Members from affected constituencies to offer all the help we can.
I also want to stress that there will be no immediate changes to the current operation of the business, including to employees’ jobs. Following the appointment of special managers, the company’s sites have been secured and employee payroll processed within 24 hours. Other Liberty Steel companies outside Speciality Steel, such as Liberty Dalzell and Liberty Hartlepool, are not affected by this action.
Following the company’s liquidation, the official receiver has been appointed as liquidator by the court. Hon. Members will know that the official receiver operates independently of Government, with a statutory duty to act in the best interests of creditors.
Yesterday, I laid a departmental minute notifying the House of the contingent liabilities associated with this intervention. I regret that, due to the liquidation taking place during recess, we have not been able to follow the usual notice period of 14 parliamentary sitting days. However, a copy of the departmental minute will be placed in the Libraries of both Houses. In addition, the Government have agreed to funding for the official receiver, who will now stabilise operations. The official receiver will gather company information and report to us on the likely next steps, including options for the company’s business and sites. The total costs will depend on market conditions and the strategy adopted by the official receiver. However, that will be subject to close scrutiny by my Department and the Insolvency Service.
As the House will be aware, the company has faced severe financial and operational difficulties since 2021. Liberty Speciality Steels had failed to file accounts for over six years—a failure that has led to a separate prosecution by Companies House of its parent company. I am sure that the official receiver will want to gain a better understanding of the company’s business and the conduct of its directors leading up to the liquidation. I also inform the House that the director of the company is currently under investigation by the Serious Fraud Office for suspected fraud, fraudulent trading and money laundering. Given that, I am sure hon. Members will agree that it would have been wholly inappropriate for the Government to enter into commercial arrangements with the company.
This Government will always take difficult decisions when they are in the national interest. That is why, in April, we acted to prevent the pre-emptive closure of the blast furnaces at British Steel in Scunthorpe. In the case of Liberty Steel, the lack of transparency, the legal and financial risks and the complete absence of reliable corporate information meant we had no credible route to act before insolvency. It is worth noting that Liberty Speciality Steels uses electric arc furnace technology that can be powered up or down as needed—although it should be noted that those furnaces have not been operating since July of last year. That was the situation this Government inherited.
The circumstances in Scunthorpe were fundamentally different. British Steel operates the UK’s last remaining blast furnaces—assets that, once shut down, cannot simply be restarted. Allowing those blast furnaces to be closed pre-emptively would have removed our ability to make strategic choices about the future of steelmaking in Scunthorpe, and that was not a position this Government were prepared to accept. Scunthorpe was therefore a truly exceptional situation and that is why we took the unprecedented step of implementing the Steel Industry (Special Measures) Act 2025 to maintain the safe operation of the blast furnaces.
The situation with Liberty Speciality Steels is not comparable. The company was issued with a winding-up order by the High Court due to longstanding financial issues. Spending taxpayers’ money on a company operating in such a way would have exposed taxpayers to hundreds of millions—potentially billions—of pounds in hidden costs.
With all that said, I very much believe that the steelmaking sites in Rotherham, Stocksbridge, Brinsworth and Wednesbury have a future. I am keen to see them return to production, but that has to be achieved through private investment by an owner who can invest in the workforce and in the future of the business so that they put it on a long-term, sustainable footing. We know that the business environment has not been good enough for the UK’s steel industry, which is why we have already made substantial changes to secure a stronger future for it. I will say more about the steps that we have taken shortly.
In the case of Liberty Speciality Steels, it goes without saying that the company’s hardworking employees are key to turning the sites around. Their skills and expertise will be essential in delivering that brighter future. However, in its current state, producing only minimal volumes of steel and with many employees still on furlough, we know that some tough choices lie ahead. It is now for the official receiver to determine the next steps in the insolvency process. But let me be clear: this Government will stand by this workforce and do all we can to support them through this period of uncertainty.
Despite the challenges facing the steel sector today after years of neglect under the previous Government, we believe that this industry will bounce back and grow stronger tomorrow. This Government are doing everything we can to make that happen. We are pressing ahead with a bold steel strategy for the UK, set to be published later this year. That strategy will set out our vision for a competitive, decarbonised and resilient domestic steel industry. Our approach is clear: we want the UK steel sector to thrive, with strong private investment and commercially sustainable operations at its core.
Under our new industrial strategy, we have already announced some major policy changes to increase the future viability of the steel industry. We are reducing electricity costs for steel producers by increasing network charge discounts through the supercharger from 60% to 90%. We are changing Government procurement rules via the publication of a new steel public procurement notice to ensure that UK-made steel is considered for all public projects. We are also strengthening current steel safeguard measures, ensuring that UK steel producers will not be undercut while still ensuring that the UK has a steady and reliable supply.
Hon. Members will know that we have also secured a much-improved deal for the workers of Port Talbot—something the Opposition repeatedly said could never be achieved—and we delivered it alongside a £500 million grant to support the transition to low-carbon electric arc furnace production. I was proud to attend the groundbreaking event for this in July with the chair of Tata Group. We will continue to work hand in hand with this vital British industry to ensure its long-term success.
Let there be no doubt that, for Liberty Speciality Steels, we will pursue every option to keep steelmaking in Rotherham, Sheffield, South Yorkshire and the west midlands. We will offer all possible support to the independent official receiver on the all-important next phase, and we will continue to work with hon. Members across the House to ensure that the UK remains a proud steelmaking country now and for many years to come. I commend this statement to the House.
Order. The Minister needs to respond. It’s been that long that I had forgotten.
Thank you, Mr Speaker. I shall just explain to the shadow Minister how the system works. The Government have not taken over control. That is not the process of the official receiver. The official receiver was appointed following a court case which began in 2024. It has been a very long and arduous case.
The hon. Gentleman will hopefully understand that I cannot set out the cost of the official receiver at this point because the official receiver has only just begun his work. It is very early days and we cannot be specific. We know the numbers will be in the millions, as opposed to anything more substantial, because the company is not operating in and of itself. What we are doing is ensuring that the salaries are paid, which I hope the whole House would agree is the right thing to do. Companies will be coming forward and expressing an interest in buying parts of the company, and it will be for the official receiver to look at that and see what process we should go through, but I cannot give the hon. Gentleman the actual numbers on that. I hope the whole House will understand why not.
On the shadow Minister’s wider point, if this Government had not intervened, thousands of people would have lost their livelihoods in Scunthorpe; that is a fact. If this Government had not intervened, we would not have had a better deal for the workers in Port Talbot, we would not have been there supporting them in the transition, and we would not be there supporting the building of the electric arc furnace, which began back in July.
The shadow Minister asked what this Government have already done. We have already changed the rules on procurement. I have worked closely with colleagues in the Cabinet Office on that to ensure that where Government are spending money, we are spending on British business where we can—something his Government failed to do. On energy prices, we have committed to lowering prices through the reduction in costs that will come from the expansion of the super-charger—something his Government failed to do. We are working on a bold strategy, which we will publish this year, that will build on that. Whether on trade protections—on which we have already taken measures—our scrap policy, R&D, jobs, apprenticeships or skills, we will have a bold strategy because we believe in steel, unlike the previous Government, who said that manufacturing is a Victorian pursuit best left to the Chinese. We do not agree with that approach.
I congratulate the Minister on saving Britain’s real engineering from years of financial engineering which was not in the best interests of this country and was more in the interests of the self-enrichment of the people behind it. The question for us today, though, is what steps the Government will now take to ensure and safeguard a growing, thriving industry. Will the Minister reassure the House that she will use us on the Committee to oversee the liabilities that the Department has taken on? Crucially, will she set out when she expects those lower energy costs to kick in, when she expects the tariff barriers in the United States to come down, and when she will tie together the steel strategy, which I hope she will publish as soon as possible, for the House to debate?
I thank my right hon. Friend for those helpful questions. He reminded me that the shadow Minister had asked about the US. Of course, we are in a position where the world has tariffs of 50% on steel and aluminium; we have 25%. We are working with our US counterparts to reach a conclusion to those negotiations. My right hon. Friend will know that the President is due to come to the UK and, of course, we will be doing all we can to get that negotiation concluded at pace.
My right hon. Friend asked about energy costs. We are seeking to ensure that there is a viable steel industry into the future and that those companies currently talking to the official receiver about wanting to take over and invest in Liberty can do so in a way that will make them money. On the charges we are reducing—the 60% to 90% super-charger extension for network charge relief—to give an example, it will mean about £4 to £5 relief per tonne of steel produced. We know that Liberty is not producing what it can at the moment, but two or three years ago it would have been producing about 300 tonnes of steel per year, so it would have saved up to £1.5 million on its energy costs. That is a substantial reduction and something that I am sure he will welcome.
On the liabilities, of course we want to be as honest, open and transparent with the House as we possibly can. A lot of the liabilities are with the creditors at the moment. We want to come to the House as soon as we can to ensure that we are setting out the costs that we incur. My right hon. Friend is right that the steel strategy this year needs to be bold, and we will of course look to the work that his Committee has done to help us in that.
May I start by associating the Liberal Democrats with the Minister’s remarks in support of the employees, families and communities who are affected by this latest development? We welcome the Minister’s coming to the House today to provide some clarity.
Steel is a sector of huge strategic importance for our country. It provides vital materials for our national infrastructure, from defence to renewable energy, and it creates thousands of jobs across the UK. The neglect of the steel industry in recent years is just another part of the previous Government’s disastrous legacy. With Putin’s barbaric war in Europe and Donald Trump’s damaging tariffs causing economic turmoil, securing the future of steel production in this country is more important than ever. That is why the Liberal Democrats firmly believe that nothing should be off the table in supporting this critical sector.
For too long, our steel industry has been neglected. The Conservative Government oversaw a string of near collapses and last-minute deals. They scrapped the industrial strategy, which is so vital to our manufacturers, and put in place new trade barriers, which constrained our exporters. In the light of this latest insolvency, will the Minister set out what actions the Government are taking to set our steel industry on a truly sustainable footing? What reassurance can the Government provide that job losses can be avoided in the future? What progress has been made in bringing down industrial electricity prices through the measures announced in the industrial strategy? What are the Government doing to press President Trump to finally drop his damaging 25% tariffs on our steel exports? Finally, what steps are the Government taking to treat steel as the nationally strategic asset that it is, ensuring that more British-made steel is used to power our national infrastructure and other major projects here in the UK?
I thank the hon. Lady for her remarks. She is right to ask about how we ensure that this nationally strategic asset is protected, and we are doing that. I have just set out the reduction in energy prices that the steel industry as a whole will benefit from—extending the super-charger from 60% to 90% to give network charge relief, which will bring significantly lower costs for energy prices for our steel industry. We are prioritising the procurement of British steel where the Government are spending money, because we believe that that is the right thing to do. We have already introduced protections for steel trading, and we are ensuring that we do everything we can, talking to our US counterparts all the time, about reaching a conclusion on the negotiations on the steel tariffs. I am optimistic about those conversations.
Of course, I speak to officials and other Ministers, and to the steel industry, about these issues all the time. We are lucky to have the Steel Council that we put together—trade unions, industry and others who are helping us to develop what we think will be an ambitious steel strategy that will ensure that the steel industry will not decline. The strategy will ensure that we will not be in the position we are currently in, where only 30% of the steel we use in this country is made in this country, and that we will be in a position where we can protect those good, experienced jobs and those good people who we want to support and make sure the industry grows.
You will be aware, Mr Speaker, that as long as I have been an MP, I have been coming to this Chamber arguing for support for Speciality Steel in my constituency. I politely say to the shadow Minister that the difference in response from this Government is night and day from what I had under the Conservatives. I personally thank the Minister, and the Secretary of State, for having such an open-door policy to me and my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball). I know the Minister is doing everything she can to save this speciality business.
One of the first actions of the official receiver was to release approximately 30 apprentices who were due to start their training in the next few weeks. Can the Minister reassure the House that the Government will not only commit to the business but acknowledge that it can survive only with its highly skilled, committed, professional staff and that she is as committed to them as she is to the business?
I thank my hon. Friend for those remarks; they are gratefully received, and we will continue to do all we can to support the steel industry. She is absolutely right that a number of apprentices were due to start this week, but the official receiver took the decision that, given that the 12-month continuation of the apprenticeships could not be guaranteed, it was right to try to find them other placements. I am taking a close personal interest in what happens to those 50 people. I know the local authority and the Department for Education are trying to ensure that we can find other places for them. I want to make sure that we can do so, because one of the things this Government are passionate about is ensuring that our young people have the apprenticeships to give them support for the jobs that we know we need into the future.
The Minister is obviously incredibly committed to the steel industry, as we all are, but manufacturing will continue to struggle in this country when it pays energy prices that are so much higher than competitors in Germany and France. Can the Minister assure the House that in a year’s time, following the Government strategy, manufacturers—whether ceramics or steel—will be paying the same amount for their industrial energy prices as their German and French competitors?
The right hon. Gentleman makes a good point. Of course, our energy prices are too high and it is difficult for companies to compete. We are taking action to address that, in the first instance by expanding the super-charger, which will make a significant difference to industries that use significant amounts of energy. We will also introduce an electricity scheme in 2027—it is a complex process and will take time to bring in—meaning that around 7,000 companies across the country will also have significant reductions in their energy costs. We are taking what we believe to be the right measures in our industrial strategy through those two interventions, to ensure that our energy costs come down and that we can be competitive among our European counterparts.
Liberty’s Speciality Steels UK has failed its highly skilled workers. This ongoing situation has been deeply concerning, so I am delighted that the Minister has offered her solidarity and the Government’s support for the incredible workforce at the site in South Yorkshire. It is hugely positive—and a great contrast with the 14 years of Conservative Government—that this Government have stepped in and appointed an official receiver to protect the 1,400-plus jobs at the two sites, including Stocksbridge Speciality Steels in my constituency. The Secretary of State has acknowledged in this Chamber the strategic significance of those sites to national security, and we must ensure that those businesses are supported in fulfilling their capability and have, as the Minister has recognised, a strong future. Will she take adequate time to find a responsible buyer with the right deal, and during that time will workers be kept in employment with salaries continuing to be paid, while efforts are made by her and the official receiver to resolve the outstanding pension issues?
My hon. Friend and I have spoken many times about this—she is such a champion for the industry, as are many colleagues. She is right to point to the importance to the country of the work at Stocksbridge. Of course, we will do what we need to do through the process of the official receiver to ensure that people get the salaries that they need. For the past couple of years, so many of those people have been on furlough—we want to turn that around. We believe that this viable industry is languishing unnecessarily. The Government will provide the right support through interventions such as our energy reduction measures, and work with the official receiver. I can tell her that multiple companies are interested and coming forward, and we need to establish how viable those offers are and what the best situation is. Of course, the official receiver must think of the best outcome for the creditors, but we take a close interest in that. My hon. Friend is right to point out the pensions issue. I know that there is uncertainty. The official receiver and Teneo are considering these issues now to see exactly what has and has not been paid so that we can unpick the pensions issue.
This is the second crisis in the steel industry in the past year. It impacts other commercially operated industries that are critical to our national security. In Lancashire, the failure to place an order for 25 Typhoon jets is risking thousands of jobs in the critical defence industry of BAE Systems. There is also a lack of join-up between Departments, which do not realise that the whole life-cycle of nuclear fuel manufacturing is equally critical for our national infrastructure and impacts on hundreds of highly skilled jobs in Lancashire at the Westinghouse Springfields site. Will the Minister update me on her work with the Ministry of Defence to ensure that commercially operated industries that are critical to our national defence capability and security are strategically supported to be sustainable in the future?
The hon. Gentleman is right to point out the importance of our defence industry and the need for us to support it. Of course, the industrial strategy outlined eight growth-driving sectors that we believe can be turbocharged with Government support—defence was one of them. We have published those sector plans, apart from the defence one, which will come shortly—he should look out for it. We have significantly increased funding for defence, which will lead to thousands of jobs across the UK. I will work closely with my colleagues in defence, particularly the Minister for Defence Procurement and Industry, to ensure that we procure UK jobs where we can and support our industry to grow.
First, I thank the Minister for her action—after 14 years of inaction by the Conservative party, it is a welcome change. Sheffield is synonymous with steel, particularly special steels, after Harry Brearley invented stainless steel in the city over 100 years ago. The Minister mentioned public procurement, and consideration being given—I think those were the words she used—to the purchase of British steel. May I ask her to be clearer about what “consideration” means? I hope that it means looking not simply at the narrow issue of costs for a product, but at the wider benefits of purchasing UK steel—benefits to the steel and engineering sectors, as well as to the broader economy. Will she assure us that when public procurement takes place, those wider considerations will come into effect?
Yes, within the parameters of what we can do legally, in terms of subsidies. We are ensuring, and the Cabinet Office is keen to ensure, that when we spend public money, we buy British. The value of that, and of British jobs around the country, is recognised in the contracts that we pursue. My hon. Friend talks about the importance of steel in his area. I have talked with colleagues about developing a steel corridor, which I think is important. We are pursuing that through the steel strategy.
The Minister was right to come here today to make a statement on such an important part of the national infrastructure. It is just a shame that no Minister has ever made a statement in this House on Grangemouth. We have now learned that the Chancellor met INEOS chair Jim Ratcliffe just three weeks ago—just three weeks before Petroineos Grangemouth closed—but she did not do so much as raise the refinery with him. In her statement, the Minister said: “the Government stand with the affected steelworkers in Rotherham, in Sheffield and in Wednesbury. We stand with their families”. That is quite right; so do we in the SNP. But why have this Labour Government never stood with the workers of Grangemouth?
It is up to the Minister to answer that question if she wants to, but the statement is about steel, rather than petroleum.
Thank you, Mr Speaker. I will just say that we have very much stood with the workers of Grangemouth. We are investing, through the National Wealth Fund, £200 million to support that development. I have had multiple conversations, and the hon. Gentleman and I have spoken multiple times in this place, about how we will support industry in Grangemouth to transition and grow, and provide significant support to workers where they lose jobs. I fundamentally disagree with the picture that he paints.
I thank the Minister for her action. Steel remains a key part of the South Yorkshire industrial and economic strategies. Can she reassure the House that workers’ wages and livelihoods will continue to be prioritised throughout the whole process, and will she join me in thanking our hon. Friends the Members for Penistone and Stocksbridge (Dr Tidball), and for Rotherham (Sarah Champion), for their work to champion not just the sites in Stocksbridge and Rotherham, but the South Yorkshire steel corridor?
Of course. I share that gratitude for those amazing colleagues who stand up for what they know to be right and sensible. We are protecting not something that is not worth protecting, but something that has a vibrant and viable future; that is what we are working towards. We are working closely with the South Yorkshire mayoral combined authority and the Mayor. In broader advanced manufacturing in the region, including the innovation district and research centre, there is a huge wealth of expertise and talent that we can build on.
I am grateful to the Minister for the frankness of her statement. She says that the director of the company is under investigation for suspected fraud, fraudulent trading and money laundering. Can she reassure the House that that will not in any way hold up the Government in taking any remedial steps that they need to take in support of the industry and its workforce? For background knowledge, will she tell the House precisely what sort of specialisms this plant offers, given that it names itself a Speciality Steel enterprise?
The right hon. Gentleman should perhaps go for a tour and see what the speciality is, but it is defence, aerospace and industrial engineering on the Stocksbridge site. The Rotherham site has two electric arc furnaces, which feed the Stocksbridge site, and there is huge expertise there. There are a number of other sites that feed various sectors, such as the automotive industry, hydraulics and a whole range of others. There are a range of specialisms.
On the investigation, the official receiver will look at what is true and what is not, because there have not been any accounts published for many years. They will establish what has happened. The Secretary of State has written to the Insolvency Service today to ask it to take special account of the Serious Fraud Office investigation, and to pass over any information it uncovers to the Serious Fraud Office, so that it can do its work.
I congratulate the Minister on the decisions she has made in the last few weeks. We in Sheffield are very proud of our steel industry, and we want to resurrect it. We want people to be proud of the city, and to get into the same work that their grandparents did many years ago. Constituents who have been in contact with me on the issue will be very relieved, following the reassurance that the Minister has given, but if she could clarify the pension issue, that would offer even more reassurance.
I am so proud to hear our Minister speaking about steel, and I am quite disgusted at the way the shadow Minister, the hon. Member for Grantham and Bourne (Gareth Davies), and other Conservative Members have tried to pretend that they did not run down the steel industry. They never even had a steel strategy in all their years in office. They really ought to apologise for the absolute rubbish they were talking.
I thank my hon. Friend for pointing out the failings of the Opposition, which we all understand very well. On the pension issue, I recognise the concern that people will have. We have to let the official receiver get under the hood and work out what has been paid and what has not, because that is not clear. Once we know, we will look into that and do what needs to be done, but I do not want to say something on the subject until we know the reality.
I congratulate the Minister and the Government on doing the right thing in supporting our steel industry. I have been expressing concern about Liberty Steel since 2021. This is a critical moment, and it will be interesting to see whether private sector investment can be attracted into electric arc furnaces, with electricity prices where they are. I think there is a better solution, which I have spoken about outside this House: merging Speciality Steel with British Steel to create a cohesive, excellent, strong champion of our steel industry that we all support into the future and invest in. That is the way to ensure economic growth in this country.
The official receiver is independent. Of course, we are very interested in this, and are keeping in close touch with the receiver on what comes out of this. The hon. Member’s idea is not necessarily foolish, on this occasion. This is a legal process, and the official receiver legally has to think of the creditors who have suffered throughout—we have to think of them as well, and make sure we do the right thing—but we will continue to do everything we can to make sure that there is a viable future, whatever form that takes.
Like others, I very much appreciate the support being given today and the wider work being done on energy prices, procurement and more. By complete contrast, the Conservative party had no steel strategy, as my hon. Friend the Member for Sheffield Brightside and Hillsborough (Gill Furniss) said, and had a woeful record on steel over 14 years. However, market conditions are particularly tough—a point made to me strongly by trade union representatives at Llanwern steelworks over the summer—so will the Minister ensure that we support the steel industry as a whole, including Llanwern, and that Wales gets its share of the green steel fund?
We talked before Parliament returned about how we can support Llanwern and the work done there. My hon. Friend is right that this is a difficult time for the steel industry. There are headwinds that we need to address: we need to conclude the negotiations with our US counterparts and bring in energy price reductions, which will make a big difference, and we need the steel strategy. We are putting all these things in place. We believe that there is a great future for steel in south Wales, and we will continue to support it.
British warships are made with a mixture of UK and non-UK steel. What impact will this announcement have on that mix, particularly for the Type 26 frigate programme, about which we had some good news earlier this week?
Navantia, which is building three ships, has recently entered into a contract to use Liberty’s steel; that relates to the Dalzell plant in Scotland, so it is unaffected by the announcements we have made today. Of course, I work very closely with my colleagues in the Ministry of Defence to ensure that we use British Steel where we can, and that we have the right infrastructure across the country, producing the right types of steel. We produce some types of steel for defence and not others, and some types of steel for shipping and not others. We need to do everything we can to protect British jobs and produce what we can here in the UK.
It would have enhanced the shadow Minister’s response if he had at least acknowledged that this Government are literally picking up the pieces after the chaotic dismemberment of the steel industry on the Conservative party’s watch. I have worked at Stocksbridge and Rotherham, and I pay tribute to the workforce there—but also to the dedicated steel team in the Department, who I know will have been working long hours in supporting the Minister on this.
The Government now own, control or fund three of the UK’s six steel companies. While a full merger of British Steel and Speciality Steel is one option, at the very least a review of all the assets under the Government’s purview would be a good idea, to see whether we can create more sustainable, investable businesses and reintegrate some of the internal supply chains. Would the Minister consider that?
I thank my hon. Friend for his words, and particularly his thanks to officials in the Department, who are brilliant; I work with them very closely, and they have not had many weekends throughout the whole steel process undertaken by this Government. His expertise is very much welcomed. We will continue to speak about this, as we did yesterday, and to use his expertise. Of course, we need to look at the whole situation. He is right that the Government are now involved in a number of steel companies, although we do not have ownership of any of them, and it is a different kind of involvement in different parts of the country. We are reviewing all that, and we want to see what the best mix is; we will continue to take his advice on that.
The Government have made direct interventions for steel jobs in Scunthorpe and now in Rotherham. That is no comfort for steelworkers in Wales; no similar measures were taken to protect their jobs. Can the Minister explain why her Government will save jobs in Yorkshire and Lincolnshire, but will only help workers in Port Talbot to write CVs and search for new jobs?
As the hon. Lady will know, one of the blast furnaces had already closed by the time we came into government. We had long conversations with Tata about a different model that we had hoped it would pursue. We were unsuccessful with that. We have now improved the outcomes and the support for that workforce, and I was very pleased to be at the first stage of the build of the electric arc furnace at Port Talbot in July, which will secure many thousands of jobs there. We will continue to support Port Talbot with the £500 million that we are investing.
I thank the Minister for her statement, and for the decisive action this Government have taken to safeguard steel jobs across the country. Liberty Pipes is delivering an important contract for the Government’s landmark carbon capture, usage and storage project in our region. Can the Minister provide assurance not only that those jobs in our region are unaffected, but that this project continues at pace?
Liberty Pipes is separate and is not part of this situation at all. Of course, there will be concern in the wider group about the impact—I understand that—but at the moment, there is no crossover. Liberty Pipes will continue to do what it is doing and, I am sure, will continue to support the CCUS industry, which is great news for the workers there, and great news for us.
It is good news that Liberty Steel Dalzell in Scotland is not involved in this immediate crisis, but it is not shroud-waving to suggest that the difficulties in the wider industry may mean that one day it will become involved. When the overdue steel strategy arrives, will it be a 360° look at steel production as a whole, in every corner of this country? Will the Minister help Scottish colleagues get to the bottom of the Scottish Government’s murky deal with this company, which means that they are on the hook for potentially as much as £565 million, a quite incredible sum, which is deeply troubling? The Scottish Government are using the devolution settlement to hide behind. What is going on there? Will she shine a torch of truth on that aspect of the steel industry?
As the hon. Gentleman knows, Dalzell is a separate legal entity, so it is not affected, but he is right to worry about the overall situation and its possible impact on the company. I will look into the point he raised about the Scottish Government and Liberty. We are looking at what the steel industry should look like across the whole of the UK; the devolved Governments are involved in the steel strategy, as well as the unions, the industry and others, so we are taking a holistic view of the whole UK to see what we can do with steel.
The Minister is right to state that the business environment has not been good for the UK steel industry. The main cause for that adverse environment, of course, has been high energy prices—twice as high as those of European competitors and three times higher than those of US competitors. Given that the energy sector reminds us daily that the Secretary of State for Energy Security and Net Zero intends to continue his manic obsession with net zero, which has caused the high energy prices and this environment, how does the Minister hope to attract the private investment that she says is necessary to make the industry bounce back stronger and to grow tomorrow?
Industrial energy prices doubled under the previous Government. The right hon. Gentleman knows that the impact of the Ukraine war on our energy prices highlighted how we are reliant on the global oil and gas market. That is why we are pushing for clean energy by 2030, to take us away from that reliance and to stop such a crisis happening again.
I should point out that the crisis at Liberty is nothing to do with energy prices—it operates electric arc furnaces, so it is not anything do with carbon pricing or anything else the right hon. Gentleman might be referring to. He is right that energy prices are too high, which is why we are intervening. We will see a significant reduction in electricity costs when we extend the industry super-charger from 60% to 90%. As I outlined earlier, in a scenario where Speciality Steel is producing what it was producing a couple of years ago, that will give it upwards of £1.5 million off its energy costs. That is a lot more than the previous Government ever did.
UK manufacturing has been undervalued for far too long. One of the best ways to support industry is to ensure that its cost base is as low as possible. Will the Minister commit to the House that, in 12 months’ time, UK manufacturers will face lower energy costs than today? Will she also rule out further national insurance increases?
UK manufacturing suffered under the previous Government, who had no strategy, did not really believe in it and allowed thousands of jobs to be lost across a range of different industries. This Government are taking a fundamentally different approach: we have an industrial strategy under which we intervene directly to grow the industries of the future, including foundational industries such as steel, which are so important to us for many different reasons. We are also introducing energy price reductions that, for companies such as Liberty that use high levels of energy, will mean significant reductions in their costs by next year. We are introducing an additional energy reduction for a wider group of up to 7,000 companies, which by 2027 will also receive a significant reduction. Again, that is something that the previous Government never did.
I thank the Minister for her statement and for her commitment. On anything that I have ever had to speak to the hon. Lady about, she has always been willing to try to achieve something to give security for jobs, and I thank her for that personally. The fact that some 1,450 jobs are on the line is devastating not only for all the families concerned, but for the subsidiary supply companies and those that rely on high-quality steel for their manufacturing. In Northern Ireland, for example, that includes Harland & Wolff, aerospace and the construction sector. For the future of steel, the sector must continue to win future contracts for our industry. How can she provide certainty in these uncertain days?
I thank the hon. Gentleman for his kind words. He is right to point to the supply chain and the need for us to support not just the key industries, but the whole network of small and medium-sized companies across the whole UK, not just in Northern Ireland. I was in Belfast a couple of weeks ago, and I was delighted to see at Harland & Wolff the building under way of the three ships that are part of the MOD contract with Navantia. I was also pleased to go to Spirit, given our good conversations with Boeing about the future of that site and what it could look like. I also met lots of other parts of the industry. Advanced manufacturing in Northern Ireland is showing the way in lots of new technologies that we need to support. I will continue to support them.
(1 month ago)
Written StatementsThe 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 priority remains to maintain the safe operation of the blast furnaces at British Steel. To that end, Government officials are continuing to provide on-site support to continue steel production, ensure that health and safety issues are being remedied, stabilise operations and improve the steady state of the business.
This month, I am pleased to confirm that British Steel will be welcoming its first cohort of apprentices in over 3 years. The programme will offer apprentices a high-quality training experience blending technical knowledge and practical skills, while helping the business to develop its next generation of engineers and technical experts.
Work continues to develop an impact assessment, which will be published in due course following Regulatory Policy Committee scrutiny. We are also continuing work on regulations under section 7 of the Act, to introduce a compensation scheme for steel undertakings that have received a notice under the Act.
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 £180 million for working capital, covering items such as raw materials, salaries, and addressing unpaid bills, including for SMEs in the supply chain. This will be reflected in the Department for Business and Trade’s accounts for 2025-26.
As I have stated previously, our long-term aspiration for British Steel will require private investment to enable modernisation and decarbonisation, support jobs, safeguard taxpayers’ money and retain steelmaking in Scunthorpe. We are continuing discussions with Jingye on options to achieve that objective.
The Government commitment to the steel sector goes beyond our intervention at British Steel and we continue to see tangible benefits resulting from the wide-ranging actions we have taken. Since early August, UK steelmakers have been able to export more construction grade steel to the EU tariff-free, following a major win secured at the UK-EU summit earlier in the year to restore our country-specific steel quota to historic levels. This bespoke agreement provides a significant boost to producers including British Steel, cutting costs and providing more certainty when exporting to one of our largest trading partners.
This builds on a series of recent milestones delivered under the plan for change, including targeted action to reduce electricity costs, strengthen procurement rules and bolster our trade defence measures. Looking ahead, we will be publishing a steel strategy later this year, setting out our long-term vision for a revitalised and sustainable industry and the actions needed to get there.
This is a pro-steel Government that are taking decisive steps to restore our steel industry after years of neglect. We are working to secure good jobs in Scunthorpe and other steelmaking communities for many years to come.
[HCWS889]
(1 month ago)
Written StatementsI have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.
Speciality Steels UK Ltd, part of Liberty Steel Group, and the third largest steel manufacturing company—by capacity—in the UK was issued with a winding up order by the High Court on 21 August, following a petition from its creditors. SSUK employs 1,400 people across four sites in Rotherham, Stocksbridge, Wednesbury and Brinsworth. The company has now entered liquidation and the official receiver, an officer of the Insolvency Service, has been appointed as liquidator by the court.
The Department for Business and Trade has provided the OR with a letter of comfort and a letter of indemnity in respect of:
Carrying out the proper performance and duties expected as the official receiver and liquidator of the company; and
Investigating the cause of failure and identifying any asset recoveries against the company, current/former directors of the company, and any other parties; and
The winding-down of the company’s business and affairs and distributing assets of the company in the ordinary course as the official receiver's duties as liquidator.
The sudden nature of the announcement of SSUK entering into insolvency on 21 August and the urgency of the need to ensure that the OR can immediately formulate and implement a plan to address site risks, means we have sought to expedite the approval process. It has not been possible to observe the usual 14 Parliamentary sitting day waiting period for this contingent liability, since it only materialised when the company entered liquidation on 21 August when Parliament was not sitting.
On the 19 August, the permanent secretary for the Department for Business and Trade wrote to the Chairs of the Public Accounts Committee and the Business and Trade Committee, outlining our intention to provide funding for the official receiver to allow it to fulfil its statutory duties—noting the contingent liability that would be created for HMG—and asking for any objection to be notified within five working days. I can confirm that neither the PAC nor the BTC have raised any objections to the issuing of this overall funding and indemnity.
It is not possible at this stage to accurately quantify the value of the overall funding requirement with relation to the letter of comfort and letter of indemnity. The OR will assess the likely scale of any liability to Government, and costs will be reported to Parliament once a more accurate quantum is known.
HM Treasury has approved this proposal. The Department will consider any concerns raised by a Member of the House regarding this contingent liability and indemnity. If the liability is called, provision for any payment will be sought through the normal supply process.
[HCWS898]
(2 months, 1 week ago)
Written StatementsThe 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.
Government officials continue to work on site in Scunthorpe, supporting British Steel’s management team. Our priorities remain: continuing production, ensuring that critical health and safety issues are being remedied, stabilising operations, and improving the steady state of the business by building additional reserves of the necessary raw materials.
Since my last written ministerial statement on British Steel on 20 June, I have written to several Members in response to further questions. Baroness Jones of Whitchurch has also written to the Constitution Committee, responding to its report on fast-track legislation and the Steel Industry (Special Measures) Act. Work continues to develop an impact assessment and to bring forward regulations under section 7 of the Act to allow the Secretary of State to introduce a compensation scheme for steel undertakings that have received a notice under the Act.
We recognise the ongoing interest from Members regarding the funding that will be required for the Scunthorpe site. The position remains that all funding will be drawn from existing budgets, within the spending envelope set out by the Government at spring statement 2025.
To date, we have provided approximately £130 million for working capital. This covers items such as raw materials, salaries, and addressing unpaid bills, including for small and medium-sized enterprises in the supply chain. As previously confirmed, the Department for Business and Trade’s accounts for 2025-26 will reflect the financial support that the Department has given to British Steel.
Work is progressing at pace to develop the optimal policy and strategy approach to the long-term future of British Steel, and we are continuing discussions with Jingye to inform that process.
More broadly, we continue to develop our close partnership with industry and trade unions to revitalise UK steelmaking and secure economic growth. On 14 July, I visited 7 Steel UK in Cardiff, where I chaired a positive and constructive meeting of the Steel Council, alongside the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Queen’s Park and Maida Vale (Georgia Gould) in her role as Minister responsible for public procurement. I travelled on to Port Talbot, where I attended an event at Tata Steel to celebrate the start of the electric arc furnace construction following the Government’s £500 million grant towards Tata’s £1.25 billion transformation project.
Further to our unique and unprecedented legislative intervention in British Steel and our confirmation at spending review of the grant funding for Tata Steel and investment in Sheffield Forgemasters, our recently published industrial strategy has identified steel as a foundational industry. We are creating a better environment for the sector by addressing crucial areas in the run-up to the launch of the steel strategy later this year.
Recent successes for steel following Government backing include:
Energy
We are cutting electricity costs for steel producers by reducing network charges via the supercharger by 90%, up from 60%, as announced in our modern industrial strategy. On Friday 18 July, the Government launched a four-week consultation on their plans to increase the discount—a key step towards implementing the extension as soon as possible. Further detail is provided in the written ministerial statement I made earlier today on the network charging compensation scheme uplift [HCWS869].
We are streamlining grid access for major investment projects, including prioritising those that create high-quality jobs and deliver significant economic benefits, through a new connections accelerator service. New powers in the Planning and Infrastructure Bill, which is currently before Parliament, could also allow the Government to reserve grid capacity for strategically important projects, cutting waiting times and unlocking growth in key sectors.
The industrial strategy’s support for sectors such as advanced manufacturing will also increase demand for steel as a foundational product, as demand for lightweight and precision-engineered steel products increases.
Trade
We have strengthened current steel safeguard measures by slowing future increases in spikes of foreign imports, capping certain import levels and tightening country-specific limits, ensuring that UK steel producers will not be undercut while still making sure that the UK has a steady and reliable supply.
We have also announced our intent to launch new laws to expand our powers to respond to unfair trade practices and to guard against global turbulence in critical sectors such as steel, as announced in the trade strategy.
In addition, we have invited steel producers, consumers and stakeholders across the supply chain to shape our future approach to trade measures for steel in a new call for evidence, as we continue to support the UK steel industry against unfair trading practices and to strengthen the UK’s critical supply chains after the expiry of the steel safeguard in June 2026.
Procurement
We have changed Government procurement rules, via the publication of a new steel public procurement notice, to ensure that UK-made steel is considered for all public projects. From 1 September, all in-scope organisations undertaking new relevant steel procurements will be required to consult UK Steel’s digital catalogue prior to making design and procurement decisions. In addition, contracting authorities must consider whether exemptions in buying rules that can support UK steelmakers are applicable. These reforms send a strong message about our commitment to UK Steel—ensuring that it plays a central role in public sector projects, secures jobs and remains at the heart of our national infrastructure ambitions.
Transforming the UK steel sector
The actions I have outlined will have tangible outcomes for the steel industry and for the proud industrial towns and communities who depend on it.
We know that steel is important for delivering on our plan for change—important for delivering on our ambition to put more money into people’s pockets and to realise a new decade of national renewal. The UK steel industry helped to build the modern world, and this Government are taking the decisive steps required to secure its future in Scunthorpe and steelmaking communities across the country.
[HCWS871]
(2 months, 1 week ago)
Written StatementsI can today announce to the House that the Government are taking the next step in delivering one of the commitments made in our modern industrial strategy, by beginning a consultation which will seek industry views on increasing the level of relief offered through the network charging compensation scheme from 60% to 90%. It will also explore doubling the window which businesses have to apply for support through the scheme from one month to two.
In recent years, British energy-intensive industries have faced the steepest industrial electricity prices in Europe, even with existing Government support schemes applied, primarily due to a long-term disparity in network and policy costs. In the modern industrial strategy, the Government identified that high electricity prices remain a significant barrier for growth and investment for critical energy-intensive industries across the UK.
If enacted, the uplift in the NCC scheme will provide over £100 million in additional electricity price relief to key industrial sectors. Around 500 of the UK’s most energy-intensive businesses across sectors such as steel, chemicals, glass and ceramics will see their cost of electricity reduce by an estimated £7 to £10/MWh from 2026, helping to bring them more in line with European competitors.
This measure will reinforce the fact that the UK is a great place to do business. It will help secure jobs and attract new investment into the UK as part of the plan for change. It will protect our foundational manufacturing sectors from the risk of carbon leakage, while helping to unlock investment in dynamic new sectors such as gigafactories, which will be critical to the UK’s future transition to net zero.
[HCWS869]
(3 months ago)
Written StatementsToday, I am pleased to have laid a departmental minute with an update on the contingent liabilities associated with the carbon capture usage and storage track 1 clusters, HyNet and East Coast Cluster. This update is in anticipation of our signing contracts with the Padeswood cement project, which we expect soon, subject to timely conclusion of negotiations and resolution of outstanding conditions. Padeswood is a key demonstrator for decarbonisation of the cement industry, on which the security of the UK’s net zero transition is dependent. The addition of further CO2 capture projects like Padeswood was planned and is part of the Government’s plan to maximise our investment in the HyNet cluster. Contingent liability Maximum exposure (£m) for Padeswood Reasonable worst-case (£m) for Padeswood The discontinuation of capture project contracts 447 187
Context
CCUS is the only feasible method for decarbonising many hard-to-abate sectors, including cement. Located in north Wales, Padeswood will be the first at-scale UK cement plant incorporating carbon capture and storage technology. The project presents a high value opportunity for the UK to secure a strong global foothold, in a growing customer market, for low-carbon cement production.
His Majesty’s Government’s CCUS programme is the first of its kind and consequently we have sought to overcome multiple market barriers which inhibit the development of a CCUS market in the UK. The costs of constructing and operating CCUS currently exceed the costs of emitting CO2—Government support is necessary to address these challenges and enable CCUS deployment at scale. Parliament agreed in November 2024 to accept five contingent liabilities within the CCUS track 1 contracts in order to reduce investor risk in CCUS technologies by bearing some of the initial risk inherent in developing a CCUS market, as well as the cross-chain risk existing across the participants in the CCUS network.
Parliament was notified on 13 November 2024 of the five CLs outlined below, which are associated with the various CCUS track 1 contracts. These were:
The supplemental compensation agreement, which is a long-term mechanism within the Government support package that enables the management of leakage risks at the geological store during operations and the post-closure period.
The revenue support agreement, which addresses demand-risks by providing for payments to CO2 transport and storage companies if their allowed revenue is not covered by user fees.
The discontinuation agreement, which provides a right for the Secretary of State to discontinue support to the transport and storage companies and entitles investors to be compensated for their investment.
The decommissioning shortfall agreement, which covers potential decommissioning fund shortfall which might arise if decommissioning is required before the fund has been fully built up.
The discontinuation of capture project contracts, which allows for payment of compensation to capture projects for any losses due to a qualifying change in law or prolonged CO2 transport and storage unavailability.
Now that HMG is near finalisation of negotiations with the Padeswood project, I am updating Parliament on our exposure to these contingent liabilities.
Update to contingent liability exposure
The table below shows the impact of signing contracts with the Padeswood project for the discontinuation of capture project contracts contingent liability. It is important to note that while the table below represents the maximum possible exposure, the probabilised exposures and likely crystallisations are far lower. There are robust risk management frameworks in place. Our assessments indicate that there are no liabilities that are likely to be realised and the vast majority are very remote.
The increase in maximum exposure outlined above is necessary to allow us to decarbonise, not deindustrialise, our cement industry. The adoption of the five contingent liabilities summarised above is already allowing HMG to deliver a first-of-a-kind CCUS sector, which we know will be vital for delivering on our net zero targets, as well as supporting jobs and growth in our industrial heartlands.
[HCWS776]
(3 months ago)
Written StatementsI wish to make Members aware of the details of a contingent liability guarantee, which will be entered into in favour of npower in accordance with and pursuant to the Steel Industry (Special Measures) Act 2025 to support British Steel Ltd and for the purpose of securing the continued and safe use of blast furnace operation in Scunthorpe.
The guarantee will replace the existing substantially similar credit support that is required by the terms of the underlying supply agreement, and would be in respect of British Steel Ltd’s payment obligations to npower. Without such guarantee, British Steel Ltd would otherwise be unable to access the bespoke rates they need or would only be able to do so on materially worse terms.
The terms of the guarantee ensure that the impact to the public purse is reduced. The guarantee will terminate immediately where the Steel Industry (Special Measures) Act ceases to be in force in relation to British Steel Ltd and/or where the directions issued under the Steel Industry (Special Measures) Act in relation to British Steel Ltd are revoked—i.e. when British Steel Ltd is no longer operating under His Majesty’s Government’s direction.
Authority for any expenditure required under this liability will be sought through the normal procedure. I will be laying a departmental minute today containing a description of the liability undertaken.
If, during the period of 14 parliamentary sitting days, a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
[HCWS768]
(3 months ago)
Written StatementsAs part of their industrial strategy, the Government have announced a new £2 billion programme to unlock investment in our automotive industry, DRIVE35—driving research and investment in vehicle electrification.
Building on the successes of the automotive transformation fund and Advanced Propulsion Centre R&D programmes, this programme will support the latest research and development, accelerate commercial scale-up, and unlock capital investment in zero emission vehicles, batteries and the wider supply chain. It will ensure continuity in Government support while transitioning to a new funding offer for investors that is much simpler, clearer and faster. The new programme will work alongside the national wealth fund, as part of a comprehensive offer to attract strategic investments.
DRIVE35 will provide long-term certainty to investors, with capital funding over five years and R&D funding for 10 years, to 2035. This long-term commitment is a vote of confidence in the sector, supporting its transformation to unlock growth and enable competitiveness.
We will release further detail in the coming weeks, and will continue to engage with industry as we take forward our plans.
As with all financial assistance, Government will disburse DRIVE35 funding via specific spending powers. As part of the requirements for capital spending under section 8 of the Industrial Development Act 1982, the Government are today tabling a parliamentary motion seeking authorisation to disburse up to £1 billion of DRIVE35’s total £2 billion via section 8. The motion is as follows and will be debated in due course:
“That this House authorises the Secretary of State to undertake, during the period beginning with the date of approval of this motion and ending on 31 July 2030, to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, grants to businesses as part of His Majesty’s Government’s project to support zero-emission vehicle manufacturing in the UK and the UK’s automotive supply chain, including to support the creation of jobs, private investment into the UK, the development of the automotive industry and emission reductions, up to an overall limit of £1 billion, and to pay during or after that period the grants that are undertaken to be paid.”
[HCWS751]
(3 months ago)
Written StatementsSteel is essential for a modern and secure economy underpinning many sectors, from construction to advanced manufacturing. The UK steel industry provides high-quality jobs in local economies—circa 40,000 jobs across the country and circa 61,000 jobs in the upstream supply chain in 2024—and plays a vital role in infrastructure, manufacturing and defence supply chains, which are critical for economic growth. However, the UK steel industry faces a challenging global trading landscape due to significant steel overcapacity. This overcapacity introduces unfairly cheap imports into the market, artificially lowering prices, reducing profitability, and hindering investment.
The UK Government have taken steps to protect our steel industry from unfair trading practices through the use of trade remedies. This includes a safeguard measure on certain product categories of steel due to expire on 30 June 2026. Initially applied in 2018 by the EU on behalf of the EU28, the measure was transitioned to the UK’s independent trading system after leaving the EU.
It is within this context that we are launching a call for evidence on steel trade measures, inviting stakeholders across the steel supply chain, including manufacturers, distributors, and end-users of steel products, to provide input, as well as other industries that may be indirectly affected by tariff policy changes. The evidence gathered will support the development of future trade policy options for imported steel products, following the expiry of the steel safeguard. Our goal is to ensure a balanced approach that considers the needs of all interested parties.
The call for evidence will be open for six weeks and will be available at https://www.gov.uk/government/calls-for-evidence/steel-trade-measures We encourage all interested stakeholders to respond. The objectives of this call for evidence have been designed to align with the UK’s trade strategy and industrial strategy, the resilience of steel supply chains, and other wider priorities within the steel strategy.
Background
The UK steel industry faces a challenging global trading landscape due to significant steel overcapacity. The OECD estimates the gap between global steel production capacity and demand—“excess capacity”—was 551 million metric tonnes in 2023. Research from the OECD has shown the global steel excess capacity is expected to continue to worsen beyond 2026. Compounding this problem is trade deflection resulting from other countries’ responses to steel excess capacity and increased geopolitical trade tensions between major trading partners.
This overcapacity artificially and unfairly lowers prices, reducing profitability and hindering investments in modern and lower-carbon technologies. In this global context, increased dependency on steel imports then impacts the security and resilience of UK supply chains and exposes the UK to the risk of price fluctuations and disruption. The UK Government have taken steps to protect our steel industry from unfair trading practices through the use of trade remedies. This includes 15 anti-dumping and two anti-subsidy measures on imports from seven individual countries, and a global safeguard measure on steel imports. This safeguard is set to expire in June 2026 in line with World Trade Organisation rules.
The Government recognise the importance of the UK steel industry and the need to ensure the security and resilience of the UK’s steel supply chains and to explore long-term protection beyond the expiry of the steel safeguard. It is within this context that we propose to gather stakeholder views on evidence that will inform future trade policy options on imported steel products.
[HCWS753]
(3 months, 2 weeks ago)
Written StatementsThe Government committed to updating Parliament on British Steel every four weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
As the Chancellor set out at spending review on 11 June, this Government faced a choice in April: to let British Steel collapse, or to intervene. We were not prepared to tolerate a situation in which Britain’s steel capacity was critically undermined, or to see another community with a deep industrial heritage lose the pride, prosperity and dignity that industry provides. We are proud of our decision to intervene to save British Steel in Scunthorpe, and the jobs that come with it.
Since my last written ministerial statement on British Steel on 20 May, I have written to several Members to respond to further questions. Work continues to develop an impact assessment and bring forward regulations under section 7 of the Act, which allow the Secretary of State to introduce a compensation scheme for steel undertakings that have received a notice under the Act. We are committed to facilitating ongoing scrutiny of the Government’s use of these powers and, to that end, the Secretary of State has replied to correspondence from the Chair of the Business and Trade Committee, and Baroness Jones will shortly write to the Lords Constitution Committee in response to their report entitled “Fast-track legislation and the Steel Industry (Special Measures) Act 2025”, published on 8 May.
Our intervention in British Steel under the Act has enabled the company to continue to operate two blast furnaces in Scunthorpe, and we have secured sufficient supplies of raw materials to maintain this asset configuration for the coming months. As hon. Members are aware, the redundancy consultation initiated by British Steel’s owners, Jingye, was cancelled shortly after the Government’s legislative intervention, removing the immediate risk to 2,700 jobs, and I am pleased to confirm that British Steel is now seeking to enrol its first apprentices in over 3 years. More than 200 people have applied to become British Steel apprentices as the business seeks to develop its next generation of engineers and technical experts, all based in Scunthorpe.
I am also delighted that British Steel, the UK’s only manufacturer of rail, has secured a new £500 million long-term supply contract with Network Rail. The 5-year agreement has an option to extend for a further 3 years and ensures that British Steel retains its position as principal supplier to Network Rail, the organisation which operates and maintains Britain’s rail infrastructure. British Steel will deliver between 70,000 and 80,000 tonnes of rail a year, all manufactured at Scunthorpe.
Government officials continue to work onsite in Scunthorpe, supporting British Steel’s management team. Our priorities remain continuing production, stabilising operations and remedying critical health and safety issues. Since the Government took control of operations, significant progress has been made to improve safety standards.
We recognise the ongoing interest from Members across both Houses regarding the funding that will be required for the Scunthorpe site. The position remains that all funding will be drawn from existing budgets, within the spending envelope set out by the Government at spring statement 2025. As the Prime Minister and the Chancellor have made clear, the UK's fiscal rules are non-negotiable.
To date, we have provided approximately £100 million for working capital. This covers items such as raw materials, salaries, and addressing unpaid bills, including for SMEs in the supply chain. This does not take into account future revenue. As previously confirmed, the Department for Business and Trade’s accounts for 2025-26 will reflect the financial support that the Department has given to British Steel.
As spending review 2025 has highlighted, this Government are investing for the long-term future of UK steel—from £500 million for Tata Steel in Port Talbot to new nuclear-grade capacity at Sheffield Forgemasters—and we will invest in Scunthorpe’s long-term future. However, we have been clear that there also needs to be private investment to modernise British Steel. Work continues at pace to develop the optimal policy and strategy approach, and we are working closely with Jingye to inform that process.
[HCWS723]